HomeMy WebLinkAboutCH2M HILL PROPOSAL CONDUCT A BOND FEASIBILITY STUDY 2000 SERIES BOND
Augusta Richmond GA
DOCUMENT NAME: ~\-\- 1- H \-\\ \ \
DOCUMENT TYPE: TJ r o-pDS;::::t \
YEAR: r~
BOX NUMBER: C)
FILE NUMBER: \ ~ "15, 3
NUMBER OF PAGES: I z..,
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CH2M HILL
115 Perimeter Center Place NE
Suite 700
. Atlanta, GA
CH2MHILL 30346-1278
'.- Tel 770.604.9095
Fax 770.604.9183
Proud Sponsor of
March 16, 2000 National Engineers Week 2000
Mr. Max Hicks, P.E.
Director
Augusta Utilities Department
2760 Peach Orchard Road
Augusta, Georgia 30906-5408
Dear Mr. Hicks:
Subject:
Proposal to Conduct a Bond Feasibility Study
2000 Series Bond
.~----
CH2M HILL is pleased to offer this proposal to assist the Augusta Utilities Department (AUD) in the
development of water and sewer system financial forecasts and the preparation of an independent Bond
Feasibilityreport to be included in forthcoming 2000 Series water and sewer revenue bond Official Statements.
For this study, CH2M HILL proposes to use a team of economists and engineers with extensive technical
capabilities as well as both national and regional experience in conducting utility financing and system
evaluation studies. The technical diversity of our team and our previous experience with AUD will enable us to
conduct the study with a thorough understanding of the financial policies, operations, and physical features and
conditions of the system.
Our Project Manager, Eric Rothstein, C.P.A., is a national expert in utility financial planning and debt
management studies. Mr. Rothstein has extensive hands-on financiaj management experience and leads
CH2M HILL's Management Solutions Practice. We are committed to assist Aub in preparing official
st~tements that are accurate and credible and that result in favorable bond ratings. We understand the critical
issues affecting AVO and have the ability to deliver the knowledge, experience, and timely work necessary to
meet your objectives.
Please call me here in our Atlanta office or Eric Rothstein at 512.422.3244 if you have any questions or require
additional information regarding this proposed scope of work and budget.
Sincerely, __
CH2.~'HILL
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, ~ Sr. Program Manager
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Project Approach
The bond feasibility study will be conducted through a multistep process designed to review capital
facility options and associated costs; and to evaluate financial forecasts and analyses for the Augusta
Utilities Department (AVO). Several of these steps must be made sequentially, as specific steps
require data developed in a previous step. However, where possible, CH2M HILL will perform steps
in parallel to minimize the time required to complete the feasibility study.
a) Project Kick-Off, Data Review and Collection
CH2M HILL will conduct an initial Project Kick-off meeting with AVO staff, bond counsel, and
underwriter to establish the project schedule, format requirements, review the proposed report
outline, identify issues of concern from the Master Plan, review bond covenants - particularly with
respect to coverage and financial policies - and define communications protocols.
Prior to the kick-off meeting, CH2M HILL will provide a data request list for collection of
information in anticipation of the initial project meetings. In conjunction with the Project Kickoff
meetings, AUD financial and operating performance data and growth projections will be reviewed
and summarized. This information will be used to establish the context for strategic financial
decision making. Specifically, the following information needs to be reviewed:
.:. Historical and projected service revenues
.:. Historical and projected tapping fee revenues, interest income, and other non rate
revenue sources
.:. Historical and projected operation and maintenance expenses
.:. Projected capital improvement program requirements
.:. Outstanding indebtedness and other long-term liabilities
.:. Uncollectible accounts receivable and disconnection rates
.:. Historical and project~d operating statistics (water system capacity, annual and peak
water production, service connections by meter size and customer class; wastewater
system capacity, annual and peak wastewater system flows, service connections by
water meter size and customer class)
.:. The most recent strategic planning documents, annual report, current budget, and
quarterly and annual financial statistics reports
.:. Bond covenants for currently outstanding bonds
b) Capital Improvement Plan Review
CH2M HILL will review AUD's Capital Improvement Plan (CIP) and associated cost estimates
based largely on system knowledge developed through our ongoing Program Management and
Master Planning work. CH2M HILL will certify that the planned capital improvements are
consistent with prudent system development and preservation and in alignment with AVO's business
strategy .
.;>'
CH2M HILL will also review operating and maintenance (O&M) cost projections for the forecast
period to ensure that operational requirements of planned capital improvements are incorporated and
consistent with industry experience.
c) Financial Forecasting and Analysis
CH2M HILL will review ADD's financial forecast information and will prepare detailed financial
forecasts to evaluate CIP financing alternatives and implications for ADD's financial performance
and rates. Forecasts will be prepared using information on prospective ADD customer growth, capital
financing costs, and future O&M costs to forecast financial performance. The project team will
forecast water rate, sewer rate, and tapping fee revenues required to fund the capital program, meet
debt service coverage requirements, and maintain adequate operating fund balances. All financial
forecast assumptions will be evaluated relative to AUD historical experience and growth projections,
and fully documented.
d) Bond Feasibility Report
CH2M HILL will compile information collected and developed on ADD's capital program and
financing plan in a bond feasibility study report. This document will be important for educating the
bond market, including underwriters, insurers and rating agencies, about ADD's current financial
plans and financial forecast. The report will be structured as follows, subject to ADD's modification:
Chapter 1 :
Introduction
This chapter will contain introductory material to focus the reader on the important
aspects of the study. Chapter I will describe the servic~ area, customers, population,
and local economic conditions and will include a service area map. The information
in Chapter I will help the reader understand the size and nature of ADD's water and
sewer system. It will also present the major conclusions of the study.
Chapter 2:
Current Water and Sewer System Facilities and Evaluation
Chapter 2 will review ADD's water and sewer system facilities, evaluate its major
system components, and comment on maintenance requirements. The chapter will
describe the overall condition of the current system and how effectively it meets the
mission of providing high-quality water and sewer service to ADD's customers.
Chapter 3:
Capital Improvement Plan
Chapter 3 will summarize the CIP reviewed in step (b) to enable the reader to
understand AUD's long-range plan for enhancing and extending services. This
chapter will explain the potential challenges the utility faces and the potential im-
pacts of these challenges on the uti I ity' s operations and capital needs.
The presentation of AUD's C1P will focus on the extent to which it supports ADD's
long-term business strategy, provides for adequate system maintenance, and
enhances capacity to meet growth in service demands. The chapter will also address
the capital requirements for compliance with current and potential water quality
regulations.
The CIP will identify, by year, specific capital improvements, the estimated cost of
each improvement, and a schedule for construction.
-~i
Chapter 4: Financial Operations and Revenue Analysis
The first section of this chapter will identify the financial capacity of AVD under
historical and current rate and fee levels. This section will include a description of
the utility's historical revenue sources, revenue requirements, rates, tapping fees, and
financial performance measures.
The second section will provide projected pro forma operating results, including
reasonable (conservative) projections of customer/usage growth, revenues,
expenditures, working capital balances, and bond coverage. Financial projections for
AVO will be presented in detail, including forecasts of the water rates and sewer
rates required to fund the capital program and meet debt service coverage
requirements; all assumptions used to develop the financial forecast will be
documented
e) Present Bond Feasibility Study
CH2M HILL will present the Bond Feasibility Study report to the Augusta-Richmond County
Commission, if requested. Presentation materials will be designed for subsequent use by AVO in the
bond rating process.
Project T earn
CH2M HILL's project team features senior level personnel with decades of economic, financial, and
engineering expertise who will be actively engaged in every aspect of this process. They will draw
on the services of other CH2M HILL professionals as needed to support the project. We propose that
the bond feasibility be conducted by CH2M HILL's Management Solutions Practice Director, Eric
Rothstein, CPA and Art Griffith, P.E., Senior Economist. Lawrence Scott, P.E. will supervise the
engineering analysis. Supplemental information on key project team members will be provided upon
request.
Proposed Budget
The estimated cost for each study task are noted below. The estimated budget does not include
participation in presentations to bond rating agencies. The proposed budget for development of the
Bond Feasibijity Report is $36,000 and should be complete within 90 days depending upon
availability of needed information.
Project Kickoff, Data Collection and Review
Capital Improvement Plan Review
Financial Forecasting and Analysis
Draft Bond Feasibility Report
Present Draft Bond Feasibility Report
TOTAL
$ 6,945
$ 3,613
$ 6,139
$11,974
$ 7329
$36,000
CH2MHILL STANDARD AGREEMENT FOR PROFESSIONAL SERVICES
This AGREEMENT is between CH2M HILL INC., ("CONSUL TANi), and
Augusta, Georgia, acting by and through the Augusta-Richmond County ("OWNER")
Commission
for a PROJECT generally described as:
Bond Feasibility Report For The Augusta Utilities Department
ARTICLE 1. SCOPE OF SERVICES
CONSULTANT will perform the Scope of Services set
forth in Attachment A.
ARTICLE 2. COMPENSATION
OWNER will compensate CONSULTANT as set forth in
Attachment B.
ARTICLE 3. TERMS OF PAYMENT
OWNER will pay CONSULTANT as follows:
3.1 Invoices and Time of Payment
CONSULTANT will issue monthly invoices pursuant to
Attachment 8. Invoices are due and payable within 30
days of receipt.
3.1.1 In the event of a disputed billing, only the
disputed portion will be withheld from payment,and
OWNER shall pay the undisputed portion. OWNER will
exercise reasonableness in disputing any bill'or portion
thereof. No interest will accrue on any disputed portion
of the billing until mutually resolved.
3.1.2 If OWNER fails to make payment in full within 30
days of the date due for any undisputed billing,
CONSULTANT may, after giving 7 days' written notice
to OWNER, suspend services under this AGREEMENT
until paid in full. In the event of suspension of services,
CONSULTANT will have no liability to OWNER for
delays or damages caused by OWNER because of
such suspension.
ARTICLE 4. OBLIGATIONS OF CONSULTANT
4.1 Standard of Care
The standard of care applicable to CONSULTANT's
Services will be the degree of skill and diligence
normally employed by professional engineers or
consultants performing the same or similar Services at
the time said services are performed. CONSULTANT
will reperform any services not meeting this standard
without additional compensation.
4..2 Subsurface Investigations
Not Used
4.3 CONSULTANT's Personnel at Construction Site
Not Used
FORM 398
REVISED 1/99
4.4 Opinions of Cost, Financial Considerations, and
Schedules
In providing opinions of cost, financial analyses,
economic feasibility projections, and schedules as a
part of PROJECT, CONSULTANT has no control over
cost or price of labor and materials; unknown or latent
conditions of existing equipment or structures that may
affect operation or maintenance costs; competitive
bidding procedures and market conditions; time, or
quality of performance by operating personnel or third
parties; and other economic and operational factors that
may materially affect the ultimate costs or schedules
developed in PROJECT. Therefore, CONSULTANT
makes no warranty that OWNER's actual costs,
financial ,aspects, economic feasibility, or schedules will
not vary from CONSULTANT's opinions, analyses,
projections, or estimates.
If OWNER wishes greater assurance as to any element
of PROJECT cost, feasibility, or schedule, OWNER will
employ an independent cost estimator, contractor, or
other appropriate advisor.
4.5 Construction Progress Payments
Not Used
4.6 Record Drawings
Not Used
4.7 Access to CONSULTANT's Accounting Records
CONSULTANT will maintain accounting records, in
accordance with generally accepted accounting
principles. These records will be available to OWNER
during CONSULTANT's normal business hours for a
period of 2 years after CONSULTANT's final invoice for
examination to the extent required to verify the direct
costs (including the actual hours or classification of
CONSULTANT'S employees, and excluding established
or standard allowances and rates) incurred hereunder.
OWNER may only audit accounting records applicable
to a cost-reimbursable type compensation.
4.8 CONSULTANT's Insurance
CONSULTANT will maintain throughout this
AGREEMENT the following insurance:
(a) Worker's compensation and employer's liability
insurance as required by the state where the work is
performed.
(b) Comprehensive automobile and vehicle liability
insurance covering claims for injuries to members of the
,
\
public and/or damages to property of others arising
from use of motor vehicles, including onsite and offsite
operations, and owned, nonowned, or hired vehicles,
with $1,000,000 combined single limits.
(c) Commercial general liability insurance covering
claims for injuries to members of the pLiblic or damage
to property of others arising out of any covered
negligent act or omission of CONSULTANT or of any of
its employees, agents, or subcontractors, with
~;1,OOO,000 per occurrence and in the aggregate.
(d) Professional liability insurance of $1,000,000 per
occurrence and in the aggregate.
(e) OWNER will be named as an additional insured
with respect to CONSULTANT's liabilities hereunder in
insurance coverages identified in items (b) and (c) and
CONSULTANT waives subrogation against OWNER as
to said policies.
ARTICLE 5. OBLIGATIONS OF OWNER
~;.1 OWNER-Furnished Data
OWNER will provide to CONSULTANT all data in
OWNER's possession relating to CONSULTANT's
services on the PROJECT. CONSULTANT may
reasonably rely upon the accuracy, timeliness, and
completeness of the information provided by OWNER.
S.2 Access to Facilities and Property
OWNER will make its facilities accessible to
CONSULTANT as required for CONSULTANT's
performance of its services and will provide labor and
8afety equipment as required by CONSULTANT for
8uch access. OWNER will perform, at no cost to
CONSULTANT, such tests of equipment, machinery,
pipelines, and other components of OWNER's facilities
CiS may reasonably be required in connection with
CONSULTANT's services.
S.3 Advertisements, Permits, and Access
Unless otherwise agreed to in the Scope of Services,
OWNER will obtain, arrange, and pay for all
advertisements for bids; permits and licenses required
by local, state, or federal authorities; and land,
easements, rights-of-way, and access necessary for
CONSULTANT's services or PROJECT related
construction.
5.4 Timely Review
OWNER will examine CONSULTANTs studies, reports,
8ketches, drawings, specifications, proposals, and other
documents; obtain advice of an attorney, insurance
counselor, accountant, auditor, bond and financial
advisors, and other consultants as OWNER deems
appropriate; and render in writing decisions required by
OWNER in a timely manner.
~i.5 Prompt Notice
OWNER will give prompt written notice to
CONSULTANT whenever OWNER observes or
becomes aware of any development that affects the
scope or timing of CONSULTANT's Services, or of any
defect in the work of CONSULTANT or construction
contractors.
!i.6 Asbestos or Hazardous Substances
Not Used
~i.7 Contractor Indemnification and Claims
Not Used
FORM 398
REVISED 1/99
.
5.8 OWNER's Insurance
Not Used
5.9 Litigation Assistance
The Scope of Services does not include costs of
CONSULTANT for required or requested assistance to
support, prepare, document, bring, defend, or assist in
litigation undertaken or defended by OWNER. All such
Services required or requested of CONSULTANT by
OWNER, except for suits or claims between the parties
to this AGREEMENT, or suits in which CONSULTANT
is a party, will be reimbursed at the rate set forth in
Attachment 8, unless otherwise agreed upon.
5.10 Changes
OWNER may make or approve changes within the
general Scope of Services in this AGREEMENT. If such
changes affect CONSULTANT's cost of or time required
for performance of the services, an equitable
adjustment will be made through an amendment to this
AGREEMENT.
ARTICLE 6. GENERAL LEGAL PROVISIONS
6.1 Authorization to Proceed
Execution of this AGREEMENT by OWNER will be
authorization for CONSULTANT to proceed with the
work, unless otherwise provided for in this
AGREEMENT.
6.2 Reuse of PROJECT Documents
All reports, drawings, specifications, documents, and
other deliverables of CONSULTANT, whether in hard
copy or in electronic form, are instruments of service for
this PROJECT, whether the PROJECT is completed or
not, and shall be the property of the OWNER. To the
extent allowed by law, OWNER shall hold harmless
CONSULTANT and CONSULTANT's officers
employees, subcontractors, and affiliated corporation~
from all claims, damages, losses, and costs, including,
but not limited to, litigation expenses and attorney's fees
arising out of or related to the unauthorized reuse,
change or alteration of these PROJECT documents.
6.3 Force Majeure
CONSULTANT is not responsible for damages or delay
in performance caused by acts of God, strikes,
lockouts, accidents, or other events beyond the control
of CONSULTANT. In any such event, CONSULTANT'S
contract price and schedule shall be equitably adjusted.
6.4 (Not used)
6.5 Termination
6.5.1 This AGREEMENT may be terminated for
convenience on 30 days' written notice, or for cause if
either party fails substantially to perform through no
fault of the other and does not commence correction of
such nonperformance within 5 days of written notice
and diligently complete the correction thereafter.
6.5.2 On termination, CONSULTANT will be paid for all
authorized services performed up to the termination
date, and if the termination is for the convenience of the
OWNER, reasonable termination expenses, such as,
but not limited to, subcontract termination costs, and
related closeout costs.
2
Ei.6 Suspension, Delay, or Interruption of Work
OWNER may suspend. delay, or interrupt the Services
of CONSULTANT for the convenience of OWNER. In
such event, CONSULTANT's contract price and
schedule shall be equitably adjusted.
6.7 No Third-Party Beneficiaries
This AGREEMENT gives no rights or benefits to anyone
other than OWNER and CONSULTANT and has no
third-party beneficiaries.
li.8 Indemnification
CONSULTANT agrees to indemnify OWNER for any
claims, damages, losses, and costs, including, but not
limited to, attorney's fees and litigation costs, arising out
of claims by third parties for property damage or bodily
injury, including death, to the proportionate extent
caused by the negligence or willful misconduct of
CONSULTANT, CONSULTANT's employees, affiliated
corporations, and subcontractors in connection with the
PROJECT.
6.9 Assignment
This is a bilateral personal Services AGREEMENT.
Neither party shall have the power to or will assign any
of the duties or rights or any claim arising out of or
related to this AGREEMENT, whether arising in tort,
contract or otherwise, without the written consent of the
other party. Any unauthorized assignment is void and
unenforceable. These conditions and. the entire
AGREEMENT are binding on the heirs, successors, and
assigns of the parties hereto.
1).10 Consequential Damages
To the maximum extent permitted by law,
CONSULTANT and CONSULTANT's affiliated
corporations, officers, employees, and subcontractors
Bhall not be liable for OWNER's special, indirect, or
consequential damages, whether such damages arise
out of breach of contract or warranty, tort including
negligence, strict or statutory liability, or any other
cause of action.
1;.11 Waiver
OWNER waives all claims against CONSULTANT,
other than those for latent defects, that are not brought
within 2 years of substantial completion of PROJECT or
final payment to CONSULTANT, whichever is earlier.
1).12 Jurisdiction
The substantive law of Georgia shall govern the validity
of this AGREEMENT, its interpretation and
performance, and any other claims related to it.
1;.13 Severability and Survival
!5.12.1If any of the Provisions contained. in this
/:I,GREEMENT are held for any reason to be invalid,
FORM 398
HEVISED 1/99
illegal, or unenforceable, the enforceability of the
remaining provisions shall not be impaired thereby.
6.12.2 Limitations of liability, indemnities, and other
express representations shall survive termination of this
AGREEMENT for any cause.
6.14 Materials and Samples
Any items, substances, materials, or samples removed
from the PROJECT site for testing, analysis, or other
evaluation will be returned to the PROJECT site within
60 days of PROJECT close-out unless agreed to
otherwise. OWNER recognizes and agrees that
CONSULTANT is acting as a bailee and at no time
assumes title to said items, substances, materials, or
samples.
6.15 CONSULTANT's Deliverables
CONSULTANT's deliverables are limited to the signed
hard copies. Computer-generated files furnished by
CONSULTANT are for OWNER or others' convenience.
Any conclusions or information derived or obtained from
these files will be at user's sole risk.
6.16 Dispute Resolution
The parties will use their best efforts to resolve amicably
any dispute, including use of alternative dispute
resolution options. However such procedures shall not
be mandatory. All claims, disputes and other matters in
question between the OWNER and the CONSULTANT
arising out of or relating to the AGREEMENT, or the
breach thereof, shall be decided in the Superior Court
of Richmond County, Georgia. The CONSULTANT, by
executing this AGREEMENT, specifically consents to
venue in Richmond County and waives any right to
contest the venue in the Superior Court of Richmond
County, ~eorgia.
6.17 Prompt Pay Act
This AGREEMENT is intended by the Parties to, and
does, supersede any and all provisions of the Georgia
Prompt Pay Act, O.C.GA Section 13-11-1, et seq. In
the event any provision of this AGREEMENT is
inconsistent with any provision of the Prompt Pay Act.
the provision of this AGREEMENT shall control.
ARTICLE 7. ATTACHMENTS, SCHEDULES, AND
SIGNATURES
This AGREEMENT, including its attachments and
schedules, constitutes the entire AGREEMENT,
supersedes ali prior written or oral understandings, and
may only be changed by a written amendment executed
by both parties. The following attachments and
schedules are hereby made a part of this
AGREEMENT:
Attachment A--Scope of Services
Attachment B--Compensation
3
IN WITNESS WHEREOF, the parties execute below:
For OWNER, AUGUSTA RICHMOND COUNTY
dated this 4th ~~~
S;gn.ture rJlif/t(~ 11[}m0U
Name (printed) Lena J'. Bonner
For CONSULTANT, CH2M HILL INC.,
2:d d.yof hlf
. /j#lf J - (ft
Name (printed) 1/;-1/Pll L . /Vt:>w!r-J
~/J /rae/s )f,fW1 a.q if"
u
Title
alated this
Signature
Title
FORM 398
R=VISED 1/99
Clerk of Commission
2000
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Title
2000
Signature
Name (printed)
Title
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ATTACHMENT A - SCOPE OF SERVICES
This attachment is to the AGREEMENT between CH2M HILL, INC., ("CONSUL TANT") , and
Augusta, Georgia, acting by and through the Augusta-Richmond County Commission," ("OWNER"), for
a PROJECT generally described as: Bond Feasibility Report For The Augusta Utilities Department
ART~CLE 1. SCOPE OF SERVICES
CONSULTANT agrees to furnish OWNER the following specific services:
Period of Performance
The CONSULTANT will begin PROJECT immediately upon authorization to proceed and complete all tasks within 90
days thereafter depending upon availability of information required.
Project Approach
The bond feasibility study will be conducted through a multistep process designed to review capital facility
options and associated costs, and to evaluate financial forecasts and analyses for the Augusta Utilities
Department (AUD). Several of these steps must be made sequentially, as specific steps require data
devElloped in a previous step. However, where possible, CH2M HILL will perform steps in parallel to
minimize the time required to complete the feasibility study.
a) Project Kick-Off, Data Review and Collection
, CH2M HILL will conduct an initial Project Kick-off meeting with AUD staff, bond counsel, and underwriter to
. establish the project schedule, format requirements, review the proposed report outline, identify issues of
concern from the Master Plan, review bond covenants - particularly with respect to coverage and financial
policies - and define communications protocols.
Prior to the kick-off meeting, CH2M HILL will provide a data request list for collection of information in
anticipation of the initial project meetings. Ih conjunction with the Project Kickoff meetings, AUD financial
and operating performance data and growth projections will be reviewed and summarized. This information
will be used to establish the context for strategic financial decision making. Specifically, the following
information needs to be reviewed: .
.::. Historical and projected service revenues
.::. Historical and projected tapping fee revenues, interest income, and other nonrate revenue sources
.... Historical and projected operation and maintenance expenses
.::. Projected capital improvement program requirements
.::. Outstanding indebtedness and other long-term liabilities
~:. Uncollectible accounts receivable and disconnection rates
.::. Historical and projected operating statistics (water system capacity, annual and peak water
production, service connections by meter size and customer class; wastewater system capacity,
annual and peak wastewater system flows, service connections by water meter size and customer
class)
..::. .The most recent strategic planning documents, annual report, current budget, and quarterly and
annual financial statistics reports
.::. Bond covenants for currently outstanding bonds
Form :l98A
REVISED: 1/99
b) Capital Improvement Plan Review
CH2M HILL will review AUD's Capital Improvement Plan (CIP) and associated cost estimates based
largHly on system knowledge developed through our ongoing Program Management and Master Planning
work. CH2M HILL will certify that-the planned capital improvements are consistent with prudent system
deVE!lopment and preservation and in alignment with AUD's busiriess strategy.
CH2M HILL will also review operating and maintenance (O&M) cost projections for the forecast period to
ensure that operational requirements of planned capital improvements are incorporated and consistent
with industry experience.
c) Financial Forecasting and Analysis
CH2M HILL will review AUD's financial forecast information and will prepare detailed financial forecasts to
evaluate CIP financing alternatives and implications for AUD's financial performance and rates. Forecasts
will be prepared using information on prospective AUD customer growth, capital financing costs, and future
O&M costs to forecast financial performance. The project team will forecast water rate, sewer rate, and
tapping fee revenues required to fund the capital program, meet debt service coverage requirements, and
maintain adequate operating fund balances. All financial forecast assumptions will be evaluated relative to
AUD historical experience and growth projections, and fully documented.
d) Bond Feasibility Report
CH2M HILL will compile information collected and developed on AUD's capital program and financing plan
in a bond feasibility study report. This document will be important for educating the bond market, including
underwriters, insurers and rating agencies, about AUD's current financial plans and financial forecast. The
report will be structured as follows, subject to AUD's modification:
Chapter 1: Introduction
This chapter will contain introductory material to focus the reader on the important aspects
of the study, Chapter 1 will describe the service area, customers, population, and local
economic conditions and will include a service area map. The information in Chapter 1 will
help the reader understand the size and nature of AU D's water and sewer system. It will
also present the major conclusions of the study.
Chapter 2: Current Water and Sewer System Facilities and Evaluation
Chapter 2 will 'review AUD's water and sewer system facilities, evaluate its major system
components, and comment on maintenance requirements. The chapter will describe the
overall condition of the current system and how effectively it meets the mission of providing
high-quality water and sewer service to AUD's customers.
Chapter 3: Capital Improvement Plan
Chapter 3 will summarize the CIP reviewed in step (b) to enable the reader to understand
AUD's long-range plan for enhancing and extending services. This chapter will explain the
potential challenges the utility faces and the potential impacts of these challenges on the
utility's operations and capital needs.
Form 398A
REVISED: 1/99
2
The presentation of AUD's CIP will focus on the extent to which it supports AUD's long-term
business strategy, provides for adequate system maintenance, and enhances capacity to
meet growth in service demands. The chapter will also address the capital requirements for
compliance with current and potential water quality regulations.
The CIP will identify, by year, specific capital improvements, the estimated cost of each
improvement, and a schedule for construction.
Chapter 4: Financial Operations and Revenue Analysis
The first section of this chapter will identify the financial capacity of AUD under historical
and current rate and fee levels. This section will include a description of the utility's historical
revenue sources, revenue requirements, rates, tapping fees, and financial performance
measures.
The second section will provide projected pro forma operating results, including reasonable
(conservative) projections of customer/usage growth, revenues, expenditures, working
capital balances, and bond coverage. Financial projections for AUD will be presented in
detail, including forecasts of the water rates and sewer rates required to fund the capital
program and meet debt service coverage requirements; all assumptions used to develop
the financial forecast will be documented
e) Present Bond Feasibility Study
CH2M HILL will present the Bond Feasibility Study report to the Augusta-Richmond County Commission, if
requested. Presentation materials will be designed for subsequent use by AUD in the bond rating process.
Project Team
CH2M HILL's project team features senior lev~1 personnel with decades of economic, financial, and
engineering expertise who will be actively engaged in every aspect of this process. They will draw on the
services of other CH2M HILL professionals as needed to support the project. We propose that the bond
feasibility be conducted by CH2M HILL's Management Solutions Practice Director, Eric Rothstein, CPA
and Art Griffith, P.E., Senior Economist. Lawrence Scott, P.E. will supervise the engineering analysis.
Supplemental information on key project team members will be provided upon request.
Proposed Budget
The estimated cost for each study task are noted below based upon the terms outlined in Attachment B:
Compensation. The estimated budget does not include participation in presentations to bond rating
agencies. The proposed budget for development of the Bond Feasibility Report is $36,000 and should be
complete within 90 days depending upon availability of needed information.
Project Kickoff, Data Collection and Review
Capital Improvement Plan Review
Financial Forecasting and Analysis
Draft Bond Feasibility Report
Present Draft Bond Feasibility Report
TOTAL
$ 6,945
$ 3,613
$ 6,139
$11,974
$ 7,329
$36,000
Form 398A
REVISED: 1/99
3
.to
,.
ATTACHMENT B - COMPENSATION
ARTICLE 2. COMPENSATION
Compensation by OWNER to CONSULTANT will be as follows:
A. COST REIMBURSABLE-PER DIEM (TIME AND EXPENSE)
For services enumerated in ARTICLE 1 , CONSULTANT's
Per Diem Rates, plus Direct Expenses,. plus a service
charge of 10 percent of Direct Expenses and 5 percent of
outside services, plus applicable sales, use, value added,
bu:siness transfer, gross receipts, or other similar taxes.
Initial Per Diem Rates for 2000 are:
Personal Grade
2000
Per Diem Rate ($ per hour)
167
125
115
97
83
70
67
92
70
59
52
50
50
EN7
EN6
EN5
EN4
EN3
EN2
EN1
TE5
TE4
TE3
TE2
TE1
Office/Clerical
B. BUDGET
A budgetary amount of Thirty-six thousand
Dollars ($
313,000 ), excluding taxes, is hereby established for
initial services in ARTICLE 1, Attachment A, Scope of
Services.
CONSULTANT will make reasonable efforts to complete the
work within the budget and will keep OWNER informed of
prcogress toward that end so that the budget or work effort
can be adjusted if found necessary.
CONSULTANT is not obligated to incur costs beyond the
indicated budgets, as may be adjusted, nor is OWNER
obligated to pay CONSULTANT beyond these limits.
C. PER DIEM RATES
FORM 3988.2
REVISED: 1/99
Per Diem Rates are those hourly or daily rates charged for
work performed on the PROJECT by CONSULTANT's
employees of the indicated classifications. These rates are
subject to annual calendar year adjustments, which shall not
exceed four percent per year; include all allowances for
salary, overheads and fees; but do not include allowances
for Direct Expenses and outside services.
D. DIRECT EXPENSES
Direct Expenses are those necessary costs and charges
. incurred for the PROJECT including, but not limited to:
(1) the direct costs of mail: special OWNER approved
PROJECT specific insurance, letters of credit, bonds, and
equipment and supplies; (2) CONSULTANT's current
standard rate charges for direct use of CONSULTANT's
vehicles, computing systems, laboratory test and analysis,
printing and reproduction services, and certain field
equipment; and (3) CONSULTANT's standard project
charges for special health and safety requirements of OSHA
and telecommunications services.
The current charge for computing systems is $4.60 per hour
for employees working on the PROJECT. It includes all
computer resources, including: computer systems for all
types of computers, computer software, networking (local
and wide area), printing, plotting, computer support,
computer supplies, and computer management and
administration. The computer charge will not be billed for
the time the CONSULTANT staff is working on equipment or
software furnished by the OWNER.
The charge for laboratory tests and analyses shall not
exceed those rates as approved-for federal government
work. The current charge for printing and reproduction
costs, other than convenience copiers which are recovered
through the telecommunications charge, are shown on the
attached sheet. The current charge for special health and
safety requirements of OSHA is $2.00 per hour for those
employees who have been specially trained and for
telecommunications is $1.40 per hour for employees
working on the PROJECT.
The costs for transportation using rental vehicles shall not
exceed the actual cost of rental of a mid-size, 4-door
automobile, plus gasoline at the actual cost.
Reimbursement for use of a personal or CONSULTANT's
vehicle when in travel status for PROJECT, shall not exceed
the allowable federal rate for mileage. Reimbursement for
meals and lodging when in travel status for PROJECT, shall
be at the per diem rates in the latest Federal Travel
Regulations CONUS, for Augusta (B97).