Okaloosa County BOCC — September 1, 2015 — Eglin AFB Utilities Privatization - Update & Authorize Final Proposal — agenda request

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: September 1, 2015 TO: Honorable Chairman and Members of the Board FROM: Jeff Littrell SUBJECT: Eglin AFB Utilities Privatization - Update & Authorize Final Proposal Revision DEPARTMENT: Water and Sewer BCC DISTRICT: All STATEMENT OF ISSUE: Okaloosa County Water & Sewer (OCWS) is providing an update on Eglin AFB Utilities Privatization (UP) and requesting Board of County Commissioners (BCC) approval to authorize staff to continue negotiating and submit the Final Proposal Revision (FPR) to Defense Logistics Agency Energy (DLA), which may result in OCWS bringing a final contract to the BCC in the future for approval and execution. Staff is also requesting BCC approval to authorize the Chairman, or his designee, to sign any and all documents related to the FPR. To summarize, Eglin UP is for the drinking water distribution system and the wastewater collection system. Please note that Eglin UP does not include wastewater treatment & disposal - OCWS has a separate contract for the treatment & disposal of wastewater from Duke Field, Eglin Main Base, and Camp Rudder. BACKGROUND: For an overview of Eglin AFB UP and Defense Logistics Agency Energy's (DLA) Request for Proposal (RFP), see the accompanying PowerPoint slides. The following is a brief summary of past agenda items and BCC action: - On 6/7/2011, the BCC approved the submittal of a Statement of Interest in Eglin UP and authorized Request for Qualifications (RFQs) from engineering firms and contract operations companies. - On 9/6/2011, the BCC approved the selection of Constantine Engineering for program management and professional services. The BCC also approved the selection of Environmental Services Group for contract operations. - On 2/5/2013, the BCC approved the submittal of a proposal to DLA in March 2013. - On 7/1/2014, the BCC authorized staff to negotiate the proposal with DLA. As this is an extremely large proposal and complex process, please review the 2 attached past agenda items for further background and explanation. The proposal on the 50-year contract is currently approximately $11M/year (2014 dollars) for the ownership, operations, maintenance, capital projects (engineering, construction, etc.), management, and financing of UP. Since the 7/1/2014 BCC meeting, the following has occurred: - DLA has issued five (5) Negotiation Messages and the County has responded in writing. The original Negotiation Message was 181 government concerns. Staff and consultants have spent the last year (5 Negotiation Messages) going back and forth over these 181 concerns to ensure that the County and Federal Government are on the same page with regards to technical capabilities, past performance, risk, the socioeconomic plan, price, legalities, and other miscellaneous items. - A face-to-face negotiation meeting occurred on 10/22/2014 with DLA, Eglin AFB staff, County staff, and respective consultants/contractors. - A total of 14 Amendments to the original RFP have been issued by DLA. - On 6/3/2015, DLA published the Government Should Cost Estimate (GSCE) in Negotiation Message #4. The 50-year net present value of water and wastewater combined must be equal to or less than $403,696,786 (in 2016 dollars). - On 8/3/2015, DLA issued the Final Amendment (#14) and the Final Negotiation Message (#5). DLA also sent a letter that day requesting the Final Proposal Revision (FPR) by 9/17/2015. - On 8/19/2015, OCWS conducted a "UP Financial Workshop" with the County's UP Financial Team. Staff is now preparing to submit the FPR by 9/17/2015 for water and wastewater combined. In conversations among OCWS staff and DLA staff, it does not appear reasonable to submit a proposal for water stand-alone or wastewater stand-alone. It makes good economic and practical sense for one entity to be the water and wastewater utilit