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HomeMy WebLinkAbout1993 10 18 - Addendum to Engineer's ReportHARTMAN & ASSOCIATES, INC. engineers, hydrogeologists, surveyors & management consultants James E. Christopher Charles W. Drake Gemld C. Hastens. Mark 1. Luke Mark A. RydninR Harold E. Schmidt, Jr. ASSOCUTES: Ms. Marilyn Swichkow Rolo,"J. Ori William Mie'er Finance Director Scor. C. Qmnian Torm,hy A. Hoehdh City of Sebastian P.O. Box 780127 Sebastian, Florida 32978-0127 Dt�cYo�er 11; 4 W T ON HAI //92-023.06 '93 OCT 21 All 1145 Subject: Addendum to the Agreement to Prepare a Consulting Engineer's Report for the Issuance of Utility Revenue Bonds Dear Ms. Swichkow: Hartman & Associates, Inc. (HAI) is pleased to submit this addendum to our Letter of Agreement to provide consulting services to the City of Sebastian, Florida (the "City") with regard to performance of certain engineering and financial services as it relates to the City's anticipated issuance of revenue bond indebtedness for the water and sewer utility system as well as the development of rates and charges in support of the acquisition of the General Development Utilities, Inc. utility system (GDU). Based on our discussions with the City with respect to these issues, we propose the following: Project Team The following key personnel will be assigned to this component of the project: Mr. Harold E. Schmidt, Jr., P.E. - Principal -In -Charge Mr. Robert J. Ori, C.P.A. - Project Manager Mr. Richard C. Copeland - Financial/Rate Analyst Mr. Jack J. Burgiel - Financial/Rate Analyst Ms. Christine C. Tomlinson - Assistant Rate Analyst Ms. Carol Lauretta - Administrative Support Mr. Ori will be the project manager for this portion of the engagement as it relates to the development of utility rates and the preparation of a financial forecast of the Utility System. Mr. Ori will be the primary contact person between the City and HAI relative to these issues. Mr. Ori is uniquely qualified for this project, having been involved in over $500,000,000 of utility bond financing projects and having conducted rate analyses for over 30 different public systems in Florida. 201 EAST PINE STREET • SUITE 1000 • ORLANDO, FL 32801 TELEPHONE (407) 839-3955 • FAX (407) 839-3790 ORLANDO FORT MYERS JACKSONVILLE TALLAHASSEE Ms. Marilyn Swichkow October 18, 1993 Page 2 Scope of Services HAI will review all the necessary documents and prepare a report incorporating the results of the engineering and financial analyses and projections for use by the City in i) the development of rates which are adequate to meet the financial needs of the utility as well as ii) the preparation of a financial forecast for an offering statement associated with the sale of utility system revenue bonds. The anticipated scope of work for this project will include the following tasks: 1. Data Acquisition and Review - detailed data regarding i) the most recent historical operating results for both the existing City and GDU utility systems; ii) customer and statistical data; iii) budgetary data for the current fiscal year; iv) debt service schedules and financial documents relative to the anticipated and outstanding bonds (e.g. - Bond Resolution); v) capital improvement and acquisition program of the City; and vi) other related information will be acquired and reviewed. 2. Review and Documentation of the Customer Forecast - a five year projection of the water and sewer customers, sales, production and treatment requirements, and an analysis of the capacity utilization of the water and sewer system will be prepared. Review and Documentation of Forecast of Operating Results - a five year projection of revenues and expenses for the water and sewer system will be prepared consistent with the flow of funds as defined in the Bond Resolution, information provided by others (e.g. - debt service schedules, increases in operating costs as a result of capital improvement program, etc.), and assumptions developed for such projections. 4. Design of Monthly Rates - based on the forecast of customers and sales and the revenue requirements of the system, rates will be designed based on an allocation of costs for the fiscal year ending September 30, 1994 in order to meet the anticipated operating needs and Bond Resolution covenants of the utility system. A price indexing analysis will also be conducted in order to meet the projected requirements of the system. 5. Design of Capacity Charges - based on the capital improvement program, existing utility assets, and customer requirements of the facility, capacity charges or impact fees will be designed to provide for the equitable recovery of costs from new users of the system. Additionally, the debt service recovery or utilization percentage for the payment of system indebtedness and debt coverage calculations will also be conducted. 6. Preparation of Rate Resolution - HAI will assist the City in the preparation of a rate resolution to be presented and adopted by the City Council. Ms. Marilyn Swichkow October 18, 1993 Page 3 7. Preparation and Presentation of Rate Study - a rate study will be prepared in order to present the assumptions used and results of our analyses to the City Council for consideration. HAI will attend one (1) public hearing relative to the presentation of the rate study for the Council's consideration. 8. Preparation of Financial Feasibility Analysis for Engineer's Report - a project feasibility analysis will be prepared and will accompany the report prepared which will be included in the offering statement for the issuance of utility system revenue bonds. The report will detail the results, assumptions, and conclusions of our analyses. It is envisioned that the rate study report mentioned above will serve as the primary basis for the project feasibility portion of the Consulting Engineer's Report. 9. Document Review - a review of the necessary documents associated with the issuance of the indebtedness (i.e., bond resolution, preparation of the Official Statement, bond purchase agreement, etc.) will be performed in order to present the financial results included in the Consulting Engineer's Report on a basis consistent with such documents. 10. Preparation of Closing Certificate - as part of the Bond Closing activities, a certificate will be prepared in accordance with the requirements of the sale and Bond Purchase Agreement. 11. Financial Client Meetings - included are two (2) meetings with the City to acquire data for the project and to review the results of the project prior to finalization of the project. Schedule Following the notice to proceed, HAI will complete the preparation of the rate study and Consulting Engineer's Report services within a period necessary to meet the closing of the utility revenue bonds by November 29, 1993. HAI Compensation Based on the work described above, we propose to establish an addendum to the existing contract to perform the Consulting Engineer's Report at an additional maximum billing threshold $25,000. This will result in a total maximum billing threshold for the preparation of the Consulting Engineer's Report and the rate study to be $36,284.80. All other contractual aspects of the Agreement between the City and HAI relative to this project will remain in effect as originally agreed. Ms. Marilyn Swichkow October 18, 1993 Page 4 If this addendum to our Letter of Agreement to prepare the Engineer's Report for the issuance of utility revenue bonds is acceptable to the City, please execute this Addendum and return one (1) copy at your earliest convenience. The other copy is for the City's files. We appreciate the opportunity and look forward to working with the City on this project. Very truly yours, Hartman & Associates, Inc. Witness Witness HES/cl/P-2/Swichkow.rjo cc: R. J. Ori, MBA, CPA, HAI City of Sebastian, Florida M Title Af-o, 15 )9U Date