HomeMy WebLinkAboutProfessional Services Agreement iwth SAIC Energy for Solid Waste Rate Design Study.pdfCommission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chuck Winn, Assistant City Manager
SUBJECT: Solid Waste Services and Rate Design Contract
MEETING DATE: July 11, 2011
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Approve contract with SAIC Energy, Environment & Infrastructure
in the amount of $39,800 to conduct a solid waste services and rate design study for the City's
solid waste division.
BACKGROUND: The city has previously conducted rate studies for its water and sewer
services. The purpose of these studies was to comprehensively analyze the costs of providing
these services (labor, maintenance, capital, administration, and depreciation) to determine how
much the city should be charging the customer for the services. The city has never conducted a
rate study for its solid waste division, and while the fund currently operates in the black, we are
uncertain that actual costs are properly attributed to the different customer classes. This study
will include residential and commercial trash collection, curbside and commercial cardboard
recycling, and commercial roll-off services. The specific deliverables and work product is
detailed in the Exhibit A Scope of Services and Schedule attached to this memorandum.
UNRESOLVED ISSUES: We had anticipated including some level of operational review in
this contract, but due to the costs and the fact that we are currently recruiting for a new Solid
Waste Superintendent, we are not recommending award of the Phase 2 - Collection Operations
Review - at this time.
FISCAL EFFECTS: At the time the FY12 budget was developed we did not know how much
a solid waste rate study might cost; we included $15,000. The unbudgeted balance of $24,800
will be covered by vacancy savings from the Superintendent position, which are roughly
$35,000 for FY12.
ALTERNATIVES: As suggested by the City Commission.
Attachments:
SAIC Contract
Exhibit A Scope of Services and Schedule
Report compiled on: June 29, 2011
57
PROFESSIONAL SERVICES AGREEMENT
This PROFESSIONAL SERVICES AGREEMENT is made this ____ day of June, 2011, by and
between CITY OF BOZEMAN, P.O. Box 1230, Bozeman, Montana, a Municipal Corporation of
the State of Montana, ("City"), and SAIC Energy, Environment & Infrastructure, LLC 5806
Mesa Drive, Suite 310, Austin, TX 78731 (“Consultant”).
RECITALS
A. City desires to employ Consultant to furnish specific services of a professional planning and
financial nature in preparation of a Solid Waste Services and Rate Design Study.
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 Agreement.
C. City designates the Director of Public Services as the representative to administer this
contract.
D. Articles 1, 2, 5 and 13 of this agreement allow for revision upon mutual written agreement of
the parties.
AGREEMENT
Subject to the provisions herein set forth and in consideration of the mutual covenants herein
contained, Consultant agrees to furnishcertain specified services and products to include: cost of
service analysis; current operations analysis with best-practices recommendations to meet goals;
and specific deliverables; 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 solid waste field.
Consultant will use final product technologies that are acceptable to the City in order to satisfy
the broadest distribution of the document possible.
Consultant will perform services under this Agreement with the degree of skill and diligence
normally practiced by professional engineers or consultants performing the same or similar
services. No other warranty or guarantee, expressed or implied, is made with respect to the
services furnished under this Agreement all implied warranties are disclaimed.
Article 1. CONTRACT TIME.
The Work will be completed within 130 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 PRICE.
City shall pay Consultant for performance of the Work for Phase I in accordance with the
Contract Documents the total sum (subject to adjustment as provided in the Contract Documents)
of
58
______________________________________________________________________________
$___________________. Consultant recognizes that the total sum is the aggregated amount all
services described in the scope of work for Phase 1 in Attachment A. City retains the right to a
refund contingent upon unsatisfactory 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.
Upon submission of monthly invoices, City shall pay Consultant for services furnished under this
Agreement based on a percentage of project completion. City shall pay Consultant in U.S.
dollars within thirty (30) days of receipt of invoices less any disputed amounts. If City disputes
any portion of the invoice, the undisputed portion will be paid and Consultant will be notified in
writing, within ten (10) days of receipt of the invoice of the exceptions taken. Consultant and
City will attempt to resolve the payment dispute within sixty (60) days or the matter may be
submitted to mediation as provided below. Additional charges for interest shall become due and
payable at a rate of one and one-half percent (1-1/2%) per month (or the maximum percentage
allowed by law, whichever is lower) on the unpaid, undisputed invoiced amounts. Any interest
charges due from City on past due invoices are outside any amounts otherwise due under this
Agreement. If City fails to pay undisputed invoiced amounts within sixty (60) days after
delivery of invoice, Consultant, at its sole discretion, may suspend services hereunder or may
initiate collections proceedings, including mediation, without incurring any liability or waiving
any right established hereunder or by law.
Article 4. CONSULTANT’S REPRESENTATIONS.
In order to induce City to enter into this Agreement, Consultant makes the following
representations:
4.1 Consultant has familiarized himself with the nature and extent of the Agreement, 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 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 as Phase 1 in the Scope of
Services contained in Attachment “A.” If City wishes Consultant to perform additional services,
including performance of Phases 2 and 3, City shall so instruct Consultant in writing. The
performance, cost, and time frame of the additional services shall be subject to mutual written
agreement of both City and Consultant. City shall provide to Consultant in a timely manner any
information the City retains that Consultant indicates is needed to perform the services
59
hereunder. Consultant may rely on the accuracy of information provide by City and its
representatives.
Article 6. CHANGES/AMENDMENTS
This Agreement may not be changed except by written amendment signed by the Parties. The
level of effort, schedule and payment required to complete Phase 1 of the Scope of Servicesis
reflected herein. Services not expressly set forth in this Agreement or its exhibits are excluded.
Consultant shall promptly notify City if changes to the Scope of Services that affect the schedule,
level of effort or payment to Consultant are necessary, and if the City agrees to the changes in
writing, the schedule and payment will be equitably adjusted. If Consultant is delayed in
performing its services due to an event beyond its control, including but not limited to fire, flood,
earthquake, explosion, strike, transportation or equipment delays, act of war or act of God, then
the schedule or payment under the Agreement shall be equitably adjusted, if necessary to
compensate Consultant for any additional costs due to the delay.
Article 7. INSURANCE
Consultant agrees to obtain prior to commencing work and 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 commercial general liability and $1.0 million automobile liability.
Consultant shall provide proof of workers compensation insurance at the State of Montana
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 on a
non-contributory basis under said insurance coverage.
Article 8. INDEMNITY
Consultant hereby agrees to defend, hold the City and its employees and officials harmless and
indemnify and the City, its employees and officials, for any and all claims, lawsuits or liability
including attorneys’ fees and costs allegedly arising out of loss, damage or injury to person, that
arise from the negligent performance of the Consultant’s work herein described. The obligations
of the Consultant to indemnify and hold harmless the City of Bozeman will apply to any suit,
cause of action, claim, loss, cost or obligation including, without limitation, those alleged under
the common law or pursuant to a federal or state statute or regulation including those arising
from the negligent acts, errors or omissions of the Consultant. The indemnity required herein
shall not be limited by reason of the specification of any particular insurance coverage in this
Agreement.
Article 9. SAFETY AND SECURITY
Consultant has established and maintains programs and procedures for the safety of its
employees. Consultant specifically disclaims any authority or responsibility for job site safety
and safety of persons other than Consultant’s employees or sub-contractors. Consultant shall not
provide any such services and disclaims any responsibility under this Agreement related to site
security or the assessment, evaluation, review, testing, maintenance, operation or safety practices
or procedures related to security.
60
Article 10. INDEPENDENT CONTRACTOR
Consultant acknowledges that the services rendered under this Agreement shall be solely as an
independent contractor. Consultant 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.
Article 11. GRANT / WORK MADE FOR HIRE / WORK PRODUCT
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 shall be deemed to be a
"commissioned work" and a "work made for hire" to the greatest extent possible under the law;
and the City shall have the right to use, execute, reproduce, display, perform, distribute internally
or externally, and prepare derivative works of the Consultant’s Work.
To the extent that Consultant’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.
If City changes or uses the Work Products other than as intended hereunder, (a) City does so at
its sole risk and discretion; (b) Consultant shall not be liable for any claims or damages resulting
from the change or use of the Work Products; and (c) City shall indemnify, defend and hold
Consultant harmless from any and all claims or damages related to the change or mis-directed
use.
Article 12. NO CONSEQUENTAL DAMAGES
In no event and under no circumstances shall Consultant be liable to City for any principal,
interest, loss of anticipated revenues, earnings, profits, increased expense of operation or
construction, loss by reason of shutdown or non-operation due to late completion or otherwise
for any other economic, consequential, indirect or special damages.
Article 13. OFFICE RULES/CONFIDENTIALITY
Consultant shall comply with all office rules and regulations, including security requirements,
when on City premises.
Certain data provided by the City pursuant to this Agreement may contain information regarding
third parties the City determines to be confidential in nature. Prior to releasing any data that has
been marked or identified as confidential by the City, the Consultant shall confer with the City
regarding whether any data must be protected as confidential under Montana or federal law.
61
Article 14. CONFLICT OF INTEREST
Consultant shall not offer or give a gratuity of any type to any City employee or agent.
Article 15. RE-PERFORMANCE OF SERVICES
If City believes any of the services provided under this Agreement do not comply with the terms
of this Agreement, City shall promptly notify Consultant to permit Consultant an opportunity to
investigate. If the services do not meet the applicable standard of care, it will promptly re-
perform the services at no additional cost City, including assisting City in selecting remedial
actions. If City fails to provide Consultant with prompt notice of non-compliance and an
opportunity o investigate and re-perform its services, Consultant’s total obligation to City will be
limited to the costs Consultant would have incurred to re-perform the services.
Article 16. NONDISCRIMINATION
The Consultant will have a policy to provide equal employment opportunity in accordance with
all applicable state and federal anti-discrimination laws, regulations, and contracts.
In addition, the Consultant agrees not to discriminate in fulfillment of this Agreement on the
basis of race, color, religion, creed, sex, age, marital status, national origin or actual or perceived
sexual orientation, gender identity or disability. The Consultant agrees this requirement shall
apply to the hiring and treatment of the Consultant’s employees and to all subcontracts
The Consultant shall be subject to and comply with Title VI of the Civil Rights Act of 1964;
Section 140, Title 2, United States Code, and all regulations promulgated thereunder.
The Consultant shall require these nondiscrimination terms of its sub-consultants providing
services under this Agreement.
Article 17. TERMINATION
Any party may terminate this Agreement upon thirty (30) days prior written notice to the other
Party. City shall pay Consultant for all services rendered to the date of termination plus
reasonable expenses for winding down the services. If any Party defaults in its obligations
hereunder, the non-defaulting Party, after giving seven (7) days written notice of its intention to
terminate or suspend performance under the Agreement may, if cure of default is not
commenced and diligently continued, terminate this Agreement or suspend performance under
this Agreement.
Article 18. 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 19. ENTIRE AGREEMENT AND NOTICE
This Agreement contains the entire understanding of the parties and may not be amended without
the specific written consent of both parties. Any notice given under this Agreement shall be
62
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: __________________________________
(printed name)
CITY OF BOZEMAN
By: __________________________________
Chris A. Kukulski, City Manager
ATTEST: _____________________________
Stacy Ulmen, City Clerk
Attachments:
- Exhibit A – Scope of Services and Schedule
63
A-1 ■ SAIC Energy, Environment & Infrastructure, LLC
This Scope of Services is for SAIC (formerly R. W. Beck) to complete a solid waste services and rate design
project, with an optional operations review, for the City of Bozeman, Montana (City). Listed below are the
key tasks to be accomplished by our project team during the conduct of this study. We have organized this
scope of services into three phases: (1) Cost of Service and Rate Design (2) Collection Operations Review
and (3) Optional In-Person Meetings. SAIC understands that the City will authorize SAIC to complete
Phase 1, with Phase 2 and Phase 3 being authorized at a later time as requested by the City.
Phase 1: Cost of Service and Rate Design Study
Task 1A: Project Initiation and Management
Establish a Project Task Force
Completion of a solid waste system financial review requires input from multiple staff within the City. In
order to get the best information possible and increase buy-in for the outcomes of this project, we
recommend that the City establish a Project Task Force (PTF) to participate throughout the process. The
PTF would ideally include 4-6 representatives from diverse roles and levels of responsibility within the City.
While the final make-up of the PTF can be discussed upon project initiation, possible participants may
include:
Assistant City Manager
Public Services senior managers
Finance Director
Key managers from the various collection operations
The PTF would participate in the kick-off conference call, help facilitate data collection, provide feedback
on preliminary findings during working sessions, and provide support to our Project Team throughout the
project. By involving a variety of individuals with a wide range of skills and responsibilities, a more
complete picture of the solid waste system can be developed more quickly. The diverse experience and
concerns of the participants will help identify problem areas and contribute meaningful input to the
solutions. Full participation from the PTF members should also be expected to increase buy-in and would
speed implementation of the project findings.
EXHIBIT A
Scope of Services and Schedule
64
Exhibit A | Scope of Services and Schedule
Request for Information
Approximately five working days following receipt of the Notice to Proceed, SAIC will provide the City
with a preliminary data request that encompasses data needs for completing Phase 1 of this Scope of
Services. The data request will itemize information needed for understanding the financial and operating
characteristics and cost drivers of the entire solid waste system. At a minimum, the following information
will be required:
Prior planning, feasibility, and rate studies conducted by City staff or outside consultants
Solid waste ordinances and policies, including rate structures
Audited annual reports for the previous three fiscal years
Budget vs. actual for the previous three fiscal years
Budget for the current fiscal year
Bond covenants and payment schedules for any outstanding solid waste bonds
Organizational charts and reporting relationships for the Solid Waste Division
Field personnel rosters and salary information for solid waste staff
Vehicle and equipment costs and inventories, including delineation of active and spare vehicles
Solid waste billing data (e.g., customer counts, container sizes) and tonnage data
Historical and projected capital expenditures
Projections made by City staff as to customer growth
Fund balances
Review Existing Information
During preliminary discussions with City staff, the City has provided an initial set of data. SAIC has
conducted a preliminary review of the data, and we believe that we will be able to complete our review in an
efficient manner. After initiating the project and receiving all of the requested data, we will conduct a
formal review of the data to gain a better understanding of the existing system. This will enable us to
develop a list of questions for the kick-off conference call and allow us to develop a draft recommendation
for the cost centers to be used in the cost of service analysis. SAIC will also prepare summary worksheets
for discussion with City staff related to the cost of service analysis (Task 1B).
Kick-off Conference Call
SAIC will conduct one or two conference calls to kick-off the project and hold in-depth discussions with
City staff related to the allocation of personnel and resource. The call(s) will be designed to accomplish
several objectives, including:
Introduce members of the SAIC Project Team
Develop a further understanding of the key financial and operational issues for the Study
A-2 ■ SAIC Energy, Environment & Infrastructure, LLC
65
Exhibit A | Scope of Services and Schedule
Discuss and finalize the cost centers for the Cost of Service Study
Preliminary discussion of “test year” budget adjustments
Preliminary discussion of personnel and equipment allocations
Review request for information and clarify any data, if needed
One critical component of the kick-off conference call is to understand and document what the City wants
to accomplish with this study. In addition, the key questions and concerns with the current solid waste rate
structures and cost of service methodologies will be addressed.
SAIC will send the City agendas and worksheets prior to the call. The City will be responsible for hosting
the conference call or web meeting. At the conclusion of the call(s), SAIC will prepare a summary of the
key issues discussed.
Additional Data Request
The kick-off meeting will help identify and develop consensus about those project issues or practices that
need further analysis as part of the study. Based on the feedback received at the kick-off meeting, we
anticipate issuance of a secondary data request to supplement the preliminary data request. The secondary
data request would be provided to the City along with the summary of important items discussed during the
kick-off meeting.
We recognize that the City may not have all information requested readily available or may track
information differently than as requested. We will work with the appointed City staff to arrive at reasonable
substitutes for the key data, if needed.
Task 1A Deliverables
Preliminary data request
One to two conference calls (kick-off meeting and preliminary data discussions)
Conference call agenda, handouts, and follow-up summary
Secondary data request
Task 1B: Current Cost of Service Analysis
A “Test Year” is a common term in rate studies that refers to an adjusted fiscal year budget that is used as a
basis for setting rates. The Test Year should be representative of typical conditions, with adjustments for
any unusual or one-time expenses. Any projected non-recurring expenses or revenues will be identified and
incorporated into the financial forecast. SAIC will work with the City to develop an accurate Test Year
revenue requirement reflecting the revenue required to meet all operating and maintenance (O&M) costs,
debt service (including coverage and reserve requirements), working capital requirements, and capital
expenditures.
The development of the solid waste revenue requirement is affected by both internal and external
influences. Two examples of internal influences include a policy to maintain a certain level of operating
A-3 ■ SAIC Energy, Environment & Infrastructure, LLC
66
Exhibit A | Scope of Services and Schedule
A-4 ■ SAIC Energy, Environment & Infrastructure, LLC
reserve funds or a policy to provide service to other City departments without charge. An example of an
external influence is the existence of mandatory bond covenants, such as debt service coverage
requirements or restricted reserve requirements. We will examine the City’s financial policies and goals to
meet these internal influences and review existing bond covenants and agreements to ascertain the City’s
external influences. From this examination and review, parameters will be established within which the
revenue requirement will be determined.
The goal of this task will be to document the current full cost of the City’s various solid waste services and
to allocate these costs to the appropriate cost centers. Further, within each cost center, this task allows for
an evaluation of the appropriateness of the current rate structure.
As part of this task, SAIC will:
Review current and historical financial data collected as part of Task 1A
Summarize and analyze the current solid waste fees
Develop a revenue requirement for the “Test Year,” which will include, but is not limited to, the
following types of costs:
Operational and maintenance
General fund and administrative overhead
Capital costs
Current and anticipated long-term liabilities and debt obligations
Work with the City to define cost centers: Cost centers will be based on the primary services provided
by the Solid Waste Division. A preliminary listing of cost centers would include but not be limited to
Administration, Residential Refuse, Residential Recycling, Commercial Dumpster, Commercial Roll-off
Cost centers might also include service to certain customer classes (e.g., those located away
from other City customers). However, in order for SAIC to include these additional cost
centers, the City will need to have an understanding of the amount of personnel and equipment
used to provide service to these customers.
Work with the City to identify the components and measurements that will be built into the cost
allocation model
Develop an infrastructure and vehicle replacement analysis to account for growth and replacement
Assist the City in developing or modifying a cost allocation strategy that captures capital, debt,
operations, and maintenance costs, as well as indirect costs (administration and overhead) for each of
the targeted services
Allocate cost centers to customer classes1
1 Customer classes will include residential and commercial customers and may include other customer groups, city
departments, etc. as determined during the course of the study.
67
Exhibit A | Scope of Services and Schedule
Determine billing units
Calculate the cost of service
For equipment and personnel that serve more than one function, we will assist City staff in the
development of an appropriate strategy to allocate those costs among the programs being evaluated. It will
be imperative to work closely with financial and operational personnel during the cost allocation process to
ensure that all direct and indirect costs are apportioned in an appropriate and meaningful way among the
programs being evaluated. A brief written summary of our approach and observations about cost allocation
will be included in the draft report.
Task 1B Deliverables
A Test Year revenue requirement
Calculation of the Test Year cost of service
Conference call with City staff to discuss results of Task 1B
Task 1C: Forecasted Cost of Service Analysis
In addition to calculating the current cost of service for the Test Year, SAIC will project the future cost of
service for a five-year time frame and will allocate these costs to the appropriate cost centers. SAIC will
work in conjunction with the City to develop an accurate five-year revenue requirement and billing unit
forecast. In order to develop the five-year revenue requirement for the City, SAIC will examine historical
budgets and audited financials and, utilizing input from City staff, will develop a forecast that incorporates
“known and measurable” changes for the forecasted period. This would include changes due to any current
or anticipated statutory regulations.
SAIC will analyze the assumptions used in projecting the revenue requirement and billing units, including
but not limited to growth rate, inflation rates, increase in contractual obligations, and capital improvement
plans.
Task 1C Deliverables
A “base case” five-year revenue requirement forecast
The calculation of the cost of service in each year
Meeting with City staff to discuss results of Task 1C
Task 1D: Determine Current Revenue and Rate Design
This task will include two primary objectives: (1) to determine current revenue generation from solid waste
utility operations; and (2) to update the fee structure, if necessary, so that it will be sufficient to recover the
cost of service in an equitable manner.
A-5 ■ SAIC Energy, Environment & Infrastructure, LLC
68
Exhibit A | Scope of Services and Schedule
Determine Current Revenue Generation
SAIC will evaluate how much revenue is currently generated by the current fee structure. We will assess the
overall revenue requirement compared to revenue generated under the current fee structure and rates. We
will complete this analysis based on a review of revenue received by the City for the various services
provided. We will independently estimate how much revenue should be generated by the current billing
units and current rates. This analysis will provide the City with an understanding of how current rates are
either over- or under-recovering compared to the cost of service for each customer class.
Rate Design
Successful rate design requires a significant amount of judgment and skill to balance the cost of service
results with the rate design objectives. SAIC will address the formulation of a rate design plan with a clear
and distinct understanding of the City’s overall goals and objectives. The City’s goals and objectives should
serve as the foundation for the development of rate options as rate design enables the City to meet its
service pricing objectives. Pricing objectives could include, but would not be limited to:
Cost of service recovery
Revenue stability
Cost containment
Adequate solid waste enterprise funding
Align with market rates
Economic development
SAIC bases its rate design recommendations on the following principles:
Meeting Revenue Requirements in a Stable and Predictable Manner – Regardless of the outcome of the
rate design process, rates must produce sufficient revenues to meet both the short-term and long-term
financial needs and business objectives of the City.
Equity and Fairness – To the greatest extent possible, rate design will be based on cost of service
principles and will not unduly subsidize certain customers or rate classes at the expense of others.
Behavior Modification – Simply put, rates send pricing signals to customers. These pricing signals
should promote efficient use of the City’s resources and increase customer understanding of the cost
associated with the various products and services provided by the City. For example, we will collaborate
with City staff to evaluate pricing options concerning variable rates for residential cart customers (i.e.,
rate distribution for 35, 65, or 95 gallon cart customers).
Simple and Understandable – From a public relations perspective, simple and easy to understand rate
structures are a benefit in that the City will be able to clearly communicate the relationship between the
cost of service and customer use.
A-6 ■ SAIC Energy, Environment & Infrastructure, LLC
69
Exhibit A | Scope of Services and Schedule
Further, SAIC is knowledgeable with regard to statutory regulations affecting cost of service and rate
development and will design rates accordingly. We will work with City staff to evaluate the City’s current
fees and discuss the merits of various alternative fee structures.
Task 1D Deliverables
An analysis of current revenue generation
A five-year forecast of recommended rates
Conference call to discuss findings with City staff
Task 1E: Report and Presentation
Draft Report
Upon completion of the analyses outlined above, SAIC will develop a draft report outlining preliminary
recommendations and conclusions. SAIC is committed to making sure the City thoroughly understands the
recommendations in the draft report. Our report will include the following:
An overview of the City’s solid waste utility
A methodology section, which defines the basic assumptions utilized in the analysis and describes the
rate design philosophy and methodology
Recommendations on rates as well as policy issues that arise, which will be determined throughout the
course of this analysis and discussed with City staff
SAIC will provide the findings to the City staff and allow these individuals sufficient time to have their
concerns and/or questions addressed. SAIC will have a conference call with City staff to discuss the report.
SAIC would request that written comments be provided as one submittal from City staff to ensure
consensus regarding staff comments.
Final Report
Upon receipt of City staff recommendations and comments, SAIC will make appropriate changes and
provide the City with a final report. We will issue the final report within three weeks of receiving
comments from the City.
Develop PowerPoint
Our Project Manager will coordinate with City staff to develop PowerPoint slides that are consistent with
the Executive Management and City Council’s expectations for these types of presentations. Our budget
assumes that SAIC will develop the PowerPoint, but does not include any meetings with the City. Phase 3
discusses the additional cost of in-person meetings or presentations.
Phase 1E Deliverables
One electronic version of the draft report
A-7 ■ SAIC Energy, Environment & Infrastructure, LLC
70
Exhibit A | Scope of Services and Schedule
One conference call to discuss the draft report
Six printed and one electronic version of the final report
PowerPoint presentation summarizing objectives, methodology, findings and recommendations
Phase 2: Collection Operations Review
During the collection operations review, SAIC will conduct a “high-level” review the residential refuse,
residential recycling, commercial dumpster and commercial roll-off operations. This “high-level” review
includes limited field observations, a review of City-provided data and subsequent analysis of the data. Due
to the limited nature of the field observation, SAIC will not collect extensive data in the field and instead
the analysis will rely on data available from the City. The objective of this Phase will be to provide the City
with key findings and recommendations of the existing collection operation.
Task 2A: Project Initiation and Management
SAIC will rely on the same Project Task Force as identified in Task 1A of Phase 1.
Request for Information
Approximately five working days following receipt of the Notice to Proceed for Phase 2, SAIC will provide
the City with a preliminary data request that encompasses data needs for completing this Scope of Services.
The data request will itemize information needed for understanding operating characteristics and cost
drivers of the entire solid waste system. SAIC will rely on information gathered in Phase 1, but will require
additional information such as:
Vehicle and equipment maintenance practices
Current routes and routing methodology
Approximate allocation of work day for each collection type (e.g., breaks, travel times to landfill, travel
times to/from yard, on-route collection time, etc.)
Time spent and resources utilized delivering and picking up containers from new customers or former
customers
Historical operating and productivity data for the collection operations
Review Existing Information
After initiating the project and receiving all of the requested data, we will conduct a initial review of the data
to gain a better understanding of the existing system. This will enable us to develop a list of questions for
the kick-off meeting and field observations.
Kick-off Meeting
SAIC will conduct an on-site kick-off meeting with all relevant City staff stakeholders. The meeting will be
designed to accomplish several objectives, including:
A-8 ■ SAIC Energy, Environment & Infrastructure, LLC
71
Exhibit A | Scope of Services and Schedule
Indentify key operational issues
Develop a further understanding of the key operational issues for the Study
Review request for information and clarify any data, if needed
Interview key operations staff (after conclusion of the group meeting)
We expect the kick-off meeting to last approximately two to four hours. SAIC will provide copies of the
agenda and any handouts. The City will be responsible for identifying and reserving an appropriate meeting
location. At the conclusion of the kick-off meeting, SAIC will prepare a summary of the key issues
discussed. The kick-off meeting with occur on the same trip as the field observations that will be
conducted during Task 2B.
Task 2B: Field Observations and Analysis
For this task, SAIC will conduct limited field observations and analyze the information collected, including
data collected during Phase 1, to evaluate the overall operational efficiency of the City’s four primary
collection operations.
Field Observations
Field observations allow us to obtain a true feel for the challenges faced, productivity levels achieved,
successes, and areas needing improvement. As part of this task, SAIC will perform field observations of the
various collection operations. Our project budget includes two person-days of field observations occurring
during the same trip as the kick-off meeting. We will spend this time observing key collection operations.
Conducting this limited review of the collection operation will provide SAIC a better sense of the
operational challenges faced by the City and will enable us to focus on the key issues during the review of
the data.
Operational Evaluation
Using the data collected from the field observations and the data requests, SAIC will examine the City’s
collection system to provide the City an overview assessment of its collection program. Aspects of each of
the four primary collection programs to be reviewed will be limited to the following:
Collection efficiency (e.g. number of houses collected per route)
On-route collection practices
Non-collection time (travel, down time, breaks, etc.)
Staffing, including use of overtime and temporary personnel
Configuration of equipment and containers
Vehicle maintenance
Key policies and procedures
Utilization of operational reports (daily driver logs, etc.)
A-9 ■ SAIC Energy, Environment & Infrastructure, LLC
72
Exhibit A | Scope of Services and Schedule
Recycling-Specific Issues
In additional to evaluating the issues list above, SAIC will also examine the following issues related to the
City’s curbside recycling program:
Subscription rate
Participation rate
Set-out rate
Recycling quantities
Task 2C: Routing Evaluation
For each collection operation, SAIC will include an overall routing evaluation. The routing analysis will
include an evaluation of the routing process and an evaluation of the City’s current routes. SAIC will rely
on GIS information provided by the City for this analysis. SAIC’s analysis will include the following
aspects of the current routes:
Days of service
Number of homes/businesses per route
Collection areas serviced each day
Route start/finish times
Once SAIC evaluates the current routes, we will develop key findings regarding the effectiveness of the
current routes and provide recommendations for any potential changes. Recommendations may include
identifying the need to develop new route areas using GIS data or purchasing a routing software product.
Task 2D: Business Strategy
For each collection operation, SAIC will provide the City with a concise assessment of how competitive the
operation is relative to other efficient public and private sector operations. To the extent that there is a
need for operational improvements, SAIC will provide the City with summarized key findings and
recommendations. The business strategy will summarize how the City should grow each of the collection
operations in the future. For example, SAIC may provide recommendations regarding how the City could
develop a marketing and education plan increase customers’ awareness of City services. The end of this
phase includes a conference call that includes discussion of the business strategy options.
Task 2E: Report and Presentation
Draft Report
Upon completion of the analyses outlined above, SAIC will develop a draft report provides an overview
with key findings and recommendations for each of the collection operations (e.g. residential refuse,
residential recycling and commercial). SAIC will have a conference call with City staff to discuss the report,
A-10 ■ SAIC Energy, Environment & Infrastructure, LLC
73
Exhibit A | Scope of Services and Schedule
including the business strategies. SAIC would request that written comments be provided as one submittal
from City staff to ensure consensus regarding staff comments.
Final Report
Upon receipt of City staff recommendations and comments, SAIC will make appropriate changes and
provide the City with a final report. We will issue the final report within three weeks of receiving
comments from the City.
Develop PowerPoint
Our Project Manager will coordinate with City staff to develop PowerPoint slides that are consistent with
the Executive Management and City Council’s expectations for these types of presentations. Our budget
assumes that SAIC will develop the PowerPoint, but does not include any meetings with the City. Phase 3
discusses the additional cost of in-person meetings or presentation.
Phase 2 Deliverables
On-site kick-off meeting with agenda and handouts
Two person-days of field observations and interviews
One electronic copy of the draft report
Conference call to discuss key findings and business strategy
Six printed and one electronic version of the final report
PowerPoint presentation summarizing objectives, methodology, findings and recommendations
Phase 3: Optional In-Person Presentations
Both Phase 1 and Phase 2 include discussion of final phase deliverables via conference call. At the City’s
request, SAIC will conduct in-person meetings or presentations. The cost for an in-person meeting or
presentation in place of a conference call is $1,700. The cost for an in-person meeting in addition to the
conference calls included in the scope is $3,250. These costs accounts for labor and expenses for one
consultant.
Project Schedule
The following is a timeline for the completion of Phase 1 of the project. The project schedule is based on
submitting the Draft Report for the cost of service study within 120 days after receiving the Notice to
Proceed (NTP) from the City. The Final Report for the cost of service study will be submitted to the City
within three weeks of receiving comments from the City.
A-11 ■ SAIC Energy, Environment & Infrastructure, LLC
74
Exhibit A | Scope of Services and Schedule
Phase 1 Task Task Description Schedule
1A Project Initiation and Management Complete 20 days after NTP
1B Current Cost of Service Analysis Complete 60 days after NTP
1C Forecasted Cost of Service Analysis Complete 80 days after NTP
1D Determine Current Revenue and Rate Design Complete 100 days after NTP
1E Draft Report Complete 120 days after NTP
Project Budget
SAIC has developed a fee estimate for the services described in the Scope of Services. The fee estimate is
based on the following billing rates. To the extent that there is a need to provide additional services beyond
this scope of services, they will be provided on these billing rates. These hourly rates are in effect through
March 31, 2012.
Position Hourly Rate
Project Principal $215
Project Manager $175
Technical Advisor $250
Senior Engineer/Senior Consultant $170
Engineer/Consultant $115
Associate $85
Administrative $60
The fee schedule below follows the format of the Scope of Services. The fee estimate includes both labor
and expenses for the project for all three phases. SAIC understands that the City will only authorize Phase
1 initially. The fee is $39,800 for Phase 1 and $40,300 for Phase 2.
A-12 ■ SAIC Energy, Environment & Infrastructure, LLC
75
Exhibit A | Scope of Services and Schedule
A-13 ■ SAIC Energy, Environment & Infrastructure, LLC
Phase / Task Task Fee Estimate
Phase 1: Cost of Service and Rate Design Study
Task 1A: Project Initiation and Management
Establish a Project Task Force $0
Request for Information $700
Review Existing Information $2,000
Kick-off Conference Call $2,100
Additional Data Request $600
Task 1B: Current Cost of Service Analysis $13,500
Task 1C: Forecasted Cost of Service Analysis $5,300
Task 1D: Determine Current Revenue and Rate Design $7,500
Task 1E: Report and Presentation
Draft Report $4,000
Final Report $2,200
Develop PowerPoint $1,900
Phase 1 Total $39,800
Phase 2: Collection Operations Review
Task 2A: Project Initiation and Management
Request for Information $700
Review Existing Information $2,000
On-Site Kick-off Meeting $5,100
Task 2B: Field Observations and Analysis
Field Observations and Interviews $4,600
Residential Refuse Evaluation $3,000
Residential Recycling Evaluation $2,400
Commercial Front Load Evaluation $3,000
Commercial Roll-off Evaluation $2,400
Task 2C: Routing Evaluation $5,000
Task 2D: Business Strategy $4,000
Task 2E: Report and Presentation
Draft Report $4,000
Final Report $2,200
Develop PowerPoint $1,900
Phase 2 Total $40,300
Phase 3: Optional In-Person Meetings/Presentations
In Place of Conference Call $1,800
In Addition to Conference Call $3,200
76