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HomeMy WebLinkAbout25A - AMEND AGMT WITH STANTEC FOR WATER RATEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 4, 2020 TITLE: APPROVE AN AMENDMENT TO THE AGREEMENT WITH STANTEC TO INCLUDE A WATER RATE ASSISTANCE PROGRAM FEASIBILITY STUDY FOR AN AMOUNT NOT TO EXCEED $37,124 (NON -GENERAL FUND) {STRATEGIC PLAN NO. 6, 1H} /s/Kristine Ri CITY MANAGER CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO 1�1��►1�1�1:3q:7 RECOMMENDED ACTION Authorize the City Manager to amend the agreement with Stantec to expand the scope of work to include a Water Rate Assistance Program Feasibility Study and additional community outreach efforts, increasing the compensation by an amount not to exceed $37,124, for a total agreement amount not to exceed $220,124, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION On July 3, 2018, at the conclusion of a competitive bid process, the City entered into an agreement with Stantec to perform a Cost of Service Study for the Water and Sewer enterprises. Their primary tasks were to create a financial plan for each enterprise, perform a cost -of -service analysis, and provide a recommended five-year rate structure for City Council consideration. On November 19, 2019, the City Council approved a resolution adjusting City water and sewer rates, including the five-year schedule of rate increases. The rate increases were necessary to cover the costs of the significant investment needed for the repair and rehabilitation of the City's aging water and sewer infrastructure. The City's Public Works Water Resources Division approached Stantec about conducting a feasibility study to evaluate the legal and procedural elements of creating a Water Rate Assistance Program (WRAP) to help offset the cost of water service for income -restricted customers. The feasibility study will evaluate the legal constraints of establishing a WRAP in California, conduct a survey of other utilities in California that offer similar programs, and provide a high-level description of implementation requirements, such as the customer qualification process and level(s) of assistance provided. 25A-1 Approve an Amendment to Agreement with Stantec to include a Water Rate Assistance Program Feasibility Study February 4, 2020 Page 2 Additional community outreach is also recommended to further explain how the newly adopted rates will affect customers and how the increased revenue will be used. The Water Resources Division will host community meetings at various locations throughout the city to inform residents of the planned improvement projects and the benefits they will provide to water and sewer customers. Staff recommends that the existing agreement with Stantec be amended to expand their scope of work to include a Water Rate Assistance Program Feasibility Study and additional community outreach efforts. Stantec will be able to provide this service on a cost-effective and expedient time frame, due to work already performed for the Cost of Service Study. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy H (complete water/waste water rate study to ensure adequate resources to capture critical long-term capital needs). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Funds are budgeted and available in the Water Administration and Engineering Account (No. 06017645-62300) for expenditure in Fiscal Year 2019-20 as follows: Fiscal Year Accounting Unit — Fund Accounting Unit, Account Amount Account No. Description Description FY 2019-20 06017645-62300 Water WaterAdmin/Engineering, $37,124 Fund Contract Services -Professional Total Amendment: $37,124 25A-2 Approve an Amendment to Agreement with Stantec to include a Water Rate Assistance Program Feasibility Study February 4, 2020 Page 3 Nabil Saba, PE Interim Executive Director Public Works Agency NS/RR Exhibit 1. Amendment to Agreement APPROVED AS TO FUNDS AND ACCOUNTS: Kathryn Downs Executive Director Finance & Management Services Agency 25A-3 Exhibit 1 THIRD AMENDMENT TO AGREEMENT TO PERFORM COST OF SERVICE STUDY FOR WATER AND SEWER ENTERPRISES THIS THIRD AMENDMENT to the above -referenced agreement is entered into on February 4, 2020, by and between Stantec ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The parties entered into Agreement No. A-2018-172, dated July 3, 2018, by which Consultant agreed to perform a cost of service study for the City's water and sewer enterprises ("Agreement"). B. On February 5, 2019, the parties entered into First Amendment No. A-2019-019, by which the Agreement was amended to include the performance of a capacity charge study and to increase the maximum expenditure under the Agreement to compensate for these additional services. C. On July 16, 2019, the parties entered into Second Amendment No. A-2019-114, by which the Agreement was further amended to expand the scope of services and to increase the maximum expenditure under the Agreement accordingly. D. The Agreement remains in effect through July 2, 2021, with provision for extension, and the parties now wish to further amend the Agreement to expand the scope of services and to increase the maximum expenditure under the Agreement to compensate for the additional services. The Parties therefore agree: 1. Section 1, Scope of Services, is amended to include the performance of a water rate assistance program feasibility study, as described in Exhibit A. 2. Section 2.a., Compensation, is amended to increase the total sum to be expended under the Agreement by $37,124 to cover the cost of the water rate assistance program feasibility study, as indicated on Exhibit A. 3. Except as modified by this Third Amendment, and all prior amendments, all terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to the Agreement on the date and year first written above. DAISY GOMEZ KRISTINE RIDGE Clerk of the Council City Manager - signatures continue on next page - Page 1 of 2 25A-4 APPROVED AS TO FORM SONIA R. CARVALHO City Attorney By: 1w. -f� L JCWIN M. FUNK Assistant City Attorney RECOMMENDED FOR APPROVAL NABIL SABA Acting Executive Director Public Works Agency CONSULTANT David Hyder Project Director Page 2 of 2 25A-5 EXHIBIT A ® Stantec December 18, 2019 Attention: Mr. Rudy Rosas City of Santa Ana, Public Works Agency 215 South Center Avenue, Building A Santa Ana. CA 92703 Reference: Water Rate Assistance Program Feasibility Study and Community Outreach Support, Amendment No. 3 Dear Mr. Rosas, As requested, Stantec Consulting Services Inc. (Stantec) is pleased to present this proposed third amendment to the Water and Sewer Study to complete a feasibility study for the potential development of a Water Rate Assistance Program (WRAP) and to provide community outreach support as needed. The Purpose of the Project The City of Santa Ana recently approved updates to the City's water and sewer rate structures along with a five-year schedule of rate increases. In addition, it is anticipated that Metropolitan Water District (MWD) and Orange County Water District (OCWD) will also increase the cost of providing water to the City, a cost that will be passed onto rate payers. These rate increases are likely to place a burden on some of the City's customers. To provide some financial relief to the most vulnerable rate payers within the City of Santa Ana, Staff has requested that Stantec and Hildebrand Consulting, LLC conduct a feasibility study to evaluate the legal and procedural elements of creating a WRAP for the City of Santa Ana, and the current funding available to deliver such a program. The community outreach support task is geared to inform the public regarding how users may be impacted by the newly adopted water and sewer rates. This outreach will address the study methodology, how the revenue from the increased rates will be used, as well as other topics as needed. Scope of the Requested Services Stantec and Hildebrand Consulting, LLC will deliver the following scope of work regarding the WRAP: 1. Evaluate the legal constraints to establishing a WRAP in California along with any pending state level initiatives; 2. Conduct a survey of other utilities in California that have implemented a WRAP; I Summarize the potential sources of funding and the range of funding requirements for the WRAP; and 4. Provide a high-level description of implementation requirements, such as qualifying customers for the program and identifying the level of assistance provided. Design with community in mind 25A-6 December 18, 2019 Mr. Rudy Rows Page 2 of 6 Reference: Water Rate Assistance Program Feasibility Study and Comm nity Outreach Support, Amendment No.3 This scope of work will not include an economic evaluation of the customer need for a WRAP, a projection of the overall impact the WRAP will have on bill affordability, nor a detailed implementation plan. The outreach meetings will be delivered by Stantec, Hildebrand Consulting, LLC, and/or CV Strategies (or a combination thereof). The effort associated with the outreach meetings may include 1. Preparing PowerPoint presentation and supporting materials; 2. Coordinating with City Staff to develop "messaging"; 3. Producing meeting handouts; and 4. Delivering presentations at public meetings. The cost of each event will depend on the amount of new presentation material and the number of consultants that attend the event. As such, costs may range from as little as $2,000 per meeting to $5,000 per meeting. The level of effort for each event will be discussed with, and subject to approval by, the City Project Manager. It is assumed that the City will secure and coordinate the meeting locations. Project Team This project will be staffed with the same team that has been working with the City over the past year. Mark Hildebrand (of Hildebrand Consulting, LLC) will continue in his role as the Project Manager, Matthew Freiberg will continue to deliver the project as the Lead Consultant, and CV Strategies will support the development of public outreach materials on an as needed basis. David Hyder will serve as the Project Director in an advisory and quality control capacity. Stantec has additional staffing resources should the need arise. Estimated Cost of the Continued Services The presented scope of services to develop the WRAP feasibility study is estimated to require 98 labor hours for a total not -to -exceed fee (including expenses) of $22,124. The customer outreach support will be delivered on an as needed basis, with a not -to -exceed fee (including expenses) of $15,000. The total Amendment #3 not -to -exceed amount will be $37,124. Consistent with our prior services and the terms of Amendment #2, we propose to provide these services on a time and materials basis and invoice monthly. A detailed breakdown of the WRAP scope of work and proposed work plan is provided below. We can begin work on this assignment immediately on receipt of notice to proceed and anticipate the completion of the analysis prior to June 30, 2020 unless there are deviations from the scope or schedule requested by the City. Please let us know if you have any questions or comments regarding this proposal. We appreciate the opportunity to be of continued service to the City. Design with community in mind 25A-7 December 18, 2019 Mr. Rudy Rosas Page 3 of 6 Reference: Water Rate Assistance Program Feasibility Study and community Outreach Support, Amendment No. 3 Regards, �- David Hyder Principal, Financial Consulting Services Signing Authority Act Mark Hildebrand Hildebrand Consulting, LLC Project Manager 25A-8 December 18, 2019 Mr. Rudy Rows Page 4 of 6 Reference: Water Rate Assistance Program Feasibility Study and Comm nity Outreach Support, Amendment No.3 Proposed Scope of Work Based on our understanding of the City's requested services, we propose to complete the following tasks. Task 1. Water Rate Assistance Program Feasibility Study Task 1 a. Project Initiation This initial task will be used to gather information and understand the City's Water Rate Assistance Program needs. To initialize the study, we will conduct a Project Kickoff Conference Call with staff to: ✓ Discuss key issues, roles and responsibilities ✓ Confirm study objectives and further explore project drivers ✓ Confirm data requirements as needed ✓ Finalize the project schedule, including key milestone dates and deliverables Prior to the call, Stantec will provide a data request list outlining information needed, including but not limited to City budgets, service area maps, and other items not already obtained through the recent rate study. Task 1 b. Evaluate the legal constraints to establishing a Water Rate Assistance Program in California Our team will prepare a deliverable that summarizes the legal constraints for implementing water rate assistance programs in California, specifically addressing key elements of Proposition 218 and relevant case law. We will also summarize the current status of any relevant state -level affordability initiatives (such as the State Water Board's proposed Bill Assistance Program). Finally, we will conduct a survey that describes affordability programs that have been implemented by other California cities, including a description of the funding source (if made available). Task 1 c. Potential Sources of Funding for the Water Rate Assistance Program In this Task 1c, we will provide a description of all feasible sources of funding for the WRAP. Common sources of funding are: • Non -rate revenue within the water or sewer fund • Discretionary tax revenues (transfers from the General Fund) • Special taxes (ear -marked taxes) • Voluntary bill donations from other customers We will also research any external funding opportunities that may be available, including state assistance programs from Task II. Design with community in mind 25A-9 December 18, 2019 Mr. Rudy Rows Page 5 of 6 Reference: Water Rate Assistance Program Feasibility Study and Comm nity Outreach Support, Amendment No.3 Task Id. Water Rate Assistance Program Implementation Plan We will describe the key elements of implementing a Water Rate Assistance Program, including options such as: • Discount calculation (how to determine the size of the discount); • Rebate mechanisms (discounts, retroactive bill refunds, indirect assistance, etc.); and • Qualification process (how to ascertain the low-income status of customer). Task le. Technical Memorandum As a final task, we will develop a draft and final technical memorandum that will include the findings from Tasks 2, 3, & 4. Task 2. Community Outreach Support The delivery of task 2 will be on an as needed basis. Our project team will develop a PowerPoint presentation to be delivered at each public presentation, along with any needed supporting materials. In advance of each public meeting, our team will coordinate with City staff to fine tune the messaging for the intended audience. The presentations will be provided by Stantec, Hildebrand Consulting, LLC, and/or CV Strategies. Design with community in mind 25A-10 � } (. - : ./ :- \\\\ /\ \ _ \\ :� {\\\ . -- ::l:7:lo •::: Tx_ k_ / 9 «z>t |E o o o =7/t .z 1» ] 4\}})}Z}7|707 {}}/{\{ \ §7\ - - :» : �_::�_:_,�,\> ;>}!>:: // !!/: \ ( \ 25A.11