HomeMy WebLinkAbout5.583 Original Contract 5.5g3
AGREEMENT FOR PROFESSIONAL SERVICES 1 /%9
BETWEEN THE
THE CITY OF PORT ANGELES
AND
KLEINSCHMIDT ASSOCIATES
THIS AGREEMENT is made and entered into this Z.9 day of A 2001, by
and between the CITY OF PORT ANGELES, a non charter code ci f the State of Washington,
(hereinafter called the "CITY and KLEINSCHMIDT ASSOCIATES, a Maine Corporation (hereinafter
called the "CONSULTANT
WHEREAS, the CITY desires to determine the value of the Morse Creek Hydroelectric Facility, and
WHEREAS, the CITY desires to engage the professional services and assistance of a qualified consulting
firm to perform the scope of work as detailed in Exhibit A, and
WHEREAS, the CONSULTANT represents that it has the background, experience, and ability to perform
the required work in accordance with the standards of the profession, and
WHEREAS, the CONSULTANT represents that it will provide qualified personnel and appropriate facilities
necessary to accomplish the work;
NOW, THEREFORE, in consideration of the above representations and the terms, conditions, covenants
and agreements set forth below, the parties hereto agree as follows:
I SCOPE OF WORK
The scope of professional services to be performed and the results to be achieved by the CONSULTANT
shall be as detailed in the attached Exhibit A and shall include all services and material necessary to
accomplish the work.
The CITY may review the CONSULTANT'S work product, and if it is not satisfactory, the CONSULTANT
shall make such changes as may be required by the CITY. Such changes shall not constitute "Extra
Work" as related in Section XI of this Agreement.
The CONSULTANT agrees that all services performed under this Agreement shall be in accordance with
the standards of the profession and in compliance with applicable federal, state and local laws.
The Scope of Work may be amended upon written approval of both parties.
II OWNERSHIP OF DOCUMENTS
Upon completion of the work, all documents, exhibits, photographic negatives, or other presentations of
the work shall become the property of the CITY for use without restriction and without representation as to
suitability for reuse by any other party unless specifically verified or adapted by the CONSULTANT
However, any alteration or reuse of the documents, by the City or by others acting through or on behalf of
the City, will be at the City's sole risk.
III DESIGNATION OF REPRESENTATIVES
Each party shall designate its representatives in writing. The CONSULTANT'S representative shall be
subject to the approval of the CITY.
IV TIME OF PERFORMANCE
The CONSULTANT may begin work upon execution of this Agreement by both parties. The work shall be
completed in accordance with the schedule set forth in the attached Exhibit A.
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V PAYMENT
The CITY shall pay the CONSULTANT as set forth in this section of the Agreement. Such payment shall
be full compensation for work performed, services rendered, and all labor, materials, supplies, equipment
and incidentals necessary to complete the work.
A. Payment shall be on the basis of the CONSULTANT'S cost for actual labor, overhead and profit plus
CONSULTANT'S direct non -salary reimbursable costs as set forth in the attached Exhibit B.
1. Labor costs shall be based on the hourly rates shown in Exhibit B. Hourly rates shall be based
upon an individual's hourly wage, times the total number of hours worked.
2. The direct non -salary reimbursable costs are those directly incurred in fulfilling the terms of this
Agreement, including, but not limited to, travel, subsistence, telephone, CADD computer,
reproduction and printing, supplies and fees of outside services and consultants.
B. The CONSULTANT shall submit invoices to the CITY no more frequently than on a monthly basis.
Invoices shall detail the work, hours, employee name, and hourly rate; shall itemize with receipts and
invoices the non -salary direct costs; shall indicate the specific task or activity in the Scope of Work to
which the costs are related; and shall indicate the cumulative total for each task.
C. The CITY shall review the invoices and make payment for the percentage of the project that has
been completed less the amounts previously paid.
D. The CONSULTANT invoices are due and payable within 30 days of receipt. In the event of a
disputed billing, only the disputed portion will be withheld from payment.
E. Final payment for the balance due to the CONSULTANT will be made upon the completion of the
work and acceptance by the CITY.
F. Payment for "Extra Work" performed under Section XI of this Agreement shall be as agreed to by the
parties in writing.
VI MAXIMUM COMPENSATION
Unless otherwise agreed to in writing by both parties, the CONSULTANT'S total compensation and
reimbursement under this Agreement, including labor, direct non -salary reimbursable costs and outside
services, shall not exceed the maximum sum of Ten Thousand One Hundred Seventy ($10,170.00)
Dollars.
VII EMPLOYMENT
Employees of the CONSULTANT, while engaged in the performance of any work or services under this
Agreement, shall be considered employees of the CONSULTANT only and not of the CITY, and claims
that may arise under the Workman's Compensation Act on behalf of said employees while so engaged,
and any and all claims made by a third party as a consequence of any negligent act or omission on the
part of the CONSULTANT'S employees while so engaged, on any of the work or services provided to be
rendered herein, shall be the sole obligation and responsibility of the CONSULTANT.
In performing this Agreement, the CONSULTANT shall not employ or contract with any CITY employee
without the City's written consent.
VIII NONDISCRIMINATION
The CONSULTANT shall conduct its business in a manner, which assures fair, equal and non-
discriminatory treatment of all persons, without respect to race, creed or national origin, or other legally
protected classification and, in particular:
A. The CONSULTANT shall maintain open hiring and employment practices and will welcome
applications for employment in all positions, from qualified individuals who are members of minorities
Kleinschmidt Contract Page 2 of 5
protected by federal equal opportunity /affirmative action requirements; and,
B. The CONSULTANT shall comply with all requirements of applicable federal, state or local laws or
regulations issued pursuant thereto, relating to the establishment of non discriminatory requirements
in hiring and employment practices and assuring the service of all persons without discrimination as
to any person's race, color, religion, sex, Vietnam era veteran status, disabled veteran condition,
physical or mental handicap, or national origin.
IX SUBCONTRACTS
A. The CONSULTANT shall not sublet or assign any of the work covered by this Agreement without the
written consent of the CITY.
B. The CONSULTANT will be using the firms submitted with its proposal as subcontractors.
Subcontractors other than those listed shall not be permitted without the written consent of the CITY.
C. In all solicitation either by competitive bidding or negotiation made by the CONSULTANT for work to
be performed pursuant to a subcontract, including procurement of materials and equipment, each
potential subconsultant or supplier shall be notified by the CONSULTANT of Consultant's obligations
under this Agreement, including the nondiscrimination requirements.
X CHANGES IN WORK
Other than changes directed by the CITY as set forth in Section I above, either party may request
changes in the scope of work. Such changes shall not become part of this Agreement unless and until
mutually agreed upon and incorporated herein by written amendments to this Agreement executed by
both parties.
XI EXTRA WORK
The CITY may desire to have the CONSULTANT perform work or render services in connection with this
project, in addition to the Scope of Work set forth in Exhibit A and minor revisions to satisfactorily
completed work. Such work shall be considered as "Extra Work" and shall be addressed in a written
supplement to this Agreement. The CITY shall not be responsible for paying for such extra work unless
and until the written supplement is executed by both parties.
XII TERMINATION OF AGREEMENT
A. The CITY may terminate this Agreement at any time upon not less than ten (10) days written notice
to the CONSULTANT Written notice will be by certified mail sent to the consultant's designated
representative at the address provided by the CONSULTANT.
B. In the event this Agreement is terminated prior to the completion of the work, a final payment shall be
made to the CONSULTANT, which, when added to any payments previously made, shall
compensate the CONSULTANT for the percentage of work completed.
C. In the event this Agreement is terminated prior to completion of the work, documents that are the
property of the CITY pursuant to Section II above, shall be delivered to and received by the CITY
prior to transmittal of final payment to the CONSULTANT.
XIII INDEMNIFICATION /HOLD HARMLESS
The CONSULTANT agrees to indemnify the CITY from any claims, damages, losses, and costs, including,
but not limited to, attorney's fees and litigation costs, arising out of claims by third parties for property
damage and bodily injury, including death, caused solely by the negligence or willful misconduct of the
CONSULTANT, CONSULTANT employees, affiliated corporations, officers, and subcontractors in
connection with the work performed under this Agreement.
The CITY agrees to indemnify the CONSULTANT from any claims, damages, losses, and costs, including,
but not limited b to, attorney's fees and litigation costs, arising out of claims by third parties for property KT ie n�imng C a s odilyacttury, including death, caused solely by the negligence or willful miscorng t g
CITY, CITY's employees, or agents in connection with the work performed under this Agreement.
If the negligence or willful misconduct of both CONSULTANT and CITY (or a person identified above for
whom each is liable) is a cause of such damage or injury, the loss, cost, or expense shall be shared
between the CONSULTANT and the CITY in proportion to their relative degrees of negligence or willful
misconduct and the right of indemnity shall apply for such proportion.
Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then,
in the event of liability for damages arising out of bodily injury to persons or damages to property caused
by or resulting from the concurrent negligence of the CONSULTANT and the CITY, its officers, officials,
employees, and volunteers, the CONSULTANT'S liability hereunder shall be only to the extent of the
CONSULTANT'S negligence. It is further specifically and expressly understood that the indemnification
provided herein constitutes the CONSULTANT'S waiver of immunity under Industrial Insurance, Title 51
RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the
parties. The provisions of this section shall survive the expiration or termination of this Agreement.
However, the CONSULTANT expressly reserves its rights as a third person set forth in RCW 51.24.035.
XIV INSURANCE
The CONSULTANT shall procure and maintain for the duration of the Agreement, insurance against
claims for injuries to persons or damage to property which may arise from or in connection with the
performance of the work hereunder by the CONSULTANT, its agents, representatives, employees or
subcontractors.
The CONSULTANT shall provide a Certificate of Insurance evidencing:
1. Automobile Liability insurance with limits no less than $1,000,000 combined single limit per accident for
bodily injury and property damage; and,
2. Commercial General Liability insurance written on an occurrence basis with limits no less than
$1,000,000 combined single limit per occurrence and $2,000,000 aggregate for personal injury, bodily
injury and property damage. Coverage shall include but not be limited to: blanket contractual;
products /completed operations; broad form property damage; explosion, collapse and underground (XCU)
if applicable; and employer's liability; and,
3. Professional Liability insurance with limits no less than $1,000,000 limit per occurrence.
Any payment of deductible or self insured retention shall be the sole responsibility of the CONSULTANT.
The CITY shall be named as an additional insured on the Commercial General Liability insurance policy,
as respects work performed by or on behalf of the Consultant and a copy of the endorsement naming
the CITY as additional insured shall be attached to the Certificate of Insurance. The CITY reserves
the right to review a certified copy of all required insurance policies in the CONSULTANT's office.
The CONSULTANT'S insurance shall contain a clause stating that coverage shall apply separately to
each insured against whom claim is made or suit is brought, except with respects to the limits of the
insurer's liability.
The CONSULTANT'S insurance shall be primary insurance as respects the CITY, and the CITY shall be
given thirty (30) days prior written notice of any cancellation, suspension or material change in coverage.
XV APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with the laws of the State of
Washington, and in the event of dispute the venue of any litigation brought hereunder shall be Clallam
County.
XVI EXHIBITS AND SIGNATURES
This Agreement, including its exhibits, constitutes the entire Agreement, supersedes all prior written Di or
�eins u
nd erst dinas nd may only be cha by a written amendment executed b y both p rt i '4 of
c c
s
following exhibits are hereby made a part of this Agreement:
Exhibit A Scope of Work
Exhibit B Method of Payment Hourly Rate Basis
In WITNESS THEREOF, the parties hereto have executed this Agreement as of the day and year first
written above.
CITY OF PORT ANGELES KLEINSCHMIDT ASSOCIATES
MICHAEL QUINN, CI MANAGER
r--�
Name:
Title: 0, ;1 ?.!4 ede4,4 I/' iiler -144/3
APPR ED AS TO FORM:
CRAIG KNU ON, CITY ATTORNEY
ATTEST:
,f :d11
BECKY UBTcA CI 4 CLERK
z.
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Kleinschmidt Contract Page 5 of 5
Exhibit A
July 17, 2001
Revised August 29, 2001
(to exclude reference to Exhibit C) 1
Mr. Glenn A. Cutler, P.E.
Public Works Utilities Director,
City of Port Angeles
321 East Fifth Street
P. O. Box 1150
Port Angeles, WA 98362 -0217
Proposal for Valuation of the Morse Creek Hydroelectric Project
Dear Mr. Cutler:
Pursuant to our recent discussion Kleinschmidt Associates Kleinschmidt) is pleased to
submit this proposal to assist you in developing an opinion of the value of the Morse Creek
Hydroelectric Project. Kleinschmidt has extensive experience over a wide range of activities
related to hydroelectric projects, including valuation of assets. In particular, the team for this
project would be comprised of Mr. Jeffery Twitchell of our Sacramento office, and Mr. Fred
Szufnarowski and Mr. Robert Smart of our Deep River, Connecticut office. Mr. Twitchell has
successfully developed hydro projects in Washington and is familiar with regional regulatory and
water issues, as well as some of the regional power sales options. Mr. Smart and Mr.
Szufnarowski are extensively involved in the purchase and sale of hydroelectric projects,
providing due diligence, financial analyses, and valuation services. Attached is a list of relevant
Kleinschmidt experience along with resumes of the team members (Attachment A).
UNDERSTANDING OF WORK
The City of Port Angeles (the City) is interested in selling its 560 kW Morse Creek
Hydroelectric Project. The City has asked Kleinschmidt for assistance in developing an opinion
of the probable value of the project. Kleinschmidt recommends that a discounted cash flow
analysis be used for this valuation. Potential buyers would use a similar analysis to develop their
offering price for the project. The discounted cash flow analysis will take into account the
condition of the facility, projected costs (both expense and capital), and projected
Mr. Glenn A. Cutler
July 17, 2001 2.
generation/revenues. Based on our experience, potential buyers will also quantify the costs and
future risks associated with the licensing status and regulatory compliance issues. Therefore, we
further recommend that a regulatory review be performed as part of the valuation effort. Our
proposed work plan is outlined below.
SCOPE OF WORK
Regulatory Review
Kleinschmidt will evaluate the status of the FERC License, FERC's Orders and
Environmental Assessment relating to the City's surrender of the License, and the status of State
and Local Permits, including the local agency comments relating to surrendering of the FERC
License. We will also identify the risks for additional conditions being imposed on the project
and for license re- openers. Kleinschmidt will also render an opinion on the potential for future
regulatory issues that may affect costs and generation.
Generation and Revenues
The FERC files would be researched to understand project details and operating
restrictions. The possibility of any physical or operational changes to the plant that might effect
generation would be considered. Kleinschmidt will review all available stream flow and historic
project operational records related to the existing pipeline diversion and powerhouse system(s).
Using this information, an estimate of potential and realistic annual generation would be
developed and compared to historic generation.
The value of this expected generation would be estimated using all readily available
information, such as records of Bonneville Power Administration's past and future pricing. The
possibility of selling the energy to a nearby Public Utility District will also be evaluated.
Costs
Opinions of capital and operating costs will be developed based on a recommended site
inspection, review of the City's records, and Kleinschmidt's experience with similar projects.
The optional site inspection, which would include a preliminary condition assessment of the
project facilities, is considered an important step toward understanding future operating costs.
Mr. Smart expects to be in the Seattle area the last two weeks of July, and Mr. Twitchell expects
to be in the Seattle area on the first two days of August. Either is available for a reduced rate to
make a full -day or partial -day trip with one of your staff to the site. The possible interest by the
City of Port Angeles in retaining the capacity to supply water to the City in case of a water
supply emergency will be explored with you, and factored into the analysis.
Mr. Glenn A. Cutler
July 17, 2001 3.
Financial Analysis
A financial model will be developed based on the above information to perform a twenty
year discounted cash flow analysis. The model will also take into account the capital structure,
lenders' criteria, and taxes (local, state, and federal). Once the model is constructed, sensitivity
analyses will be performed to estimate the impacts of interest rates, forward pricing, and other
key parameters on the purchase price.
Report
The findings of our analysis would be summarized in a letter report to the City. A draft
report would be submitted to the City within a few weeks of your notice to proceed. Within two
weeks of receipt of your comments on the draft Kleinschmidt would submit the final report.
STUDY COSTS, PROPOSED TERMS, AND SCHEDULE
Based on the scope of hydroelectric engineering services described above, we have
itemized the components of the proposed work and associated expenses, including 1) review the
FERC Records and associated correspondence; 2) review of the City's operational and electrical
demand records; 3) review of the site; 4) development of operational cost forecasts; 5) a financial
analysis of potential cash flows that may be derived from the project; 6) and preparation of a
report on our findings. Kleinschmidt would be willing to exclude portions of our proposed scope
in the event the City would like us to focus on limited portions of the hydroelectric evaluation.
For example, if the City does not require assistance in analyzing its current electrical demands or
the wholesale and retail energy prices that can be secured for future years, those portions could
be eliminated from our scope. Our estimated costs and approximate dates of completion for the
above work are outlined in the following table:
Tasks Costs, Weeks after
Incl. Exp. Notice to
Proceed
1 Review FERC License and Project Records $3,030 2
2 Develop Energy Production Estimates $1,610 4
3 Conduct Site Visit $1,120 3
4 Perform Financial Analysis $2,650 5
5 Prepare Draft Report for City Review $1,320 6
6 Incorporate Client Comments and Issue Final Report $440 7
Grand Total $10,170
Mr. Glenn A. Cutler
July 17, 2001 4.
All of the engineering services performed by Kleinschmidt will be billed on a time -and-
materials basis in accordance with our Method of Payment Hourly Rate Basis (Attachment B).
Klcinschmidt proposes to undertake the above defined scope of work in accordance with our
Standard Terms and Conditions (Attachment C).
Sincerely,
KLEINSCHMIDT ASSOCIATES
I f
1 Twitchell, P.E.
Director of Western Operations
JET:dme
Attachments
A. Experience List and Resumes
B. Method of Payment (Hourly Rate Basis)
C. Kleinschmidt Associates Standard Terms Conditions
cc: R.N. Smart
J.A. Palmer
C.R. Fenwick
E.B. Giallombardo
JET /WCM /AngelesPropLetter0717 -1et1 doe
N
Exhibit B
2001 SCHEDULE OF RATES
The following is a tabulation of the range of standard hourly billing rates for each category
of employee at Kleinschmidt Associates:
CATEGORY BILLING RATE
Senior Consultant/Project Manager $90.00 $145.00
Senior Engineer /Senior Scientist /Senior $70.00 $110.00
Licensing Coordinator
Project Engineer/Project Scientist/Project $60.00 $90.00
Licensing Coordinator
Engineer /Scientist/Licensing Coordinator $50.00 $70.00
Staff Engineer /Staff Scientist /Staff Licensing $45.00 $60.00
Coordinator
Associate Engineer /Associate $25.00 $55.00
Scientist/Associate Licensing Coordinator
Designer/Drafter $30.00 $65.00
Administrative Support $30.00 $60.00
Clerical $25.00 $55.00
Effective through December 31, 2001
S \RATES- TERMS \2001\2001A- SCHEDULE OF RATES DOC