City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: FEBRUARY 21, 2023 FROM: PUBLIC UTILITIES DEPARTMENT WARDS: ALL
SUBJECT: SECOND AMENDMENT TO THE PROFESSIONAL CONSULTANT SERVICES AGREEMENT FOR WATER COST OF SERVICE ANALYSIS AND RATE DESIGN WITH CAROLLO ENGINEERS, INC. OF RIVERSIDE, CALIFORNIA – INCREASE CONTRACT AMOUNT BY $40,000 FOR A REVISED TOTAL CONTRACT AMOUNT OF $214,832 ISSUE:
Approve a Second Amendment to the Professional Consultant Services Agreement for the Water Cost of Service Analysis and Rate Design with Carollo Engineers, Inc., of Riverside, California, increasing the contract amount by $40,000 for a total revised contract amount of $214,832.
RECOMMENDATIONS:
That the City Council:
Approve a Second Amendment to the Professional Consultant Services Agreement for Water Cost of Service Analysis and Rate Design with Carollo Engineers, Inc., of Riverside, California, increasing the contract amount by $40,000 for a revised total contract amount of $214,732; and Authorize the City Manager, or designee, to execute the Second Amendment, including making minor and non-substantive changes.
BOARD RECOMMENDATION:
On January 23, 2023, the Board of Public Utilities with all members present, unanimously voted to recommend that the City Council approve a Second Amendment to the Professional Consultant Services Agreement for Water Cost of Service Analysis and Rate Design with Carollo Engineers, Inc., of Riverside, California, increasing the contract amount by $40,000 for a total revised contract amount of $214,832.
BACKGROUND:
On March 14, 2022, the Board of Public Utilities (Board) approved the Professional Consultant Services Agreement (Agreement) with Carollo Engineers, Inc., of Riverside, California, (Carollo), for the purpose of conducting a Water Cost of Service Analysis and Rate Design Project (“the Project”) for Riverside Public Utilities. The Project will provide a comprehensive review of all rate schedules, forecast of future revenue requirements, and equitable allocation of costs among customer classes. The Project phases include:
Phase 1 – Cost of Service Analysis
Phase 2 – Rate Trends Study
Phase 3 – Rate Design
Phase 4 – Recycled Water Rate Design Recommendation
Phase 5 – Budget Based Rate Design Recommendation and Implementation Plan The work for the five phases is a coordinated effort between RPU staff and Carollo. The results of the Water Rate Trends Study were presented to the Board on August 8, 2022. Current tentative presentation dates to the Board for the Cost of Service and Rate Design are March through May 2023.
DISCUSSION:
During the project it was determined that additional analysis is required for areas such as including additional customer conservation in the sales forecasts, cost of service allocations including allocation of capital improvement projects, and rate design considerations and associated customer bill impacts.
Purchasing Resolution 23914, Section 1104 (c), Change Orders states that “Modifications to a Purchase Order shall be made only by Change Order. Unless otherwise specifically authorized by the Awarding Entity, Change Orders which cumulatively exceed the following will require Awarding Entity approval; 10% of the original contract price for Contracts and/or Purchase Orders previously approved by the Awarding Entity and the total Change Order amount will not exceed $150,000.” The Purchasing Manager concurs that the recommended actions are in compliance with Purchasing Resolution No. 23914 Section 1104 (c).
The proposed project timeline includes completing draft reports that are pending recommendations from the City Council and Board of Public Utilities, community outreach and feedback, and final approval.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 6 - Infrastructure, Mobility & Connectivity and Goal 6.2 - Maintain, protect and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability, and facilitate connectivity.
This item also aligns with each of the five Cross-Cutting Threads as follows:
Community Trust –The Water Cost of Service Analysis and Rate Design Project is transparent and developed with our customers’ and the community’s well-being as a top priority.
Equity –The Water Cost of Service Analysis and Rate Design Project includes an equitable allocation of costs among customer classes which is incorporated into the resulting rate design recommendation.
Fiscal Responsibility – The Water Cost of Service Analysis and Rate Design Project incorporates a forecasted revenue requirement that includes operating and capital expenditures funded by the prudent use of rate revenue, bond proceeds, and reserves.
Innovation –The Water Cost of Service Analysis and Rate Design Project includes the Water Utility Rate Trend Study that evaluates emerging rate structures, technologies, and trends and how they may apply or be implemented by RPU.
Sustainability & Resiliency – The Water Cost of Service Analysis and Rate Design Project will design future rates for a five-year period to equitably recover costs while maintaining the financial health of RPU.
FISCAL IMPACT:
The total fiscal impact of this action is $40,000. Sufficient funds are budgeted and available in the Electric Fund, Public Utilities Admin-Mgmt Services, Professional Services account number 6000000-421000.
Prepared by: Todd M. Corbin, Utilities General Manager Certifies availability
of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer Approved by: Kris Martinez, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Second Amendment to Professional Consultant Services Agreement Presentation
Water Cost of Service Analysis Second Amendment Page 1