10-24-2016 BPU RPT 08 - Laserfiche WebLink

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W A I= R E N E R U Y I I F F -- RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: OCTOBER 24, 2016 ITEM NO: 8 SUBJECT: SECOND AMENDMENT TO THE PROFESSIONAL CONSULTANT SERVICES AGREEMENT WITH CAROLLO ENGINEERS, INC FOR WATER COST OF SERVICE AND RATE DESIGN PROJECT - EXTENDING THE TERM TO APRIL 30, 2018 AND INCREASING THE CONTRACT AMOUNT BY $75,110, FOR A TOTAL OF $224,945 ISSUE: The issue for Board of Public Utilities consideration is approval of a Second Amendment to the Professional Services Agreement (Agreement) with Carollo Engineers, Inc., of Riverside, California, for the Water Cost of Service Analysis and Rate Design Project., to extend the term of the Agreement to April 30, 2018 and increase the Agreement by $75,110 to a revised contract amount of $224,945. RECOMMENDATION: That the Board of Public Utilities approve the Second Amendment to the Professional Service Agreement with Carollo Engineers, Inc., of Riverside, California, for the Water Cost of Service Analysis and Rate Design Project, to extend the term of the Agreement to April 30, 2018 and increase the Agreement by $75,110 to a revised contract amount of $224,945. BACKGROUND: On May 15, 2015, the Board of Public Utilities (Board) approved the Agreement with Carollo Engineers, Inc., of Riverside, California, ( Carollo), for the purpose of conducting a Water Cost of Service Analysis and Rate Design Project ( "the Project ") for Riverside Public Utilities. The Project is a critical component of Utility 2.0 and the Thriving Financially Roadmap. The scope of the project focuses on three areas: • Phase 1 — Cost of Service Analysis at Current Rates; • Phase 2 — Water Utility Rate Trends Analysis; and • Phase 3 — Rate Design Recommendations. The work for the three phases is a coordinated effort between RPU staff and Carollo. Current tentative presentation dates to the Board are June through August 2017. Conceptual approval of Utility 2.0 and incorporating numerous financial scenarios into the 10 year proforma resulted in a delay in schedule from the original implementation date and has required additional effort by RPU staff and Carollo. Additional effort is also required due to the complexity of the analysis of future rate options, impacts of the mandatory emergency drought response restrictions and determining rate alternatives. These issues combined required additional meetings between RPU staff and Carollo. The First Amendment to the Agreement with Carollo approved on May 9, 2016 extended the contract through December 31, 2016 and increased the original Agreement by $24,462 to a revised contract amount of $149,835. During the course of the Project, updated information has become available that should be incorporated into the Project including the following: 1. Updated retail sales forecasts 2. Current customer usage data and billing information