Borough Assembly

Petersburg Borough

Meeting Agenda

12 South Nordic Drive

Petersburg AK, 99833

Assembly Chambers9:00 AMFriday, August 16, 2019

1. Call To Order/Roll Call

2. Voluntary Pledge of Allegiance

3. Approval of Minutes

A. July 18, 2019 Assembly Meeting Minutes

July 18, 2019 Regular Meeting Minutes.PDFAttachments:

4. Amendment and Approval of Meeting Agenda

5. Public Hearings

A. Public Hearing for Ordinance #2019-05: An Ordinance Authorizing

Long-Term Indebtedness in an Amount not to Exceed $8 Million for the

Design and Construction of Water and Wastewater Infrastructure in the

Borough, and Directing that this Matter be Submitted to the Voters for

Consideration at the Next Regular Election to be Held October 1, 2019

Any public testimony regarding Ordinance #2019-05 should be given during this public

hearing. A copy of Ordinance #2019-05 may be found under agenda item 14A.

B. Public Hearing on Ordinance #2019-06: An Ordinance Adjusting the FY

2020 Budget for Known Changes

Any public testimony regarding Ordinance #2019-06 should be given during this public

hearing. A copy of Ordinance #2019-06 may be found under agenda item 14B.

6. Bid Awards

7. Persons to be Heard Related to Agenda

Persons wishing to share their views on any item on today's agenda may do so at this

time.

8. Persons to be Heard Unrelated to Agenda

Persons with views on subjects not on today's agenda may share those views at this

time.

9. Board, Commission and Committee Reports

Page 1 Petersburg Borough Printed on 8/13/2019

August 16, 2019Borough Assembly Meeting Agenda

10. Consent Agenda

A. Island Ventures, LLC Lease Amendment

Island Ventures Lease Amendment #1.PDFAttachments:

The original lease agreement in 2018 set the annual lease rate at $700 until Island

Ventures' ramp was fully constructed and an as-built survey performed. The as-built

survey found the leased land to be 13,535 sq. ft. in size. The Borough Assessor has

established a value of $17,500 for the leased land bringing the annual lease rate to

$1,750 (10% of assessed value).

B. Retail Marijuana Store Renewal Application - The 420

Marijuana License Renewal - The 420Attachments:

The 420 has applied with the Alaska Alcohol & Marijuana Control Office for a retail

marijuana store license renewal. The Assembly may support or protest the application.

A protest may not be arbitrary, capricious or unreasonable.

11. Report of Other Officers

12. Mayor’s Report

A. August 16, 2019 Mayor's Report

August 16, 2019 Mayor's Report.PDFAttachments:

13. Manager’s Report

A. August 16, 2019 Manager's Report

Manager Report 08082019Attachments:

14. Unfinished Business

Ordinances for Second Reading

Page 2 Petersburg Borough Printed on 8/13/2019

August 16, 2019Borough Assembly Meeting Agenda

A. Ordinance #2019-05: An Ordinance Authorizing Long-Term Indebtedness

in an Amount not to Exceed $8 Million for the Design and Construction of

Water and Wastewater Infrastructure in the Borough, and Directing that

this Matter be Submitted to the Voters for Consideration at the Next

Regular Election to be Held October 1, 2019

Ordinance #2019-05.PDF

Utility Director Hagerman Memo.PDF

Water Dept 5 Year Renewal or Replacement Plan.PDF

Wastewater Dept 5 Year Renewal or Replacement Plan.PDF

Attachments:

Utility Director Hagerman requests approval of an ordinance authorizing a ballot measure

for the October 1, 2019 election to ask the voters to approve long-term indebtedness

which would be funded from the ADEC revolving loan fund for needed water and

wastewater infrastructure projects. If the ordinance and ballot measure are approved the

authority to incur debt will be authorized; however, the decision to move forward with a

project is always contingent upon Assembly approval of a proposed loan as well as the

Assembly's approval of a contract award. Ordinance #2019-05 was unanimously

approved in its first reading.

B. Ordinance #2019-06: An Ordinance Adjusting the FY 2020 Budget for

Known Changes

Ordinance #2019-06.PDFAttachments:

Approval of this ordinance will transfer funds from the Wastewater Department's reserves

to the Kiseno Street Sewer Replacement Project. No rate increases are anticipated as a

result of this budget transfer. Ordinance #2019-06 was unanimously approved in its first

reading.

15. New Business

A. Ordinance #2019-07: An Ordinance Amending Section 3.08.150 of

Petersburg Borough Code to Outline a Procedure for Addressing the

Assembly by Written Comment at a Public Meeting

Ordinance #2019-07.PDFAttachments:

If adopted, Ordinance #2019-07 will provide a procedure for addressing the Assembly by

written comment at a public meeting.

B. Cost Proposal for Inspection of the Petro Marine Building the Borough

may be Acquiring

Cost Proposal for ServicesAttachments:

At Mayor Jensen's request, the Borough researched an estimated cost for indoor

environmental consultation services (mold testing, etc.) on the Petro Marine building the

Borough may acquire. Advance Look Building Inspections & Environmental Testing out

of Wasilla, AK has provided a proposal of $3,180 to perform the testing, if approved by

the Assembly.

Page 3 Petersburg Borough Printed on 8/13/2019

August 16, 2019Borough Assembly Meeting Agenda

C. Water, Wastewater and Sanitation Department Rate Studies Proposal -

FCS Group

Memorandum - Rate Study Recommendation

Utility Rate Study Proposal - FCS Group

Attachments:

Utility Director Hagerman and Public Works Director Cotta are recommending award of a

contract for rate studies for the Water, Wastewater and Sanitation Departments to FCS

Group, who performed rate studies for these same departments in 2012, in an amount

not to exceed $39,695.

16. Communications

A. Response to the Assembly's Letter to Kake Regarding the Proposed

Kake to Petersburg Road

Mayor Jensen received an email response from Kake's City Manager, Rudy Bean,

regarding our letter inquiring about their thoughts on the proposed Kake to Petersburg

road. Mr. Bean stated he and Kake Mayor Lloyd Davis are hoping to meet with Mayor

Jensen at the Southeast Conference Annual Meeting next month in Sitka to discuss the

matter.

17. Assembly Discussion Items

A. Parks and Recreation

Heideman Memo re P&R Minimum Age.PDF

Director Thornburg 8.9.2019.PDF

K. Wood 8.8.2019.PDF

N. Olsen 8.8.2019.PDF

R. Dormer 8.8.2019.PDF

S. Pawuk 8.7.2019.PDF

C. Worhatch 8.6.2019.PDF

J. Walker 8.6.2019.PDF

C. Martinsen 8.5.2019.PDF

J. Tagaban 8.5.2019.PDF

H. Cabral 8.3.2019.PDF

L. Thompson 8.3.2019.PDF

K. Wood 8.3.2019.PDF

H. Boggs 8.3.2019.PDF

C. Worhatch 8.2.2019.PDF

N. Olsen 7.27.2019.PDF

K. Eddy 7.25.3019.PDF

Attachments:

Assembly Member Marohl requested this agenda item. A memo to Manager Giesbrecht

from Borough Attorney Heideman regarding the recommendation to raise the minimum

age to enter the Community Center without a parent or guardian, an email from Parks &

Recreation Director Thornburg, and emails from community members are attached.

Page 4 Petersburg Borough Printed on 8/13/2019

August 16, 2019Borough Assembly Meeting Agenda

B. Recognitions

18. Adjourn

Page 5 Petersburg Borough Printed on 8/13/2019

1

2

3

4

5

6

7

8

9

Borough Manager’s Report

Assembly Meeting 8 August 2019

Amy Poe, our summer intern, is halfway through her project focused on improving user experience at the library. Please share your thoughts about using the library with her so we can make it the best it can be for our community. There is a user survey on the library’s website (psglib.org) and she can be reached at intern@petersburgak.gov. The summer intern program is fund by the Alaska State Library.

The library has received a $7,000 grant from the Institute for Museum & Library Services in partnership with the Petersburg Indian Association and a $7,000 grant from the Alaska State Library. Funds will be used to purchase materials for our collection.

Summer Stream, the library’s summer program for youth, ended July 18. The Jon Ness Memorial Super Reader Prize

winners were Payton Dreisbach & Miranda Carr, thanks to Jeanette Ness and Stewart Ness for sponsoring this annual prize.

Thank you to John McCabe, who has made a $10,000 contribution to the library’s Arts Education Endowment. He established the fund 2012 as an ongoing funding source to enhance arts programming at the Library. The fund is held and managed by the Alaska Community Foundation.

Petersburg Indian Association will not be offering sidewalk snow removal assistance during the 2019-20 winter season. We appreciate PIA’s valuable assistance in past years and hope they will be able to offer this service again in the future.

The Streets crew completed a resurfacing project on the landfill haul road, which included clearing away brush along the route. They also are replacing some failed curb and sidewalk near the school grounds.

Congratulations to Martin Odegaard, who was promoted to Streets Dept. Foreman; and to Aaron Marohl, who has been promoted to Heavy Equipment Operator. Geoffrey Gillen was hired to fill the vacant Utility Worker position and will start work on August 13th.

Sandy completed and submitted the final LEPC grant report. This program was deleted by the Governor.

We are finalizing a schedule for an Emergency Trauma Technician course to start in September.

Consultant Robert Gundling from the Fox Group was at Assisted Living July 14th - 19th. It was great meeting with him. His report should be complete within the next two weeks.

Thank you to everyone that has contributed to our “deck out the deck” fund raiser at the Manor. Thanks again to Sally Dwyer for all her hard work with this whole process!

Instructor Jeff Hall will be in town August 8-11 providing training (Advanced Patrol Tactics) for the police department on August 9 & 10. Training was secured with an offer of some fishing after class.

10

Alaska Rural Water Association maintenance staff is currently in town overhauling & testing the Harbor Back Flow Preventor in the Harbor.

The water plant is averaging about 1.5 – 1.7 million gallons of daily production this summer with no issues.

Harai and Associates will be providing a proposal to design piping changes at the water storage tank. Exploratory digging showed us that the solution to ADEC’s request for better separation between incoming water and outgoing water from the tank will be more difficult than hoped.

Hauling water to numerous residents beyond the distribution system continues with the drought. Water staff delivered over 30 loads of water in the month of July.

Staff recently began pumping wastewater sludge from the National Geographic ships that make port calls in Petersburg.

Additional ships are aware of the service and have stated that they would like to pump off in Petersburg. Wastewater staff is working with the Harbormaster to develop some permanent marine wastewater discharge access to the wastewater collection system. The concepts will be developed for Harbor department and Harbor Board review prior to bringing forward to the Manager and Assembly.

Crystal Lake is just below where its level was last year. Tyee Lake is finally higher than it was last year, but only by a slim margin. No net power sales are being made to Ketchikan from Tyee Lake. If we don’t see a large increase in lake levels this fall, the potential for a diesel run in the spring is possible – and this year we won’t have SEAPA to help the community with the cost of diesel fuel. I will be recommending that the fuel adjustment charge be utilized if PMPL must run a diesel support campaign again as a result of the drought.

PMPL is working with private property owners to attain permission to remove large trees next to the powerlines. D&D Tree Services has been great to work with and their expertise is greatly appreciated when bringing down trees that are within inches of the 24.9KV line.

PMPL’s annual FERC inspection of Crystal Lake Dam, Penstock and Hydro was held on July 10th and the inspector had no issues for the department to follow up on. A very clean inspection of our facilities! Thanks to the PMPL staff for keeping the dam, penstock and hydro in great condition.

Submitted project narrative and budget to ADOT for their review and confirmation in advance of submitting complete application to fund replacement of north gangway of south harbor with an ADA compliant gangway.

USFS RAC is seeking projects for funding in the Petersburg area. Projects generally must accomplish goals to improve the maintenance of existing infrastructure, implementing stewardship objectives that enhance forest ecosystems, and restoring and improving land health and water quality. RAC committee meets again in September to consider projects.

June was a busy month for construction - 5 new residential construction projects permitted along with 2 major renovation projects.

Working with Carol Rushmore in Wrangell to share costs and materials to attend tourism event in October.

Met with PND Engineers on Scow Bay design progress. Geotechnical report is nearly complete. Draft 35% design is ready to review. Preliminary habitat assessment work necessary for environmental permitting is getting underway.

Community conversations are in process with multiple partners including the Viking Swim Club, the school district, community members, and the borough attorney, regarding our membership and partnership agreements. This research really indicates the Borough will need to limit the age of unaccompanied children allowed in the facility.

Recreation Basketball is coming up in September. We are currently seeking volunteers to help with coaching all age groups. If you are interested, please contact Stephanie at 907-772-3392 or spayne@petersburgak.gov.

11

There is an air leak in the Dry Sprinkler system on the gymnasium side. Ketchikan Mechanical was delayed in coming

to town due to the Ferry strike. Staff are working on bringing John Taylor to town to fix this issue as well as perform our annual maintenance checks on the entirety of the Borough’s sprinkler systems.

The filter on the leisure pool is to be fixed 8/16-8/19. We will be closing the pools on Saturday 8/17 to replace the media, the broken manifolds, strainers and lateral drains. We will also be installing new chemical controllers to increase efficiency of the use of the chlorine use. These items were planned and budgeted.

12

13

14

15

16

17

18

19

20

21

Advance Look Building Inspections

& Environmental Testing

COST PROPOSAL FOR SERVICES

CLIENT: Petersburg Borough REPRESENTATIVE: Joe Bertagnoli, Building Official PROJECT NAME: IAQ inspection (Other Biological, Moisture & Microbial Sampling) Location: Old Petro Marine building Proposal Date and Time: July 27th, 2019 @ 8:00am Scope of Work: Indoor Air Quality, Moisture, Health & Safety, Remediation Plan.

Advance Look Environmental is pleased to provide this costs proposal for Indoor Environmental consultation services.

Industry standards for remediation projects include pre-remediation inspection with air sampling to document any moisture damage or microbial growth issues and to establish Indoor Air Quality (IAQ) baselines. This proposal is focused primarily on IAQ and a visual assessment for any moisture intrusion issues or potential intrusion issues, past or present. Included in the on-site service fee will be a walk- through inspection, moisture intrusion inspection and IAQ sampling. The intention is to provide a present IAQ and moisture status for the structure and if needed, provide all necessary information and guidance leading to a standards-based remediation process capable of passing a post remediation inspection and clearance sampling. This proposal is based on verbal information provided by the client about the structure and circumstances and is intended to be a “worst case scenario” given this information.

All work is completed in compliance with current Federal, State and local regulations and/or recognized Industry Standards within an acceptable “standard of care”. Indoor Environmental sampling plans and procedures are completed in compliance with Respircare Analytical Network Protocols, American Industrial Hygiene Association “Green Book” and American Society for Testing and Materials (ASTM) standard D7338. Remediation plans and recommendations follow the Institute for Inspection, Cleaning & Restoration Certification (IICRC) S520 Standard for Mold Remediation.

Onsite inspections, consultation and sampling will be performed by Patrick Hartshorn, with qualifications as follows (a full Bio is available on request):

• Industrial Hygienists (IH) • Indoor Environmental Professional (IEP) • EPA/AHERA Certified Building Inspector • EPA/AHERA Certified Project Designer • Cold Climate Building Science Analyst

Advance Look Building Inspections (907) 232-1007 Office

& Environmental Testing (877)-311-9714 fax

Wasilla, AK 99654 www.advancelookak.com 22

Other relevant information and experience includes:

• I am in my 15th year of working with IAQ Consulting, remediation projects, contractors and clients throughout the state of Alaska

• I have recently crested the 3200 count for IAQ sampling projects submitted to laboratories nationwide.

• I have almost 2000 remediation projects of experience as a consultant and oversight. • I am the senior member of RespirCare Analytical, affording me hundreds of IAQ professionals

across the US and Canada to call on for consult at any time. • We (RespirCare) are the largest client of EMLab P&K which is part of the largest lab system in

the world (TestAmerica). • RespirCare has the only contract in Alaska that requires a 100% read of EVERY spore in EVERY

sample we submit to the lab (100% defensible data) in comparison to competitors using 25% lab reads (not defensible).

• All my lab results are reviewed by a 3rd party data review agent prior to my review, this agent has no tie to the project, house, client, etc. (defensible independence)

• We use a 5-point system for data review which is an industry first and has been praised by industry experts as “the way of the future”.

• Our competitors use labs reports only for data review under a 1-point system (inside/outside) (not defensible)

• The data review agent and I must agree on the lab data results prior to forwarding to our clients with recommendations or clearances (redundant checking system)

• I have been recognized by AK DEC, Alaska Housing, AK Department of Commerce and Alaska Realtors as a qualified IAQ & Remediation expert and instructor.

• Finally: My BIO is impressive enough to get me accepted to the ANSI/IICRC S520 Consensus Board, one of only 25 people worldwide to be considered “experienced and knowledgeable” enough to be on this board!

Advance Look will provide the client (Petersburg Borough) with verbal and written consultation, moisture intrusion inspection, indoor air quality (IAQ) sampling (Mold/Other Bio), 3rd party laboratory services and 3rd party laboratory data review services. The outcome from these services will document any IAQ & moisture intrusion issues and any related building component conditions for environmental, health or safety concerns. Additionally, all provided information and documentation would be collected and prepared for the development of a remediation performance work plan if the need arose to guide the client into a standards-based remediation process. If Remedial work is necessary, the intended outcome from our services is for our client to successfully pass a Post Remediation Verification (PRV) inspection with air sampling data acceptable for project clearances and required for disclosure if needed.

We are the only Alaska IH/IEP Company that provides laboratory services that include 100% trace (sample) reading and an Independent third-party Data Review of all laboratory results by RespirCare Analytical Services. We are also the only Alaska Indoor Environmental/Building Science company providing our clients with peer reviewed, credible and defensible data!

We submit all IAQ samples to EMLab P&K in Phoenix Arizona for analysis. Our contract with EMLab allows faster analysis times and includes requirements they read 100% of the Trace (sample size) for all spores present to provide us with defensible sample data. EMLab has accreditations that meet the AIHA EMLAP requirements for microbiological sample analysis.

23

Our Analytical data review is performed by Michael Buettner, RespirCare Executive Review Coordinator with certifications as follows:

•Council Certified Indoor Environmentalist (CIE) #01918 Expires 9/30/19 •Council Certified Indoor Air Quality Manager (CIAQM) #0710047 Expires 10/31/2019

• All above certifications are board awarded and maintained through the American Council for Accredited Certifications (ACAC). ACAC programs are accredited by the Council for Engineering and Scientific Specialty Boards (CESB). All ACAC programs are compliant with ISO standards 9000, 9001, 9004, 17000 and 170. ACAC is a member of the National Organization for Competency Assurance (NOCA).

All provided inspections & sampling follow Advance Look and RespirCare policies & procedures, recognized industry standards and Alaska building Inspector Regulations. Access to closed, locked or secured areas is the responsibility of the client and/or building owner.

MOISTURE INSPECTION: “Dampness in buildings is linked with illness of occupants and deterioration of buildings. Dampness and moisture, combined with organic nutrient materials and dirt indoors, trigger a biological spark that changes a relatively dry, stable environment into a living, thriving ecosystem. Dampness is associated with adverse health outcomes in public health (e.g., residential) contexts.” (ref. ACGIH “Green book”). Advance Look starts all indoor environmental projects with a comprehensive moisture intrusion inspection. This is a visual, non-invasive inspection of the buildings general environmental condition focusing on interior occupiable spaces and any suspect adjacent areas. The moisture intrusion inspection utilizes sophisticated electronic “moisture sensing” equipment to identify suspect areas that may not be visible to the human eye. Starting with this inspection is crucial to the development of a solid sampling and plan and advancement into more thorough building diagnosis if necessary.

MICROBIAL GROWTH (mold): Mold can produce spores and toxins that become airborne and are known to be detrimental to some occupant’s health. This proposal estimates the preliminary indoor occupiable spaces sampling plan based on occupied space information provided to Advance Look via a phone conversation. A final sampling plan will be developed following a thorough visual and moisture intrusion inspection. The plan will focus on sampling interior air quality of the occupiable spaces, any adjacent areas and exterior controls. The proposed estimate of sample numbers necessary to accomplish a comprehensive Indoor Air Quality assessment is based on information provided by the client and may change if actual site conditions are different. Any alteration from this plan will be discussed with the client for approval prior to implementation.

ASBESTOS/LEAD: IF The building information indicates the age of the structure requires any “remediation” work would need to be compliant with Federal Standards for 1978 and older structures. In the eyes of OSHA, all materials are Asbestos (ACM) or Lead (LCM) containing materials until proven otherwise. It is not uncommon to have ACM or LCM in buildings up to and including the 1983 construction period and positive samples have been collected by Advance look in 1985 structures. Any identified areas that may need remediation activities will be presented to the client on site and any necessary sampling to assure compliance with Federal Law prior to remediation activities will be discussed and approved prior to implementation.

24

TRAVEL & STANDBY TIME: Travel and standby times are calculated at a reduced rate. Travel & Standby are invoiced separately of any base fees, such as the “project fee”. Any issues that may create travel delays or unintended overnight stays will be billed as standby time and any associated costs will be billed as “direct reimbursements”.

PROJECT ISSUES: Rare, yet possible delays in project times can be created by mother nature such as inclement weather conditions causing inability to collect air quality samples or causing travel delays. Other delays can be FedEx delivery issues, laboratory loads causing extended report delivery times, etc. which all can lead up to in house scheduling issues for report deliveries to clients. Other concerns can include some sample types such as bulk sampling may require invasive practices for proper sample collection. Any invasive activity requests will be reported to the client for prior permission. Repairs to any such areas if needed are not the responsibility of Advance Look and will be arranged with the client prior to sampling. An onsite inspection of the layout will allow for a solid air sampling and work plan to be discussed with the client and in most cases numbers of samples needed to accomplish the goal is reduced from what is proposed.

LOGITSTICS: This proposal is based on information supplied to Advance Look by the client or the client’s representative for determination of initial inspection, development of a preliminary sampling plan and all necessary activities and accommodations to complete these tasks. The intent by Advance Look is to reduce costs to the client if possible. The proposed costs are an estimated number based on the information that has been provided to date. Reduction in sample numbers and expenses wherever possible will be given priority.

SAMPLING PLAN: Information supplied by the client indicates there are multiple occupiable spaces and a full crawl space within the building that are of concern. The diagrams provided indicate “suspect” areas are a combination of classrooms, corridors, office space, commons areas and crawl space. There will also be required sampling of adjacent areas as defined under industry standards. If any other suspect IAQ or remediation areas are identified during the initial inspection a sampling plan will be produced and the costs for those samples will be submitted for approval prior to any actions.

PROJECT INCLUSIONS:

1. Visual inspection and sampling for microbial growth & IAQ issues, as proposed. 2. Visual inspection for moisture intrusion, safety and health issues, as proposed. 3. Insurance (General Commercial liability & E&O) – includes environmental. 4. State Inspectors License Bond Insurance. 5. One IH/IEP for duration of project as required within this bid. 6. All required testing and inspection equipment. 7. 100% work site documentation for Remediation Performance Work Plan (if required). 8. Estimated number of IAQ samples to be taken. (in pricing below) 9. FedEx sample shipping to EMLab P&K, Phoenix AZ (from Anchorage). 10. Independent 3rd party sample data review report by RespirCare Analytical Services.

11. Laboratory sample data report with additional laboratory added information. 12. Recommendations report for any conditions needing services (if applicable).

25

PROJECT EXCLUSIONS:

1. Secure-heated working area (also available for any on site consult time).

2. Power and internet to work area during on site time period and if overnight stay exists. 3. Repair of damaged areas if Invasive testing for bulk samples is necessary. 4. All Additional unforeseen costs/expenses if project/weather/mechanical delays. 5. Additional laboratory fees for needed number of samples beyond proposed maximum due to

unknown site logistics or layout prior to onsite visit. 6. Additional laboratory fees for added sample submission such as Asbestos or Lead. 7. Additional labor fees for any project delays from unforeseen circumstances.

PROPOSED COSTS:

1. Industrial Hygienist – On Site Services: Base fee for one IH/IEP site visit, inspections, sample collection and on-site consultation times: $625.00

2. Post Project - In House Services: Lab report and data review time, recommendations report

generation, phone and email consultation times: $92.00

3. Direct Reimbursement – Air travel to Petersburg & return to Anchorage: $648.00

4. Direct Reimbursement – Rental car (to food, lodging and airport): $115.00

5. Direct Reimbursement – Overnight accommodations – 1 night: $165.00

6. Set Travel Fee – Per Diem for .5+.5 days (per federal rate chart): $118.00

7. Hourly Travel Rate – Total Hourly rate for travel times: $315.00

8. Laboratory Sample Analysis Fees:

8 - Microbial “Spore Trap” samples $520.00 4 – Other Biological samples $96.00 1 – Composite Microbial surface sample $60.00 3 – MVOC/VOC microbial samples $426.00

Total estimated project cost as proposed: $3180.00

Note: We will do what we can to combine sampling areas or any other legitimate measures to reduce these costs. Some costs may be reflective of the higher available rates, such as air travel, rentals, lodging, etc. This method of proposal writing allows for variances given differences in selected dates at the time of this proposal and the actual time of an accepted project travel date. Any reductions will be reflected on the final invoice!

26

This bid proposal is valid for fifteen (15) days. 50% down payment of estimated costs is required before scheduling of travel arrangements. Final balance payment is due upon receipt of final invoice.

Any alteration or deviation from the applicable plans and specification involving extra costs for materials, services, labor, etc. will only be executed over the base contract amount. All agreements must be made in writing. The Owner or Owner’s Agent will assess no payment delays due to uncontrollable delays of the project. If you have any questions or require additional information, please do not hesitate to contact us at 907-232-1007 or contact@advancelookak.com.

Project Specific Note: CC payments are welcome but do incur a 2% service fee. Failure to pay invoices as agreed will trigger lab delays, our system is automated with the lab and payments must be completed prior to sample analysis.

By signing below, you accept the responsibilities of Petersburg Borough (the “client”) and agree to the fee schedule, hourly rates and payment requirements as stated!

This agreement contains the entire agreement of the parties, and there are no other promises or conditions in any other agreement whether oral or written.

Please read and understand this agreement. It is a legal and binding contract.

Signature: Printed Name:

Date:

If you have questions or require additional information, please do not hesitate to contact me at (907)232- 1007 or email me at contact@advancelookak.com.

Sincerely,

Patrick Hartshorn IH/IEP Manager/Senior Consultant

27

MEMORANDUM

TO: STEVE GIESBRECHT, BOROUGH MANAGER

FROM: KARL HAGERMAN, UTILITY DIRECTOR

SUBJECT: WATER, WASTEWATER AND SANITATION RATE STUDY AWARD

DATE: 8/2/2019

CC: DEBBIE THOMPSON, BOROUGH CLERK CHRIS COTTA, PUBLIC WORKS DIRECTOR

Attached to this memo is a proposal from FCS Group to conduct rate studies for the Water, Wastewater and Sanitation departments. This firm performed the rate studies for these departments in 2012 and did an excellent job at that time. Having worked with the Borough in the past, they know what data we have readily available and their expertise in assembling their analysis and presenting it in a clear and easily understandable format is a known commodity.

The scope of work is clear in the proposal, but to summarize it for the Assembly, the work will include a data collection phase whereby the Borough will provide financial data, customer class and usage data, existing rate structures, capital improvement plans and projections on customer base and usage for all three of the utilities. The Consultant will take this information and develop projections of revenue requirements to meet the capital improvement plans and operational expenses over the study period (5 years). The final result will be a recommendation for rate adjustments required to achieve projected revenue requirements in order to fund the operations and projects of the utilities. The final recommendations will be presented to the Assembly.

The consultant provided the proposal and cost estimate in February 2019, but they are willing to honor their estimate at this time. The schedule will involve an expedited analysis of the water and wastewater department’s rates with the goal of providing potential rate adjustment recommendations to the Assembly and public in late September – right before the local election when the debt authorization for water and wastewater may be on the ballot. The Consultant will also be working on the sanitation study, but the primary focus for those results will be to deliver them after the new year and for consideration during the FY21 budget preparation process.

I recommend awarding a contract to FCS Group of Redmond Washington for an amount not-to-exceed $39,695. The costs of the contract will be split evenly between Water, Wastewater and Sanitation departments and has been budgeted in this fiscal year. Optional tasks offered by FCS Group, including Cost of Service Analysis and Rate Design are not included in this contract.

Please let me know if there are any questions. Thank you.

28

PETERSBURG BOROUGH WATER, WASTEWATER, AND SANITATION RATE STUDY

The following work tasks have been developed to provide a pricing estimate and level of effort to Petersburg Borough (“the Borough”) for a water, wastewater, and sanitation rate study. Similar to the study completed in 2012 for the Borough, the rate study will review the revenue requirements of each utility on a stand-alone basis to evaluate the sufficiency of each utility’s existing rates. Our approach offers transparency in documentation, collaboration with staff and clear communication with the Borough management team and the Assembly on policy considerations. Based on a discussion with Chris Cotta on February 5th, the task plan also includes an optional cost of service and rate design analysis with the rate study. These study elements can help the Borough develop equitable and cost-based customer rates for the three utilities. The resulting financial plan from this study will establish a blueprint for achieving revenue stability, sufficiency and equitable cost-based utility rates. As outlined in the task plan, we follow a structured method to arrive at rate conclusions, which will enable us to perform the work in an orderly, efficient and results-oriented manner. The tasks noted below will be completed for each utility unless specifically noted otherwise.

TASK PLAN TASK 1 | PROJECT INITIATION MEETING A project initiation meeting will be scheduled before the commencement of the project with the consultant and Borough project team. This meeting will establish the goals and objectives of the overall project and focus the efforts of the project team. The items covered at the meeting include review of the scope of work, identify project objectives, expectations and deliverables, outline the project schedule and key milestone review points and discuss appropriate lines of communication. We have budgeted this meeting to be conducted via remote session.

TASK 2 | DATA COLLECTION AND VALIDATION Prior to the project initiation meeting, FCS GROUP will provide a data needs list encompassing historical and projected revenue, expenses, fiscal policies, capital plans, fund balances, comprehensive plans and customer use data. The data will be reviewed, analyzed and validated for inclusion in the study process. Consistent with the 2012 study, we will worked with Borough staff to develop a rate revenue forecast based on current revenue levels and an estimated revenue growth rate for each utility. As part of the optional task “Cost of Service Analysis”, we will also validate historical customer billing statistics data with the revenue generated. Validation of the customer billing statistics and rate

29

revenue is critical to the cost of service analysis. This approach offers consistency through the study process by using one validated dataset to develop customer, water demand, wastewater flow, and solid waste tonnage forecasts, as well as revenue projections, and cost allocations. This process has also proven beneficial in uncovering anomalies in data and/or incorrect billing units that can impact forecast revenue.

TASK 3 | MULTI-YEAR REVENUE REQUIREMENT The revenue requirement analysis determines near- and long-term revenue needs to ensure that utility rates can fully recover the costs of each service. Costs include annual obligations for maintenance, operations and administration; prior debt service; and prevailing fiscal management policies. Beyond that, a thorough revenue requirements analysis develops a capital funding strategy to accomplish known and estimated capital improvement programs. Developing a funding strategy for this ongoing, substantial expenditure within the framework of a utility rate study will help the Borough prioritize capital needs and avoid excessive rate impacts by taking measured steps and considering alternative financing before expenses peak. It also provides the justification for active and successful utility financial reserve management, which can enable more stable revenue patterns, phased rate plans and intergenerational equity. For this task, recommended rate increases will be applied equally to each customer class and to each rate component (e.g., fixed charges, water consumption charge). Structural changes to these rate components can also be analyzed and are included as part of the optional task “Rate Design”.

TASK 4 | MEETINGS AND PRESENTATIONS In addition to the project initiation meeting (Task 1), we will prepare materials for and facilitate the following meetings and presentations: Two review meetings to discuss interim results with Borough staff. We have budgeted these two

meetings to be conducted as remote meetings via GoToMeeting or other similar format. We anticipate one additional review meeting needed if the optional tasks are included in the project.

One on-site presentation to the Borough Assembly to present the study results, policy considerations, and rate recommendations. Additional on-site meetings can be included at the cost of time and materials.

TASK 5 | DOCUMENTATION A technical memo documenting the rate study process, methodology, key assumptions, results and recommendations will be provided to the Borough. All technical exhibits will be included in the memo as appendices. FCS GROUP will also provide an Excel-based cost of service rate study toolset for each utility.

TASK 6 | PROJECT MANAGEMENT Perform administrative and management procedures for efficient completion of the study. Monthly progress updates will be provided to the Borough which will describe recent consulting efforts, potential future considerations, as well as the status of the study progress, schedule, and budget. I will be in regular contact with both Mr. Cotta and Mr. Hagerman via telephone and email to address issues as they arise.

30

OPTIONAL TASKS OPTIONAL TASK 1 | COST OF SERVICE ANALYSIS Beyond the level of revenue required, a utility rate study can also addresses the equity of pricing: Are customers paying for their proportionate use of the system? Are customer classes representative of the customers being served? The cost of service analysis (COSA) develops a series of functional allocations to create cost pools for utility functions. Functional cost pool examples for each utility include: Water: peak, base, fire, and customer management Wastewater: flow, strength, and customer management Sanitation: collection, transfer, material processing, disposal, and customer management These functional cost pools are then distributed to classes of customers based on the proportionate share of costs required to serve their demand. This two-step allocation process distributes the costs of the utility to each customer class and provides a defensible, cost-based approach to setting future utility rates.

OPTIONAL TASK 2 | RATE DESIGN The final technical element of the rate study is the design of an actual rate structure: the system of fixed and variable charges that drive customer bills. Whereas the cost of service analysis focuses on interclass equity, quality rate design can achieve better intraclass equity, yielding customer bills that achieve proportionality between individuals. Further, we will identify the portion of revenues anticipated to be collected from the fixed and volume rate components to provide for an appropriate balance of revenue stability and the ability of customers to control their bill by changing behavior. The rate designs proposed will be consistent with the Borough’s fiscal policies, billing system capabilities and other policy and financial objectives.

31

BUDGET We have developed our cost estimate to accommodate the technical and study process elements of the project. Our estimate for the cost of completing the core project tasks is an amount not to exceed $39,695, which includes one on-site presentation to the Borough Assembly. The total project budget with the two optional tasks is estimated not to exceed $79,125 and includes the cost of service analysis and rate design elements as well as additional budget for data validation, documentation, presentation development, and one additional remote review meeting.

Column1 Column2 Column3 Column4 Column5 Column6 Column7 Column8Sanchez Virnoche Hobson Admin Total Budget

Task Detail Principal PM Sr Analy st Support Hours EstimateHourly Billing Rates 260$ 175$ 140$ 85$

Task 1 Project Initiation Meeting BelowTask 2 Data Collection and Validation 0 4 20 0 24 $3,500Task 3 Multi-Year Rev enue Requirement 12 36 90 0 138 $22,020Task 4 Meetings and Presentations

- Project Initiation Meeting 2 2 3 1 8 $1,375- Tw o Remote Rev iew Meetings 4 4 5 0 13 $2,440- One On-Site Assembly Meeting

Presentation Dev elopment 2 2 6 0 10 $1,710On-Site Meeting 12 0 0 0 12 $3,120

Task 5 Documentation 2 4 20 0 26 $4,020Task 6 Project Management 0 3 0 1 4 $610

Total Labor Hours 34 55 144 2 235Total Labor Budget $8,840 $9,625 $20,160 $170 $38,795

Ex penses $900Total Budget Estimate $39,695

Optional Cost of Serv ice Analy sis (COSA) 14 46 128 - 188 $29,610Optional Rate Design 6 20 34 - 60 $9,820

Total Labor Hours for Optional Tasks 20 66 162 - 248 Total Labor Budget for Optional Tasks $5,200 $11,550 $22,680 $0 $39,430

Total Budget Estimate w ith Optional Tasks $79,125

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62