CC 2019-01-22_08j Agreement for Water and Wastewater Rate Study
MEMORANDUM
TO: CITY COUNCIL
FROM: BILL ROBESON, DIRECTOR OF PUBLIC WORKS
NICOLE VALENTINE, INTERIM DIRECTOR OF ADMINISTRATIVE
SERVICES
SUBJECT: CONSIDERATION OF A CONSULTANT SERVICES AGREEMENT WITH
TUCKFIELD & ASSOCIATES TO PREPARE A WATER AND
WASTEWATER RATE STUDY UPDATE
DATE: JANUARY 22, 2019
SUMMARY OF ACTION:
Approval of an Agreement for preparation of a Water and Wastewater Rate Study Update.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The total cost proposal for the study is a cost not-to-exceed estimate of $36,298. It is
recommended that $30,000 be allocated from the Water Fund unallocated fund balance
and $6,300 from the Sewer Fund unallocated fund balance for the study. The impact to
personnel resources would involve staff time to meet with consultants, data collection and
report review.
RECOMMENDATION:
It is recommended the City Council: 1) approve a Consultant Service Agreement with
Tuckfield & Associates to prepare a water and wastewater rate study update; and 2)
appropriate $30,000 from the Water Fund and $6,300 from the Sewer Fund for the study.
BACKGROUND:
Studies of the City’s water and wastewater rates are completed approximately every five
(5) years. The purpose of a periodic rate study is to analyze the Water Fund and Sewer
Fund for adequacy of the revenue under the existing rates to meet current and future fund
obligations. In addition, the periodic rate study update is intended to develop reliable 5-
year financial plans for the Water Fund and Sewer Fund that includes adjustments to
revenue to meet anticipated changes in fund obligations. Finally, rate study updates help
create schedules of water and wastewater rates and charges that are fair and equitable,
that provide predictable sources of revenue developed in the financial plans, and that
meet Proposition 218 requirements for rates and charges.
In October 2017, Senate Bill 231 (SB 231) regarding stormwater fees was passed. SB
231 specified that the definition of “sewer” under Proposition 218 includes a stormwater
system. As such, stormwater fees may be included as part of the sewer fees collected
by a public agency. As part of this rate study, the consultant will be preparing a Proposed
Item 8.j. - Page 1
CITY COUNCIL
CONSIDERATION OF A CONSULTANT SERVICES AGREEMENT WITH TUCKFIELD &
ASSOCIATES TO PREPARE A WATER AND WASTEWATER RATE STUDY UPDATE
JANUARY 22, 2019
PAGE 2
Stormwater Rate component to help fund the requirements from the Central Coast
Regional Water Quality Control Board in meeting our National Pollution Discharge
Elimination System permit requirements. In addition, new filtration devices will be required
on several storm drain inlets in the coming years as part of the State Trash Amendment
Requirements. Currently, all stormwater operations, maintenance, and permit reporting is
funded through the General Fund. Through SB 231, the State of California now allows for
the stormwater collection system to become an Enterprise Fund.
On October 26, 2018, staff distributed a Request for Proposals (RFP) to qualified
consultants for the preparation of a Water and Wastewater Rate Study Update. The
update will include an analysis of data showing the number of customers, water volumes,
water revenues, sewer service charge revenues, future capital improvements and
operation and maintenance expenses for both the water and sewer systems.
By the November 29, 2018 deadline for the RFP, the City received five proposals from
qualified consultants to prepare the update.
ANALYSIS OF ISSUES:
The City last updated the water and wastewater rates in March 2014. The update
prepared a rate structure that will remain in effect through the end of fiscal year 2018/19.
In August 2016, the City mailed a Proposition 218 notice to the public to institute
temporary drought rates to stabilize the utility fund balances due to loss of revenue from
lower customer consumption. The drought rates expire in June 2019. It is necessary to
complete a new rate study to establish a five-year schedule of rates beyond 2019. An
RFP process was used to secure a consultant firm to assist the City with preparation of
the next five (5) year rate schedule. Proposals submitted by the five consultants were
evaluated on the following criteria:
Understanding of the work to be performed
Firm and staff experience with similar rate study projects
Ability to meet the City's schedule requirements
Responsiveness to the City's Request for Proposal
Cost
Staff has reviewed the proposals based on the criteria listed above and established a final
consultant ranking (Attachment 1). Tuckfield & Associates received the highest ranking
from the consultant evaluation team made up of the Public Works Director, Interim
Administrative Services Director, and the Utilities Manager and is considered the best
qualified to prepare the Water and Wastewater Rate Study Update. Tuckfield &
Associates did have the lowest cost proposal and was selected based on their strength
in financial modeling capabilities, presentation skills, and prior experience with similar rate
studies.
Item 8.j. - Page 2
CITY COUNCIL
CONSIDERATION OF A CONSULTANT SERVICES AGREEMENT WITH TUCKFIELD &
ASSOCIATES TO PREPARE A WATER AND WASTEWATER RATE STUDY UPDATE
JANUARY 22, 2019
PAGE 3
It is recommended the Council approve a Consultant Services Agreement with Tuckfield
& Associates to prepare the Water and Wastewater Rate Study Update.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve a Consultant Services Agreement with Tuckfield & Associates to prepare
the City's Water and Wastewater Rate Study Update;
2. Select another of the qualified consultants;
3. Direct staff to solicit additional proposals; or
4. Provide direction to staff.
ADVANTAGES:
Updating the rate structure provides an opportunity to develop fair and equitable water
and wastewater rates and fees that meet federal, state and local requirements, while
encouraging water conservation. The update will address operating and capital costs for
each utility, provide for rates that are fair and equitable, identify adequate reserves and
consider all costs to provide service.
Tuckfield & Associates has the necessary experience, staffing and presentation
capabilities to produce a high quality water and wastewater rate study.
DISADVANTAGES:
There are no disadvantages identified in this recommendation other than the cost.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachments:
1. Consultant Ranking
Item 8.j. - Page 3
Item 8.j. - Page 4
AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT, is made and effective as of January 22, 2019, between Tuckfield &
Associates ("Consultant"), and the CITY OF ARROYO GRANDE, a Municipal
Corporation ("City"). In consideration of the mutual covenants and conditions set forth
herein, the parties agree as follows:
1. TERM
This Agreement shall commence on January 23, 2019 and shall remain and
continue in effect until January 23, 2020, unless sooner terminated pursuant to the
provisions of this Agreement.
2. SERVICES
Consultant shall perform the tasks described and comply with all terms and
provisions set forth in Exhibit "A", attached hereto and incorporated herein by this
reference.
3. PERFORMANCE
Consultant shall at all times faithfully, competently and to the best of his/her ability,
experience and talent, perform all tasks described herein. Consultant shall employ, at a
minimum generally accepted standards and practices utilized by persons engaged in
providing similar services as are required of Consultant hereunder in meeting its
obligations under this Agreement.
4. AGREEMENT ADMINISTRATION
City's Director of Public Works, Bill Robeson shall represent City in all matters
pertaining to the administration of this Agreement. Clayton Tuckfield shall represent
Consultant in all matters pertaining to the administration of this Agreement.
5. PAYMENT
The City agrees to pay the Consultant in accordance with the payment rates and
terms set forth in Exhibit "B", attached hereto and incorporated herein by this reference.
6. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE
(a) The City may at any time, for any reason, with or without cause, suspend or
terminate this Agreement, or any portion hereof, by serving upon the Consultant at least
ten (10) days prior written notice. Upon receipt of said notice, the Consultant shall
immediately cease all work under this Agreement, unless the notice provides otherwise.
If the City suspends or terminates a portion of this Agreement such suspension or
termination shall not make void or invalidate the remainder of this Agreement.
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(b) In the event this Agreement is terminated pursuant to this Section, the City
shall pay to Consultant the actual value of the work performed up to the time of
termination, provided that the work performed is of value to the City. Upon termination of
the Agreement pursuant to this Section, the Consultant will submit an invoice to the City
pursuant to Section 5.
7. TERMINATION ON OCCURRENCE OF STATED EVENTS
This Agreement shall terminate automatically on the occurrence of any of the
following events:
(a) Bankruptcy or insolvency of any party;
(b) Sale of Consultant's business; or
(c) Assignment of this Agreement by Consultant without the consent of City .
(d) End of the Agreement term specified in Section 1.
8. DEFAULT OF CONSULTANT
(a) The Consultant's failure to comply with the provisions of this Agreement
shall constitute a default. In the event that Consultant is in default for cause under the
terms of this Agreement, City shall have no obligation or duty to continue compensating
Consultant for any work performed after the date of default and can terminate this
Agreement immediately by written notice to the Consultant. If such failure by the
Consultant to make progress in the performance of work hereunder arises out of causes
beyond the Consultant's control, and without fault or negligence of the Consultant, it shall
not be considered a default.
(b) If the City Manager or his/her delegate determines that the Consultant is in
default in the performance of any of the terms or conditions of this Agreement, he/she
shall cause to be served upon the Consultant a written notice of the default. The
Consultant shall have ten (10) days after service upon it of said notice in which to cure
the default by rendering a satisfactory performance. In the event that the Consultant fails
to cure its default within such period of time, the City shall have the right, notwithstanding
any other provision of this Agreement to terminate this Agreement without further notice
and without prejudice to any other remedy to which it may be entitled at law, in equity or
under this Agreement.
9. LAWS TO BE OBSERVED. Consultant shall:
(a) Procure all permits and licenses, pay all charges and fees, and give all
notices which may be necessary and incidental to the due and lawful prosecution of the
services to be performed by Consultant under this Agreement;
(b) Keep itself fully informed of all existing and proposed federal, state and local
laws, ordinances, regulations, orders, and decrees which may affect those engaged or
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employed under this Agreement, any materials used in Consultant's performance under
this Agreement, or the conduct of the services under this Agreement;
(c) At all times observe and comply with, and cause all of its employees to
observe and comply with all of said laws, ordinances, regulations, orders, and decrees
mentioned above;
(d) Immediately report to the City's Contract Manager in writing any
discrepancy or inconsistency it discovers in said laws, ordinances, regulations, orders,
and decrees mentioned above in relation to any plans, drawings, specifications, or
provisions of this Agreement.
(e) The City, and its officers, agents and employees, shall not be liable at law
or in equity occasioned by failure of the Consultant to comply with this Section.
10. OWNERSHIP OF DOCUMENTS
(a) Consultant shall maintain complete and accurate records with respect to sales,
costs, expenses, receipts, and other such information required by City that relate to the
performance of services under this Agreement. Consultant shall maintain adequate
records of services provided in sufficient detail to permit an evaluation of services . All
such records shall be maintained in accordance with generally accepted accounting
principles and shall be clearly identified and readily accessible. Consultant shall provide
free access to the representatives of City or its designees at reasonable times to such
books and records; shall give City the right to examine and audit said books and records;
shall permit City to make transcripts therefrom as necessary; and shall allow inspection
of all work, data, documents, proceedings, and activities related to this Agreement. Such
records, together with supporting documents, shall be maintained for a period of three (3)
years after receipt of final payment.
(b) Upon completion of, or in the event of termination or suspension of this
Agreement, all original documents, designs, drawings, maps, models, computer files,
surveys, notes, and other documents prepared in the course of providing the services to
be performed pursuant to this Agreement shall become the sole property of the City and
may be used, reused, or otherwise disposed of by the City without the permission of the
Consultant. With respect to computer files, Consultant shall make available to the City, at
the Consultant's office and upon reasonable written request by the City, the necessary
computer software and hardware for purposes of accessing, compiling, transferring, and
printing computer files.
11. INDEMNIFICATION
(a) Indemnification for Professional Liabilit y. When the law establishes a
professional standard of care for Consultant's Services, to the fullest extent permitted by
law, Consultant shall indemnify, protect, defend and hold harmless City and any and all
of its officials, employees and agents ("Indemnified Parties") from and against any and all
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losses, liabilities, damages, costs and expenses, including attorney's fees and costs to
the extent same are caused in whole or in part by any negligent or wrongful act, error or
omission of Consultant, its officers, agents, employees or subcontractors or any entity or
individual that Consultant shall bear the legal liability thereof) in the performance of
professional services under this agreement.
(b) Indemnification for Other Than Professional Liability. Other than in the
performance of professional services and to the full extent permitted by law, Consultant
shall indemnify, defend and hold harmless City, and any and all of its employees, officials
and agents from and against any liability (including liability for claims, suits, actions,
arbitration proceedings, administrative proceedings, regulatory proceedings, losses,
expenses or costs of any kind, whether actual, alleged or threatened, including attorneys
fees and costs, court costs, interest, defense costs, and expert witness fees), where the
same arise out of, are a consequence of, or are in any way attributable to, in whole or in
part, the performance of this Agreement by Consultant or by any individual or entity for
which Consultant is legally liable, including but not limited to officers, agents, employees
or subcontractors of Consultant.
(c) General Indemnification Provisions. Consultant agrees to obtain executed
indemnity agreements with provisions identical to those set forth here in this section from
each and every subcontractor or any other person or entity involved by, for, with or on
behalf of Consultant in the performance of this agreement. In the event Consultant fails
to obtain such indemnity obligations from others as required here, Consultant agrees to
be fully responsible according to the terms of this section. Failure of City to monitor
compliance with these requirements imposes no additional obligations on City and will in
no way act as a waiver of any rights hereunder. This obligation to indemnify and defend
City as set forth here is binding on the successors, assigns or heirs of Consultant and
shall survive the termination of this agreement or this section.
12. INSURANCE
Consultant shall maintain prior to the beginning of and for the duration of this
Agreement insurance coverage as specified in Exhibit "C" attached hereto and
incorporated herein as though set forth in full.
13. INDEPENDENT CONSULTANT
(a) Consultant is and shall at all times remain as to the City a wholly independent
Consultant. The personnel performing the services under this Agreement on behalf of
Consultant shall at all times be under Consultant's exclusive direction and control. Neither
City nor any of its officers, employees, or agents shall have control over the conduct of
Consultant or any of Consultant's officers, employees, or agents, except as set forth in
this Agreement. Consultant shall not at any time or in any manner represent that it or any
of its officers, employees, or agents are in any manner officers , employees, or agents of
the City. Consultant shall not incur or have the power to incur any debt, obligation, or
liability whatever against City, or bind City in any manner.
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(b) No employee benefits shall be available to Consultant in connection with
performance of this Agreement. Except for the fees paid to Consultant as provided in the
Agreement, City shall not pay salaries, wages, or other compensation to Consultant for
performing services hereunder for City. City shall not be liable for compensation or
indemnification to Consultant for injury or sickness arising out of performing services
hereunder.
14. UNDUEINFLUENCE
Consultant declares and warrants that no undue influence or pressure was or is
used against or in concert with any officer or employee of the City of Arroyo Grande in
connection with the award, terms or implementation of this Agreement, including any
method of coercion, confidential financial arrangement, or financial inducement. No officer
or employee of the City of Arroyo Grande will receive compensation, directly or indirectly,
from Consultant, or from any officer, employee or agent of Consultant, in connection with
the award of this Agreement or any work to be conducted as a result of this Agreement.
Violation of this Section shall be a material breach of this Agreement entitling the City to
any and all remedies at law or in equity.
15. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES
No member, officer, or employee of City, or their designees or agents, and no
public official who exercises authority over or responsibilities with respect to the project
during his/her tenure or for one year thereafter, shall have any interest, direct or indirect,
in any agreement or sub-agreement, or the proceeds thereof, for work to be performed in
connection with the project performed under this Agreement.
16. RELEASE OF INFORMATION/CONFLICTS OF INTEREST
(a) All information gained by Consultant in performance of this Agreement shall be
considered confidential and shall not be released by Consultant without City's prior written
authorization. Consultant, its officers, employees, agents, or subcontractors, shall not
without written authorization from the City Manager or unless requested by the City
Attorney, voluntarily provide declarations, letters of support, testimony at depositions,
response to interrogatories, or other information concerning the work performed under
this Agreement or relating to any project or property located within the City. Response to
a subpoena or court order shall not be considered "voluntary" provided Consultant gives
City notice of such court order or subpoena.
(b) Consultant shall promptly notify City should Consultant, its officers, employees,
agents, or subcontractors be served with any summons, complaint, subpoena, notice of
deposition, request for documents, interrogatories, request for admissions, or other
discovery request, court order, or subpoena from any person or party regarding this
Agreement and the work performed thereunder or with respect to any project or property
located within the City. City retains the right, but has no obligation, to represent Consultant
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and/or be present at any deposition, hearing, or similar proceeding. Consultant agrees to
cooperate fully with City and to provide the opportunity to review any response to
discovery requests provided by Consultant. However, City's right to review any such
response does not imply or mean the right by City to control, direct, or rewrite said
response.
17. NOTICES
Any notice which either party may desire to give to the other party under this
Agreement must be in writing and may be given either by (i) personal service, (ii) delivery
by a reputable document delivery service, such as but not limited to, Federal Express,
which provides a receipt showing date and time of delivery, or (iii) mailing in the United
States Mail, certified mail, postage prepaid, return receipt requested, addressed to the
address of the party as set forth below or at any other address as that party may later
designate by notice:
To City:
To Consultant:
18. ASSIGNMENT
City of Arroyo Grande
Bill Robeson, Director of Public Works
300 E. Branch Street
Arroyo Grande, CA 93420
Tuckfield & Associates
Attn: Clayton Tuckfield
2549 Eastbluff Drive, Suite 450B
Newport Beach, CA 92660
The Consultant shall not assign the performance of this Agreement, nor any part
thereof, without the prior written consent of the City.
19. GOVERNING LAW
The City and Consultant understand and agree that the laws of the State of
California shall govern the rights, obligations, duties, and liabilities of the parties to this
Agreement and also govern the interpretation of this Agreement. Any litigation concerning
this Agreement shall take place in the superior or federal district court with jurisdiction
over the City of Arroyo Grande.
20. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties relating to
the obligations of the parties described in this Agreement. All prior or contemporaneous
agreements, understandings, representations, and statements, or written, are merged
into this Agreement and shall be of no further force or effect. Each party is entering into
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this Agreement based solely upon the representations set forth herein and upon each
party's own independent investigation of any and all facts such party deems material.
21. TIME
City and Consultant agree that time is of the essence in this Agreement.
22 . CONTENTS OF REQUEST FOR PROPOSAL AND PROPOSAL
Consultant is bound by the contents of the City's Request for Proposal, Exhibit "D",
attached hereto and incorporated herein by this reference, and the contents of the
proposal submitted by the Consultant, Exhibit "E", attached hereto and incorporated
herein by this reference. In the event of conflict, the requirements of City's Request for
Proposals and this Agreement shall take precedence over those contained in the
Consultant's proposals.
23 . CONSTRUCTION
The parties agree that each has had an opportunity to have their counsel review
this Agreement and that any rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not apply in the interrretation of this Agreement
or any amendments or exhibits thereto. The captions of the sections are for convenience
and reference only , and are not intended to be construed to define or limit the provisions
to which they relate.
24 . AMENDMENTS
Amendments to this Agreement shall be in writin g and shall be made only with the
mutual written consent of all of the parties to this Agreement.
25. AUTHORITY TO EXECUTE THIS AGREEMENT
The person or persons executing this Agreement on behalf of Consultant warrants
and represents that he/she has the authority to execute this Agreement on behalf of the
Consultant and has the authority to bind Consultant to the performance of its obligations
hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year first above written.
CITY OF ARROYO GRANDE
By:-----------
Caren Ray Russom, Mayor
Attest:
Kelly Wetmore, City Clerk
Approved As To Form:
Heather K. Whitham, City Attorney
CONSULTANT
By:------------
Its : ------------
(Title)
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EXHIBIT A
SCOPE OF WORK
Task 1 -Review Current Water and Wastewater Fees and Rates
The first step in determining the long-term revenue requirement of each utility is to identify
all capital improvements including annual replacements, additions and improvements and
extensions to the system:
1.1 Review master planning reports and other available information regarding
needed replacements, improvements, and expansions of the water and
wastewater systems.
1.2 Maintain the reserve Water fund balance estimated at 90 days of operating
and maintenance expenses plus a capital project allocation of $500,000 on
an annual basis and one year of debt service.
1.3 Maintain the reserve Sewer fund balance estimated at 90 days of operating
and maintenance expenses plus a capital project allocation of $500,000 on
an annual basis and one year of debt service.
Task 2 -Revenue Requirement Projections
The objective of this task is to project revenue needs for the five-year study period for each
utility. Revenues will be projected based upon existing rates and fee schedules . Each
utility's ability to meet projected revenue requirements will be analyzed. The level of
revenue adjustments and additional financing requirements will be shown. The following
subtasks will be completed:
2.1 Estimate revenues under current rate and fee levels based upon the
projected number of customers and service requirements. Historical growth
trends, quantity of service provided, and patterns in customer service
characteristics should be considered.
2.2 Review and project revenue from miscellaneous sources such as interest
earnings, miscellaneous service fees, or other sources.
2.3 Develop annual revenue requirements of the water and wastewater utilities
recognizing historical data, current year's budgets, and anticipated future
system service requirements and operational changes. Revenue
requirements to be based on projected inflation and to include at least the
following items:
► Operation and maintenance expenses.
► Major capital expenditures.
► Effects on revenue projections from water conservation program impacts.
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► Debt service on existing and any proposed new financing methods
including appropriate reserves.
► Other cash obligations.
2.4 Develop future cash flow analyses for a five-year study period for each utility,
showing application of revenue under existing rate levels to meet the annual
revenue requirements, as determined under Task 1.2 and Tasks 2.1 through
2.3 above. Cash flows to be developed to maintain reserve fund balances
and to meet debt service coverage requirements for each utility. Determine
and present proposed water and sewer rates for a five-year period.
2.5 Prepare a survey of water and sewer rates charged by other public agencies
in San Luis Obispo County for the purposes of cost comparison.
2.6 Present water and sewer rate recommendations.
2 .7 Consultant shall provide recommended strategies to minimize the
potential impact of conservation on revenue.
Cost of Service and Rate Design
For each utility, the projected revenue requirements (costs of service) for a representative
test year within the study period should be allocated to customer classifications. Distribution
of costs will reflect cost-causative concepts in accordance with generally accepted utility
practices.
Task 3 -Allocation of Costs
3.1 Allocate the costs of service to the various costs of service components which
constitute a functional classification of the different types of service the City
provides. For water, functional cost components will include base or volume
related costs, extra capacity costs, fire protection costs, and customer costs.
For wastewater, cost components include volume and customer costs.
3.2 Distribute the costs by functional components to the various customer
classifications on the basis of the relative responsibility of each customer
classification for the service provided, as determined from the customer
classification units of service and the application of unit costs of service to the
respective units.
3.3 Compare revenue under existing rates by each customer class with the
allocated cost of service. Determine the adequacy of present revenue levels
for each class to meet cost of service and determine the indicated adjustment
in rates required.
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3.4 Consider City policy, procedures, and all currently known federal, state, and
local rules, regulations, and guidelines applicable to charges for water and
wastewater service for determining rates.
Task 4 -Anal yze and U pdate the Lo pez Charges
The cost of water supply also includes expenses associated with the Lopez reservoir and
dam , which is operated and maintained by the San Luis Obispo County Flood Control
and Water Conservation District (County). Charges to the City include a proportional
share (50.55%) of debt service, operation and maintenance expense, and capital outlay.
These charges are incorporated into current water rates.
Consultant will review and update the projected costs and recommend water rates that
ensure adequate funding for payments made to the County for the water entitlement to
cover the debt service for the existing bond and a Revolving State Loan (SRF).
Task 5 -Determine a Storm Sewer Fee for Mandated Stormwater Reg ulations
Review and calculate all City expenses related to compliance with the National Pollutant
Discharge Elimination System (NPDES) and State Water Resources Control Board
regulatory mandates for storm water protection measures. The intent for collection and
analysis of the City's related expenses is to prepare a recommendation for a potential fee
to be paid by current and future rate payers to offset these mandated expenses.
Specifically, the consultant will:
5.1 Itemize and calculate all City expenses for storm water protection measures
including but not limited to; annual report preparation , storm water
inspection costs, storm water preventative maintenance activities, related
consultant costs and other related city expenses. This information will be
provided to the consultant by City staff.
5.2 Prepare a proposed Storm Sewer fee be paid by current and future rate
payers to offset the City's annual expenses for storm water protection
regulatory measures. The potential Storm Sewer fee shall be determined
on a basis that takes into consideration differences in impacts on storm water
such as parcel size. The consultant will propose and discuss the fee
determination methodology in advance of the draft report .
Task 6-Meetin gs
The consultant should schedule and attend four on-site meetings with the City as well as
other telephonic or remote meetings as needed. These meetings are intended to provide
communication, discuss findings, and make decisions regarding rates that meet the
requirements of the City. The meeting/presentation dates depend upon receipt of data
requested and timely review of the draft and final reports by the City.
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Meeting 1. Initial meeting with City staff/data collection and scheduling.
Consultant is to organize and lead a "kick-off" meeting to include all identified project
participants. The purpose of the meeting will be to identify the Project Committee, verify
needs, schedules, and goals of the work to take place. Consultant shall define all targets,
meetings, reviews, and deliverables on a master schedule. Consultant will report to the
City's Project contact. The Consultant shall prepare and distribute minutes of all meetings
and shall prepare a Master Project Schedule for review and approval by the City.
Consultant shall base the initial schedule upon information developed by Consultant and
provided by the City. Consultant shall then be responsible for maintaining and updating
the schedule during the course of the project.
Meeting 2.
Meeting 3.
Meeting 4.
Two interim meetings with City staff to discuss the draft report and
preview rate study.
Prepare slide show and present preliminary findings and
recommendations at an evening Public Workshop.
Present Final Report to City Council.
Task 7 -Re ports (Deliverables )
The consultant shall deliver the following;
1. Five (5) hard copies of the draft Water and Wastewater Rate Study update report
for comment and review prior to final printing.
2. Five (5) hard copies of the final Water and Wastewater Rate Study update report.
3. Electronic copy of the final report in Adobe PDF format.
4. Presentation materials or power point used at the City Council for the Final Update
Report. Consultant will provide in advance, a copy of the Council presentation for
review.
All written and electronic documents, including but not limited to data compilations,
studies, and reports which are prepared in the performance of this Project, shall remain
the property of City of Arroyo Grande and will be delivered before final payment to
Consultant.
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EXHIBIT B
Proposed Fee
Tuckfield & Associates provides studies with competitive prrcmg and billing rates. We propose
to accomplish the tasks described in our scope of work section for a cost not-to-exceed estimate of
$36,298. The cost estimate is based on the standard hourly billing rates above and the number of hours
estimated to complete each task. Direct expenses will be billed at cost and will include expenses related
to travel, lodging, mileage, meals, long distance telephone, printing and binding, and other direct
costs. A cost proposal is provided below.
--.-Jiow:s__
Conferen On-s,te Clayton Total
M;unrT;:.c;k r~ r::ill I\IIPPt1n.o T,1rkf1Plrl A11f'lopt
Hourly Rate it':1.;ic:
Task 1: Initial Meeting & Data Collection , ~ --·~
Task 2: Long Range Financial Plans . _,nn
Task 2.1 : Review Fi nanci a I Info, Policy & Practice 1 0 t:-,,c..,.r,
Task 2.2: Review and Summarize Billing Info , ,1,1 <c •nn
Task 2.3: Develop long Range Financial Plans " <., ,sn
Task 3: Cost of Service Analyses ,. t, Mn
Task 3.1: Analyze Customer Usage Patterns & Classes ,, (1 ••n , .,
Task 3.2: Allocate Costs to Cost Components ,,, a s M
Task 3.3: Distribute Costs to Customer Class " ,, ,nn
Task 4: Rate Analysis and Design . ~o7n , ,n (?nM
Task 4.1: Evaluate Rate Structures & Cale Rates , 0 c, ,en
Task 4.2: Determine Bill Impacts C ,Mn
, C c,nn
Task 4.3: Bill Comparison to Other Communities Task S: <n
Draft Report Total 6 5 241 $34,945
Task 6: Publlc Workshop
Task 7: Final Report Other Direct Costs (ODCs)rrravel, Mileage & Printing: Sl 353
Task 8: Proposition 218 Public Hearing ~ ,. r ·•• ,.,, '""
OPTIONAL: Workshops/Comm Meetings (each, Incl prep)
Item 8.j. - Page 17
EXHIBIT C
INSURANCE RE QUIREMENTS
Prior to the beginning of and throughout the duration of the Work, Consultant will maintain
insurance in conformance with the requirements set forth below. Consultant will use
existing coverage to comply with these requirements. If that existing coverage does not
meet the requirements set forth here, Consultant agrees to amend, supplement or
endorse the existing coverage to do so. Consultant acknowledges that the insurance
coverage and policy limits set forth in this section constitute the minimum amount of
coverage required. Any insurance proceeds available to City in excess of the limits and
coverage required in this agreement and which is applicable to a given loss, will be
available to City.
Consultant shall provide the following types and amounts of insurance:
Commercial General Liability Insurance using Insurance Services Office "Commercial
General Liability" policy from CG 00 01 or the exact equivalent. Defense costs must be
paid in addition to limits. There shall be no cross liability exclusion for claims or suits by
one insured against another. Limits are subject to review but in no event less than
$1,000,000 per occurrence.
Business Auto Coverage on ISO Business Auto Coverage from CA 00 01 including
symbol 1 (Any Auto) or the exact equivalent. Limits are subject to review, but in no event
to be less than $1,000,000 per accident. If Consultant owns no vehicles, this requirement
may be satisfied by a non-owned auto endorsement to the general liability policy
described above. If Consultant or Consultant's employees will use personal autos in any
way on this project, Consultant shall provide evidence of personal auto liability coverage
for each such person.
Workers Compensation on a state-approved policy form providing statutory benefits as
required by law with employer's liability limits no less than $1,000,000 per accident or
disease.
Professional Liability or Errors and Omissions Insurance as appropriate shall be written
on a policy form coverage specifically designated to protect against acts, errors or
omissions of the Consultant and "Covered Professional Services" as designated in the
policy must specifically include work performed under this agreement. The policy limit
shall be no less than $1,000,000 per claim and in the aggregate. The policy must "pay on
behalf of' the insured and must include a provision establishing the insurer's duty to
defend. The policy retroactive date shall be on or before the effective date of this
agreement.
Page 14
Item 8.j. - Page 18
Insurance procured pursuant to these requirements shall be written by insurer that are
admitted carriers in the state California and with an A. M. Bests rating of A-or better and
a minimum financial size VII.
General conditions pertaining to provision of insurance coverage by Consultant.
Consultant and City agree to the following with respect to insurance provided by
Consultant:
1. Consultant agrees to have its insurer endorse the third party general liability
coverage required herein to include as additional insureds City, its officials employees
and agents, using standard ISO endorsement No. CG 2010 with an edition prior to 1992.
Consultant also agrees to require all Consultants, and subcontractors to do likewise.
2. No liability insurance coverage provided to comply with this Agreement shall
prohibit Consultant, or Consultant's employees, or agents, from waiving the right of
subrogation prior to a loss. Consultant agrees to waive subrogation rights against City
regardless of the applicability of any insurance proceeds, and to require all Consultants
and subcontractors to do likewise.
3. All insurance coverage and limits provided by Consultant and available or
applicable to this agreement are intended to apply to the full extent of the policies. Nothing
contained in this Agreement or any other agreement relating to the City or its operations
limits the application of such insurance coverage.
4. None of the coverages required herein will be in compliance with these
requirements if they include any limiting endorsement of any kind that has not been first
submitted to City and approved of in writing.
5. No liability policy shall contain any provision or definition that would serve
to eliminate so-called "third party action over" claims, including any exclusion for bodily
injury to an employee of the insured or of any Consultant or subcontractor.
6. All coverage types and limits required are subject to approval, modification
and additional requirements by the City, as the need arises. Consultant shall not make
any reductions in scope of coverage (e.g. elimination of contractual liability or reduction
of discovery period) that may affect City's protection without City's prior written consent.
7. Proof of compliance with these insurance requirements, consisting of
certificates of insurance evidencing all of the coverages required and an additional
insured endorsement to Consultant's general liability policy, shall be delivered to City at
or prior to the execution of this Agreement. In the event such proof of any insurance is
not delivered as required, or in the event such insurance is canceled at any time and no
replacement coverage is provided, City has the right, but not the duty, to obtain any
insurance it deems necessary to protect its interests under this or any other agreement
and to pay the premium. Any premium so paid by City shall be charged to and promptly
paid by Consultant or deducted from sums due Consultant, at City option.
Page 15
Item 8.j. - Page 19
8. Certificate(s) are to reflect that the insurer will provide 30 days notice to City
of any cancellation of coverage. Consultant agrees to require its insurer to modify such
certificates to delete any exculpatory wording stating that failure of the insurer to mail
written notice of cancellation imposes no obligation, or that any party will "endeavor" (as
opposed to being required) to comply with the requirements of the certificate.
9. It is acknowledged by the parties of this agreement that all insurance
coverage required to be provided by Consultant or any subcontractor, is intended to apply
first and on a primary, noncontributing basis in relation to any other insurance or self
insurance available to City.
10. Consultant agrees to ensure that subcontractors, and any other party
involved with the project who is brought onto or involved in the project by Consultant,
provide the same minimum insurance coverage required of Consultant. Consultant
agrees to monitor and review all such coverage and assumes all responsibility for
ensuring that such coverage is provided in conformity with the requirements of this
section. Consultant agrees that upon request, all agreements with subcontractors and
others engaged in the project will be submitted to City for review.
11. Consultant agrees not to self-insure or to use any self-insured retentions or
deductibles on any portion of the insurance required herein and further agrees that it will
not allow any Consultant, subcontractor, Architect, Engineer or other entity or person in
any way involved in the performance of work on the project contemplated by this
agreement to self-insure its obligations to City. If Consultant's existing coverage includes
a deductible or self-insured retention, the deductible or self-insured retention must be
declared to the City. At the time the City shall review options with the Consultant, which
may include reduction or elimination of the deductible or self-insured retention,
substitution of other coverage, or other solutions.
12. The City reserves the right at any time during the term of the contract to
change the amounts and types of insurance required by giving the Consultant ninety (90)
days advance written notice of such change. If such change results in substantial
additional cost to the Consultant, the City will negotiate additional compensation
proportional to the increase benefit to City.
13. For purposes of applying insurance coverage only, this Agreement will be
deemed to have been executed immediately upon any party hereto taking any steps that
can be deemed to be in furtherance of or towards performance of this Agreement.
14. Consultant acknowledges and agrees that any actual or alleged failure on
the part of City to inform Consultant of non-compliance with any insurance requirements
in no way imposes any additional obligations on City nor does it waive any rights
hereunder in this or any other regard.
Page 16
Item 8.j. - Page 20
15. Consultant will renew the required coverage annually as long as City, or its
employees or agents face an exposure from operations of any type pursuant to this
agreement. This obligation applies whether or not the agreement is canceled or
terminated for any reason. Termination of this obligation is not effective until City executes
a written statement to that effect.
16. Consultant shall provide proof that policies of insurance required herein
expiring during the term of this Agreement have been renewed or replaced with other
policies providing at least the same coverage. Proof that such coverage has been ordered
shall be submitted prior to expiration. A coverage binder or letter from Consultant's
insurance agent to this effect is acceptable. A certificate of insurance and/or additional
insured endorsement as required in these specifications applicable to the renewing or
new coverage must be provided to City within five days of the expiration of the coverages.
17. The provisions of any workers' compensation or similar act will not limit the
obligations of Consultant under this agreement. Consultant expressly agrees not to use
any statutory immunity defenses under such laws with respect to City, its employees,
officials and agents.
18. Requirements of specific coverage features or limits contained in this
section are not intended as limitations on coverage, limits or other requirements nor as a
waiver of any coverage normally provided by any given policy. Specific reference to a
given coverage feature is for purposes of clarification only as it pertains to a given issue,
and is not intended by any party or insured to be limiting or all-inclusive.
19. These insurance requirements are intended to be separate and distinct from
any other provision in this agreement and are intended by the parties here to be
interpreted as such.
20. The requirements in this Section supersede all other sections and
provisions of this Agreement to the extent that any other section or provision conflicts with
or impairs the provisions of this Section.
21. Consultant agrees to be responsible for ensuring that no contract used by
any party involved in any way with the project reserves the right to charge City or
Consultant for the cost of additional insurance coverage required by this agreement. Any
such provisions are to be deleted with reference to City. It is not the intent of City to
reimburse any third party for the cost of complying with these requirements. There shall
be no recourse against City for payment of premiums or other amounts with respect
thereto.
22. Consultant agrees to provide immediate notice to City of any claim or loss
against Consultant arising out of the work performed under this agreement. City assumes
no obligation or liability by such notice, but has the right (but not the duty) to monitor the
handling of any such claim or claims if they are likely to involve City .
Page 17
Item 8.j. - Page 21
EXHIBIT D
CITY'S REQUEST FOR PROPOSAL
City of Arroyo Grande
Department of Public Works
REQUEST FOR PROPOSAL
WATER AND WASTEWATER RATE STUDY UPDATE
I. INTRODUCTION
The City of Arroyo Grande, California (the "City") was incorporated as a general law City
in 1911 and is located in San Luis Obispo County along the Arroyo Grande Creek and
provides water to a 5.45 square mile service area serving a population of approximately
17,300. Water service and sewer service are accounted for separately as enterprise funds
and are operated as water and sewer utilities.
The water utility obtains its water supply from eight wells and from surface water obtained
from the Lopez Reservoir Project. Six of the City's wells extract water from the Paso
Robles Formation of the Arroyo Grande Plain, Tri-Cities Mesa (AGP-TCM) sub-basin of
the Santa Maria Ground Water Basin. Based on an agreement with other agencies
pumping groundwater from the AGP-TCM basin, the City is allocated an annual basin
extraction from these wells of 1,323 ac-ft. The remaining wells extract water from the
Pismo Formation, a separate basin. These wells are capable of extracting 160 ac-ft per
year.
The City also receives an allocation of 2,290 ac-ft of surface water from the Lopez
Reservoir project through a 1966 agreement with the San Luis Obispo Flood Control
District. This allocation amount represents 50.55 percent of the total amount of water
purchased from the reservoir. Surplus water from the reservoir may also be purchased
by the City when such supplies are available, though it is not considered to be a firm
supply for the City. Water production for the City in 2017, including surfacewater, totaled
2, 194 ac-ft.
The City is participating in a regional water recycling project with other local jurisdictions.
The "Central Coast Blue" project will inject recycled water into the groundwater basin to
secure a sustainable, drought resistant, local water supply. The City will receive a share
of the groundwater from this project. Costs and funding opportunities are currently under
review, however, future water rates will need to consider the implications of this project.
Page 18
Item 8.j. - Page 22
Storage facilities presently include six above ground or partially buried water tanks with a
storage capacity of approximately 6. 7 million gallons. The transmission and distribution
system includes over 88 miles of pipeline, 6,454 meters, and over 880 public fire hydrants.
The sewer utility consists of a collection system of sewer pipe, lift stations, and general
utility assets used to collect the City's wastewater. The collection system also includes
over 70 miles of sewer pipe ranging in size from 6 inch to 24 inch. The South San Luis
Obispo County Sanitation District provides treatment of the City's wastewater. The City
contributes approximately 1.1 mgd of wastewater to the treatment plant.
11. SCOPE OF SERVICES
The Water Fund and Sewer Fund rates are based on an equitable cost of service analysis
to develop total revenue requirements and allocation of costs to customer classes.
Historical trends should be analyzed from data showing the number of customers, water
sales volumes, water sales revenues, sewer service charge revenue, and operation and
maintenance expenses. Annual growth projections should also be included for the study
period and revenue projections reflecting growth projections by customer class.
Revenue requirements for operation and maintenance, routine capital outlays, existing
and proposed debt requirements, cash financed capital improvement projects, and
additions to operating reserves should be included. Changing conditions such as
additional facilities, recognition of growth, and non-recurring maintenance expenditures
need to be addressed including inflation for on-going expenditures as well as capital
improvement projects.
The City of Arroyo Grande has completed water and wastewater rate studies in 1999, 2003,
2005, 2009 and 2013.
Task 1 -Review Current Water and Wastewater Fees and Rates
The first step in determining the long-term revenue requirement of each utility is to identify
all capital improvements including annual replacements, additions and improvements and
extensions to the system:
1.1 Review master planning reports and other available information regarding
needed replacements, improvements, and expansions of the water and
wastewater systems.
1.2 Maintain the reserve Water fund balance estimated at 90 days of operating
and maintenance expenses plus a capital project allocation of $500,000 on
an annual basis and one year of debt service.
Page 19
Item 8.j. - Page 23
1.3 Maintain the reserve Sewer fund balance estimated at 90 days of operating
and maintenance expenses plus a capital project allocation of $500,000 on
an annual basis and one year of debt service.
Task 2 -Revenue Re q uirement Pro jections
The objective of this task is to project revenue needs for the five-year study period for each
utility. Revenues will be projected based upon existing rates and fee schedules. Each
utility's ability to meet projected revenue requirements will be analyzed. The level of
revenue adjustments and additional financing requirements will be shown. The following
subtasks will be completed:
2.1 Estimate revenues under current rate and fee levels based upon the
projected number of customers and service requirements. Historical growth
trends, quantity of service provided, and patterns in customer service
characteristics should be considered.
2.2 Review and project revenue from miscellaneous sources such as interest
earnings, miscellaneous service fees, or other sources.
2.3 Develop annual revenue requirements of the water and wastewater utilities
recognizing historical data, current year's budgets, and anticipated future
system service requirements and operational changes. Revenue
requirements to be based on projected inflation and to include at least the
following items:
► Operation and maintenance expenses.
► Major capital expenditures.
► Effects on revenue projections from water conservation program impacts.
► Debt service on existing and any proposed new financing methods
including appropriate reserves.
► Other cash obligations.
2.4 Develop future cash flow analyses for a five-year study period for each utility,
showing application of revenue under existing rate levels to meet the annual
revenue requirements, as determined under Task 1.2 and Tasks 2.1 through
2.3 above. Cash flows to be developed to maintain reserve fund balances
and to meet debt service coverage requirements for each utility. Determine
and present proposed water and sewer rates for a five-year period.
2.5 Prepare a survey of water and sewer rates charged by other public agencies
in San Luis Obispo County for the purposes of cost comparison.
2.6 Present water and sewer rate recommendations.
2.7 Consultant shall provide recommended strategies to minimize the
potential impact of conservation on revenue.
Page 20
Item 8.j. - Page 24
Cost of Service and Rate Design
For each utility, the projected revenue requirements (costs of service) for a representative
test year within the study period should be allocated to customer classifications. Distribution
of costs will reflect cost-causative concepts in accordance with generally accepted utility
practices.
Task 3 -Allocation of Costs
3.1 Allocate the costs of service to the various costs of service components which
constitute a functional classification of the different types of service the City
provides. For water, functional cost components will include base or volume
related costs, extra capacity costs, fire protection costs, and customer costs.
For wastewater, cost components include volume and customer costs.
3.2 Distribute the costs by functional components to the various customer
classifications on the basis of the relative responsibility of each customer
classification for the service provided, as determined from the customer
classification units of service and the application of unit costs of service to the
respective units.
3.3 Compare revenue under existing rates by each customer class with the
allocated cost of service. Determine the adequacy of present revenue levels
for each class to meet cost of service and determine the indicated adjustment
in rates required.
3.4 Consider City policy, procedures, and all currently known federal, state, and
local rules, regulations, and guidelines applicable to charges for water and
wastewater service for determining rates.
Task 4 -Analyze and Update the Lopez Charges
The cost of water supply also includes expenses associated with the Lopez reservoir and
dam, which is operated and maintained by the San Luis Obispo County Flood Control
and Water Conservation District (County). Charges to the City include a proportional
share (50.55%) of debt service, operation and maintenance expense, and capital outlay.
These charges are incorporated into current water rates.
Consultant will review and update the projected costs and recommend water rates that
ensure adequate funding for payments made to the County for the water entitlement to
cover the debt service for the existing bond and a Revolving State Loan (SRF).
Task 5 -Determine a Storm Sewer Fee for Mandated Stormwater Regulations
Review and calculate all City expenses related to compliance with the National Pollutant
Discharge Elimination System (NPDES) and State Water Resources Control Board
Page 21
Item 8.j. - Page 25
regulatory mandates for storm water protection measures. The intent for collection and
analysis of the City's related expenses is to prepare a recommendation for a potential fee
to be paid by current and future rate payers to offset these mandated expenses.
Specifically, the consultant will:
5.1 Itemize and calculate all City expenses for storm water protection measures
including but not limited to; annual report preparation, storm water
inspection costs, storm water preventative maintenance activities, related
consultant costs and other related city expenses. This information will be
provided to the consultant by City staff.
5.2 Prepare a proposed Storm Sewer fee be paid by current and future rate
payers to offset the City's annual expenses for storm water protection
regulatory measures. The potential Storm Sewer fee shall be determined
on a basis that takes into consideration differences in impacts on storm water
such as parcel size. The consultant will propose and discuss the fee
determination methodology in advance of the draft report.
Task 6 -Meetings
The consultant should schedule and attend four on-site meetings with the City as well as
other telephonic or remote meetings as needed. These meetings are intended to provide
communication, discuss findings, and make decisions regarding rates that meet the
requirements of the City. The meeting/presentation dates depend upon receipt of data
requested and timely review of the draft and final reports by the City.
Meeting 1. Initial meeting with City staff/data collection and scheduling.
Consultant is to organize and lead a "kick-off' meeting to include all identified project
participants. The purpose of the meeting will be to identify the Project Committee, verify
needs, schedules, and goals of the work to take place. Consultant shall define all targets,
meetings, reviews, and deliverables on a master schedule. Consultant will report to the
City's Project contact. The Consultant shall prepare and distribute minutes of all meetings
and shall prepare a Master Project Schedule for review and approval by the City.
Consultant shall base the initial schedule upon information developed by Consultant and
provided by the City. Consultant shall then be responsible for maintaining and updating
the schedule during the course of the project.
Meeting 2.
Meeting 3.
Meeting 4.
Two interim meetings with City staff to discuss the draft report and
preview rate study.
Prepare slide show and present preliminary findings and
recommendations at an evening Public Workshop.
Present Final Report to City Council.
Page 22
Item 8.j. - Page 26
Task 7 -Re ports (Deliverables )
The consultant shall deliver the following;
5. Five (5) hard copies of the draft Water and Wastewater Rate Study update report
for comment and review prior to final printing.
6. Five (5) hard copies of the final Water and Wastewater Rate Study update report.
7. Electronic copy of the final report in Adobe PDF format.
8. Presentation materials or power point used at the City Council for the Final Update
Report. Consultant will provide in advance, a copy of the Council presentation for
review.
All written and electronic documents, including but not limited to data compilations,
studies, and reports which are prepared in the performance of this Project, shall remain
the property of City of Arroyo Grande and will be delivered before final payment to
Consultant.
111. SCHEDULE OF EVENTS
The following are the anticipated schedule of events for this project:
• Issue RFP .................................................................... Friday, October 26, 2018
• Proposals due to the City by 5:00 p.m ................. Thursday, November 29, 2018
• Consultant Ranking and Selection ............................ Friday, December 14, 2018
• Finalize Contract Negotiations .................................... Tuesday, January 8, 2019
• City Council Awards Contract ................................... Tuesday, January 22, 2019
• City Issues Notice to Proceed ...................................... Friday, January 25, 2019
• City Council Final Update Report Presentation .............. Tuesday, June 25, 2019
IV. PROPOSAL REQUIREMENTS AND PROCESS
A. FORM AND CONTENT OF TECHNICAL PROPOSAL
The Proposal shall be limited to 10 pages, with the exception of resumes and
project lists, and include as a minimum the following:
1. Scope of Services
• Present your understanding and Scope of Services for the project.
2. Schedule
• Include a performance schedule for each stage of the project detailing
the length of time for completion of each task as defined in the Scope of
Services.
• Include milestone dates and processing time for review by the City.
3. Personnel
• Identify and define the experience of the Project Manager and provide
their individual resume. The designated Project Manager shall be the
primary contact with the City during the contract period and shall function
in that capacity while employed by the firm.
Page 23
Item 8.j. - Page 27
• Identify the individual(s) responsible for each service, or subconsultant,
and provide their individual resume(s).
4. References
• Provide three municipal references for projects of similar scope and
nature performed within the last five years.
• List the client's name, address, and a description of the tasks performed.
Include the name and telephone number of the client's key contact on
the project.
5. Cost Summary
• Identify the proposed basis for fees and charges as appropriate with
hourly rates of individuals that could be assigned. The fee will be
submitted in a format to include a separate cost of each of the tasks and
sub-tasks listed above. The actual fee will be negotiated after selection
of the successful applicant. The City also reserves the right to eliminate
individual tasks or sub-tasks due to budgetary constraints.
6. Signature
• The proposal shall be signed by an official authorized to bind the firm
and shall contain a statement to the effect that the proposal is valid for
ninety (90) days.
7. Submittal Requirements
Three copies of the complete proposal shall be submitted in a sealed
envelope with the firm's name printed on the outside clearly marked with
the words "Proposal for Water and Wastewater Rate Update". Proposals
received after the deadline will not be considered. Hand deliver or mail the
proposal to ensure receipt on or before 5:00 PM, Thursday, November 29,
2018 to:
City of Arroyo Grande
Attention: Kelly Wetmore, City Clerk
300 East Branch Street
Arroyo Grande, CA 93420
B. REQUESTS FOR INFORMATION
The selected consultant shall formally submit clarifications or requests for
additional documentation to City staff for review. The City shall forward a written
response to the consultant within five (5) working days. All inquiries to this RFP
shall be submitted to:
City of Arroyo Grande
Public Works Department
300 East Branch Street
Arroyo Grande, CA 93420
Attention: Shane Taylor, Utilities Manager
Telephone: (805) 473-5464
Page 24
Item 8.j. - Page 28
E-Mail: staylor@arroyogrande.org
C. SELECTION PROCESS AND EVALUATION CRITERIA
Each proposal will be reviewed by a Selection Committee to determine if the
minimum proposal requirements outlined herein are met. The City of Arroyo
Grande may reject any proposal that fails to meet the requirements set forth in this
RFP. Proposals meeting the RFP requirements will be evaluated and ranked by
the Selection Committee utilizing the following criteria:
• Understanding of the work to be performed
• Experience with similar assignments
• Assigned Project Manager/team
• Ability to complete the project on schedule
• Overall value to the City
FINAL COMMENTS
The City reserves the right to reject any and all proposals, cancel all or part of this RFP,
waive any minor irregularities and to request additional information from proposing
consultants. By requesting proposals, we are in no way obligated to award a contract or
pay expenses of the proposing consultants in connection with the preparation or
submission of a proposal.
The decision to award a contract will be based many factors including but not limited to
service, cost, experience, and innovation. No single factor, such as cost, will determine
the final decision to award .
We appreciate the efforts all the consultants and their respective staffs have put forth in
responding to the Request for Proposal.
Page 25
Item 8.j. - Page 29
EXHIBIT E
Proposal To:
City of Arroyo Grande
300 E Branch Street
Arroyo Grande, CA 93420
{805) 473-5464
Proposal For
Water and Wastewater
Rate Study Update
Submitted By:
Tuckfield & Associates
Contact: Mr. Clayton Tuckfield
2549 Eastbluff Dr, #450B
Newport Beach, CA 92660
{949) 760-9454
www.tuckfieldassociates.com
rlm'W
MANi\CEMENT CON . ULTING
November 29, 2019
Item 8.j. - Page 30
Tuckfield & Associates
2549 Eastblrf/!Drive, Suite 450B, Newport Beach, CA 92660
Phone (949) 760-9454 Fax (949) 760-2725
Email ctuckjield@tuckjie ldassociates. com
November 29, 2018
Mr. Shane Taylor
Utilities Manager
City of Arroyo Grande
300 E Branch Street
Arroyo Grande, CA 93420
Dear Mr. Taylor:
I am pleased to submit this proposal to provide consulting services for a Water and Wastewater Rate Study
Update for the City of Arroyo Grande (City). Over the last 30 years, I have conducted numerous water and
wastewater rate studies in California as well as previous experience conducting studies nationally. This
depth of experience will benefit the City throughout the performance of this study and lead to rate
structures and rates that are specifically suited to the City.
Our rate study for the City will determine the appropriate water, wastewater, and storm water rates that
are equitable and defensible; meet the requirements of Proposition 218; and funds annual operating
expense, capital spending, and debt service. Additionally, the study will include review and analyses
regarding the City's share of the Central Coast Blue project, account for mandates and industry trends, and
provide for annual inflationary rate adjustments as necessary.
The scope of work provided herein proposes to address the City's request. The study will address the
following objectives.
• Revenue sufficiency to fund operating and capital needs
• Appropriate levels of operating, capital, and emergency reserves
• Cost of service following appropriate standards, regulations, and guidelines
• Rates that are consistent with industry practice
• Ease of understanding and administration
Tuckfield & Associates consulting is a local firm with extensive experience in California, specializing in rate
studies and capacity charge studies. Mr. Tuckfield is the President and Principal Consultant for Tuckfield
& Associates, and routinely conducts rate and capacity charge studies as the sole consultant, having
completed such studies in this manner for many clients, including those whose populations have
exceeded 100,000. Recent clients in this regard include the City of Buena Park, City of Loma Linda, and
City of Pismo Beach. Additional experience is provided in the Representative Engagement section of this
proposal.
I will be professionally responsible for conducting the study and will provide hands-on work effort. This
will allow me to develop an intimate knowledge of the City's water and wastewater system which will be
beneficial when attending meetings and presenting results and findings. All rates and fees will be
developed in accordance with the American Water Works Association (AWWA) for water utilities and
Water Environment Federation (WEF) for wastewater utilities as well as California State law.
Item 8.j. - Page 31
Mr. Shane Taylor
City of Arroyo Grande
Page 2
November 29, 2018
I have the qualifications, experience, and capabilities to provide the services desired by the City. I have
conducted successful studies for large agencies in California with a focus on smaller cities and special
districts.
As requested by the City, this proposal is valid for 90 days . I look forward to working with City on this
project. Should the City need any additional information, my contact information is provided on the next
page.
Very Truly Yours,
TUCKFIELD & ASSOCIATES
lttrfar;J
G. Clayton Tuckfield
Principal Consultant
Item 8.j. - Page 32
Proposal for
Water and Wastewater Rate Study Update
Submitted to
CITY OF ARROYO GRANDE
Ta b le of Contents
Page
Firm Profile .............................................................................................................. 1
Qualifications .......................................................................................................... 2
Methodology ........................................................................................................... 3
Schedule ................................................................................................................... 9
Proposed Fee ........................................................................................................ 10
Resume ................................................................................................. Appendix A
References ........................................................................................... Appendix B
Item 8.j. - Page 33
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
Proposal for Water and Wastewater Rate Study
Update
City of Arroyo Grande
Fir m Profil e
Tuckfield & Associates was founded in 1999 to provide quality consulting
services to publicly-owned utilities to sustain their systems on sound rate-
making principles.
The firm was founded by Mr. Clayton Tuckfield PE MBA who has over 30 years of experience
conducting rate studies and capacity charge studies. Now in its 18th year, the firm has provided
innovative and time-tested strategies founded on industry practice for implementing rates and
charges. Tuckfield & Associates is a local firm located in Newport Beach and the performance of
this project will be completed at this site.
Prior to the firm's founding, Mr. Tuckfield served Black & Veatch Corporation for nearly 15 years in
their Management Consulting Division. Mr. Tuckfield has worked with numerous cities and special
districts in California and has written papers and articles for AWWA (American Water Works
Association) and California Special Districts Association (CSDA) and has conducted a webinar for
CSDA regarding financing projects with USDA funding.
Key Personnel
Clayton Tuckfield, Principal
Summary
• 30 years of experience
• Over 100 rate studies
• Public Agency Specialization
• Tested Strategies
• Project Management
Clayton Tuckfield, PE MBA-Project Consultant
Project Responsibilities
• Project Consultant
• Financial Plan, Cost of Service, and Rate
Design
• Public Meeting Presentations
Mr. Tuckfield will serve as the project consultant for the study and will be the primary contact
with City. He will be responsible for project administration, daily performance of the project,
providing all deliverables, attending and/or presenting at all meetings, and will produce key
elements of the study.
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Item 8.j. - Page 34
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
Mr. Tuckfield routinely conducts rate and capacity charge studies as the sole consultant and has
completed such studies in this manner for many clients, even for those whose populations have exceeded
100,000. Mr. Tuckfield is an expert in utility financial planning, cost of service, rate structures, and utility
management and is a professional dedicated to maintaining high financial and engineering standards.
Mr. Tuckfield has over 30 years of experience and has professionally performed over 100 utility cost of
service and rate studies and many other financial feasibility studies. He has performed studies for
numerous communities in California ranging from the cities of Long Beach, Buena
Park, Ventura, Santa Barbara, Fullerton, Loma Linda, Arroyo Grande, Grover Beach,
Pismo Beach, Oakdale, and Firebaugh to special districts including Santa Ynez CSD,
Nipomo CSD, Mission Hills CSD, Keyes CSD, Hilmar CWD, Delhi CSD, Seeley CWD,
and many others.
Mr. Tuckfield has an engineering degree and a master's degree in business administration. He has
prepared presentations and technical papers for trade organizations that include the American Water
Works Association's annual meeting, American Society of Civil Engineers, Arizona Finance Officers
Association, and has authored a section of a webinar for the California Special Districts Association (CSDA)
as well as a professional submission for CSDA's bi-monthly magazine. A resume for Mr. Tuckfield is
provided in Appendix A of this proposal.
Visit www.tuckfieldassociates.com to learn more about Tuckfield & Associates.
Quali fi ca t ions
Tuckfield & Associates Consulting
Tuckfield & Associates is a specialized consulting firm providing financial solutions for publicly owned
utilities. Mr. Clayton Tuckfield, founder and principal of Tuckfield & Associates, has managed or been
directly involved in publicly owned utility financial services for over 30 years. Since 1985, Mr. Tuckfield
has used innovative methods combined with time-tested strategies to assist municipalities and special
districts in achieving their financial goals. Clients have included public utilities, state and county
governments, municipalities, and public districts .
Services
Tuckfield & Associates provides comprehensive consulting
services intended to safeguard the financial viability of the client's
multi-million-dollar utility. Key elements include financial plans
that anticipate economic contractions and expansions, capital
planning for improvement financing options, allocation of costs to
appropriate customers based on cost causative principles, and
rates that are designed to be fair and equitable . Services provided
by Tuckfield & Associates include the following.
Tuckfield & Associates
Tuckfield & Associates
Qualifications Summary
30 years of experience
Over 100 rate studies
Public Agency Specialization
Tested Strategies
Project Management
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Item 8.j. - Page 35
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
• Cost of Service and Rate Studies
• Capacity Charge Studies
• Rate Stabilization Studies
• Supporting Information for Bond Official Statements
• Capital Improvement Plan Financing Analyses
• Computer Modeling
Commitment to Clients
Tuckfield & Associates approaches each study with the commitment to exceed our client's expectations .
Our strength lies in our proven capability to provide comprehensive, practical, and implementable
programs that serve our clients, with personal relationship-driven service .
Tuckfield & Associates is highly qualified to provide the professional services requested by the City. The
firm specializes in rate and capacity charge studies with extensive experience serving cities and special
districts in California .
M ethodo log y
The rates and charges for the City will be designed recognizing the American Water Works Association
(AWWA) methodology provided in their Manual Ml and the Water Environment Federation (WEF)
methodology from their Manual of Practice No. 27. These methodologies represent industry practice for
the development of cost-of-service rates and charges, based upon the demands placed on the facilities by
various users . The basic method includes identifying or creating different types of user classifications,
allocating annual utility costs to cost-causative components, distributing costs to customer groups based on
customer class use characteristics, and design of a rate structure and charges that will recover allocated
costs from each customer group . The methods proposed for this study are briefly described below .
Water Rate Structure and Rates
Following AWWA Manual Ml, annual costs of the water system will be summarized into functional cost
categories to the extent possible based on the City's cost accounting structure. Such functional cost
categories may consist of source of supply, pumping, treatment, storage, transmission, distribution,
meters and services, customer billing and collecting, and fire protection . These costs are then allocated
to water cost components based on the design of facilities, or may be directly assigned to cost component
because of its function. Such cost components include Base, Peaking, Meters and Services, Customer
Billing and Collecting, and Fire Protection. Base costs are further separated into costs by each water
supply source.
An example cost-of-service rate structure strategy may include recovering Peaking costs, Meters and
Services Costs, and Customer Billing and Collecting costs from a schedule affixed charges designed based
on the size of the meter installed at the customer's premises. Base costs, consisting of the various water
supply costs, would be recovered through a variable rate structure.
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Item 8.j. - Page 36
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
The design of the variable rate structure and rates may be established as rate tiers that recovers Base
costs, and possibly Peaking costs. For a residential rate structure, the tier break points may be established
as water use targets for indoor and outdoor water efficient use following guidelines of the state of
California "Making Conservation a California Way of Life" final report dated April 2017. This has been
followed up by recent legislation consisting of SB 606 and AB 1668.
An example residential first tier may be established as 4 persons per household (a default number)
multiplied by 55 gpcd multiplied by the number of days in the billing cycle (30 days for monthly billing).
Outdoor use is intended to reflect efficient water use for landscaped area square footage of various
customer types. It is unlikely that the City has matched actual landscaped square footage to each
customer account. Therefore, for residential customers, all use above indoor use may be considered
outdoor use. A third tier may be established to reflect a higher water supply cost that serves customers
in this tier.
The figure below provides a method for how the water variable rates may calculated in this example. The
rate calculated in each tier reflects the cost of the water supplied to customers in each tier. In the
example, the least expensive source would be supplied in the first tier, usually groundwater. The second
would be a combination of groundwater and the cost of the second or third water supply source . The
third tier would reflect the highest cost and the third water supply source. The rate structure may be
updated in the future when the City begins experiencing costs associated with Central Coast Blue project.
:water Source Tierl Tier2 Tier3
Groundwater ✓ ✓
State Water ✓
Lopez ✓ ✓
Volume XXX XXX XXX
Rate $/HCF $/HCF $/HCF
Note that in the "Making Conservation a California Way of Life" final report that it acknowledges the
framework does not contain a requirement on rate structures, and water suppliers are encouraged to
consider drought effects and incorporate measures for rate stabilization. In addition to a tiered rate
structure discussed above, a uniform volume rate structure would also be proposed for the City.
Wastewater Rate Structure and Rates
The approach to wastewater rate design follows a similar process as described for the water system but
following WEF Manual of Practice No. 27 for wastewater systems. Annual costs of the wastewater system
are summarized into functional cost categories based on the City's accounting structure. Such functional
cost categories may consist of collection, pumping, treatment, and disposal. These costs are then
allocated to wastewater cost components based on the design of wastewater facilities. Cost components
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Item 8.j. - Page 37
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
commonly include Volume (wastewater flow), Bio-chemical Oxygen Demand (BOD), Suspended Solids
(SS), and Customer costs. If some facilities are identified and designed on the basis of capacity, a Capacity
cost component may be included.
Allocated costs by cost component are distributed to customer classification based on how each group
uses the wastewater system. The use, or units of service, consist of flow (mgd), BOD (lbs), SS (lbs), and
Customer (bills). Wastewater rates are then established to recover the costs distributed to each customer
classification .
For the residential classification, costs may be recovered through a few well-known structures. These
include (1) fixed charges applicable to all residential customers, (2) an Equivalent Dwelling Unit (EDU) fixed
charge designed for SFR, MFR, Condo, MHP, etc. and (3) a fixed charge that recovers Customer and
possibly Capacity costs, and a variable charge that recovers flow, BOD, and SS costs based on water
consumption read through the meter. A variant of the variable charge is to cap the residential water
consumption at a certain use level which assumes that any consumption over that is being used for
outdoor purposes. Commercial wastewater rates commonly have a fixed charge and a variable charge as
most of the water use of this class returns to the sewer. The structure could be improved by having all
non-residential customers install irrigation meters to separate indoor uses from outdoor uses.
Storm Water Rate Structure and Rates
With the passing of SB 231, the definition of "sewer" under Proposition 218 was modified to include storm
water and related systems. The approach for storm water rate design is to identify costs related to
operating and maintaining the storm water system through collaboration with City staff. Such costs may
be then recovered on a flat fee, acreage, impermeable area, max allowable lot coverage, Equivalent
Residential Units (ERU), or other basis. It's unlikely that the City has detailed information available, and
therefore a storm water charge based on readily available information is anticipated for this study.
Scope of Work
Based on our understanding of the City's needs, the following tasks describe our proposed scope of work
to complete the Water and Wastewater Rate Study Update. While the tasks listed below are consecutive,
elements of certain tasks may be conducted concurrently with other tasks.
Task 1-Initial Meeting/Data Collection
The focus of this initial meeting with City Staff will be to define goals and objectives for the study and
explore the issues generated by City Staff. The meeting serves as an important first step in assuring that
all key members develop a clear understanding of the study elements and data required.
Prior to the meeting, a request will be submitted to the City for information to be gathered by City Staff.
The information request will include several items such as audits, budgets, master plans, design reports,
capital improvement plans, billing information, debt service schedules, and several others. A summary of
the minutes of each meeting of this study will be also be provided that includes a synopsis of work
activities, deliverables, project issues, suggested resolution to these issues, and project milestones .
Meetings: One (1) on-site meeting to kick-off the project
Deliverables: Request for Information, Summary of meeting minutes
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Item 8.j. - Page 38
Proposal for Water and Wastewater Rate Study Update • .ity of Arroyo Grande
Task 2 -Long Range Financial Planning
The objective of this task is to develop ten-year financial plans for the Water, Wastewater, and Storm
Water enterprise (with storm water) that projects the revenue and revenue requirements for the study
period . This task requires an assessment of the sufficiency of revenues based on the existing rates and
fee schedules, the City's ability to meet projected revenue requirements, and the determination of the
level of any revenue adjustments required with any additional financing requirements . Specific tasks
include the following.
Task 2.1: Review Financial Information, Policies, and Practice
The City's policies regarding the financial, operating and capital reserves, and rate practices will be
reviewed and evaluated. These items are essential to the long-tern sustainability of the utility. From the
evaluation, recommendations will be made
that will enhance the utility's ability to meet its
fi nan cia I goa Is. FY 2015-16 Consumption by Customer Class
2,500,DDO
2,000,000 Task 2.2: Review and Summarize Billing
Information i 1,500,l»O
i
E
The customer billing information that is
received from the City will be reviewed,
analyzed, and summarized for use in the rate
study. The information will be reviewed for
accuracy and reasonableness for use to
understand user characteristics. In addition to
water sales information, influent flow to the
wastewater treatment plant will assist in
estimating wastewater flows and peaking
characteristics for customer classifications.
i 1,oao.cno .s
Task 2.3: Develop Long Range Financial Plans
0 -•Slflll< hmily (Sfll) ■ Multl-Qmlly (MfO) Commtrdal (COM) ■ Industrial (IND) ■ ~rlptlon (I RA)
Review and summary of billing information provides an
understanding of user characteristics.
In this task, the annual revenue requirements of the Water, Wastewater, and Storm Water utilities will be
identified and projected . Budget items and any
Long Range Financial Plan future obligations will be projected for a ten-s20 ,--------------------,-s10
year forecast period. Revenue Requirements
will include operation and maintenance
expenses, existing debt service, annual
replacement, identification and financing of ~s10
future capital improvements (CIP), transfers I
to/from the utility funds, and use of reserves. i ~ $5
7 $15 j ;
~
Revenue requirements will be projected from a
review of historical results, current budget, and
current economic trends while accounting for
expected operational changes and system
growth.
Sources of Funds -Uses of Funds
-Utlllty Ta~et Cash ---■--UUUty Ending Cash Balance
A ten-year pro forma cash flow will be
developed to compare revenue using the
The long range financial plan illustrates the stability of the revenue
stream over time as well as the degree ta which financial planning
criteria are met.
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Item 8.j. - Page 39
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
existing rates to projected revenue requirements over the planning period . Revenues will be projected
by developing assumptions regarding customer growth and estimated usage information. Analysis of the
cash flow will determine if any revenue adjustments are needed to meet the revenue requirements while
recognizing the financial planning criteria developed for each fund . The long-range financial plan
developed above will be modeled such that assumptions/variables may be changed to assess the impacts
to the plan. By varying these assumptions , their sensitivity may be evaluated and the need for higher or
lower revenue increases may be determined. Several options for revenue increases may be explored and
presented to City Staff.
Conference Calls: Up to two (2) conference calls to discuss the long-range financial plans
Deliverables: Assumptions, billing summaries, long-range financial plan alternatives
Task 3 -Cost of Service Analyses
The cost of service phase of the study will focus on allocation of costs (revenue requirements) to customer
classifications based on cost causative methodologies. The cost allocations will be developed using
standards and methodologies from the AWWA, WEF, and best management practices. The cost of service
analysis part of the study provides the defensibility for the selected rate structures and rates, providing
compliance with Proposition 218.
Task 3.1: Analyze Customer Usage Patterns and Recommend Customer Classifications
Historical billing summaries that were summarized in Task 2.2 will be reviewed and analyzed by customer
classification to determine water consumption, estimate wastewater discharge volumes, and establish
user characteristics. Estimates may be made assuming census persons per household.
Task 3.2: Allocate Costs to Functional Cost Components
The annual revenue requirements will be
allocated to functional cost components
following standards in the AWWA and WEF
manuals of practice. Allocations of operation
and maintenance expenses will be allocated
separately from capital requirements of the
system.
Task 3.3: Distribute Functional Costs to
Customer Classifications
Costs that have been allocated to functional cost
components are distributed to the various
customer classifications based on their
responsibility for the service provided .
Responsibility is established from the units of
service {such as HCF, HCF/day, and number of
customers) applicable to each functional cost
component. Unit costs are developed which are
then applied back to the units of service by
7.00C.000 ~
"*·*l j ~,OIIO,OX. t
j -4QW,000
l.000,000
Comparison of current Revenue with Allocated COS
Commir.,,1 [COM I
The equity of the cullent rate structure and rates is assessed
through a comparison of current revenue with the
allocated Cost of Service.
customer class, which determines each customer classification's cost responsibility.
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Item 8.j. - Page 40
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
Task 4 -Rate Structure Analysis and Rate Design
The rate structures that are selected for each utility should be responsive to the needs and philosophy of
both the utility and its customers. The selected rate structures are a blend of what may be several
competing objectives to accomplish the overall goals desired by the utility and general public. Through
discussion with City staff, our evaluations of the existing rate structures and design of new rate structures
will meet the expectations of the utility and public.
Task 4.1: Evaluate Rate Structures and Calculate Rates
The current rate schedules will be evaluated to validate their applicability for City's cost structure and
customer base. Additionally, up to two alternative rate structures will be proposed to address the goals
and objectives of the City while enhancing the fairness and equitability among the users. A
recommendation will be made as to which rate structures best meets the City's objectives.
It is intended that the recommended rate structure will result in revenue stability, will be easy to
administer and understand, and comply with industry practices such as the AWWA, WEF, and federal,
state, and local regulations for rate setting in California.
Task 4.2: Determine Bill Impacts
The impact to customer bills is an important
aspect of any rate change. The financial
impacts to customers that results between the
existing and alternative rate structure will be
determined and a series of tables and figures
will be created that show projected rate
impacts on different types of customers at
different levels of usage.
Task 4.3: Bill Comparison with Other
Communities
Rate schedules will be gathered from other
local communities for the purpose of
calculating typical bills at various levels of
water and wastewater volume . The number of
communities chosen for analysis will be agreed
upon with the City. Example bills will be
developed using the proposed rate structure
and compared with typical bills of the other
communities at the same volumes.
Single Family jSFR) (with 5/8 inch and 3/4 inch meters)
Current ~ Percent
Description Use (Kgal) Bill ~ Change
Very low 10 S42.7G $44.88 5.0%
Low 20 $62.36 $65.45 5.0%
Median 16 S54.52 S57.23 5.0%
Average 22 $67.58 $69.57 2.9%
High 40 $126.26 S131.16 3.9%
Very High 50 $158 .86 $165 .38 4.1%
The impacts to customer bills can be identified for each rate
structure alternative prior to implementation.
Meetings: Up to two (2) on-site meetings with City Staff
Deliverables: Cost of service analyses, proposed rates and presentation material
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Item 8.j. - Page 41
Proposal for Water and Wastewater Rate Study Update • City of Arroyo Grande
Task 5 -Draft Report Preparation
A Draft Report will be prepared that includes forward looking financial plans, cost allocations, and
proposed rates. The Draft Report will include an executive summary highlighting the major issues,
assumptions, and findings and recommendations. Sections will be included that discuss the financial
plans, cost allocation methodologies, design of the proposed rate structures and rates, and rate
comparisons .
Conference Calls: Up to two (2) conference calls to discuss the Draft Report
Deliverables: An electronic copy and five (5) hard copies of the Draft Report
Comments received will be incorporated into a Draft Final Report for submission to the City. The Draft
Final Report will discuss the financial plan, the alternatives reviewed, the cost of service analyses, the rate
structures analyzed, the selected rate structure, and bill impacts.
Task 6 -Public Workshop
The Draft Report's findings and recommendations will be presented in a PowerPoint presentation format
at an evening public workshop. The presentation will discuss the financial plan, the selected rate
structure, and bill impacts.
Meeting:
Deliverables:
One (1) on-site evening Public Workshop meeting
Presentation materials for Public Workshop
Task 7 -Final Report
Comments received from City Staff and the Public Workshop will be incorporated into a Final Report for
submission to the City. The Final Report will be submitted for adoption at a regular City Council meeting.
At this meeting, it is expected that City Council will adopt the rate study and rates and direct City Staff to
prepare the Proposition 218 Notices.
Deliverables: An electronic copy and five (S) hard copies of the Final Report
Task 8 -Proposition 218 Public Hearing
Tuckfield & Associates will assist in drafting the Proposition 218 notice and attend and present the Final
Report at the Proposition 218 Public Hearing for the adoption of the new rates. To comply with
Proposition 218, the notices must be sent to all property owners/customers at least 45 days prior to the
Public Hearing .
Meeting:
Deliverables:
One (1) on-site meeting for a Public Hearing
Presentation materials for City Council meeting
Schedu le
Tuckfield & Associates has a strong track record of meeting client schedules. Our experience in performing
rate studies enables us to meet the City's goals in a timely and efficient manner. A suggested time-line
schedule is presented below in a graphical format showing key milestone and target dates.
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Item 8.j. - Page 42
Proposal for Water and Wastewater Rate Study Update • itv of Arrovo Grande
City of Arroyo Grande
Water, Wastewater, and Storm Water Rate Study -Project Schedule
Major Task Description NTP 8 22 36 148 162 176 190
Initial Meeting & Data Collection
Long Range Financial Plan
Cost of Service
Rate Structure Analysis and Rates
Administrative Draft Report
Receive Comments
Draft Final Report
Present Draft Final Report
Receive Comments
Final Report
Present at Public Hearing
◄
Proposed Fe e
◄
Tuckfield & Associates provides studies with competitive pricing and billing rates. We propose to
accomplish the tasks described in our scope of work section for a cost not-to-exceed estimate of $36,298.
The cost estimate is based on the standard hourly billing rates above and the number of hours estimated
to complete each task. Direct expenses will be billed at cost and will include expenses related to travel,
lodging, mileage, meals, long distance telephone, printing and binding, and other direct costs. A cost
proposal is provided below.
City of Arroyo Grande Rate Study Update Cost Proposal
Hours ----~
Confere n On-site Clayton Tota l
Ma1or Task De scription ce Cal l Meetin g fuck ti e l d Budget
Hourly Rate $145
Task 1: Initial Meeting & Data Collection 1 3 $435
Task 2: Long Range Financial Plans
Task 2.1: Review Financial Info, Policy & Practice 4 $580
Task 2.2 : Review and Summarize Billing Info 18 $2 ,610
Task 2.3: Develop Long Range Financial Plans 2 44 $6 380
Task 3: Cost of Sen,ice Analyses
Task 3 .1: Analyze Customer Usage Patterns & Classes 16 $2 ,320
Task 3 .2: Al locate Costs to Cost Components 14 $2 ,030
Task 3.3: Distribute Costs to Customer Class 12 $1 .740
Task 4: Rate Analysis and Design 2 2
Task 4.1: Evaluate Rate Structures & Cale Rates 44 $6 ,38 0
Task 4.2: Determine Bill Impacts 22 $3 ,19 0
Task 4 .3: Bill Comparison to Other Communities 6 $870
Task 5: Draft Report 2 20 $2 900
Task 6: Public Workshop 1 8 $1160
Task 7: Final Report 6 $870
Task 8: Proposition 218 Public Hearing 1 6 $870
OPTIONAL: Workshops/Comm Meetings (each, incl prep) $2,610
Total 6 5 241 $34,945
Other Direct Costs (ODCs): Travel, Mileage & Printl~: $1,353
Total Study Cost: $36,298
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Item 8.j. - Page 43
Appendix A
Resume
A resume for Clayton Tuckfield is provided in Appendix A.
Page: 11
Item 8.j. - Page 44
Education
M.8.A. -Finance,
University of Kansas,
Lawrence, KS, 1985
B.S. -Mechanical
Engineering, Kansas State
University, 1980
Registration
Professional Engineer:
Kansas
Years of
Experience
32
Presentations
CSDA 2011 Nov/Dec
Magazine
CSDA 2011 Rate Webinar
AWWA Annual Conference
and Exposition
Toronto, Canada
ASCE, Phoenix, AZ
AFOA, Phoenix, AZ
Clayton Tuckfield, PE MBA
Principal, Tuckfield & Associates Consulting
Mr. Tuckfield is the Principal of Tuckfield & Associates consulting. He has over 30
years of experience serving in various capacities on work performed for publicly
owned water and wastewater utilities. Mr. Tuckfield has performed a variety of
financial feasibility and economic analyses studies including utility cost of service
and rate design studies, impact fee studies, development of pro forma
statements of revenue and operating expense, cash flow analyses, preparation of
engineer's reports for revenue bond official statements, valuations of facilities
use plans, preparation of alternative financing plans for capital improvement
programs, and development of training material for presentation to international
interest groups.
Mr. Tuckfield has conducted or managed over 100 water and wastewater rate
studies for various cities and special districts in California and nationwide. Clients
have included the cities of Long Beach, Ventura, Buena Park, Fullerton, and Loma
Linda and special districts including Nipomo CSD, Heritage Ranch CSD, Templeton
CSD, Keyes CSD, Hilmar CWD, and for many other clients .
Water and Wastewater Utility Rate Studies, City of San Buenaventura,
Ventura, California. Mr. Tuckfield has performed rate study updates almost on
an annual basis for the City from 1990 through 2010. In the most recent study,
Mr. Tuckfield worked with City Staff to ex d the study period to 10 years, develop
various cash flow scenarios for alternative CIP plans, expand water customer
classifications to reflect actual operations, developed analyses regarding the
City's outside rate differential, and presented draft results to City Staff. He has
also prepared information for City Staff's use for conducting internal meetings on
an as needed basis.
Water and Wastewater Cost of Service and Rate Study, Long Beach,
California. Mr. Tuckfield was responsible for cost of service and rates for the
water and wastewater utilities for the City. The project work included
development of utility rates to promote water conservation and to allow easy
implementation and acceptance. The work effort also included development of
computer models to enable the Department to annually review utility rates. The
project included working closely with a departmental task force to develop
alternative rate structure for eventual implementation.
Wastewater Rate Study, City of Santa Barbara, California. Working as a sub consultant to a large
regional consulting firm, Mr. Tuckfield performed a wastewater rate study for the City that involved
developing a revenue plan, allocating costs, and designing several rate structures that included fixed and
variable components . The revenue plan review noted a low cash reserve level because the City had
included other assets into its beginning fund balance . The study identified necessary rate increases that
were adopted by City Council. Justification of the current cost allocations was also performed.
Page: 12
Item 8.j. - Page 45
Clayton Tuckfield, PE MBA
Principal, Tuckfield & Associates Consulting
Water Utility Rate Study, City of Fullerton, California. Working with a City organized task force, this
study included a detailed analysis of the City's Water Fund. Mr. Tuckfield developed proforma revenue,
revenue requirements, and cash flows including review of the water utility program costs for
reasonableness, which resulted in a recommendation to reallocate some of the utility overheads. Costs
were compared to other local cities including various operational ratios and franchise fees. The task force
accepted the recommendations including cash flow, cost of service allocations and rate design. The
proposed utility rates were adopted by the City Council.
Representative Water and Wastewater Rate Studies
• City of Avondale, AZ ■ City of Georgetown, TX ■ City of Pismo Beach, CA
• City Arroyo Grande, CA • City of Grover Beach, CA • City of Santa Cruz, CA
• City of Battle Creek, Ml • City of Homestead, FL • Santa Barbara, CA
• City of Brawley, CA ■ City of Imperial Beach, CA • City of Sioux City, IA
• City of Buena Park, CA • City of Imperial, CA • City of Sioux Falls, SD
■ City of Charleston, SC ■ City of Kalamazoo, Ml • City of Westmorland, CA
• City of Chesapeake, VA ■ City of Loma Linda, CA • DuPage County, IL
• City of El Monte, CA • City of Long Beach, CA • Hilmar County WD, CA
• City of Fayetteville, AR ■ City of Modesto, CA • Mission Springs WD, CA
• City of Firebaugh, CA • City of Oakdale, CA • Nipomo CSD, CA
• City of Flagstaff, AZ • City of Orange Cove, AZ • San Miguel CSD, CA
• City of Florence, AZ ■ City of Peoria, AZ • Templeton CSD, CA
• City of Fullerton, CA • City of Phoenix, AZ • Town of Cave Creek, AZ
Representative Municipal Bond Feasibility Studies
• City of Alexandria, LA • City of Salem, OR • Litchfield Park, AZ
• City of Kansas City, MO • City ofTacoma, WA • Memphis Gas, Water, TN
• City of Owensboro, KY • Eugene Water & Elec, OR • San Dieguito WO, CA
• City of Firebaugh, CA • City of Livingston, CA • City of Buena Park, CA
Other Feasibility Studies
City of Brownsville, TX
City of Detroit, Ml
City of Phoenix, AZ
County of Maui, HI
Imperial Irrigation District, CA
-Electric Utility Rate Study
-Organizational Study
-Impact Fee Review
-Pretreatment Program
-Financial Feasibility Study
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Item 8.j. - Page 46
Clayton Tuckfield, PE MBA
Principal, Tuckfield & Associates Consulting
Imperial Valley Task Force, CA
MWD of Southern California, CA
Saudi Consolidated Electric Co.
Texas A&M University, TX
United Water Conservation District
Publications/Presentations
-Financial Alternatives Study
-Review of New Demand Charges
-Electric Generation Dispatch Model
-Power Supply Alternatives Study
-Water Supply Pricing Model
"Value of Rate Study in Project Finance", CSDA November/December 2011 Magazine, Sacramento,
California
"Role of Rate Study with USDA Financing", CSDA Webinar, September 22, 2011, Sacramento, California
"Committee Involvement Facilitates Rate Implementation", AWWA Annual Conference and Expo,
Toronto, Canada 1996
"Arizona Utility Rates", ASCE Arizona Fall Conference, Phoenix, Arizona 1997
"Utility Rate Seminar'', Arizona Finance Officers Association, Spring Meeting, Flagstaff, Arizona 1998
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Item 8.j. - Page 47
Appendix B
References
References for the Water and Wastewater Rate Study Update Proposal are provided in
Appendix B.
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Item 8.j. - Page 48
Ref erenc es
Mr. Tuckfield has been providing rate consulting services for over 30 years with about 15 years working
with an international consulting firm and about 17 years with Tuckfield & Associates. Listed below are
representative engagements and references for studies delivered by Tuckfield & Associates. These recent
and successful municipal utility financial plans and rate studies are a sample of the work provided to
California communities. The studies have been prepared in conformance with Proposition 218 and all
studies use the cost of service and allocation methods described in the AWWA Manual Ml for water
utilities and WEF Manual of Practice No. 27 for wastewater utilities.
Water and Wastewater Rate Study, City of Pismo Beach, California
Tuckfield & Associates is currently completing a comprehensive water and wastewater rate study for the
City of Pismo Beach. Mr. Tuckfield also completed rate studies for the City in 2007 and 2013. The current
study reviewed and updated the water rate structure to comply with recent legislation and court decisions
regarding tiered water rate structures while also designing water shortage rates that followed the stages
of the City's drought management plan. Additionally, the study updated the wastewater rates and
developed a new storm water charge. Several options for storm water cost recovery were discussed with
City staff.
The 2007 study accounted for all financial aspects of the water and wastewater rates, including each water
supply source, utility debt and assessment debt, and various sub-funds of the utilities. The study included
financial planning, cost of service, and rate structures for both water and wastewater. The 2007 study
results were adopted by city council.
Client Reference
Ms. Nadia Feeser
Administrative Services Director
City of Pismo Beach
(BD5) 113-7010
Email: nfeeser@plsmobeach.org
The 2013 study addressed the city's 2010 Urban Water Management Plan
finding that the city needed to reduce its per capita water consumption
annually to comply with SB x7-7 as well as plan for significant replacement
of infrastructure. One of the water rate structures proposed included a four-
block rate structure to promote conservation. Wastewater rates were
developed following the WEF and SWRCB guidelines as the City has several
loans through the SRF program. Both the water and wastewater proposed
rates were adopted by the City Council.
Water and Wastewater Rate Studies, Nipomo Community Services District,
California
Mr. Tuckfield completed water rate studies for the District in 2011, 2014, and in 2017 that addressed the
District's needs to acquire supplemental water from the City of Santa Maria. Because of recent legal
actions to adjudicate the greater Santa Maria groundwater basin, the
District entered into an MOU to contract for 3,000 ac-ft of supplemental Client Reference
water from Santa Maria. In the 2010 study, Mr. Tuckfield assisted the
Mr. Mario Igles/as
General Manager
NipomoCSD
(805) 929-1133
District with evaluating several financial planning scenarios and rates
regarding the financing and implementation of the supplemental water
project. Rates were ultimately established to cover O&M and capital,
without the project, to allow the District to meet its on-going obligations Email: mlglesias@ncsd.ca.gov
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Item 8.j. - Page 49
while the District pursued establishing an assessment district to finance the project. Rates from the 2010,
2014, and 2917 studies were adopted by the Board of Directors.
In 2013, Tuckfield & Associates assisted the District for a bond offering by providing a statement of
revenue, expense and debt coverage information for its Official Statement, used to secure partial
financing for the supplemental water project. The financing was incorporated into the 2014 rate study
which developed a supplemental water rate structure that passed at the Prop 218 public hearing.
In 2015, Tuckfield & Associates conducted a Wastewater Rate Study for the District. The study included
preparing a long-range financial plan that included reserve targets, debt coverage ratios, and funding of
CIP. Wastewater rates were developed following cost of service principles from the WEF manual of
practice. Wastewater rates are currently scheduled for a Proposition 218 public hearing in November.
Water Rate Study, City of Buena Park, California
Tuckfield & Associates completed a water financial plan and rate study for the City of Buena Park in 2016.
The scope of work included (1) preparing a long-range financial plan that includes assessment of current
revenues to meet the current and future obligations of the water fund, establishing operating and capital
reserve policies, and incorporating financing of the proposed capital improvement program (CIP) spending
plan and (2) design of an appropriate rate structure that complies with Proposition 218.
Three financial plan alternatives were prepared and discussed with City Staff that funded the same CIP but with
various combinations of cash, bond financing, and annual revenue
increases. The cost of service and rate portion of the study included a Client Reference
review and justification of the City's current rate structure and rates and
preparing two tiered rate structure alternatives. The rate structures Mr. Mike Grisso
addressed the recent San Juan Capistrano court decision regarding Utilities Manager
conservation rates by preparing a new tiered rate structure to replace the City of Buena Park
current conservation rate structure while also developing a uniform volume {ll 4}562-37o5
Email: m qrisso @buenapark.com rate structure for all customers. The rates were adopted by City Council.
In August 2017, the City engaged Tuckfield & Associates to provide an updated water financial plan for inclusion
in their water bond Official Statement. Revenue bonds are planned from which to obtain proceeds from the
sale to finance the CIP projects.
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