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Home My WebLink About12-02-2014 B3 Contract Meter ReadingCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number FROM: Carrie Mattingly, Utilities Director Prepared By: Brigitte Elke, Business Manager Ron Munds, Utilities Services Manager Dave Hix, Deputy Director - Wastewater SUBJECT: AWARD OF CONTRACT FOR WATER METER READING AND ADOPTION OF RESOLUTION ESTABLISHING A DROUGHT-RELATED POLICY FOR THE AVERAGE WINTER WATER USE PERIOD RECOMMENDATION 1. Approve a three-year contract with Alexander’s Contract Services, Inc. for water meter reading services in an amount not to exceed $172,800 annually. 2. Adopt a resolution to establish a policy for the Average Winter Water Use period related to drought conditions. 3. Authorize the use of carryover funds from the water ($21,600) and sewer ($21,600) funds to pay for contract water meter reading services for the remainder of FY 2014. REPORT-IN-BRIEF On August 19, 2014, the Council authorized the release of a Request for Proposals (RFP) for contract water meter reading services. One proposal was received from Alexander’s Contract Services, Inc. It was evaluated and determined to be responsive to all elements of the RFP. A subsequent fiscal analysis demonstrated contracting out water meter reading is a cost-effective solution to multiple concerns related to utility billing and ratepayer requests, average winter water use (aka sewer caps), and staffing requirements identified through the Utilities Department organizational structure assessment. In light of this positive finding, Alexander’s references were checked and found to be satisfactory. The employee association representing positions that would be affected by this change, the San Luis Obispo City Employees’ Association (SLOCEA) was informed of the City’s intent to accept the proposal from Alexander’s Contract Services, Inc. to contract out water meter reading on October 13, 2014. Prior to requesting authority from the City Council to enter into the agreement with Alexander’s, the City and SLOCEA met and conferred over identified impacts of the action as required by law. Staff is recommending the City enter into a three-year agreement with Alexander’s Contract Services, Inc. to perform contract water meter reading services in an amount not to exceed $172,800 annually. The cost will be split evenly between the water and sewer funds. Additionally, per Council direction and based on benefits derived from contract water meter reading, a drought-related policy for the average winter water use period is recommended for adoption. 12/02/2014 B3 B3 - 1 Contract Water Meter Reading and AWWU Drought Policy Page 2 DISCUSSION Background On August 19, 2014, the City Council authorized the release of a RFP for contract water meter reading services. A mandatory pre-proposal teleconference was held on September 3, 2014. One proposal was received on September 18, 2014. The proposal received from Alexander’s Contract Services, Inc. was evaluated on September 24, 2014 by a review committee made up of staff from the Utilities and Finance & Information Technology departments as well as the SLOCEA President. The proposal was determined to be responsive to all required elements of the RFP. On October 6, 2014 a follow-up meeting took place with Alexander’s to gain clarity on some aspects of the proposal (see Attachment 1 for proposal). A subsequent fiscal analysis demonstrated contracting out water meter reading is a cost-effective solution to multiple concerns related to utility billing and ratepayer requests, average winter water use (aka sewer caps), and staffing requirements identified through the Utilities Department organizational structure assessment. In light of this positive finding, Alexander’s references were checked, found to be satisfactory, and staff is recommending the City enter into an agreement for contract water meter reading. On October 13, 2014, the Human Resources Director sent a letter to the SLOCEA President and Vice-President 1) informing them of the City’s intent to accept the proposal from Alexander’s Contract Services, Inc. to contract out water meter reading and 2) prior to requesting authority from the City Council to enter into the agreement with Alexander’s, to meet and confer over impacts of the action. The City and SLOCEA met and conferred over the impacts as required by law and the SLOCEA Board of Directors approved moving forward with contracting out. If approved by Council, two filled Water Customer Service Personnel positions will be reclassified to Water Distribution Operators when the transition to contract services is complete. The current employees possess the qualifications for the Water Distribution Operator classification. Introducing Alexander’s Alexander’s Contract Services, Inc. is a local company headquartered in Atascadero. It has been providing contract water meter reading services since 1968. Alexander’s has effectively provided these services to the communities of Paso Robles (since 1981), Atascadero Mutual Water Company (since 1978) and other San Luis Obispo County water purveyors for many years. Its current service area stretches from northern (Sacramento area) to southern California (southern Orange County) and as far east as Texas. Alexander’s reads approximately 5 million water meters annually. Why Contract Water Meter Reading? 1. Flexibility In 2007, the City implemented its current volume-based sewer user charge with a rate structure that averaged residential winter water use over three months (when irrigation is expected to be B3 - 2 Contract Water Meter Reading and AWWU Drought Policy Page 3 turned off or minimal) and created a “sewer cap”. The sewer cap sets the maximum sewer volume charge for a residence throughout the next fiscal year. After a few years of experience with the new rate structure, residential ratepayers demonstrated understanding of the connection between the amount of water used during the average winter water use (aka sewer cap) period and the setting of the volume-based sewer charge. During the recent drought (the first since enactment of the volume-based sewer rate structure) where outdoor irrigation has been required to sustain landscape during the average winter water use period, residential ratepayers expressed concern over the impacts of outdoor watering on their sewer caps. In response, City Council directed staff to find a way to create flexibility in the way the City establishes the cap for sewer charges during drought conditions. The consistent reading and billing dates achievable through contract meter reading provides the flexibility required to address concerns related to sewer caps established during droughts. This proposed policy is addressed in detail later in this report. 2. Meeting Ratepayer Requests Currently, the City’s water meters (about 15,000 meters) are read by employees who also maintain the related infrastructure. The reading schedule is divided into 64 separate routes that are billed at different times during the month dependent on when the route was read. The current system, despite attempts to adjust scheduling, results in ever-shifting meter read and billing dates. The most frequent concerns raised are: 1) ratepayers with a fixed income struggle with receiving their utility bill on different dates each month; and 2) ratepayers who chose the auto-pay option, which directly debits their account, struggle with the ever-changing billing and withdrawal date. Contract meter reading allows the billing date to be standardized for all ratepayers. All water meters would be read in one week on the same week of every month and subsequently billed the same time of month. This change effectively resolves ratepayer concerns related to when the utility bill is received and is expected to significantly reduce utility billing complaints. 3. Maximizing Workforce As part of the change to a volume-based sewer rate structure, the City shifted from bi-monthly to monthly water and sewer utility billing. An action taken to support the change to monthly billing was the hiring of additional Water Customer Service staff. Water Customer Service personnel are licensed water distribution system operators. In 2009, as a result of revenue shortfalls experienced during the recession, three positions were eliminated from the Utilities Department, one of which was a Water Customer Service position. Water Distribution Operators have been backfilling to meet the workload demands of meter reading. There are currently four authorized customer service positions, two of which are currently filled with temporary workers. B3 - 3 Contract Water Meter Reading and AWWU Drought Policy Page 4 The Utilities Department has completed an organizational structure assessment which will be presented to Council in the future. As part of this effort, workload analyses were conducted. Critical maintenance deficiencies were identified in water distribution and prioritized into three tiers according to weighted importance. In total, seven additional operators are necessary to meet the required workload. Tier one workload objectives require the addition of three operators. In another workgroup, the Utilities Services section, workload analyses requires the addition of one technician to meet workload demands as well as the objectives outlined in the Utilities Department long-range strategic plan. The implementation of contract water meter reading is a cost-effective solution that allows the minimum staffing requirements of the Water Distribution and Utility Services sections to be met without increasing the total number of City staff. The two existing Customer Service personnel are licensed water distribution system operators and they would transition to the Water Distribution Operator classification. The other two positions (operator and technician) would be filled per City policy as they are currently filled with temporary employees. To assist in visualizing the benefit of contract meter reading in maximizing the workforce, three structures (excerpted from the Utilities Department organizational structure assessment work) are shown below for the Water Division. The speckled boxes highlight how the four Customer Service personnel in the current structure shift to three operators and a technician in the contract meter reading structure. Assuming there is no contract meter reading, based on the workload analyses conducted through the organizational structure assessment, the diagonally shaded boxes indicate the additional personnel requirements (three operators, two meter readers, one technician) to meet the workload needs of the Water Distribution and Utilities Services sections. Utilities Department – Water Division Current Structure – October 2014 Deputy- H20 Supply Sup Opr (2) UtilSvcs Mgr Tech (2) WTP Sup MaintTech Chief Opr Opr (7) WDist Sup Opr (7) CustSvc (4) UGLocate B3 - 4 Contract Water Meter Reading and AWWU Drought Policy Page 5 Communication and Transition Plan In order to provide for a smooth transition to contract water meter reading services, the Utilities Department plans to communicate with the community early and often regarding the pending Utilities Department – Water Division Assuming Contract Meter Reading Deputy- H20 Supply Sup Opr (2) UtilSvcs Mgr Tech (2) Tech (1) WTP Sup MaintTech Chief Opr Opr (7) WDist Sup Opr (7) Opr (3) UGLocate Utilities Department – Water Division Assuming No Contract Meter Reading Deputy- H20 Supply Sup Opr (2) UtilSvcs Mgr Tech (2) Tech (1) WTP Sup MaintTech Chief Opr Opr (7) WDist Sup Opr (7) Opr (3) Meter Rdr (4) Meter Rdr (2) UG Locate B3 - 5 Contract Water Meter Reading and AWWU Drought Policy Page 6 change. Not only will there be change from City staff to contract staff reading the meters, but there will also be some short term billing impacts during the transition period. Once Alexander’s has fully assumed responsibility for reading the water meters, meters will be read on the same day of the month. This means some billing cycles will initially be shorter or longer depending on when the meter was read prior to the transition. This will only occur during the first month of contract meter reading service. In order to alert ratepayers of the change, a communication plan has been developed which includes the following elements: • Press releases • Billing inserts • Resource newsletter articles • Direct mail postcards • Social media posts • Farmers’ Market outreach There will also be internal impacts that will require adjustments to work flow processes in the Utilities and Finance & Information Technology departments. Currently about 3,500 meters are read each week with billing verification and any other follow-up taking place over the next week before a bill is sent out. With the change, about 15,000 meter reads will come in over a five-day period. The Finance Department does not anticipate any new staffing needs in response to this change, however new ways of billing will need to be evaluated; it is not a change to the amount of utility billing work but rather a change to how the billing work can be done. One alternative being considered is sending out bills once a month versus the existing practice of weekly mail- out. Another change is contracting out for utility bill printing. Nevertheless, Finance staffing resources and related Utilities cost allocation will remain largely the same if contract meter reading is approved. Drought-Related Policy for Average Winter Water Use Period Last winter, ratepayers experienced a dry December and a warm and dry January that provided almost no rainfall for landscape irrigation. This resulted in some higher sewer caps as residents began irrigating in the latter half of the Average Winter Water Use period. Many customers complained they lost or damaged expensive landscaping because they restricted their water use until after their AWWU period. Council took action to provide a temporary solution to the impacts of the drought on sewer caps and approximately 300 sewer caps were adjusted. In anticipation of continued and/or recurring drought, Council instructed staff to develop a policy to allow flexibility in responding to drought conditions as they occur during the AWWU period. The approval of contract water meter reading provides the foundation for the desired flexibility. The proposed policy (see Attachment 2) allows for the responsiveness to drought desired by ratepayers, is simple, flexible, responsible, and is not labor intensive. The drought-related policy for the Average Winter Water Use period for sewer caps would be triggered by: B3 - 6 Contract Water Meter Reading and AWWU Drought Policy Page 7 1. Two consecutive months of ten percent or less than the normal rainfall for those months during the AWWU period or; 2. Governor’s or Board of Supervisors’ declaration of a local drought emergency and 40 percent or less of normal rainfall during the AWWU period, or; 3. Some other unforeseen regional condition that warrants a change to the AWWU period. This general language allows for the most flexible implementation of the policy by incorporating conditions the City has recently experienced. The triggers of ten percent for two consecutive months and 40 percent over the AWWU period utilize rainfall data from November 2013 through March 2014 and represent conditions that have affected residential sewer caps. This language allows for the immediate adjustment of the AWWU if warranted by an extreme two- month dry period or the adjustment of sewer caps after the AWWU period has been completed, such as this past year. The third trigger is for any unforeseen regional condition that may require action. The language incorporates the rate structure goals approved by Council and allows the Utilities Director the flexibility to determine the most appropriate action that meets the intent of the volume-based sewer rate structure – to equitably apportion costs to residential ratepayers for the volume of wastewater sent for treatment. CONCURRENCES The Finance & Information Technology Department’s Revenue Division is a vital partner in the Utilities Department’s operation as it administers all revenue collection. Therefore, the Director of Finance & Information Technology, Finance Operations Manager, and the Revenue Division’s Supervising Accounting Assistant were part of the evaluation of the feasibility of contract meter reading, the pre-proposal meeting, as well as the proposal and organizational evaluation. All parties involved concur that contracting meter reading services will be in the best interest of the City’s ratepayers and provide opportunities for improved operations in the two departments. FISCAL IMPACT Contract Meter Reading The cost of the proposed annual contract for meter reading is $172,800. The contract amount is based on reading 15,000 meters. The City will only pay the actual number of meters read on a monthly basis. The approved amount will accommodate growth in areas such as Serra Meadows and the Orcutt annexation. The cost will be split evenly between the water and sewer funds. The increased costs for fiscal year 2015 in the amount of $21,600 for each fund can be accommodated within both funds utilizing carryover funding from fiscal year 2014. Each fund carried over $250,000. Both enterprise funds remain well-positioned financially with strong working capital balances and revenue forecasts to accommodate contract meter reading into the future. B3 - 7 Contract Water Meter Reading and AWWU Drought Policy Page 8 Enterprise Fund Time Frame Water Sewer Total Contract FY14 (Apr-Jun) $21,600 $21,600 $43,200 FY15 (Jul-Jun) $86,400 $86,400 $172,800 FY16 (Jul-Jun) $86,400 $86,400 $172,800 FY17 (Jul-Mar) $64,800 $64,800 $129,600 Total Fiscal Impact of Change Contract water meter reading maximizes the current workforce and allows for the fulfillment of immediate staffing needs identified in the organizational structure assessment for the Water Distribution and Utilities Services sections. The staffing changes are visually represented in the organizational structure charts above. A comparison of the current and proposed costs and the total impact of that change is detailed in the charts below. Description Full-time Equivalents Current Proposed Customer Service 4 0 Water Dist. Operator* 0 3 Utilities Svcs. Tech. 0 1 *Water Distribution performs meter maintenance activities. Half of these costs (one FTE) are allocated to the sewer fund. Overall, costs related to contract water meter reading and fulfilling the staffing needs of the Water Distribution and Utilities Services sections results in an additional cost of $156,400 to the Water fund and $16,900 to the Sewer fund. Total costs related to this action are $172,800 and do not require any additional FTEs. Without contract meter reading, meeting workload objectives will require additional personnel (as shown in the related organizational structure chart above) at a cost of approximately $597,000. The fiscal impact of meeting the workload objectives with contract meter reading versus without is $424,200. There is no impact on sewer or water rates related to this action. ALTERNATIVES 1. Reject the contract meter reading proposal and continue current business model. The Council could decide to reject the proposal and maintain status-quo. Continuing the status quo limits the flexibility of the proposed average winter water use drought policy as the 64 routes do not allow for equitable application of the policy. Therefore, if Council Current Costs Proposed Costs ∆ Current / Proposed Water Sewer Water Sewer Water Sewer $199,000 $199,000 $355,400 $215,900 $156,400 $16,900 B3 - 8 Contract Water Meter Reading and AWWU Drought Policy Page 9 chooses this alternative it is recommended Council does not adopt the drought policy for winter water use at this time and allow staff to re-evaluate. Furthermore, this alternative does not address citizen concerns regarding billing practices, does not consider the water distribution section’s immediate need for additional operators, and would delay the necessary work required in the Utilities Services section. The current business model is not sustainable. 2. Reject the contract meter reading proposal; authorize hiring two additional customer service personnel for a total of six authorized positions to retain meter reading in-house. The Council could decide to hire additional customer service employees in order to change the read schedule to achieve the objectives for AWWU adjustments and flexibility with in-house staffing. This option does not address the water distribution section’s requirement for additional operators, although it would free up one operator FTE (full-time equivalent) that currently performs customer service duties. This action would delay or prevent the necessary work required in the Water Distribution and Utilities Services section. This option would cost approximately $197,000 annually for two additional customer service employees and would be split evenly between the Water and Sewer Fund. ATTACHMENTS 1. Agreement 2. Drought policy resolution T:\Council Agenda Reports\2014\2014-11-18\Contract Meter Reading (Mattingly) B3 - 9 Attachment 1 AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on [insert day, date, year] by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and ALEXANDER’S CONTRACT SERVICES, INC., hereinafter referred to as Contractor. W I T N E S S E T H: WHEREAS, on August 22, 2014, City requested proposals for contract water meter reading services per Specification No. 91315; WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City for said services. NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, for three years with the option to extend for two additional years upon agreement of both parties. 2. INCORPORATION BY REFERENCE. City Specification No. 91315 and Contractor's proposal dated September 18, 2014, are hereby incorporated in and made a part of this Agreement. 3. CITY'S OBLIGATIONS. For providing equipment and water meter reading services as specified in this Agreement, City will pay and Contractor shall receive therefore compensation in a total sum not to exceed $0.96 per water meter plus/minus any agreed upon incentives and/or penalties. 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to provide equipment and services as described in Exhibit A-Professional Services Agreement and Exhibit B-Alexander’s Contract Services Inc. Response to the City of San Luis Obispo Request for Proposal attached hereto and incorporated into this Agreement. B3 - 10 Attachment 1 5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Utilities Director of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties hereto. 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Contractor Name Address 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: CITY OF SAN LUIS OBISPO ________________________________ By:_____________________________________ City Clerk Utilities Director APPROVED AS TO FORM: CONTRACTOR ________________________________ By: _____________________________________ City Attorney B3 - 11 Attachment 1 Section E INSURANCE REQUIREMENTS Consultant Services The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. B3 - 12 Attachment 1 3. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. B3 - 13 Exhibit A (BB&K: 9-10) RVPUB\DDERLETH\601461.10 CITY OF SAN LUIS OBISPO, CA PROFESSIONAL SERVICES AGREEMENT 1. RECITALS. 1.1 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing meter reading services to public clients, is licensed in the State of California, and is familiar with the plans of City. 1.2 Project; City desires to engage Consultant to render such services for the Meter Reading Services project (“Project”) as set forth in this Agreement. 2. TERMS. 2.1 Scope of Services and Term. 2.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional Meter Reading consulting services necessary for the Project (“Services”). The Services are more particularly described in Exhibit “A” attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules, and regulations. 2.1.2 Term. The term of this Agreement shall be (3) three years from _______________2014 to ______________2017, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the terms of this Agreement up to an additional (4) years, with (2) 2 year extensions based upon Consultant’s Proposal dated ____________ 2.1.3 Start – Up Period The first ninety (90) days of this Agreement shall constitute the “Start Up” period, in which Consultant shall commence the performance of those services as set forth in the Scope of Services described in Exhibit “A” including the organization of all routes and location of meters as required by the Agreement. B3 - 14 Exhibit A 2 SLO ACS 102014 2.2 Responsibilities of Consultant. 2.2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance. 2.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit “A” attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant’s conformance with the Schedule, City shall respond to Consultant’s submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 2.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City. 2.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Mark Hibshman, Chief Operations Officer; Chris Molina, Chief Operations Officer and Michael Lakes VP Operations 2.2.5 City’s Representative. The City hereby designates__________________ ____________________, or his or her designee, to act as its representative for the performance of this Agreement (“City’s Representative”). City’s Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City’s Representative or his or her designee. B3 - 15 Exhibit A 3 SLO ACS 102014 2.2.6 Consultant’s Representative. Consultant hereby designates Mark Hibshman, Chief Operations Officer, or his or her designee, to act as its representative for the performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 2.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City’s staff, consultants and other staff at all reasonable times. 2.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project. 2.2.9 Period of Performance and Liquidated Damages. Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Project Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage. 2.2.10 Laws and Regulations; Employee/Labor Certifications. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant B3 - 16 Exhibit A 4 SLO ACS 102014 performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees, and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 2.2.10.1 Employment Eligibility; Consultant. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time. Such requirements and restrictions include, but are not limited to, examination and retention of documentation confirming the identity and immigration status of each employee of the Consultant. Consultant also verifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement. Consultant shall avoid any violation of any such law during the term of this Agreement by participating in an electronic verification of work authorization program operated by the United States Department of Homeland Security, by participating in an equivalent federal work authorization program operated by the United States Department of Homeland Security to verify information of newly hired employees, or by some other legally acceptable method. Consultant shall maintain records of each such verification, and shall make them available to the City or its representatives for inspection and copy at any time during normal business hours. The City shall not be responsible for any costs or expenses related to Consultant’s compliance with the requirements provided for in Section 3.2.10 or any of its sub-sections. 2.2.10.2 Employment Eligibility; Subcontractors, Consultants, Sub- subcontractors and Subconsultants. To the same extent and under the same conditions as Consultant, Consultant shall require all of its subcontractors, consultants, sub-subcontractors and subconsultants performing any work relating to the Project or this Agreement to make the same verifications and comply with all requirements and restrictions provided for in Section 3.2.10.1. 2.2.10.3 Employment Eligibility; Failure to Comply. Each person executing this Agreement on behalf of Consultant verifies that they are a duly authorized officer of Consultant, and understands that any of the following shall be grounds for the City to terminate the Agreement for cause: (1) failure of Consultant or its subcontractors, consultants, sub-subcontractors or subconsultants to meet any of the requirements provided for in Sections 3.2.10.1 or 3.2.10.2; (2) any misrepresentation or material omission concerning compliance with such requirements (including in those verifications provided to the Consultant under Section 3.2.10.2); or (3) failure to immediately remove from the Project any person found not to be in compliance with such requirements. 2.2.10.4 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. B3 - 17 Exhibit A 5 SLO ACS 102014 2.2.10.5 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City’s Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 2.2.10.6 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Although the SCAQMD and CARB limits and requirements are more broad, Consultant shall specifically be aware of their application to "portable equipment", which definition is considered by SCAQMD and CARB to include any item of equipment with a fuel-powered engine. Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement. 2.2.11 Insurance. 3.2.11.1 Time for Compliance. Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause. 2.2.11.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subconsultants. Consultant shall also require all of its subconsultants to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. B3 - 18 Exhibit A 6 SLO ACS 102014 (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used including, but not limited to, form CG 2503, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease. 2.2.11.3 Professional Liability. Consultant shall procure and maintain, and require its sub-consultants to procure and maintain, for a period of five (5) years following completion of the Project, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $1,000,000 per claim, and shall be endorsed to include contractual liability. 2.2.11.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insured with respect to the Work or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents, and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents, and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. (C) Workers’ Compensation and Employer’s Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents, and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. B3 - 19 Exhibit A 7 SLO ACS 102014 (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents, and volunteers. 2.2.11.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers. 2.2.11.6 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims, and administrative and defense expenses. 2.2.11.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. 2.2.11.8 Verification of Coverage. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 2.2.11.9 Reporting of Claims. Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement. 2.2.12 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life saving equipment and procedures; (B) instructions in accident prevention for all employees and subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or B3 - 20 Exhibit A 8 SLO ACS 102014 injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 2.2.13 Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 2.3 Fees and Payments. 2.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit ”B” attached hereto and incorporated herein by reference. Price will remain the same through the first three (3) years of the contract. Upon renewal price may increase up to 2% annually. Fuel sur-charge could also be enforced per Exhibit “B” Item “G” 2.3.2 Payment of Compensation. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. City shall, within 30 days of receiving such statement, review the statement and pay all approved charges thereon. 2.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City. 2.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City’s Representative. 2.3.5 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on “public works” and “maintenance” projects. If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant’s B3 - 21 Exhibit A 9 SLO ACS 102014 principal place of business and at the project site. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 2.4 Termination of Agreement. 2.4.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least 60 days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. 2.4.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request. 2.4.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 2.5 Ownership of Materials and Confidentiality. 2.5.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant for the use by City under this Agreement (“Documents & Data”). Specifically, Documents and Data collected and produced by Contractor for City shall include all reads, reports, exceptions, notes, maintenance notes, liability comments and any other information collected in the field. All Documents & Data as herein described shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City's express written permission. It is expressly understood that Contractor has certain proprietary methodology in collecting field data which if made public would damage Contractor’s business, which proprietary methodology is not subject to this Paragraph 3.5.1 Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon B3 - 22 Exhibit A 10 SLO ACS 102014 payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents. 2.5.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subconsultants, or those provided to Consultant by the City. 2.5.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant. 2.5.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted. 2.5.5 Confidentiality. All Documents & Data, either created by or provided to Consultant in connection with the performance of this Agreement, shall be held confidential by Consultant. All Documents & Data shall not, without the prior written consent of City, be used or reproduced by Consultant for any purposes other than the performance of the Services. Consultant shall not disclose, cause or facilitate the disclosure of the Documents & Data to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant that is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City’s name or insignia, photographs of the Project, or any publicity pertaining to the Services or B3 - 23 Exhibit A 11 SLO ACS 102014 the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 2.6 General Provisions. 3.6.1 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: Alexander Contract Services, Inc. 8655 Morro Road, Suite D Atascadero, CA 93422 Attn: Mark Hibshman City: City Of San Luis Obispo 990 Palm Street San Luis Obispo, Ca 93401 Attn: Ron Munds Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 2.6.2 Indemnification. 2.6.2.1 Scope of Indemnity. To the fullest extent permitted by law, Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorneys fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. Consultant’s obligations under this section 3.6.2 shall include claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind arising out of, pertaining to, or incident to Consultant’s use of the staging area described in Exhibit “A,” including those arising out of unauthorized entry by third parties into the staging area and/or damage to or loss or Consultant’s property stored there. B3 - 24 Exhibit A 12 SLO ACS 102014 2.6.2.2 Additional Indemnity Obligations. Consultant shall defend, with Counsel of City's choosing and at Consultant’s own cost, expense and risk, any and all claims, suits, actions or other proceedings of every kind covered by Section 3.6.2.1 that may be brought or instituted against City or its directors, officials, officers, employees, volunteers and agents. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, volunteers and agents as part of any such claim, suit, action or other proceeding. Consultant shall also reimburse City for the cost of any settlement paid by City or its directors, officials, officers, employees, agents or volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for City’s attorney’s fees and costs, including expert witness fees. Consultant shall reimburse City and its directors, officials, officers, employees, agents, and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant’s obligation to indemnify shall survive expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents, or volunteers. 2.6.3 Governing Law; Government Code Claim Compliance. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City. 2.6.4 Time of Essence. Time is of the essence for each and every provision of this Agreement. 2.6.5 City’s Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 2.6.6 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties. 2.6.7 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for B3 - 25 Exhibit A 13 SLO ACS 102014 convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content or intent of this Agreement. 2.6.8 Amendment; Modification. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 2.6.9 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel or otherwise. 2.6.10 No Third Party Beneficiaries. Except to the extent expressly provided for in Section 3.6.7, there are no intended third party beneficiaries of any right or obligation assumed by the Parties. 2.6.11 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 2.6.12 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 2.6.13 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 2.6.14 Attorney’s Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action. 2.6.15 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 2.6.16 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. B3 - 26 Exhibit A 14 SLO ACS 102014 2.6.17 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties. B3 - 27 15 SLO ACS 102014 EXHIBIT “A” SCOPE OF SERVICES Throughout the terms of Agreement, the parties shall have the following rights and responsibilities: A. Contractor shall: 1. Perform start-up activities required to provide meter reading services for up to 15,000 customer accounts, within the SLO sphere of influence. 2. Initial start-up meter reading activities commencing in ________ 2014 and continuing until full implementation occurs includes, but not limited to, staff training, route efficiency confirmation, integration of the Contractor’s and City’s meter reading activities, integration of meter reading information for utility billing and development of service reports. 3. Have the capacity, or ability to obtain the capacity, to expand meter reading services should the City determine this service is needed. Expansion of service during the contract term shall be at the sole discretion of the City and will be negotiated with the Contractor and subject to an amendment of the Agreement. 4. As required operationally, re-sequence meter routes as needed in coordination with the SLO Customer Service Manager. Meter routes in the process of being re-sequenced may be read outside the normal route schedule, provided that the City approves the route schedule change within a week in advance of the change. 5. Provide meter reading services for designated meter routes. There shall be no change in the number or configuration of the water meter reading routes without the prior consent of the City and Contractor. Each water meter route must by read in a sequence and timely fashion to support the City daily utility billing. It is expressly understood that Contractor will make every effort to read all meters in the route, however, if a read is not obtained due to no fault of Contractor, the read shall be billed but shall be marked as “Unread Meter” with note. 6. Provide and maintain for the Meter Readers all apparatus necessary to perform Meter Reading Services. 7. Deliver meter reads via personalized web page designed by the Contractor for the City or any other agreed-upon medium to the City. 8. Ensure that all meter reading equipment, software and files used are compatible with City operating systems. 9. Contractor represents that the error rate for each meter reading cycle will not exceed 2/10th% of the total number of manual meters read during the cycle. Upon notice from the City, Contractor will take all reasonable steps to correct the error and report the B3 - 28 16 SLO ACS 102014 measures taken to the City in a timely manner. After the first ninety (90) days known as the “Start-Up” period. The City shall seek reimbursement at the cost of $15.00 per meter for mis-read errors over and above 2/10%. (2 Per 1,000) 10. Notify the City the same day of any hazardous conditions requiring immediate attention (e.g.: broken water meter box lids, broken meters, potential water leaks, construction issues, etc.). 11. Report to the City damaged meters, damaged meter boxes and/or lids, leaking meters, or any other repairs that need to be made by the City at the time of attempted read. 12. At all times, employ only competent readers, experienced or well trained in the task being performed, and who are familiar with meter location, and Contractor shall continuously oversee the activities of such readers. At the City’s written request, and based upon reasonable evidence, the Contractor shall immediately remove and replace any incompetent, careless or negligent meter readers. 13. At all times, have employees be uniformed with the Contractor company logo and identification tags. All vehicles shall be well maintained (clean) and marked appropriately to identify the service provided. 14. Pay for all utilities costs associated with the staging area. B. City shall: 1. Work diligently with the Contractor during the initial set-up phase and throughout the term of the contract to implement a successful water meter reading program. 2. Grants to Contractor the exclusive right to read all water meters located in or served by the City, whether now existing or hereafter installed during the term of this agreement or any extension hereof. 3. Provide the Contractor reasonable assistance with the training to meter readers to perform the services under the contract, including but not limited to, allowing the Contractor meter readers to accompany City meter readers to learn the routes and locations of meters. 4. Provide the Contractor with any changes that occur on City meters, including but not limited to, water meter additions, changes or substitutes and changes in location and instruction codes via personalized web page or any other agreed-upon medium. 5. Maintain all meters and enclosures in a reasonable repair and condition at all times in order for the Contractor to provide water meter reading services without undue hardship or danger. Provided that the Contractor shall be responsible and liable for any meters or meter enclosures that become defective, faulty, broken or damaged as a result of negligence, carelessness or intentional acts of Contractor employees. B3 - 29 17 SLO ACS 102014 6. Provide Contractor access to all areas in the City needed for the Contractor to perform services under contract. B3 - 30 18 SLO ACS 102014 EXHIBIT “B” COMPENSATION A. The Contractor will be paid for the Services provided to the City at the rate of Ninety Six ($.96) per meter for manually read meters per month for each meter read by the Contractor. The total compensation shall not exceed Five Hundred and Eighteen Thousand Four Hundred Dollars ($518,400.00) (3 Year Contract Services Amount). Note as new meters are added per section “B” in Exhibit C OR meters are eliminated “total compensation” shall be adjusted accordingly B. City shall pay Consultant Ninety Five Cents ($.96) when new meters are added to the service area. Going forward the cost to read this meter will be billed according to section “A” in Exhibit C C. The City will not be charged extra for additional attempts to read a meter not readily available to the Contractor on the first attempt, for meters not found by the Contractor on the first attempt, or for re-reads of meters to verify accuracy or correct errors. However, during the first ninety (90) days of Service rendered by Consultant, defined as the “Start Up” period, meters that are read, unread with notes or read in joint effort with current City Staff, shall constitute a billable read. D. The City shall pay the Contractor on monthly basis for Services rendered. The Contractor shall submit invoices for Services rendered. Invoices shall include an itemized description of the Services performed, number of units read, and the time period the Services were performed . Invoice will be dated at the beginning of services rendered. The Contractor shall invoice the City for the Set-up Fees upon submission of the first invoice for Services. Payment shall be deemed made when deposited in the United States mail, first-class postage pre-paid, and addressed to the Contractor as specified in Section entitled “Delivery of Notices.” E. Except during the “Start Up” period, City may withhold, or on account of subsequently discovered evidence such part of any payment to the extent as may be necessary to protect City from loss, including costs and attorneys’ fees, on account of (1) defective or deficient work product not remedied; (2) subsequently discovered errors in invoices previously paid; (3) claims filed or reasonable evidence indicating probable filing of a claim or claims; or (4) Contractors failure to adhere to the Schedule or to achieve sufficient progress with the Services such that Contractor is unlikely to achieve timely completion. F. Other Services such as “Customer Service, GPS Collection, etc” Shall be charged in addition to this agreement upon mutual agreement of compensation amount between SLO and Contractor. B3 - 31 19 SLO ACS 102014 G. A Fuel Surcharge could be added at the renewal of each year if average fuel costs rise above $5.50 per gallon. This figure will be based on a formula of fuel used the prior 12 months and the cost difference between the current average that is above $5.50 B3 - 32 Attachment 1 Exhibit B B3 - 33 Attachment 1 Exhibit B B3 - 34 Attachment 1 Exhibit B B3 - 35 Attachment 1 Exhibit B B3 - 36 Attachment 1 Exhibit B B3 - 37 Attachment 1 Exhibit B B3 - 38 Attachment 1 Exhibit B B3 - 39 Attachment 1 Exhibit B B3 - 40 Attachment 1 Exhibit B B3 - 41 Attachment 1 Exhibit B B3 - 42 Attachment 1 Exhibit B B3 - 43 Attachment 1 Exhibit B B3 - 44 Attachment 1 Exhibit B B3 - 45 Attachment 1 Exhibit B B3 - 46 Attachment 1 Exhibit B B3 - 47 Attachment 1 Exhibit B B3 - 48 Attachment 1 Exhibit B B3 - 49 Attachment 1 Exhibit B B3 - 50 Attachment 1 Exhibit B B3 - 51 Attachment 1 Exhibit B B3 - 52 Attachment 1 Exhibit B B3 - 53 Attachment 1 Exhibit B B3 - 54 Attachment 1 Exhibit B B3 - 55 Attachment 1 Exhibit B B3 - 56 Attachment 1 Exhibit B B3 - 57 Attachment 1 Exhibit B B3 - 58 Attachment 1 Exhibit B B3 - 59 Attachment 1 Exhibit B B3 - 60 Attachment 1 Exhibit B B3 - 61 Attachment 1 Exhibit B B3 - 62 Attachment 1 Exhibit B B3 - 63 Attachment 2 R ______ RESOLUTION NO. _____ (2014 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO TO ESTABLISH A POLICY FOR THE AVERAGE WINTER WATER USE PERIOD RELATED TO DROUGHT CONDITIONS WHEREAS, The State of California periodically experiences periods of drought and dry, warm weather and climate change may make these periods more frequent and unpredictable; and WHEREAS, the City of San Luis Obispo has adopted a sewer rate structure that uses the Average Winter Water Use (AWWU) for the months of December, January and February of each year to establish a residential sewer cap that equitably represents a residential ratepayer’s sewer rate based upon their contribution to the sewer system; and WHEREAS, winter water use may be effected by these periods of drought and dry, warm weather resulting in residential ratepayers being required to irrigate their landscape causing higher than average and unrepresentative sewer caps; and WHEREAS, a responsive and nimble policy is desirable to address ratepayer concerns, minimize confusion during the winter water use period and reduce staff work; and WHEREAS, City Council requested staff to draft a policy to establish guidelines for the AWWU periods related to drought conditions; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows; SECTION 1. The City Council declares that action to address the AWWU period and residential sewer caps be executed based upon the following findings; 1. Two consecutive months of ten percent or less than the normal rainfall for those months during the AWWU period; or 2. The Governor or Board of Supervisors’ declaration of a local drought emergency and 40 percent or less than of normal rainfall during the AWWU period; or 3. Some other unforeseen regional condition that warrants a change to the AWWU period SECTION 2. That such action utilizes the most recently adopted Rate Structure Goals SECTION 3. The City Council authorizes the Utilities Director to enact this policy to allow for the most responsive implementation by modifying the method used to establish residential sewer caps. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: B3 - 64 Resolution No. _____ (20xx Series) Page 2 AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2014. ____________________________________ Mayor Jan Marx ATTEST: ____________________________________ Anthony Mejia City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney B3 - 65 Page intentionally left blank. B3 - 66