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HomeMy WebLinkAboutResolution_77-01/02_08/22/2002• RESOLUTION NO. 77-01/02 A RESOLUTION OF THE VILLAGE COUNCIL OF THE, VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, ACCEPTING A PROPOSAL FOR ENGINEERING SERVICES FROM REESE, MACON AND ASSOCIATES, INC. FORA COMPREHENSIVE FINANCIAL PROJECTION OF THE WATER UTILITY SYSTEM IN THE AMOUNT OF $29,000, WITH FUNDS BEING APPROPRIATED FROM FY 2002/2003 WATER UTILITY FUND #401, AND AUTHORIZING THE VILLAGE MANAGER TO EXECUTE THE APPLICABLE DOCUMENTS ON BEHALF OF THE VILLAGE. • • NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS: Section 1: The Proposal for Engineering Services from Reese, Macon and Associates, Inc. for a Comprehensive Financial Projection of the Water Utility System is attached hereto as Exhibit "A" and incorporated by reference as part of the Resolution is hereby approved. THE FOREGOING RESOLUTION WAS OFFERED BY Councilmember '~f= ~ ~~ ~~ who moved its adoption. The motion was seconded by Councilmember ~,~ ~ ~ ~ ~' dom. ,and upon being put to vote, the vote was as follows: AGAINST ADOPTION The Mayor thereupon declared the Resolution duly passed this 22"d day of August, A.D., 2002. ,., ;FOR ADOPTION 1~(r~~c ~~~`r ~~ ~~1~ ~vZ'~y~-~-,~d'i/1,C~2tc ~G~1~ ~-~'~'2ti~G ATTEST: Mary W lcott, Village Clerk e A. e o RMA Recsc, Macon and Associates, Inc. July 3, 2002 Village of Tequcsta 250'1'equesta Drive, Suite 3U0 Tequcsta, HL 33469 ATTN: Michael Couzzo, Village Manager RE: Engineering Services Genttetncn: We arc pleased to submit this proposal for engineering services in connection with a financial evaluation of the Water Utility Department. R~L'SL, MACON and ASSOCIA'I'hS, 1NC:., hereinafter rcCcrred to as the 1Cngincer, shall perform the scrviccs as documented below for the village of'I'equcsta, hereinafter referred to as the Client_ SCOPE The scope oi' services to be performed will include tl~e tasks set forth below. It is notc;d and acknowledged that fete Engineer will subcontract a significant portion of the work to 1'1ZM(U, Inc. In general, the L'ngittccr will supply direction and input to PRMG, inc., related to capital needs, cods and system extensions. PRMG, Inc_, will use this information in combination with other data secured from the Village to prepare the evaluation. The following specific tasks wil! be performed: Task ! -1)a!a Ac~yuaaition ar,d nevic~w: Based on information compiled by the Village, the Engineer will request and evaluate specific information as it relates to the System necessary to complete the financial forecast. Information to he requestect from tl,e Village will include, but nut be limited ta: 1) Customer statistical information as it relates to the se,vicc area needs by frattchisc or specific service area component; lI) Bill frequency information required to develop a detailed revenue mcxlel for rate estimation purposes; 11I) Information regarding the operating expenses of the System; 1V) Information regarding the funds availability by type of fund; V) Information regarding potential changes in service area ,feeds due to the expiration of franchise agreement as well as extension of service to other areas; Vl) t:apital improvement program as estimated by both the Villale and the Village's consulting engineers; and VII) Other relevant information (e.~_ ~ consumer price index for price index rate adjustments, etc.) as deemed necessary by the Engineer to prepare the financial evaluation of the System. • 6415 Lake Worth Read • Suite 307 Lake Worth, TL 33463-2907 'I'elephnne (561) d33-3Zt6 Facsimile (Sbl) 43.1-8011 t0'd tfOt~=tt ZO-6t-s~b~ Michael Couzzo, Village Manager Re: Engineering Services Page 2 The Engineer will prepare a date request for response by both the Village and its consulting engineers to initiate the data compilation efforts and will also attend akick-off/data review meeting with both parties to evaluate trends of the System as well as review the compiled data necessary for project completion. Task 2 -Customer Statistical and Revenue Forecast: Based on a up-to-five-year historical trend of customer statistics by primary service area and/or franchise, the Engineer will prepare afive-year customer forecast of the System. The Test Year for the forecast will be the fiscal year 2003 and the forecast period will consist of the fiscal years 2003 through 2008 time frame. The Engineer will work with the Village and its consulting engineers to identify potential growth the existing service area, changes in the service area due to incremental utility extensions required of the System, as well as reduction in service area due the expiration of franchise and other service agreements that may occur during the forecast period as reflected in the report. The Engineer will conduct a corresponding evaluation of the utility rate revenues from existing rates based on the customer forecast delineated above, recognizing increases rates due to the application of the annual price index rate adjustment as allowed by utility ordinance. The customer and corresponding revenue forecast will serve as the basis for the review of net margins and availability in the overall evaluation of the System. • Task 3 -Revenue Requirement Forecast: A five-year forecast of the operating revenues of the System will be prepared recognizing current operating conditions and anticipated changes in such conditions due to changes in the service area, expiration of the bulk water contract with the Town of Jupiter, and changes in service area growth which may affect the variable related expenses associated with providing service. The Engineer will work with the Village to identify changes in utility operations that may result due to changes in service demographics as well as any revisions to the facilities which are currently in place due to anticipated capital improvement program for the Village (e.g. - construction of a additional reverse osmosis water treatment train). Projections will be based on recent historical trends and changes in cost of providing service, estimates provided by the Village and its consulting engineers as it relates to ongoing operations, and the recognition of inflationary allowances for the general cost of operations. The operating expense analysis will be performed to identify the net revenue margins to the utility that are critical in meeting the debt compliance requirements of the utility as well as identification of fund availability for repayment of debt and capital funding. A capital funding analysis will be prepared based on the current capital plan of the system and the recognition of annual funding requirements for renewal, replacements, upgrades and embetterments of the System. The Village will provide the Engineer with anticipated capital expenditure plan of the System and the Engineer will work with staff to prepare a capital funding analysis. The funding analysis will recognize the use of available funds, the receipt of additional funds due to the transition of assets to other utilities as result of the franchise agreement expiration provisions, outside senior lien and junior lien bond financing, and other sources of funds. A cash flow analysis by individual funds will be prepared to identify fund availability and use, interest in earnings accruing to the benefit of the System, and for financial target analysis. -2- • Michael Couzzo, Village Manager Re: Engineering Services Page 3 Task 4 -Financial Target Anal: The Engineer will work with Village staff to determine certain targets of the System for performance measurement and planning considerations. The financial targets will focus primarily on the income (revenue and expense) provisions of the operations and will also consider other financial targets as it relates to the financial position of the System. The Engineer will prepare presentation materials detailing historical projected trends of such target for use by the Village. Task 5 -Report Preparation and Presentation: The Engineer will prepare a results oriented report dealing with the financial forecast of the System, which encompasses the financial plan and CIP funding analysis. The report will include delineation of the assumptions and analysis used to prepare the financial forecast, the available or identified funding sources that meet the overall capital improvement program needs of the System, and any other aspects of the System (i.e., action plan items based on noted trends and the attainment of certain financial targets for the System). This task will also include a presentation of financial ratios and targets. To illustrate the overall financial position of the System in relation to the funding needs, especially as it pertains to the capital improvement program requirements. Task 6 -Meetings: During the course of this project, it is anticipated that the Engineer will attend • a total of four (4) meetings with the Village. The meetings in this scope of services include the following: Description Meetings Kick-Off/Data Review 1 Development and Review of Financial Forecast 2 Presentation of Final Report to Council 1 Total Meetings 4 ADDITIONAL SERVICES During the course of this engagement, the Village performance of additional services on behalf of the System. Although no additional services are anticipated at this time, any additional services will be performed upon written authorization by the Village and as mutually agreed between the two parties. Examples of additional services that could be performed may include, but not be limited to, the following activities. 1. Attendance of additional meetings to what is contemplated in the scope of services. 2. Performance of a detailed utility rate study to design proposed rates to meet the financial requirements of the System. -3- • Michael Couzzo, Village Manager Re: Engineering Services Page 4 3. Development of a project feasibility report associated with any financing activities (debt service issuance) necessary to fund the identified capital improvement program. 4. Negotiations with third parties associated with franchise agreements, provisions for services, or other related activities. 5. Performance of substantial changes in the financial forecast due to the receipt of inaccurate information as provided by the Village. 6. Performance of any anticipated update to the overall financial forecast after substantial completion of such forecast at the request of the Village, including the preparation of additional financial forecast scenarios. TIME OF PERFORMANCE The Engineer will commence work within seventy-five (75) days of receipt of an executed authorization and receipt of the information requested to perform the evaluation. • FEES For Tasks 1-6 the Engineer shall be paid a lump sum fee of twenty-nine thousand dollars ($29,000). If services are required in the performance of the above scope, beyond those normally provided by the Engineer, or as described above from PRMG, Inc., which must be sublet, the Engineer shall order the work after obtaining the written authorization of the Client. If the Engineer is requested to subcontract other work, a 10% handling charge will be added to the subcontractors invoice. Invoices for services rendered are issued on a monthly basis and are due within thirty (30) days of the invoice date. Interest at a compound rate of one and one-half percent per month shall be charged to any past due statements. Interest shall be computed on past due statements from the date of the invoice. COST ESTIMATES Construction cost estimates are developed from knowledge of market conditions and based on the experience of the Engineer. However, the Engineer exercises no control over the competitive • -4- • Michael Couzzo, Village Manager Re: Engineering Services Page 5 bidding process and, therefore, makes no guarantee of the accuracy of the estimate when compared to previous estimates or actual bids. TERMINATION This agreement may be terminated by either party by giving thirty (30) days written notice. The Engineer shall be paid for all services rendered prior to the termination date. ACCEPTANCE Acceptance of this proposal maybe indicated by executing this document in the space provided below. This contract shall be considered void if not executed within thirty (30) days from the above date. Upon execution of this agreement the Client shall return one copy to the Engineer. Very truly yours, • • REESE, MACON and ASSOCIATES, INC. fQ.~..~ William D. Reese, P.E. Accepted By: VILLAGE OF TEQUESTA BY: DATE: ~' 7/~ ' Yom/ -5-