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Resolution No. 8072
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 r � RESOLUTION NO. 8072 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR PROFESSIONAL CONSULTING SERVICES BY AND BETWEEN THE CITY OF VERNON AND R. W. BECK, INC. FOR TELECOMMUNICATION SERVICES FEASIBILITY STUDY WHEREAS, the City of Vernon has installed a fiber optic backbone ring that traverses the existing City right-of-way; and WHEREAS, the fiber optic ring consists of 96 strands of fiber, fifty percent of which is reserved for the City's use; and WHEREAS, the fiber optic ring is used to connect various City operations; and WHEREAS, City staff sought informal quotes from qualified firms to perform an evaluation of market potential, a feasibility assessment opinion of broadband technologies, and a financial pro forma analysis (the "Study"); and WHEREAS, R. W. Beck, Inc. ("Beck") is a licensed engineering firm which has specialized knowledge and experience in the areas of energy, water resources, solid waste and telecommunications; and WHEREAS, the City's Community Services & Water Department believes that Beck is the most qualified firm to conduct the Study meeting the Community Services & Water Departments specifications and requirements; and WHEREAS, on October 8, 2002, the Finance Committee recommended that the City Council approve the recommendation of Bruce V. Malkenhorst, Director of Finance, dated October 3, 2002, that an agreement be entered into with Beck to provide the Study; and WHEREAS, by letter dated October 1, 2002, Bruce V. t 9 1 Malkenhorst, City Administrator/City Clerk, recommended that a 2 consulting services agreement with Beck be approved and executed; and 3 WHEREAS, the City Council of the City of Vernon has 4 determined that, pursuant to the provisions of subsection (a) of 5 Section 2.27 of the Vernon City Code, it is in the public interest and 6 necessity to enter into an agreement with Beck for the Study to 7 enhance services provided to the Vernon community. 8 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 9 CITY OF VERNON AS FOLLOWS: 10 SECTION 1: The City Council of the City of Vernon hereby 11 finds and determines that the recitals contained hereinabove are true 12 and correct. 13 SECTION 2: The City Council of the City of Vernon hereby 14 approves the Agreement for Consulting Services with R. W. Beck, Inc., 15 a copy of which is attached hereto as Exhibit "A" and made a part 16 hereof. 17 SECTION 3: The City Council of the City of Vernon hereby 18 authorizes the Mayor and the City Clerk to execute said Agreement for, 19 and on behalf of, the City of Vernon. 20 SECTION 4: The City Council of the City of Vernon hereby 21 directs the City Clerk, or his designee, to send one fully executed 22 Agreement to: 23 R. W. Beck, Inc. Attn. Wendy T. Warner, Senior Consultant 24 1125 Seventeenth St., Suite 1900 25 Denver, CO 80202-2615 26 27 28 - 2 - t 1 SECTION 5: The City Clerk of the City of Vernon shall 2 certify to the passage of this resolution, and thereupon and 3 thereafter the same shall be in full force and effect. 4 APPROVED AND ADOPTED this 23rd day of October, 2002. 5 6 NIS l 7 LEOC. MALB G, Mayo 8 ATTEST: 9 10 11 BRUCE V. MALKENHORST, City Clerk 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 3 - 1 STATE OF CALIFORNIA ) 2 ) ss COUNTY OF LDS ANGELES ) 3 4 I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do 5 hereby certify that the foregoing Resolution, being Resolution No. 6 8072, was duly adopted by the City Council of the City of Vernon at an 7 adjourned regular meeting of the City Council duly held on Wednesday, 8 October 23, 2002, and thereafter was duly signed by the Mayor of the 9 City of Vernon. 10 11 BRUCE V. MALKENHORST, City Clerk 12 13 (SEAL) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 _ ExHIBIT n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AGREEMENT FOR CONSULTING SERVICES THIS AGREEMENT is made, entered into and executed in duplicate originals, either copy of which may be considered and used as the original hereof for all purposes, as of this day of October, 2002, in the City of Vernon, County of Los Angeles, California, BY AND BETWEEN THE CITY OF VERNON, a municipal corporation, (hereinafter referred to as "City") 4305 Santa Fe Avenue Vernon, CA 90058-0805 AND R. W. BECK, INC., a Washington Corporation, (hereinafter referred to as "Consultant") 1125 Seventeenth St., Ste. 1900 Denver, CO 80202-2615 WHEREAS, the City has installed a fiber optic backbone ring that traverses the existing City right-of-way; and WHEREAS, the fiber optic ring consists of 96 strands of fiber, fifty percent of which is reserved for the City's use; and WHEREAS, the fiber optic ring is used to connect various City operations; and WHEREAS, the City is interested in the possibility of developing the other half of the fiber optic ring for use by the City's inhabitants; and WHEREAS, the City sought proposals from qualified firms to perform an evaluation of market potential, a feasibility assessment opinion of broadband technologies, and a financial pro forma analysis; and WHEREAS, Consultant submitted a proposal to the City, dated 1 October 3, 2002, titled "Proposal - Telecommunications Consulting 2 Services" (hereinafter referred to as the "Proposal"), a copy of which 3 is attached hereto as Exhibit "A" and made a part hereof by reference, 4 which includes a description of the proposed services and the costs of 5 said services; and 6 WHEREAS, Consultant represents that it is qualified to 7 perform such services under this Agreement for Consulting Services 8 (hereinafter "Agreement"); and 9 WHEREAS, the City desires to engage the Consultant for the 10 services hereinafter described. 11 NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET 12 FORTH HEREIN: 13 1. SCOPE OF SERVICES. 14 Consultant shall perform its services under the general 15 supervision of the City Administrator and the Director of Community 16 Services and Consultant's scope of services shall be assigned by the 17 City,Administrator and the Director of Community Services and include: 18 Task 1 - Market Survey; Task 2 - Technical Network Review; Task 3 - 19 Financial Pro Forma; and Task 4 - Implementation Plan, as identified in 20 Exhibit "A." It is understood and agreed that in the event of a 21 conflict between the Proposal and this Agreement, the termsofthis 22 Agreement shall prevail. 23 2. PROGRESS REPORTS. 24 Consultant shall submit progress reports twice a month until 25 the work hereunder is completed. These progress reports will be sent 26 via e-mail with a follow-up conference call. Consultant shall meet 27 with City staff, upon City's request, or as needed, in order to 28 provide reports or information concerning the services being performed 6 7 8 9 item 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (by Consultant under this Agreement. Any other face-to-face meetings Inot specified in the Scope of Services will be compensated on a time and materials basis pursuant to Section 6 of the Agreement. 3. TIME OF PERFORMANCE. Consultant's services shall commence upon the signing of the Agreement by both parties and shall end when Consultant has completed the work on the items according to the work schedule contained in Consultant's Proposal, unless the Agreement is otherwise terminated according to Section 9 of this Agreement or extended upon the written agreement of both parties to this Agreement. Completion of the services to be performed by Consultant is expected to be no later than February 28, 2003. 4. COMPENSATION. A. Consulting Costs. 1. The City shall pay Consultant a total fixed - price of not to exceed Sixty -Two Thousand Five Hundred Dollars and No Cents ($62,500.00) for the services performed under this Agreement. B. Other Expenses. Any other expenses not identified in the Agreement may only be billed if advance written approval has been obtained from the City Administrator. 5. METHOD OF PAYMENT. Consultant shall submit within thirty (30) days after the last day of any month in which services have been performed or costs incurred hereunder an invoice to the City for payment. Invoices shall contain an itemization of services rendered, directly related job expenses and subcontract charges incurred by Consultant for which compensation is due, and an estimate of the percentage completed for each milestone or task. Consultant shall be responsible for paying any - 3 - 1 subcontractors used in the performance of this Agreement. Sub 2 contractors shall not bill the City directly. 3 Payment of the invoice shall be made after acceptance and 4 approval by the City within thirty (30) days of receipt. The City's 5 approval of the invoice shall not be unreasonably withheld. 6 6. CHANGES AND EXTRA SERVICES. 7 The City reserves the right to request changes in the 8 services to be performed by Consultant. All such changes shall be 9 incorporated in writtenchangeorders executed by the City and 10 Consultant that shall specify the changes ordered and the parties shall 11 mutually negotiate an adjustment of compensation and completion time if 12 required thereof. 13 Any services added to the scope of this Agreement by a change 14 order shall be executed under all applicable conditions of this 15 Agreement. No claim for additional compensation for services or 16 extension of time shall be recognized unless contained in a duly 17 executed change order. 18 If Consultant is delayed in performing its services under the 19 Force Majeure provisions of this Agreement, then the Agreement may be 20 equitably adjusted, if necessary, to compensate Consultant for any 21 additional costs due to the delay. 22 7 STANDARD OF CARE. 23 Consultant will perform services under this Agreement with 24 the degree of skill and diligence normally practiced by professional 25 engineers or consultants performing the same or similar services. 26 8. PRODUCTS OF CONSULTING. 27 All reports, plans, data, studies, maps, drawings, models, 28 photographs, documents and other writings prepared by and for i J • F 1 Consultant, its officers, employees, agents and subcontractors in the 2 course of implementing this Agreement, with the exception of working 3 notes, internal documents and Confidential Information provided by 4 businesses located in City, shall be considered the property of City. 5 Consultant shall deliver such documents and materials to the City as 6 they are generated; however, Consultant may take and retain copies of 7 said documents and materials that are not Confidential Information, as 8 desired. 9 All reports, information, data and exhibits prepared or 10 assembled by Consultant in connection with the performance of its 11 services pursuant to this Agreement are confidential until released by 12 the City to the public and Consultant agrees that such documents shall 13 not be available to any individual or organization without the written 14 consent of the City prior to such release. 15 No reports, maps, or other documents produced in whole or in 16 part under this Agreement, with the exception of the survey forms, 17 shall be the subject of an application for copyright by or on behalf of 18 Consultant. 19 Any reuse of Consultant prepared documents, other than for 20 the specific purpose intended hereunder, will be at the City's sole 21 risk and without liability or legal exposure to Consultant or its 22 subcontractor. City shall indemnify and hold harmless Consultant from 23 all claims, damages, losses and expenses including attorney's fees 24 arising or resulting from such reuse. 25 9. TERMINATION. 26 This Agreement may be terminated by the City without cause 27 on thirty (30) days written notice to Consultant. Consultant shall be 28 entitled to the compensation earned by it prior to the date of the 6 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 j 17 18 19 20 21 22 23 24 25 26 27 28 termination notice, computed pro rata up to and including that date, plus compensation for work performed during the thirty (30) day notice period and authorized in the termination notice. Consultant may terminate this Agreement on ten (10) days written notice to the City if the City fails to pay Consultant's invoice within forty-five (45) days of receipt by City; provided, that the Agreement shall not be terminated if the City issues payment within said ten (10)' day notice period. In the event of termination, all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports prepared by Consultant under this Agreement shall, at the option of City, become its property. Notwithstanding the foregoing, Consultant shall not be relieved of liability to the City for damage sustained by City by virtue of any breach of this Agreement by Consultant. 10. NOTICES. Notices to the parties, unless otherwise requested in writing, shall be sent to: City: THE CITY OF VERNON ATTN: BRUCE V. MALKENHORST CITY ADMINISTRATOR 4305 SANTA FE AVENUE VERNON, CA 90058-0805 Consultant: R. W. BECK, INC. ATTN: WENDY WARNER, PROJECT MANAGER 1125 SEVENTEENTH STREET, SUITE 1900 DENVER, CO 80202-2615 11. CONFIDENTIAL INFORMATION. A. Access to Confidential Information. The City may provide Consultant with, or allow Consultant access to, certain information not available to the public concerning the City, or - 6 - 1 businesses located in the City. The information may include company 2 information, taxes, sales, value of assets, or other such information. 3 All such information shall be known as "Confidential Information" and 4 may not be used to circumvent the responsibility of either party to 5 this Agreement. 6 B. No Disclosure. Except as expressly permitted, 7 Consultant shall not disclose, permit the disclosure of, release, 8 disseminate, or transfer, whether orally or by any other means, any 9 part of such Confidential Information to any other person or entity, 10 whether corporate, governmental, or individual, without the express 11 prior written consent of an authorized representative of the City. 12 Consultant shall return any written Confidential Information and all 13 copies made of such items to the City upon the City's written request. 14 However, Consultant may retain one copy of the Confidential 15 Information for its legal records. Consultant hereby agrees that such 16 Confidential Information and any documents provided may be used by 17 Consultant only as authorized by the City under the terms of this 18 Agreement. Consultant shall take reasonable measures to avoid any 19 disclosure of any such Confidential Information to any unauthorized 20 person. 21 Consultant will not be prohibited from disclosing or 22 using any information which; 23 (1) is or becomes generally available to the public 24 other than as a result of a disclosure by Consultant; 25 (2) was already in Consultant's possession; before 26 any disclosure of the Information by the City; 27 (3) has been or is obtained by Consultant from a 28 third party (other than one acting on behalf of the City) who 7 1 Consultant has no reason to believe is not lawfully in possession of 2 the Confidential Information and who Consultant has no reason to 3 believe is in violation of any contractual, legal or fiduciary 4 obligation to the City with respect to the Confidential Information; or 5 (4) is independently developed by Consultant 6 without breaching confidentiality. 7 C. Court Ordered Disclosure. Consultant shall 8 immediately notify the City of any court order or subpoena or other 9 directive of a court, administrative agency, quasi-judicial body or 10 arbitration panel requiring disclosure of Confidential Information, 11 and shall cooperate with legal counsel in the appeal or challenge of 12 any such order or subpoena and City shall reimburse Consultant for 13 such assistance on a time and materials basis. Recipient may only 14 disclose Confidential Information required to be disclosed pursuant to 15 court order or subpoena after legal counsel has exhausted any lawful 16 and timely appeal or challenge, to the extent that such appeal or 17 challenge does not cause hinder Consultant from their obligations 18 under such court order or subpoena. 19 D. Remedies. In addition to any other remedies that 20 it may have at law or in equity, the City shall be entitled to a 21 temporary and permanent injunction by a court of competent 22 jurisdiction against any breach or threatened breach of the 23 Confidential Information provisions of this Agreement. Consultant 24 acknowledges that in case of such breach or threatened breach of said 25 provisions, the City would have no adequate remedy at law. 26 12. GENERAL PROVISIONS. 27 A. Independent Contractor. At all times during the 28 term of this Agreement, Consultant shall be an independent contractor 1 and shall not be an employee of the City. The City shall have the 2 right to control Consultant only insofar as the results of 3 Consultant's services rendered pursuant to this Agreement; however, 4 the City shall not have the right to control the means by which 5 Consultant accomplishes services rendered pursuant to the Agreement 6 except to the extent that such services involve the use of City 7 property or Confidential Information. 8 B. Consultant Not Agent. Except as the City may 9 specify in writing, Consultant shall have no authority, express or 10 implied, to act on behalf of the City in any capacity whatsoever as an 11 agent. Consultant shall have no authority, express or implied, 12 pursuant to this Agreement to bind the City to any obligation 13 whatsoever. 14 C. Indemnification. The Consultant shall indemnify, 15 defend, protect and hold the City and its officers, agents and 16 employees, free and harmless from and against any and all claims, 17 demands, losses, damages, liabilities, fines, charges, penalties, 18 orders, or judgments which result in any injury or death, and all 19 costs and expenses incurred in connection therewith, including 20 reasonable attorney's fees and costs of defense arising out of or 21 attributable to the negligent or wrongful acts of Consultant or its 22 subcontractors, employees or agents in the performance of services 23 under this Agreement, except to the extent arising from or caused by 24 the active negligence or willful misconduct of the City, its officers, 25 agents or employees. For such matters not involving injury or death, 26 the Consultant shall not be required to defend the City, but will pay 27 the costs which the City may incur in defending such matters, 28 including reasonable attorney fees, if the Consultant is alleged to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 have been negligent in the performance of the services under this Agreement. D. Insurance. Prior to commencing work hereunder, Consultant shall provide the City with proof of insurance providing and maintaining the coverages and endorsements set forth in the Insurance Schedule attached hereto as Exhibit 'W' and made a part hereof by reference. Said proof of insuranceshallalso provide that said policy or policies shall not be canceled or materially reduced in coverage without giving at least thirty (30) days prior written notice to the City. If Consultant fails to provide proof of insurance coverage as specified above, the City may, at its sole discretion, terminate this Agreement immediately. Consultant shall not permit a subcontractor or vendor to perform work on City premises unless and until a certificate of insurance is obtained showing that such subcontractor or vendor has worker's compensation coverage. If Consultant employs subcontractors as part of the services rendered, Consultant's protective coverage is required. Consultant may include all subcontractors as insureds under its own policy or shall furnish separate insurance for each subcontractor, meeting the requirements set forth herein. E. Limit of Liability. To the extent permitted by law the total liability of Consultant, its officers, directors, shareholders, employees and subconsultants to City for any and all claims arising out of this Agreement, including attorneys' fees, and whether caused by negligence, errors, omissions, strict liability, breach of contract or contribution, or indemnity claims based on third party claims, shall not exceed One Million Dollars ($1,000,000.00). F. Consequential Damages. In no event and under no - 10 1 circumstances shall Consultant be liable to City for any interest, loss 2 of anticipated revenues, earnings, profits, increased expense of 3 operation or construction, loss by reason of shutdown or non -operation 4 due to late completion or otherwise or for any other economic, 5 consequential, indirect or special damages. 6 G. Governing Law. The validity, interpretation and 7 performance of this Agreement shall be controlled and construed under 8 the laws of the State of California as enacted and in force at the 9 time this Agreement is fully executed. 10 H. Assignment and Subcontracting Prohibited. 11 Consultant may not assign any right or obligation pursuant to this 12 Agreement except with the express written consent of the City. Any 13 other attempted or purported assignment of any right or obligation 14 pursuant to this Agreement shall be void and of no effect. Consultant 15 may not subcontract under this Agreement, without the express written 16 consent of the City, except for the retention of a survey vendor. 17 I. Amendments. Except as may otherwise be 18 specifically provided herein, this Agreement may be modified or 19 amended only by a written document executed by both Consultant and the 20 City and approved as to form by the City Attorney. 21 H. Entire Agreement. This Agreement is the entire 22 agreement of the parties. Consultant represents that in entering into 23 this Agreement, it has not relied on any previous representations or 24 understandings of any king or nature. 25 J. Benefit of Agreement. This Agreement shall bind 26 and benefit the parties hereto and their heirs, successors, and 27 permitted assigns. 28 K. Forum Selection. Any action brought relating to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 this Agreement shall be brought and held exclusively in a State Court in the County of Los Angeles, California. L. Recitals. All recitals are incorporated by reference. M. Waiver. Any waiver at any time by either party of its rights with respect to a default under this Agreement, or with respect to any other matters arising in connection with this Agreement, shall not be deemed a waiver with respect to subsequent default or other matter. N. Attorney's Fees. In the event that it becomes necessary for either party to this Agreement to enforce any of the provisions of this Agreement, the parties agree that a court of competent jurisdiction may determine and fix reasonable attorney's fees to be paid to the successful litigant. 0. Force Majeure. Neither Party shall be considered in to be in default in any of its obligations under this Contract when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force" shall mean any cause beyond the control of the party affected, including, but not restricted to, flood, earthquake, storm, fire, lightening, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor material shortage, sabotage, federal, state, or municipal action, statute,, ordinance, or regulation, embargoes of the United States Government or any other government, which by exercise of due diligence such party could not reasonably have been expected to avoid and by exercise of due diligence has been unable to overcome. Either party rendered unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force, shall give written notice within five (5) ■ 12 - 1 Business Days of such fact to the other party and shall exercise due 2 diligence to remove such inability with all reasonable dispatch. 3 P. Information Provided by Others. City shall 4 provide to Consultant in a timely manner any information Consultant 5 indicates is needed to perform the services hereunder. Consultant may 6 rely on the accuracy of information provided by City and its 7 representatives. 8 Q. Opinions of Cost. Consultant does not control the 9 cost of labor, materials, equipment or services furnished by others, 10 nor does it control pricing factors used by others to accommodate 11 inflation, competitive bidding or market conditions. Consultant 12 estimates of operation expenses or construction costs represent its 13 best judgment as an experienced and qualified professional and are not 14 a guarantee of cost. This section does not apply to the cost of 15 Consultant performing the Scope of Services. 16 17 18 19 20 21 22 23 24 25 26 27 28 - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by and through their authorized officers on the date, month and year first written ,above. ATTEST: BRUCE V. MALKENHORST, City Clerk APPROVED AS TO FORM: EDUARDO OLIVO, City Attorney CITY OF VERNON By: LEONIS C. MALBURG, Mayor R w nvrTe rXir The signatures required of a. corporation are as follows: • First Signature - the chairman of the board, the president or any vice president; and • Second Signature - the corporate secretary, any assistant secretary, the chief financial officer or any assistant treasurer. If a person holds more than one office, e.g., vice president and secretary, that person can sign the agreement twice if both capacities are identified. - 14 - ft EXHIBIT "A& Proposal Telecommunications Consulting Services Prepared for: City of Vemon, Califomia October 3, 2002 Section Executive Summary ...............................................................................I ■ Project Understanding and Purpose ■ The R. W. Beck Team ■ The R. W. Beck Difference Scopeof Work........................................................................................2 ■ Task 1: Market Survey ■ Task 2: Technical Network Review ■ Task 3: Financial Pro Forma ■ Task 4: Implementation Plan Cost Information & Schedule................................................................3 ■ Pricing ■ Schedule Summary Company Overview and Expertise.......................................................4 ■ R. W. Beck, Inca— Firm Overview ■ Partner Communications, LLC — Overview ■ Relevant Project Experience ■ Project Team Organization ■ Project Team Biographies City's Standard Contract........................................................................5 © Copyright 2002, R. W. Beck, Inc., All Rights Reserved Table of Contents R. W. Beck Contact: ■ Wendy Warner Project Manager (303) 299-5345 wwarner@rwbeek.com ■ Project Understanding and Purpose The City of Vernon ("the City") owns, operates and maintains water, gas and power distribution lines to serve the unique infrastructure and service needs of its entirely industrial customer base. The City is now considering allocating a portion of the fiber optic backbone currently used for City and city utility functions to provide advanced telecommunications and Internet services to its industrial customers. These services would be offered by multiple private carriers on a revenue sharing basis with the City. To that end, the City has issued a Request for Information (RFI) for vendors to propose the design and implementation plan for this fiber network. As part of its overall decision -making process to enter into the broadband service line of business, the City is now requesting assistance in evaluating customer needs and demand for fiber-optic based services, reviewing the City's proposed technical solution (developed from the RFI process), developing a pro forma financial analysis and developing a marketing and operational implementation plan. R. W. Beck's proposed Scope of Work is designed to provide the City with sufficient marketing research, technical review and financial documentation to make sound decisions on how to proceed. In addition, this proposed work plan provides a "Go -to -Market" plan to assist the City in identifying the activities required for a successful launch and operation. The R. W. Beck Team For this project, R. W. Beck will commit a team of telecommunications professionals who have both worked in their fields in operating telephone and broadband companies and have provided assistance to municipal utilities to launch telecommunications businesses. R. W. Beck's alliance partner, Partner Communications, LLC is an operating Competitive Local Exchange Carrier (CLEC) on the East Coast and telecom operations consulting company that will add real -life operations and cost knowledge to the analysis. The Project Manager, Wendy Warner, has over 25 years of telecommunications experience, including the development of demand estimates resulting in successful financing of projects. The R. W. Beck Difference: The R. W. Beck team provides these distinct advantages to the City: T-\Telecom ProposalsNernon CA1,ProposaF3P1747-1-Summary.doc Section 1 EXECUTIVE SUMMARY The R. W. Beck team offers_ the City of Vernon a tailored Scope of Work hacked hY similar twperience and skilled telecommunications professionals. y EXECUTIVE SUMMARY ■ Hands-on telecommunications and broadband experience ■ Telecommunications financial analysis experience ■ In-depth understanding of the municipal environment. ■ Completion of over 50 municipal telecommunications projects ■ Independent and non -biased analysis Hands-on Telecommunications and Broadband Experience ■ Marketing: R. W. Beck's Team members have personally conducted market research, developed launch plans, negotiated partnerships and had P&L responsibilities for telecommunications and Internet services for such companies as Media One, U S West Communications (now Qwest) and enable, a joint venture between KN Energy and PacifiCorp. ■ Technical: Our team members have provided network design and implementation services for numerous carriers and enterprises, including CTC, Nynex and Vtel, and have been responsible for project management for the first major fiber - to -the curb development for U S West Communications. ■ Telecom Operations: R. W. Beck's alliance partner, Partner Communications, runs a CLEC in addition to assisting new telecommunications and broadband companies in setting up the operations of their business. Team members have set up Network Operations Centers, Call Centers and Customer Billing. They are particularly adept in recommending approaches and designs that work in the cost-conscious world of competitive telephony. ■ Telecommunications Financing: Team members have developed and presented market analysis and financials for purposes of gaining funding for several broadband systems. Telecommunications Financial Analysis Experience ■ R. W. Beck has provided financial pro forma services for over 20 proposed municipal telecommunications ventures. R. W. Beck provides analyses and recommendations with the rigor required for submission for both municipal decision - making and external financing. ■ R. W. Beck's approach to determining market demand has been tested and accepted by several major investment entities (Bank of America, GE Capital). Market demand is the highest risk factor in telecommunication financial analyses. In -Depth Understanding of the Municipal Environment ■ R. W. Beck has 60 years of experience in working with municipal utilities, municipalities, counties and local utilities. We understand the unique needs and challenges of the public 1-2 T:\Telecom Proposals\Vernon CA\ProposaMP1747-1-Summary.doc EXECUTIVE SUMMARY sector and can fully support the decision -making processes found in the municipal environment. ■ R. W. Beck has been at the forefront of devising innovative ways for municipal utilities to implement and finance their capital requirements (e.g., public power agencies). Over 50 Munidpal Telecommunications Projects ■ R. W. Beck has completed over 50 telecommunications projects for municipalities and municipal utilities, including over 20 feasibility studies of the type requested by the City. We bring to the City the experience of utilities across the nation who are offering high-speed Internet, cable television, Internet services and telephony to their constituents, as well as those providing wholesale broadband services to encourage competitive choice in their communities. We are intimately familiar with the unique challenges that municipal utilities have in deploying telecommunications. ■ R. W. Beck has assisted many utilities with feasibility projects similar to the City's request. Our references for evaluation of wholesale (open access) to telecommunications projects include: ■ R. W. Beck provided Grant County, Washington with the market research and financial analysis (pro forma) that led to its seminal FTTH system. ■ R. W. Beck's strategic planning, financial analysis and probabilistic pro forma gave Eugene, Oregon the confidence to make fact -based decisions for rolling out its fiber -based, Gigabit Ethernet, open access network. ■ R. W. Beck provided the Lafayette Utilities System with strategic planning, partnership analysis, market research, and pro forma and pricing models. Today, Lafayette is offering wholesale bandwidth on its system and R. W. Beck is directly assisting LUS in recruiting customers. Independent and Non -Biased Analysis ■ R. W. Beck has an excellent reputation for independent and non -biased analysis, which gives the City confidence in making the right choices for telecommunications participation. ■ R. W. Beck has recommended deployment when financial and market analyses have warranted but has also recommended project termination to clients where there was insufficient market and financial viability. R. W. Beck has also recommended a wholesale approach where market factors indicated the inadvisability of a retail venture. R. W. Beck, Inc. 1.3 Scope of Work - City of Vernon Telecommunications Consulting Services Task 1: Market Survey This task consists of primary market research via both telephone and personal interviews with business customers. The objective of the proposed survey is to assess market potential for voice, data and Internet services provided by independent service providers over the City owned and operated open -access network. The survey will cover the following topics: ■ Current usage of telecommunication services (Internet, data and voice). ■ Satisfaction with current telecommunications products and providers. ■ Likelihood to buy telecommunication services (High-speed Internet and data, Voice over IP, switched voice) from a competitive provider at different price levels. ■ Criteria for selection of a telecommunications provider and provider preferences. ■ Attitudes toward the City as a provider of an open access network or, alternatively, as a provider of retail services. Survey Method R. W. Beck proposes to design the study, develop the survey instruments, recruit and manage the survey vendor, analyze the results and produce a final report and (optional) presentation. The survey will be conducted via telephone interviews of 16 to 17 minutes in length. Two hundred (200) interviews will be completed with general business customers, producing results with a sampling error of +/- 6.7% at the 95% confidence level. In addition, R. W. Beck will conduct personal interviews with 10 to 12 large commercial or industrial customers who are likely to have high telephony requirements. MARKET: VERNON, CALIFORNIA INTERVIEWS AND SAMPLING Customer Group # of Sample Frame Interviews General Business Customers 200 Random sample from customer rolls Large Commercial/ 10-12 Selection to be agreed upon Industrial Customers with the City Section 2 SCOPE OF WORK Our Scope of Work is designed to provide the 00, with sufficient marketing research, technology review and financial documentation,. to make sound decisions. Additionallt,, our implement- tation plan will identify the activities required for a successful launch and operation. T-',Telecom Proposals\Vernon CA\Proposal\3P1747-2 Scope_doc 2-1 SCOPE OF WORK Questionnaire R. W. Beck will develop the survey instruments. City management will have the opportunity to provide input to, and approve the questionnaire and interview guide to ensure all information needs are met. The research vendor will be responsible for conducting the telephone interviews and for production of the statistical tables for analysis. Statistical analyses will include frequencies and cross -tabulations. Sample Selection The City will provide a list of its business customers with telephone numbers to R. W. Beck in electronic format. The list will be sampled by the research field operation to conduct interviews with a random sample of City businesses. Tabulations Frequency tabulations (number and percentages) for all questions will be performed. In addition, cross -tabulations of all questions will be provided for up to 6 firmagraphic or attitudinal variables that will be used to analyze the responses to the remainder of the survey. Analysis of Results The R. W. Beck Telecommunications Marketing Team will evaluate survey results. This will include analysis of customer use and satisfaction with currently available telecommunications services, competitive positioning, purchase intent from service providers using a City network, and new product offering penetration estimates adjusted for survey effect. Deliverables The following deliverables will result from the project: ■ Survey questionnaire ■ Interview guide ■ Final Report, summarizing the analysis and conclusions (five copies) ■ Detailed Findings Appendix (statistical tables - two copies) Survey Schedule Our market research is designed to give the City initial feedback within six weeks and a research report in eight weeks. The following are approximate timeframes for the work described above. This schedule is particularly contingent upon obtaining timely project support from the City including approvals of the questionnaire, customer data for sample generation and City staff implementation of the large commercial customer interview scheduling. Please note that there are several concurrent tasks. It is highly important to begin interviewing by early 2-2 TATelecom Proposals\Vernon CA\ProposaMP1747-2 Scope.doc SCOPE OF WORK November as response rates are more difficult to achieve once the holiday period begins in late November. RESEARCH SCHEDULE Weeks to Date Completed Description (if Project Authorized by Complete' October 14, 2002) Commercial Survey Obtain sample 1 October 21 Questionnaires developed and approved 2 October 28 Field survey, Data tabulation 3 November 18 Topline results 1 November 25 Large Industrial Interviews Interview guide developed and approved 2 October 28 Large Industrial interviews completed 3 November 18 Research Report 3 December 16 + Time frame is approximate and depends on timely client response. Note that not all time frames are sequential from start date; some follow other tasks. Task 2: Network Technical Review The purpose of this task is to provide a review and feasibility assessment opinion of broadband technologies that have been identified as a result of the RFI process initiated with a response date of August 29`h, 2002 by the City. Through the survey (Task 1 above) and RFI the City will have identified the service choices and up to three alternatives for architecture, bandwidth levels, potential equipment requirements and cost. The Beck/Partner Team will review these alternatives utilizing its experience and knowledge in operating a modern telephone and data system employing the current state of the art equipment and technology. Deliverable and Schedule A Report will be developed for the City based upon the Beck/Partner review. The report will contain an opinion on the selected technologies, their technical requirements and limitations, and an overall opinion on the price, services and feasibility of the plans provided by the City. If there are areas where Beck/Partner believes that better economics, reliability or more services may be provided, suggested options will be offered and a guide to incorporating possible suggestions will be presented. The report will provide the City with a template to utilize when, selecting one or more potential methods of broadband access and R. W. Beck, Inc. 2_3 SCOPE OF WORK determining whether the speed, technical limitations and average cost will suit the City of Vernon's requirements and physical limitations. This Network Technology Review can be completed within two weeks of receipt of the technology design alternatives from the City. Task 3: Financial Pro Forma In this task, R. W. Beck will integrate the market research findings and capital costs provided by the RFI process and reviewed by R. W. Beck in Task 2 into a financial analysis to produce a ten-year pro forma (financial forecast) that includes a Cash Flow Statement and Income Statement. This includes translation of the market research findings into wholesale demand levels over the planning period, taking into consideration anticipated growth of business requirements for higher speed services. Our process is designed to provide the City with the right financial information to make fact -based decisions on whether to move forward with this venture, including substantive insights into these key questions: ■ When will the wholesale (open access) business break even? ■ How much will the City need to initially invest to make this business work? ■ What is the City's return on investment over ten years? ■ What is the forecasted debt service coverage ratio (DSC)? ■ How much financial risk is associated with serving the wholesale market? ■ How much revenue would be provided to the City's General Fund? ■ What are forecasted revenues, prices, capital and expenses? R. W. Beck's financial analyses are specifically tailored to assess a municipality's entry into telecommunications. Cases where we have specifically analyzed municipal wholesale telecommunications include: ■ Los Angeles Basin — Completed extensive dark and lit fiber market research and financial forecasts for providing wholesale services throughout the Los Angeles basin for an alternative provider. This analysis included the identification of over 100 candidate wholesale customers in the greater Los Angeles area. ■ Eugene, Oregon (EWER) — Completed market research and financial forecasts for providing retail (universal service) and wholesale telecommunications services. This analysis gave EWEB the confidence to move slowly into providing wholesale services. This was the right solution for its unique business environment. ■ Lafayette, Louisiana (LUS) — Completed market research and financial forecasts for public sector, retail, wholesale and 24 T.\Telecom Proposals\Vernon CA\Proposal\3P1747-2 Scope.doc SCOPE OF WORK partnership scenarios. Based on our analysis, LUS is currently offering open access, wholesale services to its community. ■ Grant County, Oregon — Completed market research and financial forecasts for provisioning telecommunications services to the public sector, retail and wholesale markets. Today, Grant County is widely touted as the seminal case of fiber to the home (FTTH). While not included in the City's requested scope of work, it should be noted that R. W. Beck's financial analyses have been previously used by the investment community to support municipal telecommunications projects. Deliverable and Schedule R. W. Beck's proposed pro forma will include a cash flow for each year of a 10-year planning horizon. Key line items will include: ■ Number of customers by service by year ■ Price by service by year ■ Gross revenue by service ■ Capital costs and debt service ■ Operating costs ■ Net income (NI) ■ Net present value of net income (NPV of NI) ■ Return on investment (ROI) ■ Debt service coverage ratio (DSC) ■ Financial break even The Financial Analysis will be completed within three weeks after the receipt of the results of Tasks l and 2. Task 4: Implementation Plan An Implementation or "Go -to -Market" Plan details the action steps required for your telecommunications organization to transition to fully launch your telecommunications business. It provides a checklist and work plan for the tasks necessary to run the wholesale telecommunications business and will include project goals and objectives, a market positioning statement, staffing levels and roles, and suggested strategies and tactics for products, pricing, branding, ISP account management, end -user handling, billing, customer communication, advertising and promotion. This tactical plan is the "play book" of activities to be performed for product launch. This Implementation Plan is a collaborative effort with those persons who will implement the plan. While R. W. Beck will provide the R. W. Beck, Inc. 2-5 SCOPE OF WORK leadership, formats and industry experience, the implementers will play key roles in developing content to ensure complete understanding and buy -in of the plan. Deliverable and Schedule The deliverable is a written plan detailing the strategies and tasks for launching the wholesale telecommunications business. This will be provided two weeks following the completion of the market research. 2-6 TATelecom Proposals\Vernon CA\ProposaMP1747-2 Scope.doc Pricing The fixed fee associated with prosecuting the Scope of Services outlined in Section 2 of this proposal is outlined below. Proposal Cost Summary Description Fixed Fee Task 1: Market Survey $ 33,300 Task 2: Network Technical Review $ 8,250 Task 3: Financial Pro Forma $11,000 Task 4: Implementation Plan 9,950 Total $ 62,500 These costs include all labor, expenses and the subcontractor expenses for the interviewing firm. Schedule Summary This project can be completed in approximately twelve weeks. Field surveys must begin by early October in order to complete before the holiday period. The final report may be delayed by up to one week due to the end -of -year holiday schedule. City of Vernon Telecommunications Proiect Task Weeks 1 2 3 4 5 6 7 8 9 10 11 12 Kickoff Conference Call Task 1 - Market Survey e Task 1 - Personal Interviews e Task 1 - Report Task 2 - Network Technical Review Task 3 - Financial Pro Forma I Task 4 - Implementation Plan Q = Client Review of questionnaire or interview guide, Sample due from client T = Topline Report R = Task Report T:ATelecom Proposals\Vernon CA\Proposal\3P 1747-3-Cost & Schedule.doc Section 3 COST INFORMATION & SCHEDULE 3-1 W R. W. Beck, Inc. — Firm Overview R. W. Beck specifically focuses its telecommunications efforts on the needs of municipalities and counties. We understand the development of telecommunications services, from market assessment and feasibility, through vendor solicitation, evaluation and, finally, implementation. R. W. Beck evaluates existing telecommunications systems to see where the integration of existing and new technologies makes sense and does a thorough and projectable evaluation of the telecommunications needs and demand levels of study area constituents. We provide leadership to public entities in the identification and formation of alliances and business arrangements with private enterprises to achieve telecommunications infrastructure and service goals. R. W. Beck was founded in 1942 to serve the needs of municipal utilities and non-profit entities across the United States. Since that time, the firm has specialized in the operation, planning, financial analyses, administrative procedures, design, and other matters related to telecommunications, electric, water, gas, wastewater, and solid waste infrastructures and services. The firm employs approximately 500 management consultants, engineers, accountants, economists, scientists, marketing specialists, organization and methods analysts, computer system specialists, and other professionals. Partner Communications, LLC Firm Overview Partner Communications is a full service telecommunications company providing organizations with consulting and total communications solutions for their voice, data and Internet needs. Founded in 1996, Partner is committed to serving as a one -stop telecommunications provider and offers a comprehensive package of telecom, data and web consultative services for municipalities, business and service providers. The firms consulting expertise includes telecom management, planning, expense management, call center consulting and operational support. R. W. Beck and Partner Communications have a strategic alliance for the provision of telecommunications consulting services to municipal clients. Relevant Project Experience The following three project profiles are similar in scope to the services requested in this proposal and were completed within the last two years. Section 4 COMPANY OVERVIEW AND EXPERTISE R. IV. Beck is widely recognized as one of the nation's leadin; consulting management, engineering firms. We combine our e.vtensive telecommunications experience and skill with Partner Communications, LLC to meet the diverse telecommunications needs of' our clients. T:ATelecom ProposalsNernon CATroposak3P 1747-4-Firm.doc 4- COMPANY OVERVIEW AND EXPERTISE Los Angeles Basin Wholesale Telecommunications Analysis Confidential Client R. W. Beck conducted an evaluation of the economic viability of providing bandwidth services throughout the Los Angeles Basin. Such fiber facilities have the opportunity of addressing the short haul, high bandwidth needs of service providers seeking to reach their facility points, ILEC central offices or key customers. This project included the identification and evaluation of over 100 wholesale providers operating in the Los Angeles area. Telecommunications Surrey, Market Research and Alliance Evaluation Eugene Water & Electric Board. Eugene, Oregon R. W. Beck provided telecommunications consulting services to Eugene Water & Electric Board (EWEB) that focused on market research and business planning. Market research included evaluating potential customers' satisfaction with current telecommunications services and willingness to obtain services from EWEB or an EWEB public/private alliance. R. W. Beck performed residential and commercial customer telephone interviews and quantified the market based on responses. Phases two and three evaluated Gigabit Ethernet services and the proposed Fiber Optic Group (FOG). FOG is an entity formed between EWEB and the Springfield Utility Board, to provide fiber optic capabilities to these two communities that would address the demand identified during the research portion of the project. R. W. Beck continues to provide ongoing support with EWEB's activities focused on moving forward with the development of telecommunications services. Telecommunications Market Survey and Implementation Assessment Grant County Public Utility District, Washington R. W. Beck has provided Grant County PUD with ongoing consulting services for its potential provision of broadband telecommunications across the county. In the first phase, R. W. Beck provided a review of the current telecommunications market and reported on the various trends and challenges in the industry, including recent legislation concerning the telecommunications industry, technical requirements, changes in product mix and barriers to market entry. A survey of the District's telecommunications system was prepared, and recommendations were made regarding the possible expansion of the current system to one that offered additional utility monitoring capabilities, such as demand -side management programs and interactive television. In the next phase, R. W. Beck developed a high-level financial pro forma and plan, which included conceptual design and operational requirements, potential revenue sources and estimated capital and installation costs. R. W. Beck conducted in-depth interviews with public 4-2 TATelecom Proposals\Vernon CA\ProposaMP17474-Firm.doc COMPANY OVERVIEW sectors and industrial accounts to determine viability of these segments AND EXPERTISE for initial entry. Grant County is now examining the potential for mass - market deployment of the identified services. Telecommunications Strategic Planning, Pro Forma, Market Research and Partnership Analysis Lafayette Utilities System, Louisiana R. W. Beck assisted Lafayette Utilities System (LUS) in developing a telecommunications strategic plan. LUS' desire is to maximize new sources of revenue under existing regulatory constraints and use its excess fiber assets after deployment of internal systems. R. W. Beck conducted an initial feasibility screening, helping LUS to identify potential revenues from Internet, data, cable television and telephony from various market segments. R. W. Beck also performed primary market research, developed market penetration forecasts and a pro forma; investigated potential alliances with traditional telecommunications services providers; and examined LUS' internal requirements to support proposed services. R. W. Beck also analyzed potential telecommunications partners on behalf of LUS. This effort began with our development of a Request for Interest to solicit interest from numerous candidate entities. Candidates' responses were then analyzed to create a short-list of reasonable candidates. Face-to-face interviews were then conducted by LUS and R. W. Beck to establish a recommendation for further action. R. W. Beck is also providing ongoing consulting and advice to the LUS management team regarding definition and enhancement of the utility's image in the marketplace in preparation for increased competition. Specific activities have included review and comment on the marketing and strategic plans; input into the market research effort; development of a common understanding of the utility's desired position in consumers' minds; and design of marketing strategies, including brand identity. Today, LUS is providing high-speed bandwidth services to its wholesale market. Additional Telecommunications Projects In addition to the projects above, R. W. Beck has performed the following telecommunications work (partial list, most recent first): ■ Telecom Feasibility & Business plan for Broadband Communications (for multiple islands and communities) Orcas Power and Light Cooperative, Washington (study in progress) ■ Fiber Optic Equipment Replacement Project — Vero Beach Municipal Utilities, Florida ■ Telecommunications Feasibility Study — Ashland, Oregon R. W. Beck, Inc. 4-3 0 . Y COMPANY OVERVIEW AND EXPERTISE ■ Telecommunications Feasibility Study — Public Utilities Board of Brownsville, Brownsville, Texas ■ Broadband Network Market Assessment — City Public Service of San Antonio, Texas ■ Telecommunications Feasibility Study — Elberton Water and Light, Elberton, Georgia ■ Telecommunications Business Plan — Groton Utilities, Connecticut ■ Telecommunications Business Assessment — Hingham Municipal Lighting Plant, Massachusetts ■ Telecommunications Design, Analysis and Partner Brokering — North Attleborough Electric Department, Massachusetts ■ Telecommunications Options Analysis - Taunton Municipal Light Plant, Massachusetts ■ Telecommunications Strategic Plan — Kissimmee Utility Authority, Florida ■ Communications Needs Assessment — Municipal Electric Authority of Georgia ■ Communications Risk -Benefit Analysis — Piedmont Municipal Power Agency, South Carolina Project Team Organization For this project, R. W. Beck will commit a team of telecommunications professionals who have both worked in their fields in operating telephone and broadband companies and have provided assistance to municipal utilities to launch telecommunications businesses. Our proposed Project Manager, Wendy Warner, has more than 25 years of telecommunications marketing experience, specializing in opportunity analyses and demand estimates for new broadband ventures. Her background includes wholesale (open access) services and retail telecommunications, broadband Internet and subscription (cable) television businesses. R. W. Beck's alliance partner, Partner Communications, LLC is an operating CLEC and telecom operations consulting company that will add real -life operations and cost knowledge to the analysis. 44 TATelecom Proposals\Vernon CA\Proposal\3PI7474-Firm.doc COMPANY OVERVIEW Project Team Biographies AND EXPERTISE Wendy T. Warner University of Colorado: B.S. in Business Administration, M.S. in Marketing Ms. Warner, Telecommunications and Marketing Consultant, joined R. W. Beck in 1997 from the telecommunications industry. Her areas of specialization include competitive market positioning, market -driven strategies and plans, marketing research, quantifying market demand, product development, Go -To -Market (launch) plans, and partnering and alliances. Ms. Warner has performed marketing and strategy consulting services for companies investing in or providing voice telecommunications, data services, cable television, fixed broadband wireless, Internet services and Internet hosting. Ms. Warner has completed telecommunications studies for more than 20 counties, municipalities and municipal utilities; examples include: Eugene Water & Electric Board (EWEB), Eugene, Oregon ■ Designed and supervised quantitative market research study of EWEB's business and residential customers as part of a telecommunication feasibility study and in preparation a for citizen vote on the project. ■ Designed and supervised a mapping project to identify and illustrate proximity of high potential broadband customers to existing fiber and to identify potentially profitable build - outs. Grant County PUD, Grant County, Washington ■ Designed, supervised and analyzed personal interviews with representative target telecommunications customers across a wide spectrum of industries. ■ Based on market research, developed probable penetration rates of telecommunications services based for input into financial analysis. Florida Municipal Power Agency ■ Project Manager for market, competitive, technical and financial studies encompassing 27 cities and communities. ■ Developed telecommunications needs analyses and product demand for cities varying widely in demographics, geographies and telephony environment. R. W. Beck, Inc. 4-5 COMPANY OVERVIEW AND EXPERTISE Steven F. Brodsky, P.E. University of Illinois: B.S. Electrical Engineering Carnegie-Mellon University: M.S. Electrical Engineering Colorado State University: M.B.A. Mr. Brodsky assists with a wide range of telecommunications and utility - related projects, including business case development, rate studies, public/private partnerships, and financial analyses. The following projects illustrate Mr. Brodsky's experience and commitment in providing the public sector with help in charting its course in telecommunications. Mr. Brodsky is also a member of the IEEE Communications Society and is a registered Professional Engineer. Eugene Water and Electric Board, Eugene, Oregon ■ Conducted telecommunications market research and financial forecasts (pro forma) for Eugene, Oregon's fiber based retail and wholesale Internet and Cable Television businesses. Assisted Client in evaluation of a potential public/private partnership for provision of advanced telecommunications services. Lafayette Utilities System and Lafayette Economic Development Authority ■ Analyzed the implementation of telecommunication services that focused on marketing, engineering, legal/regulatory, construction and strategic planning for Lafayette Louisiana. Assisted the Client in identifying and negotiating with more than 10 potential private enterprise partners or participants in an open -architecture network Grant County Public Utilities District, Grant County, Washington ■ Created financial forecasts (pro forma) for Grant Count's fiber to the home, wholesale telecommunications business. City Public Service, City of San Antonio, Texas ■ Conducted market research on business and public sector telecommunications customers in San Antonio, Texas. Delta -Montrose Electric Association, Montrose, Colorado ■ Conducted financial forecasts (pro forma) and reviewed existing plans for entry into new telecommunications businesses for Delta -Montrose, Colorado and REANET. Analysis included Internet, local voice, long-distance voice, cable television and data Florida Municipal Power Agency ■ Conducted financial forecasts (pro forma) for 13 municipalities in Florida (FMPA) and the entire Agency for its entry into new telecommunications businesses. The scope 4-6 TATelecom Proposals\Vernon CA\Proposal\3P1747-4-Firm.doc z r COMPANY OVERVIEW of such analysis included Internet, local voice, long-distance AND EXPERTISE voice, cable television and data Rebecca Shiflea Colorado State University: B.S. in Psychology University of Colorado: M.B.A. in Marketing Ms. Shiflea is the Manager of Market Research at R. W. Beck. Her background includes marketing research, marketing, competitive assessment and project management, and participation in a wide range of utility and telecommunications -related projects. She has 15 years of experience managing numerous quantitative and qualitative research projects relating to product and service offerings, new product testing, customer satisfaction and loyalty research, and advertising awareness. She has conducted telecommunications needs and demand studies for more than 20 communities and counties. Examples of recent projects include: EWEB, Eugene, Oregon ■ Designed survey instruments to gather market research information from key customers to determine their high- speed telecommunications needs Confidential Client in Southern California ■ Designed survey instrument and conducted face-to-face interviews with service providers to determine current and future plans and interest in a new open access network. FMPA, Florida ■ Designed research study and conducted market research to ascertain business and residential customers' telecommunications needs and their propensity to purchase voice and data services from the municipal utility across 11 separate markets ■ Participated in the competitive assessment of local and national telecommunication vendors ■ Outcome: Market research served as basis for recommendations on decisions to move forward or halt activity Ms. Shiflea will supervise a contracted market research firm to conduct telephone interviews. R. W. Beck, Inc. 4-7 µ COMPANY OVERVIEW AND EXPERTISE Michael L. Feld Hampshire College Amherst Mr. Feld is Chief Technology Officer of Partner Communications. Prior to joining Partner he was founder and President of Layer -Eight, Inc. His company provided Telecommunications and IT consulting and engineering support of carrier, enterprise and industry manufacturers. He was also the founder and president of fc.com, Inc, a profitable dot.com that specialized in remote network management, network design and implementation for carriers and enterprises. fc.com implemented a number of network infrastructures, network operation centers (NOCs), sales support systems and management infrastructures for carrier customers such as CTC, Nynex/BA, Vtel (Vermont Telephone), and Nitel (Nigerian Phone System). fc.com was sold to CTC, one of the largest Northeast CLECs, and Mr. Feld as VP of professional services was charged with the creation of a professional services group, the creation of remotely delivered services, and sales/operational training/support as required for data integration and professional services delivered to the Telco customer base. His project -relevant experience includes: ■ CTC —Created the first full remote (Voice/Data over Frame) "virtual" NOC for CTC as it developed the CLEC plan, later executed. This NOC handled all aspects of customer support on the resold data and voice platforms and integrated with a number of carrier OSS's. The "virtual" nature of the NOC consisted of fc.com technicians and engineers working from home locations all over the Northeast and functioning as a call /carrier dispatch center. Required applications (ACD, Ticketing, EDI w/ OSS and others) were developed and deployed resulting in an efficient, low -overhead operation that allowed CTC to quickly become an operational CLEC. This novel approach to NOC functions formed the model for further specialized work with other carriers. ■ fc.com — Developed one of the first "down to the desktop" NOC-driven service offerings. With little or no IT structure, fc.com provided customers residual -based services running the gamut from traditional helpdesk to total remote network operations. ■ Nynex/Bell Atlantic — Provided professional services to large accounts in NynexBell's NSM division. The services consisted of complicated customer -carrier projects involving Voice/Data/Video integration and MC (mission critical) redundancy. Customers included: Mass Mutual, Spaulding, Big Y Foods, Fleet Bank, Massachusetts Registry of Motor Vehicles, Bay Networks (now Nortel), Sapient, IBM, AT&T, Sprint, Shawmut Bank (now Fleet), and MCI. Projects were varied and included: large-scale telecommuter 4-8 TATelecom Proposals\Vernon CA\ProposalUP1747-4-Firm.doc a COMPANY OVERVIEW pilots (500+users at Mass Mutual), Physical Frame/ATM AND EXPERTISE infrastructure design/deployment for MCI (option 1 network under contract with Bay), Complete international build of infrastructure for Sapient (US, UK, Australia), as well as large internal cable plant, PBX, LAN/WAN operations and management. ■ Vtel (Vermont Telephone, ILEC w/22,000 lines) — Designed and installed facility -based ISP business. ■ CTC fiber deployment (8800 route miles) — Assisted in the turn up of a Cisco based-ATM/IP network, including class 4/5 services (soft switch). Tom Benedict Excelsior College, Albany, NY: B.S. in Business Mr. Benedict, a consultant with Partner, is the former Executive Director of ConnectConnecticut, Inc. In that capacity, he directed the public information and grass -roots outreach campaigns for the organization that is part of ConnectUSA. The primary issues addressed are changes in the telecommunications landscape for residence and business occurring due to legislative or regulatory mandates. As Vice President, System Integration, Asset Channels, Inc., Mr. Benedict was responsible for all permitting, land acquisition, franchising, municipal and state negotiations and utility registrations for a telecommunications company installing a high -capacity, undersea fiber optic cable system from Boston to Miami. Mr. Benedict was a Commissioner with the State of Connecticut, Department of Public Utility Control (DPUC), responsible, with four other Commissioners, for oversight of all regulated public utilities in the State of Connecticut (Electric, Telecommunications, CATV, Natural Gas and Water). Operations, rates, customer service and competitive entry are within the charge of the DPUC. He served as the lead Commissioner on the series of dockets that deregulated the telephone industry in Connecticut and began competition in the local telephone service market and cable television industry. He introduced significant new automation and information systems at the DPUC to better utilize available information sources from regulated company filings and hearings with a simultaneous decrease in DPUC personnel assets. R. W. Beck, Inc. 4-9 TATelecom Proposals\Vernon CA\Proposal\3P1747-5-Con tract. doc Section 5 CITY'S STANDARD CONTRACT 5-1 EXHIBIT f1 y t r 1 EXHIBIT B 2 INSURANCE SCHEDULE (CONSULTANT) 3 Consultant shall provide proof of insurance, including a standard certificate of insurance, in at least the following amounts and coverage (combined single limit permitted): 4 I Coverage and Limits 5 Bodily Injury Property Damage 6 Hazards Each Person Each Accident Each Accident 7 Automobile Liability Owned Automobiles $ 500,000 $1,000,000 $ 500,000 8 Hired Automobiles $ 500,000 $1,000,000 $ 500,000 9 Non -Owned Automobiles $ 500,000 $1,000,000 $ 500,000 Workers' Compensation $ Statutory 10 Employers' Liability $1,000,000 per employer 11 12 II. General and Professional Liability General Liability $1,000,000 $2,000,000 $1,000,000 13 Premises Operations $1,000,000 $2,000,000 $1,000,000 14 Elevators (if applicable) $1,000,000 $2,000,000 $1,000,000 Independent Contractors $1,000,000 $2,000,000 $1,000,000 15 Products - Completed Operations $1,000,000 $2,000,000 $1,000,000 Contract Liability $1,000,000 $2,000,000 $1,000,000 16 Professional Liability $1,000,000 $1,000,000 $1,000,000 17 a. The general liability policy shall contain the following special endorsements which shall be noted on or 18 attached to the standard certificate of insurance: 19 1. An endorsement naming the City of Vernon, its officers, and employees as additional insureds under 20 the policy. 2. An endorsement providing the City of Vernon thirty (30) days notice of cancellation or material 21 reduction of coverage. 22 3. An endorsement providing coverage for all operations under this Agreement. 4. Such other endorsement as may be required by addendum hereto. 23 b. In addition to the standard certificate of insurance, proof of general and professional liability coverage 24 shall be furnished in the form checked below. Only certification of the following proofs will be 25 accepted: 26 X For each policy, a notarized letter from the underwriter or carrier certifying that the coverage and 27 statements in the standard certificate of insurance (attached thereto) are true and correct and that the signator is an officer authorized to so certify. 28 A copy of each policy certified by an officer of the underwriter or carrier and notarized. EXHIBIT "B" SUPPORTING DOCUMENTS s I c i l 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AGREEMENT FOR CONSULTING SERVICES THIS AGREEMENT is made, entered into and executed in duplicate originals, either copy of which may be considered and used as the original hereof for all purposes, as of this P/_`'��day of October, 2002, in the City of Vernon, County of Los Angeles, California, BY AND BETWEEN THE CITY OF VERNON, a municipal corporation, (hereinafter referred to as "City") 4305 Santa Fe Avenue Vernon, CA 90058-0805 AND R. W. BECK, INC., a Washington Corporation, (hereinafter referred to as "Consultant") 1125 Seventeenth St., Ste. 1900 Denver, CO 80202-2615 RECITALS WHEREAS, the City has installed a fiber optic backbone ring that traverses the existing City right-of-way; and WHEREAS, the fiber optic ring consists of 96 strands of fiber, fifty percent of which is reserved for the City's use; and WHEREAS, the fiber optic ring is used to connect various City operations; and WHEREAS, the City is interested in the possibility of developing the other half of the fiber optic ring for use by the City's inhabitants; and WHEREAS, the City sought proposals from qualified firms to perform an evaluation of market potential, a feasibility assessment opinion of broadband technologies, and a financial pro forma analysis; and - WHEREAS, Consultant submitted a proposal to the City, dated 1 October 3, 2002, titled "Proposal - Telecommunications Consulting 2 Services" (hereinafter referred to as the "Proposal"), a copy of which 3 is attached hereto as Exhibit "A" and made a part hereof by reference, 4 which includes a description of the proposed services and the costs of 5 said services; and 6 WHEREAS, Consultant represents that it is qualified to 7 perform such services under this Agreement for Consulting Services 8 (hereinafter "Agreement"); and 9 WHEREAS, the City desires to engage the Consultant for the 10 services hereinafter described. .11 NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET 12 FORTH HEREIN: 13 1. SCOPE OF SERVICES. 14 Consultant shall perform its services under the general 15 supervision of the City Administrator and the Director of Community 16 Services and Consultant's scope of services shall be assigned by the 17 City Administrator and the Director of Community Services and include: 18 Task 1 - Market Survey; Task 2 - Technical Network Review; Task 3 19 Financial Pro Forma; and Task 4 - Implementation Plan, as identified in', 20 Exhibit "A." It is understood and agreed that in the event of a 21 conflict between the Proposal and this Agreement, the terms of this 22 Agreement shall prevail. 23 2. PROGRESS REPORTS. 24 Consultant shall submit progress reports twice a month until 25 the work hereunder is completed. These progress reports will be sent 26 via e-mail with a follow-up conference call. Consultant shall meet 27 with City staff, upon City's request, or as needed, in order to 28 provide reports or information concerning the services being performed - 2 - r 1 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 by Consultant under this Agreement. Any other face-to-face meetings not specified in the Scope of Services will be compensated on a time and materials basis pursuant to Section 6 of the Agreement. 3. TIME OF PERFORMANCE. Consultant's services shall commence upon the signing of the Agreement by both parties and shall end when Consultant has completed the work on the items according to the work schedule contained in Consultant's Proposal, unless the Agreement is otherwise terminated according to Section 9 of this Agreement or extended upon the written agreement of both parties to this Agreement. Completion of the services to be performed by Consultant is expected to be no later than February 28, 2003. 4. COMPENSATION. A. Consulting Costs. 1. The City shall pay Consultant a total fixed - price of not to exceed Sixty -Two Thousand Five Hundred Dollars and No Cents ($62,500.00) for the services performed under this Agreement. B. Other Expenses. Any other expenses not identified in the Agreement may only be billed if advance written approval has been obtained from the City Administrator. 5. METHOD OF PAYMENT. Consultant shall submit within thirty (30) days after the last day of any month in which services have been performed or costs incurred hereunder an invoice to the City for payment. Invoices shall contain an itemization of services rendered, directly related job expenses and subcontract charges incurred by Consultant for which compensation is due, and an estimate of the percentage completed for each milestone or task. Consultant shall be responsible for paying any - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 isubcontractors used in the performance of this Agreement. Sub- contractors shall not bill the City directly. Payment of the invoice shall be made after acceptance and approval by the City within thirty (30) days of receipt. The City's approval of the invoice shall not be unreasonably withheld. 6. CHANGES AND EXTRA SERVICES. The City reserves the right to request changes in the services to be performed by Consultant. All such changes shall be incorporated in written change orders executed by the City and Consultant that shall specify the changes ordered and the parties shall mutually negotiate an adjustment of compensation and completion time if required thereof. Any services added to the scope of this Agreement by a change order shall be executed under all applicable conditions of this Agreement. No claim for additional compensation for services or extension of time shall be recognized unless contained in a duly executed change order. If Consultant is delayed in performing its services under the Force Majeure provisions of this Agreement, then the Agreement may be equitably adjusted, if necessary, to compensate Consultant for any additional costs due to the delay. 7. STANDARD OF CARE. Consultant will perform services under this Agreement with the degree of skill and diligence normally practiced by professional engineers or consultants performing the same or similar services. 8. PRODUCTS OF CONSULTING. All reports, plans, data, studies, maps, drawings, models, photographs, documents and other writings prepared by and for - 4 - 1 Consultant, its officers, employees, agents and subcontractors in the 2 course of implementing this Agreement, with the exception of working 3 notes, internal documents and Confidential Information provided by 4 businesses located in City, shall be considered the property of City. 5 Consultant shall deliver such documents and materials to the City as 6 they are generated; however, Consultant may take and retain copies of 7 said documents and materials that are not Confidential Information, as 8 desired. 9 All reports, information, data and exhibits prepared or 10 assembled by Consultant in connection with the performance of its 11 services pursuant to this Agreement are confidential until released by 12 the City to the public and Consultant agrees that such documents shall 13 not be available to any individual or organization without the written 14 consent of the City prior to such release. 15 No reports, maps, or other documents produced in whole or in 16 part under this Agreement, with the exception of the survey forms, 17 shall be the subject of an application for copyright by or on behalf of 18 Consultant. 19 Any reuse of Consultant prepared documents, other than for 20 the specific purpose intended hereunder, will be at the City's sole 21 risk and without liability or legal exposure to Consultant or its 22 subcontractor. City shall indemnify and hold harmless Consultant from 23 all claims, damages, losses and expenses including attorney's fees 24 arising or resulting from such reuse. 25 9. TERMINATION. 26 This Agreement may be terminated by the City without cause 27 on thirty (30) days written notice to Consultant. Consultant shall be 28 entitled to the compensation earned by it prior to the date of the 61 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19' 20 21 22 23 24 25 26 27 28 (termination notice, computed pro rata up to and including that date, plus compensation for work performed during the thirty (30),day notice period and authorized in the termination notice. Consultant may terminate this Agreement on ten (10) days written notice to the City if the City fails to pay Consultant's invoice within forty-five (45) days of receipt by City; provided, that the Agreement shall not be terminated if the City issues payment within said ten (10) day notice period. In the event of termination, all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports prepared by Consultant under this Agreement shall, at the option of City, become its property. Notwithstanding the foregoing, Consultant shall not be relieved of liability to the City for damage sustained by City by virtue of any breach of this Agreement by Consultant. 10. NOTICES. Notices to the parties, unless otherwise requested in writing, shall be sent to: City: THE CITY OF VERNON ATTN: BRUCE V. MALKENHORST CITY ADMINISTRATOR 4305 SANTA FE AVENUE VERNON, CA 90058-0805 Consultant: R. W. BECK, INC. ATTN: WENDY WARNER, PROJECT MANAGER 1125 SEVENTEENTH STREET, SUITE 1900 DENVER, CO 80202-2615 11. CONFIDENTIAL INFORMATION. A. Access to Confidential Information. The City may provide Consultant with, or allow Consultant access to, certain information not available to the public concerning the City, or 6 - 1 2 3 41 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 businesses located in the City. The information may include company information, taxes, sales, value of assets, or other such information. All such information shall be known as "Confidential Information" and may not be used to circumvent the responsibility of either party to this Agreement. B. No Disclosure. Except as expressly permitted, Consultant shall not disclose, permit the disclosure of, release, disseminate, or transfer, whether orally or by any other means, any part of such Confidential Information to any other person or entity, whether corporate, governmental, or individual, without the express prior written consent of an authorized representative of the City. Consultant shall return any written Confidential Information and all copies made of such items to the City upon the City's written request. However, Consultant may retain one copy of the Confidential Information for its legal records. Consultant hereby agrees that such Confidential Information and any documents provided may be used by Consultant only as authorized by the City under the terms of this Agreement. Consultant shall take reasonable measures to avoid any disclosure of any such Confidential Information to any unauthorized person. Consultant will not be prohibited from disclosing or using any information which; (1) is or becomes generally available to the public other than as a result of a disclosure by Consultant; (2) was already in Consultant's possession before any disclosure of the Information by the City; (3) has been or is obtained by Consultant from a ,third party (other than one acting on behalf of the City) who - 7 - 1 Consultant has no reason to believe is not lawfully in possession of 2 the Confidential Information and who Consultant has no reason to 3 believe is in violation of any contractual, legal or fiduciary 4 obligation to the City with respect to the Confidential Information; or 5 (4) is independently developed by Consultant 6 without breaching confidentiality. 7 C. Court Ordered Disclosure. Consultant shall 8 immediately notify the City of any court order or subpoena or other 9 directive of a court, administrative agency, quasi-judicial body or 10 arbitration panel requiring disclosure of Confidential Information, 11 and shall cooperate with legal counsel in the appeal or challenge of 12 any such order or subpoena and City shall reimburse Consultant for 13 such assistance on a time and materials basis. Recipient may only 14 disclose Confidential Information required to be disclosed pursuant to 15 court order or subpoena after legal counsel has exhausted any lawful 16 and timely appeal or challenge, to the extent that such appeal or 17 challenge does not cause hinder Consultant from their obligations 18 under such court order or subpoena. 19 D. Remedies. In addition to any other remedies that 20 it may have at law or in equity, the City shall be entitled to a 21 temporary and permanent injunction by a court of competent 22 jurisdiction against any breach or threatened breach of the 23 Confidential Information provisions of this Agreement. Consultant 24 acknowledges that in case of such breach or threatened breach of said 25 provisions, the City would have no adequate remedy at law. 26 12. GENERAL PROVISIONS. 27 A. Independent Contractor. At all times during the 28 term of this Agreement, Consultant shall be an independent contractor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and shall not be an employee of the City. The City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement; however, theCity shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to the Agreement except to the extent that such services involve the use of City 1property or Confidential Information. B. Consultant Not Agent. Except as the City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of the City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind the City to any obligation whatsoever. C. Indemnification. The Consultant shall indemnify, defend, protect and hold the City and its officers, agents and employees, free and harmless from and against any and all claims, demands, losses, damages, liabilities, fines, charges, penalties, orders, or judgments which result in any injury or death, and all costs and expenses incurred in connection therewith, including reasonable attorney's fees and costs of defense arising out of or attributable to the negligent or wrongful acts of Consultant or its subcontractors, employees or agents in the performance of services under this Agreement, except to the extent arising from or caused by the active negligence or willful misconduct of the City, its officers, agents or employees. For such matters not involving injury or death, the Consultant shall not be required to defend the City, but will pay the costs which the City may incur in defending such matters, including reasonable attorney fees, if the Consultant is alleged to MM 1 have been negligent in the performance of the services under this 2. Agreement. 3 D. Insurance. Prior to commencing work hereunder, 4 Consultant shall provide the City with proof of insurance providing 5 and maintaining the coverages and endorsements set forth in the 6 Insurance Schedule attached hereto as Exhibit "B" and made a part 7 hereof by reference. Said proof of insurance shall also provide that 8 said policy or policies shall not be canceled or materially reduced in 9 coverage without giving at least thirty (30) days prior written notice 10 to the City. If Consultant fails to provide proof of insurance 11 coverage as specified above, the City may, at its sole discretion, 12 terminate this Agreement immediately. 13 Consultant shall not permit a subcontractor or vendor 14 to perform work on City premises unless and until a certificate of 15 insurance is obtained.showing that such subcontractor or vendor has 16 worker's compensation coverage. If Consultant employs subcontractors 17 as part of the services rendered, Consultant's protective coverage is 18 required. Consultant may include all subcontractors as insureds under 19 its own policy or shall furnish separate insurance for each 20 subcontractor, meeting the requirements set forth herein. 21 E. Limit of Liability. To the extent permitted by law 22 the total liability of Consultant, its officers, directors, 23 shareholders, employees and subconsultants to City for any and all 24 claims arising out of this Agreement, including attorneys' fees, and 25 whether caused by negligence, errors, omissions, strict liability, 26 breach of contract or contribution, or indemnity claims based on third 27 party claims, shall not exceed One Million Dollars ($1,000,000.00). 28 F. Consequential Damages. In no event and under no 10 1 circumstances shall Consultant be liable to City for any interest, loss 2 of anticipated revenues, earnings, profits, increased expense of 3 operation or construction, loss by reason of shutdown or non -operation 4 due to late completion or otherwise or for any other economic, 5 consequential, indirect or special damages. 6 G. Governing Law. The validity, interpretation and 7 performance of this Agreement shall be controlled and construed under 8the laws of the State of California as enacted and in force at the 9 time this Agreement is fully executed. 10 H. Assignment and Subcontracting Prohibited. 11 Consultant may not assign any right or obligation pursuant to this 12 Agreement except with the express written consent of the City. Any 13 other attempted or purported assignment of any right or obligation 14 pursuant to this Agreement shall be void and of no effect. Consultant 15 may not subcontract under this Agreement, without the express written 16 consent of the City, except for the retention of a survey vendor. 17 I. Amendments. Except as may otherwise be 18 specifically provided herein, this Agreement may be modified or 19 amended only by a written document executed by both Consultant and the 20 City and approved as to form by the City Attorney. 21 H. Entire Agreement. This Agreement is the entire 22 agreement of the parties. Consultant represents that in entering into 23 this Agreement, it has not relied on any previous representations or 24 understandings of any kind or nature. 25 J. Benefit of Agreement. This Agreement shall bind 26 and benefit the parties hereto and their heirs, successors, and 27 permitted assigns. 28 K. Forum Selection. Any action brought relating to 1 this Agreement shall be brought and held exclusively in a State Court 2 in the County of Los Angeles, California. 3 L. Recitals. All recitals are incorporated by 4 reference. 5 M. Waiver. Any waiver at any time by either party of 6 its rights with respect to a default under this Agreement, or with 7 respect to any other matters arising in connection with this 8 Agreement, shall not be deemed a waiver with respect to subsequent 9 default or other matter. 10 N. Attorney's Fees. In the event that it becomes 11 necessary for either party to this Agreement to enforce any of the 12 provisions of this Agreement, the parties agree that a court of 13 competent jurisdiction may determine and fix reasonable attorney's 14 fees to be paid to the successful litigant. 15 O. Force Majeure. Neither Party shall be considered 16 in to be in default in any of its obligations under this Contract when 17 a failure of performance shall be due to an uncontrollable force. The 18 term "uncontrollable force" shall mean any cause beyond the control of 19 the party affected, including, but not restricted to, flood, 20 earthquake, storm, fire, lightening, epidemic, war, riot, civil 21 disturbance or disobedience, labor dispute, labor material shortage, 22 sabotage, federal, state, or municipal action, statute, ordinance, or 23 regulation, embargoes of the United States Government or any other 24 government, which by exercise of due diligence such party could not 25 reasonably have been expected to avoid and by exercise of due 26 diligence has been unable to overcome. Either party rendered unable 27 to fulfill any of its obligations under this Agreement by reason of an 28 uncontrollable force, shall give written notice within five (5) 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Business Days of such fact to the other party and shall exercise due diligence to remove such inability with all reasonable dispatch. P. Information Provided by Others. City shall provide to Consultant in a timely manner any information Consultant indicates is needed to perform the services hereunder. Consultant may rely on the accuracy of information provided by City and its representatives. Q. Opinions of Cost. Consultant does not control the cost of labor, materials, equipment or services furnished by others, nor does it control pricing factors used by others to accommodate inflation, competitive bidding or market conditions. Consultant estimates of operation expenses or construction costs represent its best judgment as an experienced and qualified professional and are not a guarantee of cost. This section does not apply to the cost of Consultant performing the Scope of Services. - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IN WITNESS WHEREOF, the parties have caused this Agreement to lbe executed by and through their authorized officers on the date, month and year first written above. ATTES BRUCE V. MALKENHORST, City Clerk APP D AS TO FORM: E DO OLIVO, City Attorney CITY OF VERNON By: LEONIS C. MAL URG, Ma or R. W. BECK, INC. B Title:_., M Title: The signatures required of a corporation are as follows: • First Signature - the chairman of the board, the president or any vice president; a • Second Signature - the corporate secretary, any assistant secretary, the chief financial officer or any assistant treasurer. If a person holds more than one office, e.g., vice president and secretary, that person can sign the agreement twice if both capacities are identified. - 14 - vv l a v - - - - l- I v.l - L't 1 11 116. M UL' V t1 • r Mh MU, JUJU (eb 1 1 F. U3 1 IN WITNESS WHEREOF, the parties have caused this Agreement to 2 be executed by and through their authorized officers on the date, month 3 and year first written above. 4 CITY OF VERNON 5 By: 6 EONIS C. MALBVPG, Ma r ATTEST* 7 8 BRUCE V. MALKENHORST, City Clerk 9 JAPID AS TO FORM: R4t5"- 10 EDUARDO OLIVO, City A .orney 11 R. W. BECK, INC. 12 13 4 14 Title: 15 , By: 16 17 Title: :s7� s� / S�C�' 18 19 The signatures required of a corporation are as follows: 20 First Sianature - the chairman of the board, the president or any vice president; and • Second Signature - the corporate secretary, any assistant secretary, the chief 21 financial officer or any assistant treasurer. 22 if a person holds more than one office, e.g., vice president and secretary, that person can sign the agreement twice if both capacities are idenfified. 23 24 25 26 27 28 14 - Proposal Telecommunications Consulting Services Prepared for: City of Vemon, Califomia October 3, 2002 I ExecutiveSummary ...............................................................................1 ■ Project Understanding and Purpose ■ The R. W. Beck Team ■ The R. W. Beck Difference Scopeof Work........................................................................................2 ■ Task 1: Market Survey ■ Task 2: Technical Network Review ■ Task 3: Financial Pro Forma ■ Task 4: Implementation Plan Cost Information & Schedule................................................................3 ■ Pricing ■ Schedule Summary Company Overview and Expertise.......................................................4 ■ R. W. Beck, Inc. — Firm Overview ■ Partner Communications, LLC — Overview ■ Relevant Project Experience ■ Project Team Organization ■ Project Team Biographies Citys Standard Contract........................................................................5 © Copyright 2002, R. W. Beck, Inc., All Rights Reserved Table of Contents R. W. Beck Contact: ■ Wendy Warner Project Manager (303) 299-5345 wwamer@rwbeck.com Project Understanding and Purpose The City of Vernon ("the City") owns, operates and maintains water, gas and power distribution lines to serve the unique infrastructure and service needs of its entirely industrial customer base. The City is now considering allocating a portion of the fiber optic backbone currently used for City and city utility functions to provide advanced telecommunications and Internet services to its industrial customers. These services would be offered by multiple private carriers on a revenue sharing basis with the City. To that end, the City has issued a Request for Information (RFI) for vendors to propose the design and implementation plan for this fiber network. As part of its overall decision -making process to enter into the broadband service line of business, the City is now requesting assistance in evaluating customer needs and demand for fiber-optic based services, reviewing the City's proposed technical solution (developed from the RFI process), developing a pro forma financial analysis and developing a marketing and operational implementation plan. R. W. Beck's proposed Scope of Work is designed to provide the City with sufficient marketing research, technical review and financial documentation to make sound decisions on how to proceed. In addition, this proposed work plan provides a "Go -to -Market" plan to assist the City in identifying the activities required for a successful launch and operation. The R. W. Beck Team For this project, R. W. Beck will commit a team of telecommunications professionals who have both worked in their fields in operating telephone and broadband companies and have provided assistance to municipal utilities to launch telecommunications businesses. R. W. Beck's alliance partner, Partner Communications, LLC is an operating Competitive Local Exchange Carrier (CLEC) on the East . Coast and telecom operations consulting company that will add real -life operations and cost knowledge to the analysis. The Project Manager, Wendy Warner, has over 25 years of telecommunications experience, including the development of demand estimates resulting in successful financing of projects. The R. W. Beck Difference; The R. W. Beck team provides these distinct advantages to the City: Section 1 EXECUTIVE SUMMARY The R. W. Beck team offers the City of Vernon a tailored Scope of Work hacked by similar experience and skilled telecommunications professionals. T:\Telecom Proposals\Vernon CA\Proposal\3P1747-1-Summary.doc 1-1 EXECUTIVE SUMMARY ■ Hands-on telecommunications and broadband experience ■ Telecommunications financial analysis experience ■ In-depth understanding of the municipal environment. ■ Completion of over 50 municipal telecommunications projects ■ Independent and non -biased analysis Hands-on Telecommunications and Broadband Experience ■ Marketing: R. W. Beck's Team members have personally conducted market research, developed launch plans, negotiated partnerships and had P&L responsibilities for telecommunications and Internet services for such companies as Media One, U S West Communications (now Qwest) and enable, a joint venture between KN Eneigy and PacifiCorp. ■ Technical: Our team members have provided network design and implementation services for numerous carriers and enterprises, including CTC, Nynex and Vtel, and have been responsible for project management for the first major fiber - to -the curb development for U S West Communications. ■ Telecom Operations: R. W. Beck's alliance partner, Partner Communications, runs a CLEC in addition to assisting new telecommunications and broadband companies in setting up the operations of their business. Team members have set up Network Operations Centers, Call Centers and Customer Billing. They are particularly adept in recommending approaches and designs that work in the cost-conscious world of competitive telephony. ■ Telecommunications Financing: Team members have developed and presented market analysis and financials for purposes of gaining funding for several broadband systems. Telecommunications Financial Analysis Experience ■ R. W. Beck has provided financial pro forma services for over 20 proposed municipal telecommunications ventures. R. W. Beck provides analyses and recommendations with the rigor required for submission for both municipal decision - making and external financing. ■ R. W. Beck's approach to determining market demand has been tested and accepted by several major investment entities (Bank of America, GE Capital). Market demand is the highest risk factor in telecommunication financial analyses. In -Depth Understanding of the Municipal Environment ■ R. W. Beck has 60 years of experience in working with municipal utilities, municipalities, counties and local utilities. We understand the unique needs and challenges of the public 1-2 TATelecom Proposals\Vernon CA\Proposal\3P1747-1-Summary.doc EXECUTIVE SUMMARY sector and can fully support the decision -making processes found in the municipal environment. ■ R. W. Beck has been at the forefront of devising innovative ways for municipal utilities to implement and finance their capital requirements (e.g., public power agencies). Over 50 Municipal Telecommunications Projects ■ R. W. Beck has completed over 50 telecommunications projects for municipalities and municipal utilities, including over 20 feasibility studies of the type requested by the City. We bring to the City the experience of utilities across the nation who are offering high-speed Internet, cable television, Internet services and telephony to their constituents, as well as those providing wholesale broadband services to encourage competitive choice in their communities. We are intimately familiar with the unique challenges that municipal utilities have in deploying telecommunications. ■ R. W. Beck has assisted many utilities with feasibility projects similar to the City's request. Our references for evaluation of wholesale (open access) to telecommunications projects include: ■ R. W. Beck provided Grant County, Washington with the market research and financial analysis (pro forma) that led to its seminal FTTH system. ■ R. W. Beck's strategic planning, financial analysis and probabilistic pro forma gave Eugene, Oregon the confidence to make fact -based decisions for rolling out its fiber -based, Gigabit Ethernet, open access network. ■ R. W. Beck provided the Lafayette Utilities System with strategic planning, partnership analysis, market research, and pro forma and pricing models. Today, Lafayette is offering wholesale bandwidth on its system and R. W. Beck is directly assisting LUS in recruiting customers. Independent and Non -Biased Analysis ■ R. W. Beck has an excellent reputation for independent and non -biased analysis, which gives the City confidence in making the right choices for telecommunications participation. ■ R. W. Beck has recommended deployment when financial and market analyses have warranted but has also recommended project termination to clients where there was insufficient market and financial viability. R. W. Beck has also recommended a wholesale approach where market factors indicated the inadvisability of a retail venture. R. W. Beck, Inc. 1-3 Scope of Work — City of Vernon Telecommunications Consulting Services Task 1: Market Survey This task consists of primary market research via both telephone and personal interviews with business customers. The objective of the proposed survey is to assess market potential for voice, data and Internet services provided by independent service providers over the City owned and operated open -access network. The survey will cover the following topics: ■ Current usage of telecommunication services (Internet, data and voice). ■ Satisfaction with current telecommunications products and providers. ■ Likelihood to buy telecommunication services (High-speed Internet and data, Voice over IP, switched voice) from a competitive provider at different price levels. ■ Criteria for selection of a telecommunications provider and provider preferences. ■ Attitudes toward the City as a provider of an open access network or, alternatively, as a provider of retail services. Surrey Method R. W. Beck proposes to design the study, develop the survey instruments, recruit and manage the survey vendor, analyze the results and produce a final report and (optional) presentation. The survey will be conducted via telephone interviews of 16 to 17 minutes in length. Two hundred (200) interviews will be completed with general business customers, producing results with a sampling error of +/- 6.7% at the 95% confidence level. In addition, R. W. Beck will conduct personal interviews with 10 to 12 large commercial or industrial customers who are likely to have high telephony requirements. MARKET: VERNON, CALIFORNIA INTERVIEWS AND SAMPLING Customer Group Interviews Sample Frame General Business Customers 200 Random sample from customer rolls Large Commercial/ 10-12 Selection to be agreed upon Industrial Customers with the City TATelecom Proposals\Vemon CATroposal\3P1747-2 Scope.doc Section 2 SCOPE OF WORK Our Scope of Work is designed to provide the City with sufficient marketing research, technology review and financial documentation, to make sound decisions Additionally, our implement- tation plan will identify the activities required for a successful launch and operation. 2-1 ANENAKE �� 11 Questionnaire R. W. Beck will develop the survey instruments. City management will have the opportunity to provide input to, and approve the questionnaire and interview guide to ensure all information needs are met. The research vendor will be responsible for conducting the telephone interviews and for production of the statistical tables for analysis. Statistical analyses will include frequencies and cross -tabulations. Sample Selection The City will provide a list of its business customers with telephone numbers to R. W. Beck in electronic format. The list will be sampled by the research field operation to conduct interviews with a random sample of City businesses. Tabulations Frequency tabulations (number and percentages) for all questions will be performed. In addition, cross -tabulations of all questions will be provided for up to 6 firmagraphic or attitudinal variables that will be used to analyze the responses to the remainder of the survey. Analysis of Results The R. W. Beck Telecommunications Marketing Team will evaluate survey results. This will include analysis of customer use and satisfaction with currently available telecommunications services, competitive positioning, purchase intent from service providers using a City network, and new product offering penetration estimates adjusted for survey effect. Deliverables The following deliverables will result from the project: ■ Survey questionnaire ■ Interview guide ■ Final Report, summarizing the analysis and conclusions (five copies) ■ Detailed Findings Appendix (statistical tables — two copies) Survey Schedule Our market research is designed to give the City initial feedback within six weeks and a research report in eight weeks. The following are approximate timeframes for the work described above. This schedule is particularly contingent upon obtaining timely project support from the City including approvals of the questionnaire, customer data for sample generation and City staff implementation of the large commercial customer interview scheduling. Please note that there are several concurrent tasks. It is highly important to begin interviewing by early 2-2 TATelecom Proposals\Vernon CATroposah3P1747-2 Scope.doc SCOPE OF WORK November as response rates are more difficult to achieve once the holiday period begins in late November. RESEARCH SCHEDULE Weeks to Date Completed Description t (ff Project Authorized by Complete October 14, 2002) Commercial Survey Obtain sample 1 October 21 Questionnaires developed and approved 2 October 28 Field survey, Data tabulation 3 November 18 Topline results 1 November 25 Large Industrial Interviews Interview guide developed and approved 2 October 28 Large Industrial interviews completed 3 November 18 Research Report 3 December 16 Time frame is approximate and depends on timely client response. Note that not all time frames are sequential from start date; some follow other tasks. Task 2: Network Technical Review The purpose of this task is to provide a review and feasibility assessment opinion of broadband technologies that have been identified as a result of the RFI process initiated with a response date of August 29 h, 2002 by the City. Through the survey (Task 1 above) and RFI the City will have identified the service choices and up to three alternatives for architecture, bandwidth levels, potential equipment requirements and cost. The Beck/Partner Team will review these alternatives utilizing its experience and knowledge in operating a modern telephone and data system employing the current state of the art equipment and technology. Deliverable and Schedule A Report will be developed for the City based upon the Beck/Partner review. The report will contain an opinion on the selected technologies, their technical requirements and limitations, and an overall opinion on the price, services and feasibility of the plans provided by the City. If there are areas where Beck/Partner believes that better economics, reliability or more services may be provided, suggested options will be offered and a guide to incorporating possible suggestions will be presented. The report will provide the City with a template to utilize when selecting one or more potential methods of broadband access and R. W. Beck, Inc. 2_3 SCOPE OF WORK determining whether the speed, technical limitations and average cost will suit the City of Vernon's requirements and physical limitations. This Network Technology Review can be completed within two weeks of receipt of the technology design alternatives from the City. Task 3: Financial Pro Forma In this task, R. W. Beck will integrate the market research findings and capital costs provided by the RFI process and reviewed by R. W. Beck in Task 2 into a financial analysis to produce a ten-year pro forma (financial forecast) that includes a Cash Flow Statement and Income Statement. This includes translation of the market research findings into wholesale demand levels over the planning period, taking into consideration anticipated growth of business requirements for higher speed services. Our process is designed to provide the City with the right financial information to make fact -based decisions on whether to move forward with this venture, including substantive insights into these key questions: ■ When will the wholesale (open access) business break even? ■ How much will the City need to initially invest to make this business work? ■ What is the City's return on investment over ten years? ■ What is the forecasted debt service coverage ratio (DSC)? ■ How much financial risk is associated with serving the wholesale market? ■ How much revenue would be provided to the City's General Fund? ■ What are forecasted revenues, prices, capital and expenses? R. W. Beck's financial analyses are specifically tailored to assess a municipality's entry into telecommunications. Cases where we have specifically analyzed municipal wholesale telecommunications include: ■ Los Angeles Basin — Completed extensive dark and lit fiber market research and financial forecasts for providing wholesale services throughout the Los Angeles basin for an alternative provider. This analysis included the identification of over 100 candidate wholesale customers in the greater Los Angeles area. ■ Eugene, Oregon (EWEB) — Completed market research and financial forecasts for providing retail (universal service) and wholesale telecommunications services. This analysis gave EWEB the confidence to move slowly into providing wholesale services. This was the right solution for its unique business environment. ■ Lafayette, Louisiana (LUS) — Completed market research and financial forecasts for public sector, retail, wholesale and 2-4 . T:\TelecomProposals\VemonCA\Proposal\3P1747-2Scope.doc SCOPE OF WORK partnership scenarios. Based on our analysis, LUS is currently offering open access, wholesale services to its community. ■ Grant County, Oregon — Completed market research and financial forecasts for provisioning telecommunications services to the public sector, retail and wholesale markets. Today, Grant County is widely touted as the seminal case of fiber to the home (FTT H). While not included in the City's requested scope of work, it should be noted that R. W. Beck's financial analyses have been previously used by the investment community to support municipal telecommunications projects. Deliverable and Schedule R. W. Beck's proposed pro forma will include a cash flow for each year of a 10-year planning horizon. Key line items will include: ■ Number of customers by service by year ■ Price by service by year ■ Gross revenue by service ■ Capital costs and debt service ■ Operating costs ■ Net income (NI) ■ Net present value of net income (NPV of NI) ■ Return on investment (ROI) ■ Debt service coverage ratio (DSC) ■ Financial break even The Financial Analysis will be completed within three weeks after the receipt of the results of Tasks 1 and 2. Task 4: Implementation Plan An Implementation or "Go -to -Market" Plan details the action steps required for your telecommunications organization to transition to fully launch your telecommunications business. It provides a checklist and work plan for the tasks necessary to run the wholesale telecommunications business and will include project goals and objectives, a market positioning statement, staffing levels and roles, and suggested strategies and tactics for products, pricing, branding, ISP account management, end -user handling, billing, customer communication, advertising and promotion. This tactical plan is the "play book" of activities to be performed for product launch. This Implementation Plan is a collaborative effort with those persons who will implement the plan. While R. W. Beck will provide the R. W. Beck, Inc. 2_5 MalwaffeTflIT69, leadership, formats and industry experience, the implementers will play key roles in developing content to ensure complete understanding and buy -in of the plan. The deliverable is a written plan detailing the strategies and tasks for launching the wholesale telecommunications business. This will be provided two weeks following the completion of the market research. 2-6 TATelecom ProposalsWemon CA\Proposa113P1747-2 Scope.doc Pricing The fixed fee associated with prosecuting the Scope of Services outlined in Section 2 of this proposal is outlined below. Proposal Cost Summary Description Fixed Fee Task 1: Market Survey $ 33,300 Task 2: Network Technical Review $ 8,250 Task 3: Financial Pro Forma $11,000 Task 4: Implementation Plan 9,950 Total $ 62,500 These costs include all labor, expenses and the subcontractor expenses for the interviewing firm. Schedule Summary This project can be completed in approximately twelve weeks. Field surveys must begin by early October in order to complete before the holiday period. The final report may be delayed by up to one week due to the end -of -year holiday schedule. City of Vernon Telecommunications Project Task I - Market Survey — = ----=--- Q NetworkR Ell • ■o....... - Task 4 - Implementation• . ■........_._ R Q = Client Review of questionnaire or interview guide; Sample due from client T = Topline Report R = Task Report Section 3 COST INFORMATION & SCHEDULE TATelecom Proposals\Vemon CA\Proposal\3P1747-3-Cost & Schedule.doc 3-1 R. W. Beck, Inc. — Firm Overview R. W. Beck specifically focuses its telecommunications efforts on the needs of municipalities and counties. We understand the development of telecommunications services, from market assessment and feasibility, through vendor solicitation, evaluation and, finally, implementation. R. W. Beck evaluates existing telecommunications systems to see where the integration of existing and new technologies makes sense and does a thorough and projectable evaluation of the telecommunications needs and demand levels of study area constituents. We provide leadership to public entities in the identification and formation of alliances and business arrangements with private enterprises to achieve telecommunications infrastructure and service goals. R. W. Beck was founded in 1942 to serve the needs of municipal utilities and non-profit entities across the United States. Since that time, the firm has specialized in the operation, planning, financial analyses, administrative procedures, design, and other matters related to telecommunications, electric, water, gas, wastewater, and solid waste infrastructures and services. The firm employs approximately 500 management consultants, engineers, accountants, economists, scientists, marketing specialists, organization and methods analysts, computer system specialists, and other professionals. Partner Communications, LLC — Firm Overview Partner Communications is a full service telecommunications company providing organizations with consulting and total communications solutions for their voice, data and Internet needs. Founded in 1996, Partner is committed to serving as a one -stop telecommunications provider and offers a comprehensive package of telecom, data and web consultative services for municipalities, business and service providers. The firms consulting expertise includes telecom management, planning, expense management, call center consulting and operational support. R. W. Beck and Partner Communications have a strategic alliance for the provision of telecommunications consulting services to municipal clients. Relevant Project Experience The following three project profiles are similar in scope to the services requested in this proposal and were completed within the last two years. Section 4 COMPANY OVERVIEW AND EXPERTISE R. W. Beck is widely recognized as one of the nation's leading consulting management, engineering firms. We combine our extensive telecommunications experience and skill with Partner Communications, LLC to meet the diverse telecommunications needs of our clients. TATelecom Proposals\Vemon CA\Proposal\3P1747-4-Firm.doc 4-1 COMPANY OVERVIEW AND EXPERTISE Los Angeles Basin Wholesale Telecommunications Analysis Confidential Client R. W. Beck conducted an evaluation of the economic viability of providing bandwidth services throughout the Los Angeles Basin. Such fiber facilities have the opportunity of addressing the short haul, high bandwidth needs of service providers seeking to reach their facility points, ILEC central offices or key customers. This project included the identification and evaluation of over 100 wholesale providers operating in the Los Angeles area. Telecommunications Survey, Market Research and Alliance Evaluation Eugene Water & Electric Board, Eugene, Oregon R. W. Beck provided telecommunications consulting services to Eugene Water & Electric Board (EWEB) that focused on market research and business planning. Market research included evaluating potential customers' satisfaction with current telecommunications services and willingness to obtain services from EWEB or an EWEB public/private alliance. R. W. Beck performed residential and commercial customer telephone interviews and quantified the market based on responses. Phases two and three evaluated Gigabit Ethernet services and the proposed Fiber Optic Group (FOG). FOG is an entity formed between EWEB and the Springfield Utility Board, to provide fiber optic capabilities to these two communities that would address the demand identified during the research portion of the project. R. W. Beck continues to provide ongoing support with EWEB's activities focused on moving forward with the development of telecommunications services. Telecommunications Market Survey and Implementation Assessment Grant County Public Utility District, Washington R. W. Beck has provided Grant County PUD with ongoing consulting services for its potential provision of broadband telecommunications across the county. In the first phase, R. W. Beck provided a review of the current telecommunications market and reported on the various trends and challenges in the industry, including recent legislation concerning the telecommunications industry, technical requirements, changes in product mix and barriers to market entry. A survey of the District's telecommunications system was prepared, and recommendations were made regarding the possible expansion of the current system to one that offered additional utility monitoring capabilities, such as demand -side management programs and interactive television. In the next phase, R. W. Beck developed a high-level financial pro forma and plan, which included conceptual design and operational requirements, potential revenue sources and estimated capital and installation costs. R. W. Beck conducted in-depth interviews with public 4-2 TATelecom Proposals\Vernon CA\Proposal\3P17474-Firm.doc COMPANY OVERVIEW sectors and industrial accounts to determine viability of these segments AND EXPERTISE for initial entry. Grant County is now examining the potential for mass - market deployment of the identified services. Telecommunications Strategic Planning, Pro Forma, Market Research and Partnership Analysis Lafayette Utilities System, Louisiana R. W. Beck assisted Lafayette Utilities System (LUS) in developing a telecommunications strategic plan. LUS' desire is to maximize new sources of revenue under existing regulatory constraints and use its excess fiber assets after deployment of internal systems. R. W. Beck conducted an initial feasibility screening, helping LUS to identify potential revenues from Internet, data, cable television and telephony from various market segments. R. W. Beck also performed primary market research, developed market penetration forecasts and a pro forma; investigated potential alliances with traditional telecommunications services providers; and examined LUS' internal requirements to support proposed services. R. W. Beck also analyzed potential telecommunications partners on behalf of LUS. This effort began with our development of a Request for Interest to solicit interest from numerous candidate entities. Candidates' responses were then analyzed to create a short-list of reasonable candidates. Face-to-face interviews were then conducted by LUS and R. W. Beck to establish a recommendation for further action. R. W. Beck is also providing ongoing consulting and advice to the LUS management team regarding definition and enhancement of the utility's image in the marketplace in preparation for increased competition. Specific activities have included review and comment on the marketing and strategic plans; input into the market research effort; development of a common understanding of the utility's desired position in consumers' minds; and design of marketing strategies, including brand identity. Today, LUS is providing high-speed bandwidth services to its wholesale market. Additional Telecommunications Projects In addition to the projects above, R. W. Beck has performed the following telecommunications work (partial list, most recent first): ■ Telecom Feasibility & Business plan for Broadband Communications (for multiple islands and communities) Orcas Power and Light Cooperative, Washington (study in progress) ■ Fiber Optic Equipment Replacement Project — Vero Beach Municipal Utilities, Florida ■ Telecommunications Feasibility Study — Ashland, Oregon R. W. Beck, Inc. 4-3 COMPANY OVERVIEW AND EXPERTISE ■ Telecommunications Feasibility Study — Public Utilities Board of Brownsville, Brownsville, Texas ■ Broadband Network Market Assessment — City Public Service of San Antonio, Texas ■ Telecommunications Feasibility Study —Elberton Water and Light, Elberton, Georgia ■ Telecommunications Business Plan — Groton Utilities, Connecticut ■ Telecommunications Business Assessment — Hingham Municipal Lighting Plant, Massachusetts ■ Telecommunications Design, Analysis and Partner Brokering — North Attleborough Electric Department, Massachusetts ■ Telecommunications Options Analysis — Taunton Municipal Light Plant, Massachusetts ■ Telecommunications Strategic Plan — Kissimmee Utility Authority, Florida ■ Communications Needs Assessment — Municipal Electric Authority of Georgia ■ Communications Risk -Benefit Analysis — Piedmont Municipal Power Agency, South Carolina Project Team Organization For this project, R. W. Beck will commit a team of telecommunications professionals who have both worked in their fields in operating telephone and broadband companies and have provided assistance to municipal utilities to launch telecommunications businesses. Our proposed Project Manager, Wendy Warner, has more than 25 years of telecommunications marketing experience, specializing in opportunity analyses and demand estimates for new broadband ventures. Her background includes wholesale (open access) services and retail telecommunications, broadband Internet and subscription (cable) television businesses. R. W. Beck's alliance partner, Partner Communications, LLC is an operating CLEC and telecom operations consulting company that will add real -life operations and cost knowledge to the analysis. 4-4 TATelecom Proposals\Vernon CA\Proposal\3P17474-Firm.doc COMPANY OVERVIEW Project Team Biographies AND EXPERTISE Wendy T. Warner University of Colorado: B.S. in Business Administration, M.S. in Marketing Ms. Warner, Telecommunications and Marketing Consultant, joined R. W. Beck in 1997 from the telecommunications industry. Her areas of specialization include competitive market positioning, market -driven strategies and plans, marketing research, quantifying market demand, product development, Go -To -Market (launch) plans, and partnering and alliances. Ms. Warner has performed marketing and strategy consulting services for companies investing in or providing voice telecommunications, data services, cable television, fixed broadband wireless, Internet services and Internet hosting. Ms. Warner has completed telecommunications studies for more than 20 counties, municipalities and municipal utilities; examples include: Eugene Water & Electric Board (EWEB), Eugene, Oregon ■ Designed and supervised quantitative market research study of EWEB's business and residential customers as part of a telecommunication feasibility study and in preparation a for citizen vote on the project. ■ Designed and supervised a mapping project to identify and illustrate proximity of high potential broadband customers to existing fiber and to identify potentially profitable build - outs. Grant County PUD, Grant County, Washington ■ Designed, supervised and analyzed personal interviews with representative target telecommunications customers across a wide spectrum of industries. ■ Based on market research, developed probable penetration rates of telecommunications services based for input into financial analysis. Florida Municipal Power Agency ■ Project Manager for market, competitive, technical and financial studies encompassing 27 cities and communities. ■ Developed telecommunications needs analyses and product demand for cities varying widely in demographics, geographies and telephony environment. R. W. Beck, Inc. 4-5 i COMPANY OVERVIEW AND EXPERTISE Steven F. Brodsky, P.E. University of Illinois: B.S. Electrical Engineering Carnegie-Mellon University: M.S. Electrical Engineering Colorado State University: M.B.A. Mr. Brodsky assists with a wide range of telecommunications and utility - related projects, including business case development, rate studies, public/private partnerships, and financial analyses. The following projects illustrate Mr. Brodsky's experience and commitment in providing the public sector with help in charting its course in telecommunications. Mr. Brodsky is also a member of the IEEE Communications Society and is a registered Professional Engineer. Eugene Water and Electric Board, Eugene, Oregon ■ Conducted telecommunications market research and financial forecasts (pro forma) for Eugene, Oregon's fiber based retail and wholesale Internet and Cable Television businesses. Assisted Client in evaluation of a potential public/private partnership for provision of advanced telecommunications services. Lafayette Utilities System and Lafayette Economic Development Authority ■ Analyzed the implementation of telecommunication services that focused on marketing, engineering, legal/regulatory, construction and strategic planning for Lafayette Louisiana. Assisted the Client in identifying and negotiating with more than 10 potential private enterprise partners or participants in an open -architecture network Grant County Public Utilities District, Grant County, Washington ■ Created financial forecasts (pro forma) for Grant Count's fiber to the home, wholesale telecommunications business. City Public Service, City of San Antonio, Texas ■ Conducted market research on business and public sector telecommunications customers in San Antonio, Texas. Delta -Montrose Electric Association, Montrose, Colorado ■ Conducted financial forecasts (pro forma) and reviewed existing plans for entry into new telecommunications businesses for Delta -Montrose, Colorado and REANET. Analysis included Internet, local voice, long-distance voice, cable television and data Florida Municipal Power Agency ■ Conducted financial forecasts (pro forma) for 13 municipalities in Florida (FMPA) and the entire Agency for its entry into new telecommunications businesses. The scope 4-6 T:\Telecom Proposals\Vernon CA\Proposa1\3P1747-4-Firm.doc COMPANY OVERVIEW of such analysis included Internet, local voice, long-distance AND EXPERTISE voice, cable television and data Rebecca Shiflea Colorado State University: B.S. in Psychology University of Colorado: M.B.A. in Marketing Ms. Shiflea is the Manager of Market Research at R. W. Beck. Her background includes marketing research, marketing, competitive assessment and project management, and participation in a wide range of utility and telecommunications -related projects. She has 15 years of experience managing numerous quantitative and qualitative research projects relating to product and service offerings, new product testing, customer satisfaction and loyalty research, and advertising awareness. She has conducted telecommunications needs and demand studies for more than 20 communities and counties. Examples of recent projects include: EWEB, Eugene, Oregon ■ Designed survey instruments to gather market research information from key customers to determine their high- speed telecommunications needs Confidential Client in Southern California ■ Designed survey instrument and conducted face-to-face interviews with service providers to determine current and future plans and interest in a new open access network. FMPA, Florida • Designed research study and conducted market research to ascertain business and residential customers' telecommunications needs and their propensity to purchase voice and data services from the municipal utility across 1 l separate markets ■ Participated in the competitive assessment of local and national telecommunication vendors ■ Outcome: Market research served as basis for recommendations on decisions to move forward or halt activity Ms. Shiflea will supervise a contracted market research firm to conduct telephone interviews. R. W. Beck, Inc. 4_7 COMPANY OVERVIEW AND EXPERTISE Michael L. Feld , Hampshire College Amherst Mr. Feld is Chief Technology Officer of Partner Communications. Prior to joining Partner he was founder and President of Layer -Eight, Inc. His company provided Telecommunications and IT consulting and engineering support of carrier, enterprise and industry manufacturers. He was also the founder and president of fc.com, Inc, a profitable dot.com that specialized in remote network management, network design and implementation for carriers and enterprises. fc.com implemented a number of network infrastructures, network operation centers (NOCs), sales support systems and management infrastructures for carrier customers such as CTC, Nynex/BA, Vtel (Vermont Telephone), and Nitel (Nigerian Phone System). fc.com was sold to CTC, one of the largest Northeast CLECs, and Mr. Feld as VP of professional services was charged with the creation of a professional services group, the creation of remotely delivered services, and sales/operational training/support as required for data integration and professional services delivered to the Telco customer base. His project -relevant experience includes: ■ CTC — Created the first full remote (Voice/Data over Frame) "virtual" NOC for CTC as it developed the CLEC plan, later executed. This NOC handled all aspects of customer support on the resold data and voice platforms and integrated with a number of carrier OSS's. The "virtual" nature of the NOC consisted of fc.com technicians and engineers working from home locations all over the Northeast and functioning as a call /carrier dispatch center. Required applications (ACD, Ticketing, EDI w/ OSS and others) were developed and deployed resulting in an efficient, low -overhead operation that allowed CTC to quickly become an operational CLEC. This novel approach to NOC functions formed the model for further specialized work with other carriers. ■ fc.com — Developed one of the first "down to the desktop" NOC-driven service offerings. With little or no IT structure, fc.com provided customers residual -based services running the gamut from traditional helpdesk to total remote network operations. ■ Nynex/Bell Atlantic — Provided professional services to large accounts in Nynex/Bell's NSM division. The services consisted of complicated customer -carrier projects involving Voice/Data/Video integration and MC (mission critical) redundancy. Customers included: Mass Mutual, Spaulding, Big Y Foods, Fleet Bank, Massachusetts Registry of Motor Vehicles, Bay Networks (now Nortel), Sapient, IBM, AT&T, Sprint, Shawmut Bank (now Fleet), and MCI. Projects were varied and included: large-scale telecommuter 4-8 TATelecom Proposals\Vemon CA\ProposaMP17474-Firm.doc COMPANY OVERVIEW pilots (500+users at Mass Mutual), Physical Frame/ATM AND EXPERTISE infrastructure design/deployment for MCI (option 1 network under contract with Bay), Complete international build of infrastructure for Sapient (US, UK, Australia), as well as large internal cable plant, PBX, LAN/WAN operations and management. ■ Vtel (Vermont Telephone, ILEC w/22,000 lines) — Designed and installed facility -based ISP business. ■ CTC fiber deployment (8800 route miles) — Assisted in the turn up of a Cisco based-ATM/IP network, including class 4/5 services (soft switch). Tom Benedict Excelsior College, Albany, NY: B.S. in Business Mr. Benedict, a consultant with Partner, is the former Executive Director of ConnectConnecticut, Inc. In that capacity, he directed the public information and grass -roots outreach campaigns for the organization that is part of ConnectUSA. The primary issues addressed are changes in the telecommunications landscape for residence and business occurring due to legislative or regulatory mandates. As Vice President, System Integration, Asset Channels, Inc., Mr. Benedict was responsible for all permitting, land acquisition, franchising, municipal and state negotiations and utility registrations for a telecommunications company installing a high -capacity, undersea fiber optic cable system from Boston to Miami. Mr. Benedict was a Commissioner with the State of Connecticut, Department of Public Utility Control (DPUC), responsible, with four other Commissioners, for oversight of all regulated public utilities in the State of Connecticut (Electric, Telecommunications, CATV, Natural Gas and Water). Operations, rates, customer service and competitive entry are within the charge of the DPUC. He served as the lead Commissioner on the series of dockets that deregulated the telephone industry in Connecticut and began competition in the local telephone service market and cable television industry. He introduced significant new automation and information systems at the DPUC to better utilize available information sources from regulated company filings and hearings with a simultaneous decrease in DPUC personnel assets. R. W. Beck, Inc. 4-9 T.-Welecom Proposals\Vernon CA\ProposWP1747-5-Contract.doc Section 5 CITY'S STANDARD CONTRACT 5-1 4 � a 1 EXHIBIT B 2 INSURANCE SCHEDULE (CONSULTANT) 3 Consultant shall provide proof of insurance, including a standard certificate of insurance, in at least the following amounts and coverage (combined single limit permitted): 4 I• Coverage and Limits 5 Bodily Injury Property Damage 6 Hazards Each Person Each Accident Each Accident 7 Automobile Liability Owned Automobiles $ 500,000 $1,000,000 $ 500,000 8 Hired Automobiles $ 500,000 $1,000,000 $ 500,000 9 Non -Owned Automobiles $ 500,000 $1,000,000 $ 500,000 Workers' Compensation $ Statutory 10 Employers' Liability $1,000,000 per employer 11 12 II. General and Professional Liability General Liability $1,000,000 $2,000,000 $1,000,000 13 Premises Operations $1,000,000 $2,000,000 $1,000,000 14 Elevators (if applicable) $1,000,000 $2,000,000 $1,000,000 Independent Contractors $1,000,000 $2,000,000 $1,000,000 15 Products - Completed Operations $1,000,000 $2,000,000 $1,000,000 Contract Liability $1,000,000 $2,000,000 $1,000,000 16 Professional Liability $1�,000,000 $1,000,000 $1,000,000 17 a. The general liability policy shall contain the following special endorsements which shall be noted on or 18 attached to the standard certificate of insurance: 19 1. An endorsement naming the City of Vernon, its officers, and employees as additional insureds under 20 the policy. 2. An endorsement providing the City of Vernon thirty (30) days notice of cancellation or material 21 reduction of coverage. 22 3. An endorsement providing coverage for all operations under this Agreement. 4. Such other endorsement as may be required by addendum hereto. 23 b. In addition to the standard certificate of insurance, proof of general and professional liability coverage 24 shall be furnished in the form checked below. Only certification of the following proofs will be 25 accepted: 26 X For each policy, a notarized letter from the underwriter or carrier certifying that the coverage and 27 statements in the standard certificate of insurance (attached thereto) are true and correct and that the signator is an officer authorized to so certify. 28 A copy of each policy certified by an officer of the underwriter or carrier and notarized. EXHIBIT "B"