HomeMy WebLinkAboutRES 23-093RESOLUTION NO. 23-093
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT
THAT the City Manager be, and he is hereby, authorized to execute a contract
with HDR Inc., of Austin, Texas, to perform a water and wastewater utility financial
planning and rate model in the amount of $54,367.00. The agreement is substantially in
the form attached hereto as Exhibit "A," and made a part hereof for all purposes.
The meeting at which this resolution was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter
551.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 4th day of
April, 2023.
j
- Mayor Robin Mouton -
hdrinc.com
March 16, 2023
Mr. Todd Simoneaux
Chief Financial Officer
City of Beaumont
801 Main Street
Beaumont, Texas 78362
Re: Agreement for Water and Sewer Rate Study
Dear Mr, Simoneaux:
HDR Is pleased to submit, for your consideration, a this agreement for the development of a
water and wastewater utility financial planning and rate model. HDR will provide technical
and coordination support for the development of the model and rate updates,
Scope, schedule and fee is Included as Attachment A. HDR's standard terms and conditions
that will apply to this contract are included as Attachment B.
Should you find this agreeable, please counter -sign below and return a complete contract
package to HDR. If you have any questions, please call me at 512-214-6154.
Sincerely,
HDR Engineering, I%Inc.
Grady Reed
Project Manager
Agreed:
David Weston
Vice President
4401 West Gate Boulevard, Sulte 400, Austin, Tx 70745
T 512.912.5100 f 512.912,5150
Texas Registered Engineering Firm P-754
Authorized Representative
City of Beaumont, TX
Date
EXHIBIT "A"
Attachment A
Scope, Schedule and Fee
Scoge of Services
Task 1: Initial Project Meeting
This meeting will allow both parties to discuss the overall goals and objectives for this study,
while at the same time discussing issues and concerns either party may have. This meeting will
be held in person,
Task 2: Data Collection
HDR will provide a written data request prior to the initial project meeting so that it can be
discussed at the meeting and problem areas resolved. The data and information requested for
this study will be, for the most part, readily available information (e.g., financial, statistical,
customer, etc.). For example, we would collect relevant information such as past cost of service
studies, current rate ordinance and water supply contracts. Some data, particularly related to
customer consumption and usage patterns may require more effort (e.g., determining
consumption by block sizes). Where the data is not readily available or will require significant
effort to collect, our team and City staff will determine the "sensitivity" or "importance" of the
data required and whether alternative data sources are available.
Task 8: Revenue Requirement AnaEVsis
In this task, we will begin to develop the revenue requirement analyses for each utility, which is
the first major analytical portion of the comprehensive rate study process. This portion of the
study will entail reviewing, for each utility, the various sources of funds (revenues) and
comparing them to the applications of funds (expenses) for the utility. This task considers
funding for 0&M and capital expenditures for each utility and determines the need for rate
adjustments over the time -period selected. A more detailed discussion of the various steps
involved in developing the City's revenue requirements for each utility is provided below.
Step 1: Selection of a Test Period
A "test period" refers to a time frame of reference for the accumulation of revenues,
expenses, and consumption data. In this case, a 5-year projected time -period is
proposed, By reviewing costs over this extended time frame, the City can determine if
steps are needed today to help reduce future impacts (e.g., rate adjustment transition,
accumulation of capital reserves, etc.).
Step 2: Accumulation of Revenues and Expenses
Once we determine the test period, we will develop the test period revenue
requirements for each utility. These will be developed in conjunction with the City
management and staff.
Revenue requirements are composed of two major types of costs: operational and
capital expenses. In projecting revenues, the City's historical billing records (sales and
revenues) are used as a starting point, and a projection of future sales (e,g,, demands,
flows, and loads) is developed, We will work closely with the City to develop a revenue
forecast for each utility for the projected test period.
The operational costs are generally projected from historical or budgeted costs, using
assumed escalation factors, and adjusted for known changes in operations (e,g,,
additional personnel, growth/ expansion, etc.). While the projection of the operational
costs is fairly straightforward, the capital cast projections are generally the focus of the
analysis and require more thought and planning.
Within this study, the starting point for projecting capital costs (expenditures) will be
the City's capital improvements plans for each utility, or other relevant capital planning
and capital budgeting documents. In the financial planning process, consideration must
be given to maximizing capital improvements (expenditures) for the system, while
minimizing rates to its customers. This is accomplished in a variety of ways. The
important aspect of this discussion is that there are multiple methods of financing
capital expenditures, and it is through this process that rates can be minimized. HDR
will work with City staff to determine likely funding sources for each project included in
the capital improvement plan.
Step 3, Review of Policies and Financial indicators
During the development of the revenue requirement, our team will review existing
financial policies and practices and will recommend adjustments for meeting industry
standard practices, such as meeting recommended debt service coverage levels, reserve
balances, use of one-time revenues, and funding of capital from rates. For example, a
utility's debt service coverage (DSC) ratio is an important financial measure or indication
of the utility's ability to repay debt. Maintaining at least the minimum DSC is often a
rate (legal) covenant associated with the issuance of debt. During this financial planning
process, we will confirm that each utility Is projected to be able to maintain targeted
minimum reserve levels over the course of the multi -year time -period. If reserves fall
below the recommended minimum levels, our team will bring this to the City's attention
and provide alternatives to meeting certain reserve levels,
Step 4: Review of Initial Results
During the development of the revenue requirements, we will have an internal meeting
to review the draft analysis, confirm the data inputs and assumptions with the City, and
discuss the preliminary draft results. A key objective of this review process is to help City
management and staff clearly understand the approach and methodology used by our
team to develop the analysis and key assumptions.
Task 4: Cost of Service Analysis
Given the results of the revenue requirements, the City's utility costs will be allocated to the
various customer classes of service using an average embedded cost of service methodology.
We will use 2022 as the test year. A cast -of -service study attempts to equitably allocate the
revenue requirements of each utility between the various customer classes of service (e,g,,
residential, commercial, etc.). A brief discussion of the key steps associated with a cost of serve
analysis is provided below.
Step 1: Selection of the Methodology for Accumulating Cost
There are two generally accepted methods for accumulating costs — the "cash basis" and
the "utility basis." Similar to the development of the revenue requirements, the cost of
service will utilize the "cash basis" methodology.
Step 2: Functionalization and Classification of Expenses
Functionalization refers to the arrangement of cost data into its basic cost categories
(e,g., for the water utility, source of supply, treatment, transmission, distribution, etc.).
Given functionalized costs, the costs are then classified into their various cost
components. For example, for a water utility, classification involves determining
whether each specific cost or account item was incurred to meet a customer's capacity,
commodity, fire protection, or customer -related need. For the sewer utility, there are
volume, strength and customer- related costs. A thorough review of the various types of
costs that the City incurs for each utility will be undertaken, and specific cost classifiers
developed. As part of this task, all water utility costs will be allocated to the water
utility and all sewer costs to the sewer utility.
Step 3: Determining of Classes of Service
The process of establishing classes of service is to group customers into similar groups
(e.g., residential, commercial, etc.), We will review the classes of service that are
currently used by the utilities and recommended changes needed.
Step 4: Allocation of Expenses
Once the classes of service have been determined, the process of developing allocation
factors is undertaken. In developing the allocation factors, we will develop factors that
are "fair and equitable" to customers and rely upon utility specific data where available.
Where utility -specific data is not available, we will use various methods to establish
reasonable surrogates.
Step S: Summary of the Cost of Service
Given the development of the allocation factors, the final task allocates the expenses to
each class of service. From this process, a summary page of the cost -of -service study to
each utility is provided, The summary page for the cost -of -service study compares the
difference between the current level of rate revenues received from each class of
service, and the allocated cost of service for each class, Draft results will be reviewed
with City staff to confirm HDR's assumptions in cost allocations and distribution of costs,
The final cost of service results will incorporate input from the City.
The cost of service will provide average unit costs, or cost -based rates, which are
important to the development of final rate designs. Finally, the HDR team will work with
the City to examine and identify if there are cost differences in serving inside city
customers versus outside -city customers.
Task 5: Efate Design Analysis
From the initial project meeting, HDR will understand the rate design goals and objectives of
the City. As a part of this task, the City's existing rate designs for each utility will be reviewed to
verify that they conform to contemporary rate -setting goals and objectives. For each rate
design developed, a bill comparison and graph will be provided that shows a comparison
between the present bill and the proposed bill at various levels of usage and for various
customer classes. Bill comparisons are useful in assessing the potential impacts on a wide
variety of customers.
In addition, as part of this task, HDR will review and provide recommendations for changes in
service rates for various meter sizes as well as working to City staff to determine if it is
appropriate to include a minimum number of gallons into the "demand" charge. Finally,
Chapter 22 of the City's Code of Ordinances will be reviewed for other- water and sewer
ancillary charges to ensure that the current charge amounts are appropriate.
A comparison of current and recommended utility rates and average residential and
commercial bills will be developed with other like -sized municipal utilities in the surrounding
area.
Task 6., Written Reports
Upon completion of the rate analysis, we will develop a draft written report of the rate study.
The written reports are intended to be comprehensive in nature and document the activities
undertaken as a part of the project, along with our findings, conclusions, and
recommendations.
Tasl< 7: Meetings, Workshops, and Public Presentations
It is anticipated that there will be three meetings with the City Council, one to review the cost -
of -service study results and two City Council meetings to review and discuss the rate study
results. One of these meetings will be in a workshop format and the final presentation will be a
City Council meeting, The Project Manager, Grady Reed, will provide the presentations.
Throughout this study, we will schedule, as appropriate, project meetings with City staff to keep
them abreast of the progress of the study and to make sure the key assumptions and
methodology used within the study are consistent with the City's thinking.
Task 8: Computer Models and Training
Financial, cost -of -service, and rate design models developed as a part of this study will be
provided at the end of the study, Models will be developed In Microsoft Excel, During the
development of the rate model, HDR walks City staff through the model so they have an
understanding of how the model works and how the model needs to be updated. Our team can
provide additional training on the rate model if needed.
Proiect Schedule
Prolect Fee
The fee shown below is on a time and materials basis and will not be exceeded without:
advanced written approval from the City. Invoices will be determined by raw hourly rates times 3.4.
The City will be billed monthly for services with payment expected 45 days from the date of the Invoice,
Total Fe
(including
Task
Total Hours
expenses)
Initial Protect Meeting
10
$ 2,794
Data Collection and Rmhow
25
$ 6,141
Revenue Requirement Analysis
42 �
$ 10,499
Cost of 5eNce Analysis
44
$ 9,858
Rate Design Analys€sn
31
$ 7,637
Written Rim
17
$ 4,145
Pub[€G Presentations
26
$ 6,786�
Computer Model
26 r
$ 6,608
Total Hours/Fee
221
$ 54,367
Attachment (3
Standard Terms and Conditions
MDR Engineering, inc. Terms and Conditions
for Consulting Services
STANDARD OF PERFORMANCE
The standard of care for all professional engineering, consulting
and related services perforated or furnished by CONSULTANT
and Its employees under this Agreement will be the care and
skill ordinarily used by members of CONSULTANT's profession
practicing under the same or similar circumstances at the some
time and In the same locality. CONSULTANT makos no
warranties, express or implied, under this AgreemonI or
otherwise, In connection w€th CONSULTANT's services.
INSURANCE/INDEMNITY
CONSULTANT agrees to procure and maintain, at its expense,
Workers' Compensation Insurance as required by statute;
Employer's Liability of $250,000, Automobile Liability insuranco of
$1,000,000 combined single until for bodily Injury and property
damage coveting all vehicles, Including hired vehicles, owned and
non -owned voltirles; Commercial General Liability insurance of
$1,000,000 combined aingle limit for personal Injury and property
damage; and Professional Liability Insurance of $1,000,000 per
claim for protection against claims arising out of the
performance of services under this Agreement caused by
negligent acts, errors, or omissions for which CONSULTANT is
legally [table, OWNER shall be made an additional insured on
Commercial General and Automobile Liability Insurance
policies and certificates of Insurance will be furnished to the
OWNER. CONSULTANT agrees to Indemnify OWNER for third
party personal injury and property damage cialms to the extent
caused by CONSULTANT's negligent acts, errors or omissions.
However, neither Party to this Agreement shall be liable to the
other Party for any special, Incidental, Indirect, or consequential
damages (including but not limited to loss of use or opportunity;
loss of good vhli; cost of substitute facilillas, goods, or services;
cost of capltat and/or fines or penalties), loss of profits or
revenue arising out of, resulting from, or In any way related to
the Project or the Agreement from any cause or causes,
Including but not limited to any such damages caused by the
negligence, errors or omissions, strict liability or breach of
contract.
3. ESTIMATES
Any estimates of project cost, value or savings provided by
CONSULTANT are Intended to allow a comparative evaluation
between alternatives and do not constitute a detailed evaluation
or predictlon of actual project costs, value or savings. Any such
estimates are made on the basis of Information available to
CONSULTANT and on the basis of CONSULTANT's experience
and qualifications, and represents its judgment as an experienced
and qualified professional engineer. However, since
CONSULTANT has no Control over the Impact of various factors
that Impact the actual project cast, value or savings,
CONSULTANT does not guarantee that the actual project cost,
value or savings Wit not vary from CONSULTANT's estimates.
CONTROLLING LAW
This Agreement is to be governed by applicable laws in the -
State of Texas.
SUCCESSORS, ASSIGNS AND EENEFICIARIES
OWNER and CONSULTANT, respectively, bind themselves, their
partners, successors, assigns, and legal representatives to the
covenants of (his Agreement. Neither OWNER nor
CONSULTANT will assign, sublet, or transfer any Interest in this
Agreement or claims arising therefrom without the written consent
of ilia other. No third party beneficiaries are intended under this
Agreement.
4. SERVICES AND INFORMATION
OWNER will provide all criteria and information pertaining to
OWNER's requirements for the project, including design
objectives and constraints, space, capacity and podom)ance
requirements, flexibility and expandability, and any budgetary
limitations. OWNER will also provide copies of any OWNER -
furnished Standard details, Standard Specifications, or Standard
Bid&ag Documents vdt€ch are to be Incorporated Into the project.
OWNER will fumish lheservices of soilsfgootechnical engirtaers
or other consultants that include reports and appropriate
professional recommendations winen such services are deemed
necessary by CONSULTANT. The OWNER agrees to boar full
responsibility for the technical accuracy and content of OWNER -
furnished documents and aervlces.
In performing professional engineering, consulting and related
services hereunder, It Is understood by OWNER that
CONSULTANT is not engaged In rendering any type of legal,
Insurance or accounting services, opinions or advice. Further, it
is the OWNER's sole responsibility to obtain the advice of an
attorney, Insurance counselor or accountant to protect the
OWNER's legal and financlal Interests. To that and, the OWNER
agrees that OWNER or the OWNER's representative will
examine all studies, reports, sketches, drawings, specifications,
proposals and other documents, opinlons or advice prepared or
provided by CONSULTANT, and will obtain the advice of an
attorney, Insurance counselor or other consultant as the OWNER
deems necessary to protect the OWNER's Interests before
OWNER takes action or forebears to take action based upon or
relying upon the services provided by CONSULTANT.
RE -USE OF DOCUMENTS
All documents, Including all reports, drawings, specifications,
computer sofhvare or other items prepared or furnished by
CONSULTANT pursuant to this Agreement, are instruments of
service with respect to the project. CONSULTANT retains
ownership of all such documents. OWNER may retain copies of
the doctnnertts for Its Information. and reference In connection with
tha project; however, none of the documents are Intended or
represented to be suitable for reuse by OWNER or others on
extensions of lice project or on any other project. Any reuse
without written verification or adaptation by CONSULTANT for the
specific purpose Intended will he at OWNFR's sole risk and
without liability or legal exposure to CONSULTANT, and OWNER
will defend, Indemnify and hold harmless CONSULTANT from all
claims, damages, losses and expenses, including attorney's fees,
arising or resulting therefrom. Any such veriffcallon or adaptation
will enlille CONSULTANT to further compensation al rates to he
agreed upon by OWNER and CONSULTANT.
TERMINATION OF AGREEMENT
OWNER or CONSULTANT may terns€pate tite Agreement, in
whole or in part, by giving thirty (n) days written notice to the
other party. Where Ilia method of payment is "lump sum;' or cost
reimbursement, the final Invoice will Include all services and
expenses associated with the project tap to the effective date of
tarminallom An equitable adjustment shall also be made to
provide for termination settlement costs CONSULTANT Incurs as
a result of commitments that had become firm before termination,
and for a reasonable profit for services perforated.
g, SEVERAEILITY
If any provision of this agreement Is held Invalid or
unonforceablo, the remaining provisions shalt be valid and
binding upon the parties. One or more walvers by either party of
any provision, term or condition shall not be construed by the
other party as a walver of any subsequent breach of the same
provision, term or condition.
10. CONTROLLING AGREEMENT
(5/2020)
These Terms and Conditions shall take precedence over any
inconsistent or contradtciory provisions contained in any
proposal, contract, purchase order, requisition, notice -to -
proceed, or like docurnant,
11, INVOICES
CONSULTANT vAll submit monthly Invoices for services
rendered and OWNER will make payments to CONSULTANT
within thirty (30) days of OWNER's receipt of CONSULTANT's
Invoice,
CONSULTANT will retain receipts for reimbursable expenses in
general accordance Wth Internal Revenue Service rules
pertaining to the support of expenditures for Income tax
purposes. Receipts will be available for Inspection by OWNEITs
auditors upon request.
if OWNER disputes any items in CONSULTANT's Invoice for
any reason, including the lack of supporting documentation,
OWNER may temporarily delete the disputed item and pay the
remaining amount of the invoice. OWNER Wit promptly notify
CONSULTANT of the dispute and request clariflcallon endlor
correction. After any dispute has been settled, CONSULTANT
Wil Include the disputed Item on a subsequent, regularly
scheduled invoice, or on a special Invoice for the disputed Item
only.
OWNER recognizes that late payment of Invoices results In extra
expenses for CONSULTANT. CONSULTANT retains the right to
assess OWNER Interest at the rate of one porcont (1%) par
month, but not to exceed the maximum rate allowed by law, on
Invoices which are not paid vrilhln thirty (30) days from the date
OWNER receives CONSULTANT's Invoice. in the event
undisputed portions of CONSULTANT's Invoices are not paid
when due, CONSULTANT also reserves the right, after seven (7)
days prior written notice, to suspend the performance of its
services under this Agreement until all past due amounts have
boon paid In full.
12. CHANGES
The parties agree that no change or modification to this
Agreement, or any attachments hereto, shall have any force or
effect unless the change is reduced to writing, dated, and made
part of this Agreement. The execution of the change shall be
authorized and stgned In the same manner as this Agreement.
Adjustments In the period of services and in compensation shall
be in accordance with applicable paragraphs and sections of this
Agreement. Any proposed fees by CONSULTANT are
estimates to perform the services required to complete ilia
project as CONSULTANT understands it to be defined. For
these projects Involving conceptual or process development
services, activIlfos often are not fuiiy definable in the initial
planning. In any event, as the project progresses, the farts
developed may dictate a change in the services to be performed,
which may alter the scope. CONSULTANT vAlt inform OWNER
of such situations so that changes in scope and adjustments to
the time of performance and compensation can be made as
required. If such change, additional services, or suspension of
services results in an Increase or decrease in the cost of or time
required for performance of the services, an equitable
adjustment shall be niade, and the Agreement modlfled
accordingly.
13. EQUAL EMPLOYMENT AND NONDISCRIMINATION
In connection with the services under this Agreement,
CONSULTANT agrees to comply with the applicable provisions
of federal and state Equal Employment Opportunity for
Individuals based on color, religion, sex, or national origin, or
disabled veteran, recently separated veteran, other protected
veteran and arnied forces service medal veteran slalus,
disabilities under provisions of executive order 11246, and other
employment, statutes and regulations, as staled in Title 41 Part
60 of the Code of Federal Regulations § 604.4 (a•f), § 60-300.5
(a-e), § 60-741 (a-e),
14. EXECUTION
This Agreement, including the exhibits and schedules made part
hereof, constitute the entire Agreement between CONSULTANT
and OWNER, supersedes and controls over all prior written or
oral understandings, This Agreement may be amended,
supplemented or modified only by a vrritlon instrument duly
executed by ilia part€as.
16, ALLOCATION OF RISK
OWNER AND CONSULTANT HAVE EVALUATED THE RISKS
AND REWARDS ASSOCIATED WITH THIS PROJECT,
INCLUDING CONSULTANT'S FEE RELATIVE TO THE RISKS
ASSUMED, AND AGREE TO ALLOCATE CERTAIN OF THE
RISKS, $0, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE TOTAL AGGREGATE LIABILITY OF
CONSULTANT (AND ITS RELATED CORPORATIONS,
SUBCONSULTANTS AND EMPLOYEES) TO OWNER AND
THIRD PARTIES GRANTED RELIANCE 15 LiMITED TO THE
LESSER OF $1,000,000 OR ITS FEE, FOR ANY AND ALL
INJURIES, DAMAGES, CLAIMS, LOSSES, OR EXPENSES
(INCLUDING ATTORNEY AND EXPERT FEES) ARISING OUT
OF CONSULTANT'S SERVICES OR THIS AGREEMENT
RPGARDLESS OF CAUSE(S) OR THE THEORY OF
LIABILITY, INCLUDING NEGLIGENCE, INDEMNITY, OR
OTHER RECOVERY.
16. LITIGATION SUPPORT
In the event CONSUtrf'ANT Is required to respond to a
subpoena, government Inquiry or other legal process related to
the services in connection with a legal or dispute rosolution
proceeding to which CONSULTANT Is not a patty, OWNER
shall reimburse CONSULTANT for reasonable costs In
responding and compensate CONSULTANT at its then standard
rates for reasonable time incurred in gathering Information and
documents and attending depositions, hearings, and trial.
17. NO THIRD PARTY BENEFICIARIES
This Agreement gives no rights or benefits to anyone other than
the OWNER and CONSULTANT and has no third -party
beneficiaries. All work product Wit be prepared for the sole and
exclusive use of the OWNER and is not for the benefit of any
third party and may not be distributed to, disclosed In any form
to, used by, or rolled upon by, any thlyd party without the prior
written consent of CONSULTANT, which consent may be
withhold In its solo discretion. OWNER agrees to Indemnify
CONSULTANT and Its officers, employees, subcontractors, and
affiliated corporations from all claims, damages, losses, and
costs, Including but not limited to litigation expenses and
attorneys fees arising out of or related to the unauthorized
disclosure, change, or alteration of such work product.
Use of any report or any Information contained therein by any
party other than OWNER shall be at (lie sole risk of such party
and shall constitute a release and agreement by such party to
defend and Indemnify CONSULTANT and its affiliates, officers,
employees and subcontractors from and against any liability for
direct, Indirect, Incidental, consequential or special loss or
damage or other liability of any nature arising from said party's
use of such report or reliance upon any of its content. To the
maximum extent permitted by law, such release from and
indarnnlfication against liability shall apply In contract, tort
(including negligence), strict liability, or any other theory of
liability.
18. DISCLAIMER
Terms & Conditions for Consulting Services 2 (5/2020)
In preparing reports. CONSULTANT relles, In whole or in part,
on data and information provided by the OWNER and third
parties, which Infommallon has not been Independently va diled
by CONSULTANT and which CONSULTANT has assumed to
be accurate, complete, reliable, and current. Therefore, while
CONSULTANT has utllized the customary professional
standard of care In preparing this report, CONSULTANT does
not warrant or guarantee the conclusions set forth in reports
wHlch are dependent or based upon data, Information or
statements supptied by third parties or the OWNER.
19 OPERATIONAL TECHNOLOGY SYSTEMS
OWNER agrees that the effectiveness of operational technology
systems COT Syslemd') and features designed, recommended
or assessed by CONSULTANT are dependent upon OWNER's
continued operation and maintenance of the OT Systems In
accordance Will all standards, best practices, laws, and
regulations that gavem the operation and maintenance of ilia
OT Systems. OWNER shall be salaiy responsible for operating
and maintaining the OT System in accordance with applicable
industry standards (Le. ISA, NISI, etc.) and best practices,
which generally Include but are not Ilmlled to, cyber security
policies and procedures, documentation and training
requirements, continuous monitoring of assets for tampering
and Intrusion, periodic evaivallon for asset vulnerabilities,
implementallon and update of appropriate technical, physical,
and operational standards, and offline testing of all
softwarefGrmware patchaslupdates prior to placing updates Into
productlon, Additionally, OWNER recognizes and agrees that
OT Systems are subject to Internal and external breach,
compromise, and similar Incidents. Security features designed,
recommended or assessed by CONSULTANT are intended to
roduce the likelihood that OT Systems wilt be compromised by
such Incidenis, however, CONSULTANT does not guarantee
that OWNER's OT Systems are Impenetrable and OWNER
agrees to waive any claims against CONSULTANT resulting
from any such incidents that relate to or affect OWNER's OT
Systems.
20. FORCE MAJEURE
CONSULTANT shall not be responsible for delays caused by
factors beyond CONSULTANT's reasonable control, including
but not limited to delays because of strikes, lockouts, work
slowdowns or stoppages, government ordered Industry
shutdowns, power or server outages, acts of nature, widespread
infectious disease outbreaks (including, but not limited to
epidemics and pandomics), failure of any governmental or other
regulatory authority to act In a timely manner, failure of time
OWNER to furnish tinieiy information or approve or disapprove
of CONSULTANT's services or work product, or delays caused
by faulty performance by the OWNER's or by contractors of any
level or any other events or circumstances not withln ilia
reasonable control of the party affected, whether slmllar or
dissimilar to any of the foregoing. When such delays beyond
CONSULTANT's reasonable control occur, the OWNER agrees
that CONSULTANT shall not be responsible for damages, nor
shall CONSULTANT be deemed in default of this Agreement,
and the parties v4II negotiate an equitable adjustment to
CONSULTANT's schedule and/or compensation If Impacted by
the force majeure event or condition.
Terms & Conditions for Consulting Services 3 (6/2020)
I
March 16, 2023
Mr. Todd Sim nea x
Chief Financial Officer
City of Beaumont
1 Main Street
Beaumont, Texas 7 362
Re: Agreement for Water r and Sever Rate study
Dear Mr. Si ne ux;
HDR is pleased to submit, for your consideration, a this agreement for the development of a
grater and wastewater utility financial planning and rate model; HDR will provide technical
and coordination support for the development of the model and rate updates.
Scope, schedule and fee is included as Attachment A. HD 's standard terns and conditions
that will apply to this contract are included as Attachment B.
Should you find this agreeable, please counter -sign below and return ai complete contract
package age to HDR. If you have any questions, please call me at 512-214-6154.
Sincerely,
HDR Engineering, Inc.
Grady Reed
Project Manager
Agreed:
David Weston
Vice President
4401 Hest Gate Boulevard, Suite 400, Austin, Tx 78745
T 61 ,91 .5100 F 51. 1 .515
Texas Registered Engineering Firm i=-754
Authorized Representative
City of Beaumont, TIC
C/,-- �2a --
Date
Attachment
Scope, Schedule and Fee
Scope of Services
Task 1; Initial Project Meetipg
This meeting will allow both parties to discuss the overall goals and objectives for this study,
while at the same time discussing issues and concerns either party may have. This meeting will
e held in person.
Task 2; Data Collection
HDR will provide a written data request prior to the initial project meeting so that it can be
discussed at the meeting and problem areas resolved. The data and information requested for
this study will be, for the most part, readily available information (e.g., financial, statistical,
customer, etc.). For example, we would collect relevant information such as past cost of service
studies, current rate ordinance and water supply contracts. Some data, particularly related to
customer consumption and usage patterns may require more effort e.g., d.eterrining
consumption by block sizes). Inhere the data is not readily available or will require significant
effort to collect, our team and City staff will determine the "sensitivity" or "importance," of the
data required and whether alternative data sources are available,
Task 3: Revenue.Requirement Anail i
In this task, we will begin to develop the revenue requirement analyses for each utility, which is
the first major analytical portion of the comprehensive rate study process. This portion of the
study will entail reviewing, for each utility, the various sources of funds (revenues) and
comparing therm to the applications of funds (expenses) for the utility. This task considers
funding for O&M and capital expenditures for each utility and determines the need for rate
adjustments over the time -period selected. A more detailed discussion of the various steins
involved in developing the City's revenue requirements for each utility is provided below.
Step : Selection of a Test Period
"test period" refers to a time frame of reference for the ac u m u lation of reven ues,
expenses, and consumption data. In this case, a --year projected time --period is
proposed. By reviewing costs over this extended time frame, the City can determine if
steps are needed today to help reduce future impacts (e.g., rate adjustment transition,
accumulation of capital reserves, etc.).
Step 2: Accumulation of Revenues and Expenses
Once we determine the test period, we will develop the test period revenue
requirements for each utility. These will be developed in conjunction with the City
management and staff.
Revenue requirements ents are composed of two major types of costs: operational and
capital expenses. In projecting revenues, the City's historical billing records (sales and
revenues) are used as a starting point, and a projection of future sales .g., demands,
flows, and loads) is developed. We will work closely with the City to develop a revenue
forecast for each utility for the projected test period.
The operational costs are generally projected from historical or budgeted costs, using
assumed escalation factors, and adjusted for known changes in operations (e.g.,
additional personnel, growth expansion, etc,). while the projection of the operational
costs is fairly straightforward, the capital cost projections are generally the focus of the
analysis and require more thought and planning.
Within this study, the starting point for projecting capital costs (expenditures) will be
the it 's capital improvements plans for each utility, or other relevant capital planning
and capital budgeting documents. in the financial planning process, consideration rust
be given to maximizing capital improvements ents (expenditures) for the system, while
minimizing izing rates to its customers. This is accomplished in a variety of ways. The
important aspect of this discussion is that there are multiple methods of financing
capital expenditures, and it is through this process that rates can be minimized. HDR
will work with City staff to determine likely funding sources for each project included in
the capital improvement plan.
Step : Review of Policies and Financial indicators
During the development of the revenue requirement, our team will review existing
financial policies and practices and will recommend adjustments for meeting industry
standard practices, such as meeting recommended debt service coverage levels, reserve
balances, use of one --tine revenues, and funding of capital from rates, For example,
utility's debt service coverage (DSQ ratio is an important financial measure or indication
of the utility's ability to repay debt. Maintaining at least the minimum DSC is often a
rate (legal) covenant associated with the issuance of debt. During this financial planning
process, we will confirm that each utility is projected to be able to maintain targeted
minimum reserve levels over the course of the multi -year time -period. if reserves fall
......
below the recommended minimum levels, our team will bring this to the Cit "s attention
and provide alternatives to meeting certain reserve levels.
Step : Review iew f Initial Results
During the development of the revenue requirements, we will have an internal meeting
to review the draft analysis, confirm the data inputs and assumptions with the City, and
discuss the preliminary draft results. A key objective of this review process is to help City
management and staff clearly understand the approach and methodology used by our
team to develop the analysis and key assumptions.
Task : Cast of Service Anelvsis
Given the results of the revenue requirements, the Cit is utility costs will be allocated to the
various customer classes of service using are average embedded cost of service methodology.
We will use 2022 as the test year. A cost -of -service study attempts to equitably allocate the
revenue requirements of each utility between the various customer classes of service e.g.,
residential, commercial, etc.), A brief discussion of the key steps associated with a cost of serve
analysis is provided below.
Step 1: Selection of the Methodology for Accumulating Cost
There are two generally accepted methods for accumulating costs - the "'cash basis" and
the "utility basis." Similar to the development of the revenue requirements, the cost of
service will utilize the "cash basis" methodology.
Step : Functionalization and Classification of Expenses
Functionalization refers to the arrangement of cost data into its basic cost categories
e.g., for the water utility, source of supply, treatment, transmission, distribution, etc.).
Given functionalized costs, the costs are then classified into their various cost
components. For example, for a grater utility, classification involves determining
whether each specific cast or account item was incurred to meet ar customer's capacity,
commodity, fire protection, or customer -related need. For the serer utility, there are
volume, strength and customer- related costs. A thorough review of the various types of
costs that the City incurs for each utility will be undertaken, and specific cost classifiers
developed. As part of this task, all grater utility costs will be allocated to the water
utility and all sever costs to the sever utility.
Step 3: Determining of Classes of Service
The process of establishing classes of service is to group customers into similar groups
e.g., residential, commercial, etc.. We will review the classes of service that are
currently used by the utilities and recommended changes needed.
Step : Allocation of Expenses
Once the classes of service have been determined, the process of developing allocation
factors is undertaken. In developing the allocation factors, we will develop factors that
are "fair and equitable" to customers and rely upon utility specific data where available.
Where utility --specific data is not available, we will use various methods to establish
reasonable surrogates.
Step : Summary of the Cast of Service
Given the development of the allocation factors, the final task allocates the expenses to
each class of service. From this process, a summary page of the cost -of -service study to
each utility is provided. The summary page for the cost -of -service study compares the
difference between the current level of rate revenues received from each class of
service, and the allocated cost of service for each class. Draft results will be reviewed
with City staff to confirm HDR's assumptions in cost a II ocatio ns and distribution of costs.
The final cost of service results will incorporate input from the City.
The cost of service will provide average unit costs, or cost -based rates, which are
important to the development of final rate designs. Finally, the HDR team will work with
the City to examine and identify if there are cost differences in serving inside -city
customers versus outside -city customers.
Task : Rate Desian AnaMis
From the initial project meeting, HDR will understand the rate design goals and objectives of
the City. As a part of this task, , the it 's existing rate designs for each utility will be reviewed t
verify that they conform to contemporaryrate-setting goals and objectives. For each rate
design developed, a bill comparison and graph will be provided that shovers a comparison
between the present bill and the proposed bill at various levels of usage and for various
customer classes. Bill comparisons are useful in assessing the potential impacts on a pride
variety ofcustomers.
In addition, as part of this task, , HDR will review and provide recommendations for changes in
service rates for various meter sizes as well as working to City staff to determine in if it is
appropriate to include a minimum number of gallons into the "demand" charge. Finally,
Chapter 22 of the ity's Code of Ordinances will be reviewed for other water and severer
ancillary charges to ensure that the current charge amounts are appropriate.
comparison f current and recommended utility rates and average residential and
commercial bills will be developed with other like -sized municipal utilities in the surrounding
area.
Task : Written Reports
Upon completion of the rate analysis, we will develop a draft written report of the rate study.
The written reports are intended to be comprehensive in nature and document the activities
undertaken as a part of the project, along with our findings, conclusions, and
recommendations.
Task : Meetings,, Workshops, and Public Presentations
It is anticipated that there will be three meetings with one to review the cost -
of -service study results and two City Council meetings to review and discuss the rate study
results. One of these meetings will be in a workshop format and the final presentation will be
City Council meeting. The Project Manager, Grader Reed, will provide the presentations.
Throughout this sturdy, we will schedule, as appropriate, project meetings with City staff to keep
therms abreast of the progress of the study and to male sure the key assumptions and
methodology y used within the study are consistent with the ity's thinking.
Task : Computer Modes and "r it i
Financial, cost -of -service, and rate design models developed as a part of this study will be
provided at the end of the study. Models will be developed in Microsoft Excel. During the
development of the rate model, HDR walls City staff through the model se they have an
understanding of how the model works and heir the model needs to be updated. Our team can
provide additional training on the Fate model if needed.
Project Schedule
�r-
Project Fee
The fee shown below is on a time and materials basis and will not be exceeded without
advanced written approval from the City. The City will be billed monthly for services performed
with payment expected 45 days from the date of the invoice.
Task
Total Hours
Total Fee
(including
expenses)
Initial Project Meeting
Data Collection and l e ew
10
$ 2,794
$ 62141
2
YYYYYYYYY'�YsrrliYr/
l e\en e Requirement Analysis
F'Yr FFy YYi
4
O,499
Cost of SeNce Analysis
Rate Design Analysis
44
31
$ 92858
$ 7,637
Written Deport
1
26
$ 43145
6,786
Public Presentations
r rrrrrr YYf14rir#}yy^Y*ykrsrt4riY#
Computer Model
rtr}Y}Ksrrr.iY�rrtsrr
2
$ 63508
Total HourstFee
221
$ 54,367
Attachment
Standard Terms and Conditions
HDR Engineering, Inc. Terms and Conditions
for Consulting Service
STANDARD OF PERFORMANCE
The standard of care for all professional engineering, consulting
and related services performed or furnished by CONSULTANT
and Its employees udder this Agreement will be the care and
skill ordinarily used by members of CONSULTANT's profession
practicing under the same or similar circumstances at the serve
time and in the same locality. CONSULTANT makes no
warranties, express or 1mpl1ed, under this Agreement or
otherwise, In connection with NLTANT's services.
. IN URAN EIINDEi NiTY
CONSULTANT agrees to procure and malntaln, at its expense,
vorl ers' Compensation insurance a s required by statute;
Employers Liability of 2 0,000; Automobile Liability Insurance of
1,00,o0 combined single limit for bodily injury and property
damage covering all vehicles, Including hired vehicles, owned and
non -owned vehicles; Commercial General Liability insurance of
1,000,000 combined single limit for personal injury and property
damage; and Professional Liability insurance of $1,000,000 per
claim for protection against claims arising out of the
performance of services tinder this Agreement caused b
negligent acts, errors, or omissions for which CONSULTANT is
legally liable. OWNER shall be made an additional insured on
Commercial General and Automobile Liability insurance
policies and certificates of insurance will be furnished to the
OWNER. CONSULTANT agrees to Indemnify OWNER for third
party personal injury and property damage claims to the extent
caused by CONSULTAN7s negligent acts, errors or omissions.
However, neither Party to this Agreement shall be liable to the
other Party for any special, incidental, Indirect, or consequential
damages (including but not limited to loss of use or opportunity;
lass of good will; cast of substitute facilities, goods, or services;
cost of capital; and/or fines or penalties), lass of profits or
revenue arising out of, resulting from, or In any way related to
the Project or the Agreement from any cause or causes,
Including but not limited to any such damages caused by the
negligence, errors or omissions, strict liability or breach of
contract.
. ESTIMATES
Any estimates of project cast, value or savings provided by
CONSULTANT are Intended to allow comparative evaluation
between alternatives and do not constitute a detailed evaluation
or prediction of actual project costs, value or savings. Any such
estimates are made on the basis of information available to
CONSULTANT and on the basis of N ULTAI T's expedence
and qualifications, and represents its judgment as an experienced
and qualified professional engineer. However, since
CONSULTANT has no control over the impact of various factors
that impact the actual project cost, value or savings,
CONSULTANT does not guarantee that the actual project cost,
value or savings will not vary from CONSULTANT's estimates.
4. CONTROLLING LAW
This Agreement is to be governed by the law of the state where
N ULTANTPs services are perforated.
a� SUCCESSORS, ASSIGNS AND BENEFICIARIES
OWNER and CONSULTANT, respectively, bind themselves, their
partners, successors, assigns, and legal representatives to the
covenants of this Agreement. Neither OWNER nor
CONSULTANT will assign, sublet, or transfer any interest in this
Agreement or claims arising therefrorn without the written consent
of the other, No third party beneficiades are intended under this
Agreement.
a SERVICES AND INFORMATION
OWNER will provide all criteria and information pertaining to
OWNER's requirements for the project, including design
objectives and constraints, spacer capacity and performance
requirements, flexibility and expandability, and any budgetary
limitations. OWNER will also provide copies of anyOWNER-
furnished Standard Details, Standard Specifications, or Standard
Bidding Documents which are to be incorporated Into the project.
OWNER will furnish the services of soils/geotechnical engineers
or other consultants that include reports and appropriate
professional recommendations when such services are deemed
necessary by CO NSULT NT. The OWNEl agrees to bear full
responsibility for the technical accuracy and content of wNER-
furnished documents and services.
In performing professional engineering, consulting and related
services hereunder, it is understood by OWNER that
CONSULTANT is not engaged in rendering any type of legal,
insurance or accounting services, opinions or advice. further, it
is the WNER's sole responsibility to obtain the advice of an
attorney, insurance counselor or accountant to protect the
WNERs legal and financial interests. To that end, the OWNER
agrees that OWNER or the OWNERs representative will
examine all studies, reports, sketches, drawings, specifications,
proposals and other documents, opinions or advice prepared or
provided by CONSULTANT, and wall obtain the advice of an
attorney, insurance counselor or other consultant as the OWNER
deems necessary to protect the ICI ER's interests before
W N E R takes action or forebears to tale action based upon or
relying upon the services provided by CONSULTANT.
RE -USE OF DOCUMENTS
All documents, Including all reports, drawings, specifications,
computer software or'other items prepared or furnished by
CONSULTANT pursuant to this Agreement, are instruments of
service with respect to the project. CONSULTANT retains
ownership of all such documents, OWNER may retain copies of
the documents for its information and reference in connection with
the project; however, none of the documents are intended or
represented to be suitable for reuse by OWNER or others on
extensions of the project or on any other project. Arty reuse
Without written verification or adaptation by CONSULTANT for the
specific purpose intended will be at WNER's sole risk and
without liability or legal exposure to CONSULTANT, and OWNER
will defend, Indemnify and hold harmless CONSULTANT from all
claims, damages, losses and expenses, including attomeys fees,
arising or resulting therefrom;. Any such verification or adaptation
w111 entitle CONSULTANT to further compensation at rates to be
agreed upon by OWNER and CONSULTANT.
TERMINATION OF AGREEMENT
OWNER or CONSULTANT may terminate the Agreement, In
whole or in part, by giving seven 7 days written notice to the
other party, Where the method of payment is "lump sum," or cost
reimb€�rsement, the final invoice will include all services and
expenses associated with the project up to the effective date of
termination, An equitable adjustment shall also be made to
provide for termination settlement costs CONS LTAN T incurs as
a result of commitments that had become firm before termination,
and for a reasonable profit for services performed.
. SEVERABILITY
If any provision of this agreement is held invalid or
unenforceable, the remaining provisions shall be valid and
binding upon the parties. One or more waivers by either party of
any provision, tern or condition shall not be construed by the
other party as a waiver of any subsequent breach of the saute
provision, term or condition.
10. CONTROLLING AG RE NT
/2020
These Terms and Conditions shall tale precedence over are
Inconsistent or contradictory provisions contained In any
proposal, contract, purchase order, requisition, notice -to -
proceed, or like document.
11. INVOICE
CONSULTANT will submit monthly invoices for services
rendered and OWNER will ,make payments to CONSULTANT
within thirty (ag) days of WNER's receipt of N ULTAfi T's
invoice.
CONSULTANT will retain receipts for reimbursable expenses in
general accordance with Internal Revenue Service rules
pertaining to the support of expenditures for income tax
purposes. Receipts will be available for inspection by WNER's
auditors upon request.
If OWNER disputes any items in CONSULTANIrs invoice for
any reason, including the lack of supporting documentation,
OWNER may temporarily delete the disputed 'item and pay the
remaining amount of the Invoice. OWNER will promptly notify
CONSULTANT of the dispute and request clarification and/or
correction. After any dispute has been settled, CONSULTANT
will include the disputed item on a subsequent, regularly
scheduled invoice, or on a special invoice for the disputed Item
only.
OWNER recognizes that late payment of invoices results in extra
expenses for CONSULTANT. CONSULTANT retains the right to
assess OWNER interest at the gate of one percent 1 % per
month, but not to exceed the maximum rate allowed by law, on
invoices which are not paid within thirty days from the date
OWNER receives CONSU ,TANT's involve. In the event
undisputed portions of O i ULTANT`s invoices are not paid
when due, CONSULTANT also reserves the right, after seven 7)
days prior written notice, to suspend the performance of its
services under this Agreement until all past due amounts have
been paid in full.
12. C HA.N G E
The parties agree that no change or modification to this
Agreement, or any attachments hereto, shall have any force or
effect unless the change is reduced to wilting, dated, and made
part of this Agreement. The execution of the change shall be
authorized and signed in the same ,,tanner as this Agreement.
Adjustments in the period of services and in compensation shall
be In accordance with applicable paragraphs and sections of this
Agreement. Any proposed fees by CONSULTANT are
estimates to perform the services required to complete the
project as CONSULTANT understands it to be defined. For
those projects involving conceptual or process development
services, activities often are not fully definable in the initial
planning. In any event, as the project progresses, the facts
developed may dictate a change In the services to be performed,
which may alter the scope. CONSULTANT will inform OWNER
of such sltuatlons so that changes in scope and adjustments to
the time of performance and compensation can be made a
required. If such change, additional services, or suspension of
services results in are increase or decrease in the cost of or time
required for performance of the services, an equitable
adjustment shall be made, and the Agreement ,modified
accordingly.
13. EQUAL EMPL YMENT AND N NDI SCRIMINATION
In connection with the services under this Agreement,
CONSULTANT agrees to comply with the applicable provisions
of federal and state Equal Employment Opportunity for
individuals based on color, religion, sex, or national origin, or
disabled veteran, recently separated veteran, other protected
veteran and armed forces service medal veteran status,
disabilities under provisions of executive order 11246, and other
employment, statutes and regulations, as stated in Title 41 fart
60 of the Code of Federal Regulations § 60-1.4 a-f), § 60-300.5
(a-e), § 60-741 -e.
14. EXECUTION
This Agreement, including the exhibits and schedules made pert
hereof, constitute the entire Agreement between CONSULTANT
and OWNER, supersedes and controls over all prier written or
oral understandings. This Agreement may be amended,
supplemented or modified only by a written Instrument duly
executed by the parties,
15. ALLOCATION OF III
OWNER AND CONSULTANT HAVE EVALUATED THE RISKS
B
AND REWARDS ASSOCIATED WITH THIS PROJECT,
INCLUDINGCONSULTANT'S FEE RELATIVE TO THE RISKS
I
ASSUMED, AND AGREE TO ALLOCATE CERTAIN OF THE
RI KS, SO, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE TOTAL AGGREGATE LIABILITY OF
CONSULTANT (AND ITS RELATED CORPORATIONS,
SUBCONSULTANTS AND EMPLOYEES) TO OWNED AND
THIRD PARTIES GRANTED RELIANCE 15 LIMITED TO THE
LESSER OF 'I,O,OOU 0 R ITS FEE, FOR ANY AND ALL
INJURIES, DAMAGES, CLAIMS, DOSSES, CAR EXPENSES
(INCLUDING ATTORNEY AND EXPERT FEES) ARISING OUT
OF CONSULTANrs SERVICES OrdTHIS AGREEMENT
EEMENT
REGARDLESS OF CAUSE(S) R THE THEORY OF
LIABILITY, INCLUDING NEGLIGENCE, INDEMNITY, ITY, OR
OTHER RECOVERY.
16. LITIGATION SUPPORT
In the event CONSULTANT is required to respond to a
subpoena, government Inquiry or other legal process related to
the services in connection with a legal or dispute resolution
proceeding to which CONSULTANT is not a party, OWNER
shall reimburse CONSULTANT for reasonable costs in
responding and compensate CONSULTANT LTANT at its then standard
rates for reasonable time incurred In gathering Information and
documents and attending depositions, hearings, and trial.
17. NO THIRD PARTY BENEFICIARIES
This Agreement gives no rights or benefits to anyone other than
the OWNER and CONSULTANT and has no third -party
beneficiaries. All work product will be prepared for the sole and
exclusive use of the OWNER and is not for the benefit of any
third party and may not be distributed to, disclosed in any form
to, used by, or relied upon by, any third party without the prier
written consent of CONSULTANT, which consent may be
withheld in Its sale discretion. OWNER agrees to indemnify
CONSULTANT T and Its officers, employees, subcontractors, and
affiliated corporations from all claims, damages, losses, and
costs, Including but not limited to litigation expenses and
allomey's fees arising out of or related to the unauthorized
disclosure, change, or alteration of such work product.
Use of any report or any information contained therein by any
party other than OWNER shall be at the sole risk of such party
and shall constitute a release and agreement by such party to
defend and indemnify CONSULTANT and its affiliates, officers,
employees and subcontractors from and against any liability for
direct, indirect, incidental, consequential or special lass or
damage or other liability of any nature arising from said party's
use of such report or reliance upon any of Its content. To the
maximum extent permitted by law, such release from and
indemnification against liability shall apply in contract, tort
(including negligence, strict liability, or any other theory of
liability.
18. DISCLAIMER
Terms & Conditions for Consulting Services 5/2020
In preparing reports, CONSULTANT relies, in whole or in part,
on data and information provided by the OWNER and third
parties, which information has not been independently verified
by CONSULTANT and which CONSULTANT has assumed to
be accurate, complete, reliable, and current. Therefore, while
CONSULTANT has utilized the customary professional
standard of care in preparing this report, CONSULTANT T does
not warrant or guarantee the conclusions set forth in reports
which are dependent or based upon data, information or
statements supplied by third parties or the OWNER.
19 OPERATIONAL TECHNOLOGY SYSTEMS
OWNER agrees that the effectiveness of operational technology
systems "T Systems"and features designed, recommended
or assessed by CONSULTANT are dependent upon W 's
continued operation and maintenance of the OT Systems in
accordance with all standards, best practices, laws, and
regulations that govern the operation and Maintenance of the
CST Systems. OWNER shall be solely responsible for operating
and maintalning the OT System In accordance with applicable
Industry standards (i.e. ISA, MIST, etc.) and hest practices,
which generally include but are not limited to, cyber- security
policies and procedures, documentation and training
requirements, continuous monitoning of assets for tampering
and intrusion, periodic evaluation for asset vulnerabilities,
Implementation and update of appropriate technical, physical,
and operational standards, and orfline testing of all
raft arelfirm are patcheslupdate s prior to placing updates into
production. Additionally, OWNER recognizes and agrees that
CST Systems are subject to internal and external breach,
compromise, and similar incidents, Security features designed,
recommended or assessed by CONSULTANT are intended to
reduce the likelihood that OT Systems will be compromised b
such incidents. However, CONSULTANT does not guarantee
that OWNERs OT Systems are impenetrable and OWNER
agrees to waive any claims against CONSULTANT T resulting
from any such Incidents that relate to or affect OWN EI 's OT
Systems.
20. FORCE MA EURE
CONSULTANT shall not be responsible for delays caused b
factors beyond CONSULTANT's reasonable control, including
but not limited to delays because of strikes, lockouts, work
lowdo ns or stoppages, government ordered Industry
shutdowns, power or server outages, acts of nature, widespread
infectious disease outbreaks (Including, but not limited to
epidemics and pandemics, failure of any governmental or other
regulatory authonity to act in a timely manner, failure of the
OWNER to furnish timely information or approve or disapprove
of CONSULTANTCONSULTANTs services or work product, or delays caused
by faulty performance by the OWNER's or by contractors of any
Ieve l or any other events or circumstances not within the
reasonable control of the party affected, whether similar or
dissimilar to any of the foregoing. when such delays beyond
C I SULTAI T's reasonable control occur-, the OWNER agrees
that CONSULTANT shall not be responsible for damages, nor
shall CONSULTANT be deemed in default of this Agreement,
and the parties will negotiate an equitable adjustment to
l LTAI T's schedule and/or compensation if Impacted by
the force majeure event or condition,
Terms & Conditions for Consulting Services 1 0 0