HomeMy WebLinkAbout06- HDR Professional Services Agreement for Planning
PROFESSIONAL SERVICES AGREEMENT FOR PLANNING SERVICES
This Agreement is made this 11 day of Jl/A C, 2006, by and between CITY OF BOZEMAN,
P.O. Box 1230, Bozeman, Montana, a Municipal Corporation of the State of Montana, ("City"),
and HDR, 1715 South reserve Street, Suite C, Missoula MT 59801 ("Consultant").
RECITALS
A. City desires to employ Consultant to furnish specific services of a professional planning and
financial nature.
B. Consultant agrees to furnish such services in accordance with the conditions herein provided
and will carry out the duties and obligations imposed by the Contract.
C. The City of Bozeman designates the Director of Planning and Community Development as
the representative to administer this contract.
D. Articles l, 5 and 13 ofthis agreement allow for revision upon mutual written agreement ofthe
parties.
AGREEMENT
Subject to the provisions herein set forth and in consideration of the mutual covenants herem
contained, Consultant agrees to furnish, and the City agrees to accept, certain specified services
and products to include; updates to the City's Street impact fee study, more fully described in
Attachment A. Such services and products shall be referred to as the Work.
All services described herein are to be performed by Consultant and/or its contractors in
accordance with the most commonly accepted standards and practices of the impact fee
development field. Consultant will use final product technologies that are acceptable to the City
in order to satisfy the broadest distribution of the document possible.
Article 1. CONTRACT TIME.
The Work will be completed within 180 calendar days after the date of this agreement. The total
time may be adjusted at the mutual written agreement of both City and Consultant.
Article 2. CONTRACT PRlCE.
OWNER shall pay CONTRACTOR for performance of the Work in accordance with the
Contract Documents the total sum (subject to adjustment as provided in the Contract Documents)
of Ninety-nine Thousand Five Hundred Sixty Nine Dollars and Forty-Four Cents ($99,569.44).
CONTRACTOR recognizes that the total sum is the aggregated amount of two mdependently
determined costs, with one cost for each type of fee. OWNER retains the right to a refund
contingent upon satisfactory completion of the Work in accordance with this agreement. The
total sum may be adjusted at the mutual written agreement of both City and Consultant.
Article 3. PAYMENT PROCEDURES.
Not more than 90% (ninety percent) of Payment will be provided by OWNER to
CONTRACTOR upon submittal of monthly invoices. Remaining Payment will be provided by
OWNER to CONTRACTOR upon completion of the entire Work. Payment will not exceed 60%
of the contract price for each individual type of fee prior to delivery of the initial public review
draft of the Work for each individual type of fee. OWNER retains the right to a refund
contingent upon satisfactory completion of the Work in accordance with this agreement.
Article 4. CONTRACTOR'S REPRESENTATIONS.
In order to induce OWNER to enter into this Agreement, CONTRACTOR makes the following
representations:
4.1 CONSULTANT has familiarized himself with the nature and extent of the Contract,
Work, locality, and with all local conditions and federal, state and local laws, growth
policies, ordinances, rules and regulations that in any manner may affect cost, progress or
performance of the Work.
4.2 CONSULTANT represents and warrants to City that it has the experience and ability to
perform the services required by this Agreement; that it will perform said services in a
professional, competent and timely manner and with diligence and skill; that it has the
power to enter into and perform this Agreement and grant the rights granted in it; and that
its performance of this Agreement shall not infringe upon or violate the rights of any
third party, whether rights of copyright, trademark, privacy, publicity, libel, slander or
any other rights of any nature whatsoever, or violate any federal, state and municipal
laws. The City will not determine or exercise control as to general procedures or formats
necessary to have these services meet this warranty.
Article 5. SCOPE OF WORK
The Work shall consist of the preparation of the work described in the Scope of Services
contained in Attachment "A". If CITY wishes CONSULTANT to perform additional services,
CITY shall so instruct CONSULT ANT in writing. The performance, cost, and time frame of the
additional services shall be subject to mutual written agreement of both City and Consultant.
Article 6. INSURANCE
CONSULT ANT agrees to keep in force during the entire period of this Agreement professional
liability insurance and such general liability insurance as will protect it and the City from claims,
including claims under worker's compensation and other employee benefit laws that are
applicable, for bodily injury and death, and for property damage that may arise out of work under
this agreement whether directly or indirectly by CONSULTANT, or directly or indirectly by sub-
contractors hired by CONSULTANT. Minimum liability limits shall not be less than $1.0
million general liability and $1.0 million automobile liability. CONSULTANT shall provide
proof of workers compensation insurance at the State statutory limits, unless CONSULTANT
provides an exemption from the State Department of Labor & Industry. The City has the right to
require that the City be named as an additional insured under said insurance coverage.
Article 7. INDEMNITY
CONSULTANT shall indemnify, hold harmless and defend the City against any and all claims,
at CONSULTANT'S own expense, arising from the furnishing of services provided for in this
contract or caused by the services described in this contract.
Article 8. INDEPENDENT CONTRACTOR
CONSULT ANT acknowledges that the services rendered under this Agreement shall be solely as
an independent contractor. CONSULT ANT shall not enter into any contract or commitment on
behalf of City. CONSULTANT further acknowledges that it is not considered an affiliate or
subsidiary of City, and is not entitled to any City employment rights or benefits. It is expressly
understood that this undertaking is not a joint venture.
Article 9. GRANT / WORK MADE FOR HIRE
To the extent that CONSULTANT'S Work includes any work of authorship entitled to
protection under the copyright laws of the United States or elsewhere, the parties agree that:
CONSULTANT'S Work has been specially ordered and commissioned by the City as a
_"contribution to a collective work, a supplemental work, or such other category of work as may be
eligible for- treatment as a "work made for hire"; CONSULTANT is an independent contractor
and_ not an~employee, partner, joint author or joint venturer of the CITY; CONSULTANT'S
Work shaJrbe deemed to be a "commissioned work" and a "work made for hire" to the greatest
extent-possf:tjle under the law; and the CITY shall have the right to use, execute, reproduce,
display, p~form, distribute internally or externally, and prepare derivative works of the
CONSULTANT'S Work.
To the extent that CONSULT ANT'S work is not properly characterized as a "work made for
hire," then CONSULTANT shall, at its own expense, cause the CITY to have and obtain the
right and license to use, execute, reproduce, display, perform, distribute internally or externally,
and prepare derivative works based upon all such works and derivative works thereof and shall
provide to the CITY a written license granting the CITY such rights. It is the intent of the parties
that the specific work subject to said license shall be comprised of text, illustrations, calculations,
photographs, and all other works Consultant copies that may belong to third parties for which
license for use is required.
Article 10. OFFICE RULES
CONSULTANT shall comply with all office rules and regulations, including security
requirements, when on City premises.
Article 11. CONFLICT OF INTEREST
CONSULT ANT shall not offer or give a gratuity of any type to any City employee or agent.
Article 12. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws of the State of
Montana. In the event of dispute regarding the terms of this Agreement, the parties agree to
attempt mediation of the conflict prior to pursuing litigation. Venue shall be in Gallatin County,
18th Judicial District.
Article 13. ENTIRE AGREEMENT AND NOTICE
This Agreement contains the entire understanding ofthe parties and may not be amended without
the specific written consent of both parties. Any notice given under this Agreement shall be
sufficient if it is in writing and if sent by certified or registered mail.
IN WITNESS WHEREOF, the Parties hereto have set their hands and seals the day and
year first above written.
CONSULTANT
;
BY:~
Title: _ . ()fPl1J{fl11I:'''}/Vr rif 4r11t7rc.~
ATTEST:
~ri + t=b/J ~M>-tC~rk of~~io~
CITY OF BOZEMAN
By:C~fl~
Chris Kukulski, City Manager
Attachment A
City of Bozeman, Montana
Water and Sewer Rate and Impact Fee Study
Scope of Services and Project Fee Estimate
April 17, 2006
Task 1-lnitial Project Meeting
Task Objective, Bring HDR and the City together; at the start of the project, to assure
that both parties have a mutual understanding of the goals, objectives, issues and
concerns related to the study.
An initial project meeting is important to the overall success of this engagement since it
forms the foundation for the study process.. The initial project meeting is used as a
starting point in developing a strong wOlking relationship between HDR and the City,
This meeting will allow both parties to discuss the overall goals and objectives for this
study, while at the same time identify any issues and concerns that either party may have.
The pr()ject time schedule will also be discussed during this meeting. It is proposed that
the initial pr()ject meeting be a half:'day meeting.
Deliverahles as a Result of Task I-Initial Project Meeting.. From the work
accomplished above, the delivet'ables for this task will be as follows:
. An understanding of the study's goals, o~jectives, issues and concerns by both
parties,
. Face-to-face meeting to get the study off'to a positive stmt.
Task 2-Data Review, Assessment and Collection
Task Objective. Review the City's existing data, assess it and accumulate the necessary
data to conduct the rate study impact fee analysis.
The team will begin this task by reviewing the City's codes, practices, procedures, past
studies, and the accounting and customer information. From this review, we will develop
an initial written data request for the City that details the data and information required to
conduct the impact fee study. This data and information should be, for the most pmt,
readily available information (e..g. financial, statistical, customer, etc..). For those aI'eas
where the data is not readily available, or will require significant labor and expense on
the City's part to provide, the team and the City will determine the "sensitivity" or
"impOltance" of the data required and if alternative data sources are available, As with
any study, it is imperative that the City provides a timely response for the data requested.
DeIiverahles as a Result of Task 2~Data Review, Assessmellt, alld Collection. From
the work accomplished above, the deliverables for this task will be as follows:
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. A review of the City's existing data, practices and past studies
. An initial Wlitten data request to the City.
. Identification of any data constraints.
Task 3-Revenue Requirement Analysis
Task Objective' Using a generally-accepted rate setting methodology, develop the City's
water and wastewater revenue requirements, for a projected time periocL to ensure adequate
funds for operating and capital needs. Consider variousfinancial guidelines and parameters
to assure stable and prudent funding levels.
The development of the revenue requirement analyses is the first major analytical portion of
the comprehensive late study process. Ihis portion of the study entails reviewing the various
sources of funds (revenues) and compating them to the applications of funds (expenses) for
the utility. Ihis task considers the prudent and proper funding for O&M and capital
expenditures and determines the need for any late adjustments over the time petiod selected
A more detailed discussion of the vatlous steps involved in developing the District's revenue
requirements is provided below.
SELECTION OFA PROJECTED TIME PER10D AND METHOD OFACCUMULAI1NG COSTS ~ For this
study, the projected time period of 2006 ~ 2011 is proposed.. By reviewing costs over an
extended time frame, the City can determine the future impacts fr'Om changes in O&M and
capital projects and potentially take steps today to help minimize future impacts. The method
of accumulating costs for the cost of set vice will be the "cash basis" approach.. This method
sums O&M expenses, taxes/transfer payments, debt setvice, and capital improvements
funded fiom rates.
PROJECTION OF OPERATING REVENUES - For the City's analysis late revenues will be
calculated based on the cutt'ent rate levels and customel billing infOlmation (i.e., number of
customers, billed consumption, etc..). Ihis revenue will then be escalated over' the projected
time period based on assumed customer and consumption growth.. Other operating revenues
will be escalated based upon typical industry standards dUling the time period. These may
include items such as rents, leases, and other miscellaneous revenue sources.
ACCUMULATION OF REVENUES AND EXPENSES - Revenue Tequirements are composed of two
m~jor types of costs; operational and capital expenses. The operational costs are generally
pr~jected :fi:nm historical or budgeted costs, using assumed escalation factors, and adjusted
for any known changes in operations (e..g. additional personnel, growth/expansion, etc.)
dUling the projected time period Capital costs will be reviewed on a year'-by-year basis for
each year of the projected period.. The starting point for projecting capital costs
(expenditures) will be the District's five-year capital improvement program (CIP). All
capital projects are listed by anticipated construction yeat. The costs are then offset by any
outside funding sources (e.g. loans, bonds, impact fees, etc..) The balance of projects not
funded by outside funding somces must be financed fiom rate revenue.. In the financial
planning process, consideration must be given to maximizing the capital improvements
(expendituI'es) for the system, while minimizing rates to its customers. This is accomplished
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in a variety of ways However, the most impOItant aspect of this discussion is that there are
multiple methods of financing capital expenditures, and it is through this process that rates
can be minimized. Special emphasis will be placed on determining the level of annual
renewal and replacement capital the City should fund.. The final decision will be
incorporated within the capital analysis
The revenue requirement analysis will also provide a review of typical financial indicators
such as debt service coverage ratios, adequate reserve levels, along with other prudent
financial planning criteria.
Task 4-Cost of Service Analysis
Task Objective:' Develop an average embedded cost of service study to equitably allocate the
water and wastewater revenue requirements to the customers selved by the City. Develop a
methodology that equitab~y allocates the costs to customers, while considering the specific
characteristics of the City's water and wastewater system.
The cost of service will equitably allocate the City's operating and capital costs to the vmious
customer classes of service using a "generally accepted" average embedded cost of service
methodology. An average embedded cost of service methodology allocates the total revenue
requirements of the utility to the various customer classes of service (ie, residential,
commercial, etc.) in a manner that reflects a'class' proportional benefit (usage) of the system..
The premise of a cost of service is that the rates charged should closely approximate the costs
associated with providing the service
The next step in the cost of service analysis is to ftmctionalize the data.. Functionalization
refers to the auangement of cost data into its basic cost categOlies, This task is simplified
greatly through the City's use of a uniform system of accooots, The functionalized costs are
then classified to their various cost components.. Classification involves determining why
each specific cost or' account item was incUlI'ed. The following cost classification/allocation
factors ar'e typically developed for a water and wastewater' rate study. HDR and the City will
review the appropriateness of the cost components developed for the utility to detetmine if
any changes to the proposed cost components are needed. Table 1 provides an example of
the typical cost classification/allocation factors for both the water and wastewater analysis,
- - - -- - - -. - - - - - - - - - -- - - - - -
Table 1
Typical Allocation Factors
. Connnodity - Related . Volume - Related
. Capacity - Related (Peak Requirements) . Strength - Related (BODfTSS)
. Customer - Related . Customer - Related
. Fire Protection - Related . Revenue - Related
. Revenue - Related
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The summary of the cost of service study compar'es the difference between the CUIlent
levels of rate revenues received from each class of service to the allocated cost of service
for each class. The cost of service will also provide average unit costs, which are
impOItant to the development of final rate designs. Average unit costs provide the City
with an understanding of the cost/rate relationship between fixed and variable costs. The
development of average unit costs will provide "cost of service" based rates, for an
classes of service of the District.
Task 5-Rate Design Analysis
Task Objective: Develop water and wastewater rate design alternatives utilizing the cost
information developed as a part oj the previous tasks. Consider any alternative rate
structures that are contemporary, cost-based, defensible, and meet the specific rate design
objectives of the City.
A starting point for the rate design process is understanding the water and wastewater rate
design goals and objectives the City is striving for in this study.. Typical rate design
objectives may include ease of administration, simplicity, revenue stability, ability to pay,
etc Understanding the City's rate design objectives will assist HDR in the development of
the rate design altematives.
In designing any rate options for the District, the cost of service infOImation and average unit
cost infOImation will be utilized as a stm:ting point.. As a part of this task, the City's present
rate designs will be reviewed along with two (2) additional rate altematives, ifrequested. For
each watet and wastewater tate design developed, a bill compmison and gtaph will be
provided that shows a compatison between the present bill and the proposed bill at vatious
levels of usage. These bill comparisons are useful in assessing the potential impacts to a
wide variety of customers.
Task 6-Development of Impact Fees
Task Objective.:' Develop impactfees for the water; and sewer systems for imposition on
new development that are cost based, fair~ equitable and defensible.
HDR, as part ofthis task, will provide for a complete calculation of the City's impact fees
for the water and sewer systems. The new Montana law requires that the amount of the
impact fee must be reasonably related to the developments share of the cost of
improvements made necessary by the new development and may not exceed a
proportionate share of the costs incuued or to be incuII'ed in accommodating the
development.
In order to meet the proportionate share requirement, the impact fees will be calculated
based on the actual cost of the plant construction and the City's Capital Improvement
Plan.. To meet the reasonably related to and attributable requirement, HDR, as part ofthe
analysis, will first examine the planning criteria used by the City in the design and
constmction of the vmious systems.. For the water and sewer systems, the planning basis
is to meet flow demands on the system.. This infOImation will be utilized as the basis for
determining the amount ofinfrastlUcture necessary to serve new customers. Additionally,
HDR will examine the City's fixed asset records to determine those current assets utilized
to serve new development and include applicable interest rates. HDR will also utilize the
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City's Capital Improvement Plan to determine the amount of infrastmcture that will be
utilized to serve growth. Utilizing these two factors, HDR will then develop the cost-
based impact fees. The results of this calculation will provide both a reimbursement and
improvement fee impact fee for the City.
HDR/EES will also review any associated credits required to be reflected in the impact
fee calculation to assure that new development does not "pay twice", that is, once through
rates, gas taxes andlor property taxes and again through the impact fee. This will include
review of any payments by property taxes and hence are paid for whether or not the user
has been paying through rates or not. Additionally, any associated debt, which may be
paid for through revenue bonds, will also be reviewed for applicable credits.. A review of
contributed capital will also be undCItaken to assure compatibility with the City's cuuent
line extension policies.
The calculation of the impact fee will also include any administration costs as allowed
under the statues.. This will include any accounting, administrative and planning costs as
appropriate.
De/iverables as a Result of Task rr-Development of Impact Fees. From the work
accomplished above, the deliverables for this task will be as follows:
. Impact fee for the water and sewer systems that are cost-based, equitable and legally
defensible"
Task 7-Report Documentation
Task Objective.: Provide a well-written report to summarize the findings, conclusions and
recommendations of the rate and impactfee study
Upon completion of the study, the City will receive tIuee (3) draft repOlts of our findings,
conclusions and recommendations.. Two separate reports will be prepared, one for the
rate study and one for the water and sewer system impact fees.. These written repOlts will
be comprehensive documents and will discuss the development of the impact fee analyses
for each of the fees reviewed.. Any comments, suggestions or corrections from the City
will be incorporated into the final report, Fifteen (15) copies of the final repOIt will be
provided to the City.
HDR, as part of this task, will also work with the City attorney to develop an ordinance
or resolution for enactment of the impact fees which meet the requirements of Montana
Jaw.
Delivelables as a Result of Task 7-Repmt Documentation. From the work accomplished
above, the deliverables for this task will be as follows:
. A draft and final written report..
. A repOIt for the water and sewer rate study
. A report ofthe water and sewer impact fee study.
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Task 8-0rdinance Assistance (optional task)
Task Objective: Assist in the development of the ordinance required by Montana law
HDR, as part of this task, will work with the City attorney to develop an ordinance or
resolution for enactment of the impact fees which meet the requirements of Montana law..
HDR role will be to provide the required information as set forth in Section 2 of SB 185
and review the ordinance, This task is optional and would be completed on a time and
materials basis as requested by the City
Deliverables as a Result of Task 8-0rdinance Assistance. From the work accomplished
above, the deliverables for this task will be as follows:
. Assistance in the development ofthe impact fee ordinance or resolution
Task 9-Meetings and Presentations
Task Objective.: Provide for meetings and public presentations of the findings, results
and recommendations of the impact fee study
For the rate study, HDR is proposing have tlu'ee (3) meeting with the City Council.
These would follow the general steps in the rate study process, The meeting topics
suggested are as follows:
. Meeting 1 - Review revenue requirement analysis
. Meeting 2 - Review cost of service studies
. Meeting 3 - Review late design alternatives
A requirement of the new Montana impact fee law is that an Impact Fee Advisory
Committee be established.. The Impact Fee AdvisOIY Committee is charged with
reviewing and monitoring the process of calculating, assessing and spending of impact
fees. Given that these will be new fees for the City, HDR believes that this portion of the
study is critical to the overall pr~ject success and gaining support for the implementation
of the fees.. The process will assure public "buy-in" to the impact fee development
process. Four (4) meetings with hnpact Fee Advisory Committee have been included in
the budget The pmpose of the meetings is to educate the Committee, while discussing
each of the fees.. As currently envisioned, the four Committee meetings will cover the
following topics.
. Meeting 1 - Review the Montana legislation and the process of setting cost-based
rates
. Meeting 2 - Review each of the systems/fees, the impacts of growth on each
system/fee
. Meeting 3 - Review the draft impact fees and gain Committee feedback
. Meeting 4 - Determine the Committee's recommendations to the City Council on the
proposed fees
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HDR has also planned on two (2) public presentations to the City Council on impact fees.
Any additional meetings requested by the City would be billed on a time and materials
basis.
Deliverahles as a Result of Task 9-Meetings and Presentation Services. From the wOIk
accomplished above, the deliveI'ables for this task will be as follows:
. Three (3) meeting with the City Council to discuss the findings, results and
recommendations of the rate studies
. Four (4) meeting with the hnpact Fee Advisory Committee.
. Two (2) meetings with the City Council and the public to discuss the findings, results
and recommendations of the impact fee studies.
Project Fee Estimate
HDR proposes to bill the City for this project on a time and material basis. The pr~ject
fee estimate and expenses are provided in I able 2.
City of Bozeman
Water and Sewer Rate and Impact Fee Study
Project Fee Estimate
Task Amanda Tom Randy Staff Project Total
Number Description Mcinnis Gould Goff Analyst Coordinator Admin Hours Fee
1 Initial Project Meeting 4 12 12 0 0 1 29 $ 5.726 96
2 Data Review and Assessment 2 2 2 8 2 1 17 $ 2,229 76
3 Revenue Requirements 2 16 0 60 2 1 81 $ 10,43216
4 Cost of Service 2 16 0 80 2 1 101 $ 12,55416
5 Rate Design 2 16 0 36 2 1 57 $ 7,885.76
6 Impact Fee $
Water 12 0 16 48 2 1 79 $ 10,387.96
Sewer 12 0 16 48 2 1 79 $ 1038796
7 Report Documentation 2 16 16 24 2 12 72 $ 10,61992
8 Ordinance Assistance 0 0 0 0 0 0 o $
9 Meeting and Presentations 12 36 40 4 0 4 96 $ 18,47384
Total Labor 50 114 102 308 14 23 611 $ 88,698..48
Total Expenses $ 7,309..00
Total Project Fee Estimate $ 96,007.48
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