056-23 - Financial Consulting Solutions, Inc. - ContractDocuSign Envelope ID: BCD6DC32-F520-4F80-8249-10FD142F5504
Port Orchard Contract #: 056-23
Authorized Amount: $85,825.00
Date Start: July 1, 2023
Date End: March 31, 2024
CONSULTANT SERVICES AGREEMENT
Sewer Rate Study Project
THIS AGREEMENT is entered into by and between the City of Port Orchard, Washington,
a municipal corporation organized under the laws of the State of Washington ("City") and Financial
Consulting Solutions, Inc. dba FCS Group, ("Consultant") organized under the laws of the State of
Washington, located and doing business at 7525 166t" Ave NE, Ste D-215, Redmond WA 98502
(hereinafter the "Consultant").
RECITALS:
WHEREAS, the City desires to have certain services performed for its residents; and
WHEREAS, the City has selected the Consultant to perform such services pursuant to certain
terms and conditions; and
NOW, THEREFORE, in consideration of the mutual benefits and conditions set forth below, the
parties agree as follows:
AGREEMENT:
1. Scope of Services to be Performed by Consultant.
The Consultant shall perform those services described on Exhibit "A," which is attached hereto and
incorporated herein bythis reference as if set forth in full. In performing such services, the Consultant shall
at all times comply with all federal, state, and local statutes, rules and ordinances applicable to the
performance of such services and the handling of any funds used in connection therewith. The Consultant
shall perform the services diligently and completely and in accordance with professional standards of
conduct and performance. The Consultant shall request and obtain prior written approval from the City
if the scope or schedule is to be modified in any way.
If the services provided hereunder are funded in whole or in part under a Grant Funding
Agreement, then Consultant will comply with the terms of such Grant Funding Agreement to ensure that
the City is able to obtain the maximum funding under such Grant Funding Agreement. If this applies, the
City will provide the Consultant with a copy of the Grant Funding Agreement.
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2. Compensation.
The City shall pay the Consultant for services rendered according to the rates and methods set forth
below.
❑ LUMP SUM. Compensation for these services set forth in Exhibit A shall be a Lump Sum
of $
❑X TIME AND MATERIALS NOT TO EXCEED. Compensation for these services shall not exceed
$85,825.00 without written authorization and will be based on the list of billing rates and
reimbursable expenses attached hereto as Exhibit "B."
❑ TIME AND MATERIALS. Compensation for these services shall be on a time and materials
basis according to the list of billing rates and reimbursable expenses attached hereto as Exhibit
„B
❑ OTHER
3. Payment.
A. The Consultant shall maintain time and expense records and provide them to the City
monthly after services have been performed, along with monthly invoices in a format acceptable to
the City for work performed to the date of the invoice.
B. All invoices shall be paid by City warrant within thirty (30) days of receipt of a proper
invoice. If the City objects to all or any portion of any invoice, it shall so notify the Consultant of the
same within fifteen (15) days from the date of receipt and shall pay that portion of the invoice not in
dispute, and the Parties shall immediately make every effort to settle the disputed portion.
C. The Consultant shall keep cost records and accounts pertaining to this Agreement
available for inspection by City representatives for three (3) years after final payment unless a longer
period is required by a third -party agreement. Copies shall be made available on request.
D. On the effective date of this Agreement (or shortly thereafter), the Consultant shall
comply with all federal and state laws applicable to independent contractors, including, but not limited
to, the maintenance of a separate set of books and records that reflect all items of income and expenses
of the Consultant's business, pursuant to Revised Code of Washington (RCW) 51.08.195, as required by
law, to show that the services performed by the Consultant under this Agreement shall not give rise to
an employer -employee relationship between the parties, which is subject to Title 51 RCW, Industrial
Insurance.
E. If the services rendered do not meet the requirements of the Agreement, the Consultant
will correct or modify the work to comply with the Agreement. The City may withhold payment for such
work until the work meets the requirements of the Agreement. The City shall pay the Consultant for
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services rendered within ten (10) days after City Council voucher approval. However, if the City objects
to all or any portion of an invoice, it shall notify Consultant and reserves the option to only pay that
portion of the invoice not in dispute. In that event, the Parties will immediately make every effort to
settle the disputed portion.
F. The City reserves the right to direct the Consultant's compensated services before
reaching the maximum amount.
4. Duration of Agreement.
A. This Agreement shall be in full force and effect for a period commencing on July 1, 2023
and ending March 31, 2024 unless sooner terminated under the provisions of this Agreement. The City
reserves the right to offer two (2) one-year extensions prior to expiration of the Agreement to retain
the Consultant's services.
B. Time is of the essence of this Agreement in each and all of its provisions in which
performance is required. If delays beyond the Consultant's reasonable control occur, the Parties will
negotiate in good faith to determine whether an extension is appropriate.
C. The Consultant shall obtain a City of Port Orchard business license prior to commencing
work pursuant to a written Notice to Proceed.
D. The Consultant is authorized to proceed with services upon receipt of a written Notice
to Proceed.
S. Standard of Care.
The Consultant represents and warrants that it has the requisite training, skill, and experience
necessary to provide the services under this Agreement and is appropriately accredited and licensed
by all applicable agencies and governmental entities. Services provided by the Consultant under this
Agreement will be performed in a manner consistent with that degree of care and skill ordinarily
exercised by members of the same profession currently practicing in similar circumstances.
6. Ownership and Use of Documents.
A. Ownership. Any records, files, documents, drawings, specifications, data, or
information, regardless of form or format, and all other materials produced by the Consultant in
connection with the services provided to the City, shall be the property of the City whether the project
for which they were created is executed or not.
B. Records preservation. Consultant understands that this Agreement is with a government
agency and thus all records created or used in the course of Consultant's work for the City are
considered "public records" and are subject to disclosure by the City under the Public Records Act,
Chapter 42.56 RCW ("the Act"). Consultant agrees to safeguard and preserve records in accordance
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with the Act. The City may be required, upon request, to disclose the Agreement, and the documents
and records submitted to the City by Consultant, unless an exemption under the Public Records Act
applies. If the City receives a public records request and asks Consultant to search its files for responsive
records, Consultant agrees to make a prompt and thorough search through its files for responsive
records and to promptly turn over any responsive records to the City's public records officer at no cost
to the City.
7. Relationship of the Parties; Independent Consultant.
The Parties intend that an independent contractor -client relationship will be created by this
Agreement. As the Consultant is customarily engaged in an independently established trade which
encompasses the specific service provided to the City hereunder, no agent, employee, representative
or sub -consultant of the Consultant shall be or shall be deemed to be the employee, agent,
representative or sub -consultant of the City. In the performance of the work, the Consultant is an
independent contractor with the ability to control and direct the performance and details of the work,
the City being interested only in the results obtained under this Agreement. None of the benefits
provided by the City to its employees, including, but not limited to, compensation, insurance, and
unemployment insurance are available from the City to the employees, agents, representatives, or sub -
consultants of the Consultant. The City shall not be responsible for withholding or otherwise deducting
federal income tax or social security or contributing to the State Industrial Insurance Program, or
otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the
Consultant. The Consultant will be solely and entirely responsible for its acts and for the acts of its
agents, employees, representatives, and sub -consultants during the performance of this Agreement.
The City may, during the term of this Agreement, engage other independent contractors to perform
the same or similar work that the Consultant performs hereunder.
8. Indemnification.
Consultant shall defend, indemnify, and hold the City, its officers, officials, employees, agents, and
volunteers harmless from any and all claims, injuries, damages, losses or suits including attorneys' fees,
arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this
Agreement, except for injuries and damages caused by the sole negligence of the City.
Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115,
then, in the event of liability for damages arising out of bodily injury to persons or damages to property
caused by or resulting from the concurrent negligence of the Consultant and the City, its officers,
officials, employees, and volunteers, the Consultant's liability, including the duty and cost to defend,
hereunder shall be only to the extent of the Consultant's negligence.
IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED
HEREIN CONSTITUTES THE CONSULTANT'S WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE,
TITLE 51 RCW, SOLELY FOR THE PURPOSES OF THIS INDEMNIFICATION. THIS WAIVER HAS BEEN
MUTUALLY NEGOTIATED BY THE PARTIES.
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The provisions of this section shall survive the expiration or termination of this Agreement.
9. Insurance.
The Consultant shall procure and maintain for the duration of the Agreement, insurance against claims
for injuries to persons or damage to property which may arise from or in connection with the
performance of the work hereunder by the Consultant, its agents, representatives, or employees.
below:
limits:
A. Minimum Scope of Insurance. Consultant shall obtain insurance of the types described
Automobile Liability insurance covering all owned, non -owned, hired and leased
vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01
or a substitute form providing equivalent liability coverage. If necessary, the policy
shall be endorsed to provide contractual liability coverage.
ii. Commercial General Liability insurance shall be written on ISO occurrence form CG
00 01 and shall cover liability arising from premises, operations, independent
Consultants and personal injury and advertising injury. The City shall be named as
an insured under the Consultant's Commercial General Liability insurance policy
with respect to the work performed for the City.
iii. Workers' Compensation coverage as required by the Industrial Insurance laws of the
State of Washington.
iv. Professional Liability insurance appropriate to the Consultant's profession.
B. Minimum Amounts of Insurance. Consultant shall maintain the following insurance
Automobile Liability insurance with a minimum combined single limit for
bodily injury and property damage of $1,000,000 per accident.
ii. Commercial General Liability insurance shall be written with limits no less
than $1,000,000 each occurrence, $2,000,000 general aggregate.
iii. Professional Liability insurance shall be written with limits no less than
$1,000,000 per claim and $1,000,000 policy aggregate limit.
C. Other Insurance Provision. The Consultant's Automobile Liability, Commercial General
Liability, and Professional Liability insurance policies are to contain, or be endorsed to contain, that
they shall be primary insurance as respect the City. Any Insurance, self-insurance, or insurance pool
coverage maintained by the City shall be excess of the Consultant's insurance and shall not contribute
with it.
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D. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best
rating of not less than A-VII.
E. Verification of Coverage. The Consultant shall furnish the City with original certificates
and a copy of the amendatory endorsements, including but not necessarily limited to the additional
insured endorsement, evidencing the insurance requirements of the Consultant before
commencement of the work.
F. Notice of Cancellation. The Consultant shall provide the City with written notice of any
policy cancellation, within two business days of their receipt of such notice.
G. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the
insurance as required shall constitute a material breach of contract, upon which the City may, after
giving five business days' notice to the Consultant to correct the breach, immediately terminate the
contract or, at its discretion, procure or renew such insurance and pay any and all premiums in
connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole
discretion of the City, offset against funds due the Consultant from the City.
H. No Limitation. Consultant's maintenance of insurance as required by the Agreement
shall not be construed to limit the liability of the Consultant to the coverage provided by such
insurance, or otherwise limit the City's recourse to any remedy available at law or in equity.
10. Record Keeping and Reporting.
A. The Consultant shall maintain accounts and records, including personnel, property,
financial, and programmatic records, which sufficiently and properly reflect all direct and indirect costs
of any nature expended and services performed pursuant to this Agreement. The Consultant shall also
maintain such other records as may be deemed necessary by the City to ensure proper accounting of
all funds contributed by the City to the performance of this Agreement.
B. The foregoing records shall be maintained for a period of seven (7) years after
termination of this Agreement unless permission to destroy them is granted by the Office of the
Archivist in accordance with Chapter 40.14 RCW and by the City.
11. City's Right of Inspection and Audit.
A. Even though the Consultant is an independent contractor with the authority to control
and direct the performance and details of the work authorized under this Agreement, the work must
meet the approval of the City and shall be subject to the City's general right of inspection to secure the
satisfactory completion thereof. The Consultant agrees to comply with all federal, state, and municipal
laws, rules, and regulations that are now effective or become applicable within the terms of this
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Agreement to the Consultant's business, equipment, and personnel engaged in operations covered by
this Agreement or accruing out of the performance of such operations.
B. The records and documents with respect to all matters covered by this Agreement shall
be subject at all times to inspection, review or audit by the City during the performance of this
Agreement. All work products, data, studies, worksheets, models, reports, and other materials in
support of the performance of the service, work products, or outcomes fulfilling the contractual
obligations are the products of the City.
12. Work Performed at the Consultant's Risk.
The Consultant shall take all precautions necessary and shall be responsible for the safety of its
employees, agents, and sub -consultants in the performance of the work hereunder and shall utilize all
protection necessary for that purpose. All work shall be done at the Consultant's own risk, and the
Consultant shall be responsible for any loss of or damage to materials, tools, or other articles used or
held by the Consultant for use in connection with the work.
13. Termination.
A. Termination without cause. This Agreement may be terminated by the City at any time
for public convenience, for the Consultant's insolvency or bankruptcy, or the Consultant's assignment
for the benefit of creditors.
B. Termination with cause. This Agreement may be terminated upon the default of the
Consultant and the failure of the Consultant to cure such default within a reasonable time after
receiving written notice of the default.
C. Rights Upon Termination.
i. With or Without Cause. Upon termination for any reason, all finished or unfinished
documents, reports, or other material or work of the Consultant pursuant to this Agreement shall be
submitted to the City, and the Consultant shall be entitled to just and equitable compensation for any
satisfactory work completed prior to the date of termination, not to exceed the total compensation set
forth herein. The Consultant shall not be entitled to any reallocation of cost, profit or overhead. The
Consultant shall not in any event be entitled to anticipated profit on work not performed because of
such termination. The Consultant shall use its best efforts to minimize the compensation payable under
this Agreement in the event of such termination. Upon termination, the City may take over the work
and prosecute the same to completion, by contract or otherwise.
ii. Default. If the Agreement is terminated for default, the Consultant shall not be entitled
to receive any further payments under the Agreement until all work called for has been fully
performed. Any extra cost or damage to the City resulting from such default(s) shall be deducted from
any money due or coming due to the Consultant. The Consultant shall bear any extra expenses incurred
by the City in completing the work, including all increased costs for completing the work, and all
damage sustained, or which may be sustained, by the City by reason of such default.
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D. Suspension. The City may suspend this Agreement, at its sole discretion. Any
reimbursement for expenses incurred due to the suspension shall be limited to the Consultant's
reasonable expenses, and shall be subject to verification. The Consultant shall resume performance of
services under this Agreement without delay when the suspension period ends.
E. Notice of Termination or Suspension. If delivered to the Consultant in person,
termination shall be effective immediately upon the Consultant's receipt of the City's written notice or
such date as stated in the City's notice of termination, whichever is later. Notice of suspension shall be
given to the Consultant in writing upon one week's advance notice to the Consultant. Such notice shall
indicate the anticipated period of suspension. Notice may also be delivered to the Consultant at the
address set forth in the "Notices" Section herein.
F. Nothing in this Subsection shall prevent the City from seeking any legal remedies it may
otherwise have for the violation or nonperformance of any provisions of this Agreement.
14. Discrimination Prohibited.
A. The Consultant agrees not to discriminate against any employee or applicant for
employment or any other person in the performance of this Agreement because of race, creed, color,
national origin, marital status, sex, age, disability, or other circumstance prohibited by federal, state,
or local law or ordinance, except for a bona fide occupational qualification.
B. Violation of this Section shall be a material breach of this Agreement and grounds for
cancellation, termination, or suspension of the Agreement by the City, in whole or in part, and may
result in ineligibility for further work for the City.
15. Force Majeure.
Notwithstanding anything to the contrary in this Agreement, any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain services,
labor, or materials or reasonable substitutes therefor, governmental actions, governmental laws,
regulations or restrictions, civil commotions, casualty, actual or threatened public health emergency
(including, without limitation, epidemic, pandemic, famine, disease, plague, quarantine, and other
significant public health risk), governmental edicts, actions, declarations or quarantines by a
governmental entity or health organization, breaches in cybersecurity, and other causes beyond the
reasonable control of the Party obligated to perform, regardless of whether such other causes are (i)
foreseeable or unforeseeable or (ii) related to the specifically enumerated events in this paragraph
(collectively, a "Force Majeure"), shall excuse the performance of such Party for a period equal to any
such prevention, delay or stoppage. To the extent this Agreement specifies a time period for
performance of an obligation of either Party, that time period shall be extended by the period of any
delay in such Party's performance caused by a Force Majeure. Provided however, that the current
COVID-19 pandemic shall not be considered a Force Majeure unless constraints on a Party's
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performance that result from the pandemic become substantially more onerous after the effective
date of this Agreement.
16. Assignment and Subcontract.
The Consultant shall not assign or subcontract any portion of the services contemplated by this
Agreement without the prior written consent of the City. Any assignment made without the prior
approval of the City is void.
17. Conflict of Interest.
The Consultant represents to the City that it has no conflict of interest in performing any of the services
set forth in Exhibit "A." In the event that the Consultant is asked to perform services for a project with
which it may have a conflict, Consultant will immediately disclose such conflict to the City.
18. Confidentiality.
All information regarding the City obtained by the Consultant in performance of this Agreement shall
be considered confidential. Breach of confidentiality by the Consultant shall be grounds for immediate
termination.
19. Non -Appropriation of Funds.
If sufficient funds are not appropriated or allocated for payment under this Agreement for any future
fiscal period, the City will so notify the Consultant and shall not be obligated to make payments for
services or amounts incurred after the end of the current fiscal period. This Agreement will terminate
upon the completion of all remaining services for which funds are allocated. No penalty or expense
shall accrue to the City in the event that the terms of the provision are effectuated.
20. Employment of State Retirees.
The City is a "DRS-covered employer" which is an organization that employs one or more members of
any retirement system administered by the Washington State Department of Retirement Systems
(DRS). Pursuant to RCW 41.50.139(1) and WAC 415-02-325(1), the City is required to elicit on a written
form if any of the Contractor's employees providing services to the City retired using the 2008 Early
Retirement Factors (ERFs), or if the Contractor is owned by an individual who retired using the 2008
ERFs, and whether the nature of the service and compensation would result in a retirement benefit
being suspended. Failure to make this determination exposes the City to significant liability for pension
overpayments. As a result, before commencing work under this Agreement, Contractor shall determine
whether any of its employees providing services to the City or any of the Contractor's owners retired
using the 2008 ERFs, and shall immediately notify the City and shall promptly complete the form
provided by the City after this notification is made. This notification to DRS could impact the payment
of retirement benefits to employees and owners of Contractor. Contractor shall indemnify, defend, and
hold harmless the City from any and all claims, damages, or other liability, including attorneys' fees and
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costs, relating to a claim by DRS of a pension overpayment caused by or resulting from Contractor's
failure to comply with the terms of this provision. This provision shall survive termination of this
Agreement.
21. Entire Agreement.
This Agreement contains the entire agreement between the parties, and no other agreements, oral or
otherwise, regarding the subject matter of this Agreement shall be deemed to exist or bind either of
the parties. If there is a conflict between the terms and conditions of this Agreement and the attached
exhibits, then the terms and conditions of this Agreement shall prevail over the exhibits. Either party
may request changes to the Agreement. Changes which are mutually agreed upon shall be
incorporated by written amendments to this Agreement.
22. Non -waiver of Breach.
The failure of either party to insist upon strict performance of any of the covenants and agreements
contained herein, or to exercise any option herein contained in one or more instances, shall not be
construed to be a waiver or relinquishment of said covenants, agreements, or options, and the same
shall be in full force and effect.
23. Modification.
No waiver, alteration, modification of any of the provisions of this Agreement shall be binding unless
in writing and signed by a duly authorized representative of the City and the Consultant.
24. Notices.
All notices or other communications required or permitted under this Agreement shall be in writing
and shall be (a) personally delivered, in which case the notice or communication shall be deemed given
on the date of receipt at the office of the addressee; (b) sent by registered or certified mail, postage
prepaid, return receipt requested, in which case the notice or communication shall be deemed given
three (3) business days after the date of deposit in the United States mail; or (c) sent by overnight
delivery using a nationally recognized overnight courier service, in which case the notice or
communication shall be deemed given one business day after the date of deposit with such courier. In
addition, all notices shall also be emailed, however, email does not substitute for an official notice.
Notices shall be sent to the following addresses:
Notices to the City of Port Orchard shall be sent to the following address:
City Clerk
City of Port Orchard
216 Prospect Street
Port Orchard, Washington 98366
BwaIlace@cityofportorchard.us
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Phone:360.876.4407 Fax: 360.895.9029
Notices to the Consultant shall be sent to the following address:
7525 166th Avenue NE, Suite D-215
Redmond, WA 98052
Phone No.:425-867-1802
Email: Iohnglfcsgroup.com
25. Resolution of Disputes; Governing Law.
A. Should any dispute, misunderstanding or conflict arise as to the terms and conditions
contained in this Agreement, the matter shall first be referred to the Mayor, who shall determine the
term or provision's true intent or meaning. The Mayor shall also decide all questions which may arise
between the parties relative to the actual services provided or to the sufficiency of the performance
hereunder.
B. If any dispute arises between the City and the Consultant under any of the provisions
of this Agreement which cannot be resolved by the Mayor's determination in a reasonable time, or if
the Consultant does not agree with the Mayor's decision on a disputed matter, jurisdiction of any
resulting litigation shall be filed in Kitsap County Superior Court, Kitsap County, Washington.
C. This Agreement shall be governed by and construed in accordance with the laws of the
State of Washington. In any suit or action instituted to enforce any right granted in this Agreement,
the substantially prevailing party shall be entitled to recover its costs, disbursements, and reasonable
attorneys' fees from the other Party.
26. Compliance with Laws.
The Consultant agrees to comply with all federal, state, and municipal laws, rules, and regulations that
are now effective or in the future become applicable to Consultant's business, equipment, and
personnel engaged in operations covered by this Agreement or accruing out of the performance of
those operations.
27. Title VI.
The City of Port Orchard, in accordance with Title VI of the Civil Rights Act of 1964, 78 Stat. 252, 42
U.S.C. 2000d to 2000d-4 and Title 49, Code of Federal Regulations, Department of Transportation
subtitle A, Office of the Secretary, Part 21, nondiscrimination in federally assisted programs of the
Department of Transportation issued pursuant to such Act, must affirmatively insure that its contracts
comply with these regulations.
Therefore, during the performance of this Agreement, the Consultant, for itself, its assignees, and
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successors in interest agrees as follows:
A. Compliance with Regulations. The Consultant will comply with the Acts and the
Regulations relative to Nondiscrimination in Federally -assisted programs of the U.S. Department of
Transportation, Federal Highway Administration (FHWA), as they may be amended from time to time,
which are herein incorporated by reference and made a part of this Agreement.
B. Nondiscrimination. The Consultant, with regard to the work performed by it during this
Agreement, will not discriminate on the grounds of race, color, national origin, sex, age, disability,
income -level, or LEP in the selection and retention of subcontractors, including procurements of
materials and leases of equipment. The Consultant will not participate directly or indirectly in the
discrimination prohibited by the Acts and the Regulations as set forth in Appendix A, attached hereto
and incorporated herein by this reference, including employment practices when this Agreement
covers any activity, project, or program set forth in Appendix B of 49 C.F.R. part 21.
C. Solicitations for Subcontracts, Including Procurements of Materials and Equipment. In all
solicitations, either by competitive bidding, or negotiation made by the Consultant for work to be
performed under a subcontract, including procurements of materials, or leases of equipment, each
potential subcontractor or supplier will be notified by the Consultant of the Consultant's obligations
under this Agreement and the Acts and the Regulations relative to Non-discrimination on the grounds
of race, color, national origin, sex, age, disability, income -level, or LEP.
D. Information and Reports. The Consultant will provide all information and reports
required by the Acts, the Regulations and directives issued pursuant thereto and will permit access to
its books, records, accounts, other sources of information, and its facilities as may be determined by
the City, the Washington State Department of Transportation or the FHWA to be pertinent to ascertain
compliance with such Acts, Regulations, and instructions. Where any information required of the
Consultant is in the exclusive possession of another who fails or refuses to furnish the information, the
Consultant will so certify to the City, the Washington State Department of Transportation or the FHWA,
as appropriate, and will set forth what efforts it has made to obtain the information.
E. Sanctions for Noncompliance. In the event of the Consultant's noncompliance with the
non- discrimination provisions of this Agreement, the City will impose such contract sanctions as it, the
Washington State Department of Transportation or the FHWA may determine to be appropriate,
including, but not limited to:
i. withholding payments to the Consultant under the Agreement until the contractor
complies; and/or
ii. cancelling, terminating, or suspending the Agreement, in whole or in part.
F. Incorporation of Provisions. The Consultant will include the provisions of paragraphs one
through six in every subcontract, including procurements of materials and leases of equipment, unless
exempt by the Acts, the Regulations and directives issued pursuant thereto. The Consultant will take
City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
Page 12 of 24
DocuSign Envelope ID: BCD6DC32-F520-4F80-8249-10FD142F5504
action with respect to any subcontract or procurement as the City or the FHWA may direct as a means
of enforcing such provisions including sanctions for noncompliance. Provided, that if the Consultant
becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such
direction, the Consultant may request the City to enter into any litigation to protect the interests of the
City. In addition, the Consultant may request the United States to enter into the litigation to protect
the interests of the United States.
28. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall constitute an
original, and all of which will together constitute this one Agreement.
29. Severability.
Any provision or part of this Agreement held to be void or unenforceable under any law or regulation
shall be deemed stricken and all remaining provisions shall continue to be valid and binding upon the
City and the Consultant, who agree that the Agreement shall be reformed to replace such stricken
provision or part with a valid and enforceable provision that comes as close as reasonably possible to
expressing the intent of the stricken provision.
IN WITNESS WHEREOF, the City and the Consultant have executed this Agreement as of the
dates listed below.
life] ►1;i11%LLkI
By: — —
Title: President
Date: July 12, 2023
CITY OF PORT QaR #j$� D
By:
96b P IM M-SWA,
Robert Putaansuu, Mayor
7/18/2023
Date:
ATf ST.A,y/T'' 11H E NTICATE
�jvaln 1NAUL
Brandy Wallace, MMC, City Clerk
„pp❑11I I rill,,
,
pg
APP�to�VEeQbA S TO FORM
SEAL.
EP ��o:
Port Orchard City Attorney's Office
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City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
Page 13 of 24
DocuSign Envelope ID: BCD6DC32-F520-4F80-8249-10FD142F5504
EXHIBIT A
Scope of Services to be Provided by Consultant. The Consultant shall furnish services including, but
not limited to, the following outlined here or attached separately.
City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
Page 14 of 24
DocuSign Envelope ID: BCD6DC32-F520-4F80-8249-10FD142F5504
Firm Headquarters Established in 1988
•••> P C S G RD UP Redmond Town Center Washington 1425.867.1802
• 7525166"h Ave NE, Ste D-215 Oregon 1503.841.6543
Solutions -Oriented Consulting Redmond, Washington 98052 Colorado 1719.284.9168
CITY OF PORT ORCHARD
SEWER RATE STUDY
The City of Port Orchard (City) reached out to FCS GROUP and requested a scope and budget for a
sewer utility rate study. Based on a discussion with City staff in April 2023, this study will include a
revenue requirement, cost -of -service, and rate design analysis, which are described in detail below:
Revenue requirement. A revenue requirement analysis identifies the total rate revenue needed to
fully fund a utility on a standalone basis considering current financial obligations including operating
expenditures, existing debt service, policy -driven commitments, and future capital project needs.
Percentage increases indicated by the revenue requirement could be applied "across-the-board",
which maintains the existing rate structure, or incorporated into a revised rate structure (see below).
Cost of service analysis. The cost -of -service analysis is the evaluation, based on available
engineering and customer information, of how a utility should recover costs from customer classes. If
the revenue requirement analysis determines the size of the pie, the cost -of -service analysis
determines how you slice it among customers. The results of a cost -of -service analysis will be
updated rates that proportionately charge utility customers based on the unique demands of each
customer class.
Rate design. This analysis includes the development of rate structures that generate sufficient
revenue to meet the utility's revenue requirement forecast in compliance with the cost -of -service
analysis and the City's pricing objectives. The City has indicated interest in a number of rate design
changes that would vary from an "across-the-board" approach:
• Single-family: Bill based on average winter water usage instead of a uniform fixed rate.
• Multi -family / Commercial: Bill based on metered water usage; the current structure has nearly
20 rate classifications and charges based on a variety of variables including the number of
students, number of seats in a restaurant, number of washing machines, or other surcharges based
on unique types of businesses. An alternative rate structure would likely result in a blend of fixed
and variable charges that would apply uniformly to the entire class.
• Fats, oils, and grease (FOG) surcharge: A subset of non-residential customers must participate in
a City -run FOG program; this program has staffing costs related to program administration,
inspections, etc. The City is interested in evaluating the merits of a monthly FOG surcharge
which would recover FOG program costs from this specific subset of customers.
The following task plan supports these analyses.
Task 1 1 Project Kick-off & Project Management
Once under contract, FCS GROUP will provide a data request and arrange for a kickoff meeting with
City staff to set a course for completing the work and to confirm the project understanding. This
project kickoff meeting will provide an opportunity for the project team to identify and discuss key
policy and technical issues to be addressed in the study, along with any data -related questions.
FCS GROUP will review and analyze the data received and identify any data limitations, gaps, or
issues of concern.
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City of Port Orchard
Sewer Utility Rate Study
Deliverables to include:
April 2023
page 2
• Request the necessary information needed to perform the study.
• Prepare for and participate in one (1) virtual project kickoff meeting with City staff.
• Provide a follow-up data request and ask clarifying questions as needed.
• Perform project set up activities, work paper documentation, internal scheduling and workload
planning, invoicing, client correspondence, and other miscellaneous tasks throughout the study.
Task 2 1 Revenue Requirement Forecast
The revenue requirement is the total amount of rate revenue needed to meet capital, operating, debt
service (if applicable), and policy -driven commitments. The result of the revenue requirement
analysis will be the recommended percentage rate adjustments, as applied to the current rate
structure, needed to meet the obligations of the utility.
• Operating Forecast. Forecast operating costs based on the most recent budget documents
available. Also, incorporate growth forecasts, integrate additional operating expenses, if any,
resulting from the capital program, and any other known changes in operational requirements.
• Capital Funding Strategy. Develop a capital funding strategy for the latest capital program. The
analysis will include an update of key variables such as project costs, project timing, potential
borrowing and financing options, and resulting cash flow and cash balances.
• Revenue Requirement Development.
» Integrate financial policies, capital financing impacts, and the operating forecast to develop
an annual financial forecast over the study period.
» Compare forecasted financial needs against forecasted revenue under the City's existing
adopted rate schedule to determine if additional rate adjustments might be needed to keep the
utility sufficiently funded throughout the study period.
• Up to three distinct scenarios for up to a twenty-year study period. Scenarios could be based on
capital plans that vary in cost, timing, and or in priority. Changes in service levels that impact
operating expenditures could also be considered if that data is provided by City staff; e.g.,
additional staffing and / or programmatic requirements to meet existing or anticipated regulatory
requirements or additional staffing requirements needed to execute the capital plan.
Deliverables to include:
• Revenue requirements analysis and model (electronic [Excel]).
• Up to three (3) distinct scenarios for up to a twenty-year study period.
• A monthly rate survey of up to six (6) jurisdictions in the region will be conducted.
• One (1) virtual review meeting with City staff to discuss the revenue requirement.
•*4 FCS GRDUP
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City of Port Orchard April 2023
Sewer Utility Rate Study page 3
Task 3 1 Cost -of -Service Analysis (COSA)
The cost -of -service analysis is the evaluation, based on available engineering and customer
information, of how the City should recover costs from customer classes. If the revenue requirement
analysis determines the size of the pie, the cost -of -service analysis determines how you slice it
among customers. The results of the cost -of -service analysis will be updated rates that equitably
charge utility customers based on the unique demands of their class. After we allocate the function
costs to customer classes, we can compare what the distribution of the rate burden should be
(according to the cost -of -service analysis) with what the distribution of the rate burden actually is
(according to recent billing data). It is a good time to review the City's cost -of -service analysis for
two reasons:
• The City has experienced robust growth in recent years, and
• The COSA is needed to inform rate design changes (Task 4).
Deliverables to include:
• Customer billing data analysis. To ensure the quality and reliability of the cost -of -service
analyses, FCS GROUP will examine the customer statistics provided for the sewer utility. This
task will include a "Price -Out" of rate revenue by customer class under existing rates to validate
the underlying customer data set for use in assessing cost of service shifts and designing rate
structures. This is a critical process in a cost -of -service rate study to provide the baseline for
analyzing the current distribution of costs by customer class in comparison to any indicated shifts
in the distribution of costs resulting from the cost -of -service analysis.
» Apply prevailing rates to the customer statistics and calculate revenues by customer class.
» These calculated revenues are tested against actual reported revenues by customer class to
determine if the underlying data set is valid.
» Depending on the initial outcome, this could include follow-up with City staff to determine
potential reasons for any significant discrepancies before moving forward with rate design.
• Functional Cost Allocation. Drawing upon Consultant and City staff s knowledge, planning
documents, and industry experience, apportion the annual revenue requirement to the major
functions of the sewer utility, which might include: customer, flow, biochemical oxygen demand
(BOD), and total suspended solids (TSS).
• Cost Classification. Establishes a rational relationship between functions (activities) and costs.
Each line item of the revenue requirement is allocated to each function based on how those
expenses serve the system. For example, utility billing costs and postage & freight are attributed
all to the customer function, while the salaries and benefits for an FTE might have some costs
allocated across multiple functions.
• Customer Class Distinctions. Identifies the customer classes that will be evaluated as part of the
study. Existing, as well as new or revised customer classes or class definitions, may be
considered. It is appropriate to group customers that exhibit similar usage characteristics and
service requirements.
• Cost Allocation to Customer Classes. Allocates the costs from the functional cost allocation to
different customer classes based on their unique demands for each service as defined through the
cost classification process. For example, the cost of serving the utility's customers is based on
the number of customer accounts, while the cost of providing services to support the treatment
FCS GRDUP
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City of Port Orchard
Sewer Utility Rate Study
April 2023
page 4
and handling of BOD in the system is based on sewer flow data weighted by that class's BOD
strength (if available; City staff may need to provide strength estimates by class). The results
identify shifts in cost recovery by customer class from that experienced under the existing rate
structure.
• Prepare for and attend one (1) virtual review meeting with City staff to discuss the COSA.
Task 4 1 Rate Design
Rate design is the third and final technical step in utility rate setting. The first two technical steps
(revenue requirement, Task 2, and the cost -of -service analysis, Task 3) provide the revenue targets
for rate design. The principal objectives of rate design are to implement rate structures that collect
the appropriate level of revenue and that are reasonably aligned with cost -of -service.
Based on discussions with City staff, and as summarized at the outset of this document, the following
rate design elements will be included:
1. Single-family: Eliminate uniform fixed charge; bill based on unique average winter water usage.
Using winter average avoids charging sewer volume charges based on summer irrigation water,
which does not enter the sewer system. There are a variety of approaches the City could consider,
such as the following:
a. Bill based on actual water usage each month, but have a year-round cap based on the
prior winter's monthly average water usage for each customer;
b. Bill based on actual water usage each month during winter months, but have a cap during
summer months only; or
c. Create a fixed charge unique to each customer based on the prior winter's monthly
average water use, then reset every twelve months.
The City will need to provide guidance on which approach most aligns with City policy
objectives and customer billing system capabilities.
2. Multi -family /commercial: Eliminate the —20-class structure; bill based on a fixed plus variable
rate structure, where the variable charge structure is based on actual metered water usage.
3. FOG surcharge. Develop a cost -based FOG program surcharge to recover the costs of the FOG
program from those customers that are served by this program.
Deliverables to include:
• Up to three (3) distinct rate design scenarios (as noted above).
• A comparison of customer bills will be generated describing the number of and degree to which
different sample customers are impacted by changes to the current rate structures.
• Prepare for and attend two (2) virtual review meetings with City staff to discuss rate design.
Task 5 1 Update Selected Miscellaneous Fees
The City also requested that FCS GROUP evaluate the cost to provide miscellaneous services and
calculate fees to recover those costs. Based on discussions with City staff, these types of fees are
likely to include, fire hydrant service, temporary service, meter rentals, delinquency notices, water
shutoff fees, water turn-off violations, utility system damage violation fine, after hours turn-
on/shutoff, notification to tenant of water shutoff per hold harmless agreement, and final billing
FCS GRDUP
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City of Port Orchard
Sewer Utility Rate Study
April 2023
page 5
closing requests. Additionally, City staff would like FCS GROUP to develop an hourly charge for
general labor and vehicle time.
For each type of fee, perform the following
• Develop staff time and materials cost estimates, by type of fee.
• Develop hourly rates for affected positions.
• Create an overhead factor, which could include departmental general management and
administrative time that can be allocated to an individual service fee.
• Calculate recommended fees.
We will rely on City staff to provide time estimates by fee, describe what staff works on each type of
fee service, and what types of material, equipment, and or vehicles are used for each service.
Deliverables to include:
• Calculate up to ten (10) miscellaneous fees.
• Develop a general hourly labor and vehicle charge.
• Prepare for and attend one (1) virtual review meeting with City staff to discuss charges.
Task 6 1 Utility Committee & Council Meetings
FCS GROUP will prepare for and meet with the Utility Committee and / or City Council up to three
times to present findings. The budget accounts for two virtual meetings and one onsite meeting.
Based on discussions with City staff, these meetings will likely be two (2) virtual Utility Committee
meetings and one (1) onsite City Council meeting.
Deliverables to include:
• Provide preliminary draft PowerPoint content to City for preliminary review.
• Provide draft and final PowerPoint content for City Council meetings (electronic [PowerPoint]).
• Participate in up to two (2) virtual Utility Committee and / or City Council meetings.
• Participate in up to one (1) onsite Utility Committee and / or City Council meeting.
Task 7 1 Documentation
FCS GROUP will document findings in a comprehensive study report, and provide a copy of the
spreadsheet analyses for future use by City staff. Typically, the report is completed after the City
Council meeting, which allows the written report to reflect decisions made by the City Council.
• Draft Report. After completing the analytical tasks, FCS GROUP will provide a draft report for
City review. The preliminary draft report will summarize the methodology and analysis
undertaken in completing the project, the results and conclusions of the study, and noted
recommendations.
• Final Report. Upon receipt of comments from the City, FCS GROUP will incorporate the
comments, as appropriate, into a Final Report to be submitted to the City. FCS GROUP will
submit one electronic copy in both Word and/or PDF formats.
• Spreadsheet Model. FCS GROUP will deliver a final copy of the Excel -based spreadsheet model
for City use. The models will provide for 1) evaluation of revenue and cost changes on rates, 2)
analysis of fiscal policy implementation options, 3) analysis of changes in economic and
FCS GRDUP
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City of Port Orchard
Sewer Utility Rate Study
April 2023
page 6
financial indicators, 4) rate smoothing, and 5) variances to any other key rate study inputs
including the capital plan, the operating budget, etc.
Deliverables to include:
• Provide draft & final rate study report (electronic [Word and/or PDF]).
• Provide final analytical model (electronic [Excel]).
SCHEDULE
The timeframe for completing the study will depend on various factors including the timeliness of
receiving data, the relative quality and completeness of data, and the ability to schedule meetings in a
timely manner. A study schedule will be developed in collaboration with the project team as part of
the initial kick-off meeting.
The City's bimonthly sewer rates have not been updated since 2020. While the City would like to
have updated rates approved in time to implement January 1, 2024, the study might not be completed
by then. In order to have a January 1, 2024 rate resolution approved by the City Council, we likely
need to be presenting to the Utility Committee and City Council in October and November. During
discussions with City staff, they did not anticipate that this contract would be approved until the
middle of June. For planning purposes, we anticipate that a study of this type would require 6-8
months to complete after receiving data, which would result in meeting with the Utility Committee
and City Council December 2023 through February 2024.
We are currently experiencing a high demand for our services. We take our relationships and the
quality of our deliverables seriously and want to ensure that we offer the City the appropriate amount
of time to develop thoughtful analysis and a complete set of options to inform the City's future
decisions. We will work to expedite the project schedule should workload allow. We thank you for
your consideration.
1 project Kick-off & project Management
2 Revenue Requirement Forecast
3 Cost -of -Service Analysis
4 Rate Design
5 Update Selected Miscellaneous Fees
6 Utility Committee and City Council Meetings
7 Documentation
2023 2024
Sta( 4V Comitlee I j
Meeting Council -
P-entatlon
•:;> FCS GRDUP
Report,
www.fcsgroup.com
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EXHIBIT B
Rates for Services to be Provided bV Consultant. The Consultant shall furnish the services in accordance
with the rates specified below or attached hereto, as Exhibit B.
City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
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City of Port Orchard April 2023
Sewer Utility Rate Study page 7
BUDGET
The table below summarizes our estimated cost to complete the task plan. This includes a project
contingency to address unforeseen issues during this study and will only be utilized upon written
request by the City. The detailed estimates by task are for planning purposes only - the "not to
exceed" amount refers to the total contract, not any given task.
Task 1 Project Kick-off & Project Management
Data request & follow-up
2
4
6
$ 1,220
Project kickoff meeting (1) virtual
2
2
2
6
1,430
Project administration
1
6
3 10
1,945
$ 4,595
Task 2
Revenue Requirement Forecast
Update operating forecast
2
8
10
1,980
Develop updated capital funding strategy
2
12
14
2,740
Revenue requirement scenarios
1
8
34
43
8,595
Rate survey
1
2
3
610
Staff review meeting (1) virtual
2
2
2
6
1,430
$ 15,355
Task 3
Cost -of -Service Analysis
Customer billing data analysis
4
32
36
$ 7,000
Functional cost allocation
1
2
4
7
1,515
Cost classification
1
2
6
9
1,895
Customer class distinction
1
1
2
4
905
Cost allocation to customer classes
1
1
8
10
2,045
Staff review meeting (1) virtual
2
2
2
6
1,430
$ 14,790
Task 4
Rate Design
Alternative rate design alternatives (three)
2
8
24
34
$ 6,990
Staff review meeting (2) virtual
4
4
4
12
2,860
$ 9,850
Task 5
Update Selected Miscellaneous Fees
Develop staff time & materials cost estimates
2
12
14
$ 2,740
Develop hourly rate for affected positions
1
6
7
1,370
Updated overhead factor
1
1
8
10
2,045
Calculate recommended fees (up to 10)
1
4
10
15
3,115
Develop general hourly labor and vehicle rate
1
2
4
7
1,515
Staff review meeting (1) virtual
1
1
1
3
715
$ 11,500
Task 6
Utility Committee and City Council Meetings
Presentation materials
2
8
16
1 27
$ 5,560
Utility Committee Meetings (2) virtual
4
4
4
12
2,860
City Council meetings (1) onsite
10
10
2
22
5,630
$ 14,050
Task 7
Documentation
Staff review meetings notes
2
4
6
$ 1,220
Draft report
2
4
26
32
6,450
Final report
1
2
4
1 8
1,605
Spreadsheet model
2
4
1 7
1,310
$ 10,585
Contingency
Only if authorized in writing by City staff
2
6
16
1 25
$ 5,100
;> FCS GRDUP
www.fcsgroup.com
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APPENDIX A
During the performance of this Agreement, the Consultant, for itself, its assignees, and successors in
interest agrees to comply with the following non-discrimination statutes and authorities; including
but not limited to:
Pertinent Non -Discrimination Authorities:
• Title VI of the Civil Rights Act of 1964 (42 U S.C. § 2000d et seq., 78 stat. 252), (prohibits
discrimination on the basis of race, color, national origin); and 49 C.F.R. Part 21.
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42
U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been
acquired because of Federal or Federal -aid programs and projects);
• Federal -Aid Highway Act of 1973, (23 U.S.C. § 324 et seq.), (prohibits discrimination on the
basis of sex);
• Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits
discrimination on the basis of disability); and 49 C.F.R. Part 27;
• The Age Discrimination Act of 1975, as amended, (42 U S.C. § 6101 et seq.), (prohibits
discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982, (49 USC§ 471, Section 4 7123), as amended,
(prohibits discrimination based on race, creed, color, national origin, or sex);
• The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and
applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and
Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms
"programs or activities" to include all of the programs or activities of the Federal -aid
recipients, sub- recipients and contractors, whether such programs or activities are Federally
funded or not);
• Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the
basis of disability in the operation of public entities, public and private transportation systems,
places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131-12189) as
implemented by Department of Transportation regulations at 49 C.P.R. parts 37 and 38;
• The Federal Aviation Administration's Non-discrimination statute (49 U.S.C. § 47123)
(prohibits discrimination on the basis of race, color, national origin, and sex);
• Executive Order 12898, Federal Actions to Address Environmental Justice in Minority
Populations and Low -Income Populations, which ensures discrimination against minority
populations by discouraging programs, policies, and activities with disproportionately high
and adverse human health or environmental effects on minority and low-income populations;
City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
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• Executive Order 13166, Improving Access to Services for Persons with Limited English
Proficiency, and resulting agency guidance, national origin discrimination includes
discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI,
you must take reasonable steps to -ensure that LEP persons have meaningful access to your
programs (70 Fed. Reg. at 74087 to 74100);
• Title IX of the Education Amendments of 1972, as amended, which prohibits you from
discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).
City of Port Orchard and Financial Consulting Solutions, Inc. dba FCS Group
Sewer Rate Study
Updated 4/2022 IBDR
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