R05-0651
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RESOLUTION NO. R05-
A RESOLUTION OF THE CITY OF BOYNTON
BEACH, FLORIDA, AUTHORIZING EXECUTION OF
TASK ORDER NO. 3 TO THE FIRM OF BROWN AND
CALDWELL TO PROVIDE A BUSINESS CASE
EVALUATION FOR THE UTILITIES DEPARTMENT
CAPITAL PROGRAM IN THE AMOUNT OF
$252,000.00; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on December 21, 2004 the City of Boynton Beach entered into a five-
13 year bulk potable water purchase agreement to receive up to 5 MGD. There is also an option
14 to extend the agreement up to 25 additional years and purchase up to 8 MGD. In order to
15 exercise the option to extend the agreement, the City must notify Palm beach County of a
10 commitment to extend the agreement by December 1, 2005; and
17 WHEREAS, as such, Brown and Caldwell has been asked to undertake a a Business
18 Case Evaluation of the City's options; and
19 WHEREAS, the City Commission, upon staff's recommendation, has deemed it
20 appropriate and in the best interests of the public to approve Task Order No. 3 in the amount
21 of $252,000 with Brown and Caldwell to provide a Business Case Evaluation for the
22 Utilities Department Capital Program within the context of a strategic implementation plan,
23 and an evaluation of the water system options afforded the City by way of water system
24 interconnection with Palm Beach County Utilities.
25 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF
20 THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
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Section 1. The foregoing "Whereas" clauses are hereby ratified and confirmed as
being true and correct and are hereby made a specific part of this Resolution upon adoption
hereof.
Section 2. The City Commission of the City of Boynton Beach, Florida does
5 hereby authorize and direct the approval and execution of Task Order No. 3 in the amount of
6 $252,000.00 with Brown and Caldwell to provide a Business Case Evaluation for the
7 Utilities Department Capital Program within the context of a strategic implementation plan,
8 and an evaluation of the water system options afforded the City by way of water system
9 interconnection with Palm Beach County Utilities.
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Section 3. This Resolution shall become effective immediately upon passage.
11 PASSED AND ADOPTED this ~ day of ~1~,~ ,2005.
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3O ATTEST:
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r r \Br wn n
geO de s o a d Caldwell Task Order 3.doc
CITY OF BOYNTON BEACH, FLORIDA
C
~c m~er~-'
TASK ORDER No. 3
APPLICATION OF BUSINESS CASE EVAI.UATION
FOR THE CITY OF BOYNTON BEACH
UTILITIES DEPARTMENT CAPITAI. PROGRAM
Background
Tbe Utilities Department has developed q- extensive Capital Impro--ement
Program that contains a number of significant projects, with long-term
implications for costs and rates. Amongst the improvements are upgrade
and/or expansion of both the East and West Water Treatment Plants. These
projects have been proposed, in part, to meet projected furore demands caused
by increasing development densities in the City and changes in the source of
raw water supply triggered by new permit requirements from the South Florida
Water Management District (SFWMD). These projects will have a significant
impact on long-term debt service, operations and maintenance costs for the
City.
One objective of this project will be to develop a broad, strategic context for
the orderly delivery of the Capital Projects. A Business Case Template will be
developed as a tool for achieving this goal.
Also to be considered is the opportunity for long-term bulk water purchase
from Palm Beach County, potentially in lieu of one or more of the capital
projects mentioned above.
Prior to moving forward with these projects, a Business Case Evaluation (BCE)
will be conducted by Brown and Caldwell (Engineer). BCE is a process that
has been developed and applied, following sound and proven principles of
asset management. The essential features of BCE are as follows:
A clear definition of the underlying needs and drivers for the project -
W/hat issue(s) is this project addressing?
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A thorough identification of alternatives that address the issues- Wa'hat
options (including outside options, such as purchasing water from Palm Beach
Coun(y) address the issues?
Critical review of the universe of options identified and elimination of
any options that have fatal flaws -Mre any options infeasibkfor technical,
economic orpolitica/ reasons or do any options not complete~ address the project
issues?
A life cycle cost analysis of the remaining options -Quantify capital,
operations and maintenance (O(_~M) and refurbishment costs for each option over its
entire life ycle.
Identification and quantification (to the extent possible) of benefits
produced by each option - Benefits are articulated in the context of achieving
customer level of service expectations
Identification and quantification of risks associated with each option -
W/hat risks does each option pose and what is the assodated risk cost?
A present value analysis of the options - Present value is an economic
evaluation that allows the comparison of options with differing useful lives and cost
functions (lower capital, higher OZ:~M vs. higher capital and lower OOM). In
addition, risk cost and benefits are included in the ana~sis if th~ can be quantified.
The BCE approach produces sound, objective information that facilitates
decision-making by providing a rational basis to compare options that have
very. different risk, cost and operating profiles. BCE applies fundamental
economic principles that have been used by private industry to evaluate capital
proposals for decades. It has recently been applied to public agency water and
sewer projects in Seattle, WA, Sacramento, CA and Asheville, NC.
Using BCE will allow Boynton Beach to objectively evaluate the proposed
Utilities Department water supply and treatment capital improvement program
by providing sound, comparable information to decision-makers for defensible
options that vary significantly. This will ensure that customers are provided the
best, most cost-effective, long-term solution.
In addition to the BCE, the City desires to produce a prioritized Capital
Improvement Program of water, wastewater and reclaimed water projects for
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the Utility Department. Al] proposed capital projects will be subjected to a
multi-step process, which will result in a prioritization of projects and a 7 to 10-
year CIP, based on that prioritization. The results of the BCE for the water
supply and treatment options will be used to define which projects are
constructed and will provide input to the prioritization process. The
prioritization process defines when projects will be constructed.
Scope of Work
Part 1 - Business Case Evalua~on (BCE) / Long- Term Water Supply
Task 1 - Kickoff Meeting with Business Case Team~ (BCT)
(The Business Case Team will consist of City staff, familiar with the issues
pertaining to this project.)
Objec~ivec. Engage the City's representatives in an effort to achieve consensus
on the issues, confirm project goals and define project success.
Activitie.c.
1. The Engineer will assemble available background information and will
generate all exhibits and written material to be used during the meeting.
2. The Engineer will meet with members of the BCT to review said
materials and explain how Business Case analyses are conducted.
3. A draft outline of Business Case practices will be distributed and
discussed, and an example of a simple business case will be provided.
Based on these activities and discussions, consensus will be achieved
with regard to project issues, project goals and critical success factors.
4. The issues discussed and the resultant path forward for the project will
be captured in the form of a Meeting Summary memorandum and will
be included in the Final Report.
Ddiverab/ec. The deliverables for this task will consist of the development of
meeting materials, facilitating the kick-off meeting and generating draft and
final Meeting Summary memoranda.
Task 2 - Development of Business Case Template
Objeclivec. The objectives of this task include the development of a Business
Case Template and discussion on its intended use for this project.
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~lctivitiec.
1. Based on the results of the I~ck-off Meeting, the Engineer will develop
the draft Business Case Template and will distribute same to the BCT
for review and comment. The template will include requirements for the
Project Development Plan, cost/benefit analysis, benefits definition and
net present value calculations.
2. A question and answer session to address questions and comments
pertaining to the Business Case Template will be conducted via
telephone conference, if necessary.
Deliverablec. The deliverables for this task will be participation in a telephone
question and answer session (if needed), and draft and final Business Case
Template docw0ents .for use during the project.
Task 3 - Information Request for Business Case Analysis
Objectivec. The objectives of this task are to collect and organize information
pertinent to this project, developed by Department staff and other consultants.
Activitiec.
1. Engineer will meet with Utilities Department to review, collect and
organize information developed by others, including studies, preliminary
engineering reports, preliminary designs and cost estimates. This data
will serve as the basis for the Business Case Evaluation.
Deliverables: The deliverables for this task will be draft and final tabulations of
information collected for use on this project and for inclusion in the Final
Report.
Task 4 - Project Alternatives Workshop
Objectives'. Identify and achieve consensus on the alternatives to be analyzed
during this project.
Activities:.
1. Engineer will develop materials and exhibits, and will facilitate a one-day
workshop with the BCT to discuss, explore and define alternatives to the
water supply and treatment projects agreed upon under Task 3, above.
2. Utilizing Business Case Evaluation tools and criteria established by the
BCT, the selected alternatives will be evaluated for feasibility, life cycle
cost, benefits, implementation feasibility, regulatory acceptance and
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public/customer impact. The results of this workshop will be used in
the subsequent stages of the project.
Deliverables. The deliverables for this task will be draft and final summary
memoranda, capturing the workshop discussions and presenting a path
forward.
Task 5 - Life Cycle Cost Analysis
Objectives: To perform cost/benefit analysis on the alternative project selected
during the Workshop conducted under Task 4, above.
Activities'.
1. Engineer, working with the BCT, will prepare a life cycle cost/benefit
analysis for the selected projects and the top three (3)-ranked alternative
projects.
2. Benefits will be quantified to the maximum possible extent and defined
qualitatively, where quantification is not feasible.
3. A question and answer session to address questions or concerns from
the BCT will be facilitated via telephone conference call, if needed.
De/iverablw. The deliverables for this task will be participation in a telephone
conference call (if needed), and draft and final Summary Memoranda,
presenting the results of the cost analysis.
Task 6 - Net Present Value Analysis
Objectivw. Develop Net Present Value analysis based on information and
activities conducted thus far in the project. (The products of this Task will be
used by the BCT for help in identifying the most critical, cost-effective
projects.)
_/tctivitie.c.
1. Engineer will review the information gathered thus far, will use the Life
Cycle analysis to prepare a Net Present Value analysis and will prepare
the Business Case for the projects selected by the BCT. The Business
Case documents will be in the form of individual Technical Memoranda
for each of the projects. These memoranda will be submitted to the City
for review and comment.
2. A question and answer session to address questions or concerns on the
part of the BCT will be conducted via telephone, if needed.
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Deliverables. The deliverables for this task will be a question and answer session
(if needed), and draft and final Business Case Technical Memoranda.
Task 7 - Project Results Workshop and Final Report
Objectives. Review each Business Case Analysis with the BCT, address final
questions, and identify any revisions needed prior to generating the Final
Report.
Ac/id/fez
1. The Engineer will prepare materials and exhibits, and will facilitate a
one-day Project Resul ts Workshop.
2. The Business Case Analysis for each project will be presented and
reviewed with the BCT.
3. Modifications to the Business Cases resulting from discussions and
observations during the workshop will be noted and incorporated into
the Final Report.
Ddiverab/e~. The deliverable for this task, and Final Deliverable for this project,
will be a project Business Case Evaluation Final Report.
Part 2 - Prioritized Capital Improvement Pro~.t,ram
Task 1 - Collection of Project Information
Objectives. Collect, organize and review available information provided by
Utilities Department staff.
~lclivitiec.
1. Engineer will collect, review and compile existing information pertaining
to capital projects greater than $500,000 in size from readily available
sources, such as studies, prelin'finary engineering reports, master plans,
design basis reports, concept designs, etc.
2. Utilities Department staff will provide this information. Materials
collected under this Task will be used to facilitate Task 2.
De/iverab/ec. The deliverable for this task will be draft and final candidate
project lists, including project names, project objectives and forecast capital
costs.
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Task 2 - Prioritization Criteria & Workshop No. 1
Objectives. Develop and achieve consensus on a preliminary list of project
prioritization criteria, along with a "rating system" that will be applied to said
criteria to facilitate the decision-making process.
Activitiec.
1. Engineer will develop a preliminary list of prioritizafion criteria, such as
regulatory compliance, reliability, cost of service, water and wastewater
quality and quantity, safety and stakeholder confidence, and a rating
system in order to apply the criteria.
2. Engineer will prepare materials and exhibits, and will facilitate a half-day
workshop with City staff t~, review and refine the selection criteria aod'
rating system, and to finalize the candidate project list.
Deliverables: The deliverables for this task will be draft and final Summary
Memoranda of the workshop discussions, a refined criteria, rating system, and
final candidate project list.
Task 3 - Analyze Available Project Information
Objectives: Generate a preliminary "rating" for each candidate project.
Activitiw.
1. Engineer will review and analyze available information for the candidate
projects relative to the prioritization criteria established under Task 2,
above.
2. This information will be used by the Engineer to prepare a preliminary
rating for each candidate project.
3. Gaps in available information will be identified and appropriate City
staff will be requested to fill said gaps.
Deliverablec. The deliverables for this task will be a preliminary list rating the
projects and a list of information gaps.
Task 4 - Preliminary Prioritization & Workshop No. 2
Objectives: Achieve consensus regarding the "rating" for each project, relative to
the established prioritization criteria (from Task 2).
~ictivitiw.
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Engineer will prepare materials and exhibits, and will facilitate a half-day
workshop to review and confirm the preliminary prioritization list with
City staff. The goal of the workshop will be to reach a consensus view
of the rating for each project relative to the prioritization criteria.
Business Case Evaluation tools developed under earlier Tasks in this
project will be used here.
Deliverables. The deliverables for this task will be draft and final Summary
Memoranda of the workshop discussions and a final list of prioritized projects.
Task 5 - Draft CIP
Objec/ive~. Develop a Draft CIP. listing projects identified, using the Business
Case Evaluation process and a Long-Range Conceptual Asset Plan Template.
Aciivitiw.
1. Engineer will use the prioritized list of projects to prepare a draft 7 to
1 O-year CIP. Project sequencing and relationships will be considered in
developing the program. In addition, affordability, reasonable
implementation schedules and logistical issues will be considered.
2. Engineer will develop a Long-Range Capital Asset Plan Template, which
will provide the context for the CIP and a roadmap for moving forward.
The Conceptual Asset Plan Template will identify the relationship
between the CIP, an asset management program and a condition
assessment program as a means toward sustainable infrastructure.
Preliminary implementation schedules and first order budgets for major
program components will be included.
Deliverables. The deliverable for this task will be a draft 7 to 10-year CIP and a
Draft Long-Range Conceptual Asset Plan Template.
Task 6 - Draft CIP Review - Workshop No. 3
Objeclive~. Review the Draft CIP prepared under Task 5, address comments
and/or concerns and achieve consensus on the sequence and scheduling of the
projects.
~4ctivitiec.
1. Engineer will prepare material and exhibits, and will facilitate a half-day
workshop with City staff to review the draft CIP.
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City staff will have an opportunity to ask questions and offer comments
concerning the project, and will be asked to reach consensus regarding
the sequence and timing of projects in the CIP.
De/iverablw. The deliverables for this task will be draft and final a Summary
Memoranda of the workshop discussions.
Task 7 - Final CIP and Presentation
Objectivw. Develop and present the Final 7 to 10-year CIP and Conceptual
Asset Plan Template for the Uflities Department.
~lctivitie~.
1. Based on the input received in Workshop No. 3, Engineer will prepare
the final CIP.
2. Engineer will present the final CIP to City Manager and Commission.
Ddiverablw. The deliverables for this task will be the Final 7 to 1 O-tear CIP,
Final Long-Range Conceptual Asset Plan Template, and the presentations to
the City Manager and City Commission.
Contract Reference
The subject Task Order will be performed in accordance with terms and
conditions contained in the Brown and Caldwell Professional Consulting
Services Agreement of November 18, 2003.
Additional Services
Additional services requested by the City may be prov/ded under an
amendment to this Task Order, or under separate Task Order.
Obligations of the City
The City will provide information and documentation pertinent to this project
within fifteen (15) calendar days from request by Brown and Caldwell.
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It is also anticipated that the review process for draft documents submitted for this project
will be completed within fifteen (15) calendar days.
Schedule
It is anticipated that the effort for Part lwill be concluded within one hundred
twenty (120) days after receipt of a Notice to Proceed (NTP) and Part2will be
concluded within one hundred sixty (160) days after a NTP. Individual Tasks
will be completed within the stated number of days following the NTP as
follows:
Part 1 - BCE
Task 1 - Kick-Off Meeung i 5 days
Task 2 - Business Case Template 20 days
Task 3 - Information Request 20 days
Task 4 - Project Alternatives Workshop 45 days
Task 5 - Life Cycle Cost Analysis 75 days
Task 6 - Net Present Value Analysis 100 days
Task 7 - Results Workshop & Report 120 days
Part 2- Prioritized ClP
Task 1 - Project Information Collection 15 days
Task 2 - Prioritization Criteria & Workshop No.1 30 days
Task 3 - Analyze Project Information 60 days
Task 4 - Preliminary Prioritization & Workshop No. 2 90 days
Task 5 - Draft CIP 130 days
Task 6 - Draft CIP Review - Workshop No. 3 140 days
Task 7 - Final CIP 160 days
Compensation
The budgets for each Sub-task and corresponding percent value are as follows:
Part 1- BCE
Task 1 - Kick-OffMeeting
Task 2 - Business Case Template
Task 3 - Information Request and Analysis
Task 4 - Project Alternatives Workshop
Task 5 - Life Cycle Cost Analysis
$ 7,500 (o5%)
$ 5,000 (o3%)
$19,200 (12%)
$33,400 (20%)
$55,400 (34%)
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Task 6 - Net Present Value Analysis
Task 7 - Results Workshop and Report
$t 8,500
$25,600
(11%)
(15%)
Part 1 Total Fees = $164,600
Part 2- PHoritized ClP
Task 1 - Project Information Collection $15,500
Task 2 - Priofitization Criteria & Workshop No. 1 $ 9,500
Task 3 - Analyze Project Information $ 9,800
Task 4 - Preliminary Prioritization & Workshop No. 2 $11,000
Task 5 - Draft CIP $20,800
Task 6 - Draft CIP Review - Workshop No. 3 $ 7,800
Ta~k 7 - Final CIP $13,200
(18%)
(11%)
(11%)
(13%)
(23%)
(09%)
, '-0/,
(1~ ,o)
Part 2 Total Fees = $87,600
Compensation for services rendered under this Task Order No. 3, Part 1 is
based on a Lump Sum Fee of $164,600. Compensation for services rendered
under this Task Order No. 3, Part 2 will be based on a Lump Sum_Fee of
$87,600. The grand total Lump Sum Fee for Task Order No. 3 is $252,200.
Monthly invoices will be based on "percent complete", in accordance with
individual sub-task values listed in this section.
APPROVED BY:
CITY OFf. ACH, FLORIDA
By: _
Kurt Bressner, City Manager
Dated this "~ day of /Y~ (~ ,2005.
SUBMITTED BY:
BROWN ~ELL
Ronald M. h~sh, P.E. ~"
Vice President
Dated this t~'~ day of Att~tff/ ,2005.
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