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HomeMy WebLinkAboutContract 22192299 August ] 0, 2009 Mr. Kevin Hansen, PE Public Warks Director /City Engineer City of Columbia Heights 637 38°i Avenue NE PO Box 249 Columbia Heights, MN 55421 Dear Mr. Hansen: RE: City of Columbia Heights, Minnesota Conservation Water Rate Study and Utility Rate Study Updates SEH No. P-COLHT ].09505 SEH is pleased to submit this proposal to provide engineering services for a Utility Rate Study Update. The proposed study will include a review of financial data, establishing trends and projections, financial needs determination, rate development and report production. As part of our rate development, SEH staff will create a water rate structure that will meet the requirements set forth in MN State Statute ] 03G.291. According to this statute, Columbia Heights must have a conservation rate structure in place by January 1, 2010. As part of this study, the computer rate model will be updated to recommend rates for the next five years. The proposed engineering services will consist of the following scope of work: I. Obtain and Review Data A. Review Historical Utility Data. An initial list of information will be requested from the City so recent data can be updated in the model. Once received, the data will be checked for completeness and organized into tables used to generate future rates needs. II. Establish Historical Trends and Projections A. Review Population and Connections. Historical data will be reviewed for the purpose of establishing trends. Typically, five years of data is required to establish a trend. Population and system connections/system users will be reviewed first, since the number of customers is an important part of the rate formula. Any City projections relating to future connections or redevelopment will be incorporated at this point in the study. B. Analyze Water Sales. Billing records will be tracked. over the last five years minimum and projected five years into the future. Similarly, water billed will be projected five years into the future to account for projected population growths. C. Quantify "Unaccounted For" Water. Water that is "unaccounted for" or "lost" in the system will be estimated based on annual wholesale metered water between Columbia Heights and Minneapolis. Unaccounted for water is water that is pumped but is not billed to customers because it is lost in the system (hydrant flushing, fire fighting, water main breaks, leaking pipes, umnetered connections, etc.). Some unaccounted for water is normal in every system. Unaccounted for water will be quantified to determine if it is eXCeSSIVe. D. Project O&M Expenses. Operation and maintenance expenses for each utility (water, wastewater, storm and refuse collection) will be projected based on historical trends and budgeting information supplied by the city. Expenses will include meter reading, billing, Short Elliott Hendrickson Inc., 3535 Vadnais Center Drive, St. Paul, MN 55110-5196 SEH is an equal opportunity employer ~ www.sehinc.com ~ 651.490.2000 ~ 800.325.2055 ~ 651.490.2150 fax Mr. Kevin Hansen, PE August 10, 2009 Page 2 collection, administration, operation, maintenance costs, replacement, etc. For each utility, historical data will be reviewed to determine other trends which may affect expenses. Depreciation schedules for current assets wilt be reviewed and updated since depreciation can be treated as an expense for each utility. Other expenses will be projected, such as principle and interest payments on the existing debts. E. Estimate Unit Cost of Service. For each utility, future costs for each line item (O&M, debt repayment, etc.) will be established based on projections of historical data. F. Determine Offsets to Revenue Requirements. Offsets to revenue requirements will be estimated for each utility. These include interest income on invested funds, miscellaneous, fees, etc. III. Future Financial Needs Determination A. Review and Update CIP for Utilities. The existing CIP will be reviewed and updated to include those projects proposed to be paid either in cash or financed by the respective utility. B. Determine Revenue Requirements. Revenue requirements will be based on the projected expenses to operate and. maintain the system as well as the CIP. Revenue requirements will include water, sanitary sewer, storm sewer and refuse collection and capital needs financed from operating revenue. A cash balance goal of the City will be reviewed to determine if a suitable amount is kept in reserve. IV. Rate Structure Development A. Assess the Health of Each Utility Fund. The projected expenses will be compared with the existing rates to determine the financial shortfall that may develop if rates are not increased. ]t is expected that annual rate increases are required due to the dept repayment and future capital expenditures. II. Prepare Model for Rate Adjustment. The project expenses, capital improvements and debt repayment expenses will be incorporated into a rate model that can easily adjust different rate increases. The rate model will reflect the requirements of a conservation rate structure. An analysis of expenses and revenues generated by the rate increase will verify that a cash balance goal will be maintained.. The proposed. water rate structure change will be composed of an inclining block rate structure for residential users and can either include a seasonal surcharge rate structure for the remainder of customer classes (commercial, industrial, institutional, etc.) or additional inclining block rate structures based on meter sizes. While creating several rate structures for varying meter sizes may create additional work, it is important to compare similar water usage patterns. The goal of the rate structure should be to first curb unnecessary water usage and then reduce water usage universally. Therefore, differing customers based. on meter sizes should be dealt with differently. For example, a large industrial user should not be compared with a single family home, nor should they be compared to a convenience store. While the latter two may use an excessive amount of irrigation water, the large industrial customer may not use any. However, their overall water usage would likely be significantly higher than the smaller two combined. The ultimate goal of an inclining block rate structure is to unplement conservation. Therefore, the rate study should not only be able to generate the needed revenues, but also compare how those revenues may change given the effects of conservation. Mr. Kevin Hansen, PE August 10, 2009 Page 2 Our study will be based on one year worth of test data comprised of 12 months worth of billing data. The data will be sorted based on consumption and blocks will be defined as patterns of water use are determined. With this data, the effects of conservation can be analyzed quickly to determine what changes may be necessary to the rates to ensure that proper revenue is maintained. To complete this analysis, we assume that we will be provided with the following data: • 12 months worth of account data including consumption for the period., date billed, account number, customer type along with meter size. • The data should be in a database format exportable to Microsoft Access or Microsoft Excel V. Report Production A. Prepare Draft Report. A draft report will be prepared that documents the data collected, historical trends observed, projections made, financial needs estimated and various rate scenarios considered. B. Draft Report Review Meeting. Three copies of the draft report will be delivered to the City for review. SEH will follow up with a conference call to discuss staff's input so that changes can be made to the final report if necessary. C. Produce and Distribute Final Report Copies. Upon revision of the draft report, ten copies of the final document will be provided to the City for distribution. D. City Council Presentation. The final report recommendations will be presented at a City Council meeting in a PowerPoint format. We propose to perform these services on an hourly basis for a maximum fee of $9,740. We will invoice the City on the basis of actual hours spent at current billing rates plus the actual cost of reimbursable expenses up to the maximum fee amount. Any additional services requested by the City will be invoiced on the basis of actual hours spent at current billing rates plus the actual cost of reimbursable expenses. All services will be invoiced monthly. If this proposal is acceptable, please sign. one copy and return it to us for our records. If you. would like to discuss these services in detail, please call me at your convenience. Sin rely, .~-- Dou . Klamerus, PE Greg F. Johnson, PE Pr ect Manager Principal Accepted this ~ 7 day of Gt.S ~ , 2009. City of Colu.rnbia Height , Mi nesota ~~. By ~~ s ',ae\c\col ht\common\proposai s\col ht_109505-doe ACORD CERTIFICATE OF LIABILITY INSURANCE PRODUCER (852)893-1933 FAX (952)893-1819 H. Robert Anderson & Assoc., Inc. 4600 West 77th Street Suite 105 Edina, MN 55435 -- INSURED Short-Ell iott-Hendrickson, Inc. SEH, Inc. 3535 Vadnais Center Drive St. Paul, MN 55110 COVERAGES DATE (MM/DD/YYVY) 08/27/2009 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGE NAIC # - - -_ : _ __ INSURERA XL Specialty Insurance Co. __ ; I INSURER B '~. INSURER C INSURCR D ~' INSURER E ~- 1 HE POLICIES OF INSURANCE LISTED BELO'vV HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDIGATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY 8E ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TER MS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS INSR ADD'L ~ ~ POLICY EFFECTIVE POLICY EXPIRATION LTR INSRD TYPE OF INSURANCE ' POLICY NUMBER .DATE MM/DD/YYVY I GATE MM/DD/YYVY LIMITS GENERAL LIABILITY I '' .EACH OCCURRENCE ~ $ ' ~ COMMERCIAL GENERAI. LIABILITY i ! - DANUAGE Tb RENTED PREMISES (Ea occurrence} $ I I ~ ~ I CLAIMS MAUL ~ ~ OCCUR , ~ I . I ~ MED CXP (Any one persun} I $ ~ PERSONAL & ADV INJURY $ ii ~ I I GENERAL AGGREGATE ~ $ i (3CN'L. AGGRLGAI E LIMIT FlPPLICS PER I PRODUCTS - COMI'!OI' AGG $ ' I POI ICY ~ ~ I'RO ~ JECT i LOC I I i AUTOMOBILE LIABILITY ~I ~ ~ ~ COMBINED SINGLE LIMIT ANY AUTO ~ ~ ~ (Ea eco~enp ~ $ AEI. OWNI-D AUTOS ~ I I BODILY INJURY ~ : SCHf DUl F: D AUTOS i ~ ~ I ~ (Per persun} ~ $ - I HIRED AUTOS ~ ~ I ~ BODILY INJURY $ NON-OWN[: D AUTOS , (Per acatlen!j ~' '. I PROPERTY DAMAGE , __ i i $ ~ (Per accidenry GARAGE LIABILITY ' ", AUCO ONLY - EA ACCIDCNI '; $ ANY AU IY) ' ~'. OTHER Tt1AN LA ACC. $ ' ~' AUTO ONLY AGG ',. $ EXCESS f UMBRELLA LIABILITY ~,. I, EACii OCCURRENCE $ -- CJCC;IIR I'i C.LAIMS MADE AGGRCGATC ~ $ ~ _. ' UC.DUCi18t. E. '~, I RC TCNIION $-___-- ~ $ 'WORKERS COMPENSATION '' '' J A U TII ~ ~ AND EMPLOYERS' LIABILITY Y / N i , ~ l ORY LIMITS ~ ~ CR ~, ANY (ROE RIC70R/PARTNER/EXECUTIVE LL EACH ACGUL N~T $ OFI IC FR/MLMBLf2 F:XCLUDFD~ CT I ' . . ~ ~ , IManUatory m NH) ' i L L. DISEASC- CA f MPLOYL t:~ $ II Yr w desanbo under ~ -- i SPF(.IAL PROVISIONS bF~low ~ E L DISEASf_ -POLICY LIMIT '. !Professional Liability ~ DPR9612870I 10/01/2008 10/01/2009 ' Each Claim/ $5,000,000 A ~ Annual Aggregate $10,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS ! VEHICLES I EXCLUSIONS ADDED BY ENDORSEMENT 1 SPECIAL PROVISIONS This certificate or memorandum of insurance does not affirmatively or negatively amend, extend, or alter the coverage afforded by the insurance policy. ~~10 da s notice for cancellation if reason is for non- a ment of remium. ~.r n i mr~.,n I c nuLUCrc GANGtt_I.ATION City of Columbia Heights Attn: Kevin Hansen 637 38th Ave NE Columbia Heights, MN 55421-3806 ACORD 25 (2009/01} SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 3D'~ _ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. _,- -- © 1988-2009 ACORD CORPORATInN All rinhtc rocnn.orl The ACORD name and logo are reyistered marks of ACORD CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YY) ACORD M 8/26/09 PRODUCER 952-830-3000 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Wells Fargo Insurance ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFICATE DOES NOT AMEND, EXTEND OR Services of Minnesota, Inc. ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 4300 MarketPointe Dr #600 COMPANIES AFFORDING COVERAGE __ _ ^ Bloomington, MN 55435 coMPANY A Federal Insurance Company --------------------- --- ---- -------- INSURED --------- - COMPANY SEH InC. g Nationwide Mutual Insurance Co Short-Elliott-Hendrickson Inc , 3535 Vadnais Center Drive COMPANY C Cincinnati Insurance Company St Paul MN 55110 ''' coMPANv D Chubb Indemnity Ins Co COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. T ---- I - - CO TYpg OF INSURANCE POLICY NUMBER POLICY EFFECTIVE ;POLICY EXPIRATION LTR I ~.! DATE (MM/DDlYY) ', DATE (MM/DD/YY) ' LIMITS A I GEN ERALLIABILITY I 35829618 10/01/08 10/01/09 GENERAL AGGREGATE ~ $ 2x00000 X~, COMMERCIAL GENERAL LIABILITY ~ IfICIUdeS Per 'PRODUCTS -COMP/OP AGG ! $ 2000OCC -- CLAIMS MADE ~ OCCUR LOCatiOn ~ ~ ---- - J ~ PERSONAL & ADV INJURY $ lOCOGG_0_____ OWNER'S & CONTRACTOR'S PROT Aggregate/Per EACH OCCURRENCE $ .000600 Project FIRE DAMAGE (Any one fire) $ 1000000 i ' Aggregate i i MED EXP (Any one person) $ 1npGn g ; AuroMOBae uABIUrY BA7131965099 ~ 10/01 /08 10/01 /09 i j i X ANY AUTO !COMBINED SINGLE LIMIT $ i000C00 ~' f ALL OWNED AUTOS ~ I ~ BODILY INJURY $ SCHEDULED AUTOS II ~ (Per person) HIRED AUTOS li ~ ~ i ' BODILY INJURY $ ~' NON-OWNED AUTOS __..j - '' ~ (Per accident) ~,' ' ( PROPERTY DAMAGE ----~-~----._........__.._.__._... $ I~ GARAGE LIABILITY ', i. AUTO ONLY - EA ACCIDENT $ I ANY AUTO ~ OTHER THAN AUTO ONLY: ~'~ ' EACH ACCIDER'T~~~ ~S~-~ '~ f AGGREGATE'~: $ C EXCESS LIABILITY X$1151890 _ 10/01/08 10/01/09 ~ EACHOCCURRENCE ~_-. $ SCOOOOU I ~ UMBRELLA FORM _...__.... ~ AGGREGATE $ SCOOOOG '~ X OTHER THAN UMBRELLA FORM $ D ~ WORKERS COMPENSATION AND 7l 7201 Ol 10/Ol /08 10/01 /09 WC STATU- OTH X TORY LIMITS ER EMPLOYERS' LIABILITY ~ ! .. __,._, _ .-..-.-.----..-_.. , '~, ' EL EACH ACCIDENT ------ $ lOGOCOG PARTN RS/EXEOCRUTIVE INCL '~ '~ r EL DISEASE -POLICY LIMIT ':~ $ 1000060 ---- _._. OFFICERS ARE: EXCL ' EL DISEASE - EA EMPLOYEE $ 1600006 A OTHER 35829618 10/01/08 10/01/09 Blanket Contents $8,851,400; Replacement Cost I $ 1,000; Deductible I i Special Form including theft DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES/SPECIAL ITEMS CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE City of Columbia Heights IXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL Attn: Kevin Hansen 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, 637 38th Ave NE BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY Columbia Hei hts MN 55421 OF ANY KIND UPON THE C OM PA NY, ITS AG E NTS OR REPRESENTATIVES. g , AUTH ~ ~ ~ ~ ~ J G~~~?~G~~~- '~~ ;=-~i:~iG=-Titer-~---^--~ ACORD 25-S (1/95) 70- 31 -.._.. ©ACORD CORPORATION 1988 ZZI `~ ACORN CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DDlYYYY) 09/29/2009 PRODUCER 952.893.1933 FAX 952.893. 1819 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION H . Robert Anderson & Assoc . , Inc . ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 4600 West 77th Street ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Suite 105 Edina, MN 55435 INSURERS AFFORDING COVERAGE NAIC # INSURED Short-Elliott-Hendrickson, Inc. INSURER A: XL Specialty Insurance Co. SEH, Inc. INSURER B: ~ 3535 Vadnais Center Drive INSURER C: ~ .« ""'" ` ~ St . Paul , MN 55110 INSURER D: _ INSURER E: ~~ ~~°~ COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE F a CATED. NOTWITHSTANDING ~~ ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS C TE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR DD' NSR TypE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE MMIDD/YYYY POLICY EXPIRATION DATE MM/DD/YYYY LIMITS GENERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY PREMISES Ea Deco enee $ ___ CLAIMS MADE ~ OCCUR MED EXP (Any one person) $ PERSONAL 8 ADV INJURY $ GENERAL AGGREGATE $ GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/CP AGG $ POLICY PRO- LOC JECT AUT OMOBILE LIABILITY COMBINEDSINGLE LIMIT ANY AUTO (Ea accident) $ ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTOS (Per person) $ HIRED AUTOS ' BODILY INJURY NON-OWNED AUTOS (Per accident) $ PROPERTY DAMAGE (Per accident} $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN ~ ACC $ AUTO ONLY: qGG $ EXCESS !UMBRELLA UABILlTY EACH OCCURRENCE $ f f OCCUR ~ CLAIMS MADE AGGREGATE $_ ` $ DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSnTInu ND EMPLOYERS' LI BILITY S A - O TORY LIMITS ER ..- A A ANY PROPRIETOR/PARTNER/EXECUTIVE~ E L. EACH ACCIDENT $ OFFiCEWMEM(tER EA%LUii'tD? (Mandatory in NHj U E.L. DISEASE - EA EMPLOYEE $ If yes, describe under SPECIAL PROVISIONS below E.L. DISEASE -POLICY LIMIT $ OTHE t~ bili i l i DPR9615876 10/01/2009 10/01/2010 Each Claim/ $5,000,000 Pro ona L a ty ess A Annual Aggregate $10,000,000 DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES /EXCLUSIONS ADDED BY ENDORSEMENT /SPECIAL PROVISIONS This certificate or memorandum of insurance does not affirmatively or negatively amend, extend, or alter the coverage afforded by the insurance policy. °10 da s notice for cancellation if reason is for non- a ment of remium. CERTIFICATE HOLDER CANCELLATION City of Columbia Heights Attn: Kevin Hansen 637 38th Ave NE Columbia Heights, MN 55421-3806 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATIOI DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30'` DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR nr_nan ~~ r~nno/nat ©1988-2009 ACORD CORPORATION. All riahts reserved. The ACORD name and logo are registered marks of ACORD