THIS AMENDMENT (Amendment) is agreed to by and between the CITY OF LAWRENCE (CLIENT) and BLACK & VEATCH CORPORATION (CONSULTANT).
ARTICLE 1 - APPLICATION
This Amendment amends the Consulting Services Agreement, dated January 8, 2004, any amendments thereto and any work orders, work authorizations, purchase orders or documents of similar effect issued thereunder, between CLIENT and CONSULTANT (the Agreement).
ARTICLE 2 – ADDITIONAL SERVICES
As provided under Optional Task 10 of the Agreement, the CLIENT has requested the CONSULTANT to provide additional follow-up services related to the completed water and wastewater rate studies. These additional services are identified in Attachment A-1.
ARTICLE 3 – ADDITIONAL COMPENSATION
Compensation for the additional services provided by this Amendment shall be at the billing rates specified below. The maximum amount payable to the CONSULTANT for services provided by this Amendment shall not exceed fourteen thousand five hundred dollars ($14,500) without further CLIENT authorization.
Executive Officer $300/hour
Director (Principal-in-Charge) $250/hour
Principal Consultant $215/hour
Senior Consultant (Project Manager) $175/hour
Consultant (Project Staff) $140/hour
Senior Associates (Support Staff) $110/hour
Associates (Support Staff) $80/hour
Clerical/Administrative Support $60/hour
ARTICLE 4 - EFFECTIVE DATE
The effective date of this Amendment shall be . All other provisions of the Agreement, to the extent not inconsistent with this Amendment, remain in full force and effect.
CITY OF LAWRENCE (CLIENT) BLACK & VEATCH CORPORATION
(CONSULTANT)
By: ______________________________ By: _____________________________
Mike Wildgen William C. Cole
City Manager Vice President
Date: ____________________________ Date: ____________________________
The following scope of work includes tasks designed to meet specific requests of the City Commission to consider additional water rate alternatives and further clarify portions of the recently completed water and wastewater report.
This task includes a meeting with CLIENT staff to discuss additional water rate alternatives and obtain policy guidance concerning material to be presented to the City Commission. It also includes a meeting with CLIENT staff and a representative of the Lawrence Chamber of Commerce to discuss concerns related to the proposed water rate structure and the potential negative effects of a conservation based residential rate structure.
Text will be included in a letter to the City Commission to further state and clarify that the proposed residential water rate structure is based on cost of service principles that are designed to recover costs more equitably from those users that exert the greatest demands on the City’s water system. It will be further stated that the proposed residential water rates are not designed to principally reduce residential water consumption like those rates imposed by other water utilities that have limited water resources.
Additional water rate structures will be prepared for the City Commission’s consideration. All of the alternatives will include the same schedule of service charges developed in the report, which is proposed to replace the existing schedule of minimum charges. The alternatives will include (1) the continuation of a declining block rate structure with the first block to also apply to the prior minimum usage allowance, (2) uniform volume charges by customer class as proposed for fiscal year 2005 in the report, (3) an initial inverted rate structure for residential customers instead of uniform residential rate with uniform rates for all other customer classes, (4) inverted residential water rates at a middle transition to targeted inverted residential rates with uniform volume charges for all other customer classes, and (5) inverted residential water rates at a full transitional level with uniform volume charges for all other customer classes. All of the water rate alternatives will be expressed at a 2005 cost level for presentation and comparison purposes. The water usage breakpoint for application of the higher residential water rate will be set at 10,000 gallons per month.
Typical residential water bills for 2005 will be developed for each alternative and compared with bills determined under existing water rates. A graph showing the distribution of water bills for residential customers served by 5/8-inch water bills will be created to indicate the percentage of bills that would be affected by the potential inverted residential rates.
Rate related information for up to five Kansas communities will be obtained, reviewed, and used to discuss how other Kansas water utilities are charging their residential customers. This information will also be used to calculate typical bills imposed by each of the utilities which will be compared with Alternatives 2 and 5 proposed for the City of Lawrence. All rate structures expressed in hundred cubic feet will be converted to thousand gallons for direct comparison purposes.
All water utilities are subject to potential revenue shortfalls due to weather conditions. The customers generally affected the most by weather conditions are typically the heavy irrigators within the residential class. This is also the customer group that will be impacted the most by any potential residential inverted rate block structure. The letter will caution the City Commission about the potential increased revenue at risk through an inverted residential rate structure.
CONSULTANT will prepare a draft letter report covering the six tasks previously summarized for CLIENT review and comment. Based on review comments of the draft letter report, a final letter report will be prepared and an electronic copy in a PDF format will be delivered to the City.