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R2000-002 01-10-00RESOLUTION NO. R2000-2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A CONTRACT WITH BOB STEPHENS &ASSOCIATES, P.C. TO EXAMINE REVENUE NEEDS AND RATE PROJECTIONS FOR THE WATER AND SEWER FUND. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain contract by and between the City of Pearland and Bob Stephens & Associates, P.C., a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. Thatthe City Manager or his designee is hereby authorized to execute and the City Secretary to attest a contract with Bob Stephens & Associates, P.C. to examine revenue needs and rate projections for the water and sewer fund. PASSED, APPROVED and ADOPTED this the 10th day of January , A.D., 2000. MAYOR / EC .,'TARY APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY Bob Stephens & Associates, P.C. 2825 Wilcrest, Suite 408 Houston, Texas 77042 Phone Fax 713-339-3388 713-339-2355 Mr. Alan Mueller Assistant City Manager City of Pearland 3519 Liberty Drive Pearland, Texas 77581 We are pleased to con£nTn our understanding of the nature and limitations of the services we are to provide for the City of Pearland. As you requested, we will apply the agreed-upon procedures, which are listed below. This engagement is solely to assist the City in completing the tasks outlined below. Our engagement to apply agreed-upon procedures will be performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the City. Consequently, we make no representation regarding the sufficiency of the procedures described below. If, for any mason, we are unable to complete the procedures, we will describe any restrictions on the performance of the procedures we undertook. We will provide assistance to the City as discussed on the attached Task list. In addition we will perform the following tasks: 1) Review the impact of assessing alternative fees for services, i.e. implementation of line extension charges in lieu of at-large funding. 2) Analyze the effect of"transfers" to and from the Water and Sewer Fund and determine A rationale method for calculating an equitable transfer from the Water and Sewer Fund to the General Fund. Because the agreed-upon procedures listed above do not constitute an examination, we will not express an opinion on any fmancial statements or financial statement elements. In addition, we have no obligation to perform any procedures beyond those listed above. Our fees for these services will be billed at our standard hourly rates based upon the time it takes to complete the tasks listed above. We estimate that our fees for these services will range from $23,000 to $23,500. The fee estimate is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the engagement. We appreciate the opportunity to assist you and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. If the need for additional services arises, our agreement with you will need to be revised. It is customary for us to enumerate these revisions in and addendum to this letter. Very truly yours, B~ob~Step~A,~CMA, CVA Response: This letter correctly sets forth the understanding of the City. Title: Deputy City Manager Date: Proposal for Professional Consulting Services Water and Wastewater Rate Study We have identified a general scope of services, presented in tasks. Below each task we have identified the project team members assigned and an estimate of required hours. This project may be accepted with or without Task 1. Tasks 2-5 are dependent tasks and cannot be segregated. These Tasks are described as follows: Task 1 - Meet with the City Engineer and review the current status of water and wastewater services and the condition of facilities. Meet with City Management to review annexation plans and identify potential impacts to water and wastewater services and rates. Prepare a needs assessment, with the help of City staff, of facility repairs and new construction necessary to meet current and future demands of City resources. Review the City's Comprehensive Plan, as of the most recent update, to compare projected needs with those identified in the Comprehensive Plan. Position Estimated Hours Project Engineer 32 Task 2 - Analyze the City's current financing practices for funding water and wastewater system improvements. Assess the tree cost of maintaining water and wastewater system services by service components, and by unit cost. Identify state and federal legislation which has a current and future impact on the operation of the City's water and wastewater services. We will also attempt to quantify the impact these laws have on the City's rates. Position Estimated Hours Project Manager 12 Project Senior 48 Task 3 - Perform a historical trend analysis to identify lrends and develop projections to evaluate the current and future ability of the City to support water and wastewater services utilizing its current rate structure. Prepare a three, five and ten year projection of revenue requirements to support operating costs, capital improvements and debt service needs. Position Estimated Hours Project Manager 12 Project Senior 32 Proposal for Professional Consulting Services Water and Wastewater Rate Study Task 4 - Analyze, develop and test alternative rate structures, including fiat, ddb, and inverted rate structures. Obtain comparative rotes, rate stxuctures and capacities with cities of similar population sizes. Position Estimated Hours Project Manager 12 Project Senior 32 Task 5 - Prepare a report which presents our findings and makes recommendations for rates and rate structures currently needed and projected for three, five and ten years into the future. Identify fac'thty needs and projected needs for repairs and, or upgrades to increase capacity or meet legislative mandates. Position Estimated Hours Project Engineer 12 Project Manager 12 Project Senior 8 Clerical 24 We anticipate the study as outlined above will take approximately four weeks. In order to conduct this study as efficiently as possible we will need the following information prior to b~ginning our work: · A copy of the last rate study performed for the City. · A copy of the last three CAFRs prepared by the City. · A copy of the most recently approved rate ordinance. · A summary of anticipated capital improvements and bond issues proposed for the coming fiscal year and beyond. · A summary of proposed annexations to be contemplated in this study. · Other information as required.