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HomeMy WebLinkAboutAmendment to PSA - H.J. Umbaugh & Associates - Amendment for Assistance with IURC^d. '. . IA peat dm v;» 06 SOUTH BEND, INDIANA DEPARTMENT OF PUBLIC WORKS GENERAL SERVICE AGREEMENT — AUGUST 19,201 EXHIBIT A-3 Services Provided — Municipal Water Utility Scope of Services The Firm agrees to furnish and perform the following services with respect to the preparation of the Water Utility Cost of Service study. Article I. Analysis of Costs and Revenues (Rate Analysis) A. Prepare from available records historical balance sheets and/or historical recorded financial information for a period of three (3) calendar years and the most recent twelve (12) month period available (the "test year"). B. Prepare from available records a schedule of flow of funds for the past three (3) calendar years and the test year for the purpose of determining trends, amounts of revenue, cash operation and maintenance expenses, debt service requirements and expenditures for improvements to the Utility property and plant. C. Analyze expenses of the test year in order to locate and adjust items which should be properly capitalized, expensed or reclassified. D. Analyze accounts, invoices and pertinent documents and interview Client personnel and/or consulting engineers made available by the Client to determine possible changes in expenses and the possible effects of those changes. E. Obtain information from Client officials, engineers and/or other available sources to suggest to the Client adjustments to test year cash operating expenses such as additional labor, power costs, chemical costs, additional taxes and other fixed, known and measurable expense changes. F. Schedule monthly revenues of the test year in order to locate and adjust unusual and significant fluctuations in such revenue. G. Prepare amortization schedules of presently outstanding funded debt extending over the life of the remaining years of payment and obtain information from bond ordinances or other documents relating to such funded debt. H. Obtain information from the rate ordinance, tariffs and bond ordinances now in effect. Assist in the development of a capital improvements program and determine alternative financial programs leading to the obtaining of funds necessary to meet the capital improvernent requirements through funds now available and/or future revenues of the system and/or the use of debt financing. SOUTH BEND, INDIANA DEPARTMENT OF PUBLIC WORKS GENERAL SERVICE AGREEMENT — AUGUST 192014 EXHIBIT A-3 (Cont'd.) Services Provided — Municipal Water Utility Provide alternative estimates of future annual revenue requirements for consideration by the Client. Article H. Cost of Service Study A. Obtain information from Client officials, consulting engineers and available records, invoices, etc, to determine the classification of Utility plant as necessary for Cost of Service analyses. B. Compile a detailed study of all customer billings for twelve (12) months' usage of the test year for each rate schedule currently in effect in order to determine billing demands and customer usage characteristics. C. Confer with the Superintendent, consulting engineers and other consultants to the Client, as necessary, to determine maximum hourly dernand characteristics, maximum daily demand characteristics, fire flow requirements, meter equivalence ratios and other data for each customer classification in order to determine the cost responsibility for each class of service. D. Confer with the Superintendent, consulting engineers and other consultants to the Client, as necessary, to arrive at the allocation of the costs of Utility plant operating expenses and other revenue requirements to cost functions (i.e. base costs, extra capacity, customer, administrative and direct functions). E. Confer with the Superintendent, consulting engineers and other consultants to the Client, as necessary, to arrive at the allocation of each functional cost to each of the present customer classifications in relation to each customer class's responsibility for - those costs. F. Compare the test year revenues under the current schedule of rates with the projected annual costs of providing service for each of the present customer classifications. G. Recommend the consolidation of certain present rate classifications where appropriate. H. Recommend alternative methods of revising rates and charges which are projected to produce revenues approximately equal to the determinable costs of providing service to the customers being billed frorn said rates. Prepare schedules comparing typical monthly billings under the present and proposed rates of the Client with the rates being charged in other communities in the surrounding area. Prepare and furnish an accounting report of findings and recommendations concerning the finances of the Client and a new schedule of rates and charges. SOUTH BEND, INDIANA DEPARTMENT OF PUBLIC WORKS GENERAL SERVICE AGREEMENT — AUGUST 19 2014 EXHIBIT A-3 (Coat' d.) Services Provided -- Municipal Water Utility Article III, Meetin s and Local Rate Hearin A. Meet, as needed, with the Client to discuss findings and recommendations. B. Provide financial information (including a new schedule of rates and charges, if required) to the Client's attorney for preparation of resolutions and ordinances as may be required. C. If a change in rates or fees is required, attend a local public hearing to present accounting and financial information relating to rates and charges for service. Article IV. Assistance with the Indiana Utility Regulatory Commission ("IURC") Approval A. I1' necessary, attend a prehearing conference to establish among other items the accounting test year and the accounting method to be utilized in the preparation of the financial and accounting statements and exhibits to be offered as evidence in the Utility's cause. B. Prepare the written accounting and financial testimony and exhibits constituting the Utility's Case -in -Chief. C. Include in the written accounting and financial testimony and exhibits substantiation of the proposed rate increase through calculations which consider rates of return on utility equity and utility rate base as provided in Public Law 67 and used by the IURC to determine the reasonableness of the proposed rate increase. Article V. Additional Services Required for the IURC Approval A. If necessary, meet with the Office of the Utility Consumer Counselor's ("OUCC") staff and IURC's staff to discuss the written accounting and financial testimony and exhibits and to make available copies of our work papers in support of the Utility's Case -in -Chief. B. Assist in the preparation of all accounting related responses to Discovery Requests from the OUCC and/or IURC and/or third party intervenors. C. Review the written testimony and exhibits prepared by the staff of the OUCC, staff of the IURC and any third party intervenors, and prepare- timely written rebuttal testimony for prefiling in accordance with the prehearing conference order. D. Attend the evidentiary hearing when the Utility's Case -in -Chief is presented and be prepared to be cross-examined upon the accounting and financial evidence of record. E. Assist in the preparation and review of any settlement agreements and/or final orders from the IURC. EXHIBIT B -- Amended September 8, 2017 Fees — Exhibit A-3 The Firm's fees for services as set forth in Exhibit A-3 of the General Services agreement dated August 19, 2014, shall be billed at the Firm's standard billing rates, as follows: A. For services provided as set forth in Articles I through IV, fees shall not exceed One Hundred Thousand Dollars ($100,000). B. For services provided as set forth in Article V, fees shall be billed at the Firm's standard billing rates based upon the actual time and expenses incurred. We estimate these costs to be approximately Seventy -Five Thousand Dollars ($75,000). If, due to the length and detail of discovery requests as well as third party intervention, fees may be materially higher than the estimate, the Firm will provide the Client in writing with an updated fee estimate before proceeding with the services to be provided. The above fees shall include all expenses incurred by the Firm with the exception of expenses incurred for travel, if any, outside the State of Indiana. No such expenses will be incurred without the prior authorization of the Client. The fees do not include the charges of other entities such as rating agencies, bond and official statement printers, couriers, newspapers, bond insurance companies, bond counsel and local counsel, and electronic bidding services, including Parity x , Coordination of the printing and distribution of Official Statements or any other Offering Document are to be reimbursed by the Client based upon the time and expense for such services. Standard Hourly Rates by Job Classification 01/01/2017 Partners / Principals $275.00 to $475.00 Managers $190.00 to $325.00 Consultants $130.00 to $250,00 Municipal Bond Disclosure Specialists $120.00 to $195.00 Support Personnel $105,00 to $150.00 Billing rates are subject to change periodically (late to changing requitetnents and economic conditions. Actual fees will be based itpon experience of the staff assigned and the complexity of the engagement. Board of Public Works, City of S Lith Bend, Indiana `t` /(,�' G / d-O / 7 Date igh & Associates blic Accountants September 8, 2017 Date