HomeMy WebLinkAbout70-05 RESOLUTIONRESOLUTION NO. 70-05
A RESOLUTION TO APPROVE AN ENGINEERING SERVICES
CONTRACT WITH HDR/ECONOMIC AND ENGINEERING
SERVICES, INC. IN THE AMOUNT OF $60,636.00 WITH A
CONTINGENCY OF $8,000.00 FOR AN OPERATIONS STUDY
OF THE CITY'S WATER AND WASTEWATER OPERATIONS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS'
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
approves an engineering services contract with HDR/Economic and Engineering
Services, Inc. in the amount of $60,636.00 with a contingency of $8,000.00 for an
operations study of the City's water and wastewater operations.
PASSED and APPROVED this 5th day of April, 2005.
c R
:(j• • /0=
FAYETiEVILLE •
ATTEST:
y.RkANSP�J?
•'4••NG o,•
j1%%%%%% �
By:
AJC-/
SONDRA SMITH, City Clerk
By
APPROVED:
DAN COODY, Mayor
•
•
AGREEMENT
For
PROFESSIONAL ENGINEERING SERVICES
Between
CITY OF FAYETTEVILLE, ARKANSAS
And
HDR ENGINEERING, INC.
THIS AGREEMENT is made as of 4pri) ,,7 , 20by and between City of
Fayetteville, Arkansas, acting by and through204-, its Mayor (hereinafter called CITY OF
FAYETTEVILLE) and HDR ENGINEERING, INC. with offices located at 500 108th Avenue
N.E., Suite 1200, Bellevue, Washington 98004 (hereinafter called HDR).
CITY OF FAYETTEVILLE from time to time requires professional engineering services in
connection with the 2005 Water & Sewer System Operations Study. Therefore, CITY OF
FAYETTEVILLE and HDR in consideration of their mutual covenants agree as follows:
HDR shall serve as CITY OF FAYETTEVILLE's professional engineering consultant in those
assignments to which this Agreement applies, and shall give consultation and advice to CITY OF
FAYETTEVILLE during the performance of HDR's services. All services shall be performed
under the direction of a professional engineer registered in the State of Arkansas and qualified in
the particular field.
SECTION 1- AUTHORIZATION OF SERVICES
1.1 Services on any assignment shall be undertaken only upon written Authorization of
CITY OF FAYETTEVILLE and agreement of HDR
1.2 Changes, modifications or amendments in scope, price or fees to this contract shall
not be allowed without a formal contract amendment approved by the Mayor and the
City Council in advance of the change in scope, costs, fees, or delivery schedule.
SECTION 2 - BASIC SERVICES OF
Report on Operations of the Water & Sewer System
Initial Meeting and Data Collection
•
• •
2.1 The imtial project component includes preparation of a data request and a meeting with
City representatives to identify and discuss key project objectives and major points of
interest and concern, collect and discuss data pertinent to the study, and schedule
interviews and on-site surveys. Specific tasks anticipated are:
2.2 Prepare and submit an initial request for financial and operational data needed for the
study.
2.3 Meet with City representatives to identify major items of interest and concern
and to discuss principal objectives and policies.
2.4 Obtain and review financial and operational data and information.
2.5 Prepare instructions and provide assistance to appropriate City data processing,
billing, and accounting personnel for the development of historical tabulations of
customers' bills for water and sewer service. Summarize the bill and usage
distributions for use in forecasting revenues under existing and proposed rates.
2.6 Identify personnel to be interviewed and facilities to be observed, and establish
schedules for interviews and onsite observational tours.
Engineering Evaluation
2.7 The engineering evaluation will include interviews of key water and wastewater utility
personnel, observational tours of selected major water and wastewater system facilities,
review of operation and maintenance policies and procedures, and review of major
capital improvement programs.
2.8 The wastewater treatment plant and major lift stations are operated under contract, the
City will elicit the contractor's cooperation for interviews and observational tours.
Specific tasks to be performed are:
2.9 Conduct interviews with key water and wastewater utility personnel regarding
policies and procedures utilized to achieve safe, efficient and economical
operation.
2.10 Review operation and maintenance record keeping practices, records and
techniques to evaluate the impact on facility performance, maintenance, and
reliability.
2.1 I Review operation and maintenance techniques and policies regarding scheduled
maintenance, emergency maintenance, adequacy of staffing and equipment,
adequacy of funds, and availability of spare parts and replacement items.
2
•
2.12 Conduct onsite observational tours of selected above ground or readily
observable water and wastewater facilities to determine the general condition of
structures, improvements and equipment; and the adequacy of maintenance
policy and procedures.
2.13 Review the major capital improvement programs for the water and wastewater
utilities to evaluate the adequacy of planned future facilities to meet projected
service requirements.
Financial Analysis
2.14 The objective of this project component is to forecast revenue and revenue needs for the
water and sanitary sewer utilities based upon existing rates and fee schedules. The
adequacy of each utility's forecasted revenues to meet future revenue requirements shall
be analyzed to determine the level of revenue adjustments and debt financing, if either is
required, to meet forecasted revenue requirements on a sound utility financial basis.
This study component shall include the following subtasks prepared for a five year study
period separately for each utility:
2.15 Forecasts of accounts and billed volumes will be made for the study period by
considering historical growth trends, climatological patterns, local economic
conditions, the potential for adding/losing major utility customers, and changes
in customer class usage patterns over time. The volume projections will be made
based on projected number of utility accounts and a usage per account analysis
to differentiate the historical effects of account growth and increased (decreased)
usage by existing customers.
2.16 Forecasts of utility revenues under existing rates for the study period will be
developed recognizing projected accounts, volumes, and usage patterns by
customer class. Future revenues from miscellaneous sources such as interest
earnings, service installation charges, late payment penalties, and service
initiation fees will also be projected.
2.17 Study period revenue requirements will be developed based on an analysis of
historical, currently budgeted, and projected needs. The revenue requirements
will be projected on a yearly basis, taking into account expected operational
changes, changes in staffing or operating expenditures for new facilities, system
growth by new development, anticipated extraordinary expenses, and allowances ,
for inflation. Revenue requirements will include:
• Operation and maintenance expenses, including purchased water and
contract operations of the wastewater treatment plant.
• Outlays for routine annual capital additions and replacements.
• Debt service and reserve requirements on existing and proposed bond
issues
• Transfers for major capital improvements financing.
3
• Other cash requirements.
2.18 Forecasts of revenues and revenue requirements will be summarized into five-
year cash flow analyses for determination of revenue adequacy on an annual
basis. The cash flow analyses will identify annual revisions of water and sewer
utility revenues necessary to comply with bond covenant requirements, good
utility practice, or sound utility financing considerations recognizing current City
policy and planning.
Bond Ordinance Compliance
2.19 Concurrent with the engineering evaluation and financial analysis, Consultant will
evaluate the utilities' compliance with certain provisions of the Bond Ordinance No.
3638, No. 3829, No. 4159, and No. 4381, which places certain conditions and
requirements on the water and sewer utilities and which are designed to protect the
interest of the bond holders. Consultant will:
12.20 Verify that the following required funds have been established and that fund
balances and reserves are in compliance with bond covenants:
• Revenue Fund
• Operation and Maintenance Fund
• Bond Fund
• Renewal and Replacement Fund
• Debt Service Reserve Fund
• Construction Fund
2.21 Review insurance coverage of the water and sewer utilities.
2.22 Verify that required debt service coverage tests are being met.
2.23 Review other practices and procedures for compliance with the bond covenants.
Items to be reviewed will include, but will not necessarily be limited to, the
following:
• Required levels of bond payments are made through the designated
Paying Agent on a timely basis.
• Systems are operated on a fiscal year beginning January 1.
• Systems are maintained in good condition and operated in an efficient
manner at reasonable cost.
• No free water service is provided.
• The City has not mortgaged or disposed of any substantial portion of the
systems.
• Required budgets have been prepared.
• No action has been taken to cause the interest on the bonds to be subject
to federal income taxes.
• Improvements authorized by the Bond Ordinances are being or have
been constructed.
Reports and Meetings
2.24 Communication with the client is essential during all aspects of the study. Consultant
will:
• Maintain ongoing dialogue with City representatives concerning study progress
and policy issues through written and telephone communications and periodic
meetings.
• Prepare a draft Report on Operations of the Water & Sewer Systems incor-
porating the findings, conclusions, and recommendations of all facets of the
study and submit 5 copies of the report for review by City representatives.
• Prepare a final Report on Operations of the Water & Sewer Systems incor-
porating any revisions agreed upon as a result of the City's review of the draft
report, and submit 25 copies to the City.
• Present a presentation of study findings to Fayetteville Water & Sewer
Committee, Fayetteville City Council, Elkins Water & Sewer Committee,
Elkins Council, Farmington Water & Sewer Committee, Farmington Council,
Greenland Water & Sewer Committee and Greenland Council.
• Develop a project schedule which includes, the steps and milestone dates to be
undertaken in the completion of this project. Nonconformance with this
schedule by Consultant and its subconsultants may result in the assessment of
damages payable to the CITY OF FAYETTEVILLE. The maximum cost
liability of Consultant shall be limited to the total gross amount payable to the
Consultant authorized under this agreement, including amendments thereto.
• Render monthly Work progress reports to CITY OF FAYETTEVILLE project
manager.
• Attend Fayetteville Water and Sewer Committee meeting and the ensuing City
Council meeting to recommend action by the respective bodies. Prepare and
present a recommendation complete with such supporting information as
necessary for the bodies to make an informed decision on the action
recommended.
•
RESPONSIBILITIES OF CITY OF FAYETTEVILLE
CITY OF FAYETTEVILLE shall, within a reasonable time, so as not to delay services of
Consultant:
Provide full information as to CITY OF FAYETTEVILLE's requirements for the Project.
Assist Consultant by placing at Consultant's disposal all available information pertinent to the
assignment including previous reports and any other data relative thereto.
Provide such professional legal, accounting, financial, and insurance counseling services as may
be required for the Project.
Designate in writing a person to act as CITY OF FAYETTEVILLE's representative with respect
to the services to be performed under this Agreement.
PERIOD OF SERVICE
•
This Agreement will become effective upon the first written notice by CITY OF
FAYETTEVILLE authorizing services hereunder.
The provisions of this Agreement have been agreed to in anticipation of the orderly progress of
the Project through completion of the services stated in the Agreement. Consultant will proceed
with providing the authorized services immediately upon receipt of written authorization from
CITY OF FAYETTEVILLE. Said authorization shall include the scope of the services
authorized and the time in which the services are to be completed.
Compensation
For the Scope of Services described herein, CITY OF FAYETTEVILLE shall pay HDR the
lump sum amount of fifty two thousand, eight hundred twenty seven United States Dollars (US
$52,827.00), plus estimated reimbursable expenses of seven thousand, seven hundred sixty- six
United States Dollars (US $7,766.00), for a total contract not to exceed sixty thousand, six
hundred thirty-six United States Dollars (US $60,636.00).
•
• r
Subject to the City Council approval, adjustment of the lump sum amount may be made, should
HDR establish, and CITY OF FAYETTEVILLE agree that there has been or is to be a
significant change in scope, complexity or character of the services to be performed; or if CITY
OF FAYETTEVILLE decides to shorten the duration of work from the time period specified in
the Agreement for completion of work and such modification warrants such adjustment.
Changes, modifications or amendments in scope, price or fees to this Contract shall not be
allowed without formal contract amendment approved by the Mayor and the City Council in
advance of the change in scope, cost, fees, or delivery schedule.
The lump sum amount as stated in this Section shall be submitted in six (6) equal portions to
CITY OF FAYETTEVILLE for services consistent with HDR's normal billing schedule.
Reimbursable expenses shall be included applications for payment as accrued. Applications for
payment shall be made in accordance with a format to be developed by HDR and approved by
CITY OF FAYETTEVILLE. Each month an updated project report by task will be submitted to
the CITY OF FAYETTEVILLE as the basis for determining the value earned as the work is
accomplished. Final payment for services shall be made upon CITY OF FAYETTEVILLE's
approval and acceptance with the satisfactory completion of the Project.
Payments
All statements are payable upon receipt and due within thirty (30) days. If a portion of HDR's
statement is disputed by CITY OF FAYETTEVILLE, the undisputed portion shall be paid by
CITY OF FAYETTEVILLE by the due date. CITY OF FAYETTEVILLE shall advise HDR in
writing of the basis for any disputed portion of any statement. CITY OF FAYETTEVILLE will
make reasonable effort to pay invoices within 30 days of date the invoice is approved, however,
payment within 30 days is not guaranteed.
Final Payment
Upon satisfactory completion of the work performed under this Agreement, as a condition before
final payment under this Agreement, or as a termination settlement under this Agreement, HDR
shall execute and deliver to CITY OF FAYETTEVILLE a release of all claims for payment only
against CITY OF FAYETTEVILLE arising under or by virtue of this Agreement, except claims
• r
which are specifically exempted by HDR to be set forth therein. Unless otherwise provided in
this Agreement or by State law or otherwise expressly agreed to by the parties to this Agreement,
final payment under this Agreement or settlement upon termination of this Agreement shall not
constitute a waiver of CITY OF FAYETTEVILLE's claims against HDR or his sureties under
this Agreement or applicable performance and payment bonds, if any
GENERAL CONSIDERATIONS
Insurance
During the course of performance of these services, HDR will maintain (in United States
Dollars) the following minimum insurance coverages:
Type of Coverage
Workers' Compensation
Employers' Liability
Commercial General Liability
Bodily Injury and
Property Damage
Automobile Liability:
Bodily Injury and
Property Damage
Professional Liability Insurance
Limits of Liability
Statutory
$500,000 Each Accident
$1,000,000 Combined Single Limit
$1,000,000 Combined Single Limit
$1,000,000 Each Claim
HDR will provide to CITY OF FAYETTEVILLE certificates as evidence of the specified
insurance within ten days of the date of this Agreement and upon each renewal of coverage.
Professional Responsibility
HDR will exercise reasonable skill, care, and diligence in the performance of HDR's services
and will carry out its responsibilities in accordance with customarily accepted professional
engineering practices. HDR agrees not to seek or accept any compensation or reimbursements
from the City of Fayetteville for engineering work it performs to correct any errors, omissions or
other deficiencies caused by HDR 's failure to meet customarily accepted professional
engineering practices. CITY OF FAYETTEVILLE retains all other remedies to recover for its
damages caused by any negligence of HDR
In addition HDR will be responsible to CITY OF FAYETTEVILLE for damages caused by any
negligent conduct to the extent covered by HDR's Commercial General Liability and
Automobile Liability Insurance policies as specified above.
Changes
CITY OF FAYETTEVILLE shall have the right to make changes within the general scope of
HDR's services, with an appropriate change in compensation and schedule only after
Fayetteville City Council approval of such proposed changes and, upon execution of a mutually
acceptable amendment or change order signed by the Mayor of the CITY OF FAYETTEVILLE
and the President or any Vice President of HDR
Termination
This Agreement may be terminated in whole or in part in writing by either party in the event of
substantial failure by the other party to fulfill its obligations under this Agreement through no
fault of the terminating party, provided that no termination may be effected unless the other party
is given:
Not less than ten (10) calendar days written notice (delivered by certified mail, return receipt
requested) of intent to terminate,
An opportunity for consultation with the terminating party prior to termination.
This Agreement may be terminated in whole or in part in writing by CITY OF FAYETTEVILLE
for its convenience, provided that HDR is given:
Not less than ten (10) calendar days written notice (delivered by certified mail, return receipt
requested) of intent to terminate,
An opportunity for consultation with the terminating party prior to termination.
•
• •
If termination for default is effected by CITY OF FAYETTEVILLE, an equitable adjustment in
the price provided for in this Agreement shall be made, but no amount shall be allowed for
anticipated profit on unperformed services or other work,
Any payment due to HDR at the time of termination may be adjusted to cover any additional
costs to CITY OF FAYETTEVILLE because of HDR's default.
If termination for default is effected by HDR, or if termination for convenience is effected by
CITY OF FAYETTEVILLE, the equitable adjustment shall include a reasonable profit for
services or other work performed. The equitable adjustment for any termination shall provide
for payment to HDR for services rendered and expenses incurred prior to the termination, in
addition to termination settlement costs reasonably incurred by HDR relating to commitments
which had become firm prior to the termination.
Upon receipt of a termination action under Paragraphs above, HDR shall:
Promptly discontinue all affected work (unless the notice directs otherwise),
Deliver or otherwise make available to CITY OF FAYETTEVILLE all data, drawings,
specifications, reports, estimates, summaries and such other information and materials as may
have been accumulated by HDR in performing this Agreement, whether completed or in process.
Upon termination CITY OF FAYETTEVILLE may take over the work and may award another
party an agreement to complete the work under this Agreement.
If, after termination for failure of HDR to fulfill contractual obligations, it is determined that
HDR had not failed to fulfill contractual obligations, the termination shall be deemed to have
been for the convenience of CITY OF FAYETTEVILLE In such event, adjustments of the
agreement price shall be made as provided above.
Delays
In the event the services of HDR are suspended or delayed by CITY OF FAYETTEVILLE or by
other events beyond HDR's reasonable control, HDR shall be entitled to additional
10
• •
compensation and time for reasonable costs incurred by HDR in temporarily closing down or
delaying the Project.
Rights and Benefits
HDR's services will be performed solely for the benefit of CITY OF FAYETTEVILLE and not
for the benefit of any other persons or entities.
Dispute Resolution
Scope of Paragraph: The procedures of this Paragraph shall apply to any and all disputes
between CITY OF FAYETTEVILLE and HDR which arise from, or in any way are related to,
this Agreement, including, but not limited to the interpretation of this Agreement, the
enforcement of its terms, any acts, errors, or omissions of CITY OF FAYETTEVILLE or HDR
in the performance of this Agreement, and disputes concerning payment.
Exhaustion of Remedies Required: No action may be filed unless the parties first negotiate. If
timely Notice is given, but an action is initiated prior to exhaustion of these procedures, such
action shall be stayed, upon application by either party to a court of proper jurisdiction, until the
procedures have been complied with.
Notice of Dispute
For disputes arising prior to the making of final payment promptly after the occurrence of any
incident, action, or failure to act upon which a claim is based, the party seeking relief shall serve
the other party with a written Notice;
For disputes arising within one year after the making of final payment, CITY OF
FAYETTEVILLE shall give HDR written Notice at the address listed in the contract within
thirty (30) days after occurrence of any incident, accident, or first observance of defect or
damage In both instances, the Notice shall specify the nature and amount of relief sought, the
reason relief should be granted, and the appropriate portions of this Agreement that authorize the
relief requested.
11
Negotiation: Within seven days of receipt of the Notice, the Project Managers for CITY OF
FAYETTEVILLE and HDR shall confer in an effort to resolve the dispute. If the dispute cannot
be resolved at that level, then, upon written request of either side, the matter shall be referred to
the President of HDR and the Mayor of CITY OF FAYETTEVILLE or his designee. These
officers shall meet at the Project Site or such other location as is agreed upon within 30 days of
the written request to resolve the dispute.
CITY OF FAYETTEVILLE represents that it has sufficient funds or the means of obtaining
funds to remit payment to HDR for services rendered by HDR
Indemnification
Computer Models
HDR may use or modify HDR's proprietary computer models in service of CITY OF
FAYETTEVILLE under this Agreement, or HDR may develop computer models during HDR's
service to CITY OF FAYETTEVILLE under this Agreement. Such use, modification, or
development by HDR does not constitute a license to CITY OF FAYETTEVILLE to use or
modify HDR's computer models. Said propnetary computer models shall remain the sole
property of the CITY OF FAYETTEVILLE and HDR will enter into a separate license
agreement if CITY OF FAYETTEVILLE wishes to use HDR's computer models.
Ownership of Documents
All documents provided by CITY OF FAYETTEVILLE remain the property of CITY OF
FAYETTEVILLE. HDR may retain reproduced copies of drawings and copies of other
documents.
Engineering documents, drawings, and specifications prepared by HDR as part of the Services
shall become the property of CITY OF FAYETTEVILLE when HDR has been compensated for
all Services rendered, provided, however, that HDR shall have the unrestricted right to their use.
HDR shall, however, retain its rights in its standard drawings details, specifications, databases,
computer software, and other proprietary property. Rights to intellectual property developed,
utilized, or modified in the performance of the Services shall remain the property of HDR
12
• •
Any files delivered in electronic medium may not work on systems and software different than
those with which they were originally produced. HDR makes no warranty as to the compatibility
of these files with any other system or software. Because of the potential degradation of
electronic medium over time, in the event of a conflict between the sealed original drawings/hard
copies and the electronic files, the sealed drawings/hard copies will govern.
Notices
Any Notice required under this Agreement will be in writing, addressed to the appropriate party
at the following addresses:
CITY OF FAYETTEVILLE's address:
City of Fayetteville
Mayor Dan Coody
113 W. Mountain
Fayetteville, AR 72701
HDR ENGINEERING, INC's address:
500 108th Avenue N.E.
Suite 1200
Bellevue, Washington 98004
Successor and Assigns
CITY OF FAYETTEVILLE and HDR each binds himself and his successors, executors,
administrators, and assigns to the other party of this Agreement and to the successors, executors,
administrators, and assigns of such other party, in respect to all covenants of this Agreement;
except as above, neither CITY OF FAYETTEVILLE nor HDR shall assign, sublet, or transfer
his interest in the Agreement without the written consent of the other.
Controlling Law
This Agreement shall be subject to, interpreted and enforced according to the laws of the State of
Arkansas without regard to any conflicts of law provisions.
13
Entire Agreement
This Agreement represents the entire Agreement between HDR and CITY OF FAYETTEVILLE
relative to the Scope of Services herein. Since terms contained in purchase orders do not
generally apply to professional services, in the event CITY OF FAYETTEVILLE issues to HDR
a purchase order, no preprinted terms thereon shall become a part of this Agreement. Said
purchase order document, whether or not signed by HDR, shall be considered as a document for
CITY OF FAYETTEVILLE's internal management of its operations.
SPECIAL CONDITIONS
HDR shall be and shall remain liable, in accordance with applicable law, for all damages to
CITY OF FAYETTEVILLE caused by HDR's negligent performance of any of the services
furnished under this Agreement except for errors, omissions or other deficiencies to the extent
attributable to CITY OF FAYETTEVILLE or CITY OF FAYETTEVILLE-furnished data.
HDR's obligations under this clause are in addition to HDR's other obligations under this
Agreement or State law and in no way diminish any other rights that CITY OF
FAYETTEVILLE may have against HDR for services provided.
Remedies
Except as may be otherwise provided in this Agreement, all claims, counter -claims, disputes and
other matters in question between CITY OF FAYETTEVILLE and HDR arising out of or
relating to this Agreement or the breach thereof will be decided in a court of competent
jurisdiction within Arkansas.
Audit: Access to Records
HDR shall maintain books, records, documents and other evidence directly pertinent to
performance on work under this Agreement in accordance with generally accepted accounting
principles and practices consistently applied in effect on the date of execution of this Agreement.
HDR shall also maintain the financial information and data used by HDR in the preparation of
support of the cost submission required for any negotiated agreement or change order and send
to CITY OF FAYETTEVILLE a copy of the cost summary submitted. CITY OF
14
FAYETTEVILLE, or any of their authorized representatives shall have access to all such books,
records, documents and other evidence for the purpose of inspection, audit and copying during
normal business hours. HDR will provide proper facilities for such access and inspection.
Records shall be maintained and made available during performance on assisted work under this
Agreement and until three years from the date of final payment for the project. In addition, those
records which relate to any controversy arising out of such performance, or to costs or items to
which an audit exception has been taken, shall be maintained and made available until three
years after the date of resolution of such appeal, litigation, claim or exception.
This right of access clause (with respect to financial records) applies to:
Negotiated prime agreements:
Negotiated change orders or agreement amendments in excess of $10,000 affecting the price of
any formally advertised, competitively awarded, fixed price agreement:
With respect to record pertaining directly to subagreement performance, excluding any financial
records of HDR;
If there is any indication that fraud, gross abuse or corrupt practices may be involved;
If the subagreement is terminated for default or for convenience.
Covenant Against Contingent Fees
HDR warrants that no person or selling agency has been employed or retained to solicit or secure
this Agreement upon an agreement of understanding for a commission, percentage, brokerage or
continent fee, excepting bona fide employees or bona fide established commercial or selling
agencies maintained by HDR for the purpose of securing business. For breach or violation of
this warranty, CITY OF FAYETTEVILLE shall have the right to annul this Agreement without
liability or at its discretion, to deduct from the contract price or consideration, or otherwise
recover, the full amount of such commission, percentage, brokerage, or contingent fee.
15
Gratuities
If CITY OF FAYETTEVILLE finds after a notice and hearing that HDR or any of HDR's agents
or representatives, offered or gave gratuities (in the form of entertainment, gifts or otherwise) to
any official, employee or agent of CITY OF FAYETTEVILLE, in an attempt to secure an
agreement or favorable treatment in awarding, amending or making any determinations related to
the performance of this Agreement, CITY OF FAYETTEVILLE may, by written notice to HDR
terminate this Agreement. CITY OF FAYETTEVILLE may also pursue other rights and
remedies that the law or this Agreement provides. However, the existence of the facts on which
CITY OF FAYETTEVILLE bases such finding shall be in issue and may be reviewed in
proceedings under the Remedies clause of this Agreement.
In the event this Agreement is terminated as provided above, CITY OF FAYETTEVILLE may
pursue the same remedies against HDR as it could pursue in the event of a breach of the
Agreement by HDR As a penalty, in addition to any other damages to which it may be entitled
by law, CITY OF FAYETTEVILLE may pursue exemplary damages in an amount (as
determined by CITY OF FAYETTEVILLE) which shall be not less than three nor more than ten
times the costs HDR incurs in providing any such gratuities to any such officer or employee.
Arkansas Freedom of Information Act
City contracts and documents, including internal documents and documents of subcontractors
and sub -consultants, prepared while performing City contractual work are subject to the
Arkansas Freedom of Information Act (FOIA). If a Freedom of Information Act request is
presented to the CITY OF FAYETTEVILLE, HDR will do everything possible to provide the
documents in a prompt and timely manner as prescribed in the Arkansas Freedom of Information
Act (A.C.A. §25-19-101 et seq.). Only legally authorized photocopying costs pursuant to the
FOIA may be assessed for this compliance.
16
Debarment And Suspension
I certify that to the best of my knowledge and belief that the company that I represent and its
principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded from covered transactions by any Federal department or agency;
(b) Have not within a three year period preceding this proposal been convicted of or had a
civil judgement rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a public (Federal, State, or
local) transaction or contract under a public transaction; violation of Federal or State
antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a government
entity (Federal, State, or local) with commission of any of the offenses enumerated in
paragraph (b) of this certification; and
(d) Have not within a three-year period preceding this application/proposal had one or more
public transactions (Federal, State, or local) terminated for cause or default.
I understand that a false statement on this certification regarding debarment and suspension may
be grounds for rejection of this proposal or termination of the award. In addition, under 18 USC
Sec. 1001, a false statement may result in a fine of up to $10,000 or imprisonment for up to 5
years, or both. I further certify that I will obtain a similar certification for each subcontract
awarded in excess of $25,000.
DEBARMENT CERTIFICATION
AUTHORIZED REPRESENTATIVE
HDR ENGINEE, C.
SIGNATURE. 2
t DATE: 76-54-, n
PRINTED NAME: &AI JI '3 Owe S TITLE• Jeer ri ci• /�
17
•
•
•
IN WITNESS WHEREOF, CITY OF FAYETTEVILLE, ARKANSAS by and through its
Mayor, and HDR, by its authorized officer have made and executed this Agreement as of the day
and year first above written.
CITY OF FAY, EVIL _, A' SAS
��................ By:
U.•GASYOFSG,p 1.
Mayor
1' = ATTEST:
E_ ;FAYETTEVILLE'
9:'k•S By: W1ow/V 'VIL '• �'KANSPJ=
City Clerk
HDR ENG RING, INC.
By:
Title:
S. til)r- 4 P at.d—
Changes, modifications or amendments in scope, price or fees to this Contract shall not be
allowed without formal contract amendment approved by the Mayor and the City Council in
advance of the change in scope, cost, fees, or delivery schedule.
END OF AGREEMENT FOR PROFESSIONAL ENGINEERING SERVICES
18
• •
City of Fayetteville
Work Plan for the Operations Report
of the Water and Sewer System
Task 1—Initial Meeting and Data Collection
Task Objective: Bring the Consultant, City management and staff together, at the start of the
project, to assure that both parties have a mutual understanding of the goals, objectives, issues
and concerns related to the study. Review and assess the City's existing water, sewer, and storm
water data, and provide a written data request detailing the data required to complete the study.
The initial project meeting is used as a starting point for the study. It is proposed that the initial
project meeting be approximately %2 day in length, and review the goals, objectives and key
issues for the operations study. One of the key objectives to be accomplished in the initial
project meeting is the scheduling of interviews and on-site surveys. Discussions will be held to
determine the appropriate individuals and their availability. A determination will be made of the
specific facilities to be surveyed/observed and the method to best accomplish this task. A
schedule will be determined and arranged to conduct the survey tours.
At the same time, provide a written data request to the City will be provided to obtain the
necessary financial and operational data and information needed to complete the study. The data
and information requested for this study should be, for the most part, readily available
information (e.g. financial, operational, statistical, customer, etc.).
An important data item is customer billing and bill tabulation information. HDR/EES will work
closely with the City's customer service and data processing personnel to obtain the data and
information in a format suitable for this study. HDR/EES does not anticipate any major
problems obtaining this data and information in a suitable format.
Expected City Staff Support for Task 1:
• Have their key management/project team members attend a %2 day planning meeting.
• Review the on-site facilities to be surveyed and determine a schedule to conduct the on-site
surveys
• Gather the data requested in the written data request provided by EES. (Note: typically
requires 20 — 40 hours of total staff time to provide.)
• Work with City staff to determine the format for bill tabulation data.
Work Product Deliverables as a Result of Task 1 -Initial Rick -off Meeting.
■ Face-to-face meeting to identify key objectives, issues and concerns by both parties.
• An initial written data request to the City
■ Identification of any data constraints.
• Schedule for conducting on-site surveys
• Format and approach to obtain bill tabulation data
I Work Plan - Operations Study
I MeeS City of Fayetteville
A-1
H. •
2 —Engineering Evaluation
(Task Objective: Evaluate the operation, and maintenance practices of the water and wastewater
utilities to assess the condition, reliability, performance or current infrastructure and major
capital improvements planned for the utilities.
This work will be accomplished through a combination of meetings with City utility/OMI
(contract staff, field inspections of readily accessible infrastructure, review of operational and
maintenance procedures and records, as well as a regulatory review of compliance confirmed by
(written inspections, correspondence, and personal contact with the appropriate state and local
(regulatory agencies. Key engineering data requests will be provided the Task I as well as
,contact information for operational staff and regulatory agency personnel.
A summary of each system's major infrastructure will be provided along with reported
tcapacities. Programmatic activities such as monitoring, cross connection control, source
iprotection, conservation, meter reading, industrial pretreatment, UI control, biosolids
management, odor control and others will also be summarized. Levels of certified operators in
specialty areas will be compared to regulatory requirements, and record keeping practices will be
examined. In addition, recommended capital improvements and summary write ups for their
need and justification will be requested and reviewed in relation to the system's most recent
futility master plan.
All conditions and criteria outlined in the bond covenants will be compared to the engineering
,information. Any areas of compliance and/or discrepancy will be noted and observations on
leas of improvement will be included. Observations regarding funding priorities for adequate
renewal and replacement activities, GASB 34 inventory control and asset management practices,
,and other issues influencing system integrity will be included.
� Expected City Staff Support for Task 2:
l ■ Provide copies of most recent utility plans and all requested data for each system.
• Explain current operating and maintenance practices as well as all planned changes.
• Guide and accompany the consultants in field visits and observations of infrastructure
facilities.
■ Provide requested information regarding all planned, documented, and anticipated capital
improvements.
• Participate in interviews and meetings.
Work Product Deliverables as a Result of Task 2 —Engineering Evaluation
■ A Report on the Operations of the Water and Sewer Systems.
■ Summary table of key infrastructure features.
■ Summary of key observations, compliance, and discrepancies.
Task 3 —Financial Analysis
I Task Objective: Develop a five-year forecast of the revenues and expenses (i.e. revenue
requirements) for the water and sewer utility. The analysis should be summarized to identify the
needed annual adjustments to water and sewer rates. The analysis must comply with bond
L� m Work Plan - Operations Study A-2
1 Lam\ t/,\MS City of Fayetteville
requirements, prudent financial planning criteria and sound business practices.
five-year forecast of revenues and expenses (i.e. revenue requirements) will be undertaken.
is portion of the study entails reviewing, for each utility, the various sources of funds
venues) and comparing them to the applications of funds (expenses) for the utility. This task
risiders the prudent and proper funding for O&M and capital expenditures for each utility, and
[ermines the need for any rate adjustments over the five-year time period. A more detailed
;cussion of the various steps involved in developing the City's financial analysis (revenue
luirements) for each utility is provided below.
'STEP 1 — SELECTION OF A TEST PERIOD — The first step in the development of the financial
[analysis is the selection of a "test period". A five-year future test period is required. In this case,
la five-year projected time period of CY 2006-2010 is proposed.
'STEP 2 —FORECAST OFACCOUNTS AND BILLED VOLUMES — For the five-year period, the number
lof accounts and billed volumes will be developed. The forecast of accounts and billed volumes
twill be developed on a monthly basis for the five-year period and summarized as an annual
(forecast. In forecasting the accounts and billed volumes, consideration will be given to a number
lof factors that impact customer growth and consumption. These factors include the local
economic climate, climate, changes with major customers and changes in customer usage
behavior. HDR/EES will review our account and billed volume forecasts with the City to verify
(reasonableness. Tables will be developed that compare the last five historical years with the
projected five-year period of the number of accounts and billed usage.
!STEP 3— FORECAST OF REvENuEs — For each utility, a forecast of the projected revenues will be
developed. Based upon the forecasted number of accounts and billed volumes (Step 2), the
(projection of rate revenues will be at present (current) rate levels. A table will be developed that
(compares the last five year's historical rate revenues to the projected five-year rate revenues. In
addition to rate revenues, the City receives a variety of miscellaneous revenues. The
miscellaneous revenues will also be projected for the five year period and summarized.
'STEP 4— PROJECTION OF EXPENSES (REVENUE REQUIREMENTS) — For the five-year period, a
projection of the "cash basis" revenue requirements for each utility will be undertaken. The
(revenue requirements will be. projected on an annual basis. Table 1 provides an overview of the
"cash basis" revenue requirements to be used in this study.
+ O&M Expense
— Purchased Water (Water Utility)
— Purchased Contract Operations (Sewer Utility)
Other O&M Expenses
+ Taxes or Transfer Payments
+ Capital Projects Financed with Rate Revenues (≥ Deprec. Exp.)
+ Debt Service (P+I)
= Total Revenue Requirements
!The projection of O&M expenses will take into account any changes in operations or anticipated
� Work Plan - Operations Study A-3
L 1 1.J.\ I City of Fayetteville
ladditional personnel over the five-year period. It should also take into account changes due to
,growth or any extra -ordinary expense anticipated during the five-year time period.
,In projecting the capital projects ftiiided from rates, consideration will be given to the City's
!capital improvement plans and the key findings of the engineering evaluation. HDR/EES is of
,the understanding that the City funds a portion of their capital infrastructure via sales tax. The
;balance of infrastructure funding is obtained primarily from rates, connection fees and long-term
!borrowing.
STEP 5— SUMMARIZE THE PROJECTION OF REVENUE REQUIREMENTS — Given the projection of
revenue and expenses, the results will be summarized into a revenue requirement analysis. This
(summary will indicate and identify any needed adjustments to water and sewer rates to meet the
;financial requirements of each utility. The revenue requirements will be developed individually
for the water and sewer utility, and summarized on an annual basis for the five-year period. The
,final revenue requirements must be developed in concert with the engineering evaluation (Task
2) and the bond ordinance compliance (Task 4).
!Expected City Staff Support for Task 3:
1■ Provide "as needed" assistance, via email and telephone, to explain the City's data and
information as it relates to developing the revenue requirements.
I■ Provide "as needed" data refinements or additional data needs as determined during the
process of developing the revenue requirements.
�■ Attend a one-half day project meeting to review the draft revenue requirement analysis.
Work Product Deliverables as a Result of Task 3 —Financial Analysis:
• A
five-year projection
of the
City's
water and sewer accounts and billed volumes
• A
five-year projection
of the
City's
water and sewer rate revenues and miscellaneous revenues.
• A
five-year projection
of the
City's
water and sewer revenue requirements.
• A
summary of the anticipated (projected) adjustments to water and sewer rates to support each
utility
on a financially
stable
basis
and meet the various bond
covenants.
4 —Bond Ordinance Compliance
Task Objective: In conjunction with the engineering evaluation and financial analysis, evaluate
each utility's compliance with certain provisions of the outstanding bond ordinances.
Bond covenants are designed to protect the bond holders and provide assurance that the City's
utilities are being operated in a prudent manner and that the rates and charges of the City are
sufficient to repay the bonds. In order to make that determination an analysis will be undertaken
to review the various bond covenants and report on the City's status of meeting those covenants.
An overview of our approach to review compliance with the bond ordinances is provided below.
lThe first
step of
reviewing the bond ordinance
compliance is to gain an understanding of the
(various bond ordinances
currently in place. To
do this, Bond Ordinances No. 3638, 3829, 4159
and 4381
will be
reviewed to determine the various conditions and requirements placed upon the
City. A
simple
matrix will be developed to
summarize these conditions and requirements
imposed
by each
bond ordinance.
L� Work Plan - Operations Study A-4
11.l\ nieesCity of Fayetteville
typical requirement of a bond ordinance is the establishment of various funds and maintenance
minimum balances. In this case, HDR/EES will verify the establishment of the following
nds and their balances:
• Revenue Fund
• Operation and Maintenance Fund
• Bond Fund
• Renewal and Replacement Fund
• Debt Service Reserve Fund
• Construction Fund
bond covenants also require insurance coverage to protect the water and sewer assets of the
y. HDR/EES will verify that any required insurance is in force and meets the minimum
irements of the bond ordinance.
Debt service coverage ratios are a financial measure of the utility's ability to repay debt. Debt
service coverage (DSC) ratios will be calculated as a part of the financial analysis (Task 3), and
will be calculated in compliance with the rate covenant of each bond ordinance. The DSC is
calculated before and after any projected rate adjustments.
review will be undertaken of other practices and procedures for compliance with bond
'enants. Items to be reviewed, but not limited to, include the following:
• Required levels of bond payments are made through the designated Paying Agent and on
a timely manner
• Systems are operated on a fiscal year (FY) beginning January 1
• Systems are maintained in good condition and operated in an efficient manner at
reasonable cost
• No free water service is provided
• The City has not mortgaged or disposed of any substantial portion of the systems
• Required budgets have been prepared
• No action has been taken to cause the interest on bonds to be subject to federal income
taxes (i.e. private use)
• Improvements authorized by the Bond Ordinances are being, or have been, constructed
Expected City Staff Support for Task 4:
■ Provide the data and information necessary to review compliance with bond ordinances
Work Product Deliverables as a Result of Task 4 Bond Ordinance Compliance:
• Matrix of the bond covenants for each bond issue (bond ordinance)
• Verification of the establishment of the required funds and maintenance of minimum balances
(if required)
• Verification that required insurance coverage is in force
1 ■ Verification and summary of the debt service coverage tests for each bond issue (bond
I ordinance)
I ■ Review of other practices and procedures required of each bond ordinance.
L�L.\ mm Work Plan - Operations Study A-5
1 I em City of Fayetteville
t • •
5 —Reports and Meetings
Task Objective: Provide a well -written report to summarize the findings, conclusions and
recommendations of the rate study. Provide effective public presentations of the findings, results
l and recommendations of the study.
I
(Upon completion of the tasks, HDR/EES will develop a written report of the operations study. A
draft final version of the operations study will be prepared. Five (5) printed copies of the draft
,final report will be provided to the City, along with an electronic (PDF) version of the report.
;The City will provide comments and suggested changes to the operations report, and final reports
'will be issued. The City has requested twenty-five (25) bound copies of the final operations
report and an electronic copy.
'Based upon discussions with the City, it is assumed that two (2) public presentations of the
'results will be provided. Furthermore, these meetings will be coordinated to occur the same day.
The first meeting will be with the City's working selection group and the other meeting will be
,with the the Fayetteville Water and Sewer Committee / Fayetteville City Council.
IHDR/EES will be available for additional public meetings to discuss the operations study but this
effort will require a revision to the scope and budget.
!Expected City Staff Support for Task 5:
�■ Review the draft operations report and provide comments for the final reports
I■ Assist in reviewing the proposed handouts for a public meeting and coordinate the meeting
time and location during the visit.
I Work Product Deliverables as a Result of Task 5 — Reports and Meetings
I■ Draft and final reports for the Operations Study.
■ Development of handouts and attendance at public presentations with the Fayetteville Water
and Sewer Committee and Fayetteville City Council to discuss the study and its conclusions,
and make recommendations.
6 —Project Administration
k Objective: Manage
the study to
assure that it completed on time and within budget
rdinate a work plan with the City's
project manager to assure
that the project meets the
is and objectives of the
City. Provide
monthly progress reports to
the City.
assure that the project is completed on time and within budget, the HDR/EES project
lager for this study will work closely with the City's project manger to maintain open and
r communication. A work plan will be developed to assure that both parties understand the
Is and objectives of each task, along with deliverables for each.
IAs invoices are prepared, a monthly progress report will be provided to keep the City's project
-manager aware of any issues or problems that may arise, along with a clear understanding of the
(status of the budget.
Expected City Staff Support for Task 6:
■ Review of the HDR/EES work plan
��) �n Work Plan - Operations Study A -S
It 1 taws City of Fayetteville
Availability of the City's Project Manager to discuss and resolve any problems, issues or
concerns of either party.
Work Product Deliverables as a Result of Task 6 —Project Administration
Monthly invoice and project status report
Time Schedule
important element of this study is the time schedule. It is our current understanding that the
rations study must be completed prior to September 1, 2005. To achieve this project
dine, the following project time schedule has been developed.
•j .14
2005
Task
Description
April May
June July
August
fl
Oct
1
Initial Meeting/Data Collection
•
2
Engineering Evaluation
3
Financial Analysis
4
Bond Ordinance Compliance
5a
Written Reports
5b
Public Presentations
•
0
6
Project Administration
1 Budget By Task
agreement for professional engineering services has a "lump sum" fee arrangement.
ded below in Table I is a summary of the fees by task.
Labor:
Task I: Initial Project Meeting and Data Collection
Task 2: Engineering Evaluation
Task 3: Financial Analysis
Task 4: Bond Ordinance Compliance
Task 5: Written Reports and Presentations
Task 6: Project Administration
Grand Total Labor Fees (Lump Sum Basis)
Plus: Estimated Reimbursable Expenses
$2,955
16,890
11,850
6,985
11,100
3,090
i
$7,766
labor portion of the fee is
a fixed lump
sum amount, while travel and
other
miscellaneous
�nses will be reimbursed.
For purposes
of Table 2, the expenses have
been
estimated and are
��-y� Work Plan - Operations Study
i lJ.� meo City of Fayetteville
A-7
• •
• not intended to create a "not to exceed" limit or threshold.
Any additional meetings beyond the original scope of services will be provided for $3,000 per
meeting, plus travel and miscellaneous expenses. These meetings must be at the request of the
City. Any out of scope work, or additional requested services by the City in 2005, will be
provided at the hourly billing rates used to determine the lump sum fee for the original scope of
services.
FIJIAAA Work Plan - Operations Study A-8
1 Lam\ I City of Fayetteville
S I
City Council Meeting of April 5, 2005
yeuerile
CITY COUNCIL AGENDA MEMO
To: Mayor and City Council
Thru: Bob Davis, Water/Wastewater Director
Stephen Davis, Finance and Internal Services Directo,
From: David Jurgens, Water/Wastewater
Rainy Laycox, Billing & Collection Manager
ND4/ conaM1t
f
ylZA6,,4-ar' "5
L41
Date: March 23, 2005
Subject: Resolution approving an engineering services contract with HDR/Economic
and Engineering Services, Inc., for a detailed evaluation and report of the
Water/Sewer operations, as required by the terms of the City's Water and
Wastewater bond covenants
RECOMMENDATION
Fayetteville City Administration recommends approval of an authorization totalling
$60,636.00, said amount being the face value of a proposed contract with HDR/
Economic and Engineering Services, Inc. (HDR/EES), and approving a contingency of
$8,000.00.
BACKGROUND
The City of Fayetteville must, by bond indenture requirement, conduct an operations
study of the water and sewer utility (Utility) every three (3) years. The operations study
examines the Utility and reports on the following elements:
• Engineering Evaluation
• Financial Analysis
• Compliance with Bond Indenture(s)
The City committed to our customer groups to solicit requests for qualification for the
required operations report for 2005 and in compliance with contractual terms invited
West Fork and Elkins to participate in the selection process. Additionally, Fayetteville
offered representation to Farmington, Greenland, Goshen, the Fayetteville Chamber of
Commerce and the University of Arkansas. Elkins, Farmington, Goshen, Fayetteville
Chamber of Commerce and the University of Arkansas have participated fully in this
selection process.
The contracts with West Fork and Elkins require the City of Fayetteville engage a
registered professional engineering firm with a national presence to conduct rate studies.
Additionally, contractual terms also require rates to be developed on a utility model cost
of service basis. The City reviewed statements of qualifications for engineering firms
that meet the contractual requirements. The initial listing included seven firms and the
Committee narrowed the list to three firms: Carter & Burgess, Burns & McDonnell and
HDR/EES.
City Council Meeting of April 5, 2005
Ieer le
Through several meetings and interviews in February, 2005, the Committee selected
HDR/EES to perform the work. A contract has been negotiated with HDR/EES (copy
attached) wherein the services will be provided for a lump sum cost of $52,870.00 plus
estimated reimbursible expenses of $7,766.00.
In order to continue building consensus and promoting concept buy -in, a selection group
consisting of representatives from Elkins, Farmington, Goshen, the University of
Arkansas, the City of Fayetteville Chamber of Commerce, and City staff have committed
to continue through the completion of this process with the distribution of the final report.
DISCUSSION
To meet the bond covenants, the study must be completed by 1 September 2005. This
Operations Study Project is planned to include the following scheduled briefings for the
Selection Group:
• Water Distribution System — capacity and condition assessment
• Wastewater Collection and Treatment system — capacity and condition
assessment
• Asset Management Strategy for the Utility (GASB 34)
HDR/EES is scheduled to give a presentation of their report to the Fayetteville City
Council prior to 1 September, 2005.
The contingency is requested to expedite approval of any additional presentations or
additional work that may be required.
BUDGET IMPACT
The $68,636.00, including the $8,000.00 contingency, is included in the 2005 budget.
RESOLUTION NO.
A RESOLUTION TO APPROVE AN ENGINEERING SERVICES
CONTRACT WITH HDR/ECONOMIC AND ENGINEERING
SERVICES, INC. IN THE AMOUNT OF $60,636.00 WITH A
CONTINGENCY OF $8,000.00 FOR EVALUATION AND RATE
STUDY OF THE CITY'S WATER AND WASTEWATER
OPERATIONS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
approves an engineering services contract with HDR/Economic and Engineering
Services, Inc. in the amount of $60,636.00 with a contingency of $8,000.00 for
evaluation and rate study of the City's water and wastewater operations.
PASSED and APPROVED this 5th day of April, 2005.
ATTEST:
By:
SONDRA SMITH, City Clerk
By:
APPROVED:
DAN COODY, Mayor
Proposed Goals
For the Selection Group
For the 2005 Water & Sewer Operations Study
• Promote customer confidence by providing operational and financial transparency
to utility consumers.
• Promote exceptional environmental stewardship through independent
confirmation of the functional status of the water & sewer utility.
• Obtain independent assessment of the financial condition of the water & sewer
utility.
• Provides a basis for determining optimum utility services that are funded fairly
and equitably.
• Provides a basis for future utility investments to insure system reliability.
• Providing the framework that addresses the long-term service and the functional
and financial viability of the System.
• Recognizing the System as an integral part of a larger community
I. -Rclm�
. ,
m
M ■
om §m
-m �o�sATo of �omNkrN §
-I® c
m
• mm �m _ a
• m
m
jrn
% M 2 m
§ 2 m
• ) § q /
o z @
,
o
% @
c
$ q n -<
z 2 . CO
r q
mn
k "n
•
Water & Sewer Operations Study Selection Committee Milestone Dates
Project Milestone
Early
Late
Kickoff Meeting
February 4
February 4
Selection Committee Recommendation for Preferred
Consultant
February 22
March 8
City Council Agenda Session
March 8
March 25
City Council Contract Authorization
March 15
April 5
Report Presentation — City Council
August 9
August 30
City of Fayetteville
Work Plan for the Operations Report
of the Water and Sewer System
Task 1 —Initial Meeting and Data Collection
Task Objective: Bring the Consultant, City management and staff together, at the start of the
project, to assure that both parties have a mutual understanding of the goals, objectives, issues
and concerns related to the study. Review and assess the City's existing water, sewer, and storm
water data, and provide a written data request detailing the data required to complete the study.
The initial project meeting is used as a starting point for the study. It is proposed that the initial
project meeting be approximately %2 day in length, and review the goals, objectives and key
issues for the operations study. One of the key objectives to be accomplished in the initial
project meeting is the scheduling of interviews and on -site surveys. Discussions will be held to
determine the appropriate individuals and their availability. A determination will be made of the
specific facilities to be surveyed/observed and the method to best accomplish this task. A
schedule will be determined and arranged to conduct the survey tours.
At the same time, provide a written data request to the City will be provided to obtain the
necessary financial and operational data and information needed to complete the study. The data
and information requested for this study should be, for the most part, readily available
information (e.g. financial, operational, statistical, customer, etc.).
An important data item is customer billing and bill tabulation information. HDR/EES will work
closely with the City's customer service and data processing personnel to obtain the data and
information in a format suitable for this study. HDR/EES does not anticipate any major
problems obtaining this data and information in a suitable format.
Expected City Staff Support for Task 1:
Have their key management/project team members attend a V2 day planning meeting.
,U Review the on -site facilities to be surveyed and determine a schedule to conduct the on -site
surveys
• Gather the data requested in the written data request provided by EES. (Note: typically
requires 20-40 hours of total staff time to provide.)
• Work with City staff to determine the format for bill tabulation data.
Work Product Deliverables as a Result of Task 1 —Initial Kick-off Meeting.
• Face-to-face meeting to identify key objectives, issues and concerns by both parties.
• An initial written data request to the City.
• Identification of any data constraints.
• Schedule for conducting on -site surveys
■ Format and approach to obtain bill tabulation data
'-ill
Work Plan - Operations Study A-1
IZJ.\ ams City of Fayetteville
Task 2 —Engineering Evaluation
Task Objective: Evaluate the operation, and maintenance practices of the water and wastewater
utilities to assess the condition, reliability, performance or current infrastructure and major
capital improvements planned for the utilities.
This work will be accomplished through a combination of meetings with City utility/OMI
contract staff, field inspections of readily accessible infrastructure, review of operational and
maintenance procedures and records, as well as a regulatory review of compliance confirmed by
written inspections, correspondence, and personal contact with the appropriate state and local
regulatory agencies. Key engineering data requests will be provided the Task 1 as well as
contact information for operational staff and regulatory agency personnel.
A summary of each system's major infrastructure will be provided along with reported
capacities. Programmatic activities such as monitoring, cross connection control, source
protection, conservation, meter reading, industrial pretreatment, I/I control, biosolids
management, odor control and others will also be summarized. Levels of certified operators in
specialty areas will be compared to regulatory requirements, and record keeping practices will be
examined. In addition, recommended capital improvements and summary write ups for their
need and justification will be requested and reviewed in relation to the system's most recent
utility master plan.
All conditions and criteria outlined in the bond covenants will be compared to the engineering
information. Any areas of compliance and/or discrepancy will be noted and observations on
areas of improvement will be included. Observations regarding funding priorities for adequate
renewal and replacement activities, GASB 34 inventory control and asset management practices,
and other issues influencing system integrity will be included.
Expected City Staff Support for Task 2:
1
• Provide copies of most recent utility plans and all requested data for each system.
• Explain current operating and maintenance practices as well as all planned changes.
• Guide and accompany the consultants in field visits and observations of infrastructure
facilities.
i.• Provide requested information regarding all planned, documented, and anticipated capital
improvements.
!■ Participate in interviews and meetings.
Work Product Deliverables as a Result of Task 2 —Engineering Evaluation
'■ A Report on the Operations of the Water and Sewer Systems.
!■ Summary table of key infrastructure features.
■ Summary of key observations, compliance, and discrepancies.
Task 3 —Financial Analysis
Task Objective: Develop a five-year forecast of the revenues and expenses (i.e. revenue
requirements) for the water and sewer utility. The analysis should be summarized to identify the
;needed annual adjustments to water and sewer rates. The analysis must comply with bond
LiR/n Work Plan - Operations Study A-2
/1\ City of Fayetteville
covenant requirements, prudent financial planning criteria and sound business practices.
A five-year forecast of revenues and expenses (i.e. revenue requirements) will be undertaken.
This portion of the study entails reviewing, for each utility, the various sources of funds
(revenues) and comparing them to the applications of funds (expenses) for the utility. This task
considers the prudent and proper funding for O&M and capital expenditures for each utility,.and
determines the need for any rate adjustments over the five-year time period. A more detailed
discussion of the various steps involved in developing the City's financial analysis (revenue
requirements) for each utility is provided below.
STEP I — SELECTION OF A TEST PERIOD — The first step in the development of the financial
analysis is the selection of a "test period". A five-year future test period is required. In this case,
a five-year projected time period of CY 2006-2010 is proposed.
STEP 2— FORECAST OFACCOUNTS AND BILLED VOLUMES — For the five-year period, the number
of accounts and billed volumes will be developed. The forecast of accounts and billed volumes
will be developed on a monthly basis for the five-year period and summarized as an annual
forecast. In forecasting the accounts and billed volumes, consideration will be given to a number
of factors that impact customer growth and consumption. These factors include the local
economic climate, climate, changes with major customers and changes in customer usage
behavior. HDR/EES will review our account and billed volume forecasts with the City to verify
reasonableness. Tables will be developed that compare the last five historical years with the
projected five-year period of the number of accounts and billed usage.
STEP 3— FORECAST OF REVENUES — For each utility, a forecast of the projected revenues will be
developed. Based upon the forecasted number of accounts and billed volumes (Step 2), the
projection of rate revenues will be at present (current) rate levels. A table will be developed that
compares the last five year's historical rate revenues to the projected five-year rate revenues. In
addition to rate revenues, the City receives a variety of miscellaneous revenues. The
miscellaneous revenues will also be projected for the five year period and summarized.
STEP 4 — PROJECTION OF EXPENSES (REVENUE REQUIREMENTS) — For the five-year period, a
projection of the "cash basis" revenue requirements for each utility will be undertaken. The
revenue requirements will be projected on an annual basis. Table I provides an overview of the
"cash basis" revenue requirements to be used in this study.
Major Components of the "Cash Basis" Methodology
+ O&M Expense
- Purchased Water (Water Utility)
- Purchased Contract Operations (Sewer Utility)
-Other O&M Expenses
• + Taxes or Transfer Payments
• + Capital Projects Financed with Rate Revenues (2, Deprec. Exp.)
+ Debt Service (P+1)
= Total Revenue Requirements
The projection of O&M expenses will take into account any changes in operations or anticipated
Work Plan - Operations Study A-3
l City of Fayetteville
additional personnel over the five-year period. It should also take into account changes due to
growth or any extra -ordinary expense anticipated during the five-year time period.
In projecting the capital projects funded from rates, consideration will be given to the City's
capital improvement plans and the key findings of the engineering evaluation. HDR/EES is of
the understanding that the City funds a portion of their capital infrastructure via sales tax. The
balance of infrastructure funding is obtained primarily from rates, connection fees and long-term
borrowing.
STEP 5— SUMMARIZE THE PROJECTION OF REVENUE REQUIREMENTS — Given the projection of
revenue and expenses, the results will be summarized into a revenue requirement analysis. This
summary will indicate and identify any needed adjustments to water and sewer rates to meet the
financial requirements of each utility. The revenue requirements will be developed individually
for the water and sewer utility, and summarized on an annual basis for the five-year period. The
final revenue requirements must be developed in concert with the engineering evaluation (Task
2) and the bond ordinance compliance (Task 4).
Expected City Staff Support for Task 3:
Provide "as needed" assistance, via email and telephone, to explain the City's data and
information as it relates to developing the revenue requirements.
■ Provide "as needed" data refinements or additional data needs as determined during the
process of developing the revenue requirements.
■ Attend a one-half day project meeting to review the draft revenue requirement analysis.
;Work Product Deliverables as a Result of Task 3 —Financial Analysis:
• A five-year projection of the City's water and sewer accounts and billed volumes
• A five-year projection of the City's water and sewer rate revenues and miscellaneous revenues.
'■ A five-year projection of the City's water and sewer revenue requirements.
■ A summary of the anticipated (projected) adjustments to water and sewer rates to support each
utility on a financially stable basis and meet the various bond covenants.
Task 4 —Bond Ordinance Compliance
iTask Objective: In conjunction with the engineering evaluation and financial analysis, evaluate
each utility's compliance with certain provisions of the outstanding bond ordinances.
!Bond covenants are designed to protect the bond holders and provide assurance that the City's
utilities are being operated in a prudent manner and that the rates and charges of the City are
;sufficient to repay the bonds. In order to make that determination an analysis will be undertaken
to review the various bond covenants and report on the City's status of meeting those covenants.
An overview of our approach to review compliance with the bond ordinances is provided below.
;The first step of reviewing the bond ordinance compliance is to gain an understanding of the
various bond ordinances currently in place. To do this, Bond Ordinances No. 3638, 3829, 4159
land 4381 will be reviewed to determine the various conditions and requirements placed upon the
;City. A simple matrix will be developed to summarize these conditions and requirements
imposed by each bond ordinance.
Work Plan - Operations Study A-4
1 L.\ City of Fayetteville
A typical requirement of a bond ordinance is the establishment of various funds and maintenance
of minimum balances. In this case, HDR/EES will verify the establishment of the following
funds and their balances:
• Revenue Fund
• Operation and Maintenance Fund
• Bond Fund
• Renewal and Replacement Fund
• Debt Service Reserve Fund
• Construction Fund
The bond covenants also require insurance coverage to protect the water and sewer assets of the
utility. HDR/EES will verify that any required insurance is in force and meets the minimum
requirements of the bond ordinance.
Debt service coverage ratios are a financial measure of the utility's ability to repay debt. Debt
service coverage (DSC) ratios will be calculated as a part of the financial analysis (Task 3), and
will be calculated in compliance with the rate covenant of each bond ordinance. The DSC is
calculated before and after any projected rate adjustments.
i
A review will be undertaken of other practices and procedures for compliance with bond
covenants. Items to be reviewed, but not limited to, include the following:
• Required levels of bond payments are made through the designated Paying Agent and on
a timely manner
• Systems are operated on a fiscal year (FY) beginning January 1
• Systems are maintained in good condition and operated in an efficient manner at
reasonable cost
• No free water service is provided
• The City has not mortgaged or disposed of any substantial portion of the systems
• Required budgets have been prepared
• No action has been taken to cause the interest on bonds to be subject to federal income
taxes (i.e. private use)
• Improvements authorized by the Bond Ordinances are being, or have been, constructed
Expected City Staff Support for Task 4:
■ Provide the data and information necessary to review compliance with bond ordinances
Work Product Deliverables as a Result of Task 4 —Bond Ordinance Compliance:
A Matrix of the bond covenants for each bond issue (bond ordinance)
■ Verification of the establishment of the required funds and maintenance of minimum balances
(if required)
• Verification that required insurance coverage is in force
■ Verification and summary of the debt service coverage tests for each bond issue (bond
ordinance)
■ Review of other practices and procedures required of each bond ordinance.
Work Plan - Operations Study A-5
1 — Lam I IneeS City of Fayetteville
n
C
Task 5 —Reports and Meetings
Task Objective: Provide a well -written report to summarize the findings, conclusions and
recommendations of the rate study. Provide effective public presentations of the findings, results
and recommendations of the study.
Upon completion of the tasks, HDR/EES will develop a written report of the operations study. A
draft final version of the operations study will be prepared. Five (5) printed copies of the draft
final report will be provided to the City, along with an electronic (PDF) version of the report.
The City will provide comments and suggested changes to the operations report, and final reports
will be issued. The City has requested twenty-five (25) bound copies of the final operations
report and an electronic copy.
Based upon discussions with the City, it is assumed that two (2) public presentations of the
'results will be provided. Furthermore, these meetings will be coordinated to occur the same day.
The first meeting will be with the City's working selection group and the other meeting will be
with the the Fayetteville Water and Sewer Committee / Fayetteville City Council.
HDR/EES will be available for additional public meetings to discuss the operations study but this
effort will require a revision to the scope and budget.
Expected City Staff Support for Task 5:
• Review the draft operations report and provide comments for the final reports
• Assist in reviewing the proposed handouts for a public meeting and coordinate the meeting
time and location during the visit.
Work Product Deliverables as a Result of Task 5 — Reports and Meetings
• Draft and final reports for the Operations Study.
• Development of handouts and attendance at public presentations with the Fayetteville Water
and Sewer Committee and Fayetteville City Council to discuss the study and its conclusions,
and make recommendations.
Task 6 —Project Administration
'Task Objective: Manage the study to assure that it completed on time and within budget.
Coordinate a work plan with the City's project manager to assure that the project meets the
goals and objectives of the City. Provide monthly progress reports to the City.
To assure that the project is completed on time and within budget, the HDR/EES project
manager for this study will work closely with the City's project manger to maintain open and
clear communication. A work plan will be developed to assure that both parties understand the
goals and objectives of each task, along with deliverables for each.
As invoices are prepared, a monthly progress report will be provided to keep the City's project
manager aware of any issues or problems that may arise, along with a clear understanding of the
'status of the budget.
Expected City Staff Support for Task 6:
• Review of the HDR/EES work plan
L� Work Plan - Operations Study A-6
City of Fayetteville
■ Availability of the City's Project Manager to discuss and resolve any problems, issues or
concerns of either party.
Work Product Deliverables as a Result of Task 6 — Project Administration
■ Monthly invoice and project status report
Project Time Schedule
An important element of this study is the time schedule. It is our current understanding that the
operations study must be completed prior to September 1, 2005. To achieve this project
deadline, the following project time schedule has been developed.
..•
2005
Task
Description
April
May
June
July
August
Sept.
Oct.
I
Initial Meeting/Data Collection
•
2
Engineering Evaluation
3
Financial Analysis
4
Bond Ordinance Compliance
5a
Written Reports
5b
Public Presentations
O
6
Project Administration
Fee Budget By Task
The agreement for professional engineering services has a "lump sum" fee arrangement.
Provided below in Table 1 is a summary of the fees by task.
Task Description Total
Labor:
Task 1: Initial Project Meeting and Data Collection $2,955
Task 2: Engineering Evaluation 16,890
Task 3: Financial Analysis 11,850
Task 4: Bond Ordinance Compliance 6,985
Task 5: Written Reports and Presentations 11,100
Task 6: Project Administration 3,090
Grand Total Labor Fees (Lump Sum Basis) S5�$ZIl
Plus: Estimated Reimbursable Expenses $7,766
The labor portion of the fee is
a fixed lump
sum amount, while travel and
other
miscellaneous
expenses will be reimbursed.
For purposes
of Table 2, the expenses have
been
estimated and are
AAc Work Plan - Operations Study A-7
11.J�\ lams City of Fayetteville
not intended to create a "not to exceed" limit or threshold.
Any additional meetings beyond the original scope of services will be provided for $3,000 per
meeting, plus travel and miscellaneous expenses. These meetings must be at the request of the
City. Any out of scope work, or additional requested services by the City in 2005, will be
provided at the hourly billing rates used to determine the lump sum fee for the original scope of
services.
Work Plan - Operations Study A-8
FIJI lams City of Fayetteville
David Jurgens
Submitted By
• City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
5 -Apr -05
City Council Meeting Date
Water/Wastewater
Division
•
Water/Wastewater
Department
Action Required:
ie an engineering services contract with HDR/Economic and Engineering Services, Inc., in the amount of
16.00 for a detailed evaluation and report of the Water/Sewer Operations, as required by the terms of the City's
and Wastewater bond covenants, and approving a contingency of $8,000.00.
$68,636.00
Cost of this request
5400-1840-5314-00
Account Number
02064
Project Number
Budgeted Item XX
Department Director
City A torney
Finance and Internal Service Director
Mayor
$ 150,032.00
Category/Project Budget
$ 130.00
Funds Used to Date
$ 149,902.00
Remaining Balance
Budget Adjustment Attached EJ
F=W&S Rate/Opns Study
Program Category / Project Name
W&S Rate/Opns Study
Program / Project Category Name
Water/Sewer
Fund Name
Previous Ordinance or Resolution #
->Seoi
Date Original Contract Date:
Original Contract Number:
3-23-oS
Received in City Clerk's Office
3-a -aim
Date
Received in Mayor's Office
Date
SCANNED