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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. Kleinschmidt Contract Page 1 of 5 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. N.\Agree_Contract \Small Contracts \Klee nsch midtCont.doc 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