205-CPH-Amendment 41 P.O. Box 7778 - 327Y~-~778
Telephone (40 7)
Fax (407) 330-SSSS
April 14, 1993
Conklin, Porter and Holmes Engineers, Inc.
P. O. Box 2808
Sanford, Florida 32772-2808
ATTN: Mr. Paul E. Porter, P.E., President
R__E: Update or Restructuring of Sanford's Water,
Wastewater and Water Reuse Rates System
Dear Paul:
Enclosed herewith, please find one (1) fully executed copy of
Amendment No. 41 to our agreement dated December 7, 1983 for
Consulting Engineering Services. This Amendment will provide for
an update or restructuring of the City's utility rate system.
Please proceed on this work as soon as possible and keep me advised
regarding progress. I would like to work toward adoption of a new
rate ordinance prior to the end of June, 1993.
Very truly yours,
W. A. Simmons, P.E.
City Manager
'IWAS/acd
"The Friendly City"
AMENDMENT 41
TO
AGREEMENT
DATED DECEMBER 7, 1983
FOR
CONSULTING ENGINEERING SERVICES
BETWEEN -
THE CITY OF SANFORD, FLORIDA
AND
CO~IKLIN, PORTER & HOLMES-ENGINEERS, INC.
FOR
REPORT TO FORM THE BASIS
OF
AN UPDATE OR RESTRUCTURING OF THE CITY OF SANFORD'S
WATER, WASTEWATER AND WATER REUSE RATES SYSTEM
This AMENDMENT, dated thiS/~;/_Z
day of///~/~/~- , in the year Nineteen
Hundred and Ninety-Three, between the CITY OF SANFORD, FLORIDA (hereinafter
called the OWNER) and CONKLIN, PORTER & HOLMES-ENGINEERS, INC. (hereinafter
called the ENGINEER), is mutually agreed upon and declared an authorized
Amendment to an Agreement dated December 7, 1983, between the parties, herein
setting forth the scope, terms and conditions of the work herein authorized.
I, GENERAL
The City of Sanford is in need of an update or restructuring of its water and
wastewater and water reuse rate systems. During the past year, actual revenues and
expenses have shown significant variation from projections. Consequently, net
revenues available to the system for operation, maintenance, repair and debt service
obligations are below desired levels for utility operations. As a result, the City
recognizes the need to adjust monthly rates. In addition, during the course of the rate
study, the City is interested in identifying alternative rate structures that could be
used to generate the revenues needed from rates. Therefore, for comparison
purposes, the City has requested that proposed rates be developed using: 1 } the
current rate structure in the form of an across-the-board adjustment, and 2) an
appropriate alternative structure identified and agreed upon during the stuG~/. Under
both scenarios, proposed rates will take into account the water reuse program and be
developed for a two year period beginning June 1993.
II. SERVICES HEREIN TO BE PROVIDED
The services to be provided under this Amendment are covered'in our Agreement with
the City for Consulting Services, dated December 7, 1983, under "Additional Services
of the Engineer", Section 3.1.2, and are described as follo,~:
1. We will review the City's most current operating and capital budgets for the
potable water, reuse water and wastewater systems to identify the total costs
to be recovered in rates.
2. We will allocate these costs to appropriate operation and rate categories based
upon discussions, review and acceptance by the City and utility personnel.
3. We will calculate rates for a two-year period based upon the cost identification
and allocation.
4. We will develop a rate impact analysis consisting of a comparison of the
average monthly,bills for customers at current rates compared to projected
monthly bills using: 1) the cost identification and allocation methodology
identified above, and 2) an across-the-board increase applied to the existing
rate structure.
5. We will prepare and submit a draft report for review by City staff, discuss with
City staff, incorporate any improvements, recommendations, and refinements
and submit a final report for approval.
6. We will be available for up to two public presentations before the !City
Commission.
III. AUTHORIZATION OF SERVICES AND PAYMENTS TO THE ENGINEER
It is the intent of this Agreement that, upon execution of the same, all services herein
are authorized to be performed.
For the performance of the Scope of Work described herein, payment to the
ENGINEER by the OWNER shall be on the basis of a lump sum fee. The lump sum fee
for the work herein authorized is $20,220.00, based on the services listed in the
attached Plan of Study, :
IN WITNESS WHEREOF,. the parties have caused this Amendment to be
executed as of the day and year' hereinabove set forth,
CONKLIN PORTER & HOLMES-ENGINEERS, INC.
ent
· CITY OF SANFORD, FLORIDA
Bet~;~ith, Mayor
ATTEST:
Date:
S0602
AMEND41
CITY OF SANFORD
WATER AND WASTEWATER RATE STUDY
APPROACH
Our work plan consists of the following ten tasks which are described
more fully on the following pages:
Task i ~ Initiate the Project
Task 2 Analyze Existing Water and Wastewater Rate Structure
and Related Data
Task 3 Develop Conceptual Design for the ASsessment of
Alternative Water and Wastewater Rate Systems
Task 4 Conduct Cost-of-Service Analysis and Assess AdequacZ
of Existing Rates to Generate Sufficient Revenues
Task 5 Develop Automated Rate Model to Calculate Water and
Wastewater Rates
Task 6 Determine Water and Wastewater Rates under Selected
Alternatives
Task 7 Prepare Customer Impact Analysis
Task 8 Prepare and Present Final Report
PRO~ECr ~ASE DESCRiPtiONS
Task ~ - ~n~a~e ~he Pro~ec~
Purpose: To fonu~lize the lines of communication between the
consultant and appropriate City personnel, to finalize
the project schedule and to ensure that the project
objectives are clearly defined and understood by all
parties. In addition, deliverable products and dates
will be identified, and meetings and interviews will
be scheduled.
Subtasks: This task will require completion of the following
subtasks:
1.1 Conduct organizational meeting with appropriate City
~ personnel and project coordinator.
1.2 Review pertinent background documents related to water
and wastewater operations such as:
Operating and capital budgets for the current and
.prior three years as well as audited financial
statements.
Official offering statements or related documents
for current debt including rate covenant and
coverage tests.
State Revolving Loan Fund documents.
State Grant documents requiring funding of the
Capital Improvement Fund.
Proposed Capital Improvement Plans or bond
issues.
Developer Agreements.
Three years of customer constituency informa-
tion(billed gallons, usage characteristics,
number of accounts, customer effluent strengths,
etc.).
Operating statistics (gallons treated, wastewater
treatment plant influent levels, domestic sewage
strengths, potable water pumped, reclaimed water
sold, etc.).
Task 2 - Analyze Existing Water and Wastewater Rate Structure
and Related Data
Purpose= To compile information with respect to revenues and
key financial and management information.
Subtasks= This task will require completion of the following
subtasks:
2.1 Interview City personnel that interact with the
utility such as finance, accounting, data processing,
etc.~
2.2 Obtain and review relevant documents related to system
costs and operations such as bond ordinances, annual
financial reports, O&M and capital budgets, operations
~ reports, etc.;
2.3 Obtain and review relevant prior reports or studies
such as facilities plans, rate studies, etc.;
2.4 Gather billing information to direct the preparation
of a bill frequency analysis to determine the number
of customers at various consumption levels in order to
evaluate water conservation rate alternatives. It
is assumed this data will be provided to us by the
City.
2.5 Review customer constituency and document number of
customers by class, meter size, etc.;
Task 3 - Develop Conceptual Design for the Assessment of
Alternative Water and Wastewater Rates
Purpose= Define the most appropriate rate structures which will
distribute all costs of the water and wastewater
systems to their users. The conceptual design will
analyze various rates for the reclaimed water system
as well as the development of alternative conservation
pricing techniques.
Subtasks: This task will require completion of the following
subtasks:
3.1 Explore alternative water and wastewater rate struc-
tures which also address other concerns such as
simplicity, conservation, reuse, lifeline rates, fire
protection charges, ease of implementation, etc.~
3.2 Define cost determination and allocation criteria for
potable water, reclaimed water, and wastewater costs
under each alternative~
3.3 Prepare and deliver conceptual design memo documenting
the results of the above subtasks and identifying the
preferred alternatives.
Task 4 - Conduct Cost;of-Service Analysis and Assess Adequacy
of Existing Rates to Generate Sufficient Revenues
PUTDOSe: TO identify all costs to be recovered (including
deposits but excluding all other specific service
charges such as turn-on and turn-off charges, late
payment fees, etc.) and to allocate those costs to the
identified charge categories and customer classes for
fair and equitable distribution to the users.
Identification of Total Water and Wastewater Costs.
~ The first step in the assessment of the existing water
and wastewater rates is the determination of all costs
incurred in providing potable and reclaimed water and
wastewater services and their proper allocation to
charge categories. The three major categories of
costs are discussed below:
'Potable and Reclaimed Water and Wastewater Costs
- Operation and Maintenance (O&M) costs and
certain capital costs, includihg debt service and
renewal and replacement, which can be readily
allocated to each operation.
Joint Costs - O&M costs and certain capital
costswhich are related to or benefit potable and
reclaimed water and wastewater operations (e.g.,
administration costs, data processing costs,
customer service costs, etc.). These costs will
be allocated to potable and reclaimed water and
wastewater operations to identify the portion of
the joint cost related to each.
City Costs Benefiting Water and Wastewater
Operations -- Costs incurred in other depart-
ments of the City which benefit potable and
reclaimed water and wastewater operations will be
allocated to water and wastewater to isolate the
portion related to each.
Cost Allocations. The next step in the rate setting
process is to allocate the identified costs to the
functional cost categories identified in the conceptu-
al design and to customer classes within those charge
categories. This will define the total cost to be
recovered thr6ugh each part of the rate structure from
each customer class. We expect costs to be allocated
to the following charge categories:
Monthly Service Costs
- Minimum Charge
- Volume Charge
Revenue Analysis. After determination of the total
projected costs of service for water and wastewater,
~ a comparison of the projected costs of service to
projected revenues under the current rates will be
prepared. This will reveal the overall order of
magnitude of any required rate increase. However, if
the current rate structure is modified the impact of
a rate increase will be different for customers with
different usage patterns. This will be examined in
the customer impact analysis to be performed during
Task 7.
Subtasks: This task will require completion of the following
subtasks:
4.1 Identify all operations and maintenance costs associ-
ated with the water and wastewater operations and
allocate to water and to wastewater;
4.2 Identify all current and anticipated capital costs to
be recovered through the rates (including debt service
and related reserves and coverage requirements,
capital outlays from revenues, and renewal and re-
placement costs);
4.3 Allocate O&M and capital costs to functional cost
categories and user classes; and,
4.4 Prepare revenue analysis.
Task 5 - Develop Automated Rate Model to Calculate Water and
Wastewater Rates
Puroose: To develop a microcomputer rate model to calculate
rates and charges and facilitate future rate updates.
The model will be designed to calculate water and
wastewater rates for a two-year period.
Subtask: This task will require completion of the following
subtask:
5.1 Develop microcomputer model using LOTUS 123® which
incorporates the selected rate structure alternatives
presented in the conceptual design.
5.2 Deliver printouts of rate model for review and comment
by City staff.
Task 6 - Determine Water and Wastewater Rates Under Selected
Alternatives
PurPose: To calculate a schedule of water and wastewater rates
and charges which recover the projected water and
wastewater costs from the system's users.
Subtasks: This task will require completion of the following
subtasks:
6.1 Determine monthly minimum charges to include:
Customer costs - meter reading, customer service,
billing and collection, etc.; and,
Capacity costs - a portion of fixed capital costs
to be determined during the conceptual design
process and refined or revised during this task.
6.2 Determine proposed water and wastewater volume charg-
es.
Task 7 - Prepare Customer Impact Analysis
PurPose: To assess the impact, when compared to existing rates,
of the proposed rates upon various classes of custom-
ers with different usage levels. This task is criti-
cal in order to fully understand the potential rate
impacts upon customers with substantially different
usage patterns.
Subtasks: This task will require completion of the following
subtasks:
7.1 Develop an impact assessment model for the rates and
classes of users identified in the rate study; and
7.2 Prepare impact assessment of proposed rates compared
to current rates.
Task 8 - Prepare and Present Final Report
Purpose: To document the water and wastewater cost-of-service
and rate calculations and methodology in a complete
but concise report for presentation to the City
Commission.
Subtasks: This task will require completion of the following
subtasks:
8.1 Prepare and deliver five draft reports;
8.2 Prepare and deliver fifteen final reports;
8.3 Attend one workshop session with the City Commission
to present study recommendations;
8.4 Attend one rate hearing before the City Commission to
present study recommendations for the purpose of
enacting rate adjustments.
CITY OF SANI~ORD HOURLY ESTIMATE
CPH ~"VBK
HOUF~ HOURS HOUFLY
~ TOTALS
TAS):(S PERFOF~4ED
Tk~k 1 4 4 8
T~k 3 4 12
· Tk~k 4 8 ~0
T~ 5 O 64 I
T~sk 6 4 32 36
T~s~ 7 0 8 16
T~sk 8 8 48 4B
TOTAL HOUFB 28 260 28~
City of Sanford PROJECT SUMMARY
EXPFH<3E: People x Hotel Cat Meals AJd~ro Phcne Pdn~im Po~ta~e~
PATE P'~:.~I3Ay: NumlyJr ' MAN LADGi:t EXPEN':,i ' TOTAL
TASIL'~, F~RFORMED OI Do.re, HOURS COBTS COSTS COST"
T~,~k t $O :$0 8 $6,10
'r~,~ 2 $0 $0 0 $2,880!
Task 4 $o $0 0 $4~8,60 $o i ' $4.860
T~,sk 6 $260 $50 3 HIqzlO -~250 , $41690
I~PENS~ GRANO
SUBTOTALS $o $0 $o $0 $0 $200 $50 TOTAL 12 $19,970 $250 $20.220