HomeMy WebLinkAboutDocumentation_Regular_Tab 10_01/09/2014 VILLAGE CLERK'S OFFICE
AGENDA ITEM TRANSMITTAL FORM
Meeting Date: Meeting Type: Regular Ordinance #: N/A
1 /9/14
Consent Agenda: No Resolution #: N/A
Originating Department: Manager
' � ` • • • • - : - • � -�•
Award of Contract to Arcadis for Utility Financial Evaluation — Water System and General Uti�ity / Civil Projects
Work Authorization in the Amount of $35,000 to Evaluate and Determine the Ability of the Utility Rate System
Rate Structure to Support Pending R&R Projects, including by not limited to, Replacement of Asbestos Cement
Pipe within the Distribution Syst�r�
� . . -.
Account #: � Amount of this item:
Current Budgeted Amount Available: Amount Remaining after item:
N/A
Budget Transfer Required: No Appropriate Fund Balance: No
'' • � •' • • • •
....� . .
Department Head Submitted by Manager
Finance Director
Reviewed for Financial Sufficiency ❑
No Financial Impact ❑
Attorney: (for legal sufficiency)
Village Manager:
Submit for Council Di�cussion: ❑ �
Approve Item: 0� �, � 1 '
Deny Item: �
• • - . . - .. -- - . -. .- - . .- -
.- . ..- . . -. _ ... . - - - . -
Form Amended: 7/12/12
, � �� ARCADI
S ARCADIS U.S., Inc.
ir%�ru�:±r�i��tu�c �Water Environment 6uildings 2081vistaParkway
West Palm Beach
Florida 33411
Tel 561 697 7000
Fax 561 697 7751
Village of Tequesta www.arcadis-us.com
345 Tequesta Drive
Tequesta, FL 33469
Attn: Michael Couzzo, Village Manager
Re: Utility Financial Evaluation WATER RESOURCES
Dear Mr. Couzzo:
Enclosed, as discussed, are three copies of the work authorization to cover Date:
the referenced project. As you are aware, the intent of this effort is to evaluate and August 29, 2013
determine the ability of the utility system rate structure to support pending R&R
projects, including but not limited to, replacement of asbestos cement pipe within the Contact:
distribution system. Essentially, the intent will be to integrate the previously �Nilliam D. Reese, PE
completed Equipment Condition Assessment with the financial ability to support the
Phone:
recommended improvements (and if necessary, alter and re-prioritize the initially 561.697.7069
developed scheme).
Email:
If acceptable, please execute and return two copies. Due to potential timing william.reese@arcadis-
considerations related to AC Pipe matters and to the Jupiter Inlet Colony project we us.com
have notified PRMG, Inc. of the need to reach an initial discussion point with
Our ref:
urgency. They are prepared to expedite their initial work accordingly.
Should you have questions or require anything further at this point, please Florida License Numbers
call.
Engineering
E600007917
Very truly yours Geology
GB564
ARCADIS U.S., Inc.
� Surveying
, ,' ,
LB7062
William D. Reese, PE
Vice President
encls.
Imagine the result
g:\aprojects\wr\rf projects\correspondence (e)1wp60\proposal\tequesta\couuo_u.f.e._08292013.doc
VII..LAGE OF TEQUESTA
WATER SYSTEM AND GENERAL UTILITY/CIVIL PROJECTS
WORK AUTHORIZATION
Utility Financial Evaluation
This Work Authorization authorizes ARCADIS G&M, Inc. to perform the work set forth herein
and is issued pursuant to the "Professional Engineering Consulting Services Agreement for Water
System and General Utility/Civil Projects", dated November 17, 2005. All terms and conditions
of said agreement shall be applicable to this Work Authorizarion.
SCOPE
The work performed under this authorization will be primarily performed by the rate consultant
used for prior similar projects for the Village. The scope of work is as set forth in the sub-
consultant's (PRMG, Inc.) documentation, attached as Appendix A to this authorization. The
Engineer will supply the required engi.neering documentation (cost estimates, project
prioriti�tion, etc.) to support PRMG's work effort.
COMPENSATION
For the scope of services as set forth herein the Engineer shall be paid a lump sum amount of
thirty five thousand five hundred dollars ($35,500).
TIME OF PERFORMANCE
The Engineer will complete Scope within 120 days of the receipt of an executed authorization,
exclusive of delays beyond the control of the Engineer.
This authorization can be ca.ncelled with or without cause by the Village with 30 days written
notice. Should said cancellation occur, the Engineer will be paid for a11 services performed
through the cancellation date.
Page 1 of 2
ACCEPTED BY:
Village of Tequesta
(Utility Financial Evnluation)
Michael R. Couzzo, Village Manager
Date:
ARCADIS G&M, Inc.
(Utility Financial Evaluation)
William . eese, P.E., Vice President
Date: B 24 /3
Page 2 of 2
ATTACHI��NT A
PUBLIC RECOUSRCES MANAGEMENT GROUP, INC.
SCOPE OF SERVICES - UTILITY FINANCIAL EVALUATION
The scope of services to be performed by PRMG, as a subconsultant to ARCADIS, will include
the following tasks:
Task 1— Data. Acquisition and Review• Based on information complied by the Village, PRMG
will request and evaluate specific information as it relates to the System necessary to complete the
financial forecast. Information to be requested from the Village will include, but not be limited to:
i. Customer statistical information as it relates to the service area needs by franchise or
specific service area component;
ii. Bill frequency information required to develop a detailed revenue model for rate estimation
purposes;
iii. Information regarding the operating expenses of the Water System;
iv. Information regarding the funds availability by type of fund;
v. Information regarding potential changes in service area needs due to the expiration of
franchise agreement as well as extension of service to other areas;
vi. Capital improvement program as estunated by both the Village and ARCADIS, including
the recognition of the capital needs identified in the Assessment Report; and
vii. Other relevant information (e.g., consumer price index for price index rate adjustments,
etc.) as deemed necessary by PRMG to prepare the financial evaluation of the System.
PRMG will prepare a date request for response by both the Village and ARCADIS to initiate the
data compilation efforts and will also attend a kick-off/data review meeting with both parties to
evaluate trends of the Water System as well as review the compiled data. necessary for project
completion.
Task 2— Customer Statistical and Revenue Forecast: Based on an up-to-five-year historical trend
of customer forecast statistics by primary service area andlor franchise, PRMG will prepare a five-
year customer forecast of the Water System. The Test Year for the forecast will be the Fiscal Year
2014 and the forecast period will consist of the Fiscal Years ending September 30, 2014 through
2018 (the "Forecast Period"). PRMG will work with the Village and ARCADIS to identify
potential growth the existing service area, changes in the service area due to incremental utility
extensions required of the Water System, as well as reduction in service area due to the expiration
of franchise and other service agreements that may occur during the Forecast Period. PRMG 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 currently allowed by utility ordinance. The customer and
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corresponding revenue forecast will serve as the basis for the review of net margins and
availability in the overall evaluation of the Water System.
Task 3— Develonment of Revenue Projections from Existin Rates• This task involves the
development of projections of utility rate revenues for the Forecast Period from existing rates
recognizing: i.) the results of the customer and sales forecast performed in Task 2; and u.) the
Village's existing rates for service. Additionally, this task will involve a rate-revenue
"reasonableness" test (reconcile model results to reported amounts on Village financial
statements) to ensure that the revenue model and billing determinants are reasonable relative to the
modeling process.
This task will also involve the projection of other operating revenues, interest income earned on
unrestricted fund balances as defined in the bond resolution for the utility system and revenues
derived from other utility transactions (e.g., customer service charges).
Task 4— Development of erati.ng Expense Projections• This task involves the development of
the estimated amount of operating expenses required to be funded from water rates for the
Forecast Period. PRMG will work with both the Village and ARCADIS 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 unprovement program for
the Village. PRMG projections will be based on recent historical trends and changes in cost of
providing service, estimates provided by the Village and ARCADIS 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 meeti.ng the debt compliance requirements of the Water System as well as
identifica.tion of fund availability for repayment of debt and capital funding. Finally, other
operating expenses such as inter-fund transfers, administrative allocations, contingency reserves,
insurance needs, and other expenses will be evaluated to ensure that the full recovery of costs are
reflected in the rate sufficiency analysis.
Task 5— Canital Imnrovement and Fundin�alysis• This task involves a detailed review of the
Village's five-year or applicable capital improvement program and other engineering planning
documents such as the Assessment Report, and the performance of a funding analysis to identify
available sources of funds for financing of the capital improvement program and the estimated
impact on utility rate revenues associated with the capital funding program for the Forecast Period.
This task will include the development of the estimated fiand balance by individual fundlaccount
and the development of a flow of fiinds analysis for liquidity evaluation purposes.
Task 6— Other Revenue Requirement Identification a.nd Mana�ement Dashboard• In order to
meet the financial obligations of the Villa.ge's utility systems, PRMG will review the financial
aspects of the Village's utility systems in order to potentially recognize other revenue
requirements that may need to be allocated or included in the rate analysis and program updates to
the financial forecast model. This task will include assistance in the development of fiscal policies
in terms of working capital maintenance, the funding of capital re-investment for long-term
planning needs, the funding of other departmental capital or maintenance reserves for items such
as vehicles and equipment, and the recognition of any other transfer requirements that may be
associated with the utility system. As part of this task, PRMG will develop a"management
dashboazd" to allow for the review of the financial position of the utility and the ability to perform
sensitivity analyses in order to finalize the finaneial forecast.
-2-
Task 7— Compliance Analysis: This task will be conducted in order to satisfy the rate covenant
requirements and the flow of fund requirements as defined in the goveming bond resolution that
authorized the issuance of the outstanding utility system revenue bonds. The compliance analyses
will be performed for the Forecast Period to mai.ntain the financial integrity of the utility system.
Task 8— Rate Comparison with Nei boring Utilities: As part of the evaluation of the sufficiency
of rates, PRMG will prepare a rate comparison of the Village's existing water rates with other
neighboring utilities and illustrate the potential customer impact on any recommended rate
adjustment associated with the development of the financial forecast and rate evalua.tion.
Task 9— Develo of Net Revenue Requirements and Rate Impact Anal and Staff
Presentation: Based on the aforemenrioned tasks, PRMG will prepare a summary of the total net
revenue requirements of the Water System and the accompanying rate requirements for each fiscal
year of the Forecast Period. A meeting by not more than two representatives of PRMG will be
held with both the Village staff and ARCADIS in order to present the results of the initial study
findings and results. Based on the results of the staff ineeting, PRMG will make modifications to
the analysis prior to the presenta.tion of the evaluation to the Village Council.
Task 10 — Report Preparation and Presentation: PRMG will prepare a technical memorandum or
report in support of the evaluation of the sufficiency of rates to meet the expenditure requirements
of the Water System, which encompasses the financial plan and capita.l improvement plan funding
analysis. The report prepared by PRMG will include delinea.tion of the assumptions and analysis
used to prepaze the financial forecast, the available or identified fiinding sources that meet the
overall capital improvement program needs of the Water System, and any other aspects of the
Water System (i.e., action plan items based on noted ixends and the attainment of certa.in financial
targets for the System). This task will include a presentation of financial ratios and ta.rgets to
illustrate the overall financial position of the Water System in relation to the funding needs,
especially as it pertains to the capital improvement program requirements.
Task 11 — Meetin�s: During the course of the project, it is anticipated that PRMG will attend a
total of three (3) on-site meetings with the Village and ARCADIS and attend two WebEx
meetings to present ongoing results with Village staff and/or ARCADIS. Attendance of the on-site
meetings will be by not more than two (2) employees of PRMG. The on-site meetings in this
scope of services include the following:
Description Meetings
Kick-Off/Data Review 1
Development and Review of Fina.ncial Forecast 1
Presentation of Fina1 Report to Council 1
Total Meetings 3
PROJECT SCHEDULE
Upon notification to proceed as provided by the Village, PRMG would complete the Project
within one hundred and twenty (120) days after being given notification to proceed as defined
below for presentation to the Village Council at a public workshop, the date of which has yet to be
determined. The completion of the analysis would be subject to the availability of information
-3-
provided to PRMG from both ARCADIS and the Village that would be necessary to conduct our
financial analysis.
ADDITIONAL SERVICES
During the course of this engagement, the Village may request that PRMG perform additional
services as a subconsultant to ARCADIS on behalf of the Water System. Although no additional
services are anticipated by PRMG at this time, any additional services as requested by the Village
will be performed by PRMG upon written authorization by the Village and as mutually agreed
between the three parties. Examples of additional services that could be performed by PRMG may
include, but not be limited to, the following activities:
1. Attendance of ineetings 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 Water System.
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 ageements, provisions for
services, or other related activities.
5. Performance of substantial cha.nges in the financial forecast due to the receipt of inaccurate
information as provided by the Village or due to delays in the Project that were not caused
by PRMG.
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.
(Remainder of page intentionally left blank)
-4-
Public Resources Management Group, Inc.
Utility, Rate, Financial and Management Consultants
August 17, 2012
Mr. William D. Reese, P.E.
President
ARCADIS/Reese, Macon and Associates, Inc.
2081 Vista Parkway, Suite 100
West Palm Beach, FL 33411-2702
Subject: Village of Tequesta Request for Services
Dear Bill:
As you know and based on my conversations with Mr. Couzzo at the Village of Tequesta (the
"Village"), he would like PRMG to prepare a high-level analysis of the indirect cost allocation
currently being budgeted for payment by the water utilities system (the "System") to the Village's
General Fund. Furthermore, he would like us to be a sub-consultant to ARCADIS for this
limited engagement. Recognizing the request of Mr. Couzzo, we are proposing the following to
ARCADIS for consideration:
PROJECT TEAM AND BILLING RATES
With respect to the performance of this analysis, Mr. Robert J. Ori will be the principal-in-charge
for the project and will serve as primary contact between ARCADIS, the Village, and PRMG.
PRMG may utilize other employees or associates during the course of the Project as needed.
The services covered by this Agreement shall be provided based on the direct labor ra.tes set out
in Attachment A.
SCOPE OF SERVICES
T'he scope of services to be performed by PRMG is summa.rized as follows:
1. Compile financial, statistical, and operational information to identify the costs to be
allocated and to assist in the development of the allocation basis or factors. PRMG will
prepare requests for information and conduct discussions with Village staff to compile
information required for analysis.
2. Prepare a cost allocation analysis to identify the costs that reasonably support the
operations of the System which are accounted for in non-utility funds such as the General
Fund. Compare the results of the analysis with current transfer levels for genera.l
reasonableness.
K�DLY1056�Upd UN Fin Foremst 20l IP�Bg\CoaespVnd'veclCos�PcoposelroARCADIS
341 NORTH MAITLAND AVENUE — SUITE 300 — MAITLAND, FL 32751
Tel: 407-628-2600 • Fax: 407-628-2610 • Email: PRMG@PRMGinc.com • Website: www.PRMGinc.com
Mr. William D. Reese, P.E.
ARCADIS/Reese, Macon and Associates, Inc.
August 17, 2012
Page 2
3. After review with Village management, finalize the cost allocation analysis and provide
working paper / analysis to the Village for future use.
4. PRMG will budget the attendance of two meetings with management and staff to
evaluation the cost centers / activities that support the operations of the System and to
develop the analysis.
5. Prepare transmittal letter to provide Village the analysis; it is assumed that that tables
atta.ched to letter will provide general cost allocation basis for determination of the indirect
cost allocation.
COMPENSATION AND BILLING
Based on the scope of services as summarized above and the direct hourly labor billing rates as
shown on Attachment A herein, we propose a not-to-exceed budget allowance of $5,000 for the
Project. We do not anticipate that the analysis performed by PRMG will approach this estimate
but it will provide an allowance for additional analytical analyses that may be required based on
requests made by the Village, condition of the data received, and other factors. The billings for
the services provided by PRMG will be on a monthly basis and will include the direct cost of
personnel anticipated to be assigned to the Project as well as any other direct costs such as tra.vel,
telephone, copying, printing, and shipping charges. The costs incurred by PRMG for such other
direct costs, if any, will be billed based on the actual cost or the standard unit cost rates as
summarized on Attachment A.
The services provided by PRMG will be billed on an hourly basis predicated on the actual work
effort performed by PRMG and not on a lump-sum basis. To the extent that the analysis is
completed at a cost less than the proposed contract budget allowance as identified above, PRMG
will not invoice the Village for any amounts remaining (unbilled) within the contract budget
except for the provision of any additional services which the Village may request from PRMG,
as mutually agreed between the parties.
SCHEDULE
It is anticipated that the preparation of the indirect cost analysis and transmittal of the findings
and work product will be submitted to the Village within fifteen (15) business da.ys after being
given authorization to proceed by both ARCADIS and the Village. The completion of the
analyses contemplated herein will be subject to the availability of information provided to
PRMG by the Village that is considered as being necessary to conduct the financial services
being requested by the Village.
K�DC11056�Upd Util Fm Foreeast ZOl1P�dglCortespUndirectCoetPropoaeltoARCADiS
Mr. William D. Reese, P.E.
ARCADIS/Reese, Macon and Associates, Inc.
August 17, 2012
Page 3
If this proposal is acceptable to both ARCADIS and the Village, please provide us with a notice
to proceed recognizing the provisions of this proposal and any other contractual agreements
needed between our two firms. The receipt of the notice to proceed will be considered as
acceptance of this proposal by both ARCADIS and the Village. We appreciate the opportunity
provided by ARCADIS to assist the Village in its review of the cost allocation process and look
forward to working with both the Village and you in the near future.
Very truly yours,
Public Resources Management Group, Inc.
�.� � � •
� �
Robert J. Ori
President
RJO/dlc
Attachment
K�DCi10561Upd Util Fin Foreeast 2011P�d'g\Co�avpUnd'veclCoatPmposeltoARCADIS
DRAFT
PUBLIC RESOURCES MANAGEMENT GROUP, INC.
SCHEDULE OF DIItECT LABOR HOURLY RATES AND STANDARD COST RATES
DIRECT LABOR HOURLY RATES
Direct Labor
Project Team Title Hourly Rates [*]
Principal $170.00
Associate $125.00
Managing Consultant $115.00
Supervising Consultant $110.00
Senior Consultant $105.00
Rate Consultant $ 95.00
Consultant $ 85.00
Senior Rate Analyst $ 75.00
Rate Analyst $ 65.00
Analyst $ 55.00
Assistant Analyst $ 45.00
Administrative $ 48.00
[*] D'vect labor houdy rates effective twelve months atter the date of execubion of the
Agreement; rates will be adjusted by not more tk� the net percentage chenge (but
not less than 0%) in the Consumer Price Index — Urban Consumers per azmum
(roimded to the nearest dollar) or as mutually agreed between parties for invoices
rendered ai�er each anniversary date of each year thereafter imtil project
completion or terminaiion of the Agreement between the parties.
STANDARD COST RATES
Expense Description Standard Rates [*]
Mileage Allowance — Personal Caz Use Only $0.485 per mile
Reproduction (black and white) (in house) $0.05 per page
Reproduction (color) (in house) $0.25 per page
Reproduction (contracted) Actual Cost
Computer Time $0.00 per hour
Telephone Charges Actua.l Cost
Delivery Charges Actual Cost
Lodging/Other Travel Costs Actual Cost
Meals Not W exceed per
PRMG Employee:
$8.00 — Breal�ast
$12.00 — Lunch
$25.00 — Dinner
Subconsultant Services Actual Cost plus 5.0%
Other Costs for Services Rendered Actual Cost
[*] Standard cost rates effective twelve months aftcr the date of execution of the
Agreeme� where applicable, rates will be adjusted by not more than the net perce�age
change (but not less than 0%) in the Consumer Price Index — Urben Cons�ers per
annum (rounded to the nearest dollar) or as mutually agreed between pazties for
invoices rendered after each anniversary date of each year thereafter imU7 project
completion or termination of the Ageement between the �rties. A�ry Standard Rate
edopted by policy by Clieot will supersede rates shown above.
K�nCilos6�vpd ufil Fm Fo�st 20t 1P�8g�CorraspUndirectCustAoposelmARCAn7S