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HomeMy WebLinkAbout12/15/2004 - STAFF REPORTS (14) November 24, 2004 Page 1 INTRODUCTION The City of Palm Springs has requested a proposal for a wastewater rate study. The City recently retired all outstanding wastewater debt and desires to determine how this fact should impact wastewater rates. Bartle Wells Associates has identified a n unber of key issues which the study should address: ■ Adequacy of rates: The wastewater rates should be established at a level which will meet the enterprise's financial needs, both for operations and maintenance and for capital improvements. The rate study will include a 5-year expense projection and recommend rates, which will protect the financial condition of the wastewater fund throughout that time period. ■ Capital improvement funding: The City has developed a wastewater capital improvement program, which identifies facilities needs. The study will examine methods of funding the capital projects and demonstrate the impact on wastewater rates. ■ Cost of service: A cost of service approach provides an equitable and justifiable method of detenning rates. We will exarnine the cost of collecting,treating, and disposing of wastewater fi-om various customer classes and recommend rates that recover the cost for service. Bartle Wells Associates has completed hundreds of wastewater rate studies. Our fine was created in 1964 expressly to provide professional financial advice to public agencies. We specialize in municipal utilities,particularly water and wastewater. We are fully conversant with not only issues relating to rates and charges, but also in the methods of financing public improvements for California local governments. We have served as financial advisor on over 300 water and wastewater bond issues. November 24, 2004 Page 2 SCOPE OF SERVICES Wastewater Rate Study Bartle Wells Associates will perform the following services in connection with preparation of a wastewater rate study for City of Palm Springs, working at all times in close cooperation with the City's staff and other consultants and advisors. 1. Project Team Orientation/Kickoff Meeting To initiate our work, hold a meeting with City staff, and others as appropriate, to accomplish the following: ■ Identify members of City staff, Council, and others who will participate in the project. ■ Determine the roles and responsibilities of all project participants. ■ Identify other parties that have a significant interest in the project, such as large customers and other public agencies. ■ Establish project schedule and key milestone dates. ■ Confirm the key goals, objectives, and expectations of the project team. 2. Investigation and Data Collection Assemble the infonnation necessary to understand and describe the City's current financial situation and its ability to finance the proposed wastewater capital improvements. Assistance and cooperation of City staff will be needed to assemble the background information. The objectives of investigation and data collection are to develop an understanding of the individual characteristics of the wastewater enterprise, its finances, the projects to be financed, and to reach an agreement on the basic assumptions to be used in the study. We will need a variety of information from the City, including the following: Financial Information: ■ Revenue and expense detail for 3-5 years ■ Current budget ■ Financial condition ■ Current rates and recent changes in rates ■ Conditions leading up to this study Customer Information: ■ Major customers ■ Wastewater flows and characteristics ■ Unusual characteristics of system ■ Growth rates - historical, projected Capital Facilities Information: 0 Capital facilities needs November 24, 2004 Page 3 ■ Approved capital improvement program or master plan ■ Project beneficiaries 3. Cost of Service Rate Setting Methodologies hi accordance with state law, the utility rates need to be based on cost of service criteria. Wastewater rates will be developed based on the methodology presented in the State Water Resources Control Board's Revenue Program Guidelines for Wastewater Agencies, modified as necessary to meet he City's available information and customer characteristics. 4. Analysis of Wastewater System Costs Analyze wastewater flow and strength records, cost information, revenue requirements, and other information available regarding wastewater enterprise. Analyze the costs and revenues associated with residential and nonresidential classes of customers to ensure equitable treatment of all customer classes. Allocate costs to various classes based on cost of service. 5. Analysis of Wastewater Rate Structure Review the City's current wastewater rate structure to determine if it provides equity among the various classes of users. If necessary, recormmend adjustments as appropriate. 6. Future Facilities Requirements Review capital improvement program and estimates of wastewater facilities capital needs and cost estimates. Develop a method to annualize these costs for rate determination. Review the capacity these facilities would add to the current wastewater systems. Work with City staff to identify any other future wastewater facilities that may be required for growth. 7. Preliminary Rate Recommendations—Draft Report Based on the analysis of current rates and charges, anticipated capital and operating expenses, and incorporating any rate structure adjustments, recommend a system of wastewater rates for various classes of customers. Project an adequate level of wastewater rates for the next five years. Prepare and submit a draft report of our findings and recommendations. Present for review our recommendation to City staff and others interested in the study. 8. Council Workshop or Presentations Receive staff comments and suggestions and incorporate as appropriate into our report. Prepare and lead a presentation to the City Council. The presentation may be in a workshop or other format. Present our report and findings at another public meetings as may be requested by the City. November 24, 2004 Page 4 Additional Services Remain available to attend additional meetings and provide additional financing consulting services beyond the scope of the tasks listed here, as requested by the City. Such services may include: ■ Meetings at the City in excess of 4 ■ Changes in project scope ■ Any other services not specified in this scope Schedule We will develop a mutually agreeable schedule to complete the study by late March 2005. Bartle Wells Associates is willing and able to complete the assigmnent in accordance with that schedule, provided that all necessary information is available from the City in a timely manner. Availability & Fees Bartle Wells Associates will perform the following services in connection with the wastewater rate study, working at all times in close cooperation with the City's staff and its other consultants and advisors. 1. We are prepared to begin work upon your acceptance of this proposal. The study will be completed in accordance with a schedule established jointly with the City. We understand that the City would like the study completed by late March 2005. 2. The fee for professional services will not exceed $24,800, including direct expenses. The fee is payable as provided in our Billing Rate Schedule 2004. 3. This fee is based on the following conditions: a. Availability of all necessary infonnation from the City in a timely manner. b. Attendance at not more than four meetings at the City. Preparation for and attendance at additional meetings will be billed according to our Billing Rate Schedule 2004. c. If the project is delayed due to circurnstances over which we have no control, we may request reimbursement for time and expenses incurred beyond a reasonable date. Costs will be based on our then-current billing rate schedule. d. One draft submittal of the report based on infonnation provided by the City. Time and expense involved in revising tables and assumptions due to changes in information or in preparing additional draft reports constitute additional services. 4. In addition to the services provided under this proposal, the City may authorize us to perform additional services for which the City will compensate us based on our hourly rates at the time the work is performed, plus direct expenses. November 24, 2004 Page 5 ■ Meetings in excess of 4 meetings ■ Changes in project scope ■ Delays in project schedule ■ Any other services not specified 5. Bartle Wells Associates will maintain in force, during the fall teen of the assigmnent, insurance in the amounts and coverage as provided in the Schedule of Insurance attached. 6. If the project is temnhlated for any reason, we are to be reimbursed for professional services and direct expenses incurred up to the time we receive notification of such termination. 7. This proposal may be withdrawn or amended if not accepted within 60 days of its date. Ene: Billing Schedule 2004 BARTLE WELLS ASSOCIATES BILLING RATE SCHEDULE 2004 Rates Effective 1/l/2004 Professional Services Financial Analyst I..................................................................................... $ 95 per hour Financial Analyst II..................................................................................... 120 per hour Project Consultant....................................................................................... 140 per hour Senior Consultant ....................................................................................... 155 per hour ProjectManager.......................................................................................... 170 per hour Principal Consultant.................................................................................... 185 per hour Expert witness, legal testimony or other special limited assigmnent will be billed at one and one-half tines the consultant's hourly rate. The professional time rates include all overhead and indirect costs. Bartle Wells Associates does not charge for secretarial support services and internal computer time. The above rates will be in effect through December 31, 2004, at which time they will be subject to change. Direct Expenses Word processing and computer-assisted services related to report and official statement production is charged as a direct expense at $50 per hour. Subconsultants will be billed at cost plus ten percent. Other reimbursable direct expenses incurred on behalf of the agency will be billed at cost plus ten percent. These reimbursable costs include, but are not limited to: ■ Travel, meals, lodging ■ Automobile mileage ■ Long distance telephone and fax ■ Messenger services and mailing costs ■ Typography and printing ■ Photocopying and report binding ■ Special statistical services ■ Graphic design and photography ■ Outside computer services ■ Legal services ■ Bond ratings ■ Advertisements Insurance Bartle Wells Associates maintains insurance in the arnounts and coverage as provided in the attached schedule of insurance. Special insurance, licensing, or permit requirements beyond what is shown on the schedule of insurance are billed in addition to the contract amount. Payment Fees will be billed monthly for the preceding month, and will be payable within 30 days of the date of the invoice. A late charge of 1 percent per month is applied to balances unpaid after 30 days. THOMAS E. GAFFNEY, CIPEA Experience Thomas E. Gaffney is a principal consultant of the firm and has over 25 years of consulting experience. He is an expert in water and wastewater financing plans and institutional programs, contract negotiations,utility rate studies, connection fee studies, and bond marketing. Mr. Gaffney has directed projects involving more than 300 separate agencies in California and 5 other western states. Mr. Gaffney has developed the key terns and conditions of multiple-agency agreements for over 15 regional financing programs. Tom has served as project manager on projects involving water and wastewater, reclaimed water, hydroelectricity,public buildings, storm drainage, flood control, and highways. He has helped implement utility billing systems for over 20 local agencies. Mr. Gaffney has managed sales of various forms of municipal bonds. Mr. Gaffney specializes in water and wastewater financing plans and rate studies. He has worked extensively developing wastewater revenue programs conforming to the SWRCB's Revenue Program Guidelines. He has developed water rate analyses involving virtually every type of fixed and volume water rate configurations. Project Assignments ■ City of Redwood City: Developed financing plan for over$38 million of recycled water capital facilities. ■ Selma-lUngsburg-Fowler CSD: Prepared a Financial Policies and CIP Update for$28 mullion of capital and replacement facilities. Recommended connection charges for the district and its member cities. ■ Marin Municipal Water District: $234 mullion capital facilities financing master plan; connection charge study; marketing of COPS and revenue bonds. ■ Napa Sanitation District: Prepared a revenue program as a portion of the requirements for an SRF loan. Developed a financing master plan requirements pay-as-you-go financing plan for$10 million of wastewater facilities. Developed a billing system for service to City of American Canyon ■ Novato Sanitary District: Financial advisor for$70 million wastewater treatment master plan. Recommended a policy plan for District restive funds. ■ City and County of San Francisco: Prepared capital financial plans for$2.5 billion of water facilities and$800 million of wastewater facilities. Prepared analysis of water and sewer rate structures. ■ City of Thousand Oaks: Wastewater financing plan including rate and connection charge study for$75 million of capital improvements. ■ City of Vacaville: Water and wastewater rate studies and wastewater capital facilities financing. ■ City of Woodland: Prepared water,wastewater, and storn drain rate studies. Developed a fully pay-as-you-go financing plan for the three City enterprises. ■ Zone 7 Water Agency: Prepared a plan for financing agricultural water facilities totaling over$200 million. Memberships and Professional Affiliations ■ Association of California Water Agencies ■ California Association of Sanitation Agencies ■ California Water Environment Association Registrations/Certifications Registered Civil Engineer in California Certified Independent Public Finance Advisor(CIPFA), and professional member of the National Association of Independent Public Finance Advisors Education B.S., Civil Engineering,University of California, Berkeley M.B.A.,Finance,University of California, Berkeley SOPI3IA D. SKODA,PE, CIPFA Experience Sophia D. Skoda is a senior consultant with Bartle Wells Associates. She assists public agencies in developing utility rates and connection fees, financing plans, revenue programs, and conducting bond sales. Ms. Skoda has developed user rates and financial plans for clients in California, Oregon and Washington. She has assisted in both revenue supported and GO bond sales. She has worked in the area of financial services since 1997. Ms. Skoda works closely with public agencies, engineers, and other consultants to develop financial models, evaluate financing alternatives, develop presentations, and assist in public outreach efforts. Prior to joining Bartle Wells Associates,Ms. Skoda worked as an associate with Brown and Caldwell in financial services. Recent Assignments ■ City of Benicia: Have assisted the City in development of water and wastewater financing plans. Currently updating water financial projections. ■ EBMUD: Currently completing a wastewater cost allocation study. ■ Town of Windsor: Updated water and wastewater rates. Completed recycled water rates. ■ Montara Water and Sanitary District: Coordinated the sale of$17.5M in bonds for acquisition of a private water system. Currently working on water rates and financing plan. ■ City of South San Francisco: Assisted in passing sewer rates in conjunction with implementation of a $50M capital program for wet weather facilities. Created impact fee for new development's share of industry specific sewer facilities. ■ Sonoma County Water Agency: Prepared an analysis of financing options for flood zone capital improvements inside of the agencies jurisdiction. ■ Oro Loma Sanitary District: Sold $7.7M in refunding bonds for a 12.7% savings. ■ City of Milpitas: Water, wastewater, and storm water rates and financing plan. ■ Zone 7 Water Agency: Prepared financial impact projections for water quality facilities financing. Developed an agricultural water financing plan. ■ City of Burlingame: Developed SRF revenue program for the City's Wastewater Treatment Plant hnprovements working in conjrmetion with the City's financing and engineering teams. ■ City of Daly City: Prepared SRF revenue program for the City's Water Recycling Project. ■ City of Thousand Oaks: Updated long range CIP financial plan. ■ City of Cotati: Developed water and wastewater rate and connection fee studies. ■ City of Woodland: Water, wastewater and storm drain rates and long term financial plans. ■ City of Yuba City: Assisted in valuation and acquisition of a private water company. Assisted in sale of$5M of water COPS and$12M of sewer COPS. ■ Squaw Valley Public Service District: Water, sewer and fire long range financing plans. ■ Fairbanks North Star Borough: Have prepared Offering Statements for GO bond issues for school improvements in 2000, 2001, 2002, 2003, and 2004. Education B.S., Stanford University M.S.,University of California at Berkeley Certifications Registered Professional Civil Engineer(PE)in California. Certified Independent Public Finance Advisor(CIPFA). s C7 f J/ if MINUTE ORDER NO. APPROVING AN AGREEMENT WITH BARTLE WELLS, TO PREPARE A WASTEWATER COST SERVICE STUDY, IN AN AMOUNT NOT-TO- EXCEED $24,800, AND AUTHORIZE THE CITY ATTORNEY TO PREPARE A CONTRACT SERVICES AGREEMENT. I HEREBY CERTIFY that this Minute Order, approving an agreement with Bartle Wells, to prepare a wastewater cost service study, in an amount not- to-exceed $24,800, and authorize the City Attorney to prepare a contract services agreement, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 15th day of December, 2004. KATHIE HART Acting City Clerk /1/11 13