Okaloosa County BOCC — July 1, 2014 — reading text

maintained by Eglin to being operated and maintained by OCWS. During this transition period, OCWS would be taking a full inventory of the system and doing an investigation/analysis on the infrastructure, mostly underground. OCWS would be able to opt out of the contract or we would be able to renegotiate the contract and enter into the final 50-year contract. At the conclusion of the transition period, OCWS would be given a Bill of Sale, and we would be responsible for owning, operating, maintaining, and replacing the water distribution system and wastewater collection system for a Packet Pg. 270 period of 50 years. At the end of the 50-year contract, the infrastructure reverts back to Eglin AFB or there is the possibility to re-negotiate. If OCWS were to be awarded the contract for Eglin UP, this transaction would yield great benefits to OCWS rate payers and to Okaloosa County as a whole. As the owner, we would enhance our existing relationship with Eglin AFB by establishing a 50-year relationship. We would maintain control of decision making and how to most effectively utilize our resources. The ownership role provides for a greater opportunity to create new sources of positive cash flow, which assists in stabilizing operations, and potentially in mitigating future rates increases. Our expanded operations could also serve to facilitate investigating other consolidation of services opportunities in the local and regional area. OPTIONS: Approve or Deny. RECOMMENDATIONS: Staff recommends BCC approval to submit a proposal for Eglin UP and to authorize the Chairman to sign the proposal/contract offer documents on behalf of Okaloosa County Water & Sewer. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator Packet Pg. 271 Water and Wastewater System Utility Privatization Proposal Eglin Air Force Base Florida Packet Pg. 272  Eglin AFB Utility Privatization Project Overview • Solicitation for Proposals from Utilities and Private Companies • Water and Wastewater Systems Privatization • 50 year Contract Term and Bill of Sale • Defense Logistics Agency (DLA) is Managing the Procurement of Services • Utility Privatization Project DOES NOT include the Wastewater Treatment Facilities. • Wastewater Treatment is Separate Contract Packet Pg. 273  Eglin AFB Locations • Eglin AFB UP includes the following locations: • Main Base • Santa Rosa Island • Duke Field • Mid-Bay Shores • Camp Rudder Maxwell/Gunter • 7th Special Forces Group Recreation Area (White Point • Navy EOD • Numerous Test Sites • Cape Sand Blas and Ranges • Poquito Bay Housing • Camp Pinchot Area Packet Pg. 274 Eglin AFB Reservation Map Packet Pg. 275  Water System Overview Water assets include water distribution, storage, water supply, and treatment: • 652,305 Lineal feet of various size/type of pipe • 747 Fire hydrants • 1249 Valves, various size/types • 82 Water wells, pumps, etc. Packet Pg. 276  Water System Overview Water assets include water distribution, storage, water supply, and treatment: • 992 Backflow preventers, various size/types • 17 Elevated Tanks and other ground storage tanks • Associated chemical systems and other ancillary equipment Packet Pg. 277  Wastewater System Overview Wastewater assets include gravity collection system, force mains, and pump stations : • 398,358 Lineal feet of various size/type of gravity collection piping • 1058 manholes, various sizes/types • 83 Wastewater pumping stations Packet Pg. 278  Wastewater System Overview Wastewater assets include gravity collection system, force mains, and pump stations : • 62,222 Lineal feet of various size/type of force main piping • Associated buildings, systems, and other ancillary equipment Packet Pg. 279  Utility Privatization Procurement 1. Submit Proposals 1. Water 2. Wastewater 3. Combined 2. Proposals Due February 19 3. DLA Proposal Review (6-12 mos) 4. If Selected, Negotiations & DLA Audit of County and Subs 5. Transition Period (6-9 mos) 6. Final Negotiation and 50-yr Contract Execution 7. Bill of Sale-Transfer of Ownership Packet Pg. 280 Water and Wastewater System Utility Privatization Proposal Eglin Air Force Base Florida Packet Pg. 281 Packet Pg. 282 Packet Pg. 283 Packet Pg. 284 Packet Pg. 285 Packet Pg. 286 Packet Pg. 287 Packet Pg. 288 Packet Pg. 289  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 Packet Pg. 290  - 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 Packet Pg. 291 - 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. Packet Pg. 292  BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: July 1, 2014 TO: Honorable Chairman and Members of the Board FROM: Jeff Littrell SUBJECT: College Blvd Eglin Easement Amendment #1 DEPARTMENT: Water and Sewer BCC DISTRICT: District: 1 STATEMENT OF ISSUE: Staff requests the Board of County Commissioners execute Amendment #1 of a previous utility easement between Okaloosa County Water & Sewer and Eglin Air Force Base for the East County Sewer Conveyance Improvements Project. BACKGROUND: In 2011, OCWS staff identified the need for an Eglin AFB