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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.., I' -; .. 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 V- /~' ~~tt '.E. , ~ Sr. Program Manager , .. .-" 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 ~~~r, ~~~rinted) Title 2000 Signature Name (printed) Title ~. ~t ;(l~ e'V .. .t' / ^ ~ . ,~:-~':f' ~ /j;\ ~ ~::~r2- ~-:z.~ ;!.t. .,rZl(Pn.P.E.~ ::::::_~ V':~ " ~r-.>::: - $. ~,.J ;: ,..;::::: ~4;. ,1:).._ _I'".~~ ~,~'''''' .'';-' "~$ ~ .":--/--. " . . '. ~'~ -"-:\ ~. NQtary Ptlblic. Gwlnn~tti0,~ifnty~Q1gja:' ,~.....,::- My CommIsSIon Expires May,3Q;,tOOO~: I.,. '\rt',..",'<".~" 4 ". 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).