HomeMy WebLinkAbout001255 Original Contract 'The City of Port Angeles
Record # 001255
AGREEMENT FOR PROFESSIONAL
SERVICES BETWEEN THE
CITY OF PORT
ANGELES AND
FCS GROUP,INC.
THIS AGREEMENTis made and entered into this I day of July, 2017,by and between THE
CITY OF PORT ANGELES, a non-charter code city and municipal corporation of the State of
Washington, (hereinafter called the "CITY") and FCS Group, Inc.,a Washington Corporation authorized
to do business in the state of Washington (hereinafter called the "CONSULTANT").
WHEREAS,the CITY requires a professional cost of service Study of its I it d u s t r i a I W ate r U i I ity;
and
WHEREAS,the CITY desires to engage the professional services and assistance of a qualified consulting
firm and
WHEREAS, the CONSULTANT represents that it is in full compliance with the statutes of the State of
Washington for professional registration and/or other applicable requirements, and
WHEREAS,the CONSULTANT represents that it has the background,experience,and ability to perform
the scope of work as detailed in Exhibit A 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 professional set-vices to be performed by the CONSULTANT are detailed in the attached Exhibit A.
In addition to the services expressly identified in Exhibit A, the CONSULTANT also shall perform all
services and provide all material necessary to accomplish the work.
The CITY may review the CONSULTANT'S work product, and if the work product, in the City's sole
deterrn i nation, 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 XII 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.
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11 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.
Flowever, any alteration 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, "I"he CONSULTANT'S representative shall be
subject to the approval of the CITY.
IV TIME OF PERFORMANCE
The CONSULTANT may begin work upon execution ofthis Agreement by both parties and the duration
of the Agreement shall extend until all tasks in Exhibit A have been satisfactorily completed; provided,
however. the CONSULTANT shall fulfill and perform all services identified in Exhibit A not later than
31 December 2017.
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,
X Payment for labor shall be on the basis of the CONSULTANT'S standard billing rates by the actual
hours worked..
B. The CONSULTANT shall submit invoices to the CITY. 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 CONST. LTANT 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 CONSULTANTwill be made after the completion of the
work and acceptance by the CITY.
F. Payment for "Extra Work" performed under Section X11 of this Agreernent shall be as agreed
to by the parties in writing.
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V1 MAXIMUM COMPENSATION
Unless otherwise agreed to in writing by both parties, the CONSULTANT'S total compensation and
reimbursement under this Agreement,including labor,expenses,direct non-salary reimbursable costs and
outside services, shall not exceed the maximum sum of$41,885.00. The budget for each task is as set
forth in the attached Exhibit A. Budgets for task(s) may be modified upon mutual agreement between
the two parties, but in any event, the total payment to CONSULTANT shall not exceed $41,885.00.
Nothing contained in this agreement shall be construed as (1) binding the City to expend in any one
calendar year any sum in excess of appropriations made by the City in its budget process for the purposes
of this agreement for that calendar year or (2) obligating the City to further expenditure of money in
excess of such appropriations.
VII INDEPENDENT CONTRACTOR STATUS
The relation created by this Agreement is that of owner-independent contractor. The CONSULTANT is
not an employee of the City and is not entitled to the benefits provided by the City to its employees. The
CONSULTANT, as an independent contractor, has the authority to control and direct the performance of
the services. The CONSULTANT shall assume full responsibility for payment of all Federal, State, and
local taxes or contributions imposed or required, including, but not limited to, unemployment insurance,
Social Security, and income tax.
Vill 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.
IX 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 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
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of all pet-sons 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.
X SUBCONTRACTS
A. The CONSULTANT shall not sublet or assign any of the work covered by this Agreement without
the prior written consent of the CITY.
B, In all solicitations, either by competitive bidding or negotiation, by the CONSULTANT for work
to be performed pursuant to a subcontract,, including procurement of materials and equipment, the
CONS U LTANT shall require each potential subconsultant or supplier to comply with
CONSULTANT'S obligations under this Agreement, including the nondiscrimination
requirements.
X1 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.
X11 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.
ni 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
CONSLU]"ANT'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 11 above, shall be delivered to and received by
the CITY prior to transmittal of final payment to the CONSULTANT.
XIV INDEMNIFICATION/HOLD HARMLESS
CONSULTANT shall defend, indemnify and hold the CITY, its officers, officials, employees and
volunteers harmless from any and all claims, injuries, damages, losses or Suits including
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attorney fees, arising out of or resulting from the negligent acts, errors or ornissions, of the
CONSULTANT in performance of this Agreement, except for injuries and damages caused by the sole
negligence of the CITY.
The CITY agrees to indemnify the CONS(J I..,TANT from any, claims, darnages, 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 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 darnage 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, the CITY, and the officers,
officials, employees, and volunteers of either, 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.
XV 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.
No Limitation. CONSULTANT'S maintenance of insurance as required by the agreement shall not be
construed to limit the liability of the CONSULTANT to the coverage provided by such insurance, or
otherwise limit the CITY'S recourse to any remedy available at law or in equity.
Failure on the part of the CONSULTANT to maintain the insurance as required shall Constitute a material
breach of contract, up which the City may, after giving five business days notice to the CONSULTANT
to correct the breach, immediately terminate the Agreement, or, at its discretion, procure or renew such
insurance and pay any and all prerniums in connection therewith, with any sum so expended to be repaid
to the City on demand, or at the sole discretion of the City, offset against funds due the CONSULTANT'
from the City.
A. Minimum Scope of Insurance
CONSULTANT shall obtain insurance of the types described below:
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I. Automobile Liability insurance covering all owned,non-owned,hired and leased vehicles. Coverage
shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing
equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability
coverage-, and,
2. Commercial General Liability insurance shall be written on ISO occurrence forrn CG 00 01 and shall
cover liability arising from premises, operations, independent contractors, and personal injury and
advertising injury. The City shall be named as an insured Linder the CONSULTANTS Commercial
General Liability insurance policy with respect to the work performed for the City; and,
3. Workers' Compensation coverage as required by the Industrial Insurances law's of the State of
Washington; and
4. Professional Liability insurance appropriate to the CONSULTANT'S profession.
B. Minimum Amounts of Insurance
CONSULTANT shall maintain the following insurance limits:
1. Automobile Liability insurance with a minimum combined single limit for bodily injury
and property damage of$1,000,000 per accident.
2. Commercial General Liability insurance shall be written with limits no less than
$1,000,000 each occurrence. $2,000,000 general aggregate.
3. Professional Liability insurance shall be written with limits no less than
$1,000,000 per claim and $1,000,000 policy aggregate limit.
C. Other Insurance Provisions
The insurance policies are to contain,or be endorsed to contain,the following provisions for Automobile
Liability, Professional Liability and Commercial General Liability insurance:
1. The CONSULTANT'S insurance coverage shall be primary insurance as respect the City.
Any insurance, self-insurance, or insurance pool coverage maintained by the City shall N.
excess of the CONSULTANT'S insurance and shall not contribute with it.
2. The CONSULTANT shall provide the City and any additional insureds with written notice
of any policy cancellation, within two business days of their receipt of such notice.
3. Any payment of deductible or self-insured retention shall be the sole
responsibility of the CONSULTANT.
4. 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.
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D. Acceptabillior of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:V1I.
E. Verification of Coverage
CONSULTANT shall furnish the City with original certificates and a copy of the amendatory
endorsements, including but not necessarily limited to the additional insured endorsement, evidencing
the insurance requirements of the CONSULTANT before commencement of the work.
XVI 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 Ciallarn
County,
XVII EXHIBITS AND SIGNATURES
This Agreement, including its exhibits, constitutes the entire Agreement, supersedes all prior written or
oral understandings, and may only be changed by a written amendment executed by both patties. The
following exhibits are hereby made a part of this Agreement:
Exhibit A - Scope of Work
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day, and year first
written above.
CITY OF PORT ANGELES APPROVED AS TO FORM:
DAN MCKEEN, CI'T'Y MANAGER WILLIAM E. BLOOR, ciLY ATTORNEY
FCS GROUP, INC. ATTEST:
GEL
ANGIE SANCHEZ VIRNOCHE, PRINCIPAL JENNIFER VENEKLASEN, CITY CLERK
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Industrial Water Utility Cost of Service Studies
E X111BIT A —SCOPE OF WORK
The fbilow,ing scope of' services has been agreed upon by the City or Port Angeles and FCS
GROUP for the Industrial Water Utility Service Studies.
0 1 Y (w P(,w i ANCATFS
INM. S I RM L WA I ER Uiii r�y
cost or SrAvlcp� S I d, In,
The following scope of services has been developed to address the request by the city of Port Angeles
(City) to complete a Cost of Service Study for the Industrial Water Utility,
Background
The City has for many years owned and operated a simple industrial water system that delivered
untreated water to three major customers—two fish-related facilities and a paper mill. With the
removal of the dams on the 1--'I"rha River, the amount of sedimentation in the river has increased
dramatically. As part of the dam removal project, the National Park Service (NPS,) eliminated the
original intake for the City system and created a new, more complex intake farther upstream, along
with fish screens, trash rigs, a Temporary Diversion Pumping Iacility (TDPF), and other facilities
that were intended to replace the functionality of the original industrial water system and remove
sediment. I lowever, the new facilities do not work as intended, and the result is industrial water that
is more costly and of much poorer quality.
The National Parks Service has requested that the City take ownership of those facilities related to
the Industrial Water system constructed as part of the Elwha Dam removal mitigation.
Overview of Study
The City has requested assistance from FCS GROUP to complete a Cost of Service Study (COSS)
that establishes an industry standard cost allocation methodology that can be used to determine the
cost of operating and maintaining the new industrial water system and developing charges for its
customers.
In simple terms, Cost of Service Study mainly addresses the question, "How much should the City
charge users of the industrial water system?"
Scope of services
As illustrated in the task plan, the contractor will follow a structured method to at-rive at conclusions,
which will enable the contractor to perform the work in an orderly, efficient and results-oriented
manner.
Task 11 Data Collection and Review
FCS GROUP will provide a data needs list encompassing system asset data, customer data,operating
& maintenance costs, service level agreements,and planning information. The data will be reviewed,
analyzed and validated for inclusion in the study process. The data review will allow the prqject team
to understand the history of the facilities, assets that were constructed, agreements in place,
actions/decisions that resulted in the request for the City to take over tile facilities and the past
operating philosophy and financial situation of the system.
I
Industrial Water Utility Cost of Service Studies
Task 2 1 Project Initiation Meeting
FCS GROUP will schedule a project kickoff meeting with the City prQject team, The meeting will
identify study objectives, discuss expectations and deliverables and confirm prqject schedule.
Task 31 Cost of Service Study (COSS)
The CUSS will contain the three key analytical components of-
]) Revenue Requirement Analysis — this analysis determines the costs (operating,
maintenance, capital, depreciation, and fiscal policy attainment) associated with operating and
maintaining the industrial water facilities over a multi-year period.
2) Cost of Service Analysis - this analysis establishes a defensible basis for assigning "cost
shares" and establishing "equity" or the cost to serve each customer using cost causation principles.
3) Rate Design Analysis — this analysis identifies how the required level of revenue is
generated and collected from the various rate components(e.g. fixed and variable),
The objective of the CUSS is to establish the foundational methodology that will be used to evaluate
industrial water rates now and easily facilitate updates in the future.
Revenue Requirement
The revenue requirement establishes the annual system costs over a multi-year period that meets the
projected total financial needs of the utility. Annual cash flow needs will be analyzed by identifying
expenses incurred to operate and manage the system including:
• Cost increases resulting from staffing changes, enhanced programs or initiatives and
operational changes,
• Existing contract cost arrangements.
• Capital project needs identified in capital planning documents and/or from work products
provided by CH2M
• New and/or existing debt repayment obligations.
• Fiscal policy achievement related to operating and capital reserve targets, depreciation
funding, and other financial metrics identified by the City.
Projected revenue will consider existing revenue Sources and the sensitivities of changing customer
use/demands and seasonality of use.
Up to three revenue requirement alternatives have been identified by the project team for
development and analysis.
• Alternative 1: Baseline — costs prior to dam removal
• Alternative 2: Transfer— costs after system transfer assuming business as usual operations as
is, meaning any recommended repairs or changes to the facilities are not made prior to
transfer;
• Alternative 3: Transfer Mo�dified — costs after system transfer and facilities and/or operations
have been modified
Cost ref'Service
The cost of service analysis establishes a defensible basis for assigning "cost shares" and
establishing "equity" for system customers. This is accomplished with the development of a series
of allocations, based on customer data and engineering/ planning criteria to assign utility cost
2
Industrial Water Utility Cost of Service Studies
recovery to Customers in proportion to their actual demands and tailored to the City's industrial
water system.
`tjstolner 1)e, ignalion,a
The cost of service analysis will identify the customers that will be reviewed in the cost of service
analysis, It is our understanding that the industrial water system currently serves three Customers I)
Nippon Paper Industries,2) Lower F`Iwha Klallam Tribe Fish I latchery and 3)The State Department
offish and Wildlife rearing channel. Another customer group identified for evaluation in the cost
of service study is municipal. The industrial water system is used as a back-tip municipal water
supply for the City's municipal water treatment plant and as such Would have a cost associated with
the benefit derived. It is possible that the fish hatcheries could be combined into one class. More
information will be gathered during the study to determine the final customer designations for
analysis.
1ssign Plefill in Service to 1`141,lclional Cot Poo[�
The assets of the industrial water system will be compiled and reviewed. Asset information ideally
Will include original cost, useful life and date asset was placed in service. This information will
serve to determine the total system value and a method for calculating depreciation expense. The
assets will be evaluated to identify the percentage allocation associated with providing service to
each of the customer served by the system. Included in the cost allocation is the percent allocation
to the Municipal group for the backup system. The cost of service will be developed for each of the
three revenue requirement alternatives developed as costs allocation will likely shift depending on
the facilities in use under each alternative.
Develol)Allocation Factors
Allocation factors will be developed to equitably allocate system costs to Customers, The allocation
factors will be the basis for assigning cost recovery to customers in proportion to their actual
demands on the system. We will use customer specific information to develop allocation factors
associated with total use, average demand, peak demand, customer and system source capacity.
Distribute Costs to Customers
Costs will be distributed to customers by analyzing the budget line items and determining the most
equitable allocation factor to allocate costs. The costs will be assigned to fixed and variable
categories that Will ultimately inform the rate design process to align with the fixed and variable
costs of the system.
Rate Design
Rate design determines how the target level of revenue will be generated from each customer, Rate
design considers both the level (amount of revenue that must be generated) and structure (how the
revenue will be collected or bill assessed), Each rate design alternative is developed to generate
sufficient revenue to meet the revenue requirement of the system. Rate design structures will be
developed for each of the three industrial water COSS alternatives,
The rate structures developed may include a fixed and variable structure to align with the fixed and
variable costs of the systern. The amount to collect from each component will be discussed with the
City and consider how costs are incurred along with promoting revenue stability for the system. Up
to three (3) rate design structure alternatives will he developed for consideration.
Task 4 J Project Team Review Meetings
Project team review meetings are critical to the success of the project to make certain that the study
develops work products collaboratively, reflect the industry expertise of the project team and the
specific needs and goals of the City, Up to four(4)project review meetings are included in the scope
of services. The content of the meetings and attendees will be identified during scheduling of
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Industrial Water Utility Cost of Service Studies
meetings.
Task 5 � Documentation
A technical mernorandurn will be developed for the COSS. The memorandum will dOCUrrient the
methodology used, key assumptions, results and recommendations. '['he technical memorandum will
be provided in electronic form and include supporting technical exhibits. One(1) electronic copy of
the COSS modeling tool will also be provided.
Budget
The total proposed level of effort to complete the COSS is summarized below, Our normal billing
practice is to bill based oil time and materials,actually expended,not to exceed the total budget. Each
task identifies the billable hourly rate and expected number of hours required of each consultant in
order to accomplish the proposed scope of work. Due to the nature of the project, senior level effort
has been proposed for the majority of this project,
Sanchez Cebmn ison Admin Total Budget
*00 Uft*
10A I DW461110*04 4,44 4010W, 2 % $3�230,,'
T"k 2 Roj"t t*"#A# 1 4 4 $11.0)
TAsk3 C*st*fSwk*ftWyJ4A4vaa#vW
Revenue Requkement 52 52 $13,260
Cost of SOMM 26 4 9 39 $9,290
Rate Design 20 20 $5,100
$Vbt0tWA;"1o6f sorofolswdy 90" 4 a 110 $27,650
Task 4 ftlea Tosat Wow 400ags 4 12 12 43�06D
Task$Ovaomenbilon a 32, $6,80D
Labor ToW $38,250 $1,020 $1,640 $850 $41,,760
i $125
Budget Estimate $41,885
The budget includes time related to the technical development of analyses identified. Any additional
support, required for assistance with litigation or expert testimony is beyond the scope of services
included herein and will be billed on time and materials.
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