HomeMy WebLinkAbout09.a EDB CO No 1 SA No 4 CDM Smith Rate Study Final EXECUTIVE SUMMARY
AGENDA ITEM:
Proposed Change Order No. 1 to Supplemental Agreement No. 4 to Professional Engineering Services
Agreement 18/19 No. 3 to provide Professional Engineering Services with CDM Smith,Inc. (CDM Smith)
for the Water, Wastewater, and Reclaimed Water Rate Study
Date: December 1, 2023
BACKGROUND:
Staff requests authorization to amend the scope of services with CDM Smith related to the Water,
Wastewater, and Reclaimed Water Rate Study. The amendment of the scope of services focuses on two
(2) issues. The first issue addresses the added debt carrying costs CCUA will incur with both the $75
million approved in June 2023 and the $30 million we will advertise in December 2023. The second issue
centers on a peer review for technical and legal sufficiency should the Rate Study and any subsequent
Board of Supervisors actions relating to the Rate Study be challenged. This change order addresses both
issues.
CDM Smith progressed through the development of the Rate Study consistent with the agreed upon
schedules. CCUA bid the Peters Creek Water Reclamation Facility (WRF) and supporting infrastructure
during this time. CCUA received a single bid for the Peters Creek WRF and supporting infrastructure that
was more than two (2) times the expected cost. The impact of the costs for the Peters Creek WRF and
supporting infrastructure resulted in a recommendation to the Board of Supervisors acquiring the $75
million in additional financing more than a year before we anticipated. CDM Smith and the CCUA team
did not anticipate the amount and timing of the financing in the original scope of services for the Rate
Study approved in December 2021.
The CCUA team advanced the Lake Asbury Master Planning Area (LAMPA) Trunk Main Capital Cost
Recovery Policy during 2023. The LAMPA policy commits CCUA to roughly$30 million in new capital
infrastructure. The LAMPA policy also provides the funding mechanism for these projects with a cost
recovery charge per Equivalent Residential Connection (ERC) within the benefiting area. While the
capital projects for LAMPA were within the Capital Improvement Program, the cost recovery charges on
the revenue side and the likely $30 million in financing for these projects did not exist during the
development of the rate study. We want to capture these elements with the proposed change order.
Finally, staff seek to confirm the technical and legal sufficiency of the completed Rate Study. One of the
recommendations within the Rate Study the Board of Supervisors will consider centers on applying a
tiered rate structure to all customer classes. This recommendation will most likely draw the attention of
some, commercial class customers. For this reason, staff requested a peer review of the Rate Study be
completed to address issues that could arise if challenged by an interested party.
//JDJ(Author)
//JW,GW,and AB(Review)
//JDJ(Final)
Executive Summary Change Oder No. 1 to Supplemental Agreement No.4 CDM Smith
Page 1
BUDGET:
Staff identified sufficient funding within the operations budget for this expense.
CCNA:
CCNA, F.S. s. 287.055, does apply to the use of a consultant under continuing contract. The estimated
cost of this study does not exceed$500,000. Staff negotiated this Supplemental Agreement in compliance
with F.S. s. 287.055. Staff and the consultant negotiated the scope and fee, based on established contract
rates, for the professional services at a compensation which CCUA determines is fair, competitive, and
reasonable.
RECOMMENDATION:
Staff respectfully requests the Board of Supervisors approve Change Order No. 1 to Supplemental
Agreement No. 4 with CDM Smith, Inc., in the amount of$63,000 to complete the Water, Wastewater,
and Reclaimed Rate Study.
ATTACHMENTS:
Change Order No. 1 to Supplemental Agreement No. 4 with CDM, Smith, Inc.
Scope and Fee Proposal dated November 15, 2023
//JDJ(Author)
//JW,GW,and AB(Review)
//JDJ(Final)
Executive Summary Change Oder No. 1 to Supplemental Agreement No.4 CDM Smith
Page 2
CLAY COUNTY UTILITY AUTHORITY
CIVIL AND ENVIRONMENTAL CONTINUING SERVICES
RFQ 18/19 NO.3
November 15, 2023
SUPPLEMENTAL AGREEMENT NO. 4
CHANGE ORDER No. 1
This Authorization, when executed, shall be incorporated in, and become part of the Agreement for
Professional Services between Clay County Utility Authority (AUTHORITY), and CDM Smith Inc.
(CONSULTANT), dated May 28, 2019, hereafter referred to as the Contract.
BACKGROUND
The AUTHORITY contracted with CONSULTANT to perform an evaluation of the AUTHORITY's current
rate structure and provide the AUTHORITY with a financial plan and rate structure that will meet its
requirements over the Master Planning period. Near the end of the Rate Study,the AUTHORITY
obtained $105 million in additional debt related to the Peter's Creek Wastewater Treatment Facility
(WWTF) and the Lake Asbury Master Plan Area, which was not included in the financial analysis to set
near-term rates.The AUTHORITY has requested that CONSULTANT incorporate the new debt obligations
and revise rate recommendations accordingly.
Rate revisions impact residents and commercial customers and are subject to public scrutiny.To aid the
AUTHORITY in documenting the technical basis for the proposed recommendations, the CONSULTANT
will engage the services of an independent third party to provide a technical review of the rate
recommendations. Independent technical reviews of work products are of paramount importance in
ensuring the quality, accuracy, and reliability of projects. By having independent experts assess work
products, potential errors, inconsistencies, or overlooked details can be identified and rectified prior to
public release of the rate recommendations.
SCOPE OF SERVICES
The following tasks describe the scope of services to perform the incorporation of the additional debt
obligations and revision of the rate recommendations.
PHASE 1: ALTERNATIVE RATE STRUCTURE EVALUATION AND DETERMINATION
No change to Phase I tasks.
PHASE 2: REVENUE REQUIREMENTS AND RATE DETERMINATION
The following actions will be undertaken as part of this amended scope of work.
TASK 10: REVENUE REQUIREMENTS DATA COLLECTION
No changes to this task.
TASK 11: DEVELOP REVENUE REQUIREMENTS FORECASTING MODEL
No changes to this task.
TASK 12: INCORPORATE 20 YEAR CAPITAL IMPROVEMENT PLAN
No changes to this task.
TASK 13: CONNECTION AND LINE EXTENSION FEES
No changes to this task.
TASK 14: MISCELLANEOUS CHARGES AND COSTS OF SERVICE
No changes to this task.
TASK 15: RATE REVENUE REQUIREMENTS
CONSULTANT will re-evaluate the baseline forecast to include the new debt obligations.This will include
updating requirements based on fiscal year 2023-2024 (FY23) actual financial information and update
revenues to reflect FY23 water and wastewater rates. CONSULTANT will work with the AUTHORITY to
create a more realistic and smoother pattern over the forecast period. CONSULTANT will perform a
sensitivity analysis to assess the implications of shifts in key parameters such as higher/lower inflation or
higher/lower interest costs.
CONSULTANT will provide the AUTHORITY with the final revenue forecasting model so that the
AUTHORITY can update its projections and revenue requirements as future year budgets are developed
and capital improvement projects are constructed and update/modify economic assumptions to reflect
then-current conditions. CONSULTANT will provide the AUTHORITY with a short users' manual to aid in
the use of the forecasting model.
TASK 16: FIVE-YEAR RATE DEVELOPMENT
Following the revised rate revenue forecast, CONSULTANT will apply the rate structure agreed to in
Phase 1 to the revenue requirement for the first five years to provide the AUTHORITY with the
recommended rates for the initial five-year period. CONSULTANT will perform a sensitivity analysis to
assess the implications of higher/lower population growth on near-term rates.
TASK 17: DEVELOP TECHNICAL MEMORANDUM WITH EXECUTIVE SUMMARY
Sections 4 through 6 of the Rate Study Report will be revised to reflect the additional debt obligation
and impacts to rate recommendations.
TASK 18: PROJECT AND QUALITY MANAGEMENT
Activities performed under this task consist of those general functions required to maintain the project
on schedule, within budget, and that the quality of the work products defined within this scope of
services is consistent with CONSULTANT's standards and AUTHORITY's requirements. Specific activities
include project quality review of deliverables, periodic progress meetings, and general administration of
the Contract.
TASK 19: INDEPENDENT PEER REVIEW
CONSULTANT will contract with a qualified third-party to perform an independent technical review of
the Rate Study Report.The third-party review will consist of an assessment of the rate study
methodology, financial model, and rate recommendations. Findings from the independent technical
review will be documented in a technical memorandum to the AUTHORITY.
ASSUMPTIONS
1. CCUA will provide the following information to incorporate the new debt service obligations:
a. Debt service schedule for the new debt service to be incorporated in the financial model
b. List of projects that are covered by the new bond(s)
2. Population growth sensitivity will be documented in the Revenue Forecast sections of the
report. One population growth rate will be selected to establish Rate Recommendations.
3. CONSULTANT will set recommended rates for the first 5-year projection only due to the number
of changes in later years which could impact the accuracy of projected rates. Factors leading to
changes in later year projections include cost volatility, shifts in project priorities, changes in
development rates, and changes in sales rates. The cumulative impact of these changes means
the underlying cost of service evaluation will require periodic updating. (Task 16)
TIME OF COMPLETION/SCHEDULE
It is anticipated that the work will take 2 months to complete, starting within two weeks of receipt of a
formal notice to proceed (NTP).The estimated schedule is shown in Figure 1. CONSULTANT will prepare
an updated detailed schedule within the first thirty(30) calendar days after Notice to Proceed.
Task Deliverable Completion Schedule
Task 15-17 Revised Draft Report Within 30 days of Start
Task 19 Peer Review Within 30 days of revised draft report
Task 17 Final Report Within 15 days of comments received on Draft
Report
COMPENSATION AND PAYMENT
CONSULTANT will complete the work described in in this work order on a lump sum basis not to exceed
$63,000, as shown in Exhibit A.The amended total lump sum amount of this Supplemental Agreement
No. 4 is$213,000. Invoices will be submitted monthly based on the percentage of work complete during
the billing period. Lump sum compensation shall be for all labor, sub-consultants, and other direct costs
associated with the performance of the work.
Accepted by: Date:
Engineer:
Shayne Wood,P.E.
CDM Smith,Inc.
Accepted by: Date:
Owner:
Jeremy Johnston,PE,MBA,
Executive Director
Clay County Utility Authority
CCUA Supplemental Agreement No.4 to RFQ 18/19 NO.3
Rate Study Evaluation 2021 Aml
Contract Document
Taks Description Engineer Engineer Engineer Engineer Engineer Eingineer Engineer Engineer Administra Control Administra Total Hours by Other Direct
Grade 10 Grade 9 Grade 8 Grade 7 Grade 5/6 Grade 3/4 Grade 2 Grade 1 for Specialist tive Task Total Labor by Task OP Costs Total Cost by Task
$ 255.00 $ 245.00 $ 215.00 $ 184.00 $ 153.00 $ 138.00 $ 123.00 $ 92.00 $ 123.00 $ 101.00 $ 86.00
Task 1 Data Collection and Evaluation 0 $ - $0
Task 2 Data Review Meeting and Project Objectives Discussion 0 $ - $0
Task 3 Setting Rate Alternatives 0 $ - $0
Task 4 Develop Rate Structure Evaluation Tool 0 $ - $0
Task 5 Cost of Service Evaluation 0 $ - $0
Task 6 Assess Other Rate Considerations 0 $ - $0
Task 7 Develop Rate Structure Alternatives 0 $ - $0
Task 8 Rate Structure Workshop 0 $ - $0
Task9 Phase l Summary Technical Memorandum 0 $ - $0
Task 10 Revenue Requirements Data Collection 0 $ - $0
Task 11 Develop Revenue Requirements Forecasting Model 0 $ - $0
Task 12 Incorporate 20-year CIP 0 $ - $0
Task 13 Connection and Line Extension Fees 0 $ - $0
Task 14 Misc Charges and Cost of Service 0 $ - $0
Task 15 Rate Revenue Requirements 10 10 30 4 54 $ 9,634.00 $9,634
Task 16 Five-year Rate Development 10 10 10 4 34 $ 6,574.00 $6,574
Task 17 Develop Technical Memorandum with Executive Summary 20 20 24 20 84 $ 15,532.00 $15,532
Task 18 Project and Quality Management 4 6 4 4 4 22 $ 3,550.00 $644 $4,194
Task 19 Independent Peer Review 10 10 10 4 4 38 $ 7,066.00 $20,000 $27,066
Total 54 - 46 - 74 - 20 - 4 4 16 232 $39,714 $0 $644