Okaloosa County BOCC — July 1, 2014 — Agenda — reading text

OKALOOSA COUNTY WATER & SEWER ADMINISTRATION Eglin AFB Utilities Privatization (UP) Workshop April 3, 2014 Attendees: - Ernie Padgett, County Administrator - OCWS – Jeff Littrell, Director; Mark Wise, Deputy Director; Kim Kilpatrick, Financial Manager; Valerie Broxson, Administrative Manager - Constantine Team (Program Manager & Engineers) – Jim Kizer & Joey Crews - ESG Team (Contract Operations) – John Eddlemon & staff - Clerk of Court – Gary Stanford, Finance Director; Jodi Gates, Financial Services Manager; Marcella Eubanks, Contracts & Grants Manager - Purchasing – Zan Fedorak, Purchasing Manager; Jack Allen, Purchasing Coordinator; Jo Kublik, Contracts Coordinator - Risk Management – Gary Real, Manager - Nabors Giblin Nickerson (County Attorney) – Heather Encinosa, John Jenkins - Burton & Associates (OCWS Rate Model Consultant) – Mike Burton - First Southwest Company (County Financial Advisor) – Mark Galvin Purpose today – background, financial structure, future contract What is UP, briefly? - If selected and a contract is negotiated, Okaloosa County would have a 50-year contract to own (Bill of Sale), operate, and maintain all of Eglin’s water distribution system and wastewater collection system. - Expands over 3 counties (minus Hurlburt Field) – primarily in Okaloosa, but infrastructure also in Santa Rosa & Walton - Includes approx. 82 wells, 17 tanks, 747 fire hydrants, 83 lift stations, 1,058 manholes, and over 200 miles of piping - 6-month Transition Period (under contract) occurs before 50 years starts - Annual revenue would begin at approx. $14M first year, with an approx. 1.5% annual escalator for 50 years - Does not include wastewater treatment & disposal, which is separate contracts o County Contract #C09-1740-WS for $5,232,000 – 7SFG o County Contract #C11-1906-WS for $16,699,568 – Duke, Main Base, Camp Rudder Background: - Apr 2009 – OCWS did not submit Statement of Interest (SOI) & Letter of Interest (LOI) in response to a Sources Sought Notice (SSN) from Defense Logistics Agency (DLA) - May 2009 – conversations with Eglin’s 96th Civil Engineering Group (96CEG) o PURPOSE – USAF & OCWS: Eglin’s Mission, County Strategic Plan (Military Partnerships & Gov’t Consolidation), stability for both entities, OCWS ratepayers - Jul 2012 – OCWS submitted a SOI and LOI to DLA in response to another SSN  - Sep 2012 – Master Services Agreements (MSAs) executed with Constantine (C12-1983-WS) & ESG (C12- 1982-WS) upon completion of the RFQ bidding process o Task Order 1 for Constantine & ESG o The County’s ownership role - Sep 2012 – DLA issues RFP - Feb 2013 – OCWS submits proposal (12 volumes) to DLA, approved by BCC (attached Agenda Request); the following volumes were submitted for Water Only, Wastewater Only, and Water & Wastewater Combined (see attached Table of Contents): o Volume I – various operational plans, Initial Repair and Replacement (R&R) Plan, Transition Plan o Volume II – past performance o Volume III – contract documentation (attached)  Prepared by HDR & Heather Encinosa  The contract language “is what it is” with many FAR references, BUT we can take exception to pertinent items; most exceptions are because we are local gov’t - not a private sector contract operations company  County Contract Review Coordination Sheet (attached) o Volume IV – price schedules - Apr 2013 – DCAA audit - Jul 2013 – DCMA audit - Jan 2014 – Period of Validity extended to 4/29/2014 - Letter of Intent to Award could potentially be before 4/29/2014 o Realistic possibility – pros & cons - Other pertinent info: o Org Chart (see attached) o 2 new positions – UP Program Manager, UP Financial Officer (Compliance Officer / Small Business Liaison Officer); JDQs submitted Financial Structure: - Long-term expenses o Purchase system from Eglin o Reimbursed from Eglin o O&M – ESG o Engineering/Program Management – TCG & subs o R&R Plan (AKA “CIP”) – major construction projects o Debt Service o Some expenses from OCWS budget – i.e. major construction projects & major main breaks – would be billed to UP department - Financing - New fund/dept/acct numbers? - Protecting our rate payers Future Contract: - Transition Plan (see attached Proposed Transition Expenses, which was in proposal) - DLA issued RFP w/ 8 amendments - We responded with a 12-volume proposal - Example of MacDill AFB contract - The 50-yr Contract will consist of elements from both the RFP, as amended, and the proposal as negotiated and amended. In other words, the language for the contract is already established (RFP & proposal combined) - For many components of the fed gov’t contract, “it is what it is” with the exception to the items listed in Volume 3 of the proposal. - Matrix – comparing the contract sections to the proposal sections - Team Members: Please review matrix and review any sections that pertain to your area of expertise or oversight. If you have any comments or questions, please email Mark W, and he will coordinate appropriately. Please review in the next few weeks, if at all possible, in preparation for a Letter of Intent from DLA.