Exh 8FAGENDA ITEM #8F
MAY 13, 2002
CITY OF ATLANTIC BEACH
..CITY COMMISSION MEETING
STAFF REPORT
AGENDA TTEM: Proposed Scope of Services for a Water and Sewer Utility Rate
.Restructure Request for Proposals #0102-6
SUBMITTED BY: Nelson Van Liere, Finance Director
DATE: May 6, 2002
BACKGROUND: The City staff has determined that a rate restructure analysis for the City's
Water and Sewer Utilities is necessary.. We have considered the many
variables involved in making significant changes to our utility rate
structure and have determined that we do not possess the expertise to
model all of the variables that need to be addressed.
Attached to this report is a proposed scope of services to be included in a
Request for Proposals that we would hlce to advertise upon City
Commission Approval.
This study is important for many reasons, however, the directive of the St.
Johns Water Management District to incorporate conservation incentives
into our rate structure is very important due to the relationship to our
consumptive use permit requirements.
Below are listed the issues to be addressed to ensure that our rates
continue to be competitive, that our conservation issues are met and that a
new rate structure will continue to meet our revenue needs:
• Implement a conservation element into our rate structure consistent
with the St. Johns Water Management District's recommendations.
• Elimination of the 3,000-gallon volume allowance.
• Elimination of discounted rates for different customer classes.
• Elimination of the State Revenue Generation Charge and rolling
that charge into the base charge for sewer services.
• Adjust the rates to recover the recently passed 5% franchise fee
imposed on outside City sales.
• Adjust the rate components to ensure that the inside/outside 25%
rate differential remains intact after all other adjustments are
implemented.
AGENDA ITEM #8F
MAY 13, 2002
• Adjust the rates between the water and sewer utilities to recover
the appropriate debt service for the 1996 Utility Revenue Bonds.
Debt service based on final project estimates.
• To evaluate and make recommendations for changes to the City
Code pertaining to customer classes.
BUDGET: City Manager estimated cost for this type of report with presentations is between
$7,000 and $12,000.. A midyear budget modification may be necessary for funding.
RECOMMENDATION: Authorize the City Manager to negotiate and sign a contract to
perform water and sewer utility rate restructure analysis.
REVIEWED BY CITY
AGENDA ITEM #8F
MAY 13, 2002
REQUEST FOR PROPOSALS
CITY OF ATLANTIC BEACH, FLORIDA
WATER AND SEWER UTILITY USER FEE RATE RESTRUCTURE
INSTRUCTIONS TO OFFERORS
1.
2.
DEFINED TERMS
Terms used in these instructions to Offerors are defined and have the meaning assigned to
them The teen "Offeror" means one that submits a proposal directly to CITY as distinct
from aSub-Offeror, who submits a Proposal to the Offeror. The term "Successful
Offeror" means the qualified, responsible and responsive Offeror to whom City (on the
basis of City's evaluation as herein after provided) makes an awazd. The term "CITY"
refers to the City of Atlantic Beach, Florida, a municipal corporation of the State of
Florida. The term "CONSULTANT" shall mean the individual(s) or firm(s) to whom the
award is made and who executes the Contract Documents.
PURPOSE
2.1 The City is seeking a professional consultant to prepare a rate restructure analysis
for the user fees of the City owned and operated water and sewer utilities in an
effort to simplify the rate structure, address new issues and make it more
consistent with other municipal utilities.
2.2 The objective of the rate analysis is to restructure the existing rates in such a way
as to generate the same revenues currently being generated with options for
enhanced revenues.
3. PROPOSED SCOPE OF SERVICES
3.1 DATA REVIEW AND PLANNING MEETING
3.1.1 The consultant shall review the City of Atlantic Beach's Code of
Ordinances, Chapter 22, which prescribes utility rates.
3.1.2 The consuhant will conduct an organizational meeting with City staff in
order to review the major questions and concerns with the current rate
structure and methodology.
3.1.3. The consultant will submit a detailed list of tasks to be accomplished and
time schedules for completion of various tasks, reviews and the generation
of the report.
AGENDA ITEM #8F
MAY 13, 2002
3.3.3 The report shall include a rate model that will enable the consultant and staffto
evaluate various "what if1 ", scenarios and propose alternatives while addressing
the issues as stated in the "Rate Design Factors"; Section 3.2 above. The reports
shall include graphic representations of the outputs as well as narrative
explanations of the various alternatives proposed
3.3.4 The report is also to include existing rate structure for comparison purposes and to
validate the customer database.
3.3.5 The report shall compare the present rate structure and proposed alternatives to
the local competitors rates on a by customer bases at various consumption levels.
Required compazable rates would be JEA, Neptune Beach, and Jacksonville
Beach at a minimum. The comparisons should also show the inside and outside
jurisdictions as well as the different customer classes.
3.3.6 The consultant shall present preliminary findings to the City Commission at a
public meeting. Twenty copies of the preliminary findings. shall be provided to
the City.
3.3.7 Prepaze and present a Final Report at a public hearing before the City
Commission for the purpose of adopting the new utility rates.
3.4. PREPARATION OF WATER AND SEWER UTILITY RATE REPORT
3.4.1. Prepare a written report for the City s»nrr,a,;~;,,~ the assumptions, analysis, and
recommendations of the study. The written report must support all findings and
projections. in detail of the final results. Provide twenty copies of final report.
3.4.2 The consulting services are to be performed and the final report shall be delivered
before the City Commission within 60 days from the authorization to proceed as
directed by the City Manager unless extensions are agreed upon.
4. EYALUATION.OF PROPOSALS
4.1 The proposals will be evaluated by City staff and a recommendation w~71 be
presented by the City Manager to the City Commission for approval The staff
will grade and rank all offerors that propose by the deadline in accordance with
the evaluation ranking criteria
4.2. In order to qualify as responsible and responsive, an offeror must meet the
evaluation criteria as they relate to this Request for Proposal.
AGENDA ITEM #8F
MAY 13, 2002
3.1.4. The consultant will prepare a comprehensive analysis and evaluation of
the currentcustomer data and revenues of the City's water and sewer
funds and demonstrate the ability to emulate the current rate structure and
thereby validating the data base to be used in the analysis.
3.2. RATE DESIGN FACTORS
3.2.1 Design into the rate structure conservation incentives as requested by the
St. Johns Water Management District. This may include addressing the
rate structure for irrigation meters in relation to conservation incentives.
,3.2.2 Develop the most appropriate rate structure which will fairly distribute the
charges of the water and sewer systems to their users.
3.2.3 Design and propose water and sewer rates, that include appropriate
minimum base charges (fixed chazges), and volume chazges (variable
charges), for all customer types (e.g. residential, commercial and
irrigation).
3.2.4 Elimination of the 3,000.gallon volume allowance
3.2.5 Make recormnendations on rates for different customer classes
3.2.6 Elimination of tbe State Revenue Generation Chazge and rolling that
chazge into the base charge for sewer services
3.2.7 Adjust the rate components to ensure that the inside/outside 25% rate
differential remains intact after all other adjustments aze implemented.
3.3. MEETINGS AND PRESENTATIONS
3.3.1 .Meetings with City staff will be held at City Hall as frequently as the consultant
deems necessary to address the rate. design factors and to review progress towards
report deadlines as proposed in the agreed upon timeline. Additional meetings
maybe scheduled to address issues and concerns as needed including those that
are the result of public and City Commission input after the preliminary report is
.delivered.
3.3.2 The consultant will present preliminary findings to City staff in -a manner that
cleazly addresses and answers specific questions and concerns. Cleazly explain
rational upon which the findings, conclusions, and recommendations of the
review are based.
AGENDA ITEM #8F
MAY 13, 2002
4.3. The evaluation criteria will include, but shall not be limited to data in evaluation
criteria listed on the evaluation form. The evaluation form shall also indicate the
ranking percentages, which will be utilized by the City in the evaluation of the
proposals.
4.4. Discussions may be conducted with these offerors to further clazify the City's
requirements and the offeror's ,proposals. Therefore, the offeror shall have
officials of the appropriate management level representing the firm. Offerors may
be required to make presentations. Also, the City will reserve the right to begin
negotiations with the top ranked firm without requiring presentations.
4.5. The City reserves the right to request clarification of information submitted and to
request additional information of one or more offerors.
5. CONTACT
5.1. All prospective Offerors are hereby instructed not to contact any member of the
City of Atlantic Beach City Commission, City Manger, or City of Atlantic Beach
staffmember other than the contact person indicated regarding this solicitation or
their submittal after the deadline at any time prior to the final evahration and
recommended ranking by the City staff for this project. Any such contact shall be
cause for rejection of your submittal.
6.INQUIRIES -
6.1. Addenda: In case the City finds it necessary to supplement, modify or interpret
arty portion of the Request for Proposal documents before the due date, such
modifications will be accomplished by issuance of written Addenda to the
Request for Proposal which will be mailed or faxed to all prospective Offerors at
the respective addresses fiuz»shed for such purposes. It shall be the responsibility
of the Offeror, prior to submitting their proposal, to contact the Procurement
Division to determine if addenda were issued acknowledging and incorporating
them into their proposal. Failure to do so could result in rejection of the proposal
as unresponsive. No addenda shall be issued less than seven (7) calendaz days
prior to the opening, unless otherwise specified by the City of Atlantic Beach
Finance Department.
6.2. Oral Inquiries: The. City will not respond to oral inquiries. Offerors may submit
written or faxed inquiries regazding this Request for Proposal to the Finance