HomeMy WebLinkAbout17 EVAL PRIVATIZATION OF WATER SERVICES 07-20-98AGENDA:- -
DATE: 3ULY 20, 1998
Inter-Com
NO. 17
7-20-98
TO'
FROM:
SUBJECT:
WILLIAM A. HuSTON, CITY MANAGER
PUBLIC WORKS DEpARTMENT/WATERSERVICES DIVISION
CONSULTANT SERVICES AGREEMENT TO EVALUATE PRIVATIZATION
OPPORTUNITIES FOR THE CITY'S MUNICIPAL WATER SYSTEM
SUMMARY
The prOposed Consultant Services Agreement with BoOkman'Edmonston Engineering, Inc., will .initiate a study
that will determine and.evaluate privatization opporturdties for the City of Tustin' s Municipal Water System.
RECOMMENDATION
It is recommended that the City Council authorize the Mayor and City Clerk to execute a Consultant Services
Agreement with Bookman-EdmonstonEngineering, Inc., subject to City Attorney's approval, to prepare Phase I of
a study entitled "Privatization Opportunities for the City of Tustin's Municipal Water System", for a not to exceed
fee of $74,756.
FISCAL IMPACT
Funds for this project in the amount of $112,000 have been budgeted in the FY98-99 Water Operating Fund. The
remaining funds will be available for future phases of the project includLng preparation of the RFP and selection of
a contractor if warranted. Phase I ofthe study will cOst $74,756. Phase II will cost $30,176 and Phase III will cost
$6,856 (if the City Council decides at a later date to proceed with these phases.)
BACKGROUND
During 1997, the City received several preliminary unsolicited proposals from various firms expounding the
potential economic benefit to the City through privatization of the Municipal Water System. Generally, these
proposals involved the City entering into an agreement with a private entity for the sale, lease or operation of the'
water system.
In response to these inquires, a Request for Proposal to assist the staffin determining the potential value to the city
of privatizing any or all elements of the City's water system was prepared. The proposal was structured in three
phases and sent to nine frans experienced in the evaluation of the financial, engqneering, and operation aspects of
Municipal Water Systems. Phase I of the proposal is intended to provide a level of assessment of the existing
water operation that will determine if proceeding with a privatization option is warranted. Phase I will be
completed Within 90 days of authorization to proceed, phaSes II and III will then involve a preparatiOn of an RFP
for any privatization option selected and the resulting evaluation of the responses.
DISCUSSION
It was recognized that some of the firms that received the request for proposal would need to joint venture with
either an engineering or financial fmu to fully respond to the requirements of the. request. Subsequently, the firms
of Public Financial Management, Inc., Hilton Farnkopf and Hobson, LLC, and HDR declined to propose due to
existing commitments or inability to fmd a suitable partner. No response was received from Stone and Youngberg
Consultant Services Agreement to Evaluate Privatization Opportunities for the City's Municipal Water System
July 20, 1998
Page 2
or Bartle Wells Associates. F°ur propoSals Were received from the firms of Psomas and Associates, Bucknam
and Associates, Stetson Engineering, and Bookman-EdmonstonEngineering, Inc.
The submitted proposals were evaluated based on experience with this type of project, proposed work plan and
management approach using a weighted scale by a panel consisting of the City Manager, Assistant City Manager,
Finance Director, Director of Public Works, and the Water Services Manager. The results of the initial evaluation
yielded the following rankings:
Total Point Score (400 Max.)
1. Bookman-Edmonston, Inc. 314
2. Stetson Engineering 312
3. Psomas and Associates 299
4. Bucknam and Associates 213
This ranking was supplemented by a review of the amount of time the Project Manager would devote to the project
as a percent of total project time, the total number of project hours by phase and fee, and the total fee.
$ (Hours)
CONSULTANT
BOOKMAN
STETSON
PSOMAS
BUCKNAM
PHASE I PHASE II PHASE III TOTAL
$ 74,756.00(600) $ 30,176.00'(219) $ 6,856.00(60)
$ 91,824.00(98'6). $ 18,448.00(154) $ 14,200.00.(108)
$ 50,740.00(453) $ 48,705.00(443) $ 18,100.00(160)
· .
$ 66,870.00 (530) $ 10,740.00 (82) $ 7,160.00 (64)
$111,788.00 (879)
$ 124,472.00 (1248)
$ 117,545.00. (1056)
$ 90,321.00(676)
CONSULTANT
BOOKMAN
STETSON
PSOMAS
BUCKNAM
PROJECT MANAGER VS TIME ALLOCATED
PROJECT
MANAGER
TOTAL % OF
HOURS TIME
RATE/HR.
Harold Morgan
329 37'% $150.00
Steve Johnson
288 23% $126.00
Kevin Hunt
166 16% $155.00
Steve Bucknam
148 22% $175.00
Consultant Services Agreement to Evaluate Privatization Oppommities for the City's Municipal Water System
July 20, 1998
Page 3
The above analySis revealed that Bookman-EdmonstonEngineering, along with Stetson Engineering would devote
a substantial amount of their total effort to determining the existing level of Service within the Water Department
and if proceeding with a privatization option is warranted. Additionally, each firm was assigning a significant
amount of Project Manager time to the project. As a result of their written proposal, Stetson Engineering and
Bookman-Edmonston Engineering, Inc. were inVited to an oral interview with the review panel to discuss the
project report.
While the panel appreciated the efforts of all four professional firms and found that all of them presented the
necessary experience and qualifications to perform the tasks for a successful project, it is the panel's professional
opinion that Bookman-EdmonstonEngineering, Inc., is the preferred fmu to conduct the privatization study for the
City of Tustin based on:
2.
3.
4.
5.
6.
7.
The quality of their written proposal
The firm's experience in the water industry
The fmu' s experience in privatization efforts
The understanding and effort allocated to each phase of the project
The effort as a percent of total project time the Project Manager will devote to the project
The oral communication skills and project understanding demonstrated at the interview
The total Project fee
CONCLUSION
Bookman-Edmonston Engineering, Inc., will perform the tasks specified in phase I of the ReqUest for Proposal for
a not to exceed fee of $74,756. These tasks include analyzing the system's present condition, analyzing revenue
and expenditures over a fifteen-year time frame, establishing a growth rate, and evaluating the rate structure.
Additionally, Bookman-Edmonston will identify and evaluate operations that may be operated in a more cost
effective manner, review the status of other municipal privatization efforts and compare them to the Tustin system,
and ultimately recommend a specific option based on their analysis. At the completion of Phase I, it is intended
that any oppommifies for privatization are clearly un'derstood and that all current and future impacts to the City and
the ratepayers have been carefully analyzed and quantified. Upon completion of Phase I the City Council Mil
decide, based on the recommendations set forth in the Phase I Study, whether to proceed with Phase II and III. If a
decision to proceed with Phase II ($30,176) and Phase III ($6,856) is reached, this agreement will be amended and
returned to Council for approval.
Tim D. Serlet
Director of Public Works, City Engineer
Gary Veeh
Water Services Manager
TDS:ccg:CSA Bookman eval
CONSULT.a~NT SERXqCES AGREEMENT
THIS AGREEMENT FOR' CO~SULT:&NrT SERVICES, is made and entered into this
__ day of ., 19__, by and between the CITY OF TUSTIN, a municipal corporation,
hereinafter referred to as "City", and Bool~nan,Edmonston En¢ineerin~ Inc. a California
corporation, hereinafter referred to as "Consultant".
..
RECITALS
WHEREAS, City requires the services of a consultant to furnish the necessary.
engineering serx4ces for study 0f"Privafization Opportunities for the City of Tustin's Municipal
Water System" hereinafter referred to as "Project"; and
WHEREAS, Consultant has submitted to City a proposal dated March 20. 1998.., a copy
of which is attached hereto, marked as Exhibit "A" and is by tiffs reference incorporated into this
Agreement; and
WHEREAS, Consultant is qualified to provide the necessary services for the Project and
desires to.provide said serxfces; and
WHEREAS, City desires to retain the services of Consultant for said Project.
NOW, THE~FO~, for the consideration and upon
hereinafter set forth, the parties agree as follows:
the terms
and conchtions
AGREEMENT
Section 1: Scope of Consultant's Services.
Consultant shall perform all work necessary to complete in a manner satisfactory to City,
the services set forth in the City's. Request for Proposal dated February 18. 1998, a copy of
which is attached hereto, marked as Exhibit "B" and is by this reference incorporated into this
Agreement. consultant shall also perform all the services set forth in Exhibit "A".
Section 2: Order of Precedence.
In the event of a conflict between or among any of the documents comprising this
Agreement, the following order to precedence shall govern the provision in question:
1.' This Agreement
2. City's Request for Proposal (Exhibit "B")
3. Consultant's Proposal (Exh/bit "A")
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Section 3: Time for Completion. ~/' ~.~,,,~-',~,/2, '~d 2¥r-~/·
The time for completion of the work to be performed by Consultant is an essential
condition of th/s Agreement. Consultant shall prosecute regularly and diligently the work of this
Agreement according to reasonable schedules established by the City for various, items· described
and as outlined Within Consultant's proposal. Consultant shall not be accountable for delays in
the progress of its work caused by any condition beyond its control and without the fault or
negligence of Consultant. Delays shall not entitle Consultant to any additional compensation
regardless of the party responsible for the delay.
Section 4: Compensation.
mo
The compensation to be paid under this Agreement shall be as set forth in Exhibit "A",
not to exceed a total 'cost of $74.756.00 for Phase I.
g~
Consultant shall submit detailed invoices, based upon the actual work performed
accompanied by backup documentation as requested by the City.
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Progress payments for work completed shall be paid by City .as the work progresses,
within thirty (30) days of the date of Consultant's invoice.
D.
Consultant shall provide City with a monthly itemization Of all work performed, and the
fees accrued thereon, in complete and sufficient detail to fully apprise City thereof.
·
Section 5: Independent Contractoi'.
Consultant's relationship to City in the performance of this Agreement is that of an
independent contractor. Consultant's personnel performing services under this Agreement shall
at all times be under Consultant's exclusive, direction and control and shall be employees of
Consultant and not employees of City.' Consultant shall pay all wages, salaries and other
amounts due its employees in connection with this Agreement and shall be responsible for all
reports and obligations respecting them, such'as social securit3;,' income tax withholding,
unemployment compensation, workers' compensation and similar matters.
Section 6: Indemnification.
Consultant agrees to' indemnify, defend and hold City, its officers, agents, employees,
successors and assigns harmless fi'om any loss, damage, injury, sickness, death, or other claim
made by any person and fi'om all costs, expenses and'charges including attorney's fees caused by
or arising out of Consultant's, its officers', ~ents',~ subcontractors', .or employees' negligent
acts, negligent errors, or negligent omissions or willful misconduct.
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Section 7: Insurance~
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Consultant shall maintain in full force and 'effec~ during the term of this A~eement
policies of comprehensive general liability, personal injury and automobile liability
insurance with limits of at ]east $1,000,000 combined single limit coverage per
occun'ence.
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Consultant shall mainmiu in full force and effect during thc t~nn of this Agreement a
policy of professional liability insurance coverage with limits of'at ]east $500,000
combined single limit coverage per claim or per occurrence. If Consultant provides
claims made professional liability insurance, Consultant shall also a~ee in writing either
(1) to purchase tail insurance in the mount reqUired by this Agreement or to cover
claims made within five (5) years of the completion of Consultant's service under this
Agreemem, or (2) to maintain professional liability insurance coverage with the same
carrier or with an equivalent, carrier meeting the requirements of Subsection D in the
amount required by this Agreement for at'least five (5) years after completion' of
Consultant's services under this Agreement. Consultant shall also provide evidence to
the City of the purchase of the required tail insurance or continuation of the professional.
liability policy by executing the attached Letter Agreement on Consultant's letterhead.
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Consultant shall carry and pay for such compensation insurance as is necessary to fully
protect Consultant and its employees under California Worker's Compensation Insurance
and Safety Laws, and shall relieve the City from all responsibility under said laws in
connection with the performance of this Agreement. ..
D.
All insurance required pursuant to this Section shall be issued by a company admitted in
the State of California and rated A, .VII or better by the latest edition-of Best's Key
Rating Guide.
E. Upon execution of this Agreement, Consultant shall provide to City certificates of
insurance on the City's form. evidencing the required, insurance. If self-insured for
worker's compensation, Consultant shah submit to City a copy of its certification of self-
insurance issued by the Department of Industrial'Relations.
-.
Section 8: Termination of Agreement,
'A.
City shall have the right to terminate any or all of'the services covered by this Agreemem
at any time for any reason by giving written notice to Consultant.
Bo
Upon te~jnation of this Agreement, Consultant shall be paid for services rendered by
the effective date of the termination.
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Upon. termination of this Agreement or completion of the Project, all documents relating
to the Project shall become the sole property of City. Should City terminate this
Agreement pursuant to subparagraph A. of this Section, Consultant shall, within ten (10)
business days of receipt of notice of termination, provide City with all documents within
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Consultant's possession relating to this Agreement and the Project, including but not
'limited to all completed documents and all drafts of uncompleted documents.
Section 9: Notices
Any notice allowed or required.to be ~ven shall be effective upon personal del/very
thereof, or upon depositing thereof in the United States Postal'Service, certified mail, return
receipt requested, postage prepaid, addressed as follows:
To City:
City of Tustin
Atto: Director of Public Works'
300 Centennial Way
Tustin, CA 92780
To Consultant:
Bookman-Edmonston Engineering, Inc.
Attn: Mr. Harold V. Morgan
225 W. Broadway, Suite 400
Glendale, CA 92304-1331
Section 10: Miscellaneous Provisions.
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Consultant shall proceed immediately and diligently to Perform the serxdces provided for
in this Agreement upon receipt of notice bom City to proceed therewith.
No part of tiffs Agreement may be assigned by Consultant without the prior written
approval of City.
Tiffs Agreement shall extend to and be binding upon and inure to the benefit of heirs,
executors, administrators, successors and assigns of the respective parties hereto.
Consultant shall perform, ail services reqmr.' ed under this Agreement using that degree of
care and skill ordinarily exercised under similar conditions in similar localities, and shall
be responsible for all errors and omissions for services performed by Consultant under
the terms of this Agreement.
Consultant certifies that there shall be no discrimination against any employee who is
employed in the work covered by this Agreement, or against any application for such
employment, because of race, religion, color, sex or national origin including but not
limited to, the following: employment, upgrading, demotion or transfer, recruitment, or
recruitment advertising, lay-off or term/nation, rate of pay or other forms .of
compensation,' and selection for tra/ning, including apprenticeship.
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IN WITNrESS WI~REOF, this A~eement was executed by the parties on the day and
year first above ~tten.
"CITY"
CITY OF TUSTIN
By
Thomas R. Saltarelli, Mayor
ATTEST:
Pamela 'Stoker, City. Clerk
APPROVED AS TO FORM:
Lois E. Jeffrey, City Attorney
"CONSULTANT"
Bookman-Edmonston Engineering, Inc.
By
Signature
(Print Name / Title)
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EXHIBIT A
.
. . .
· .
BL, OICMAN- EDMONSTL,N
EN GIN EERIN G'
Specialists in Water Resources
March 20, 1998
Mr.. Tim S~let
Director o£ Public Works
City of Tustin
300 Centennial Way
Tusfi.rt, CA 92780
.
Subje~' Privafization Opporturdfi~ Study
Dear Mm 5erlet
Ln response to yom request, Boo 'kman-Edmonston Engine~_dng, Inc (B-E) is ple2secl to
submit this proposal to proxdde a study o£ the pfivatization opportunities for the' City
o£ Tusffu water system_ We propose to do fl-re assiom-u:nent on a time and expm~e basis
w/th a budget estimate ol $75,000 for Phase L'Phases II and II1 are pr 'e_lumlnarfly
estimated at $30,000 and $7,000 respectively, for.a total project cost of.$112,000.
The actual cost o£ tlne work ~dll be determined, in large part, by the extent and
availabil/ty of irdormation with respect to tinandal and system records. If the City has
extev~ive organized records and prior studies on system condition and other areas, the
study cost will probably approach the estimate as c'm-rently proposed. If, however,
records are poorly org-~dzed or nonexistent, and the extent of Phase II and IZ ms'ks are
om:eater than ant/dpated (which in some cases are out of our control to estimate hours),
it is antidpatecl t,%at .',_he smd}, cost ,~dil exceed the budget estimate. Other factors
/nfluendng the bu. dget include the mount o/ legal time necess .ar_y /or review of
pr/vatizafion alternatives, and the potent/al need to establish a market value range for
an outright sale of the water system to the private reomalated marketplace (which latter.
need Ls not emdsioned to be required by the City at this ffme). Consequently, the
budget as developed, in this proposal is subject to refinement depending on B-E
~-~ining a oo-reater understanding of the system, i~s records, and 'the extent o/the task
assigrmaents as e~nxfisioned by the City.
In order to accomplish this study in a timely manner, we have assembled a team of
professionals w/th ex*~ve experience in utili~ valuation and privatization stud/es.
Mr. Harold Moro~an is a specialist in utility valua~iorrs and related studies and has
det~mLned water and wastewater system values for about 60. utilities (which prior
A Ds vision, oF
1~ E $ 0 U"R C E J~,~ A N A C E'M E N T I N T E R N A T i O N A L,
INC.
~ W. Bv, o.aDw.av, Sc-'r~., 400 - G~.-~D.~I.£, CA 91204-1331 - (818) 244-0] 17 - FAx (81 S) 242-0480
Mr. 2-nn S~let.
March 20, 1998
Page 2
work also includes the extensive review o£ the 1980 purchase of ~ahe Tustin water
system by the City together with a field review of flhe Tusfin system conducted by City
olveraffr~ staff). He is a registered Civil Engineer and licensed oReal Estate Broker in
C~!ifomia. Mr. Morgan ~6./I be_ the project manager for tiffs assignment Mr. Ruben
Zubia has many years o£ expo_dence in ~he design and operations of waterworks
projects and systems. Mr. Zubia will be responsible for system anal}'sis and review of
system conditions. Mr. David Swank has over 20 years of ex'P~ence in all aspects of
utility rate setting, financial planning, and economic analysis work relating to
management and opm'afioru Mr. Swank will conduct rate impact analysis and provide
economic evaluation sup?oft on this project
On bel~lf of Bookman-Edmonston, I t. hank you for the opporttmity to submit t_tiis
proposal We look forward to working,adth you on this interesting project'
--.
Enclosure
Sincerely,
Richard W. Atwater
President
FOR
EVALUATION OF PRIvATIZATION OPP°RTUNITIES
FOR THE
CITY OF. TUSTIN MUNICIPAL WATER SYSTEM
'-':'...!. ;..-;.'
Prepared for
CITY OF TUSTIN, CALIFORNIA
Prepared by
BOOKMAN-EDMONSTON
ENGINEERING, INC.
It' R O P D $;&L.
CITY OF TU;TIN
EVALUATION OF PRiYATIZATION OPPORTUNITIES
TABLE OF CONTENTS
PRIYATIZATION EVALUATION OF
CITY OF TUSTIN WATER SYSTEM
A
B
INrI'RODUCTiON .................................................................. L."
SCOPE OF SERvIC7~-$ ................................. : ...........................
PROIECT TF_AM ORGA.NIT_¢TION ........................................ ']5-1
~ANT EXPE~CE ................................ i ...................... C-1
PROPOSED BUDGET ............................................................. D-1
SCHEDUL~G ........................................ ~ .............................. E-1
KEY PROISCr TEAM ~ ............................. APPENDIX A
~Y o}: B-E AP?P,A~AL EXPERmNCE ....... 'AP?ENDD( B
~ SCHED~ ................. · ................................... .APPENDIX C
pROPOSAl
C;ITT' DF TU&TIN
EVALUATION OF PRI1/'ATIZATION OPPoRTUNITles
INTRODUCTION
ABOUT THE FIRM
Bookman-Edmonston Engin_~rin~, Inc_ (B-E) has earned recognition as one of the foremost
water resources ¢ng~eefmg firms in the western United States. We have comprehensive
experience in all aspects' and levels-of water' resources en~in~ ~rom basic concei~
development to £eas~bflity, planning, design, and constxu~on su~ion o£ major
conveymace and distribution works, i ~z~ additic~, ~-E is one o£ the premier ~TTnS in
CalLfo~a in the pexformance of utility.valuations, due 3~l~gence investigations, and system
c°ndition appraisals as they relate to the sale and acquisition o£ water systems, wast~vater
fatalities and water rightS. ..
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serving a broad client base in gove. mment, bushaess;' and industry,-fmcluding water
.districts, municipalities, ufiltties, regional water-supply entities, and water- purveyors. B-E
maintains specS~l~zed expertise in hydraulics, project economics,: ~inancial analyses,
hydrology, groundwater management, fight-o£-way engin~ £ar~l~ties design'-and
constxuction su~or~ including pipelines, canals, dams and diversion Works, pumping
plants, power systems, we11.% and other water resources management fa~!~ties. The range
of B-E's expex~e enables us to approach every assignment with the flexibility required to
meet each client's spe~c needs.
EXPERIENCE AND QUALIFICATIONS
The technical and managerial capabilities of B-E encompass an extensive a:ray of munidpal-
and utility services including:
Water and WaStewater System Condition
Assessments
Rate Studies and Cost of Service Studies
Project' Planning and E~aluation
Utility Appraisals, Valuations and Acquisitions
Civil, Mechanical and Eie~rical Design
Water Quality Management
Water Rights and Water Allocations
Water Marketing, Transfers, .and Exchanges
Project Economic and Financial Feasibility
Evaluation
Due Diligence Investigations
Groundwater Well Design and Inspection
Construction Inspection and Management
Groundwater Management
Environmental Analysis
Conservation and Efficiem,'y Studies
Wastewater Reclamation
B-E draws on a highly skilled and experienced stmf-f of enoch, geologists, hydrologists,
and economists, many of whom previously held top management positions in major
national and local government water resource agencies. The capabilities of B-E's
pro~essionals are stzen~-~ahened by access to computer and communication facilities.
,. 1 ]rztroductiorz
PROPO$&L
CITY DF TU~;TIN
EYALU&TIDN DF PRIV&TIZATION OPPORTUNITIES
Suppor~g these smudces are word processing, database management, computer-aided
design systems, computer-assisted, graphic design, state-o£-the-m Gig, and report
production facilities.
OFFICE LOCATION
The work for ~ds assignment ~-ill be performed out of B-E's. Glendale o/flee_ The address
for the B-E Glendale office is listed below.
BOOKMAN-EDMONSTON ENGINEERING, INC.
225 West Broadway, Suite 400
Glendale, CA 91204-1331
Telephone: 818/244-0117
Fax: 818/242-0480
RESOURCE FIANAGEMENT INTERNATIONAL, INC
Resource Management International, [nc_ CRM~ is a national 'enginemSng, economic,
environmental, and management consulting firm serving the water, energy, and waste
management industries Irom headquarter offices located in Sacramento and nine other
'locations fl~roughout the United S~ates. RMZ is an associated company with B-E as both
Enuns are subsidiaries of Metzler Group, Inc_ One o£ fl~e projec~ team members proposed for
this study, Mr. Dave Swank, is an .employee of KML Also, selected r~erences in Section C
are for projects completed jointly by B-E and tLML
2 Introduction
PRDPO~;AL.
CITY OF TU~;TIN
EVALUATION OF PRIVATIZATIDN DPPDItTUNITIES
SCOPE OF SERVICES
~..
A. PHASE !
· 1. Review and evaluate the City,s water utility including but.not Jimited to
the system's present condition, service area,, operating .~evenues and
expenditures, administrative .and operation functions (personne6 facilities,
billing, meter reading), annual maintenance and repair needs, and anticipated
capital improvement~ ~ ~ - '
Task I - lOok, Off Meeting and Data Base Development
W'ithin five busings days of notification to proceed
submit a derailed dmtm ~equest to flue Cify .outlining flue init~l irfformafion required for
flae complefi°n of flxis sfady. Datm reques~d ~s anficipa~ecl to include financial dam,
faciiify recOrds, operating.dam, rate and capi~ml improvment shaclies and projections,
operating' and naain~ce ex, ramses .records, orgmaizafi°n char~s, personnel job
descriptions, _business or management operating plans, and other records.
...
B-E will schedule and parfidpate w~th the City in a kick-off meet~ to review the
information requested,, discuss the objectives of the sfudy, and-cla~ any questions
that exist Following this kick-oH meeting, B-E will conduct a field visit to observe the
· condition of the system.
Task Z -em Arm rs
B-E will perform' a field %fisit and conduct a review of current operations and condition
of the water system- Based on these evaluations, conclusions _'will be reached with
-' resPect to caPital improvement requirements resulting/xom de~erred 'maintenance or
system conditions, in_conducting this analysis, B-E wiU undue the following fas-ks:
T~s~ 2~ Fmc. Ymrt ro I,sP~c-r FamCmEs
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'A field' visit ~ ~e ~aae o£ the ~vater sy~em *o review the cu~eni c°nclifion and
operation o{ the la~ties. It is anticipated this ~alcl v~it will be macl~ with assistance
~rom the City operating persannak In addition to viewing the ~ar~fies and .gaining an
understanding o£ system operations from interviewing City staff, the field vL~it will also
~clude review, o£ the existir~ and potential service areas ~or the pm-pose o~ assessin§
the lOCation, .wpes, and potcnfi~ ~owth o£ system
TASK 2.B WATER et,iALr'~ EVAuJATIoN . ~''
Water ~ality. data £or supplies purchased and producedby the Tustin'syste~n'~ be
c011ec~ed and evalua~ecL In conjunction with hhis dam, haformafion o]~mined during a
meeting ~o be scheduled ~riflx flue Cm]~fomia Deparbn~t of Heal~ Services (DOHS)
Sect/on A
Sc. ope of Serv/c_'_e _
P ItO PC) ~;AL
~ITT OF TUSTIN
EVALUATION DF PRIVATIZATION OPPORTUNITIES
· Illlll
will. be cansidered to assess the system's ability to Comply with exis~ water qualiV
standards and to detm-mine if any health-related concerns cx4st among regulatory
·
pers~ In addition to assessing current supplies and their ccmfozman~ with
ex~sting standards, an assessment will also be made of poten~ capit~ improvements
.. required to meet drinking water standards anticipated to be impleme~t~:l in the near
future, indudi~ addressing such potently] conc-mxs as high levels of arsenic, reduced
allowable concentrations for trLhalomethanes, and the presence of radon_
T~sK P-C RESOURCE
An im, estigation will be made of the availab~ty of water supplieS in'order to fully
sm-ye the anticipated numb~ of water custom~ within the sm-vice area at the end. of
fifteen years. The anticipated relative dependence on' imported supplies and
groundwater production for future annual deliveries will .also be reviewed. Finally,
~sk will include a review of the current status and condition of .groundwater pumping
fadlities and imported water t-amours, as well as the need for production ~a. ci~ty
improvements or additions.
T~.sK 2.D WATER S'rS~'EM A~U.¥ms
·
An evaluation will be made of the existing water system to determine its adequacy of
supplying currently required system demands and fire flOWS as well as the ability of
existing facilities to meet future growth. A review wili be made of the system design
and ex~sting operations in order'to identify potential deficiencies, such as inadequate
fire hydrant spacing, inadequate main looping, substandard pit, line sizes or other
systezn design, deficiencies. This analysis will also take into account the'* ~ of
materials used in the water system construction. An evaluation will be made of the
ability of the water system to meet peak flows and to provide adequate storage under a
range of Operating conditions. A review will also be made to determine ff any fire
hydrant pressure defidencies exkst, and other potential Problems with fire supply..as
mentioned.above, contact will also be made with the State DOHS in order to review
regulatory concerns, ff any. Particular attention will be paid to consumer complaints of
pressure deficiencies or other concerns with water system service_ A review will be
made o£ current capital improvement plans and recent experience with maintenance
and repair.expenses. Conclusions will be reached-reg~arding capital improvement needs
as a resttlt of system condition and the potentlaI cost to cure 'system defidencies~ or
significant deferred maintenance_ System maps, maintenance records, 'and system data.
will be requested for our review.-
·
TASK 2. E ADMINt~TIVE AND MANAGEMENT OPEI"'ATIONS'
.
A review of available documentation and interviews with selected personnel will be
underak~n, in order to understand, the Tustin Water. Departmer2'-organization,
personnel requirements and respons~lifies, .and administrative functions including
t~lHr~g and meter reading. B-E will ~also investigate the Water .Dep~ent practices
with regard to leak detection, water usage audits, .energy use audits, customer surveys,
meter testing and-repair practice~,i valve maintenance,' and other *administrative or
management practices2 Also in this task wi]i be an identification of key administrative
A-2
Section A
Scope of Services
~..IT¥ DF TUI, TIN
EVALUATION DF I"R, IYATI,T. ATION DppDRTUNITIE~,
pm-ameters (such ~s the number o~ W~ter Dep~~ management personne3) which
wz31 be u~li~ed in the ~nahmar~g t~sk descrfbed below.
Z Document and analyze the revenues and expenditures necessary to
support the Municipal Water System for a Fifteen-year time frame .along with
the impacts' On the rate structure. This' will involve establishing a growth .rate
along with estimating, future water purchases, groundwater, costs, and
energy Costs.
· Task 3-Rate Impact .Pm, jec'tion~ ·
The Consultant ~ review the latest water uffliTM revenue reguirements studies, as
well as fmanfi~ data ger~ated in Task l (both historic and curr~t opeza~g revenues
.and ~tures, debt Xepa~ent obligations; and .capi~a] ~mproVemerrt requirements).
This foreCaSt Will ~ke into account operating impacts from growl~, and escalation of
significant c°st/actors induding.ener~-~, 'groundwater Production-expenses and wa~er
purchases.' B-E will ~aen prepare a baseline finan~ ~brecast .of f_he water system's
operations ~or a fifteen-year period based on continued ownership and operation by the
City. This bas~]ine iorecast will .be later compared to a forecast of future finan~
results based on potential cost. Savings identified 'in ff~e benchmarking analysis
described below, and temas and conditions confined ~n each lvrivatization alternative
identifiecL The results of these comparisons will pr°vide fhe City wi~ an fiadication of
~e zate impacts associated with each alternative and a common ground by which to
evaluate the financial implications of the different proposal%. These comparisons will
focus on the.potential.cost sa~dn~ because of the reduction in the operating costs for
labor and O&M, as well as changes in administrative practices. '
3. Identify and evaluate alternative methods, of operating any or all
portions of the water system that will be more cost-effective than current
operations and may provide other benefits to the Oity. ]'his shah inoiude:
' a. An analysis' of .'options .fOr improving the effectiveness of current
operations and'methods to reduce costs..
'" la. An analysis of options specifically' for contracting out any portion or
ali' of the ex~Sting water services to the private' se~tor or to an :existing
Water Utility.
c., All options evaluated in the preceding sub-tasks, a and b shaft be.
evaluated and quantified for.their, legal and organizational feasibility,
sot-up costs,' effect on employees and benefit/cost ratio. Categories of
costs may include contra:t expense, set-up expenses, operating costs,
etc. Categories of benefits may include long-term rate stability and net
revenues availabie to the City; *- : '
..
....
...
_ '~ . . '..
·
Scope of Services
PRDPD$&L
;::;ITT' DF TU,~TIN
EV&LUA, T1ON DF PRIV&TIZ&TIDN DPPDRTUNITIE~
Task 4- Benchmarki
In order ~) evalua~ txhe potential cost savings ~rom privatization, it ~s fn~ neamsary to
evaluat~ the comparative level of performance of the ~ty's Water Departmen~ with the
private sector..TI~ B-E Team's approach in conducth~' this study will be sirn~ed to
diagnose the City's water supply performance (baSed on anal)~is of .performance
measures, comparative b,muchmarking~ examination of City records, and' inten~iews
wiflu City personnal), identify areas where there are opportunities for improvement,
and evaluate privafizafion opportunities that will reduce costs and improve service.
The B-E Team proposm to per/om a benchmartdng study o£ operations and
management proc~flures which will cover four sub, ct areas: administration, customer
service, ~eering/operatiohs, and maintenance.
The g°al o£ ~he bent. brant]ring study will be ±o cletamSne if any 0£ the ~tudiecl operating
procedures or any other internal workings o£ ~-m' City Water Department are inef-Scient,'
improvident, or imprn~[en~_ The Consultant will use these determiua, fions to identify
pzivatization OPPortunities.
It is anticipated that'a significant number o£ the benchmark comparative analyses
already developed by B-E in a similar assignment for the City o£ Palo Alto will be
applicable_' The City o£ Palo Alto has a water supply and distribution system that
provides service to 19,000 customers. Comparative benchmarking data/or that analysis
were o~ed from six other California water purveyors of comparable'size including a
California-regulated water utility. In addition, the benchmark analysis included using
Water lrduslnj Daf~ B~ UDlity ProJ~s published by the American Water Works
AssoCiation Research-Foundation. .All of these benchmarking data are currently in
electronic format/or easy access and analys~.' It is also recognized that supplemental
data from substitutions/or comparative analysis may have to be developed in view o£
the unique economic environment of.Orange County.
· .
Task 5- Analysis of Privatiz:atJon Options
Based on all of the above tasks, the B-E Team will develop a 1/st of potential
privatizafion oppommities to evaluate. Each option identified w i Il'be 'evaluated
according to its fmandal and rate impacts compared to the base cOndition, l%~al and
organizational ~eam%ffity, initial'set-up costs, and impacts on current City employees. A
benefit/Cost ratio will be_ determined based on identification of assodated costs and
4. ' Review the status of other municipal water systemprivatization efforts
and compare them. to the Tustin system. Document any issues/problems that
have occurred. ' -
..
In 1995 B-E/RMI negotiated and prepared. (with leg-al assistance) a private party
operation and maintenance contract for the City of Rio Rancho, New Mexico, iuvoh4ng
a munidpal water system serving approximately 14,000 residential, commercial and
A-4
Section A
Scope of Services
PItDPO$&L
t;:17'1' OF TU~;TIN
E~'ALUATIDN OF pRIYATI2ATIDN DppDRTUNITIES
~ustrial customers. Since that t~e a major sou~west FfiVate operator
~ag~g the tUo Rancho system under a four-year operating
Iu addition,-several California 'communities have. implemented private/public
parmm~ ~o either manage their wate~ systems or provide other utility services.
These include the City of Bakersfield (20,800 connections)which pays a private Old-raZor
a monthly~ee per connection in addition ~o receiving assistance in capital improvement
planning and waf~m' resources issues, the City of Hawhhorne (6,000 connections) which
has granted a 15-year lease to a private ot:~-rator in exchange for an upfront and annual
payments, and the cities of Menlo' Park (4,000 connections) and Cupertino (~200
connea~ons) whichhave private parbf contract~ for sys.tem operations.
B-E proposes ~o review the status of these projects ~o identify issues..and problems. In
the case of Bakersfield and Rio Rancho, in view of their large size, and' lena~h of
operating ex-patience, it is planned ~o make office visits Ln order to thoroughly
interview City representatives and obtmin status information, Both smaller referenced
'dries can probably be Lnien6ewed by telephone ~o receive status reports, and reques~
additional infomati0ru-As indicated in Section C below,' the City of Cupertino
previously retained B-E to appraise its 'Wa~er system as part of an irdtial eHort
evaluate a potential privatization asset sala Contact will also be made with the City
Westminster to identi/y issues encounter.ed with ~he City's attempt ~o 1ease its wa~er
system to a private sector company. Even though the City's.voters ended the pro)ed,
the exF~-ience gained by the City until the pro}ed was suspended would still be
ins%uctive.
..
B-E also proposes ~o intarview one or more large California private water companies
experienced in murddpal Water system privatization contracts in order ~o receive inputs
on issues from an operator's perspective.
5. Recommend specific options based on the preceding analysis. Identify
financial and legal issues and procedures necessary.~ ~ to implement._ ** any
..
recommendation. ' . .. . ..--. ~ _ ..- ~. .
' ' B~ on ~e r~ of ~ T~k 5 ~ys~, ~E ~ ~ s~fic ~o~~afio~ for
~ ~s c~id~afion to pfiva~ ~ or a po~°n 0f-~e wa~'syst~ ~g~~
~d o~afiom. Na~y, it ~ possible .~t ~e reco~~dafion may ~ ~de to
z~ ~~ ~ o~afio~ ~out' siamt ~gm.: ~ re~ted, ea~
reco~mded' op~on ~ ~ accomp~ed by id~mfi0n of my ~d~ md leg~
work for ~y le~ r~ew ~d i~ ~s~d co~ ~ n~d to ~ made'at ~e ~e of
id~~g zeco~~ded option. '~E ~ conrad ~ serum a~omeys q~ed to
m~e ~ r~s. ~ proposed budget' coned ~ ~on D d~ not .con, in ~e
c~t of le~ renew at ~ ~e.
A-5
Section A
Scope of Services
CITT OF TUSTIN
EVALUATION OF PRIVATIZATION OPPORTUNITIES
i
6. ff privatization options are recommended, identify a list of qualified
private companies and water purveyors that have the experience and
available resources necessary to respond to a proposal based on the
recommended option~
TaSk 7 - 'idenfif~=~:~ of Co,~ dC.~.>r~ ' "
Based on the current pr~va~izafion prc~ect B-E is impiementkn~ on ]:~hal{ o£ the City o£
West Covina, as well as other business experience B-E has. gained over many decades in
dealing with major Ca~omia water purveyors and priva~ companies, a list of
qualified Operators capable of responding to a privatizafion proposal will be prepared.
In addition to having management contac% B-E is also extensively familiar with the
operating experience and abilities of most of these potenti~ operators.
PHA E i PRODUCT
'A comprehensive technical report to. be provided as follows: Five (5) screen
copies 'for City.review and comment fifteen (15) final copies and one (1)
reproducible. . .
'r k Pre ara m
The results of the study will be careh~y narrated in a bound report Supporting dam
and benchmar~g graphs will be included in the report as necessary to dearly support
the study recommendations. Included with this ~msk would be'a meeting with the City
in order, to present the results of the study. Within 'ten business days following
submif~al of the draft report, B-E will meet with representatives of the City to present
the study ~indings and answer any. questions related to the study. Within five business
days following the presentation of the draft report, B-E ~11 submit i~s final report
B. PHASE !1
1. ff the City counc#'determine$ to proceed with Phase !!, draft an RFP
for the portion of or al~ of existing Water services recommended for operation
by the private sector.
Task I - Preparation of RFP
B-E and RMI have recentlY prepared KFPs on behaH of the cities of Rio Rancho and
West Covina for either qua]Jficatons to provide water Service and operate the
municipal system, or submitm_ls of purchase offers. An RFP for the privafization option
selected by the C-i'ty of T~istin would be prepared foCUSing on the specific goals of the
priVafizaton. - _
..*:..!:':*
A-6
Section A
Scope of Servicbs
PROPOSAL.
CITY' OF TUSTIN
EVALUATION DF pRIVATIZATIDN OPPORTUNITIES
· Prepare criteria .for the evaluation of each RFP.
Task a- 'P P
*To date, ~-E ~s evaluated ~ Co~'s ~cc~vc~ ~t~~ o~ ~~o~
'* r~Po~ to ~ ~'s ~, ~ ord~ to m~e ~ s~ ~~fion for ~
~~ W~e d~o~d ~ ~ b~ic ov~ ~e~: u~ m~~~ ~~ce,
u~ o~fi~ ~~ce,' ~d ~tom~ compl~. For ~e ~~ ~' of wa~
u~ ~g~~ ~~ce, s~c ~ w~e ~~ted ~du~g ~e subje~
~~g, s~t~ d~i~, ~pi~ ~prOv~~ ~d r~c~~, wat~
mg~t ~~~gt rate ~g~t, wat~ r~o~c~ ~d ~ fi~, ~d
re~ded w~t~ e~mce.
.
.
For ~e ov~ ~jea ~ o{ wa~ u~ o~on ~~ce, ~e ~ea ~ of
rep~ ~d ~~ce, ~g~ r~pome ~pabffi~, s~ ~d ~k ~g~t,
wa~ ~d ~~ com~-a~on, ~ ~tom~ sa~fa~on s~eys W~e
ev~ted ~d comp~e& ~ ~e s~je~ ~ of ~tom~ compl~, ~ ~~on
~o~ed on prince complain ~ 1,000 co~e~o~, ~t~ ~~ compl~
1,000 co~e~, ~d l~/ou~g~ compl~ ~1,000 co~e~. S~ ~t~a,
'~du~ ~~ ~t~a, woffid ~ d~o~d for ~~g prop~ rec~ved by
~e G~ of T~
3. Evaluate each Of the proposals received based upon the established
criteria.'
Task 3' Proposal Evaluat~n
Ag~' using a similar approach as u~ilized'in' the West Covina project, for each subject
area, a numerical grade relative to each utility within the group was given.depending
on all of the .information received and reviewed in the SOQs as submitted. Grades
ranged fr0m 0 to 5 (either no expet4ence or very poor performance, up to very extensive
experience or exCellent performance). For example, for the evaluation of the subject area
of engine~.ng, taken into account were the relative size, range and experience of the
mgineering staff;, its ability to design and manage routine and complex fadlities;, the
reliance on consultants; the use of CAD (computer assisted drafting), hydraulic models,.
and other technologY; the quality of er/gineering staff as reflected by submitted
resumes; and any other submitted informatio& Based on numerical grading for each
subject area, a total score was then derived which provided a relative letter grade in the
overall evaluation area £or each utiliW.
Finandal evaluations would be .assessed differently depending on the criteria'
developed. Most likely, typical analyses using annual cost savin~, benefit/cost ratios,
and net present worth would be employed.
· f.:}.......'.,
A-7
Section A
Scope of Services
PROPOSAL
CITY OF T*U&TIN
EVALUATION OF PRIVATIZATION OPPORTUNITIES
ii i
4. Prepare a technical memorandum identifying issues associated with
each proposal and rank the proposals based upon .the established financial
and operational criteria.
Task 4- Rankin9 of Proposa~ -
Based on the work performed in Task 11, proposals would be ranked in order of the
desirability of selection as a privatizai~on contractor. A technic, a] znemorandu]m would
be prepared t° support the conclUSions of this ranking including 'a discussion of
assodated issues.
5. Prepare questions for interviewing the top firms and participate on the
interview panel ,.
T~sk S- Proposer Interviews
:As requested, BF. would prepare a list oi: interwiew questions ~or intex-viewing the top
selected furms and pa_r~cipate in the intarviews.
1. After selection of a preferred private sector operator; assist in drafting
and negotiating, agreement with selected company..
Task 1 -Ass~n~ with Preparation and Negotf,. 'ation of Agreement
i'ne B-E Team has experience in providing assistance with both contract .draf~g and
con, actor negotiating associated with operator agreemen~ in the cities of Santa Fe and
Rio Rancho, New Mexico. Contracts for both of these' Projec~ would be available as a
s~mrting format
Sectio,~ A
Scope of Services
PRDPO~:&L
C:~TT DF TUSTIN
EVALUATION OF PRi*VATI2:ATION OPPDI~TUNITI£~
PROJECT TEAM ORGANIZATION
B-E proposes ~o perform this assignment with a key ff~r~person team highly
expm-ienced in utility valuations, utility management and operations., rate impact
analys~, .and operations contracting. The following is a brief overview of the roles and
relevant capabilities and experience of fl~ ~ members. In addition, Richard Atwater,
President of B-E, would be available' for executive 'oversight and partic~ation in selected
assignments, and Ki .chard Andemon would provide ke~ ~ suppor~ '
Harold Morgan, Executive t¥incipal Engineer, 5s a registerect Civil engineer in the State of
California He Zs also a licensed C-]ifornia ~ Estate Broker and a re .b:~!sterect' New Mexico
Real Estate Appraiser with experience in business and income properties. Mr. Morgan is a
spe~iqt inutility Valuations and has cl~d water and wastewater system values for
60 utility systems in several western states in connection with sales, condemnation
proceedings, bond sales,~ bankruptcy proceedings, t2uc assessments, title insurance
requirements, water serVice'disputes and* contract negotiations. Mr. Morgan has
represented many municipal clients in pn'vatization valuations. He has been involved with
every appraisal assignment listed in Appendix B. lie was also project manager in' a B-E
.assigrunent to conduct a benchmarking study of the City of Palo Alto's water and
wastewater systems to identify potential operational improvements and cost savings.
.. .
_ .
Mr. Morgan will be the Project .Manager for this assignment, supervise the study tasks,
design the benchmarking analysis, participate in conducting many of the tasks, and
supe~wise preparation of rite written reportS. Mr. Morg-art will also attend City Council
meetings, public hearings and other m~tings; as well as participate in negotiations.
Recently, Mr. Morgan represented the-City of Santa Fe in a key neg0tiating role in the
City's successful effort to acquire the Sangre De Cristo Water Company from Public Semdce '
Company Of New Mexic°.
Rubtm rub/a, Pr/ndpa/ Engineer, has over 13 years of ~ence in ~ design and
opm-afiom of waterworks projects and systems. During his previous employment with the
Los Angeles County Waterworks Districts, Mr. Zubia served as the Systems Manager for 18
waterworks districts, varying in size from 300 to 45,000 service connections. His duties
included the management of the day-to-clay operations and maintenance of the systems,
'and the planrdng and design of required system improvements, More recently, through
employment with consulting firms, Mr. Zubia has been involved in the master planning
and design of water and reclaimed water system improvements, and in the valuation of
water systems for acquisition and system mergers. Mr. Zubia will be respons~le for the
water system analysis and review of system conditions, as well as participate in other tasks
of this assignment.
Section B
Project TeaTM Organization
PROPOSAL
~gTY DF TU~TIN
EVALUATION OF PRIVATI2:ATIDN DPPDI(TUNITIES
__
ii
David Swank, Err, cup, ye Cons~tant, is an analyst with almost 20 years of experience in the
utility industry. Me spe~ in the preparation of financing, user ~ee, economic, and
planrfing studies ~or electric, water, natural g-as, and waste managemen~ clients. Mr. Swank
has authored seVeral papers on rates and finan~ issues confronting fire utility industry.
· Mr. Swank was responsible ~or negotiating'on behalf of the City of Rio RanCho in its
successful efforts to acquire the water and wastewater systems from United Water
Resources. Mr. Swank wi~ play a key role in preparing a fmandal projection of the City of
Tustin's water system revenues and expenses, and a projection of future rate impacts from
current operations. Other assignments in which Mr. Swank will play a key role include
firtan~l evaluation of privatization alternatives'..
·
r~o~c~ m~~~t ~d p~g. He ~ s~ed ~ ~~ ~g~ for ~e W~ B~
M~dp~ Wa~ ~ffi~ ~d ~e C~2~ B~ M~dp~ Wat~ ~d ~
~o~ ~e ~o ~ ~~, ~ou~ s~te .~fifi~, ~ve ~e a~~afive
s~. Combed, ~ ~t~ ~~ s~ed a p~fion of more ~ Z3 ~illi~ ~ong
~ co~ pl~ of L~ ~g~ Co~ ~ ~duded 41 ~co~ora~d dfim. ~. Am~
'~ plonked m~y a~d~~g proem ~t b~~ ~e mffifiple mm'~d d~
of wat~ ~d m~t t~ay's ~ smd~ for ~W, r~bffiW ~d c~~e~vmms. ~
m~g~ of ~e Cm2d ~d W~t B~ ~s, ~.'. Amm~ ~ g~ed comid~le
· ~~ce ~ con~a~ nego~fi~ ~d ~d p~ o~afiom. He ~ pro, de suppo2
m key t~ m~~ ~ ~ded ~d ~come ~volved w~e s~~ed e~ ~
req~ed.
Richard C. Anderson, Associate Engineer, is a registered dvil engineer with over 7 years of
experience in water resources engineering. Mr. Anderson has provided significant staff
support in the recent valuations B-E has performed On behalf of the rifles of West Covina,
Modesto, Tucson, Santa Fe and Rio Rancho.
Resumes for these individuals are included as Append~ A to this proposal. Other staff
members will be utilized on a limited basis under the supervision of 'the above key
individuals as needed.
Section B
.Project Team Organization
C:.IT'Y' DF TU,~TIN
£'t/'&LU&TION DF pRI¥&TIZ&TIDN DPPDI~TUNITIlr,~
RELEVANT EXPERIENCE
m
D'eta/led* be_low is a se_]eded pr~ect summ~ o£ the ]3-]E Team's e~/mce in
i~._rJ[o~ skr~/l~ projecis conducted -w/ff3in ~onuia and otl~ west/em states,
indu~ the key individuals in the~ projects, pro~ect costs, and tl~ names and phone
numbers for client references.
,
·
Cn~ or w~.~ CovzNa: l~U~r~ON o~: ~m-m~ 5'rsrm~ The .City of West C°vin~ (City)
o~u~s a water system servin§ customers in/he City .aha adjacent City of Walnut The City
system distn'but.~ over 6,000 .acre-/eet of water p~ year throU~ an in/raStruch~e ~hat
includes aPProximately 84 miles of trm~sion and distn/mtion mains ?rovidi~ service
to approximately 7,000 connedions.
· ,
The City is exam/nin§ ~ potential to divest itse/f.of its munidpall, y. owned water system
~hrough a multiple-step process. Th~ first step involved receiv/n§ Statements of hterest
and Statements of Q~,~]i~ications/rom qualified-buyers capable o£ provi. 'dir~ a hiDh quality
of utility water service to City residen/s. Based on ./he resp~ received, the City
evaluated each interested buyer's q~cations in order to select a lira/reel number o£
potential buyers /rom which a request may be made by the city to submit Offers to
Purcha~, containing the offered price, tenns, and other fmand~] .considerations. The
request for oilers/rom a few selected hiDNly qualified purchasers, and evaluation of those
offers will involve the second step of the sale process., l:iv~]]y, follo~dn§ the city coUndl's
selection'of a preferred buyer, a vote will be taken by the customers of the water systen~
residing in the City of West Co,dna in order to confirm the'sale of the water system to
selected buyer.. -. .
p=t-of pot t :' p r or=
· valuation study of the City's wate~ system. Based on B-E's analysis, the estimated
cost new less depreciation amount o£ the City.sTstem as of June 30,.1996'is estimated to be
approXknatelY $13.7 n~]ion. ...... .... .
Followi~ the valuation study, B-E prepared .the Request for Statexnen~s of Interest and
Statements of Qualifications (SOQ), and distributed it to nmjor-Cali/omia water utilities.
B-E acted as the point of contact on behalf o£ the City to answer potential buyers' questions.
Subsequently, B-E prepared aiterh by which to' evaluate the SOQs, followed by
perfonnin~ the service cf,~li~ications evaluation on eaCh'of the statements receive& B-E has
made recommendations to the Ciiy Council to;a~sist it in seledin~ a smaller /7'oup o£
potential buyers from which to request Offers to Purchase/B-E at the request of the City
tins just completed the Request for OHers to Purchase for the City's review. It is anticipated
B-E will continue to assist the 'City through the completion or suspension of the Sale
process.
Section C
ReIevant Experience
P Il: D P 0 $&l..
itYAI..U&TION OF PRIV&TIZ&TIDN DPPDRTUNITI£&
Pat Glaver, Acting City Manager
Phcrr~ 626/814-8401
Key staff:. Harold Morgan; Richard Anderson
Cost $40,000 .(to date)
C1TY 0£ PALO .ALTO: BEN~G STUDYAND ORGAN1Za~ON~ ~r. ~E ~d ~,
~ ~s~afion ~fi~-~o~ 'co~~g ~, prepped a ~n~~ study ~d ~
or~afio~ r~ of ~e ~ of P~o ~to's ~t~, ~~~, m~ g~ ~d ~e~c .
s~c~. ~E ~ r~p~ible f~ condU~g ~e ~~~g s~dy of ~ ~W's wat~
~d ~~at~ s~~. ~e s~dy for ~e ~'s p~ble ~mt~ s~c~ ~dUded
comp~g ~e ~'s ~ u~ to s~m wa~ p~ey0rs ~~ ~duded bo~ p~Sc
~d pfi~ u~fi~ of s~ s~e lo~d ~ no~ ~d sou~ ~Ji~. S~~y,
~E comp~ed ~e u~fi~ ~ ~ ~ of ~dce ~d s~ce 1~, sy~ o~afio~ ~d
m~ce, s~~ ~or~, record-~d e~pm~t, co~m~on ~d 2a~g
auto~fio~ o~~ ~omafiO~ ~d~ ~omfio~ billin~ ~tom~ s~ce ~ w~
~ g~~ s~c~ ~d a~~afio~ ~ r~. w~e ~o comp~ed to ~e da~
~~ed ~ou~ ~ ~~~ Wat~ Wor~ ~sodafion R~e~ Fo~dhfi~ ~E ~o
p~dpated ~ mn or~fio~, r~~ of ~e wat~ u~W dePmmt ~ w~ ~
re~Se~g s~ pm~ ~d approa~ ~ ~e ~ of smd~ ~d mat~,
mm~ce ~d %~afio~ pro~~, ~~g, Systm consol, re~o~ pl~ ~d
o~ ~o~. ~ study w~ ~omed ~ 1996.
R~mc~ ~. R~~ ~ton
Photo: 415/329-~
Key s~ ~old Morg~ ~~d ~d~mn
Cost $35,000
<<.:.>. .
CITY oF'CuPERT12qO: PRIVATIZ~TION 0£ ~zA~R'S~~. ~ ~~ 1996, ~E ~f0~ed ~
ev~uafion of ~e r~ge of f~ m~ket vMue of ~e wat~ syst~ fa~fi~ of ~e G~ of
Cu~o to ~s~ ~ G~ kn ~s~s~g pot~ p~va~fio~ ~ ~ys~ w~
~omed to prmdde ~e G~ ~ a r~ge ~4~ w~ ~E b~ea' a SPe~c ~
m~k~ v~ue op~m.woffid ~ rea~ed ff a ~orou~ appr~ w~e ~omed. B~ed on
~ rm~ of ~ study, ~ G~ made ~e de~i0n to not s~ ~ wa~ ~s~ to a private
~y~. Howev~, ~e GW ~a~y p~va~ed ~ syst~ ~o~ a long-t~ le~
concm~on ~ a l~ge re,ted u~.
Referenc~
. .
Bert J. Viskovich
Director of Public WorY, s
Phone: 408/777-3291
Key staff: Harold Morgan, Ruben Zubia
Cost $7,500
' :'.ii:-:
0-2
Section C
Relevant Experience
C. rrY o~ D~LM_% ~ - WXt.Lat~ AND IYERN. a~, INC.: F_.X~ TZS'n~ONr ON ~ STA~S
O~ P~~ON. ~ 1~5, ~E w~ re~~ by ~ law ~ oi Da~ ~d W~on to
~m~e ~ ~~y ~ ~ sm~ of p~va~fi~ ~~ ~d ~o~ ~ a 1o~,
re~~, ~fi~ ~ ~~fi~ ~~ve .r~d' ~o* ~fi~fi~ ~~ ~e O~ of
D~, T~ ~d ~e ~ of W~ace ~d ~~ ~. ov~ a wat~ s~ eq~pm~t
~u~. ~ p~~ of ~e t~ony f~ed ~ ~ ~fion ~ to ~ p~s~ ~d
probab~ of ~e ~ pfiva~ i~ w~ ~~' (~ ~~ w~ wo~d ~at~y
~ on ~ 1~ of pot~ mone~ ~g~)- ~E r~ed pfiva~fi~ proje~,
~fimfio~ ~su~, con~ad ~g~~, oppo~fi~ for ~fiva~ m~dp~
~c~, ~d pfi~fi~ ~~ ~ a ~ob~ s~a Co~id~ble r~ew wm ~de of ~e
U~d ~do~ ~' ~~, ~ o~ ~Oe~ed ~~fio~ ~. ~ ~ of
fo~ ~uded C~B~a, T~m, ~~ ~d ~ York ~: Mor~ ~~ted ~~
t~~y ~ ~, T~ Su~or C~ ~ ~e r~ffi~ of ~ zm~
· . · ~
Rd~e: S~e W~d, ~q.
Da~ ~d W~son
Fho~ 5~/482~614
~y ~ H~old Morg~; ~~d ~d~son
CrlT OF LONG BF.,aCE: PRIVAr~Z,eTJON 0£ GROUNDWATin~ R. rGt~T:3. ~ ~ of ~e ~ of
~ ~a~ Wa~ ~m~t ~B ~ j~ completed ~ '~uafion of a ~dM
propos~ ~om J3. Mor~ ~~fi~ ~c ~ propm~g a 1~ of ~ ~o~dwa~
fi~ m ~M for a o~~e u~ont pa~t, w~ fi~ wo~d ~ ~ l~ed ba~ to
~e ~ for i~ ~ ov~ ~e t~ of ~e le~e for s~Hfied ~~ pa~~. ~e prop~
~io~ o~afio~ ~g~ w~ wo~d g~ate sa~ ~ wat~ produ~on
~, w~ ~ ~ wo~d or, et ~e m~d to ~e~ wat~ ra~ ~ ord~ to pro, de
for ~u~ le~e pa~~ to mo~e ~e ~M c~i~d pa~t ~om ~
~d ~pa~; so~c~ ~d c~ of ~~fiVe wa~ suppS~ (~du~g ~e prOj~on of
~po~ed wa~ c~, ~d ~fion of pow~ ~d ~~~ ~~ for ~o~dwat~
produ~on ~d ~m~t). ~ ord~ to ~s'~e econo~c w~~ of ~e ~M propose,
~E r~~~ ~ Projeaed ~d propped wat~ ~pply pa~~; ~a~d' ~e
~t~ rate of rm r~~g ~om ~ projed .propose; ~d d~ved ~e r~~ c~h
flow sa~ ~g ~y re~ rate proj~o~. B~ed on ~e ~ys~, ~E ~sued
~ op~on to ~e ~ on ~e ~ab~ of ~e prop~
Referenc~:
John Kruse, Controller
Long Beach Water Deparknent
Phone: 562/570-2366
Key staff: Harold Morgan; Richard Atwater
Cost $15,000
SANTa FE, N~w M. EX~co: APPP. A~SAL OF WirER SYsrf~; FnvANCrAL PRO~CnONS; AND
PRIVAT~ PARRY OPERAIION AGREEMEwr. RMI was retained by the City of Santa Fe, New
S~fion C
ReleVant Experience
PRDPDi;&L
CITY DF TU,~TIN
EVALUATION DF PRIYATIZATIDN OPPORTUNITIES
Mexico (City) to Provide an appr-~al of the value of the Sangre de Cristo Water Company
(Company) and' assist in the fri~dly negotiatian of a.purchase agreement for City
ownership of the Company. Sangre de Cristo is an operafirg division of the Public' Service
Company of New Mexico CPNM) and provides re/afl water service to approximately 20,000
customers in and around'the City. Due to changes in PNM's' 'strategic business plan, a
decision was made to sell the Company. As a result of PNM financial considerations, the
valuation of the Company and negotiation of a purchase agreement Was to be completed
within approximately 60 days of the notice to proceed with the aSsignment.
B-E undertook a detailed evaluation of the physical condition of the water system,
including its mkrface' and groundwater resources. Comprehensive analyses were
undertaken with respect to future capital improvement requirements and the need to
correct problems resulting bom' deferred maintenance of the water system- The books and
records of the-Company were evaluated by B-E and a zange of.appraisal values developed
based on capitalized earnings, market sales, and reproduction cost new less depredation
methodolo~es.. In addition, R_MI p~formed a detailed breakeven analysis to aSsess the
level of financial commitment the City could .reasonably und~ BaSed' on these
analyses, a finn purchase offer was made to PNrM. Within two weeks following its initial
offer, an agreement in prindple'was reached between the City and PNM on the sale of the.
Company. R/VII/BE aSsumed a lead role in these negotiations and in aSsisting the City in
the preparation of sales documents, a contract wihh the Company for an operating
agreement, filings with the state Public Utility Commission, development of a transition
plan, finan~ of the acquisition, and other activities.
Reference:
Joseph S. Gonzales
Utilities Rate Special/st
Utilities Department
City of Santa Fe
Phone: 505/984-_6621
Key staff:. Harold Morgan; Dax~id Swank
Section C
Relevant Experience
PROPOSAL
CiTY OF TUSTIN
EVALUATION OF PRIVATIZATIDN OPPORTUNITIFs
-.:.'::.: :.'
PROPOSED BUDGET
The proposed services would be provided on. a time and material basis with a
negotiated not-to-exc~d budget estimate_ Pursuant to the requirements.of the RFP, a
table which presents B-E's assessment of'the man-hour allocation and budget needs of this
project is included in ~ Section (Table 1). Table 1 follows the rusk outline of the Scope of
Work and is broken down by hours for assigned personnaL The ruble provides a Summary
of the estimated man-hours and respective estimates of cost by tasks. A 'Schedule of Fees
for B-E is included in ~.pp~dix C.
The rounded budget estimate for Phase I 'Tasks is $75,000. The rounded budget
for lVhases II and II! are $30,000 and $7,000 resl~ctive]y- The to~a] proposed budget estimate
for all ffrree phases listed in the Scope of Work is rounded ±o $112,000.
Not included in these budget estimaf~.s are potentially needed hours for legal review. It is
not possible at this time to estimate this cost ~dthout ideniif~g spe~.fic leg-al issues which
may need to be addressed.
Section D
Proposed Budget
CITT DF TUSTIN '
EVALUATION OF PRlVATI2;ATIDN OppORTUNITIES
-'- SCHEDULING
t 'is envisioned the Phase I assignment ~dll require up to 90 days ~rom notice to
proceed to submission of a final report_ B-E will' attempt to Pe~fform this study in as
sho~ a time hame as practicable. Assuming a negotiated contract betw~ the City and B-E
5s executed by the end of April, the completion of Fhase I is projected to occur on or before
July 29,1998.
The--~oIlOwing lZigure 1 presents an anticipated schedule for completion of /rusk
assignments. Figure t also presents a' possible schedule for follow-on rusk assignm,~m~
~ithout slve_~fic dates. As the City is aware, the schedule for subsequent tasks .is' very
uncertain due to the many factors outside the consultant's .control (e.g., the' time it takes for
the City Council'm decide whether or not ±o privatize system operations):.
..
.
E-t
Section. E
Scheduling.
APP'ENDIX A
'..:' :-..-...
...
KEY PROJECT TEAM RESUMES
HAROLD V. MORGAN
I
Mr. Morgan is a Registered Civil Engin~r with Dyer 25 years of exper~nce in water resources planning and .
mana~ment, particularly in issues related to water quality, reclaimed water use, environmental impacts evaluation
and regulatory compiianm, and institutional issues.
Mr. Morgan is also a iicensed Real Estate Broker and registered Real Estate Appraiser, and is a highly recognized
expert in the. valuation and app,"aisais of public and private utilities and water rights, both surface and ground, water.
Mr. Morgan has appraised about 5D water and sewer utility systems of which about On,half are regulated utiiit~s in
connection with potential Dr actual condemnation prDc~dings (values fi'Dm $16,0DD'to over $5D million); others are
related'to bond sa~s, ~,'al bankruptcy proc~dings, potential or actual sales and acquisitions, legal proc~dings in
water service disputes, and in testimonial support, in conjunction with the many utility appraisals Mr. Morgan has
performed, he has investigated water and wastewater utility operations and conditions, revenues and 'expenses,
rates of return, cDmparab~ rates for ~rvice and potential rate impacts from change of ownership..Mr. Morgan has
acted as expert witness on water system valuations and rate issues ~fore both the Public Utilities Commission and
Superior CDurt;. on ior..al, national and international privatizatiDn 'trends in Dallas, Texas Sups. flor Court; on water
issues befD~ the Regional Water Quality Control Board and State Water Resources Control Board; and supported
valuation testimony before the Tax As~ssment Ap~als Board. He :has als0 ~fformed negotiations with regulatory
'agencies and ~tw~n water system buyers and sellers.
EDUCATION
M.S., Environmental Engineering, Loyola
University, Los Angeles, 1975
B.S., Ciw'l Engi~nering, Oregon Stye
University, Corval~"m, 1969
B.S., Business Ad'nioistration, Oregon
State University, Corvallis, 1~9
Certif'~:atas in Real Est-ate F'mance,.
Marketing, and General P,'-actL-e,
University of Car~fornia Extensbn, LOs
Angeles, 1972
CONTINUING EDUCATION
DisPosal of Residues on Land, National
Conference, St. Louis, 1976
Design of Water Quality Monitoring
Networks, Colorado State University,
1982
California Environmental Regu~ar~
California Business Law ir,,sffmte,'l~
Gmmd Waer Professional as a~ F.x~e~
Witness Semirar, Na",Jonal Water W~II'
Assn., 1985 . .
Sampling Toxic i~ Ground Water,
California Stae University, Fresno, 1957
Treatment Techr~iogy for Contaminated
Ground Water, National Water Well
Assn., 1989
Containment of Ground Water
Contamina~on, National Water Well
Assn., 1989
Groundwater Pollution and Hydmbgy,
Groundwater Ass~ates of Prircet~n,
1990 Water System AucrC~ng and Losses,
AWWA, 19N
REPR=-SENTATIVE PROJECT EXPERIENCE
Water System'Appra'mals And Economic Evaluations'
Mr. Morgan was resportsibte 'for water and 'sewer system evaluation, economic
analysis, and market data f~rmutatim for the .following on ~half of public
investor-owre, d ~lities and priva~.~.
= City of West Covirm municipal water system, valuation at $12 million'
· City of San Jose municipal water systems, valuation confi~ntial
· Rio Rancho UlJliti~ Corporation, water and westewater systems,
N-~w Mexico, combined value, on in excess of $50 million.
[] Silver Lake Water Company, Reno, Nevada, valuation confi~ntial
[] Santa Teresa wastewater system, Dona Ana County, New
Mexico, valuation corrfi~ntial
[] Washoe County, Nevada, public owned water systems (12.
separate systems), combi~d valuation in excess of $6 million
.. [] Azusa Val~y Water Company, valuation at $8 million
· Del Este WaterCompany, serving Modesto, California, valuation
confidential
'. · Sang~ De Crism Water Company, serving Santa Fo, New
Mexico, valuation ~er $413 million
· Citizens UiJlilies Company of California (Niles District), valuation
at $1.3 million
North Los Altos Water Company, valuation at $850,000
Washington Water and Ught Company, valuation at $2.6 million
La Quinta Water Company, valuation at $225,000
Calumet Water Company, valuation at $16,000
Northeast Gardens Water Company, valuation at $25,000
Gorm, an commuffrty ~ system, valuaiJon confidential
Kavanagh Vista Water Company, valuation at $225,000
'Park Water Company, Vanden~rg WaterOivision, valuation at $1.7 million
Southern California Water Company, La Quinta water system, valuation at
$830,000
· Rtch ~ountaln Water Company, valuation at $50,000
·
·
[]
·
·
·
ii
I
·
·
A-¶
Appendix A
Resumes
HAROLD V. MORGAN
I
Envinmmenml Due D~l~-e,
Pub. hr.., 19Li~
~ion of Water Utilities, AWWA,
PI:I~DNAL HISTDRY .
R~J 5slate investment t3roke,~ge Fh'rn,
Dwner, lg71'1g'/2
Engineer, lg70-1
REGISTRATIDNB
Flegistamd C, ivii ~r Professbnal Engieeer,
and New Yo~ -
~ Real Estae 13rckor' Car~omia
Registered Reel 5stme Appraiser, New
PRDF"=SSIDflA~. IJEMBERSHIPS
Ameri:an Waer Works Asso:iation
National Water Well
·
PUBLICATIDN, S AND PRE ~SENTATIDNS
IVlun' '.c~ Owne~ of Water and
' Wastewater Ut~ies, presented at'City af
Apache Junction Business Leaders
Seminar, W' .ckenburg, ATizona~ 1
Replenishment Using Reclaimed
' Wastewater in the Central and West
pubi'~ed and presented at the annual
meeting af the Geological Society of
Angeles, CaJ"ffomia, March 1986.
Monitoring of Surla..,'e and Ground Water
Supplies in the Cent-d] Basin, presented
at the Central Basin water Asso~ation
meeting, Vernon, Cal~omia, March 1
Water Ouar~ Iv',anagement ~'-tJvities in
Cenizal and West Coast Basins,
presented at the West Coas~ Basin Water
Association Meeting, Redondo Beach,
CalJfom~ December 1989.
Rectarge Jn Cerdm] and West Coast
Rhone, Proceedings af ~e 1991
Specialty Conference, Environmental
Engineering Division of ~he American
Society of Civil Engineers, Reno,
Nevada.
VaJuation of Ground and Surface Water
Rights, presented at the annual mee'dng
of 1he State Bar E~'ninent Domain
" Camp Meeker warm Company, valu~on confidential.
Ddeans community warm system, valuation at S;Z25,DOD, for ba~"y
pro;-~dmgs on behalf of the U.S. Depa~nent of Agri~lture.
· Anoosh-Van Water Company, valuation aI SBD,DDO
· S~ Ran~ Water Company, valuation mnfidentJa]
· .
· Palm Springs Water Company, Arizm-m~ valuation at $1 miliion
· Arizona Water c~mpany, Apache Jur~on System, valuation at $4 million
· Southern Cal~m~a Water Company, C, leariake and Bay Districls, valuations
~onfidential
· Citizens Utilities Company, Montara and Gueme. ville Districts, combined
valuations in excess af $4 million
.
Conduct~l tw~ separam app~ Df inv,-mr-owned ~w~r systems br ~ City of
Simi Valley and Vandenberg Community Services District to support sale
negatiatians .anti_eminent damain proceeding.
'Reviewed appraisal' cak:ulations of Napa Sanit~on District's sewer system for
Pmpar~ :an ~[pprajsal af a water system owned by a public agen%, to assist
~gatJaiions and legal pm.~ngs .by a competing water district and drip' in a water
service dispute.
Supe-rvised 1he engi" .neering study on the valua~gn of the water.system ass~, and
revenues .and expenses Jn support Df bond sales for accluJsftJon Df Cal'domi~-
American Water .Company,_ NatiDnaJ.City system by $outhbay irrigation District.
Conducted a study'of water utility privat~on trends on global, national, and
regional levels on behalf Df a water system equipment manufacturer and made a
present~Dn Jrt.Dallas, T~ Superior Court.
F..vaJuatecl the feasit~T~ of municipal ownership of investoT'-owned utilities in Washce
County, Nevada, including water services t~ the cities'Df Reno and Sparks; also the
priv~?'~on o~on for two public.owned systems. Upper ran~ of acquis~on costs
for assets of eight water companies was va]u~ at over $450 million.
Mr. Mo_man was responsible for valua~on and appraisals Df water fights in Los
An.c~es, Kern and San ~ma~no CouPes, in=luc~rng:
· On three separate occasions valued the acre-foot value of adjudicated
rights in the West Coest Basin of the Los Angeles coastal plain,, for
industriaJ users in support of hearings before the Tax Assessment Appe~s
Board:
· Prepared appra]snl of 1,229 acre-feet of water rights in the Central Basin of
L~s Angetes County on behalf of the City of South Sine t~ support
condemna~on proc~m~. The fair market value was approximately
.$SDO,O00.
m On l~..half of the ld_~ropolitan Water District of Southern California,
performed a. study on th~ market values of ground water pumping rights in
· all Southern Cai~,a aa]udicated basins.
· Valued 4,2DO acre-feet of export pumping rights in ~e Bunker Hill Basin of
San Bemardino Caunty on b~half Df-the. City of Riverside.
Negafiatians And institutional Studies
On ~half of the City of..Palo Alto,. conducted a benchmarking study on the.
opera, one 'of the muni~al wamr and waste~tar systems to evaluate efi~n~ of'
operations. Pazti~pated in in'ew'~#s Df key ~y opera~ions and engineering staff as
pazt of organkational review and i~ntification of issues for benchma~ng.
A key rnem~r 'of the City of Santa Fe team nego~ating with the Public Service
Company of Nm~,, Mexico for the. acquisilJon of the. Sangre de Cristo water system.
Responsible for presenting the City% position on fair market value of the u~i~s
I.
HAROLD Vo MORGAN
assets. An agreed sales pri~ was reached a~,~8.25 milibn.
Dn behaft of, the. City of Azusa, pmsem~ the fa~ market value, opinion of SB miilion
to the Board of Directors ~f the Azusa Valley Water Company.
~d with the Cai'~m~a R~ior, al Waer Quality Control Beard and ~e State
Department of Hsalth Services ~n ~ tsm~s and concr~ms ~ the. permit to recharge
Water Replenishment District ~f Southern California.
A mem~r of, the. joint agen~ ~nmittee lo negotiate with the. Environmental
Protection A~n~ on the. mitigation and monitoring of ground water contamination in
the Whittier Narrows threatening the Central t~.sin from the San Gabriel Valley.
Dn ~half of MDmebe_llo Land and water COmpany neg~ia/ed a permit for a
domestic water supply wsll with the. State Department of Health Services.
on several'occasions, negcY~ted with the. Regional Water Quarry Control Board on.
~ l~rms of the Monteb-311o Forebay' monitoring program on behalf of the Waist
F~.nishment DLs~ of Southern Car~Dmia.
For ~ U.S. Gypsum Company, evaluated irstitutional alternates for domestic
waer service in the Ocotilio area of Imperial County including evaluation of various
forms of pubiir, .agens~, investor-owned utility, mutual water companY, water
wholesaler, and an AB 3030 man _age. ment ptan.
On ~t'alf of ~ Sea Ranch Homeowners Association, evaluaIed public agency
atmmalives for water system uwremhip, including Community SeMc;es Distri~
County Water Distri~ Public utir~ Distri~ and Municipal Wa~' Distric[ Also
reviewed LAFCO rev~w pm=ess and characteristi= of a mutual water company.
Pariiclpaed in a water mana~ment study for the City of Claremont, including the
evaluation of the benefits and ;disadv~ of utility water service under private
ownership compared 1~ municipal ownership, and an assessment of insiJbJtioral
altema~ves available for increasing city involvement in water management.'
-.
Appendix A
.Resumes
DAVID SWANK
I I
Mr. Swank is a f~nancial and rate analyst with Dyer 20 yr=,ars of experienm .in the utility industry. He has p~pared
over 49 retail and whDJesa~ rate studies for water, wastewater, ele~i:, and natural gas utilities. This rate
. experien~ ranges from mrnventional finandal ptanning and embedded cost-of-service studies to the assessment Df
pri~'mg mednanisms to Promote Conservation and ~ak ~mand objectives. 'He has deveio~d innovative cost
alio~tion procedures for use in utility ~st-of-service'studies and has ~signed a wide vari,~y of incentive rate and
customer rebate programs to ~ncoul-age ~anges in customer usage patterns. Mr. Swank also has an extensive
ba~gmund in utility ~.ancings, having cond.u~ed f,~ancial studies and deveio~d ~onsul'ant% reports in support of
more than $6 billion ~f short- and long-term debt financings.~ in addition, his experience includes financial studies
associated with facility acquisitions, system rehabilitations, and new capital pro, ets; assessment of'mechanisms to
ensure financial performance; and development of tampax computer models to simulate flow of funds under
altematiye financing structures. ' '
EDUCATION
B.S.- Business Administ~i~
PRDFESSIDN/U. HISTORY
Resource Management International, Inc.
Financial Analyst
FLW. Beck & Associates
' Pa=a3c Power & ti_oM Company
PUBLICATIONS
'Retail Raternaking,' presented =ri the
Missouri Basin Municipal Power Agency
R~.~al] Rate Seminar, August 1982.
'An Overview of Etect~ Ratemaking,'
presented to the Minnesota Muni=ipal
'LJtiT~ Assoc~ 1983 Fall Meeting,
1984 Fall Meeting, ~c11987 Summer
Meeting.
'lntmdu~k)n to R~ Ratemaking,'
~rninar presented to the Moorh~ad,
M'm. nesota, Water Rate Task Force ar¢l '
MOOrheacl, Minneso'a, Eiectrb Rme Task
Force.
'F'mancing Demand-Side Management
(DSM) investments,= DSM Quarterly,
W'mter 1992. Coauthor.
· Joint Action for DS~' Pubr¢ Power,
July-August 1992, Coauthor
" REpRF_.SF. NTATIVE PROJECT EXPERIENCE
-' Prepared an'assessment Df ' .mstitutio~ alternatives avallab~ to local governments
to improve tim coon:iination and qual'ey Df io~d water service. The study inctu~d
identification and s~eening of ;potential 'jnsfitutioral alternatives, .assessment of
related financing requirements, analysis Df finan-Jal impacts t~ the region's wa~
users, examination Df unresolved issu~ Df relevan~ to each irL~itutional alternative,
a ranking'~'Df ~ alternatives based on quantitative-and qual~ factors, and
formulation Df an implementation plan.~ '
Directed a'finand, al ess~nt Of the Silver Lake Water Distribu~on Company on
market Value Df the 'ulir~y, an evaluation Df impacts the. acquisition would have on
Westpac's future wa~r rates, an estimae of the.-fe~,'aJ tax impact of the. acquisi~on
on Westpac, and an eValua~on Df the likely treatment Df the acquisi~n by state utility
regulators. · ~ '-
'Djrected a~ financial assessment Df the proposed aCquisi~on Df a private ~velo~r-
owned water u'aTej by the sea Ranch Homeowners Assoc{ation in Cal'rfomia. This.
assessment included an estimate of annual revenue requirements un~r public and
private ownership, ~rlvatiOn Df the break-even acquisition price that could ~ paid
by the home~wrers' asso'sation, and calculation Df the rate impacts on water
at a range of acquisil~on values. Also evaluated the total finan~g requiremenS
associated with the acquisi~on and o~om for securing the financing.
Participated in an acquisition of ~ Sangre ~ Cristo Water Company by the city of
Santa Fe, New Mexico. Responsii~ities inctu~d evaluating future revenue
requirements under public ownership and alternative acquisition prices, assessing of
acquisition firan~g requiremer~, assisting with the drafting Df a purch~e
agreement and third-party o~rating agreement, and d~eioping financing
'documents. Also pa~cipated in the preparation Df Written tes~mony submitted to the
state regulatory commissk)n.
Directed consulting and eng'm~ring services'in support Of the city Df Rio Rancho's
acquisition Df water and wastewater systems owned by Rio. Rancho ~'lities
Corpora~ibn in ~w Mexico. Activities. included a feasibliity assessment Df
acquis'~Jon, valualion'of the' water and wastewater systems, participation in
condemnation efforts undertaken by the city, and parlJcipation in settlement
~g~ations w~h the. company. Also provided assistance with forma~on Df.a u~r~y
board, reining a third-party operant of the ~ity systems, preparation of a
management transition ptan, and financing of the acquisitio~
.
Prepared an araly~ of financial impacts associated with a Southern CaYrbmia
municipal water system~ pmp~ed acquisition of a neighboring water ufir~j. The
analyses included developing estimated revenues under existing and alternative
rates, estimates Df annual revenue requirements including water production and
pur~e costs, and .calculating the break-even financing capabir~j associated with
I
DAVID SWANK
acqui~on costs, fomcasls d :lulum ~ requirements, evalu~ d ~~
~m~ d fi~dng ~uim~, ~d ~o~ d pm fo~ ~g ~u~
a N~ ~i~ ~~on d ~u~o~ ~r ~. ~ ~ ~ed m
~ ~~ ~ue ~ ~ ~u~o~ ~I~, e~d ~ ~ o~ng ~
~,~e~ ~ ~ ~m, ~d ove~l im~d~ ~ ~u~on on ~ ~r ~.
s~p~ p~ning ~d ~veiopme~ ~d ~ like~ o~ to ~ ~u~o~.
~~ ~di~ D ~ ~ ~ fe~ib~ ~ ~ui~g e~g ~r ~I~
~ ~ ~qu~ ~ e~ng ~ supp~, ~~ ~d ~~ ~r~;
~o~; ~d '~ ~ m~ ~ revenue ~uimm~ un~r ~g ~
~. P~ ~ui~on ~ ~m ~U~ ~r a ~ ~ s~~,
.
n~ ~ supp~-~ ~~on Se~, ~d ~ir~ to ~leh ~ ~a
p~d ~c~aff. revenue ~e~ ~i~ ~ing ~m~e ~ e~ng or
~ve e~ supplie~.
.....
For a Ne~da ~er ~off b~, ~&u~ed ~ im~ on ~ion~ ~r supp~
~ ~ng ~ ~m~e ~me~ for ~ o~~, o~on, ~d
m~me~ of ~ ~ion's ~r puw~om.
II
A-$
Append~ A
Resumes
RUBEN ZUBIA
Mr. Zubia has Dyer 14 years Df experience, in various aspects Df water and ~wer works and civil engin~ring
projects. Parti:utar signifir, ant recent experience includes program and proper management a .xperlence including
the development and implementation Df Capital improvement Programs for potable water, recycled water and sewer
systems. His level Df involvement in the~ programs has extended from managing the initial planning studies, design
of improvements, assisting in developing community involvement programs, and construction management. Mr.
:Zubia has also conducted many special studies including 'water. suPPly mana~ment studies, hydraulic analyses,
water and wastewater treatment, planning studies, .feasibility and design reports, pipeline alignment studies, urban
water management plans, water system appraisals (valuation), system reliability studies, water and sewer rate
studies, pumping plant efficiency studies and environmental compliance studies.
EDUCATIDN
B.S.- Civil Engir~ering, University ~f
Texas, El Paso
PROFESSIONAL HISTORY
ASL Consulting Engineers, Program /
Pmje~ IVlanaeer
City of L~ Angeles, Bureau of
San~ Pmje:t Manager/Solid Waste
Management Task ~rce
Les Angeles County Department of
Pubrc Works, Waterwodcs and Sewer
l~aintenan~ Division Civil Engineer '
Assistant-
R~GISTRATIDES
Reg'~tered Chh'! Engineer, Cafifornia
PROFE. SIDNAL M=J~IBF. RSHIPS
American Waer Works Assoc'ation
Amerk:an So.-%,ty of Civil Engineers
Southern California Water utirfdes
Association
REPRESENTATIVE PROJECT EXPERIENCE
Pmgram/Proje=t Management ,
Managed the planning and design, of over ~SO miles of pipeline including potable
~ater, re~Tcled water and sewer pipeline systems. For ap. proxJmate~ haft Df these
pipeline systems, 'Mr. Zubia wes also directly-involved all levels of the construction
management a..,'tivit~s. Pipeli~ diameters have varied from 6:-. to 7B- inches.
R~ent Projects inctu~ 1tm design of over 30 miles of lransm~ion and dstfibution
pipelines and 10 pumping plants for the Semitropic Water Storage.. District, 5 miles of
pipeline and a 55 tis pumping plant for Imperial Irrigation District, .6D miles, of
reclaimed water pipeline for CentraJ E~..sin Municipal Water DistriCts C, entun] and Rio
HOndo Reclaimed Water Programs; 4 miles of sewer main replacement and one
sewer r~ sta~on for the City of Loma Unda, over 20 r~iles of reclaimed water pipeline
for the City of Glendale Verdugo Canyon Reclaimed Water Program; over 10 mii~
Df transmission and dstributi~ water mains and 10 miles Df sewer mains for Sh~a.
Development Corporation in Rowland Heights; and over 5 miles Df potable water
pipelines, 4.5 miles'~r mains and 4 miles of storm drains for the Porter Ranch
· Development Corporation in the city of Los Angeles and the retrofit and upgrading Df
10 sewer rrlt ~Ons for the ~ An~les County Department Df Public Works. T~
value of the projects that Mr. Zubia has managed the design for exceeds. $250
m~lion and the value of the projects for which Mr. Zubia has mana~d the
construction Df exceeds $120 million.
"Capital Improvement Programs' : '
Managed the dgvelopment and implementation of Capital Improvement Prog,'ams
(CIPs) for potable water, recycl~ water and wast.water faciliti~ for municipaliti~
and for ~velopers. Mr. Zubia has been involved in the prepar~on of over 30 CIPs.
His involvement has been in the !nventory and assessment of existing faciliti~,
conservation and effiSency stud'~s, ~velopment'of growth' projections, source
supply investigations, si~ng studio, feasib~ity stud's, economic evaluations,
ope,'ations and ~nch marking stu6~, reliabi~ analysis, finansaJ plans, and
extensive pipe. network'and modeling ushg various computer moiling and
simu~on software. Mr.-Zubia is profiSent in the use of most of the c~mputer
modeling software currently' ava]able. 'Mr. Zubia~ involvement in CIPs include
programs for the following agencies:. ·
[] l.~ng B~ch water Department; Recycled Water System Expansion
.
program · -:
[] C~llegu~ Municipal Water Dis~i:t; Potable. and Recycled Water Systems
[] .City of Loma IJnd~, ~r System
[] City o~ AppleV~lley (Je~s ~andn)'-, Sewer System
[] Los ~ County Depmiment o~ Publi: Wo~; ,?,ewer Lift Stations
[] C, ent~ B~n Muni.clp,s~ Water Distd~.2 Recycled Water Systems
[] Los Angeles County Wate~orks Distfi~, 8 PotM~le W~ter ~ystems
A-$
Appendix A
Resumes
RUBEN ZUBIA
I
· Yorba Lind• Water District, Po'able Water System
· City of Glendale, Recycted Water System
· City of Ontario, Pcfmble Water and Sewer System
Water Management Plans ' "
-Completed and assisted 'in the implementation ~f water mana~ment plans for
various water' agendas. Involvement bcluded the development of water
:onservation .programs,. leak detection programs, irrigation policies, water rate
stru~:tures as a conservation tool, and other water resource management programs.
Water management plans. completed ~o date include plans for the following agendes:
· Caileguas Municipal Water District
· Central Coast Water Authority
· City'of Alhambra '
· City of E! Monte
· Row'and Water District ~
....
· City of South Pasade~
· City ~f Monterey Park
· City of Mort•via ·
System Appraisal (Valuation) ' .
Mr. Zubia has' completed or has assisted in the completion of Dyer 30 ub'lity system
app~ which includes water and sewer system ranging in size from 250 to 55,000
service cormedio,,'s. Mr. Zubia's ~ive experience in system planning, design,
constru.~on and operation of bath water and sewer s} =,stem. s provides, him a needed
kn:)wtedge and unders'anding of the adm~e aspects of municipal w~ter and
wastewater enginee...ring, prm,,id~ him wibh the spedar[zed sic'lis required to prepare
ublity app, ;-alsa~ and reliability studies. Valu~orm prepared to date.include appm;sals
of ba'~ regulated and nonregulated wat~r systems. Recent appraJsa~ have included:
· Wash~.County, 4 Sewer Systems
· City of San Jose; Water System
· City of Apple Valley;, Water and Sewer Systems
· Dona An• County, New Mexico; Sewer System
· City of Rio Rancho, New Mexico; Water System
· Los Angeles County Waten~orks Districts; 5 Water Systems
· City of [] Monte Water System, Water System
[] C,e~ar Avenue Mutual Water System
.. .
Rate Studies/Financial Plans
Mr. Zubia has complied several rate stua¥~ for various water and wastewater
agencies, including the. development of rate schedules for both conne~on and
- service charges for water and sewer systems. Recent rate studies have included
studies for the. following' agencies:...
· City of Nhambra, Water and Sewer Rate Study -
· City of South Pasadena, Water and Sewer Rate Study
· Rowland Water DiStrict, Water Rate Study
· City of Camariilo, Water and Sewer Rate Study
· City of [] Monte, Water Rate Study
Mr. Zubia has had substantial involvement in developing finandal plans for various
utilities including engin~ring reports used for securing federal and state funding
assistance and for the formation of Melio-Roos districts, assessment districts, and
county improvement distri~.
,
A-7
Appendix A
Resumes
.' 'i';.':'.:'..' '
'RICHARD C. ANDERSON
Mr. An~rson is a Registered Civil Engineer with ever 7 years Df experience in the t'~id of water supply and water
quality evaluation. He has evaluated the ecDnomi= of water treatment technologies, prepared water quality
monitoring reports; and has created, managed and maintained an extensive 'groundwater quality database for the
southern portion of Los Angeles County. He has also participated in many municipal water systern appraisal projects.
EDuC;ATIDN -
B.S. - Ckn'l Engineering, CaJifomia
Polyte~nic State Univesity, ~ Luis
PRDF-~.'.~DNAL HISTORY
Booiman-=_dmonst~n =,Engineering, ln-t.
PRDFESSIDNAL MEMBERSHIPS
Ameri=an Water Wmks Asso~
REGIsTRATIDNs
Pmfessia'al ~gineer, CaJifomia
R=-'PRESENTATIVE PROJECT EXPERIENCE
Economic Analysis
Assisted in the. econom~ analysis of the. replacement of ssa water barriers for the.
Water Replenishment District Df Southern California.
Water Resources Planning and Management
Performed modeling of Salinity of Car~omia Sta~ Water Proje~ ,and Westlands
Water Distrid~ for the. Metropolitan Water Distri~ Df $outi~..m California.
Performed stream flow profiles for the Gualala River based on rainfall and stream
flow records forThe Sea Ran~
As part ~ the San Gab~l River Watem~..ster's.Annual 'Report,. perbrmed analysis
of surface and subsurface flow
Wastewater, Water Oualit~' and Waste Management
Assisted in the p~~ of an engineering background .report for a hearth effe=ts
study on the. potential impacts ~f reclaimed water in ff~e C, oasta] Plain groundwater
supply for.the Water Replenishment Distri~ of Southern California.
Assisted in the preparation of the_ Engineering Report for the re=hamjing cfi reclaimed
wa~er in the. Monteb-3llo Fore_bay.
Water System Valuations and Appraisals
Assisted in vaJua~ion studies of water systems for the ~ of West Covina,
Medes'to, Tucson, and Rio Rancho. He has aJso assisted in valuation, studies
~rformed on several systems owned by Wash~ County, Nevada.
Assisted in the. benchmarking study of both fie water and wastewater sTstems for
the City of Palo Nfl) Utilities Department.
EnvirOnmental Services
Ass~ed in the evaluation of the. nature and extent Df subsudace contamination at
landfills and hazard.s waste sites in the. Monte~lio Forebay.
Performed a test review-of a leaking underground storage, tank and solid wast~
assessment .for
As part of a wellhead trea~ent study t~ pump volatile organic compounds,
l~rbrmed an economic and feasi~T~ty analysis Df vark)us treament technologies for
the Water Replenishment District of Southern California.
Oversaw dr~iing and installation of multiport wells for water quar~ a'aJysis for the
Water Replenishment ~ct of Southe. rn California.
Water Resources and Water Oualit]f Management . .
Oversaw drillin~ and' install~on Of a produ~on~ell for South Montebelio Irrigation
District. '
Performed data ent~, rnar~e~ and rnalnt-'~ance of a. groundwater .quality
d~hase for the Water Replenishment District of Southern Cal'~mia.
: Performed grour;dwater Samt:f,~, prepared an 'annual water qua"~ monitoring
report, and collected water quarry data for the Water Replenishment District of
Southern California.'
·
App~ A
Resumes
RICHARD W. A'i'WA R
II I
I I I
Mr. Atwater has Dyer 20 years of exp~rien~ in water rP..Sou~s management and planning. He has served as
GsJ~ral Manager for two large water districts, which serv~_d a ~mbined populati~ of over 2.3 million. Mr. Atwater
has pioneered many award-winning programs that balanm the multiple uses and demands of water and meet
todays high standards for quality, reliability and'cost'-effe~ness. During the past 15 years, Mr. Nwater has
participated in ~reative solutions to SOlvE water problems throughout the westemafid states, including the Colorado
River, Missouri, Columbia River watersheds and has assisted in formulation of national water policies for the Western
Governors Association and the U.S. D-2partme. nt of the Interior. He has testi~d extensively before the
Congress On wp. stem water iss~s.
EDIJCATION 'FIEPRESENTATIVE PROJECT EXPERIENCE
R.S.- Geology, Stanford University Mr. Atwater was G~re,-al Manager'of 1he West Basin Municipal wa~r District and
M.S. - Urban and Regional Planning, ~ Central Basin Municipel Water District (1990--1996). These .two water Distri. 'cts,
University of Soutt~m Oar~omia although separate ent~ have or~ administrative s'aff. The Districts' seMce areas
PRO~--r_SSIDNAL HISTORY' are the coastal plain of Los ..Angeles County and include 41 incorpo~ cities with a
Central Basin Municipal waer Dist,'t,combined populalion of approximately 2.3 million.
General Ill, aha.oar ~ Districts have received statewide awards and national recognition for their'
WestBasin Municipal WaterDist~ innoval~Jve water corservalion and recTcting projects. They have implemented a
General Mana~r ' number ~ coopemlJve mnservafion programs with the. cities within their service
Metroporrtan Water District of Southern. area, and also have un~r construction lJ3e la~ water recycling project in the U.S.
Califamia, Manager-Resources Division(total capital cost is ,~..50 milliori). The Clinton Administration declared the water
Bureau of Redamatirm, Ass'stent to the re~ciing prcijects to b~. a Presidential Priority Investment Initiative. Govemor
Commissi~mer .. Wilson awarded the Districts his "Environmental. and Economic Lea~rship Award"
Nevada MX Lo=al Oversight Committee, in 1994.
=.Executive Director I~" addition, Mr. Atwa~r is the Executive Secre~ to the West Basin Water
.. Clark County, Nevada,' Manag~rof C~an Associa:~Jon and ~ ContraJ Basin Water AssodatiorL The two Associations
Water 208 Amawide Water Plan represent all lJ3e ground wa~r rights holders in these two aa~udicated basins {about
40 percent of the drinking water supply).
REGISTRATIONS
Previous project expe~n~ includes manager of the resources d'~sion, Metropolitan
American Institute of Cortfl3ed Pianners Water District of Southern CalifOrnia (1986-1990). In this capa~, Mr. Atwater was
PROFF..SSIONAL MEMBERSHIPS responsible for the water and power contracts for the Colorado River, State Water
· City of La Can~,-~q'nttidge Planning Project, and local water resource manag--..ment programs (groundwater and water
Conm~ission, Ame~can Planning re'cycling). From 1981 to 1985, Mr. Atwater worked for the U.S. Bureau of
Association (AICP), American Water Re,~am~on as assistant to the Commissio~r. He was responsible for directing the.
Works Associatian, Association of Bureau's v,~ter policies, 'Congressional and western states governmental affairs
Metmpor~tan Water Agencies, ~, and managing the Bureau's day-to-day Washin~q:)n, D.C. office a~viti~.
Association of California Water Agencies
(Board of Directors 1990-1994), Urban SELECTED PUBLICATIONS
Water institute (Board of Directors), and · WatarMarketinginSou~emCalifomia, M. Hoburt, F~.ardAtwater, T..Qu.nnlJourr~of
Westem Urban Water Coalition (Board of AWWA, March, 1988 ' ' ' ' ::-
Directors 1992-1996.)... ~ Usk~£ 14tnolesale Rates to Ertcoura~e Groundwater Conjurcffve Use, ASCF_, February, 1990
AWARDS .- , Bu~g ~ Largest l Water Recking Pro]~l ~ lhe U.S., prese~n at Water Environment
Secr,~tai7 of the interior, l~ruce t~bb~, Fede,-aion, T~ro~, Ca'a~ Ju~,, ~ 99~ ~ ·
awamled Richard Nwater the
Consenration Servire Award of the -- ,. W'a~Ragc~gk~A~t31heM'nist~ofWaterResoumes,~~,19~
Department ofthe Interior (the highest '--~e~ Deregulation Impacts on Water and Waste~aterA~ncies, Urban Water lnslJtute,
award in the federal government for June, 19~
natural resources'management) in Innovate Parlnersh~s. '~o Conserve and Recycle Water, presentation to Syrbey Water
November, 1994.; :~,' ' ' .. Corporation, Sydney, Austral'a, July, 1995 '~
.,
HONORS . Pr/v~n Experiences at WBMWD/CBMWD, U.S. Conference of Mayors, Washington
. Gorden Whitnall Award as OutstanEag ---. D.C., Septernt~r, 1995 . ' ~-. :. - . ~
Student at USC (1976) - '~ Fir~anc/r~£ Water ReCYCrng Projects, paper presented to Association of Metropolitan Water
Agencies, San Fran~ism, Ca~fomia, Octaber, 19~
~' .. ..... ' water conservalion Pract/c~ h the .West,'conserv '96, Orlando, Florida, January 1996
Numerous panel presert, ations a~ Associa~on of Cal'~mia Water Agencies, Urban Water
institute, AWWA, California Water Association, Cat, mia Water Resources Association, and
Colorado River Users Assor~ti~n.
I I
. .- A-9 - Appendix A
Resumes.
· i .';::'.'- '
· _.
A,PPE'NDIX B
SUMI~tARY OF B-E'APPRAISAL EXPERIENCE
SUMM.4~Y OF BOOICM.tOJ-EDMONSTON APPRAISAL EXt'ERIIENC~ .
AS OF ~~
(~ ~st~g l~d ~ ~o~ ~s o~e~ n~d)
~ient Pu~e of [ Sy~em Ap~ · ~e~
App~[ .. ~o~t Prodded
~W of W~ Co~ Pfiva~fion ' M~p~ Wa~ $~,000~00 ' A~r~ ~pon
5y~ ~d M~g
W~ac ~fi~'~d ~e F~ ~k~ V~ue Tw~ve Wat~ Sy~ ~ ~s of Appr~
Co~ of W~h~, Nevada f~ ~va~fion of W~h~ Co~ $6,000,000 ~po~
Econo~c'
~=fi~ of
~va~fion
~ of C~ ~ ~va~fion M~dp~ Wa~ Co~d~fiM Appr~M ~po~
5y~ '
~ of S~J~ ~-~fi~Ne~fiafi°m~ S~J~eM~p~ J Co~d~fi~ J ~pr~~Wa~ 5y~
G~ of M~o S~e m Adjo~ ~ve ~fip~ Wa~ Co~d~fi~ Appr~
Gfi~ ~ 5y~ ~~ G~
~va~fion
,
~ of ~o P~o, ~~W Study ~o ~~ Wa~ ~d $52~00~00 Ap~
New M~co ~d Nego~fiom ~w~ 5y~ .~o~;
Eviction of
Propos~ for'
Con~a~
~afion
,
GV of S~m ~, New F~~g ~d 5~e ~ ~ Wat~ ~ ~cess of Negotiation;
M~co Negofiafiom 5ys~ ~0,000D00 Wfi~ ~
T~ony
G~ of Tu~ .~o~ Ac~ifion by ~o V~ey ~d ~~ P~ Appr~M ~po~.
Adjo~ Gfi~ ~n~g)
~f~ss ~ Wa~ Negofiafiovm Hyde P~k Wat~ P~ Appr~M Repo~
Au~o~, N~ York 5y~ ~~g)
G~ of ~ ~ Nego~fi~ ~ ~m Wa~ P~g Appr~ ~po~
. ~~y ~~g)~
U~. ~t of A~~ ~pt~' ~1~ Wa~ Sy~ ' [ ~,000 Appr~ ~
~W ~ ~ ~ · ~~ Do~ Mo~ ~e Co~d~fi~ ~pr~ ~po~
Wa~ Sy~
~ ~ ~eo~s Ne~fio~ ~ ~ ~ra~ C~d~fi~ Appr~ .~
~W of ~~ Nego~fi~ ~o~ ~ Wa~ ~0,000 Appr~
Sy~
,
~ Co~W ~%~W Study ~~ Wa~'Sys~ Co~d~ Appr~
SW~a~ 5~ Wa~ Negofiafiom ~d G~e Wa~ $3,000~00 Ap~ ~
~a ~t ~m 5ys~ -
Co~W of ~~ ~~ Do~ [ Fit~ Mo~ Wa~ Lms ~
1
$~Y OF BOOKMAN-EDMONSWON A.FI'~AL
AS OF ]VlA_R~ 1998
~~ Amo~t ' ~ded
' ] ~ 5yst~. ~00,00~
NegoQa~ ~ 5y~ Appra~
W~ac U~fim Negofiafi~ 5Uv~ ~ Wa~ C~d~fi~ ~pr~.~po~
~,N~ada - Comply
Co~, ~~ I~eg°~afi°m.I~M~Wat~ ~~°fSyst~ $100,000 ~pr~ ~
~t Yolo ~~ ~ Do~ J Wm~~ Wa~ ~ ~,600~00
~e~ ~[ ~m ~. T~ony
Apple V~ ~os Wat~ ~~ge ] j~s ~ ~ Co~d~fi~ Ap~ ~po~
~mp~y Nego~fiom[ 5y~
~vple V~ey ~s Wat~ ~ ~~ A~le V~ey ~d~ Co~d~ ~ Appr~ ~o~
C°mp~Y[ Negofiafiom P~k ~ra~ Sy~ ,
N~, M~co W~mwa~ 5yst~ 5500,000
~ of S~ V~ey [ ~~t Do~ S~ V~,S~mfion $600,000 .. Syst~
~1~ V~ey M~pM F~n~ ~d ~~ ~mW Co~d~fiM ~ Appr~M ~po~
Wa~ ~~ Negofiafiom Wa~ Sys~
O~ ,Fr~o Negofia~om I'&~sh-v~ Wat~S.~ ~0,000 I Appf~ Repo~
,
O~'of Mod~o Negofiafiom ~d ' ~ ~ Wa~ 5yst~ ~s ~ Appr~
~~t Domm $~,000~00 ~po~
Negofiafiow
O~ of ~ Negofiafio~ .~ V~ Wat~ Co. ~,000~00 Ap~
~po~
Negofiafiovm
~n~a ~ Wa~ ~ ~~ ~m W~ ~b~g Wa~ 'Co~d~ ' ~p~E
Sy~
~om P~ Sp~ Wat~
S}~m
Ofi~ of ~v~ide ~ ~~ ~m Tmes~ Wa~ ~,000~00 ~ ~ony
Corom -. Comply ~d B~
~ B~ pm~g
figh~
fi~ ~ Groom ~~ ~d pomom V~ey ~ $15,000~00 Appr~ ~po~
Wat~ ~g~ Wat~ Sy~
m~ Study
5UMMAI~Y OF BOOK~,LA_I~-EDMONSTON APPEAL
~i~t p~ of ~ Sys~m Ap~
A~~[ ~ount ~ided
Sys~ · T~ony
~m Wa~ Sy~
G~ of ~u~ Gain ] ~ Do~ C~ B~ P~p~ $600,000
~ghm T~~y
5ys~ T~ony
~e~ ~ Wa~ 5~ T~ony
~e~ Co~ Wa~ . ~~t Do~ ~ N-tim Wa~ Sys~ $1~00,000
~~[ T~ony
W~ Co~ ~ Wa~ I T~s~sm~t I W~t ~ B~ $1,000,0O0
Us~s Ap~ P~p~ ~ghm Tm~ony
~ght, Br~ a ~n~ ~ M~pm~m ~ Sp~ for ~ffied AppromtMy
~figafion[ Wa~ $100,000 T~ony
~e~ Mm~pM Wa~ Neg~afio~ f~ ~d~o C~yon Co~d~fiM A~r~M ~po~
~ffi~ Ac~ifion ' Tr~ion ~e,
~ok, ~d
~ of To~ .I Negofiafio~ W~t B~~ Co~d~ I ,vpr~ ~po~
~e Me~opo~ Wat~ Con~a~ V~om ~ P~S ~ew of
~ffi~ of ~u~m Nego~fiom on S~ag~ Wat~ ~pi~ C~
~v~~
Nego~fiom Comply ~m ~
. .. .
l:klhx~oo~\l'ustm~oc 31191~
APPENDI-X C
FEE SCHEDULE
BO OKMA-¥-ZDMONSTON ENGINEERENG , INC.
SC.HEDULE OF FEES
Ct SSmCaT ON
RATE PER HO LU~
Managing Executive Consultant
t~rincipal Executive Engine~or
ExecUtive En~neer
P r~rtC ipal ' E n gin eer
Supervising Engineer
Senior Engineer
Senior .Consultant
A~sociate En gin _eer
Assoc&te Professional
A~sistant Engineer.
C_4D D Manager/Designer
Senior CAD D Operator/Designer
C.RD D Operator/Designer
Technician I
Technician II
Technician IH
Technician IV
Administrative/Clerical
oo ·
$266
$150
· $1~_0
$230
$120
$99
$99
$62
$75
$66
$66
$73
FOR OUT-OF-POCKET EX2~ENSEs, incIuding but not limited to plane travd, meals,
lodging, reproduction expenses, and long distance telephone at the actual cost thereof,
with comput'er time billed at $15 per hour, automobile rrdIeage at the amount allowed by
1RS reomdations per mile, and Xerox copies at 10 cents per copy. Subconsultants and
subcorttractors ~ be billed at actual costs plus 10 percent
~For appeara .nces b~fore judicial or quasi-judiciaI bodies, including depobitions- Darly Rate
(eight hours at $200 per hour). For appearances of other professionals b~Core judicial or quasi-
judicial bodies, including depositions- DaVy (eight hours at $170 per hour)..
This Fee Schedule is reviewed armually and subject to c.~mnge..
Effective January 1,1998.
EXHIBIT B
:-'.::';-;::'-7.
Public Works / Engineering
February 18, 1998
Bookman -Edmonston
225 W. Broadway, Suite 400
Glendale, CA 91204-1331
City
of Tustin
300 Centennial Way
Tustin, CA 92780
· (714) 573-3150'
FAX (714) 734-8991
Request for Proposals to Evaluate Privatization Opporumities for the City of Tustin's
Municipal Water System
Dear Sir::
The City of T~stin is requesting proposals from consultants experienced in the evaluation of the
financial, engineering and operational aspects of municipal water systems to determine the
potential value of privatizing any.or all elements of the City's water system. The City is
interested in providing a stable rate base while continuing to meet the increasing environmental
regulations along with the capital needs Of the water System. The City wishes to be certain that
any opportunities for privatization are clearly understood and that all current and future potential
financial impacts to the City and the ratepayers are carefully analyzed and quantified.
The proposed scope of work, selection process, and proposal instructions are attached as Exhibit
"A". However, the expansion of any tasks that will assist the City in making the best decision
will be considered. It is intended that Phase I will provide a level of assessment that will enable
the City to determine if proceeding with the preparation of any RFP for privatization services is
warranted. Phase II and III will then involve the preparation of an RFP and subsequent
evaluation of the responses.
.
Your firm has been recommended as caPable of performing this task. We look forward to
receiving your response to this request by not later than March 23, 1998. Please do not hesitate
to contact me in writing il'you have any concerns regarding this matter.
Sincerely,
Tim D. serlet
Director of Public Works/City Engineer
TDS:ccg:RFP Pfivatiza_tion of Water
Enclosures
1_
EXHIBIT A
RB, Q~ST FOR PROPOSAL
.
Priva6:,ation Opportunities for Tustin Municipal Water System
SCOPE OF SERVICES
.
.
.
-5.
.
Phase I
l~eview and evaluate the City's water utility including but not limited to the
systems present condition, service area, operating revenues and expenditures,
ad/ninistmtive, and operation functions (personnel, facilities, billing, meter reading),
annual maintenance and repair needs, and anticipated capital improvements.
Document and analyze the revenues and expenditures necessary to support the
Municipal Water System for a fifteen-year ~ime frame along with the impacts on
the rate structure. This will involve establishing a _m-owth rate along with
estimating future water purchases, groundwater costs, and energy costs.
· .
Identify and evaluate alternative methods of operating any or ail portions of the
water system that will be more cost effective'than current operations and may
provide other benefits to the City. This shall include:
a. An analysis of options for improving the effectiveness of current operations
and methods to reduce costs.
b. An analysis of options specifically fc~r contracting out any portion or ail of
the existing water services to the. private sector or to an existing water
utility.
c. All options evaluated in the preceding sub-tasks a and b shall be evaluated
and quantified for their legal and organizational feasibility, set-up costs,
effect' on employees and benefit/cost ratio. Categories of.costs may include
contract'expense, set-up expenses, operating costs, etc~ Categories of
benefits may include long-term rate stability and net revenues available to
the City.
..
Review the status of other municipal water system privatization efforts and
compare them to the Tustin system. Document any issues/problems that have
occurred. -
Recommend specific Options based on the preceding analysis. Identify'financial
and legal issues and procedures necessary-to implement any recommendation.
·
.-
If privatization options are recommended, identify a list of qualified, private.
companies and water purveyors that have the experience and available resources
necessary to respond.to a proposal based on the recommended options.-
.
.
.
.
.
Phase !
Product
?hase 17
A comprehensive technical report to be provided as follows:
Five (5) screen copies'for City review and comment, fifteen (15)
~nal copies and on~ (1) reproducible.
If the City Council determines to proceed with Phase Il, draft an RFP for the
portion of or all of existing water services recommended for operation by the
private sector.
?'r, epare criteria for the evaluation of each RFP.
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Evaluate each of the proposals received 'based upon the established criteria.
Prepare a technical memorandum identifying issues associated with each proposal
and rank the proposals based upo. n the established financial and operational'
criteria.
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Prepare questions for intervie .wing the top firms and participate on the interview
panel.
C. ' Phase III
1.
After selection of a preferred private sector operator, assist in dmfLing and
negotiating a~eement with selected company. ·
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17. CONSULTANT SELECTION PROCESS
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The selection process will entail a comparative analysis of the professional qualifications and'
experience of consultants related to the needs of the' project. The cost associated with the'-
proposal will also be a factor in the comparative analysis. The prospective Consultant must haVe
the qualifications and recent experience necessary to ptrform the required analysis including:
· Recent experience with a comparable project;
· Knowledge of applicable water system standards, criteria, and requkements;
· Knowledge of applicable federal, State, and local regulations, policies, and procedures.
· Knowledge of the financial aspects of operation a'municipa! water system.
Upon our selection of the most .highly qualified 'firm to provide the required services, we will
negotiate the price for individual phases in the proposed scope. If we can reach a price we deem
fair and reasonable, the contract will be awarded with the City reserving ihe .right not to proceed
to a next phase. If. we are not able to negotiate a price we deem to be fair and reasonable to the
'City, .We will' proceed to the next most highly qualified firm to provide the requested service and
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requested service and will seek to r~ch a negotiated price' with that company and so on.
However, the City reserves the right to reject any or ali proposals.
n s ucr oNS ?ROPOS RS-
Please limit your proposal to 20 pages, excluding resUmes and copies of'brochures. Company
brochures or other forms ofpreprinted materials shall be minimized and separately bound.
Proposal Format and Contact
It is required that, at a minimum, the following-be submitted with your proposal:
J[ brief list of similar types of projects that your firm has previofisly performed,.
including scope, study cost, project construction cost, 'agency for whom
completed, and agency individual 'in responsible charge of the project.
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Identification, resumes and titles of individuals whO will supervise and perform the
service, inCluding .any subconsulting firms fo be utilized.
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A description of the methodology and the work pro_m-ams that will be implemented
to perform the requested services.
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A graphical project time schedule broken down according to the tasks listed in the
detailed Scope of Work for accomplishing the project through Phase II. phase I
shall be completed no later than 90 days following the Notice to Proceed.
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The schedule should also include a projection of anticipated man-hours broken
down by major tasks and the various titled individuals, who will be'assigned to
each. '
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Fee schedule indicating the proposed coSt for completing each task in the Scope of
Work, and a. resulting' total coSt of the project, based .upon the work hours, hourly
rates, and other associated costs. The proposed hourly rates and cost to complete
each task 'shall include the cons of all administration and overhead, project site
visits, attendance at meetings, and all rePrOduction .costs. The costs associated
with administration, overhead, mailings, reproductions, phone usage, facsimile
transmissions, mileage, and other ministerial items shall be included in the hourly
rate.
6.
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LiSt and description of products your finn will produce for each phase and taslc
Schedule' of houfly rates for your firm's employee titles or various classifications,
and for any subconsultants~
Submission and deadline for proposals
A respondem shall submit five (5) copies of their proposal to. the Director of
Public Works at 300 Cemennial Way, Tustin California no later than March 23,
~!998. Ali' questions concerning the proposal shall be-submitted in writing to Tim
~erlet, Director of Public Works and must be 'received by March 23, 1998. All
firms mailed copies of the RFP will be mailed answer's to the questions. ' '.