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HomeMy WebLinkAboutC2026-100 - 6/30/2026 - Approved •' Amendment#6 -� Finance & Procurement Date: June 4, 2026 Agreement #: 4090 Rate Model 2022 Contractor/Consultant: NewGen Strategies and Solutions, LLC Current Amount: $45,000.00 I. Section 3, Compensation and Payment, of the Agreement is amended by increasing the amount by$184,687.00; of which $19,000.00 is included for estimated travel expenses, in order to expand the scope of services necessary to complete a comprehensive rate study determination for the anticipated FY 2027 rates and obtain consulting services for the City's water and wastewater systems; therefore, the revised total amount of the Agreement is $229,687.00. II. Attachment A of the Agreement is supplemented with the addition of Attachment A-6, which is attached to this Amendment #6 and its content is incorporated by reference into the Agreement as if fully set out here in its entirety. Attachment A-6 includes supporting details of the expanded scope of work and associated professional fees and expenses necessary during the option years to include an in-depth analysis of consumption, and revenue, multi-year financial plan updates (including operating and capital budgets), evaluation of the adequacy of reserves, water, and wastewater cost of service updates, evaluation of the then-current rate design, determination of alternative rate structures, as well as public involvement and presentations to the City Council and other stakeholder groups. III. This Amendment #6 is effective upon the date of final execution by the parties, unless an earlier date is expressly stated within this document. To the extent that the provisions of this Amendment #6 conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment #6 shall prevail and govern for all purposes and in all respects. Clarissa 202609:43:12CDT 07/15/2026 07/14/2026 (Jul( ) Richard Campbell(Jul 14,202 11:53:15 CDT1 Sergio Villasana Date Contractor Date Director, Finance & Procurement Reviewed by: M2026-062 L.LIi 1-Ill11Zl-la 51 UEa On swl' Gh 07/14/2026 Ch.,W - r L.I �a 24'��:25:na CDT) Contracts Manager Date Cou IC-JI 6/30/2026 Approved as to form: l Elizabeth RI)Mfu 07/14/2026 ATfFST. PI—holh I-lii A."(I'd 9a �ma��m��c T; Assistant City Attorney Date Rebecca flrteea Rebecca Huerta(Jul 15,2026 09-45-41 CDT) Rebecca Huerts City Secretary Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Attachment A-6 NewGen 275 W Campbell Road, Suite 440 Richardson, TX 75080 Strategies & Solutions Phone: (972) 680-2000 May 29, 2026 via email Mr. Kamil Taras Assistant Director—Finance &Administration City of Corpus Christi,Texas 1201 Leopard St. Corpus Christi,Texas 78401 Subject: Update of Cost of Service & Rate Model for FY 2027 — Proposed Scope, Estimated Cost and Expedited Project Schedule Dear Kamil: NewGen Strategies and Solutions (NewGen) is pleased to provide the City of Corpus Christi (City) and Corpus Christi Water with our proposed detailed scope of work, estimated project cost, standard billing rates for 2026, and expedited project schedule, which have been enclosed for review by you and Corpus Christi Water. Task 1 — Project Initiation and Project Management 1.1 Preliminary Data Request After a Notice to Proceed is received for the Study, the Project Team will provide the City with a preliminary data request that encompasses data needs for completing the Study. The data request will itemize information needed for understanding the financial and operating characteristics and cost drivers of the water,and wastewater utilities as well as any changes to City policies.The preliminary data request will be provided within five (5) days of contract execution, and an initial virtual meeting will be conducted with the City staff to review and clarify the data request and to answer any questions which may arise. 1.2 Kickoff Meeting After receiving the initially requested data,the Project Team will work with the City to schedule a virtual kickoff meeting. The primary reason for the kickoff meeting is to allow the key Project Team consultants and participants from the City to be introduced and lay the general framework for how the study will be conducted, as well as to chart the critical path towards successfully achieving the project's goals and objectives. This meeting will also allow for the finalization of the proposed work approach, as well as discussion and clarification of the information previously analyzed. In addition, the project kickoff meeting will allow for the Project Team to gain a better understanding of the goals and objectives,as well as expectations,which the City desires to achieve from the study.As part of the kickoff meeting,the Project Team members will also discuss: Political and customer views/opinions of current rates and departmental service/operations, as well as any changes; Capital/operational demand changes anticipated over the study's forecast period; Initial rate design pricing objectives; and Economics Strategy Stakeholders Sustainability www.newgenstrategies.net Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 2 Initial strategies for implementing/communicating possible rate changes. We expect the kickoff meeting to last approximately two hours. NewGen will provide copies of the agenda and any handouts. 1.3 Update Contract Customer Matrices Throughout this Study the Project Team will build on our prior knowledge of the City's operations, customer base, and existing customer contracts to update and develop a deeper understanding of the utility and its operations. To facilitate this, after receiving the initially requested data, the Project Team will update contract matrices to identify the following: Any new contracts or amendments with contractual elements that must be recognized in the development of appropriate rates including, but not limited to,the specific functionalization methods agreed to between the City and its wholesale customer group along with the specific financial metrics contractually agreed to between the parties and how said metrics drive the revenue requirement and Any changes to the variety of water sources and treatment facilities that service the City's customers and how the defined customer classes utilize these facilities. By updating and further solidifying this understanding early in the engagement, our Project Team will ensure that it is developing appropriate rates reflective of the service provided to a specific customer while recognizing key contractual commitments and minimizing potential conflict with the City's active raw water wholesale water customer group. 1.4 Initial Data and Information Assessment Once the City has submitted the initially requested data, the data will be reviewed for further discussion and clarification with the City staff. Throughout the course of the project, data received by the Project Team will be sampled and evaluated for accuracy.The sampling and testing of data is imperative regarding the billing data used to set rates. It is essential that the billing data be as accurate as possible in the development of proper cost allocations and reliable revenue projections. The Project Team will work closely with the City's billing staff to extract the appropriate billing data. We have extensive experience with billing software and will request a raw data file for analysis. This will reduce the burden of documentation by the City's utility billing staff and provide the level of detail desired by the Project Team to provide an in-depth analysis of consumption by rate class and consumption tiers enabling careful consideration of the adequacy and equity of the current rate structure. In addition, as necessary,the Project Team will conduct informal interviews with the City staff during our review of the historical data to ensure that the Project Team understands the information provided. From this data review and assessment,the Project Team will also work to gain a comprehensive understanding of the utilities' operating environment, including identification of key financial, regulatory, operational, and political issues to be addressed.As needed,follow-up one-on-one interviews may be conducted with the City staff to ensure the Project Team has a full and complete understanding of the utility prior to proceeding with the cost of service analysis. 1.5 Ongoing Project Management To ensure the City's overall goals and objectives are met, proper management and control of the project is critical. NewGen understands the importance of proper project management and has assembled a team well versed in the proper control and coordination needed to successfully execute this engagement. Throughout the course of the Project, the Project Director and Project Manager will maintain consistent, Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 3 constant, and open communication with key City stakeholders. We are also committed to maintaining appropriate staffing to ensure the Project is delivered on time, on budget, and results in actionable recommendations. Task 2 — Update Consumption and Revenue Analysis At a foundational level, rates are simply a fraction, with revenue requirements serving as the numerator and the units of service (e.g., number of customers or accounts, consumption, billed flow, etc.) representing the denominator. If the denominator of the rate calculation is inaccurate,the rates resulting from the analysis may be insufficient.As such,an accurate determination of service units and a projection of customers and usage is critical to a proper rate analysis.The following tasks will be utilized in Task 2 to ensure the integrity of the rates developed from this Study. 2.1 Analyze Detailed Usage/Peak Demands A key step in a study of this type is to gain an understanding of the make-up of the customers served by the systems and how and when they use water (and generate sewage) throughout the year. This is necessary for determining appropriate cost allocations, to develop demand projections, to evaluate the appropriateness of the current rate structures, and to evaluate potential alternative rate structures. To facilitate this review, NewGen will request the most recent year of detailed consumption at the customer account level. The customer and customer usage data will be statistically analyzed to identify usage patterns, including seasonal usage and customer class peaking. Demand ratios (max week, max day, max hour, etc.) will be identified and considered in this analysis, as will peak demands related to any large customers or customer classes. 2.2 Demand Forecast The demand forecast will be based on historical usage patterns, including the interval analysis conducted in Task 2.1, water facilities plan, and discussions with the City as to projected water demand. We will compare projected customer growth with the City's plans to confirm consistency with such plans. If there are deviations from the City's plans,we will document the basis for and reasonableness of such deviations. As part of developing the demand projections, it may be necessary to incorporate the estimated impact of elasticity of demand within the revenue projections. Elasticity of demand is the economic concept that recognizes the relationship between the quantity demanded of a good and a change in the price of that good or service. Failure to recognize this relationship, particularly regarding water sales, can result in an inaccurate estimate of revenue on a going-forward basis. The Project Team will presume industry standards, long-term elasticity standards within its calculations, where necessary. The demand projections will be developed for a ten-year period, by customer class. One of the key variables that must be developed is the rate of growth in the utility, including the numbers and types of new customers to be added year by year as well as increases (or decreases) in water usage over time by existing customers.Where possible,sensitivity analyses will be conducted to produce a potential range of service units and forecasted demand, with specific emphasis on the impact of weather and fluctuations in larger accounts. 2.3 Realizable Revenue Under Current Rates After determining and forecasting service units,the Project Team will calculate the water and wastewater revenue streams anticipated to be generated under current rates. The results of this analysis will be compared to actual and budgeted revenue performance to determine the overall accuracy and Docusign Envelope ID: CB4B1 F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 4 appropriateness of the forward-looking projections.This process will also serve as a "check"on the billing data provided to ensure the integrity of developed rates and recommendations. Task 3 — Update Multi-Year Financial Plan The model previously developed by our team will be updated to address operations and maintenance (O&M) costs, debt service,demand/usage, capital improvement program plan (CIP) costs, cost of service, etc. 3.1 Development of Revenue Requirements and Financial Plan While the focus of this Study will be on the development of the cost of providing water and wastewater service to the City's customers, the revenues and expenses related to the provision of raw and wholesale treated water service (contracted customers) will not be overlooked. Our approach includes a detailed review of each of the costs incurred by the City to ensure the cost of service is developed while maintaining compliance with contractual requirements. The cost analysis can be broken down into four main categories of costs: O&M costs, capital improvements, existing debt service (including compliance with debt service coverage requirements), and any contributions needed to meet debt service coverage and reserve requirements.The total amount of cash required on an annual basis for all purposes and from all sources is called the "Revenue Requirements." The completion of this task will provide a Operating& comprehensive ten-year forecast of Maintenance Expenses revenue requirements for the City water (Day to Day Operations) and wastewater systems with the ability to change assumptions (capital financing, Outstanding economic assumptions, etc.) and Debt immediately see the impact on revenue (Annual Principal and requirements. At this point, the Project Contributions to ' _© Interest Payments) Team will provide an assessment of the Reserves adequacy of the current rates and their _ ability to recover the full cost of service, as well as an assessment of the current rate structure's performance as a baseline for Planned Capital comparing recommended changes. Improvement Projects Review of Operating and Maintenance Costs Using the City's current operating budget as a starting point, we will review the adequacy of budgeted O&M costs. To the extent that costs are directly identified to specific functions of the water and wastewater systems, they will be documented. Any indirect support from other City funds will be reviewed for appropriateness. O&M expenses will be forecasted based on estimated annual inflation rates at the budgetary account line-item level.The forecast for operating expenditures will be based on: Review of historical operating expenditure increases by individual budget account line item, Any additional information that would increase the accuracy of the estimates (e.g., staffing increases/decreases, etc.), and Identifying and assessing the impact of the current capital improvement program on operating expenditures. Docusign Envelope ID: C134131 F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 5 Review of Capital Improvement Plans and Evaluate Potential Capital Financing Sources We will review the City's most recently adopted capital improvement plans for the water and wastewater systems to gain a better understanding of the City's forward-looking capital plans. NewGen will then examine the types and levels of various funding sources available to pay for the capital and operating costs of the utility systems,and the impacts of various approaches will be quantified.While it is presumed that all operating and maintenance costs will be funded via user rates, there are various approaches to funding capital expenses.Typically, a utility might use a mix of financing sources including grants, cash or pay-as-you-go (PAYGO)funding from revenues, General Obligation or Revenue Bonds, or State Revolving Fund (SRF) Loans. Based on the proposed funding of each capital project within the City's capital plan, NewGen will incorporate those impacts into revenue requirements. If so desired by the City, the Project Team will work closely with City Staff, the City's engineers, and the City's financial advisors to develop detailed capital planning and funding scenarios for the Rate Study. Analyze Current and Projected Debt Service NewGen will document the annual principal and interest payments for existing debt service related to the utility systems. Those projects or categories of projects contained in the CIP plan, and which are anticipated to be debt-funded will be identified, and projections of debt service will be developed. The City's practices on types of debt (general obligation bonds, revenue bonds, SRF loans, frequency of borrowing, etc.) will be determined, as will typical debt structure (e.g., payment term, level principal payments vs. level debt service)and assumed interest rate.Additionally,the Project Team will ensure that the revenue requirements account for, and support agreed debt-service coverage factors and reserve requirements for both priority and subordinate debt. Evaluate the Adequacy of Reserves The wise use and management of financial reserves provide many advantages to a utility, such as rate stabilization and "smooth" rate increases,as well as enhanced credit ratings and resulting interest savings. NewGen will review the adequacy of the City's current reserves or fund balances based on the City policy and our industry expertise. The analysis will include development of recommended target balances for the City's water and wastewater reserves or fund balances. The maintenance of adequate reserves and contingency funding for emergency preparedness have been elevated to greater levels since 2021's Winter Storm Uri, which highlighted the need for back-up power generation and other extreme weather preparedness. The Project Team will discuss the City's level of contingency planning with City Staff as it relates to reserves or fund balance, as well as Capital Outlays. Develop Revenue Requirements The sum of the O&M costs, annualized capital costs (debt service plus cash purchases of capital assets), and any contributions to reserves constitutes the revenue requirement—the amount of money that must be raised from all sources over a given year. This amount becomes significant when sensitivity analyses are performed to evaluate miscellaneous revenues,since any shortfall in miscellaneous revenues must be offset by either drawing down fund balance or increasing user rates.The gross revenue requirement less miscellaneous revenues result in the net revenue requirement to be collected from customers. As part of the complete development of revenue requirements, the Project Team will forecast revenue requirements over a ten-year period and incorporate key assumptions including, but not limited to population changes, inflation rates, increase in contractual obligations, contractor costs, anticipated new Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 6 or augmented programs and staffing levels, and capital improvements. All assumptions will be clearly defined and discussed with the City staff prior to finalizing the revenue requirements projection. Task 4 — Water and Wastewater Cost of Service During the Cost of Service Study, NewGen will identify specific cost of service methodology issues and review these with City Management, the Corpus Christi Water Project Team, and the Public Involvement Committee.The two most employed methods for water utility cost allocation are base-extra capacity and commodity-demand methodologies. However, it is not uncommon for the base-extra capacity method to yield a lower cost of service for the residential customer class based on the way the commodity-demand method limits the costs divided by total volume of consumption to variable costs (e.g., chemicals and electricity),whereas the base-extra capacity method also includes costs associated with providing service at average annual rates of consumption. Further,as mentioned in the AWWA M1,1 the base-extra capacity method also identifies the lowest rates possible at perfect load factor(or constant rate of consumption), which can prevent a utility from establishing rates that could result in the sale of water below cost.These concepts will be important to discuss and evaluate as part of the public involvement process. Task 5 — Rate Design and Benchmarking 5.1 Evaluation of Current Rate Design Based on the goals and objectives that are determined during preliminary discussions with the City, the Project Team will perform an evaluation of the current rate structure's ability to achieve these goals and objectives. We will communicate a list of strengths and weaknesses of the current rate structure, as well as potential changes which may better achieve these goals and objectives. On completion of this Rate Design and Benchmarking task, the Project Team will prepare a draft report for the City to review. Upon review, the Project Team will meet with the City to make any necessary changes, which will be used to guide our completion of Task 6. In developing the proposed rates, the Project Team will also discuss with the key stakeholders any limitations and/or guidelines when incorporating the cost of services results developed in earlier tasks into the rate design. For example, if it is not politically feasible to move immediately to cost of service-based rates for a particular class of customers, we will seek to set boundaries on the overall changes seen by a customer class and/or identified group of customers. When needed, the implementation of structural changes or significant adjustments through a phased-in approach, combined with ratepayer education, helps minimize the financial impact on customers and increases public acceptance and understanding. 5.2 Development of Rates Based on the rate design plan developed in Task 5.1, the Project Team will develop a rate design for the City's consideration. Please note that based on past experiences, the Project Team anticipates up to two alternative water rate designs and up to two alternative wastewater rate designs. The recommendations for a ten-year rate plan will be developed to include the following objectives: Rates will be developed with consideration of the recovery of cost of serving each of the respective classes of customers based on industry standards, 1 American Water Works Association, Manual of Water Supply Practices, M1, Principles of Water Rates, Fees and Charges,Seventh Edition,2017, Page 70. Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 7 Consideration and identification of the fixed and variable elements of the rate, Compatibility with the existing utility billing computer software, and ■ The ease of communicating and explaining changes in the rates to ratepayers. 5.3 Determination of Realizable Revenue with Alternative Rate Structures The Project Team will analyze and compare the revenues forecasted to be generated under proposed rates to the forecasted cost of service to determine the adequacy of the rate structures to meet the City's financial goals, including debt service coverage requirements and fund balance. Finally, the monthly impact on customer bills under the proposed rates will also be examined, along with the impact on the City's revenue stability. 5.4 Rate Comparison Review NewGen's Study will include data and graphics to facilitate comparison of the City's current and proposed bills for a typical residential customer compared to the bills of residential customers of at least seven of the largest Texas cities, as well as utilities of comparable size and service characteristics. A rate comparison of the current rates will be compared to both the new rates and those of comparable cities. Task 6 — Public Involvement and City Council Meetings (with Presentations) NewGen will develop presentations based on the findings and draft reports and present them to the City Management Team, Corpus Christi Water Project Team, special customer groups, and the City Council. Draft versions of the PowerPoint presentations will be provided to the Corpus Christi Water Project Manager for review, comment, and approval prior to finalization. Deliverables ■ Draft and final PowerPoint presentations Up to eight meetings with City Staff, City Council members, and specific customer groups Up to two City Council Meetings to present the draft report and proposed rates A revised final report will be finalized after rates are adopted by the City Council as discussed in Task 7 below Task 7 — Report The Project Team will develop a draft report summarizing analyses conducted, as well as findings, conclusions, recommendations, and associated rationale for all relevant components of the cost of service and rate design study shortly after completion of Task 5.The risks of potential challenges to various issues will be identified and discussed. The report shall include an Executive Summary and a full discussion of the impacts of the recommendations on revenue requirements, cost of service and rates. NewGen will provide the draft report to the City Management Team and the Corpus Christi Water Project Team and will meet virtually to discuss the report. NewGen will then compile all comments and revise the report, as appropriate. The revised draft report will be shared with the City Council prior to their consideration to adopt the recommended rates. A final report will then be provided after adoption of rates in early October 2026. Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Mr. Kamil Taras May 29, 2026 Page 8 Deliverables ■ Draft and final reports • Up to ten meetings to present and discuss findings with City Staff, City Council, and specific customer groups One digital PDF copy of the final report If you require any further information, please feel free to contact Andy McCartney at (817) 475-5813 or by email at amccartnev@newgenstrategies.net. Sincerely, NewGen Strategies and Solutions, LLC Eloculigned by: [, CAA4,rba Ric�ia r 'L'B' a4m Abel I Managing Director—Water and Wastewater Enclosures: Estimated Cost Hourly Rates by Position Expedited Project Schedule Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Corpus Christi Water Rate Study for Determination of FY 2027 Rates Hourly Billing Employee Hours Rate Total Richard Campbell 96 $ 400 38,400 Andy McCartney 418 $ 310 129,580 Tia Carnes 52 $ 220 11,440 Andrea Campbell 440 $ 205 90,200 Steve Doogue 24 $ 250 6,000 Administrative Staff 32 $ 145 4,640 1,062 $ 280,260 Other: Travel Expenses 3 Trips for 3 people @$3,000/Trip $ 9,000 Other: Travel Expenses 5 Trips for 2 people @$2,000/Trip $ 10,000 Estimated Total Cost of 2027 Rate Study $ 299,260 Existing Funidng for 2027 Rate Study $ 114,573 Additional Funding Request(05/29/2026) $ 184,687 Tasks 1-Project Initiation and Project Management 2-Update Consumption and Revenue Analysis 3-Develop Revenue Requirements&Multi-Year Financial Plan 4-Water&Wastewater Cost of Service Allocations' 5-Rate Design and Monthly Bill Comparisons 6-Project Meetings and City Council Meetings(with Presentations) 7-Report Tasks by Hours Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Hours Richard Campbell - - - 80 16 96 Andy McCartney 48 2 24 24 24 240 56 418 Tia Carnes 24 28 - 52 Andrea Campbell 16 24 96 96 88 72 48 "0 Steve Doogue 24 - - 24 Administrative Staff - - 16 16 32 88 78 120 120 112 408 136 1,062 Tasks by Dollars Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Total Richard Campbell - - - - - 32,000 6,400 $ 38,400 Andy McCartney 14,880 620 7,440 7,440 7,44D 74,400 17,360 $ 129,580 Tia Carnes 5,280 6,160 - - - - - $ 11,440 Andrea Campbell 3,280 4,920 19,680 19,680 18,040 14,760 9,840 $ 90,200 Steve Doogue - 6,000 - - - - - $ 6,000 Administrative Staff - - - - - 2,320 2,320 $ 4,640 $ 23,440 $ 17,700 $ 27,120 $ 27,120 $ 25,480 $123,480 $ 35,920 $ 280,260 Effective Hourly Rate $ 266.36 $ 226.92 $ 226.00 $ 226.00 $ 227.50 $ 302.65 $ 264.12 $ 263.90 Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 5 Task 5 Hours Richard Campbell - - - 80 16 96 Andy McCartney 48 2 24 24 24 240 56 418 Tia Carnes 24 28 - 52 Andrea Campbell 16 24 96 96 88 72 48 "0 Steve Doogue 24 - - 24 Administrative Staff - - 16 16 32 88 78 120 120 112 328 120 1,062 Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 5 Task 5 Total Richard Campbell - - - - - 32,000 6,400 $ 38,400.00 Andy McCartney 14,880 620 7,440 7,440 7,44D 74,400 17,360 $ 129,580 Tia Carnes 5,280 6,160 - - - - - $ 11,440 Andrea Campbell 3,280 4,920 19,680 19,680 18,040 14,760 9,840 $ 90,200 Steve Doogue - 6,000 - - - - - $ 6,000 Administrative Staff - - - - - 2,320 2,320 $ 4,640 $ 23,440 $ 17,700 $ 27,120 $ 27,120 $ 25,480 $123,480 $ 35,920 $ 280,260 $ 266.36 $ 226.92 $ 226.00 $ 226.00 $ 227.50 $ 376.46 $ 299.33 $ 263.90 Docusign Envelope ID:CB4B1F73-9B36-8A3A-838D-5B2F3F5477EA Corpus Christi Water Rate Model Development NewGen Strategies and Solutions 2026 Billing Rates Position Hourly Billing Rate Partner $285— $455 Principal $285— $455 Senior Manager $240— $315 Manager $205— $240 Senior Consultant $185 —$205 Consultant $170 —$185 Administrative Services $145 Note: Billing rates are subject to change based on annual reviews and salary increases. k7$ , M. oil \ \� E - � { / - - } - \ 2 \ \ § Cl) $ m CO In - / - ` § § � ) ) ) \ \ \ > \ , 7 2 _ 27) •bus ct,� G� 0 ��' Amendment#5 Finance & Procurement NOflPOPPE� 1852 Date: February 21, 2025 Agreement#: 4090 - Rate Model 2022 Contractor/Consultant: NewGen Strategies and Solutions, LLC Current Amount: $45,000.00 I. Section 3, Compensation and Payment, of the Agreement, is amended by increasing the amount $316,080.00, of which $22,000.00 is included for estimated travel expenses, in order to expand the scope of services necessary to complete a comprehensive rate study determination for the anticipated FY 2026 rates and obtain consulting services for the City's water and wastewater systems; therefore, the revised total amount of the Agreement is $406,080.00. II. Attachment A of the Agreement is supplemented with the addition of Attachment A-5, which is attached to this Amendment #5 and its content is incorporated by reference into the Agreement as if fully set out here in its entirety. Attachment A-5 includes the current billing rates and estimated additional hours that may be needed. Additionally, for clarity, Attachments A-1 and A-4 are superseded by Attachment A-5; Attachment A-2 is contined in force solely to give effect to the description of the annual optional extensions and the associated dollar amounts; annual amounts for the optional extensions; and Attachment A-3 is continued in effect for the purpose of defining the task order descriptions and deliverables as applied to the rate models for FY 2026. III. This Amendment #5 is effective upon the date of final execution by the party signing last in time, unless an earlier date is expressly stated within this document. To the extent that the provisions of this Amendment #5 conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment #5 prevail and govern for all intents and purposes. 'o l/' ana k�Ard �e�G 04/13/2025 Richard Campbell(Feb 25,2 510:49 CST) 02/25/2025 �Qt.,vt fin...i z nt m•z rnr� Sergio Villasana Date Contractor Date Director, Finance & Procurement Approved as to legal form: M2025-035 ALIthorized By ElizUbof-h OLUndley 94/09/2025 Council 4/8/2025 Elizabeth Hundley(Apr 9,2025 21:48(fDT) Assistant City Attorney Date Asa ATTEST: Stegha ie Box for IAor 14,2025 0:20 CDT) Rebecca Huerta City Secretary Attachment A-5 Corpus Christi Water Rate Study for Determination of FY 2026 Rates i f Hourly Billing Employee Hours Rate Total Richard Campbell 140 $ 365 51,100 Andy McCartney 448 $ 300 134,400 Tia Carnes 324 $ 200 64,800 Andrea Campbell 196 $ 170 33,320 Steve Doogue 28 $ 225 6,300 Administrative Staff 32 $ 130 4,160 1,168 $ 294,080 Other: Travel Expenses 2 Trips for 3 people @$3,000/Trip $ 6,000 Other: Travel Expenses 8 Trips for 2 people @$2,000/Trip $ 16,000 $ 316,080 Tasks 1 -Project Initiation and Project Management 2-Update Consumption and Revenue Analysis 3-Update Multi-Year Financial Plan 4-Water&Wastewater Cost of Service 5-Rate Design and Benchmarking 6-Public Involvement and City Council Meetings(with Presentations) 7-Report Tasks by Hours Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Hours Richard Campbell 4 - - 2 2 124 8 140 Andy McCartney 80 4 16 20 16 264 48 448 Tia Carnes 24 28 56 56 56 56 48 324 Andrea Campbell 16 24 44 40 40 16 16 196 Steve Doogue - 28 - - - - - 28 Administrative Staff - - - - - 16 16 32 124 84 116 118 114 476 136 1,168 Tasks by Dollars Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Total Richard Campbell 1,460 - - 730 730 45,260 2,920 $ 51,100 Andy McCartney 24,000 1,200 4,800 6,000 4,800 79,200 14,400 $ 134,400 Tia Carnes 4,800 5,600 11,200 11,200 11,200 11,200 9,600 $ 64,800 Andrea Campbell 2,720 4,080 7,480 6,800 6,800 2,720 2,720 $ 33,320 Steve Doogue - 6,300 - - - - - $ 6,300 Administrative Staff - - - - - 2,080 2,080 $ 4,160 $ 32,980 $ 17,180 $ 23,480 $ 24,730 $ 23,530 $140,460 $ 31,720 $ 294,080 Effective Hourly Rate $ 265.97 $ 204.52 $ 202.41 $ 209.58 $ 206.40 $ 295.08 $ 233.24 $ 251.78 Page 1 of 1 Docusign Envelope ID:9A37CCE3-59D2-4EA8-954A-6EF4CB2D1216 .qua U.�A- GO °� Amendment# 4 v Finance & Procurement NOflPORRtF 1852 Date: September 5, 2024 Agreement #: 4090 — Rate Model 2022 Contractor: NewGen Strategies and Solutions, LLC Current Amount: $532,310.00 I. Section 3, Compensation and Payment, of the Agreement is amended by increasing the amount $45,000.00 for additional labor costs incurred for meetings and discussions at the request of the City Council; therefore, the revised total amount of the current Agreement is $577,310.00. II. Attachment A of the Agreement is supplemented with the addition of Attachment A-4, which is attached to this Amendment #4 and its content incorporated by reference into the Agreement as if fully set out here in its entirety. Attachment A-4 details the necessary additional hours. III. This Amendment is effective upon the date of final execution by the parties, unless an earlier date is expressly stated within this document. To the extent that the provisions of this Amendment #4 conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment #4 prevail and govern for all intents and purposes. FDocuSigned by: Do/IcuS''igned by: ��l 9/9/2024 �1( � b (A PM a 9/9/2024 JOs ron ey Date Contractor Date Assistant Director, Finance & Procurement Approved as to legal form: ned by: 1 A04 ( 9/9/2024 sffilgff My Attorney Date Docusign Envelope ID:9A37CCE3-59D2-4EA8-954A-6EF4CB2D1216 ATTACHMENT A-4 L abOF SmInd Hots RaM Allrmunt Andy McCartney 111.75 2B5.0D 531,.8 40.73 EiLFdh 5pery 4.25 150.010� S552 50 Katie Fawler 2.75 1al)101 ' $367_50 Richard C.'ampbell 54.013 350,OD 510.900.00 Thorn.as Jearrsvnrm 1.00 1155,00 5165.00 Tlaanna Cnrn+ 33.50 190.00 $B,365 M L.@ter sobloW 207.25 0 95 188.7 Amount remaining on PO 230978 - $13,818.66 Total: $44,370.09 Page 1 of 1 DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 O�u0 V� � Amendment # 3 v Finance & Procurement NOflPORPtO 1852 Date: February 1, 2024 Agreement #: 4090 — Rate Model 2022 Contractor: NewGen Strategies and Solutions, LLC Current Amount: $304,270.00 I. Section 3, Compensation and Payment, of the Agreement is amended by increasing the amount by$204,040.00, of which $19,800.00 is included for estimated travel expenses, in order to expand the scope of services necessary for comprehensive model development and consulting services for the City's water and wastewater systems utilized by Corpus Christi Water; additionally, Section 3 is further amended by the deletion of $21,000.00 erroneously captured in Amendment #2; and the parties acknowledge that option year 1 was exercised in November, 2023; therefore, the revised total amount of the current Agreement is $532,310.00. II. Amendment #2 to the Agreement is revised, pursuant to this Amendment #3, to eliminate Attachment A-1, which is no longer necessary following the deletion of the $21,000.00 amount detailed above in part 1 of this Amendment #3. For clarity, Attachment A-2 of Amendment #2 is retained in full force and effect, being that Attachment A-2 includes supporting details of the professional fees and expenses necessary to the parties' Agreement executed in July, 2022, and also includes supporting details of the additional fees stated in Amendment #1, which was previously executed by the parties. III. Attachment A-3, which is attached to this Amendment#3 and incorporated by reference as if set out here in its entirety, supplements Attachment A and includes supporting details of the expanded scope of work and associated professional fees and expenses necessary during the option years to include an in-depth analysis of consumption and revenue, multi-year financial plan updates (including operating and capital budgets), evaluation of the adequacy of reserves, water and wastewater cost of service updates, evaluation of the then-current rate design, determination of alternative rate structures, as well as public involvement and presentations to the City Council and other stakeholder groups. IV. This Amendment is effective upon the date of final execution by the parties, unless an earlier date is expressly stated within this document. V. The parties acknowledge that the Agreement and any related amendments provides for the performance of a professional service, which type of service is exempt from competitive bidding requirements pursuant to Sec. 252.022 of the Texas Local Government Code. To the extent that the provisions of this Amendment conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment sphall prevail and govern for all purposes and in all respects. II '_ A✓—', db,`' C J 3/8/2024 �1(,IA,G�V'�, f b (A* a 2/6/2024 ljbshbCC ironley Date Contrac or Date Assistant Director, Finance & Procurement M2024-023 ATTEST: Authorized By APPROVED AS TO LEG /� Si- dbY �ocu1,9neC bY: 2/20/2024 ��t^st�nt it Attorney Date Rebecca Huerta Council City Secretary DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11 FDCB16033 ATTACHMENT A-3 NewGen 275 W Campbell Road, Suite 440 Q C +� Richardson, TX 75080 Strategles U( JoIutionS Phone: (972) 680-2000 November 27,2023 via email Ms. Reba George Assistant Director—Business&Customer Support City of Corpus Christi,Texas 1201 Leopard St. Corpus Christi,Texas 78401 Subject: Update of Cost of Service&Rate Model for FY 2025—Proposed Scope,Timeline,and Cost Dear Reba: NewGen Strategies and Solutions (NewGen) is pleased to provide the City of Corpus Christi (City) and Corpus Christi Water with our proposed detailed scope of work, project timeline, estimated project cost, and standard billing rates for 2024,which have been enclosed for review byyou and Corpus Christi Water. Task 1 — Project Initiation and Project Management 1.1 Preliminary Data Request After a Notice to Proceed is received for the Study, the Project Team will provide the City with a preliminary data request that encompasses data needs for completing the Study.The data request will itemize information needed for understanding the financial and operating characteristics and cost drivers of the water,and wastewater utilities as well as any changes to City policies.The preliminary data request will be provided within five(5)days of contract execution,and an initial virtual meeting will be conducted with the City staff to review and clarify the data request and to answer any questions which may arise. 1.2 Kickoff Meeting After receiving the initially requested data,the Project Team will work with the City to schedule a virtual kickoff meeting. The primary reason for the kickoff meeting is to allow the key Project Team consultants and participants from the City to be introduced and lay the general framework for how the study will be conducted, as well as to chart the critical path towards successfully achieving the projects goals and objectives. This meeting will also allow for the finalization of the proposed work approach, as well as discussion and clarification of the information previously analyzed. In addition,the project kickoff meeting will allow for the Project Team to gain a better understanding of the goals and objectives,as well as expectations,the City desires to achieve from the study.As part of the kickoff meeting,the Project Team members will also discuss: ■ Political and customer views/opinions of current rates and departmental service/operations, as well as any changes; • Capital/operational demand changes anticipated over the study's forecasted period; ■ Initial rate design pricing objectives;and ■ Initial strategies for implementing/communicating possible rate changes. Economics I Strategy I Stakeholders I Sustainability www.newgenstrategies.net DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11FDCB16033 Ms. Reba George November 27, 2023 Page 2 We expect the kickoff meeting to last approximately two hours. NewGen will provide copies of the agenda and any handouts. 1.3 Update Contract Customer Matrices Throughout this Study, the Project Team will build on our prior knowledge of the City's operations, customer base, and existing customer contracts to update and develop a deeper understanding of the utility and its operations. To facilitate this, after receiving the initially requested data, the Project Team will update contract matrices to identify the following: ■ Any new contracts or amendments with contractual elements that must be recognized in the development of appropriate rates including, but not limited to,the specific functionalization methods agreed to between the City and its wholesale customer group along with the specific financial metrics contractually agreed to between the parties and how said metrics drive the revenue requirement;and ■ Any changes to the variety of water sources and treatment facilities that service the City's customers and how the defined customer classes utilize these facilities. By updating and further solidifying this understanding early in the engagement, our Project Team will ensure that it is developing appropriate rates reflective of the service provided to a specific customer while recognizing key contractual commitments and minimizing potential conflict with the City's active raw water wholesale water customer group. 1.4 Initial Data and Information Assessment Once the City has submitted the initially requested data, the data will be reviewed for further discussion and clarification with the City staff. Throughout the course of the project, data received by the Project Team will be sampled and tested for accuracy. The sampling and testing of data is imperative regarding the billing data used to set rates. It is essential that the billing data be as accurate as possible in the development of proper cost allocations and reliable revenue projections. The Project Team will work closely with the City's billing staff to extract the appropriate billing data. We have extensive experience with billing software and will likely request a raw data file for analysis. This will reduce the burden of documentation by the City's utility billing staff and provide the level of detail desired by the Project Team to provide an in-depth analysis of consumption by rate class and consumption tiers enabling careful consideration of the adequacy and equity of the current rate structure. In addition, as necessary,the Project Team will conduct informal interviews with the City staff during our review of the historical data to ensure that the Project Team understands the information provided. From this data review and assessment,the Project Team will also work to gain a comprehensive understanding of the utilities' operating environment, including identification of key financial, regulatory, operational, and political issues to be addressed.As needed,follow-up one-on-one interviews may be conducted with the City staff to ensure the Project Team has a full and complete understanding of the utility prior to proceeding with the cost of service analysis. 1.5 Ongoing Project Management To ensure the City's overall goals and objectives are met, proper management and control of the project is critical.NewGen understands the importance of proper project management and has assembled a team well versed in the proper control and coordination needed to successfully execute this engagement. Throughout the course of the Project,the Project Director and Project Manager will maintain consistent, constant, and open communication with key City stakeholders. We are also committed to maintaining DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11FDCB16033 Ms. Reba George November 27, 2023 Page 3 appropriate staffing to ensure the Project is delivered on time, on budget, and results in actionable recommendations. Task 2 — Update Consumption and Revenue Analysis At a foundational level, rates are simply a fraction, with revenue requirements serving as the numerator and the units of service (e.g., number of customers or accounts, consumption, billed flow, etc.) representing the denominator. If the denominator of the rate calculation is inaccurate,the rates resulting from the analysis may be insufficient.As such,an accurate determination of service units and a projection of customers and usage is critical to a proper rate analysis.The following tasks will be utilized in Task 2 to ensure the integrity of the rates developed from this study. 2.1 Analyze Detailed Usage/Peak Demands A key step in a study of this type is to gain an understanding of the make-up of the customers served by the systems and how and when they use water (and generate sewage) throughout the year. This is necessary for determining appropriate cost allocations, to develop demand projections, to evaluate the appropriateness of the current rate structures, and to evaluate potential alternative rate structures. To facilitate this review, NewGen will request the most recent year of detailed consumption at the customer account level. The customer and customer usage data will be statistically analyzed to identify usage patterns, including seasonal usage and customer class peaking. Demand ratios(max week, max day, max hour, etc.) will be identified and considered in this analysis, as will peak demands related to any large customers or customer classes. 2.2 Demand Forecast The demand forecast will be based on historical usage patterns, including the interval analysis conducted in Task 2.1, water facilities plan, and discussions with the City as to projected water demand. We will compare projected customer growth with the City's plans to confirm consistency with such plans. If there are deviations from the City's plans,we will document the basis for and reasonableness of such deviations. As part of developing the demand projections, it may be necessary to incorporate the estimated impact of elasticity of demand within the revenue projections. Elasticity of demand is the economic concept that recognizes the relationship between the quantity demanded of a good and a change in the price of that good or service. Failure to recognize this relationship, particularly regarding water sales, can result in an inaccurate estimate of revenue on a going-forward basis. The Project Team will presume industry standard, long-term elasticity standards within its calculations where necessary. The demand projections will be developed for a ten-year period, by customer class. One of the key variables that must be developed is the rate of growth in the utility, including the numbers and types of new customers to be added year-by-year as well as increases (or decreases) in water usage over time by existing customers.Where possible,sensitivity analyses will be conducted to produce a potential range of service units and forecasted demand, with specific emphasis on the impact of weather and fluctuations in larger accounts. 2.3 Realizable Revenue Under Current Rates After determining and forecasting service units,the Project Team will calculate the water and wastewater revenue streams anticipated to be generated under current rates. The results of this analysis will be compared to actual and budgeted revenue performance to determine the overall accuracy and DocuSign Envelope ID:91D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11 FDCB16033 Ms.Reba George November 27, 2023 Page 4 appropriateness of the forward-looking projections.This process will also serve as a"check"on the billing data provided to ensure the integrity of developed rates and recommendations. Task 3 — Update Multi-Year Financial Plan The model previously developed by our team will be updated to address operations and maintenance (0&M)costs,debt service, demand/usage, capital improvement plan(CIP)costs, cost of service, etc. Development of Revenue Requirements and Financial Plan While the focus of this study will be on the development of the cost of providing water and wastewater service to the City's customers,the revenues and expenses related to the provision of raw and wholesale treated water service (contracted customers) will not be overlooked.Our approach includes a detailed review of each of the costs incurred by the City to ensure the cost of service is developed while maintaining compliance with contractual requirements. The cost analysis can be broken down into four main categories of costs: O&M costs, capital improvements, existing debt service (including compliance with debt service coverage requirements),and any contributions need to meet debt service coverage and reserve requirements.The total amount of cash required on an annual basis for all purposes and from all sources is called the"Revenue Requirements." The completion of this task will provide a Operating& comprehensive ten-year forecast of Maintenance Expenses revenue requirements for the City water (Day to Day Operations) and wastewater systems with the ability to �. change assumptions (capital financing, economic assumptions, etc.) anda,l 3 Debt immediately see the impact on revenuey(Annual Principal and requirements. At this point, the Project Contributions to ' e r r, f Interest Payments) Team will provide an assessment of the Reserves adequacy of the current rates and their ability to recover the full cost of service,as �`Y well as an assessment of the current rater1 structure's performance as a baseline for 'i' >- p I Dinned Cap. comparing recommended changes. Improvement Projects Review Operating and Maintenance Costs Using the City's current operating budget as a starting point, we will review the adequacy of budgeted O&M costs. To the extent that costs are directly identified to specific functions of the water and wastewater systems, they will be documented. Any indirect support from other City funds will be reviewed for appropriateness.0&M expenses will be forecasted based on estimated annual inflation rates at the budgetary account line-item level.The forecast of operating expenditures will be based on: • Review of historical operating expenditure increases by individual budget account line item, ■ Any additional information that would increase the accuracy of the estimates (e.g., staffing increases/decreases, etc.),and ■ Identifying and assessing the impact of the current capital improvement program on operating expenditures. DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11 FDCB16033 Ms.Reba George November 27,2023 Page 5 Review Capital Improvement Plans and Evaluate Potential Capital Financing Sources We will review the City's most recently adopted capital improvement plans forthe water and wastewater systems to gain a better understanding of the City's forward-looking capital plans. NewGen will then examine the types and levels of various funding sources available to pay for the capital and operating costs of the utility systems,and the impacts of various approaches will be quantified.While it is presumed that all operating and maintenance costs will be funded via user rates,there are various approaches to funding capital expenses. Typically, a utility might use a mix of financing sources including grants,cash or pay-as-you-go (PAYGO)funding from revenues, General Obligation or Revenue Bonds,or State Revolving Fund (SRF) Loans. Based on the proposed funding of each capital project within the City's capital plan, NewGen will incorporate those impacts into revenue requirements. If so desired by the City, the Project Team will work closely with City Staff, the City's engineers, and the City's financial advisors to develop detailed capital planning and funding scenarios for the rate study. Analyze Current and Projected Debt Service NewGen will document the annual principal and interest payments for existing debt service related to the utility systems.Those projects or categories of projects contained in the CIP,and which are anticipated to be debt-funded will be identified, and projections of debt service will be developed. the City's practices on types of debt (general obligation bonds, revenue bonds, SRF loans,frequency of borrowing, etc.) will be determined, as will typical debt structure (e.g., payment term, level principal payments vs. level debt service) and assumed interest rate. Additionally, the Project Team will ensure that the revenue requirements account for and support agreed debt-service coverage factors and reserve requirements for both priority and subordinate debt. Evaluate the Adequacy of Reserves The wise use and management of financial reserves provides many advantages to a utility, such as rate stabilization and"smooth"rate increases,as well as enhanced credit ratings and resulting interest savings. NewGen will review the adequacy of the City's current reserves or fund balances based on the City policy and our industry expertise. The analysis will include development of recommended target balances for the City's water and wastewater reserves or fund balances. The maintenance of adequate reserves and contingency funding for emergency preparedness have been elevated to greater levels since 2021's Winter Storm Uri,which highlighted the need for back-up power generation and other extreme weather preparedness. The Project Team will discuss the City's level of contingency planning with City Staff as it relates to reserves or fund balance as well as Capital Outlays. Develop Revenue Requirements The sum of the 0&M costs, annualized capital costs (debt service plus cash purchases of capital assets), and any contributions to reserves constitutes the revenue requirement—the amount of money that must be raised from all sources over a given year. This amount becomes significant when sensitivity analyses are performed to evaluate miscellaneous revenues,since any shortfall in miscellaneous revenues must be offset by either drawing down fund balance or increasing user rates.The gross revenue requirement less miscellaneous revenues result in the net revenue requirement to be collected from customers. As part of the complete development of revenue requirements, the Project Team will forecast revenue requirements over a ten-year period and incorporate key assumptions including, but not limited to, population changes, inflation rates, increase in contractual obligations,contractor costs, anticipated new DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11 FDCB16033 Ms. Reba George November 27, 2023 Page 6 or augmented programs and staffing levels, and capital improvements. All assumptions will be clearly defined and discussed with the City staff prior to finalizing the revenue requirements projection. Task 4 — Water and Wastewater Cost of Service During the cost of service study, NewGen will identify specific cost of service methodology issues and review these with City Management,the Corpus Christi Water Project Team, and the Public Involvement Committee.The two most employed methods for water utility cost allocation are base-extra capacity and commodity-demand methodologies. However, it is not uncommon for the base-extra capacity method to yield a lower cost of service for the residential customer class based on the way the commodity-demand method limits the costs divided by total volume of consumption to variable costs (e.g., chemicals and electricity),whereas the base-extra capacity method also includes costs associated with providing service at average annual rates of consumption.Further,as mentioned in the AWWA M1,1 the base-extra capacity method also identifies the lowest rates possible at perfect load factor(or constant rate of consumption), which can prevent a utility from establishing rates that could result in the sale of water below cost.These concepts will be important to discuss and evaluate as part of the public involvement process. Task 5 — Rate Design and Benchmarking 5.1 Evaluation of Current Rate Design Based on the goals and objectives that are determined during preliminary discussions with the City, the Project Team will perform an evaluation of the current rate structure's ability to achieve these goals and objectives.We will communicate a list of strengths and weaknesses of the current rate structure,as well as potential changes which may better achieve these goals and objectives. On completion of this Rate Design and Benchmarking task, the Project Team will prepare a draft report for the City to review. Upon review, the Project Team will meet with the City to make any necessary changes, which will be used to guide our completion of Task 6. In developing the proposed rates, the Project Team will also discuss with the key stakeholders any limitations and/or guidelines when incorporating the cost of services results developed in earlier tasks into the rate design. For example, if it is not politically feasible to move immediately to cost of service-based rates for a particular class of customers, we will seek to set boundaries on the overall changes seen by a customer class and/or identified group of customers. When needed, the implementation of structural changes or significant adjustments through a phased-in approach, combined with ratepayer education, helps minimize the financial impact to customers and increases public acceptance and understanding. 5.2 Development of Rates Based on the rate design plan developed in Task 5.1, the Project Team will develop a rate design for the City's consideration. Please note that based on past experiences, the Project Team anticipates up to two (2) alternative water rate designs and up to two (2) alternative wastewater rate designs. The recommendations for a ten-year rate plan will be developed to include the following objectives: ■ Rates will be developed with consideration of the recovery of cost of serving each of the respective classes of customers based on industry standards, 1 American Water Works Association, Manual of Water Supply Practices, M1,Principles of Water Rates, Fees and Charges, Fifth Edition,2000, Page 59. DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11FDCB16033 Ms. Reba George November 27, 2023 Page 7 ■ Consideration and identification of the fixed and variable elements of the rate, ■ Compatibility with the existing utility billing computer software, and ■ The ease of communicating and explaining changes in the rates to ratepayers. 5.3 Determination of Realizable Revenue with Alternative Rate Structures The Project Team will analyze and compare the revenues forecasted to be generated under proposed rates to the forecasted cost of service to determine the adequacy of the rate structures to meet the City's financial goals, including debt service coverage requirements and fund balance. Finally, the monthly impact on customer bills under the proposed rates will also be examined,along with the impact on the City's revenue stability. 5.4 Rate Comparison Review NewGen's study will include data and graphics to facilitate comparison of the City's current and proposed bills for a typical residential customer compared to the bills of residential customers of at least seven (7) of the largest Texas cities as well as utilities of comparable size and service characteristics. A rate comparison of the current rates will be compared to both the new rates and those of comparable cities. Task 6 — Public Involvement and City Council Meetings (with Presentations) NewGen will develop presentations based on the findings and draft report and present it to the City Management Team, Corpus Christi Water Project Team, Public Involvement Committees, and the City Council. Draft versions of the PowerPoint presentations will be provided to the Corpus Christi Water Project Manager for review, comment, and approval prior to finalization. Deliverables ■ Draft and final PowerPoint presentations ■ Up to ten (10) Public Involvement meetings with various City's customer groups ■ Up to two(2)City Council Meetings to present the draft report and proposed rates ■ A revised final report will be finalized after rates are adopted by the City Council as discussed in Task 7 below Task 7 — Report The Project Team will develop a draft report summarizing analyses conducted as well as findings, conclusions,recommendations,and associated rationale for all relevant components of the cost of service and rate design study shortly after completion of Task 5.The risks of potential challenges to various issues will be identified and discussed. The report shall include an Executive Summary and a full discussion of the impacts of the recommendations on revenue requirements, cost of service and rates. NewGen will provide the draft report to the City Management Team and the Corpus Christi Water Project Team and will meet virtually to discuss the report. NewGen will then compile all comments and revise the report, as appropriate. The revised draft report will be shared with the City Council prior to their consideration to adopt the recommended rates. A final report will then be provided after adoption of rates in early October 2024. DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11FDCB16033 Ms. Reba George November 27, 2023 Page 8 Deliverables ■ Draft and final reports ■ Up to two (2)virtual meetings to present and discuss the draft report to City Staff ■ Ten (10) bound hard copies of the final report ■ One (1) digital PDF copy of the final report The project team at NewGen looks forward to hearing from you so we can draft the initial data request. If you require any further information, please feel free to contact Andy McCartney at(817) 475-5813 or by email at amccartney@newgenstrategies.net. Sincerely, NewGen Strategies and Solutions, LLC DocuSigned by: D77B822782EF40F... Richard Campbell Managing Director—Water and Wastewater Enclosures: Projected Timeline Estimated Cost Hourly Rates by Position DocuSign Envelope ID:91D51F4FD-438C-4668-8397-FE9260F76366 c c a c c t z og' - a a -a ' E M a � M � 3 Q a E r Q m � d 0] E E E 3 E O C W C rn u) o O DocuSign Envelope ID:9D51F4FD-438C-4668-8397-FE9260F76366 Corpus Christi Water Rate Study for Update of FY 2025 Rates Hourly Billing Employee Hours Rate Total Chris Ekrut 8 $ 340 $ 2,720 Richard Campbell 86 $ 350 30,100 Andy McCartney 246 $ 250 61,500 Tia Carnes 380 $ 180 68,400 Steve Doogue 10 $ 210 2,100 Noah Healey 76 $ 170 12,920 Administrative Staff 50 $ 130 6,500 856 $ 184,240 Other: Travel Expenses 6 Trips for 3 people @$3,300/Trip $ 19,800 $ 204,040 Tasks 1 - Project Initiation and Project Management 2- Update Consumption and Revenue Analysis 3- Update Multi-Year Financial Plan 4-Water&Wastewater Cost of Service 5- Rate Design and Benchmarking 6- Public Involvement and City Council Meetings (with Presentations) 7- Report Tasks by Hours Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Hours Chris Ekrut - - - - - - 8 8 Richard Campbell 16 - 2 2 2 56 8 86 Andy McCartney 40 4 4 32 10 132 24 246 Tia Carnes 24 24 32 64 32 180 24 380 Noah Healey - 24 12 24 16 - - 76 Steve Doogue - 4 - 4 2 - - 10 Administrative Staff - - - - 2 32 16 50 80 56 50 126 64 400 80 856 Tasks by Dollars Employee Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Total Chris Ekrut $ - $ - $ - $ - $ - $ - $ 2,720 $ 2,720 Richard Campbell 5,600 - 700 700 700 19,600 2,800 $ 30,100 Andy McCartney 10,000 1,000 1,000 8,000 2,500 33,000 6,000 $ 61,500 Tia Carnes 4,320 4,320 5,760 11,520 5,760 32,400 4,320 $ 68,400 Steve Doogue - 840 - 840 420 - - $ 2,100 Noah Healey - 4,080 2,040 4,080 2,720 - - $ 12,920 Administrative Staff - - - - 260 4,160 2,080 $ 6,500 $ 19,920 $ 10,240 $ 9,500 $ 25,140 $ 12,360 $ 89,160 $ 17,920 $ 184,240 Effective Hourly Rate $ 249.00 $ 182.86 $ 190.00 $ 199.52 $ 193.13 $ 222.90 $ 224.00 $ 215.23 DocuSign Envelope ID:91D51F4FD-438C-4668-8397-FE9260F76366 DocuSign Envelope ID:96B2B589-3862-4769-A733-F11 FDCB16033 Corpus Christi Water Rate Model Development NewGen Strategies and Solutions 2024 Billing Rates Position Hourly Billing Rate Partner $265—$4055 Principal $250—$405 Senior Manager $225—$280 Manager $195—$225 Senior Consultant $170—$195 Consultant $160—$170 Administrative Services $130 Note: Billing rates are subject to change based on annual reviews and salary increases. DocuSign Envelope ID:07AF3D54-A18D-4553-9692-009B226991F2 O�u0 V� -, Amendment #2 v Finance & Procurement NeOflPORPtO 1852 Date: July 28, 2023 Agreement #: 4090 — Rate Model 2022 Contractor/Consultant: NewGen Strategies and Solutions, LLC Current Amount: $283,270.00 I. Section 3, Compensation and Payment, of the Agreement is amended by increasing the amount $21,000.00 to include additional preparation and support work with City staff in advance of the upcoming large volume customer meetings; therefore, the revised total amount of the Agreement is $304,270.00. II. Attachment A of the Agreement is supplemented with the addition of Attachment A-1, which is attached to this Amendment #2 and its content incorporated by reference into the Agreement as if fully set out here in its entirety. Attachment A-1 details the estimated additional hours necessary to complete the preparation and support work the Contractor has agreed to provide. III. Attachment A of the Agreement is further supplemented with the addition of Attachment A-2, which is attached to this Amendment #2 and its content incorporated by reference into the Agreement as if fully set out here in its entirety. Attachment A-2's content was inadvertently omitted from the Agreement at the time of execution and details the fee amounts agreed upon by the parties. IV. This Amendment is effective upon the date of final execution by the parties, unless an earlier date is expressly stated within this document. To the extent that the provisions of this Amendment conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment shall prevail and govern for all purposes and in all respects. DocuSigned by: DocuSigned by: F (� 8/2/2023 E. g• 7/31/2023 F�B,A865fiE5fJdE6^... ��9E6A91... Josh Chronley Date Contractor Date Assistant Director, Finance & Procurement APPROVED AS TO LEGAL FORM: FDocuSigned by: „� ,�f11n 8/1/2023 B@5�5Bi'T35*YQB "_'"_I Assistant City Attorney Date DocuSign Envelope ID:07AF3D54-A18D-4553-9692-009B226991F2 ATTACHMENT A-1 NewGen Strategies & Solutions, LLC Large Volume Customer Meeting Support Actual Billing Actual 07/24-07/27 Hours Rate Costs Andy Actual Time 24.50 $ 235.00 $ 5,757.50 Tia Actual Time 4.00 $ 165.00 $ 660.00 Andy Actual Travel Expenses $ 795.43 $ 7,212.93 Estimated Billing Billed Estimated Time&Expenses Hours Rate Costs Andy 40.00 $ 235.00 $ 9,400.00 Tia 20.00 $ 165.00 $ 3,300.00 Andy Estimated Travel Expenses $ 1,000.00 $ 13,700.00 Total Actual&Estimated Cost $ 20,912.93 Rounded Estimated Cost for Amendment $ 21,000.00 (Not to Exceed Cost) Scope: Travel&meeting attendance(and participation)at Large Volume Customer meeting on July 24th Meeting support and attendance on Council Budget presentation(July 25th) Prepare Slides for Presentation the week of August 7th Review Large Volume Cost of Service,Proposed Rates,and COS Rates Find comparable Utilities and Prepare Monthly Bill Comparison for Large Volume Customers(ICL&OCL) Travel&Attend Large Volume Customer Meeting the week of August 7th Page 1 of 1 DocuSign Envelope ID:07AF3D54-A18D-4553-9692-009B226991F2 ATTACHMENT A-2 Corpus Christi Water Rate Model Development and Annual Support Rate Model Development Tasks Time Period : 4 months Amendment#1 1 $ 14,620.00 2 $ 20,340.00 3 $ 53,070.00 $ 20,000.00 4 $ 35,640.00 $ 25,000.00 5 $ 23,940.00 $ 4,500.00 6 $ 23,860.00 7 $ 4,300.00 $ 175,770.00 Travel $ 13,000.00 $ 188,770.00 Annual Support Initial $ 45,000.00 Total 16 months $ 233,770.00 $ 49,500.00 Optional Extensions Year 1 $ 45,000.00 Year 2 $ 45,000.00 Year 3 $ 45,000.00 Year 4 $ 45,000.00 Year 5 $ 45,000.00 $ 225,000.00 $ 458,770.00 Page 1 of 1 DocuSign Envelope ID:CE033593-E894-4A85-9A1D-206E7E62220B Amendment # 1 v Finance & Procurement NOflPORRtF 1852 Date: July 10, 2023 Agreement #: 4090 — Rate Model 2022 Contractor: NewGen Strategies and Solutions, LLC Current Amount: $233,770.00 I. Section 3, Compensation and Payment, of the Agreement is amended by increasing the amount by $49,500.00 due to an unexpected increase in hours needed for rate model development of Tasks 3,4, and 5; therefore, the revised total amount of the Agreement is $283,270.00. II. This Amendment is effective upon the date of final execution by the parties, unless an earlier date is expressly stated within this document. To the extent that the provisions of this Amendment conflict with any provisions of the Agreement and prior amendments, if any, the provisions of this Amendment shall prevail and govern for all purposes and in all respects. DocuSigned by:/r / DocuSigned by: q_'j— �� 7/11/2023 7/10/2023 Josh Chronley Date Contractor Date Assistant Director, Finance & Procurement (APPOR. QV�P AS TO LEGAL FORM: ,iAja 4 RVJAjh,� 7/10/2023 Assistant City Attorney Date DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61DE10BBE PROFESSIONAL SERVICE AGREEMENT NO. 4090 Rate Model 2022 CO P00.PtE� 1852 THIS Rate Model 2022 (''Agreement") is entered into by and between the City of Corpus Christi, a Texas home-rule municipal corporation ("City") and NewGen Strategies and Solutions, LLC ("Contractor"), effective upon execution by the City Manager or the City Manager's designee ("City Manager"). WHEREAS, Contractor has agreed to provide professional consulting services to develop a new utility rate model to replace the one currently in use by the City of Corpus Christi. NOW, THEREFORE, City and Contractor agree as follows: 1. Scope. Contractor will provide a comprehensive cost of service analysis for water, wastewater and reuse effluent ("Services") in accordance with the attached Scope of Work, as shown in Attachment A, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety. 2. Term. This Agreement is for 16 months. The parties may mutually extend the term of this Agreement for up to five additional one-year periods ["Option Period(s)"], provided, the parties do so in writing prior to the expiration of the original term or the then-current Option Period. 3. Compensation and Payment. This Agreement is for an amount not to exceed $233,770.00, of which a travel expense budget of $13,000.00 is included, with the total amount being subject to approved extensions and changes. Payment will be made for Services completed and accepted by the City within 30 days of acceptance, subject to receipt of an acceptable invoice. All pricing must be in accordance with the attached Bid/Pricing Schedule, as shown in Attachment B, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety. Any amount not expended during the initial term or any option period may, at the City's discretion, be allocated for use in the next option period. Invoices must be mailed to the following address with a copy provided to the Contract Administrator: City of Corpus Christi Attn: Accounts Payable P. O. Box 9277 Corpus Christi, Texas 78469-9277 Professional Service Agreement- Page 1 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61DE10BBE 4. Contract Administrator. The Contract Administrator designated by the City is responsible for approval of all phases of performance and operations under this Agreement, including deductions for non-performance and authorizations for payment. The City's Contract Administrator for this Agreement is as follows: Name: Reba George Department: Corpus Christi Water Phone: 361-826-1648 Email: RebaG@cctexas.com 5. Insurance; Bonds; License. (A) Before performance can begin under this Agreement, the Contractor must deliver a certificate of insurance ("COI"), as proof of the required insurance coverages, to the City's Risk Manager and the Contract Administrator. Additionally, the COI must state that the City will be given at least 30 days' advance written notice of cancellation, material change in coverage, or intent not to renew any of the policies. The City must be named as an additional insured. The City Attorney must be given copies of all insurance policies within 10 days of the City Manager's written request. Insurance requirements are as stated in Attachment B, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety. (B) In the event that a payment bond, a performance bond, or both, are required of the Contractor to be provided to the City under this Agreement before performance can commence, the terms, conditions, and amounts required in the bonds and appropriate surety information are as included in the RFB/RFP or as may be added to Attachment C, and such content is incorporated here in this Agreement by reference as if each bond's terms, conditions, and amounts were fully set out here in its entirety. (C) Prior to beginning work, Contractor must provide evidence of any valid professional license necessary for the performance of the work under this Agreement. 6. Standard of Care. Contractor warrants that all Services will be performed in accordance with the standard of care used by similarly situated contractors performing similar services under the same professional license. 7. Non-Appropriation. The continuation of this Agreement after the close of any fiscal year of the City, which fiscal year ends on September 30th annually, is subject to appropriations and budget approval specifically covering this Agreement as an expenditure in said budget, and it is within the sole discretion of the City's City Council to determine whether or not to fund this Agreement. The City does not represent that this budget item will be adopted, as said determination is within the City Council's sole discretion when adopting each budget. Professional Service Agreement- Page 2 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61DE10BBE 8. Independent Contractor; Release. (A) In performing this Agreement, both the City and Contractor shall act in an individual capacity and not as agents, representatives, employees, employers, partners, joint venturers, or associates of one another. Contractor shall perform all professional services as an independent contractor and shall furnish such Services in his own manner and method, and under no circumstance or condition shall an employee, agent, or representative of either party be considered or construed to be an employee, agent, or representative of the other party. (B) As an independent contractor, no workers' compensation insurance shall be obtained by City covering the Contractor and employees of the Contractor. The Contractor shall comply with any and all workers' compensation laws pertaining to the Contractor and employees of the Contractor. 9. Subcontractors. Contractor may not use subcontractors in connection with the work performed under this Agreement. 10. Amendments. This Agreement may be amended or modified only in writing executed by authorized representatives of both parties. 11. Waiver. No waiver by either party of any breach of any term or condition of this Agreement waives any subsequent breach of the same. 12. Taxes. The Contractor covenants to pay payroll taxes, Medicare taxes, FICA taxes, unemployment taxes and all other applicable taxes. Upon request, the City Manager shall be provided proof of payment of these taxes within 15 days of such request. 13. Notice. Any notice required under this Agreement must be given by fax, hand delivery, or certified mail, postage prepaid, and is deemed received on the day faxed or hand-delivered or on the third day after postmark if sent by certified mail. Notice must be sent as follows: IF TO CITY: City of Corpus Christi Attn: Reba George, Assistant Director 2726 Holly Road Corpus Christi, TX 78415 IF TO CONTRACTOR: NewGen Strategies and Solutions, LLC Attn: Chris D. Ekrut, Chief Financial Officer 275 W. Campbell Road, Suite 440 Richardson, Texas 75080 Professional Service Agreement- Page 3 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61DE10BBE 14. CONTRACTOR SHALL FULLY INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY OF CORPUS CHRISTI AND ITS OFFICERS, EMPLOYEES AND AGENTS ("INDEMNITEES') FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, CLAIMS, DEMANDS, SUITS, AND CAUSES OF ACTION OF WHATEVER NATURE, CHARACTER, OR DESCRIPTION ON ACCOUNT OF PERSONAL INJURIES, PROPERTY LOSS, OR DAMAGE, OR ANY OTHER KIND OF INJURY, LOSS, OR DAMAGE, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, ATTORNEYS' FEES AND EXPERT WITNESS FEES, WHICH ARISE OR ARE CLAIMED TO ARISE OUT OF OR IN CONNECTION WITH A BREACH OF THIS AGREEMENT OR THE PERFORMANCE OF THIS AGREEMENT BY THE CONTRACTOR OR RESULTS FROM THE NEGLIGENT ACT, OMISSION, MISCONDUCT, OR FAULT OF THE CONTRACTOR OR ITS EMPLOYEES OR AGENTS. CONTRACTOR MUST, AT ITS OWN EXPENSE, INVESTIGATE ALL CLAIMS AND DEMANDS, ATTEND TO THEIR SETTLEMENT OR OTHER DISPOSITION, DEFEND ALL ACTIONS BASED THEREON WITH COUNSEL SATISFACTORY TO THE CITY ATTORNEY, AND PAY ALL CHARGES OF ATTORNEYS AND ALL OTHER COSTS AND EXPENSES OF ANY KIND ARISING OR RESULTING FROM ANY SAID LIABILITY, DAMAGE, LOSS, CLAIMS, DEMANDS, SUITS, OR ACTIONS. THE INDEMNIFICATION OBLIGATIONS OF CONTRACTOR UNDER THIS SECTION SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT. 15. Termination. (A) The City Manager may terminate this Agreement for Contractor's failure to perform the work specified in this Agreement or to keep any required insurance policies in force during the entire term of this Agreement. The Contract Administrator must give the Contractor written notice of the breach and set out a reasonable opportunity to cure. If the Contractor has not cured within the cure period, the City Manager may terminate this Agreement immediately thereafter. (B) Alternatively, the City Manager may terminate this Agreement for convenience upon 30 days advance written notice to the Contractor. The City Manager may also terminate this Agreement upon 24 hours written notice to the Contractor for failure to pay or provide proof of payment of taxes as set out in this Agreement. 16. Assignment. No assignment of this Agreement by the Contractor, or of any right or interest contained herein, is effective unless the City Manager first gives written consent to such assignment. The performance of this Agreement by the Contractor is of the essence of this Agreement, and the City Manager's right to Professional Service Agreement- Page 4 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61DE10BBE withhold consent to such assignment is within the sole discretion of the City Manager on any ground whatsoever. 17. Severability. Each provision of this Agreement is considered to be severable and, if, for any reason, any provision or part of this Agreement is determined to be invalid and contrary to applicable law, such invalidity shall not impair the operation of nor affect those portions of this Agreement that are valid, but this Agreement shall be construed and enforced in all respects as if the invalid or unenforceable provision or part had been omitted. 18. Order of Precedence. In the event of any conflicts or inconsistencies between this Agreement, its attachments, and exhibits, such conflicts and inconsistencies will be resolved by reference to the documents in the following order of priority: A. this Agreement (excluding all attachments and exhibits); B. its attachments; then, C. its exhibits, if any. 19. Certificate of Interested Parties. Contractor agrees to comply with Texas Government Code Section 2252.908, as it may be amended, and to complete Form 1295 "Certificate of Interested Parties" as part of this Agreement if required by said statute. 20. Governing Law. This Agreement is subject to all federal, State, and local laws, rules, and regulations. The applicable law for any legal disputes arising out of this Agreement is the law of the State of Texas, and such form and venue for such disputes is the appropriate district, county, or justice court in and for Nueces County, Texas. 21. Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter of this Agreement and supersedes all prior negotiations, arrangements, agreements and understandings, either oral or written, between the parties (SIGNATURE PAGE FOLLOWS) Professional Service Agreement- Page 5 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE CONTRAC RSigned by: M2022-113 Signature: e�aeeaer�s Authorized By Matthew B. Garrett Printed Name: Council 7-19-2022 Title: Managing Partner DS Date: 7/8/2022 CITY OF CORPUS CHRISTI ATTEST: DocuSigned by: DocuSigned by: -F Rebecca Huerta Josh Chronley City Secretary Assistant Director, Finance - Procurement 7/21/2022 Date: APPROVED AS TO LEGAL FORM: FDocuSignedbby: twL 712112022 Assistant City Attorney Date Attached and Incorporated by Reference: Attachment A: Scope of Work Attachment B: Insurance and Bond Requirements Professional Service Agreement- Page 6 of 6 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE Attachment A- Scope of Work 1.1. General Requirements The primary objectives of this project are: • Conduct a comprehensive cost of service analysis for water, wastewater, and reuse (effluent). • Develop a new utility rate model to replace the one currently in use by the City of Corpus Christi. • Incorporate a financial planning model to allow for `what-if' scenarios and projecting future costs and rate impacts. 1.2. Scope of Work The scope of work shall include, but will not be limited to: Task 1: Project Initiation and Management Coordinate a project kickoff meeting with city staff to review/identify project tasks, approach and methods, communication channels, deliverables, and data needs to complete the project. Develop an approved project timeline. Identify pricing and rate setting objectives. Task 2: Consumption and Revenue Analysis Study historical consumption by all customer types and develop usage and growth factors for each type. Examine all current customer classifications. Analyze current revenues at current rates. Task 3: Financial Planning and Rate Model Development Review financial policies. Determine revenue requirement for water, wastewater, and reuse for multi-year period. Determine impacts that each customer class puts on assets of the water, wastewater and reuse system. Develop financial planning and rate model with the following attributes/functionalities: - User friendly and flexible - Ability to model multiple rate structures at the some time - Ability to change one or more factors of usage, debt service, O&M, etc. and observe rate impacts - Incorporate financial planning over multiple years with the ability to change certain standard assumptions by year - Flag results such as failure to meet debt coverage reserves falling below target levels - Provide graphics and easy to understand summary tables RFQ Template 01.13.2020 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE Task 4: Water, Wastewater, and Reuse Cost of Service The consulting team will follow the accepted process for conducting a water utility cost of service study as detailed in the American Water Works Association (AWWA) Manual of Water Supply Practices M1 , Principles of Water Rates, Fees, and Charges (AWWA Manual M1 ). The wastewater utility and reuse cost of service study standard to be used is detailed in the Water Environment Federation (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems published by the WEF. Task 5: Rate Design and Comparison Evaluate current rate structure providing alternatives. Evaluation will include affordability and equity. Complete a benchmarking analysis to compare the proposed rate structure and rates with the seven (7) largest Texas cities and other communities of comparable size and service characteristics. Task 6: Reports and Presentations A draft and final report will be completed documenting the process, recommended changes, and results of the cost of service and rate study. An electronic copy of the final financial planning and rate model will be provided. A presentation will be developed to summarize process, findings, and recommendations to the Executive Leadership Team and/or City Council. Task 7: Training and Support Training on the model will be provided to City staff. A comprehensive Training Manual on the model will be developed. Assist City staff with responses to questions arising during the rate review/budget adoption process. 1.3. Contractor/Consultant Quality Control The Contractor/Consultant shall establish and maintain a complete Quality Assurance/Control Program that is acceptable to the City to assure that the requirements of the project are provided as specified. RFQ Template 01.13.2020 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE Attachment C-Insurance Requirements LIABILITY INSURANCE 1 . Contractor must not commence work under this agreement until all insurance required herein has been obtained and approved by the City. Contractor must not allow any subcontractor to commence work until all similar insurance required of the subcontractor has been so obtained. 2. Contractor must furnish to the City's Risk Manager and Contract Administrator, one (1) copy of Certificates of Insurance with applicable policy endorsements showing the following minimum coverage by an insurance company(s) acceptable to the City's Risk Manager. Project name and/or number must be listed in Description Box of Certificate of Insurance. TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE $1,000,000 Per Claim (Defense costs not included in face value of the policy) If claims made policy, retro date PROFESSIONAL LIABILITY must be at or prior to inception of (Errors and Omissions) agreement, have extended reporting period provisions and identify any limitations regarding who is insured. 3. In the event of accidents of any kind related to this project, Contractor must furnish the Risk Manager with copies of all reports of any accidents within 10 days of the accident. Additional Requirements - 1 . Applicable for paid employees, Contractor must obtain workers' compensation coverage through a licensed insurance company. The coverage must be written on a policy and endorsements approved by the Texas Department of Insurance. The workers' compensation coverage provided must be in statutory amounts according to the Texas Department of Insurance, Division of Workers' Compensation. An All States Endorsement shall be required if Contractor is not domiciled in the State of Texas. 2. Contractor shall obtain and maintain in full force and effect for the duration of this Contract, and any extension hereof, at Contractor's sole expense, RFQ Template 01.13.2020 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE insurance coverage written on an occurrence basis, by companies authorized and admitted to do business in the State of Texas and with an A.M. Best's rating of no less than A- VII. 3. Contractor shall be required to submit renewal certificates of insurance throughout the term of this contract and any extensions within 10 days of the policy expiration dates. All notices under this Exhibit shall be given to City at the following address: City of Corpus Christi Attn: Risk Management P.O. Box 9277 Corpus Christi, TX 78469-9277 4. Contractor agrees that with respect to the above required insurance, all insurance policies are to contain or be endorsed to contain the following required provisions: ■ List the City and its officers, officials, employees, and volunteers, as additional insureds by endorsement with regard to operations, completed operations and activities of or on behalf of the named insured performed under contract with the City, with the exception of the workers' compensation policy. ■ Provide for an endorsement that the "other insurance" clause shall not apply to the City of Corpus Christi where the City is an additional insured shown on the policy; ■ Workers' compensation and employers' liability policies will provide a waiver of subrogation in favor of the City; and ■ Provide 30 calendar days advance written notice directly to City of any cancellation, non-renewal, material change or termination in coverage and not less than ten calendar days advance written notice for nonpayment of premium. 5. Within five calendar days of a cancellation, non-renewal, material change or termination of coverage, Contractor shall provide a replacement Certificate of Insurance and applicable endorsements to City. City shall have the option to suspend Contractor's performance should there be a lapse in coverage at any time during this contract. Failure to provide and to maintain the required insurance shall constitute a material breach of this contract. 6. In addition to any other remedies the City may have upon Contractor's failure to provide and maintain any insurance or policy endorsements to the extent RFQ Template 01.13.2020 DocuSign Envelope ID:093C07D7-B87B-44A5-B9BE-E8A61 DE10BBE and within the time herein required, the City shall have the right to order Contractor to stop work hereunder, and/or withhold any payment(s) which become due to Contractor hereunder until Contractor demonstrates compliance with the requirements hereof. 7. Nothing herein contained shall be construed as limiting in any way the extent to which Contractor may be held responsible for payments of damages to persons or property resulting from Contractor's or its subcontractor's performance of the work covered under this contract. 8. It is agreed that Contractor's insurance shall be deemed primary and non- contributory with respect to any insurance or self-insurance carried by the City of Corpus Christi for liability arising out of operations under this contract. 9. It is understood and agreed that the insurance required is in addition to and separate from any other obligation contained in this agreement. 2021 Insurance Requirements Ins. Req. Exhibit 3-H Professional Services - Other Professional Services 05/10/2021 Risk Management - Legal Dept. RFQ Template 01.13.2020