HomeMy WebLinkAbout2024-116 PO 20240380 HDR Engineering Inc.
Purchase Order
Fiscal Year2024Page:1 of: 1
THISPO NUMBER MUSTAPPEAR ON ALL
INVOICES, AND SHIPPINGDOCUMENTS.
B
City of Ashland
I
ATTN:Accounts Payable
Purchase
L
20 E. Main
L
20240380
Order#
Ashland, OR 97520
Phone: 541/552-2010
T
Email: payable@ashland.or.us
O
S
VC/O Public WorksDepartment
H
HDR ENGINEERING INC
E
51 Winburn Way
I
PO BOX 74008202
N
Ashland, OR 97520
P
CHICAGO, IL 60674-8202
D
Phone: 541/488-5347
OEmail: ACCOUNTSRECEIVABLE@HDRINC.COM
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Fax: 541/488-6006
R
O
Vendor Phone NumberVendor Fax NumberRequisition NumberDeliveryReference
20240196
DateOrderedVendor NumberFreight Method/TermsDepartment/Location
DateRequired
06/04/20242369FOB ASHLAND OR/NET30Public WorksDepartment
Item#Description/PartNoQTYUOMUnit PriceExtended Price
Waterrate study
1Waterrate study1.0EACH$49,814.00$49,814.00
Project Account:
***************GL SUMMARY ***************
081800 - 604100$49,814.00
By:Date:
AuthorizedSignature
PO Total$49,814.00
PERSONAL SERVICES AGREEMENT (greater than $25,000.00)
CONSULTANT: HDR Engineering, Inc.
CONSULTANTÓS CONTACT: Josiah Close
ADDRESS: 1050 SW Sixth Avenue, Suite 1800
20 East Main Street
Portland, OR 97204
Ashland, Oregon 97520
Telephone: 541/488-5587
TELEPHONE: 360-570-7294
Fax: 541/488-6006
EMAIL: josiah.close@hdrinc.com
This Personal Services Agreement (hereinafter ÐAgreementÑ) is entered into by and between the City of
Ashland, an Oregon municipal corporation (hereinafter "City") and HDR Engineering Inc., a foreign business
corporation ("hereinafter ÐConsultant"), for a Water Rate Study.
NOW THEREFORE, in consideration of the mutual covenants contained herein, the City and
Consultant hereby agree as follows:
1. Effective Date and Duration: This Agreement shall become effective on the date of execution on
behalf of the City, as set forth below (the ÐEffective DateÑ), and unless sooner terminated as specifically
provided herein, shall terminate upon the City's affirmative acceptance of Consultant's Work as
complete and Consultant's acceptance of the City's final payment therefore, but not later than June 30,
2025.
2. Scope of Work: Consultant will provide a water rate study, as more fully set forth in the ConsultantÓs
Scope of Services for Water Rate Study, April 29, 2024, which is attached hereto as ÐExhibit AÑ and
incorporated herein by this reference. ConsultantÓs services are collectively referred to herein as the
ÐWork.Ñ
3. Supporting Documents/Conflicting Provisions: This Agreement and any exhibits or other supporting
documents shall be construed to be mutually complimentary and supplementary wherever possible. In
the event of a conflict which cannot be so resolved, the provisions of this Agreement itself shall control
over any conflicting provisions in any of the exhibits or supporting documents.
4. All Costs Borne By Consultant: Consultant shall, at its own risk and expense, perform the Work
described above and, unless otherwise specified in this Agreement, furnish all labor, equipment, and
materials required for the proper performance of such Work.
5. Qualified Work: Consultant has represented, and by entering into this Agreement now represents, that
all personnel assigned to the Work to be performed under this Agreement are fully qualified to perform
the service to which they will be assigned in a skilled and professional manner and, if required to be
registered, licensed or bonded by the State of Oregon, are so registered, licensed and bonded.
Page 1 of 6: Personal Services Agreement with HDR
6. Compensation: City shall pay Consultant the sum of $49,814.00 as full compensation for Consultant's
performance of all Work under this Agreement. In no event shall Consultant's total of all compensation
and reimbursement under this Agreement exceed the sum of $49,814.00 without the express, written
approval from the City official whose signature appears below, or such official's successor in office.
Payments shall be made within 30 days of the date of receipt by the City of ConsultantÓs invoice.
Should this Agreement be terminated prior to completion of all Work, payments will be made for any
phase of the Work completed and accepted as of the date of termination.
7. Ownership of Work/Documents: All Work product or documents produced in furtherance of this
Agreement belong to the City, and any copyright, patent, trademark proprietary or any other protected
intellectual property right shall vest in and is hereby assigned to the City. Any reuse of the work product
by the City for purposes not contemplated herein shall be at the City Ó s sole risk, without liability to
Consultant.
8. Statutory Requirements: The following laws of the State of Oregon are hereby incorporated by
reference into this Agreement: ORS 279B.220, 279B.230 and 279B.235.
9. Living Wage Requirements: If the amount of this Agreement is $21,507.75 or more, Consultant is
required to comply with Chapter 3.12 of the Ashland Municipal Code by paying a living wage, as
defined in that chapter, to all employees performing Work under this Agreement and to any
Subcontractor who performs 50% or more of the Work under this Agreement. Consultant is also
required to post the notice attached hereto as Ð Exhibit B Ñ predominantly in areas where it will be seen
by all employees.
10. Indemnification: Consultant hereby agrees to defend, indemnify, save, and hold City, its officers,
employees, and agents harmless from any and all losses, claims, actions, costs, expenses, judgments,
subrogations, or other damages resulting from injury to any person (including injury resulting in death),
or damage (including loss or destruction) to property, of whatsoever nature to the extent the losses,
claims, costs, expenses, or other damages are caused by the negligent acts, or errors or omissions of
Consultant (including but not limited to, Consultant's employees, agents, and others designated by
Consultant to perform Work or services attendant to this Agreement) in the performance of this
Agreement. However, Consultant shall not be held responsible for any losses, expenses, claims,
subrogations, actions, costs, judgments, or other damages, directly or solely caused by the negligence of
City.
11. Termination:
a. Mutual Consent. This Agreement may be terminated at any time by the mutual consent of both
parties.
b. City's Convenience. This Agreement may be terminated by City at any time upon not less than
30 daysÓ prior written notice delivered by certified mail or in person.
c. For Cause. City may terminate or modify this Agreement, in whole or in part, effective upon
delivery of written notice to Consultant, or at such later date as may be established by City under
any of the following conditions:
i. If City funding from federal, state, county or other sources is not obtained and continued at
levels sufficient to allow for the purchase of the indicated quantity of services;
ii. If federal or state regulations or guidelines are modified, changed, or interpreted in such a
way that the services are no longer allowable or appropriate for purchase under this
Agreement or are no longer eligible for the funding proposed for payments authorized by this
Page 2 of 6: Personal Services Agreement with HDR
Agreement; or
iii. If any license or certificate required by law or regulation to be held by Consultant to provide
the services required by this Agreement is for any reason denied, revoked, suspended, or not
renewed.
d. For Default or Breach.
i. Either City or Consultant may terminate this Agreement in the event of a breach of the
Agreement by the other. Prior to such termination the party seeking termination shall give to
the other party written notice of the breach and its intent to terminate. If the party
committing the breach has not entirely cured the breach within fifteen (15) days of the date of
the notice, or within such other period as the party giving the notice may authorize in writing,
then the Agreement may be terminated at any time thereafter by a written notice of
termination by the party giving notice.
ii. Time is of the essence for ConsultantÓs performance of each and every obligation and duty
under this Agreement. City by written notice to Consultant of default or breach may at any
time terminate the whole or any part of this Agreement if Consultant fails to provide services
called for by this Agreement within the time specified herein or within any extension thereof.
iii. The rights and remedies of City provided in this subsection (d) are not exclusive and are in
addition to any other rights and remedies provided by law or under this Agreement.
e. Obligation/Liability of Parties. Termination or modification of this Agreement pursuant to
subsections a, b, or c above shall be without prejudice to any obligations or liabilities of either
party already accrued prior to such termination or modification. However, upon receiving a
notice of termination (regardless whether such notice is given pursuant to Subsection a, b, c, or d
of this section, Consultant shall immediately cease all activities under this Agreement, unless
expressly directed otherwise by City in the notice of termination. Further, upon termination,
Consultant shall deliver to City all Agreement documents, information, works-in-progress and
other property that are or would be deliverables had the Agreement been completed. City shall
pay Consultant for Work performed prior to the termination date if such Work was performed in
accordance with this Agreement.
12. Independent Contractor Status: Consultant is an independent contractor and not an employee of the
City for any purpose. Consultant shall have the complete responsibility for the performance of this
Agreement. Consultant shall provide workers' compensation coverage as required in ORS Chapter 656
for all persons employed to perform Work pursuant to this Agreement. Consultant is a subject employer
that will comply with ORS 656.017.
13. Assignment: Consultant shall not assign this Agreement or subcontract any portion of the Work
without the written consent of City. Any attempted assignment or subcontract without written consent
of City shall be void. Consultant shall be fully responsible for the acts or omissions of any assigns or
subcontractors and of all persons employed by them, and the approval by City of any assignment or
subcontract of the Work shall not create any contractual relation between the assignee or subcontractor
and City.
14. Default. The Consultant shall be in default of this Agreement if Consultant: commits any material
breach or default of any covenant, warranty, certification, or obligation under the Agreement; institutes
an action for relief in bankruptcy or has instituted against it an action for insolvency; makes a general
assignment for the benefit of creditors; or ceases doing business on a regular basis of the type identified
Page 3 of 6: Personal Services Agreement with HDR
in its obligations under the Agreement; or attempts to assign rights in, or delegate duties under, this
Agreement.
15. Insurance. Consultant shall, at its own expense, maintain the following insurance:
a. WorkerÓs Compensation insurance in compliance with ORS 656.017, which requires subject
employers to provide Oregon workersÓ compensation coverage for all their subject workers
b. Professional Liability insurance with a combined single limit, or the equivalent, of not less than
$2,000,000 (two million dollars) per claim. This is to cover any damages caused by any error,
omission or negligent act related to the professional services to be provided under this Agreement.
ÐTailÑ coverage will be required at the completion or expiration of this Agreement for a duration of
forty-eight (48) months following such completion or expiration. Consultant will be responsible for
furnishing acceptable insurance certif icates showing such ÐtailÑ coverage as described or continuous
Ðclaims madeÑ professional liability coverage for forty-eight (48) months following the termination
or expiration of this Agreement. Continuous Ðclaims madeÑ professional liability coverage wi ll be
acceptable in lieu of ÐtailÑ coverage, provided its retroactive date is on or before the Effective Date
of this Agreement. This coverage will be a condition of the final acceptance of the Work performed
pursuant to this Agreement.
c. General Liability insurance with a combined single limit, or the equivalent, of not less than
$2,000,000 (two million dollars) per occurrence for Bodily Injury, Death, and Property Damage.
d. Automobile Liability insurance with a combined single limit, or the equivalent, of not less than
$1,000,000 (one million dollars) for each accident for Bodily Injury and Property Damage, including
coverage for owned, hired or non-owned vehicles, as applicable.
e. Notice of cancellation or change. There shall be no cancellation, material change, reduction of limits
or intent not to renew the insurance coverage(s) without 30 daysÓ prior written notice from the
Consultant or its insurer(s) to the City.
f. Additional Insured/Certificates of Insurance. Consultant shall name the City of Ashland, Oregon,
and its elected officials, officers and employees as Additional Insureds on any insurance policies,
excluding Professional Liability and WorkersÓ Compensation, required herein, but only with
respect to ConsultantÓs services to be provided under this Agreement. The consultantÓs insurance is
primary and non-contributory. As evidence of the insurance coverages required by this Agreement,
the Consultant shall furnish acceptable insurance certificates prior to commencing the Work under
this Agreement. The certificate will specify all of the parties who are Additional Insureds. Insuring
companies or entities are subject to the CityÓs acceptance. If requested, complete redacted copies of
insurance policies; trust agreements, etc. shall be provided to the City. The Consultant shall be
financially responsible for all pertinent deductibles, self-insured retentions, and/or self-insurance.
16. Nondiscrimination: Consultant agrees that no person shall, on the grounds of race, color, religion,
creed, sex, marital status, familial status or domestic partnership, national origin, age, mental or physical
disability, sexual orientation, gender identity or source of income, suffer discrimination in the
performance of any Work under this Agreement when employed by Consultant. Consultant agrees to
comply with all applicable requirements of federal and state civil rights and rehabilitation statutes, rules
and regulations. Further, Consultant agrees not to discriminate against a disadvantaged business
enterprise, minority-owned business, woman-owned business, a business that a service-disabled veteran
owns or an emerging small business enterprise certified under ORS 200.055, in awarding subcontracts as
required by ORS 279A.110.
Page 4 of 6: Personal Services Agreement with HDR
17. ConsultantÓs Compliance With Tax Laws:
17.1 Consultant represents and warrants to the City that:
17.1.1 Consultant shall, throughout the term of this Agreement, including any extensions hereof,
comply with:
(i) All tax laws of the State of Oregon, including but not limited to ORS 305.620 and ORS
Chapters 316, 317, and 318;
(ii) Any tax provisions imposed by a political subdivision of the State of Oregon applicable
to Consultant; and
(iii) Any rules, regulations, charter provisions, or ordinances that implement or enforce any
of the foregoing tax laws or provisions.
17.1.2 Consultant, for a period of no fewer than six (6) calendar years preceding the Effective Date
of this Agreement, has faithfully complied with:
(i) All tax laws of the State of Oregon, including but not limited to ORS 305.620 and ORS
Chapters 316, 317, and 318;
(ii) Any tax provisions imposed by a political subdivision of the State of Oregon applicable
to Consultant; and
(iii) Any rules, regulations, charter provisions, or ordinances that implement or enforce any
of the foregoing tax laws or provisions.
18. Governing Law; Jurisdiction; Venue: This Agreement shall be governed and construed in accordance
with the laws of the State of Oregon without resort to any jurisdictionÓs conflict of laws, rules or
doctrines. Any claim, action, suit or proceeding (collectively, "the claim") between the City and the
Consultant that arises from or relates to this Agreement shall be brought and conducted solely and
exclusively within the Circuit Court of Jackson County for the State of Oregon. If, however, the claim
must be brought in a federal forum, then it shall be brought and conducted solely and exclusively within
the United States District Court for the District of Oregon filed in Jackson County, Oregon. Consultant,
by its signature hereon of its authorized representative, hereby consents to the in personam jurisdiction
of said courts.
19. THIS AGREEMENT AND THE ATTACHED EXHIBITS CONSTITUTE THE ENTIRE
UNDERSTANDING AND AGREEMENT BETWEEN THE PARTIES. NO WAIVER, CONSENT,
MODIFICATION OR CHANGE OF TERMS OF THIS AGREEMENT SHALL BIND EITHER
PARTY UNLESS IN WRITING AND SIGNED BY BOTH PARTIES. SUCH WAIVER, CONSENT,
MODIFICATION OR CHANGE, IF MADE, SHALL BE EFFECTIVE ONLY IN THE SPECIFIC
INSTANCE AND FOR THE SPECIFIC PURPOSE GIVEN. THERE ARE NO UNDERSTANDINGS,
AGREEMENTS, OR REPRESENTATIONS, ORAL OR WRITTEN, NOT SPECIFIED HEREIN
REGARDING THIS AGREEMENT. CONSULTANT, BY SIGNATURE OF ITS AUTHORIZED
REPRESENTATIVE, HEREBY ACKNOWLEDGES THAT HE/SHE HAS READ THIS
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND
CONDITIONS.
20. Amendments. This Agreement may be amended only by written instrument executed by both parties
with the same formalities as this Agreement.
21. Nonappropriations Clause. Funds Available and Authorized: City has sufficient funds currently
available and authorized for expenditure to finance the costs of this Agreement within the CityÓs fiscal
year budget. Consultant understands and agrees that CityÓs payment of amounts under this Agreement
attributable to Work performed after the last day of the current fiscal year is contingent on City
appropriations, or other expenditure authority sufficient to allow City in the exercise of its reasonable
Page 5 of 6: Personal Services Agreement with HDR
administrative discretion, to continue to make payments under this Agreement. In the event City has
insufficient appropriations, limitations or other expenditure authority, City may terminate this
Agreement without penalty or liability to City, effective upon the delivery of written notice to
Consultant, with no further liability to Consultant.
22.Certification. Consultant shall sign the certificat ion attached hereto as ÐExhibit CÑ and incorporated
herein by this reference.
23.Estimates.Any estimates of costs, value or savings provided by Consultant as part of its services
hereunder are made on the basis of information available to Consultant and on the basis of Consultant's
experience and qualifications, and represents its judgment as an experienced and qualified professional
engineer. However, since Consultant has no control over the impact of various factors that impact actual
costs, value or savings, Consultant does not guarantee that the actual costs, value or savings will not
vary from Consultant's estimates. Additionally, when preparing any work product hereunder, Consultant
may rely, in whole or in part, on data and information provided by the City and third parties, which
information shall not be independently verified by Consultant. Therefore, while Consultant will utilize
the industry standard of care in preparing any work product, Consultant does not warrant or guarantee
any conclusions set forth in any work product provided under this Agreement which are dependent or
based upon data, information or statements supplied by third parties or the City.
CITY OF ASHLAND:HDR(CONSULTANT):
Digitally signed by Tracy
Ellwein
Date: 2024.05.20
14:50:54-07'00'
By: ___________________________________By: _______________________________
Interim City ManagerSignature
Tracy Ellwein
Scott Fleury
____________________________________________________________________
Printed NamePrinted Name
5.21.2024
Vice President
____________________________________________________________________
DateTitle
_________________________________
Date
Purchase Order No. _______________________(W-9 is to be submitted with this signed Agreement)
Proposed changes, AATF.
Carmel Zahran, Assistant City Attorney
5.16.24
Page 6of6: Personal Services Agreementwith HDR
EXHIBIT C
CERTIFICATIONS/REPRESENTATIONS: Consultant, by and through its authorized representative, under
penalty of perjury, certifies that (a) the number shown on the attached W-9 form is its correct taxpayer ID (or is
waiting for the number to be issued to it and (b) Consultant is not subject to backup withholding because: (i) it
is exempt from backup withholding, or (ii) it has not been notified by the Internal Revenue Service (IRS) that it
is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has
notified it that it is no longer subject to backup withholding. Consultant further represents and warrants to City
that: (a) it has the power and authority to enter into and perform the Work, (b) the Agreement, when executed
and delivered, shall be a valid and binding obligation of Consultant enforceable in accordance with its terms, (c)
the work under the Agreement shall be performed in accordance with the customary professional standards, and
(d) Consultant is qualified, professionally competent, and duly licensed (if applicable) to perform the Work.
Consultant also certifies under penalty of perjury that its business is not in violation of any Oregon tax laws, it
is an independent contractor as defined in the Agreement, it is authorized to do business in the State of Oregon,
and Consultant has checked four or more of the following criteria that apply to its business.
______ (1) Consultant carries out the work or services at a location separate from a private residence or is in
a specific portion of a private residence, set aside as the location of the business.
______ (2) Commercial advertising or business cards or a trade association membership are purchased for
the business.
______ (3) Telephone listing is used for the business separate from the personal residence listing.
______ (4) Labor or services are performed only pursuant to written contracts.
______ (5) Labor or services are performed for two or more different persons within a period of one year.
______ (6) Consultant assumes financial responsibility for defective workmanship or for service not
provided as evidenced by the ownership of performance bonds, warranties, errors and omission
(professional liability) insurance or liability insurance relating to the Work or services to be
provided.
__________________________________________________________
Consultant Date
Page 1 of 1 EXHIBIT C
EXHIBIT B
C I T Y O F A S H L A N D, O R E G O N
City of Ashland
LIVING
ALL employers described
WAGE
below must comply with City
of Ashland laws regulating
payment of a living wage.
$18.12 per hour, effective June 30, 2023.
The Living Wage is adjusted annually every
June 30 by the Consumer Price Index.
portion of business of their 401K and IRS eligible
Employees must be paid a
employer, if the employer has cafeteria plans (including
living wage:
ten or more employees, and childcare) benefits to the
has received financial amount of wages received by
assistance for the project or the employee.
For all hours worked under a
business from the City of
service contract between their
Ashland in excess of Note: For temporary and
employer and the City of
$25,335.05. part-time employees, the
Ashland if the contract
Living Wage does not apply
exceeds $25,335.05 or more.
If their employer is the City of to the first 1040 hours worked
Ashland, including the Parks in any calendar year. For
For all hours worked in a
and Recreation Department. more details, please see
month if the employee spends
Ashland Municipal Code
50% or more of the
In calculating the living wage, Section 3.12.020.
employeeÓs time in that month
employers may add the value
working on a project or
of health care, retirement,
Foradditionalinformation:
Call the Ashland City AdministratorÓs office at 541-488-6002 or write to the City Administrator,
City Hall, 20 East Main Street, Ashland, OR 97520, or visit the CityÓs website at www.ashland.or.us.
Notice to Employers: This notice must be posted predominantly in areas where it can be
seen by all employees.
Page 1 of 1 EXHIBIT B
City of Ashland | Water Rate Study
HDR Proposal
Scope of Services
Based on Study goals and objectives and City-requested services, the following scope of
services has been developed.
Task 1. Project Management
Task 1 includes general project management activities required to complete the project. This
includes allocating the labor resources to the project and working with the City Project Manager
to schedule project meetings and provide regular progress reports.
EXPECTED CITY STAFF SUPPORT FOR TASK 1:
Coordination with HDR
Review and process invoices
TASK 1 DELIVERABLES:
Progress reports and invoices summarizing of project status and budget
Task 2. Data Collection and Review
HDR will provide an electronic copy of the written data request to the City that outlines the data
and information for the Study. The primary data will be historical customer consumption data,
operating budget, capital improvement plan, asset/depreciation data, etc. The data request will
be provided prior to the kick-off meeting to provide City staff time to send the data to HDR for
review prior to the kick-off meeting. This will provide both parties time to review and discuss
outstanding data needs or alternative data to support the Study.
EXPECTED CITY STAFF SUPPORT FOR TASK 2:
Provide HDR with the requested data and information.
Provide additional, or alternative, data to support the development of the Study as
needed.
TASK 2 DELIVERABLES:
An electronic written data request detailing the data for the Study.
Identification of data gaps or additional data needs.
Task 3. Initial Kick-Off Meeting
The initial project (kick-off) meeting will review Study goals and objectives, review the scope of
services, and discuss Study issues or concerns that either party may have. This meeting is
proposed to be held virtually for a two-hour period and include up to two HDR project team
members.
EXPECTED CITY STAFF SUPPORT FOR TASK 3:
Key staff members participate in a two-hour kick-off meeting at the CityÓs offices.
April 29, 2024 | 2
City of Ashland | Water Rate Study
HDR Proposal
TASK 3 MEETINGS:
A virtual kick-off meeting two HDR project team members to:
ɉ Identification of objectives, issues, and concerns by both parties.
ɉ Review and confirm Scope of Services, data needs, and general approach.
Task 4. Revenue Requirement Analysis
Development of the revenue requirement analysis is the first major analytical portion of the
Study process. This portion of the Study entails reviewing the revenues and expenses to
provide water services. The steps involved in developing the revenue requirement are described
below.
Step 1 Î Selection of a Test Period
A test period refers to a time frame of reference for the accumulation of revenues, expenses,
and consumption data. HDR will discuss the projected time period with the City during the initial
project kick-off meeting. HDR assumes a projected time period for the next five (e.g., fiscal year
\[FY\] 2025 Î FY 2029) would be appropriate.
Step 2 Î Method of Accumulating Costs
A cash basis methodology is proposed. This methodology sums the uses of funds which include
the CityÓs operation and maintenance (O&M) expenses, taxes/transfer payments, debt service,
and capital improvements funded from rates. This is the most common approach for setting
public/municipal utility rates. During the initial project kick-off meeting, the methodology will be
reviewed and confirmed.
Step 3 Î Accumulation of Revenues and Expenses
HDR, in collaboration with City management and staff, will develop the test period revenue
requirement. The first step is projection of consumption and rate revenues at present rate levels.
For the projected five-year period, HDR will work with the City to develop the projection of
revenues based on water consumption data and customer count information for each customer
class of service. In addition, HDR will work with City staff to determine if adjustments to the
consumption data is necessary based on past and future consumption levels to project a normal
water consumption year. HDR will closely review this aspect of the Study with City staff and
develop a mutually acceptable assumption (forecast).
The revenue requirement is composed of two major costs: operational and capital. Operational
costs are projected from historical or budgeted costs, using assumed escalation (inflationary)
factors, and adjusted for any known changes (e.g., additional personnel, increase in electricity).
While the projection of operational costs is generally straightforward, the projection of capital
costs is typically the focus of the analysis and requires more thought and planning.
The starting point for projecting capital expenditures will be the CityÓs water capital improvement
plan. During the financial planning process, consideration must be given to maximizing the
capital improvement expenditures, while minimizing utility customer rates. The capital
April 29, 2024 | 3
City of Ashland | Water Rate Study
HDR Proposal
(improvement) funding plan is developed on a year-by-year basis for the projected rate study
time period. Capital projects are listed by year with the estimated (planned) outside funding
sources for each project. The balance of projects not funded by the available sources of funds
must be financed from a combination of long-term debt and rates (or deferred). Balancing the
use of long-term debt to rate impacts are critical to the analysis. The above framework provides
the proper approach to evaluate the financial/rate implications of the planned capital
improvements. HDR will work closely with City staff to evaluate the current levels of funding for
replacement capital and develop a long-term plan to increase funding to appropriate and
adequate levels.
In developing the final revenue requirement, financial planning aspects are considered. These
include, but are not limited to, minimum debt service coverage ratios, minimum operating
reserves, and minimum annual rate funding for renewal/replacement and upgrade of
infrastructure. Upon development of a draft revenue requirement analysis, a two-hour virtual
project meeting will be held to review the draft revenue requirement analysis.
HDR will develop summary pages comparing the present revenues to the projected operating
and capital expenditures for the test period at the conclusion of the revenue requirement
analysis. This will provide the overall cost-basis for any adjustments to revenues (i.e., rate
adjustments). If needed, HDR will develop a rate transition plan to smoothly implement rate
adjustments over the five-year period.
Step 4 Î Summarize the Results
The revenue requirement analysis is designed to understand the total costs to operate and
maintain the water system on a year-by-year basis. While the analysis is detailed, an important
step is to summarize those results and findings into an easy to understand format. Results are
summarized both numerically and graphically. HDR will develop summary tables for the revenue
requirement analysis that provide easy to understand findings and results.
EXPECTED CITY STAFF SUPPORT FOR TASK 4:
Provide as needed assistance to clarify the CityÓs data and information as it relates to
developing the revenue requirement.
Provide as needed data refinements or additional data needs as determined during the
process of developing the revenue requirement.
Collaborate in the development of the revenue requirement and projections of the
consumption and revenue assumptions.
Attend and participate in a half-day in person meeting to review development of the
draft revenue requirement analysis.
TASK 4 DELIVERABLES:
A water revenue requirement analysis for a projected five-year period that considers the
necessary operating and capital needs of the water utility.
April 29, 2024 | 4
City of Ashland | Water Rate Study
HDR Proposal
A capital financing plan within the revenue requirement analysis, using the CityÓs current
capital improvement plan.
A rate transition plan to phase in identified rate adjustments.
Recommendations regarding key financial indicators (e.g., debt service coverage,
capital funding/replacement through rates, minimum reserve levels).
TASK 4 MEETINGS:
A half-day in person meeting with two HDR staff participating to develop the final
revenue requirement analysis.
Task 5. Cost-of-Service Analysis
A cost-of-service analysis proportionally distributes the revenue requirement to the different
customer classes of service. The basis for establishing rates that are fair, proportional, and
defendable has traditionally been cost-of-service principles and methodologies. Generally
accepted cost-of-service methodologies are discussed in detail within the AWWA M-1 Manual,
Principles of Utility Rates, Fees and Charges. Within a cost-of-service analysis, the revenue
requirement is functionalized, allocated, and distributed to the CityÓs water customer classes of
service (e.g., residential, commercial), or rate schedules. The basic steps of a water cost-of-
service analysis are described in more detail below.
Step 1 Î Selection of Test Period
The first step of a cost-of-service analysis is to select a time period for the allocation of costs.
For cost-of-service purposes, allocating the rate setting period revenue requirement (e.g.,
FY 2025) would appear appropriate. This will be discussed and finalized during the initial project
kick-off meeting.
Step 2 Î Determine Classes of Service
HDR will review with City staff the current customer classes of service or rate schedules.
Classes of service refer to the grouping of customers for cost distribution. HDR will work with
the City to review the customer characteristics to determine the basis for specific customer
classes of service that reflect the levels of service provided by the City.
Step 3 Î Functionalization and Allocation of Expenses
Next, plant (infrastructure) and O&M expenses are functionalized, which is the arrangement of
cost data into its basic cost categories (e.g., supply, treatment, pumping, storage, distribution).
The CityÓs chart of accounts will generally provide the functionalization of costs. Costs are then
allocated to their respective cost component(s). Allocation involves determining whether each
specific cost or account item was incurred to meet a customer classÓs commodity (average day),
capacity (peak day), fire protection, or customer-related need. Some costs may be directly
assigned to specific customers or customer groups. A thorough review of the various types of
costs the City incurs will be undertaken and specific cost allocators developed.
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City of Ashland | Water Rate Study
HDR Proposal
Step 4 Î Develop Distribution Factors
To distribute the allocated revenue requirement, distribution factors will need to be developed.
For each allocation cost component, a proportional method will be developed to distribute each
specific cost to the identified customer classes of service. HDR will review with the City to
develop distribution factors that are proportional to each customer class of service, and which
rely on City-specific data.
Step 5 Î Distribute Costs
Given the allocation of the test period revenue requirement and development of distribution
factors, the costs can be proportionally distributed to the identified customer classes of service.
Step 6 Î Cost-of-Service Summary
The previous step proportionally distributes the rate base and O&M expenses to each customer
class of service. From this process, a summary page can be developed that compares the
difference between the current level of rate revenues received from each class of service, and
the cost-of-service for each class of service. The summary page provides an important measure
of the proportionality of the current rates in comparison to the cost-of-service. In addition to the
summary page, average unit costs (i.e., cost-based rates) are also developed for each customer
class of service. Average unit costs provide the City with an understanding of the cost/rate
relationship between fixed (monthly meter charges) and variable (consumption charges) costs.
These unit costs are important for developing the proposed rate designs.
EXPECTED CITY STAFF SUPPORT FOR TASK 5:
Review and discuss the appropriate customer classes of service.
Work collaboratively with HDR during the development of the cost-of-service analysis.
Participate in a two-hour virtual meeting to review the cost-of-service analysis.
TASK 5 DELIVERABLES:
Draft Cost-of-Service Summary documenting:
ɉ Recommended customer classes of service for cost-of-service (rate schedule).
ɉ Revenue requirements proportionally distributed by identified classes of service.
ɉ Average unit costs (cost-based rates) for the development of the proposed rates.
TASK 5 MEETINGS:
A two-hour virtual meeting to discuss the draft cost-of-service analysis.
Task 6. Rate Design Analysis
HDR will review the CityÓs current rate structure and compare to generally accepted and
industry standard approaches and to the CityÓs water rate design goals and objectives, HDR will
develop up to two rate structure alternatives for the CityÓs review and consideration. This
includes alternatives levels of fixed (monthly meter charges) and variable (consumption
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City of Ashland | Water Rate Study
HDR Proposal
charges), and evaluating the current tier sizes, for each customer class of service. The City is
also interested in evaluating pump zone charges for pumping water up to higher pressure
zones. HDR will collaborate with the City to determine an approach for evaluating pump zone
charge. For each alternative rate design developed, a bill comparison and graph will be
provided that shows a comparison between the present bill and the proposed bill at various
levels of usage. Bill comparisons are useful in assessing the potential impacts to a wide variety
of customers.
EXPECTED CITY STAFF SUPPORT FOR TASK 6:
Discussion of the CityÓs rates design goals and objectives
Review of the draft rate structure alternatives
Participate in two one-hour virtual project meetings to review the alternative rate
structures
TASK 6 DELIVERABLES:
Up to two (2) alternative rate structures for each class of service.
Bill comparisons for each alternative rate structure.
TASK 6 MEETINGS:
Up to two, one-hour virtual meetings to review the rate structure alternatives
Task 7. Water Rate Study Report
Upon completion of the technical analysis, HDR will develop a draft water rate study report. The
report is intended to be comprehensive in nature and document the activities undertaken as a
part of the Study, along with the findings, conclusions, and recommendations. The report will
have appendices with the technical analyses undertaken. HDR will provide an electronic copy
(e.g., word, PDF) of the draft report to the City for its review and comment. Agreed upon
comments, suggestions, or corrections from the City concerning the draft report will be
incorporated into the final report. A final electronic version (PDF and Word) of the report will be
provided to the City.
EXPECTED CITY STAFF SUPPORT FOR TASK 7:
Review the draft written report
Participate in a one-hour virtual meeting to discuss the draft report
TASK 7 DELIVERABLES:
Draft and Final Water Rate Study Report (electronic)
TASK 7 MEETINGS:
A one-hour virtual meeting to discuss the draft report
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City of Ashland | Water Rate Study
HDR Proposal
Task 8. Public Presentations
To effectively communicate the results of the Study, HDR recommends two public meetings.
This includes a presentation on the results of the Study, and the public hearing to establish the
final water rates. HDR will prepare handouts and Josiah Close, HDRÓs project manager, will be
conduct the presentations. Should additional public meetings or presentations be required, they
will be provided on a time and material basis.
EXPECTED CITY STAFF SUPPORT FOR TASK 8:
Review and comment on the proposed presentation material
TASK 8 DELIVERABLES:
Develop Study-related presentation materials for up to two (2) public presentations by
the HDR Project Manager
Task 9. Rate Model
At the completion of the Study, HDR will provide the City with the final rate model. The rate
model will be developed in Microsoft Excel and based on the CityÓs specific accounts, budget
structure, and customer and system characteristics. This proposal does not include the
development of a user manual or user training.
EXPECTED CITY STAFF SUPPORT FOR TASK 9:
None
TASK 9 DELIVERABLES:
Electronic delivery of the final water rate model (Excel)
Task 10. Customer Assistance Program
In discussion with the City, it was conveyed to HDR that the current customer assistance
program is in need of being updated. As part of this task, HDR will work with the City to identify
the desired changes related to the eligibility and level of assistance provided base on the
available data. HDR will hold up to two virtual meetings to work through the development of the
revised customer assistance program. HDR will document the process, goals, and objectives as
well as the direction from the City Council as part of the draft and final water rate study report.
The water rate study model will calculate the discounted rate(s) based on the final direction,
eligibility requirements, and approach selected.
EXPECTED CITY STAFF SUPPORT FOR TASK 10:
Provide input and direction for updating the program
Participate in up to two (2), one-hour virtual meetings to discuss the customer
assistance program
TASK 10 DELIVERABLES:
Updated customer assistance program with discussion in the draft and final reports
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City of Ashland | Water Rate Study
HDR Proposal
This concludes HDRÓs discussion of the proposed Scope of Services for the CityÓs water rate
Study. Additional out-of-scope work requested by the City can be provided on a time-and-
material basis and will only be provided with the written authorization of the City.
Proposed Project Team
The following individuals will provide the services being requested by City:
Josiah Close | Project Manager
Josiah will lead development of the CityÓs Study. Josiah has more than 10 years of financial
planning experience and has recently been the project manager for the rate studies for the City
of Talent, City of North Plains, Lane County, and the Rockwood Water Peoples Utility District
(Portland, OR). Josiah has also assisted in development of the Medford Water rate studies in
prior years.
Shawn Koorn | QA/QC
Shawn, an Associate Vice President at HDR, will provide Study QA/QC. In this role, Shawn will
review the technical analyses and information provided to the City as part of the Study. Shawn
has more than 24 years of utility rate setting experience and has been the project manager for
studies across the United States.
Sara Anderson | Financial Analyst
Sara will develop the technical analysis for the CityÓs Study. Sara most recently assisted in the
development of the rate models for the City of Talent (OR), City of Stockton (CA), City of South
Salt Lake (UT), and others.
Nathan Fastenau | Engineering Assistance
Nathan will provide engineering assistance in the development of the Study. Nathan has
handled various roles on water and civil site projects, including technical writing, drafting, cost
estimating, and assisting in project design.
Proposed Project Time Schedule
In discussion with City staff, the project will be completed towards the end of 2024 (i.e.,
December 2024) to allow for the presentation of the Study in early 2025 for budget preparation
and City rate implementation. As a point of reference, a Study of this nature generally takes six
to eight months to complete. HDR will develop a final project time schedule in coordination with
the City. HDR will begin the Study as soon as notice to proceed is given by the City and a
professional services agreement is executed.
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City of Ashland | Water Rate Study
HDR Proposal
Hourly Rates and Fee Estimate
Rate Schedule
Our proposed hourly rate schedule by job classification is provided below. This hourly rate
schedule will be in effect through December 2024. Annually hourly rates are updated by HDR in
January and HDR will work with the City to update the hourly rates for the staff working on the
CityÓs project. These rates will apply for performance of the requested scope of work, and
additional out-of-scope work as agreed to in writing.
HDR Hourly Rate Schedule - May 2024 through December 2024
Project Manager $198/Hour
QA/QC$326/Hour
Principal $288/Hour
Financial Analyst $132/Hour
Engineering Assistance $158/Hour
Admin/Clerical $120/Hour
Rates are subject to change after December 31, 2024. The billing rates shown
cover payroll cost, employee benefits, and HDR overhead and profit.
Expenses: In-House Expenses
Vehicle Mileage (per mile) Current Federal Travel Regulation (FTR)
Black/White Photocopies (per copy) $0.05 to $0.09
Color Copy (per copy) $0.15 to $0.30
No markup on expenses. Other direct expenses (e.g., airfare, rental car) are billed at cost.
Fee Estimate
The project fees are a function of the hourly billing rates for the employees to be used for CityÓs
water rate study, and the amount of time required to complete each task. HDRÓs estimated
project fees for the Study follows:
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City of Ashland | Water Rate Study
HDR Proposal
Fee Estimate
City of Ashland Water Rate Study
Task Description Total
Labor:
$5,539
Task 1: Project Management
1,200
Task 2: Data Collection and Review
933
Task 3: Initial Kick-Off Meeting
Task 4: Revenue Requirement Analysis8,282
Task 5: Cost-of-service Analysis 9,526
Task 6: Rate Design Analysis 5,325
Task 7: Written Documentation 4,250
Task 8: Public Presentations 5,583
Task 9: Rate Model 1,063
Task 10: Customer Assistance Program 4,525
$46,226
Total Labor
$3,588
Expenses:
$49,814
Grant Total with Expenses:
HDR estimates a total fee of $49,814 for the CityÓs water rate study. During the course of the
Study, HDR will keep the City informed of the progress of the Study with respect to schedule
and project budget.
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