HomeMy WebLinkAboutResolution 96-339 12/16/1996RESOLUTION NO. 96-339 N.C.5.
1 of the City of Petaluma, California
2
3 APPROVING DETAILED PROPOSAL EVALUATION
4 AND SELECTION METHODOLOGY
5
6 WHEREAS, the City of Petaluma approved Resolution No. 94-157 in June 1994
7 which outlined a methodology for review of proposals for the wastewater facilities
8 project and long range management program;
9
to WHEREAS, the City of Petaluma issued a Request for Proposals for provision of
11 services related to the wastewater facilities project and long range management program
12 in July 1996. The Request for Proposals included a description of the major criteria
13 upon which the proposals were to be evaluated and their respective weights. The RFP
14 also indicated that the weights were preliminary and that final weights would be issued
15 as an addendum to the RFP; and
16
17 WHEREAS, the Citizens' Wastewater Advisory Committee has recommended a
18 proposal evaluation methodology which further expands and defines the methodology
19 adopted under Resolution No. 94-157.
20
21 NOW, THEREFORE, BE IT RESOLVED that the Detailed Proposal Evaluation and
22 Selection Methodology attached herein as Exhibit A is hereby approved and adopted.
23
24 BE IT FURTHER RESOLVED that the Net Present Value analysis will be conducted
25 as described in Exhibit A and that the financial factors and the influent flow and
26 loading projections to be used in the Net Present Value analysis will be derived as
27 described in Exhibit A.
28
29 9814cvallsb/agenda/a:9
Under the power and authority conferred upon this Council by the Cflarter of said City
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the City of Petaluma at a (Regular) (rl8ji5tlt6`~i)t7(S~WFIaI) meeting form
on the ....1.G.Xl.L.._....... day of _......._December .....................-...., 19.`3..6..., by the
following vote: _ _ ..............
City Attorney
AYES: MAGUIRE, HAMILTON, BARLAS, READ, SIiEA, VICE MAYOR STONIPE, MAYOR IIILLIGOSS
NOES: NONE
ABSENT:
~_
ATTEST: . N...yl~,/~C~~GCP~ ... ... ......... ..
Cit Clerk --
CA 10.85
Gblmcil P91a_ _._._
Res No..........96.-3.3.9. N.c.s.
Exhibit A
Petaluma Wastewater Facilites.Project
Detailed Proposal. Evaluation and Selection. Methodology
(ResolutionNo. 96-339N.C: S.)
1.0 Background
1.1 Objectives
-- comply with state law
-- "competitive procedure ... not solely based on price"
-- "evaluated pr'oject's design; capaoity,.financial feasibility, and cost compared..
with other conventional financing methods.,.... project's cost will be equal`to, or
lower than; conventional financing"
-- unbiased, fair'and defensible
-- reflect Cityvalaes for differentevaluation criteria
-- provide flexibility desired by proposers regarding<agreementtennsin base proposals
1.2 Request For Proposals
The June, 1996, Request For Proposals (RFP),distributed to the five short-listed teams
(Proposers) indicateson page 2-7 that the weightsset forth for the major criteria for the
evaluation of proposals are preliminary and final weights would be issued as an
addendum to the RFP. On. September 12, 1996, in re"spouse to comments and questions
from the Proposers, a letter of clarification of the intent of the RFP was 'distributed
concerning the degree to which base proposals must be consistent with the, Drafr
Agreements in order to`be responsive and subject_fo further evaluation on a comparative
basis.
1.3 City Council Resolution
Adopted on June 20, 1994, City Council Resolution No. 94-.157 provides for the
following basic steps in the evaluation of proposals submitted to the City:
City staff to evaluate responsiveness of each-Proposal and responsibility of each
Proposer (r/r).
Page l of 22
i~'e~. R(o- 3~A~1CS
2. If any Proposal does not pass initial r/r evaluation, City staff may waive
deficiency,, request clarification or additional information, ahd7or may
recommend rejection.
3, If rejection of anyLroposa! is recommehded,as a result of the r/r evaluation, City
staff must present a report to the Citizens Wastewater Advisory Committee
(CWAC) for comment and then present-such reportfor action by City Council.
City staff _to submit a report with recommendations (identifying one or more
Proposals-for negotiations or rejecting all) to CWAC for comment.
4. City staff to evaluate; score and rank all Proposals. passing the r/r evaluation
6. City-staff to present report and recommehdations to City Councilfor action.
City staff to undertake negotiations pursuanPto City Council action.
2;0
City Staff Evaluation
$1
2.2
SfaffEvaluation Committee
The City Manager; on' or before November _, 1996, intends to appoint the members, of
City staff to•serve on the Staff Evaluation Committee (SEC): Such SEC will have the
responsibility detegated`to staff under City Council Resolution No. 94-157 to evaluate
all"Proposals received in response to the REP and'to present staff recommendations to
CityCouncil foraction, after review and comment by the CWAC.
Basic ProceduratRules
-Each member of the SEC will evaluate each Proposal under the initial
responsiveness/responsibility review, ahd then will evaluate and score "each Proposal
,passing the initial -.:review against each major criteria, assigned to such member The
individual scores of'each member for each majoreriteria will be aggregated anil then.
divided. by the total number of SEC members assigned to each major criteriaao'yield<an
average score for each Proposal for each ofitlie major criteria. Identical„ pre,formatted
worksheets will be utilized by each memberpfttie SEC for each of the majorcriteria and
their related subcriteria:
The SEC may submit to one or more ofthe Proposers written requests for clarifications
of specificaspects of the Proposal. The SEC will hold periodic meetings to discuss the
contents of the Proposals; including questiohs, the need for clarifications, written
requests to tfie Proposers for clarifications, and. the written responses submitted by the
Proposers; as well as to review and discuss the progress of the evaluatidn process.
Page 2 of-22
~eso. 91D- 339 fJCS
2.3 .Role of Consultants
No consultarif,shall be a,inember~ofdtie=SEC;or.ltave ariy scoring;or voting, rights on~the
SEC. To the extent, requested by She SEC, the :consultants may provide technical
assistance to the SEC in its review and'eyaluation of tfie Proposals.
3.0 Responsiveness and Responsibility Review
Each question to be answered Yes;or No. If any question is answered No; then the Proposal may.
be rejected:
3.1 Responsiveness
-- Does the Proposal substantially conform witfi tfie format and content reg6irements of
the RFP?
-- Does theProposal,contain any significanteleiiient which is not demonstrated. to be
feasible or which;is,ottierwise unacceptable tothe,City?
-- Doesafie Proposal include the Proposal Deposif as"required by the RFP?
-- Does the Base Proposal include the fundamental elements set forth in the September
12, 1996;.LetterofClarifcation of Intentbf RFP?.
1. New-Treatment Facilities
2. Existing Treatment Facilities
3. Fixed prices
4. External indexes for adjustments of fixed`prices
5. City reviews
6. Existing Facilities and,Publio Works Projects
7. Local Government Privatization Act
8. Public Utilities Code
32 Technical Capabilities
-- Does the Proposal demonstrate that Proposer will have sufficient personnel available
'iii the followingteclinical`areas
-- design,
-- permitting;.
-- construction,..
-- construction;management,
-- operations°and maintenance?
-- .Does the. Proposal demonstrate that the "proposed process for the New Treatment
Facilities has been,proven to be reliable and is capable of consistently meeting effluent.
performance criteria?
~eso . ~l to -339 ~ cS
Page 3 of 22
3.3 Financial Capabilities
=- Doesthe Proposal contain°a.commitment letter (or letters)"from a surety'(or sureties)
listed.-as acceptafile by the'most recehfpublication'by the U.S. Department of Treasury
of Circular-570 ("Commpanies Holding Certificates of Authority as Acceptable Su"reties
on Federal Bonds ai+d' as Acceptable Reinsuring Companies") indicating willingness to
provide forthe Proposer:
=- A Project Development Bond in ap amount equal, to Proposer'.s
estimate oftfie4otal capital cost for the New TreatmenfFacilities?
-- A Service Bond in an amount equal to•Proposer's estimate of Service
Fee. for first year based on Proposer's pricing terms and the City
estimate ofinfluent loadings for the first year of plant operations (see
Attachment B)?
-- Does the Proposal contain satisfactory evidence of the ability of the Proposer fo
provide or arrange-for the capital and other funds necessary to finance the design and
construction of the New Treatment Facilities?
-- Do the rfinancial. statements included in 4he Proposal indicate the ]?ioposer's
(including proposed ,guarantors or obligors) compliance with the following minimum
financial standards:
-- Equity;ih excess of$ 50.0million,.as•ofthe ProposaLDue.Date or; if
;financial information is unavailable as of'the Proposal Due Date, then
such;other date as closeas possifile to the Proposal Due Date?
- Positive Return on Equity for two of the most recent three fiscal
years; orifthis is not the case, isa satisfactory explanation provided?
-a Liquidity in excess of 1:1.8, as measured by current assets divided by
current liabilities reported on the most recent audited balance sheet
available to the Proposer or, if this is not the case, is a satisfactory
explanation provided?
4:0 Comparative Evaluation
4.1, Major Criteria and Weights
Proposals passing the r/r review will undergo a rigorous comparative evaluation. The
comparative evaluation.will comprise two criteria: 1)Non-Price and, 2) Price. The Price
evaluation will be based on a'net present value calculation: The Non-Price evaluation
wilLcomprise evaluating five (5) major Non-Price criteria. The £ve major Non-Price
criteria and their associated weights are:
~esa. 91n-33~i ` 0.1cS
Page 4 of 22
Maximum
Non-Price-Criteria Po'infs,
Technical Approach.. 300 (30%)
Financing Approach 100 (10%)
FinanciaLCapabilities 150 (d5%)
Company/SfaffQualifications 250 (25%)
Agreement Terms 200 (20%)
Total: 1,000
4.2
Each of the above "`NornPrice" major criteria includes several subcriteria, as further
described below in Sections 43 through 4.7.
Scoring, Ranking and Selection
4,211 Scoring and Ranking
The Proposals will be scored and ranked on'the basis of how each. P-roposal
compares to the others for each of the two~criferia (Price and Non-Price).
The Price criterion will be evaluated; on the basis of a net present value:
calculation_`asseY_forth in Subsection 4:8_ The.other major. criteria,,referred to as
the Non-Price criteria will be evaluated on ,the basis of several sulicriteria and
factors as seYforth;under Subsections 4.`3 through 4:7. Individual points°will be!
awarded for each subcriteria included :irr four of the Non=Price criteria.
(Technical Approach, Financing Approach, Financing Capabilities and
Company/$taffQualifications) as follows:.
IVlost Advantageous Proposal(s) max. points
Advantageous Proposal(s) 75% of max. points
Adequate.or Average Proposal(s) 50% of max. points
Unacceptable Proposal(s) zero points
Upon completing;the;evaluation for'eachof`the major criteria, one ranking will
be'presented to reflect the combined results of the "Non-Price Criteria" and
v , >__
another ranking will be;presented toereflecYthe results of the "Pricing" criterion.
The Non-Pnce`Griteria'ranking will be fi;om,liighest to lowesf overallpoinbscore
and the Price ranking,will be>froin lowest+to highestnet present value of the total
costs to the'City.:
4.2.2 Selection
One or more Proposal(s)iwill:be selected:'for the purpose of contracYnegotiations
(after review and comment'by the CWAC,of the SEC's recommendations and
afer approval by City Coupcil) based'onrthe City's determination, in its sole and
exclusive discretion, of the most advantageous combination of Non-Price and
Page 5 of22
~e.sa. ~ to - 33 1' nXtS
Price considerations; If the same,Proposal is ranked first in.bdthahe Non-Price
and Price ::rankings, then only such Proposal will be.recommended by the SEC
for contract, negotiations, unless a decision is made°to recommend the rejection
of .all Proposals. Alower-ranked Proposal will be considered for. confract
negotiations only after negotiations' with such first-ranked Proposer ..are
concluded, in the City's sole discretion, without reaching _agreement on final
contract. terms. If no single Proposer is ranked first on both the Non-Price
criteria and the-Price criterion, then either one`or more than one Proposer may be
recommended for contract negotiations.
4.3 Technical Approach
4.3.1 PurposebfCriterion
-- to assess the relative merits of the proposed approach to the technical
activities and related performance requirements
4.3.2 WastewaterPrivatization Services
4.3.2.1 Overall Quality
How well is the technical approach presented in terms of
comprehensiveness, understanding,,level of detail and substance?
4.3.2.2 Interim {Services
(a) Transition Plan -- What level of clarity, comprehensiveness and
effectiveness is demonstrated?
(l) O&Ivl of Existing Treatment Facilities -- How complete an
understanding of the projects requirements is demonstrated in the
proposed scope of work? How clearlyare the Proposer's responsibilities
defined and how well do they"reflecfahe City's needs?
(c) Industrial Pretreatment and Pollution Prevention Programs, -- How
clearly defined and comprehensive. are the proposed programs? How.
well does the scope of work reflect an.understanding of the'programs?'
4.3:2.3 New Treatment Facilities
The following factors (and possibly .others) will be considered to
evaluate the degree to ,which each Proposal demonstrates the benefits of
the proposed treatment process and the ability of the New Treatment
Facilitiesio meet the objectives=and requirements of the project:
-- reliability
-- flexibility
-- regulatory compliance program
Page 6 of22.
i~eso:. Q ~°- 33g t~c:S
-- environmental`sensitivity
-- energy conservation,
-- biosolids irianagament
-- aesthetic/arcliitectutal
-- plan fornew utilities
-- permitting
-- chemical usage
-- performance test plan
-- design development
-- plant process control system
-- access to site
-- construction
4.3.2.4 Schedule
How comprehensive is tfie. scfiedule for permitting, design and
construction of .the New Treatment:: Facilities? How realistic is the
scfiedule? Is-the critical patfi clearly defined? How respohsiva is the
schedule to the need to bring the New Treatment Facilities into
operation within the shortest possible time frame?
43.2:5 Long Term Services
How :clear, comptehensive 'and effective is the transition plan? How
.effectively do the standard operating procedures account for different
operating conditions? What level. of reliability and flexibility is
demonstrated with respect to the long-term operation and maintenance
of[he New Treatment Facilities?
43.3 Public Works Services
4.33.1 Design;anil Construction ManageritenCServices
The-following factor{and possibly others) will be considered to evaluate '~
the.degtee,to which each Ptoposal,demonstrates the benefits of the
proposed approach to .the design and construction management services
required for the Ptiblio'Works Projects and the ability of the Proposer to
meet the objectives and?requirements>of theproject:
(a) Scopepf Work --.what level of understanding of the requirements for
the Public Work:Projebts is demonstrated in the proposed scope of
work?
433.2 O&M•ofExistii~g~Eacilities
-- How complete an-.unilerstandiiig of the project's requirements is
demonstrated in the ,proposed scope of work? How clearly .are the
Proposer's responsibilities. defined and how well do they reflect the
City's needs? ,
Page 7 of 22
o. °Iln 33~i' tJc.S
4;3.4 Maximum Points for Subcrite~ia
The maximum point score for each subcriteria is as follows:
Subcritetia Weight
Qverall Quality I5
Interim Services 25
New Treatment Facilities 130
Schedule 30
Long Term Services 50
Design/Construction Management Services 25
O&M of Existing Facilities 25
'T`otal:
300
The total of 300 is based on a relative weight of 30% for Technical Approach
per Section 4.1
4.4 .Financing Approach
4:4.1 Purpose of Criterion
-- to assess the relative merits of the proposed fihancing approach relative to the Draft
Wastewater Privatization Service Agreement
4.4.2 Subcriteria
The debt, equity and guarantee components ofihe proposed financing-approach
will each be'evaluated in terms of:
4.4.2.1 Implementation of Construction Stage:
(a) Overall Quality
-- Is the financing approach presented comprehensively,
including all elements necessary to demonstrate timely funding,
guarantees and repayment over the full term of the agreement?
-- Is the financing approach explained in sufficient detail to
provide adequate understanding ofall elements?
-- Does the description of tfie elements of the financing
approach accurately reflect important conditions, circumstances
and policy elements of the RFP?
(b) Risks
-- To what extent does the fhancing approach require approvals
not directly guaranteed by the terms of the Proposal?
Page 8 of 22
~eSO. 9~ - 33~ Nc-S
-_ Totwhat ex_ tent is the.viability of the financing approach aT its
assumptions affected by market conditions or other
uncontrollable risk,conditions? '
r- How complex is the financing approach (number-of parties,.
likelihood of eachparticipating)?
-- To what extent; `does', ttie financing approach appear to
?negatively impact the fin„ancal strength of the P,roposer,?
-- To what extent does the Proposal contain provisions for
mitigation of the risk elements'of the financing approach (e.g.,
..interest rate changes-prior to the closing of financing)?
(c) Timing/Schedule
-- Does the Proposal include.a+detailed schedule of all events
necessary to accomplish all,elemenfs of the financing:approacfi?
-- Is the schedule realistic; with appropriate cushions. i^ timing
and:fall back plans for unachieved deadlineswhere;appropriate?
-- Are the steps requitedifor'financing well integrated;,and is4he
financing schedule itself well integrated with tfie temainder of
project scheduling?
-- To what extent does the schedule include any steps required.
of the City and to whatdegree.are these acceptable'and feasible?
(d) Assumptions
s- Does the financing approach contain a complete and detailed
description of all assumptions?
-- Are-the assumptions realistic. with respect to each other as
well as to external circumstances, and qualified where
necessary?
-- Do the assumptions, wfiere applicable, accurately reflect
economic and financial market conditions and perspectives as
well as other factors .and circumstances affecting timely
implementation of the financing approach?
(e) Flezifiility
-- To what extent. does the financing approach contain
alternative approaches fo~-eacfi;component?
-- Does the Proposal provide for the possibility oftax-exempt
PtivatBrActivity Bonds, if available?
4.4.2.2 Implementation°of;Ope~ations Stage
(a) Risks
--: To'whatextenYate sub"sequent events required for the success
of the :fnancing; approacG (e.g., rollover of debt, balloon
payments; substitution of guaranty parties, conversion of debt
terms; etc:)?`
-- Ifiany subsequent eyentsare;,required, to what exteht are there
any questions or issues with respect to the factors described
above regarding Timing,ASsumptions and Flexibility?
Page 9 of 22 $E54: 9 6- 3 3 g N C S
-- To'what degtee does the legal structure of the Proposer or t_he
structure of the financing create. uncertainty' that the. parties to
tfie financing can; remain together for the duration of them
commitment?
(b)Cohtrol/Operation Impacts
-- To what eztenf can any critical proposed element of the.
project operation ,be adversely affected by the financing-
approach after operations begin (e.g., proposed capital
replacement and reserve'ftinding)?
4.4.2.3. Relatiorito Fixed Prices
(a) Risks
-- Ate there any elementsof'the capital cost component of the
pricing proposal. that are not fixed or iitfienvise guaranteed
relative to the terms and provisions of the financing-approach?
-- To what extent- is tfie= Proposal vulnerable fo subsequent'
events which are necessary to the financing approach?-
4:43 Maximum Points for Subcriteria
The maximum pointscore for each subcriterion is as follows:
Subcriteria
Weight
Implementation of ConstructiomStage 50
Implementation of Operations Stage 20
Relatio_n.to Fixed Prices 30
Total':' l00
The total'of'] OO;is based on a relative weightof I0% for Financing Approach
perSection 4.1
4.5 Financial Capabilities
4.5.1 Purpose of Criterion
-- to assess the:~elative fihaiioiaf strength of;the Proposers, including guarantors
and obligors ("Proposer"'includes guarantorsand obligors) relative to the Draft
WastewateYPtivatization Service.Agreement
4.-5':2 Subcriteria
-- all financial,rafio',calculation"s inclri8ad below'are,to be based on book values,
but consideration :may be„given to'~riar_ket, values in cases where significant.
deviation exists
YtES(D. g 6- 3 3 g N C S
.Page IO of 22 -
4:5.2.1 Ratings
(a) Credit Rating
-- What are the S&P and/or,Moody's credit ratings (or other. outside
credit evaluation that may be;:available) curtently and for the past three
fiscal years?
(b) BankReferences
-- Whatis the quality of the responses obtained from bank references?
4.5.2.2 Size
(a) Tangible Net Worth
-- What. is the value of tangible net worth currently and for the past
thtee~fiscal years?
-- Wfiatis the impact of the ptoposed.financing approach on equity?
(b) .Asset Base
-- What are the asset base values currently and for the pastth~ee fiscal
years?
(c) Revenue Base
-- What levels of gross revenue have been. generated over the most
recentquarters and during the prior most recent three fiscal years?
4.5.2.3 Profitability/Cash Flow
(a) Opetating/Net Income
-:- What levels of operating income and net income have been earned
over the most recent quarters. and dining the prior most recent three
fiscal' years?
(b) Return on Assets/Equity
-- What returns pn assets and on equity are indicated by the balance
sheets=and ihcome<statemerits forthe~most recent quarters and the most
recent. three: prior ;fiscal ,years, calculated on the basis of net. income
divided by total,assets and by shareholder's equity?
RESO.96-339NCS
Page 11 of 22
(c) Profit Margins.
-- What profit marginsl(calculatadbn the'basis of net income divided by
revenue) are indicated by the '.income statements for the most' recent
quaftars and the most recentthree fiscal years?
(d). Cash Flow
-- What cash flow positions are iiidicated.by the income statements for
the most recent quarters and the most recent three fiscal years,
calculated. as (net income-+ depreciation + deferred taxes) divided by
Tong-term debt?
-- Whafis the impact of the proposed,financing approach on cash flow?
4.5.2.4 Liquidity/Leverage
(a) ,Liquidity
-- Wfiat;liquidity values do the balance sheets for the most recent
quarters and the mostrecent three prior fiscal years reflect, calculated o0
the basisof current assetsdivided by current liabilities?
(b) Leverage
-- WhaY;leverage values are indicatedbythe balance sheets for the most
recentguarters and the most recent three prior fiscal years, calculated on
the basis of total long-term debtdivided 6y equity?
-- Whaf is,the impact of the proposed financing approach on leverage?
4.5:2.5 Trends/Misc.
(a) General
-- What trends may be indicated 6y'tfie above financial indicatots in
termsof growth; profitability andfinancial risk?
(b)' Material,Adverse Conditions
-- What particular areas of concern; such as pending litigation or past
bankruptcy filings, .may be indicated- with respect to the on-going
financial;strength of the Proposer?
(c) Contingent Liabilities
-- Do any of the contingent liabilities`,present acause for concern as to
the on-going financial strength of the Proposer and how do the
contingent liabilities compare to'.tfie financial indicators?
RED®.96-339NCS
Page 12 of22
45.3 Maximum Points for,Subcriteria`
The maximum point scor8 foreachsubcriterion>is as follows:
Subcriteria Weight
Ratings 30
Size 30
Profitability/Cash Flow 30
Liquidity/Leverage 30
Trerids/N1 isc. 30
Total: I50
The total of 150 is based on a relative weight of`1'S% for Financial Capabilities
per Section 4:1.
4.6 Company and';StaffQualifications
4.6.1. Purpose'ofCriterion
-- to assess4he relative capabilities andanticipaYed effectiveness of the proposed
company and the proposed staff
4:6.2 Subcriteria
4:6[2.1 Overal I'Qual ity
-- .How clearly and comprehensivelydoes the Proposal present the legal
sfructure and the relevanT capabilities and performance history of'the
Proposetiand the proposed staff?
4.6:2.2 Legal Structure
-- How effective is the proposed, egal structure and organization of the
Proposer,likely to bein.managing:and carrying out the proposed services
and, related obligations of the Company and in othettivise meeting the
City's needs?
-- Are there any aspects of the relationships reflected in the proposed
IegaLstructure that may raise coricernsthat a party or parties may lack
appropriate;ipcentives'or the ability to fulfill their obligations tliroughout
the.entira term of the agreement.
4.6.2.3 Compliance'History
--- How dothe records of compliance history„as perAttachment O to the
RFP, compare?
Page 13 of 22 R~S~1.9.6 - 3 3 9 N C S
4.6.2.4 Firm Qualifications
4.6.2.4.1 Wastewater Privatization Services
-- Interim Services: How does the Proposer's experience aiid
demonstrated capabilities relate to the scope of work associated
with operation and maintenance of the Existing Treatment
Facilities and with implementation of the Industrial Pretreatment
Program and Pollution Prevention Programs? To what degree
do the results of contacts with client references support or
contradict the qualifications set forth in the Proposal or
otherwise provide support for an expectation of successful
performance by the Proposer?
-- Project Development How does the Proposer's experience
and demonstrated capabilities relate to the scope of work
associated with the permitting, design and constructioq of the
New Treatment. Facilities? To what degree do the results of
contacts with client references support or contradict the
qualifications set forth in the Proposal or otherwise provide.
support for an expectation of successful performance by the
Proposer? Inspect similarfacilities designed and constructed by
Proposer.
-- Long Term Services: How does the Proposer's experience
and demonstrated capabilities relate to the scope of work
associated with operation and maintenance of the New
Treatment Facilities and with implementation of the Industrial
Pretreatment Program,and.Pollution Prevention Programs? To
what degree do the results' of contacts with client references
support or contradict the qualifications set forth in the Proposal
or otherwise provide support. for an expectation. of successful
performance by the Proposer? Inspect similar facilities
currently operated and maintained by Proposer.
4.6,2.4.2 Public Works Services
-- How does the Proposer's experience and demonstrated
capabilities,relate tothe`scope of work associated with operation
and.maihtenance oftfie Existing Facilities? To what degree do
the results of contacts with client references support or
contradict. the 'qualifications. set forth in the Proposal or
otherwise provide support for an expectation of successful
performance by th8 Proposer?
-- How does the Proposer's experience and demonstrated
capabilities relate to the scope of work associated with the
design and. construction management of the Public Works
Projects? To what degree do the results of contacts with client
Page 14 of 22 ~~~ ~ ~j - ~ 3 ~ ~ C
references support+or.contradict the qualifications setforth in the.
Proposal or otherwise provide support for,.. an expectation of
successful performance,liy the Proposer?
4:6.2.5. Earsonoel Qualifications
4i6i2.5.1 Wastewater Privatization Services
-- Interim Services: How does the experience and demonstrated
capabilities of key management, operations and maintenance
personnel relate to the scope of work associated with the
operation and maintenance of,the Existing Treatment Facilities
and with implementation of :Industrial Pretreatment and
Pollution Prevention Programs? How effective and what
benefits are associated with the proposed approach of the
Proposer to supervising and managing such .operations
personnel?
-- Project Development: How does the experience. and
demonstrated capabilities of key design and construction
personnel relate to the scope of work associated 'with the
permitting design, and construction of the New Treatment
Facilities? How effective and what benefits are associated witfi
the proposed approach of tfie Proposer to supervising and
managing such permitting; design and construction personnel?
-- Long Term. Services: How does the; experience and
demonstrated capabilities of key operations and maintenance
personnel relate to .the scope of work associated. with the
operation and maintenance of the New Treatment Facilities^and
with implementation of Industrial Pretreatment and Pollution
Prevention Programs? How effective and what benefits are
associated with Elie, proposed approach' of the Proposer to
supervising and managing_such operations personnel?
-- Management, Personnel. How does the experience :and
demonstrated capabilities of the designated management
personnel relate to the cope of work associated with the Interim
Services, Project Developmem,and Long-Term Services? To
what level~will;the project director be committed to the project?
What,. !if ~any,a was -the management personnel's level of
involvement relative'to 'any affirmative answers, to Attachment
03
4:6:2.5.2 . Puli l ic`W orks Services
-- How. does. the experience and demonstrated capabilities of
key''`managemeht, operations and maintenance personnel relate
to the 'scope of work associated with the .operation and
Page 1S of22 RES®.,g 6- 3 3 9 N C~
maintenance of the Existing Facilities? How effective and what
benefits are associated .with the proposed approach of the
Proposei to supervising and managing such operations
personnel?
-- How does the experience and demonstrated capabilities of
key design and construction management personnel. relate to the
scope of work associated with the design and construction df the
Public Works Projects? How effective and what benefits: are
associated with the proposed approach of the Proposer to
supervising and managingsuch personnel?
4.6.2.6 Allocation of Resources
-- Local Resources: To what degree are local (Bay Area) resources,
such as suppliers, service providers, subcontractors and labor,
incorporated into the Proposal?
-- Depth of Resources: How extensive are the relevant key technical
resources dimonstrated to be available to Proposer for carrying out 'its
obligations for this project?
4.6.3
Maximum Points for Subcriteria
The maximum points available for each subcriterion is as follows:
Subcriteria Weieht
Overall Quality 15
Legal Structure 55
Compliance History 15
Firm Qualifications 75
Personnel Qualifications 75
Allocation of Resources 15
Total: 250
The total of 250 is based on a relative weight of 2$% for Company and Staff
Qualifications per Section 4.1
4.7 Agreement Terms
4.7.1 Purpose of Criterion
-- to assess the relative degree to which proposed variations depart on a
substantive basis from the terms of the Agreements
Page 16 of 22 RES®. g G- 3 3 9 N G S
-4.7:2 Subcriteria
4.7.2.1 Force Majeure Definition
-- To what. extent do tfie proposed changes expand the 'definition of
Force Majeure?
4.7:2.2 Force Majeure Impacts
-- How do tfie:proposed termsfor addressing the conditions arising from
a ForcelMajeure event increase the level of risk assumed by the City?
4.7.2:3 Existing Treatment Facilities (WP,S'A, Section 3.2)
-- In wfiich respects do the 'proposed changes reduce the ProPoser's
responsibilities for operation and'-maintenance of the Existing Treatment
Facilities prior to the Commencement Date?
4.7.2.4 Project Schedule (WPSA, Sections 4:2 and 4.10)
-- What delay risks for completion of'the New Treatment: Facilities
would.be shifted to the City asa result of the proposed changes?
4.7,2.5 Project Acceptance (WPSA, Section 4.9)
-- To what extent are the proposed changes adverse to the. provisions
relati'ngao-Project Acceptance?
4.7.2.6 New Treatment Services (WPSA, Sections 5.2 and 5.3)
-- In which respects do tfie proposed changes reduce>the Proposer's
responsibilities or otherwise modify the provisions concerning; the New
Treatm ent Eac i I hies?
4.7.2:7 .Service Fee (WPSA, Section:5.5)
-- How closely does the proposed formula approximate the~$ervice Fee
formula, and what are the risks; benefits and disadvantages of any
variationsproposed;to;the~formula and/or adjustment mechanisms?
4.7.2:8 Modifications (WPSA, Section.7.0)
-- What variations,;are! proposed which may be adverse to the City's
rights concerning modfi'catons;to•the prdjecforthe services?
4.].2.9 Insurapce; Bond`s and7ndemnificatioi9{WPSA, Section 8.0)
Page 17 of 22 RESO.9 ~- 3 3 9 N C S
-- How do the proposed variations. adversely affect .thee, protections
provided to !the City by the provisions concerning. insurance; bonds
and/or indemnification?
4.7.2.10 Ti;i`mination Fot Convenience (WPSA, Section 9.0)
-- In whatiways do the proposed variations reduce the rightsiif the City
with respect. o its abilityto terminate the agreemenf for convenience?
4.7.2.1:1 Ground'Lease
-- To what extent does the,Proposal include proposed variationsonahe
terms of fie Draft Ground LeasethaYadvetsely affect,the lessor rights of
the City?
4.7.2.12 Other
-- To-what extent do the proposed variations to the Drafr. Wastewater'
Privatization .Service Agreement, other than those listed above;
materiallyand°adversely affect the rights'of the City?
4.7.3 Basis of Scoffing
Detailed worksheets will be utilized'by each member of the SEC incorporating
the above questions"in order to evaluate and compare each Proposal's variations
to the Drafr Wastewater Privatization Service Agreement and Drafr Ground
Lease. Specific maximum point scores will nobaie utilized for each subcriteria.
The assignment. of points for the. Agreement Terms major criterion, up to the
maximum amount of 200, will be based on an overall assessment of the
proposed variations in the terms of the.Draft Agreements.
48 Pricing
°4:8.1 Total City Costs
The Pricigg'terms wilt be evaluated 6ytaking into account-the total overall costs
anticipated to be 'incurred by the City over a 30-year operating period in
connection witfi'"tfietbase proposal Tfie proposed O & M Fee, Service Fee and
Interim Service Fee amounts will be subject to ~a net present value analysis as
described im Subsection .4.8.2 below. [n addition, the impacT of the base
proposal on other costs'tfiaFwill be incurred by tfie-City, such as,the costs for
new effluent conveyance and storage facilities, will be evaluated also on a net
present value basis, as described in Subsection 4.8.3 below. Rankings of the
Proposals;:for purposes of the Pricing,criterion:will be based on the total overall
costsanticipated to be incurred by the City and as'reflected by the composite net
ptesenfvalue based on Subsections 4.8:2 and 4:8:3.
Yt~SO.96-339NCS
Page 18 of 22
4.8.2 Net Present Value'Calculation
The Net Present Value (NPV) of ilia O, & M Fee, Interim Service. Fee and"
Service Fee payments during the Initial Term (i.e., 30 yews after 4fie
Commencement- Date) will be calculated utilizing the proposed pricing terms
included in each .base proposal and the City's assumptions as to future influent.
loadings (see Attachment A). The Expansion Price, Teriniriation For
Cdtiveriiance :Payments and IPP Credits under the , Draft Wastewater
Privatization Service Agreement, and any alternatives to the base proposal are
not to be included' in the NPV ca{culation, Such proposed amounts; and
alternatives to the base proposal will, however, be utilized in contract:
negotiations. '
The NPV wil(lie calculated as follows:
Tfie'following price components will be included:
-= O & M Fee.
-- InteFiin.Seivice Fee
-- Service Fee
Tfie: payments by the City relative: to the O&M Fee .will' be calculated
over,a 5-year period starting on ftie assumed O&M start=up date (See
No. ¢ below . The a ments b thg City relative to the Interim Service
PY Y
Fee will 6e calculated on the assumed O & M start-update and ending
on the assumed EommencementDate (see .no. 5 below). Payments
relative to .the Service Fee will be-calculated over a30 yeaz period.(the
initial,'term) starting on the as§iimed Commencement Date and using a
baseline projection of assumed Influent flow and loadings prepared by.
the City for such 30-year period (see:Attachment A).
If transfer to the City of ownership of the New: Treatment Facilities at
the end of the initial 30-year operating period would require a payment
by the City'("Transfer Price"), then~an estimated value for such Transfer
PriceJ.in.year 30 will be added to the NPV of the City payments. The
estimated value will be based on'the proposed method ,of setting°the
Transfer Price: If a fair market value basis is proposed as the Transfer
Price, then its eStiinated value shall be equal to fifteen percent-(IS%) of
the Proposers.capital cost of`the New Treatment Facilities with such
capital cost amountadjusted,from the assumed Commencement Date to
the'year 30'by [he'annual inflation,factoCOffnur percent (4%).
4. If owner§fiip;oftfie New; TteatmehtFacilities would be transferred to the
City at the eiid of'the, Initial'Term without any payment to be made by
the City'("Residual'Value"),#hen the anticipated value of the facilities at
that time: will be, deducted ftom> the NPV of the City payments. Such
Residual Value will'be~calculated:asthe'amount equal to fifteen percent
(15%) of'the Proposer's capital: cost and adjusted from the assumed
Page 19 of 22 1$E~®: 9 6- 3 3 9 N C S
Commencement Date to .the year 30 by the annual inflation factor of
four percent (4%).
5. Followingmilestone dates areassumed for NPV calculation.
Description Date
Effective•Date January 1,1998
Starting Date, for O&M of Existing Facilities April 1, 1998
(O&M Fee) and Existing Treatment Facilities
(Interim Service Fee)
Commencement Date for Annual Economic July 1, 1999
Adjustment to O&M Fee (Section 5.2.1 of
Attachment C)
Commencement Date (end of Interim Service July 1, 2000
period)
Commencement of Annual Economic July 1, 2001
Adjustment to Service Fee (Section 5:5.2 of
Attachment A)
Contract for O&M of Existing. Facilities April 1, 2003
Expires
Build-Out 2015/2016
Initial Term Expires July ], 2030
6. The following financial factors will be utilized:
-- annual discount rate equal to six and one-half percent (67z %)
-- CPI Annual Change of (value to be based on review of historical
percentage change in CP/ for Urban Wage Earners and Clerical
Workers for San Franeiseb-Oakland)
-- Energy, Provider Rate Change, of (value Jo be based on review of
historical percentage change in energy indexes)
-- Chemical Index Change of (value to be based on review of historicdl
percentage change in. Wholesale Price Index for Industrial Chemicals
(061))
7. The: following annualized land costs will be included in the NPV for
each base proposal:.
(a) Oxidation Pond Site: $45_ per acre (for the first 5 years after the
Corninencement Date„escalated 2% per year thereafter)
(b) Other Plant Sites: (market price) per acre (for each year
up to the~Commencement Date)
Page 20 of_22 ~tE~O: ~J b- 3 3 9 N C S
$ (market price) per acre (for the first five. years after the
Commehcement Date, escalated 2% per year tfiereafter)
4.8.3 Reclaimed Water Storage and Other Pricing A"djustments
The proposals must include an estimate of the minimum amount of reclaimed
water storage associated with the propdsed wastewater treatment technology. If
this amowu does not vary significantly between proposals, then the estimated
cost implications of the reclaimed water storage reservoirfor each proposal will
not be included in the comparative NPV calculation. However, if the amount of
storage required foreach treatment technology varies such that the relative cost
implications are impacted significantly, then an estimated cost for the reservoir
will be included in the NPV calculation for each base proposal. If, upon review
of the ptoposals, the SEC determines that this calculation is warranted, then it
will be conducted by estimating the construction costs associated with each
proposed design.
If necessary, other adjustments will be.applied to the proposed. pricing foreach
base proposal.as may be necessary to reflecrthe total overall costs to the City
and the NPV calculation methodology set forth under Subsection 4:8.2 will be
applied.
5.0 Negotiations and Conventional Finance Comparison
5.1 Contract Negotiations
Upon the adoption by City Council of a resolution accepting or modifying the
recommendations of the SEC and after comment by the CWAC, the City Manager shall
appoint a contract negotiating team consisting of selected members of City staff with.
appropriate support from the consultants. Such contract negotiating team shall enter'into
good faith negotiations with one or more Proposers, depending on the direction from
City Council, and shall present to the CWAC for review and comment and then to City
Council for action, a recommendation as to the proposed final form of the contractual.
documents for the Wastewater Privatization Services and the Public Works Services.
Suchpegotiations shall continue for such period of time as may be necessary to ,reach
final agreement; between City staff and the Proposer or Proposers as to all terms and
,conditions or until such point that City staff determines in i[s sole discretion that fuRher
negotiations are not likely to lead to final agreements.
5.2 Conventional Finance Comparison
Prior to presenting the final conttact documentation to City Council for action, the City
staff will prepare, in accordance with Section 54253 (b) of The Local Government
Privatization Act of 1995, as amended, ait evaluation of the final project's proposed
design, capacity, financial feasibility and cost compared with other conventional
financing methods. This evaluation and comparison. will be based on the evaluation of
the Proposals conducted by the SEC and upon the information provided by Proposers,
Page 21 of 22
~~~®.9G-339NCS
and',furtherevaluated and adjusted (if deemed"necessary) by City staff, underSubsectioh
3.4.12 of tha RFp.
53 City Council Action
City staff, after completingfinal 'contract negotiations and the evaluation. required by
Section 5.2 above and. after review and comment< by the CWAC, shall, present. the
proposed final contractual documents and thel resalts ofahe Section 5:2 evaluation and
comparison to City Council for action.
MB/mWe:\winword\salmons\waztewffi\evalm[fl. doc
Page 22 of 22 ~tESQD. 9 6- 3 3 9 N C' S
ATTACHMENT A
PROJECTED,INFLUENT FLOW ANDZOADINGS TO
THE NEW TREATIVIENT'FACILITY
dtES®. 9 6- 3 3 9 N C S
ATTACIIMENT.A
PROJECTED.INFIi7ENT EI;OW. AND I:OADING'TO
THE NEW TREATMENT. F`ACII:ITY
INTRODUCTION
As stated in Section 4.8'.2, the Net,Present Value (NPV) of the O&M Fee, Interim Service
Fee„and Service Fee paymerits,during:`the Initial Term will be calculated utilizing the proposed
pricing terms included. m each base proposal and the City's assumptions for future influent
laadmg to the' New Treatment Facility.
The. O.&M Fee .and the Interim Service Fee are based on fixed monthly rates and are not
dependent on plagt flows and loading: Therefore influent projections are- not needed to
calculate-the NPV of each of these fees.
SERVICE.I~E
The,Service Fee is`based on a combination of fixed cost factors and variable cost factors:
Service Fee = FCl +FC2 + FGL + QP + BOD + SS; where:
Fixed. Cost: Factors
FC1 =fixed amount to reflect capital investment (proposal)
FC2 =fixed amount'to reflect operations and maintenance costs (proposal)
FGL =fixed amount to reflect Ground Lease (determined by City)
Variable Cost Factors.
QP =variable charge. for pumping based on the total of (a) the cumulafive
monthly flow times a constant factor of $( j_per.million alg lons and
(b) the Peak.^Fiourly'Flow for the month times a "constant factor of ~( j
per million allons per dam
BOD =variable charge :for processing of'dnfluent Biological Oxygen Demand
(BOD) based on the cumulative monthly loading of Influent'BOD in pounds
times a constant'factor of $( ,).-per pound o'fBOD.
SS =variable charge for processing of Influent Suspended Solids (SS) based on
[he cumulative monthly loading of Influenf.SS.n pounds times a constant factor
of $( Zper aound of SS`.
( )indicates value to be provided in proposals.
In order to calculate the NPV of'the Service Fee, the Cityinust project future values for the
four (4) variablecost factors listed above (BOD, SS, Q and P). These projections will be
based on historical•;plant flows and the Influent Parameters anticipated at Build-Out (refer to
Appendix G of Attachment A). The projections will tie calculated for an annual basis that
coincides with the City's fiscal year, and will be conducted assuming a linear progression from
peso q lo- 339 rJ CS
c:\rCpwwtp\propeval\atlach-a:doc
current and historical flow values to projected values at ,Build-Out of the General Plan
(assumed to occur in 2015/2016).
Projections for BOD and SS at Build-Out have already been conducted and aze provided in
Appendix C of Attachment A. Therefore,, projected values for Q (the cumulative monthly
flow) and P (Peak Hourly Flow for the.month)'must be calculated.
Calculation of Q
The. calculation for the variable Q was conducted for an. annual basis, or the Total Annual
Flow (million gallons). Using historical influent flow data from July 1986 to June 1996, the
average ratio of Annual Average Daily Flow to Average Dry Weather Flow (influent flow for
June, July, August and September) for the referenced timeframe was calculated to be 1.09 (see
Table Al). Table Al does not- include data from 88789 due to meter failure. The average
ratio value of 1.09 was calculated without the high and low historical ratios of 1.37 for the
year 94/95 and 1.03 for the year 86/87, respectively.
Applying the calculated ratio of 1.09 to the Average Dry Weather Flow of 6.7 mgd (see
Appendix C of Attachment A) yields a projected annual average daily flowrate at Build-Out of
7.3'mgd, which yields a total annual flow of 2,665 million gallons.
Calculation of P
(Projected values for Peak Hourly Flow will be based on a review of historical monthly peak
flows.)
Annual Projections
Thee projections for Total Annual Influent BOD, Total Annual Influent SS, Total Annual Flow
(Q)'and Peak Hourly Flowrate (]?) aze shown on Table A2. For example, in 2009/2010 the
projected Total Annual. Influent BOD is 5,694,275 pounds and the projected Total Annual
Flow is 2,443 million gallons. These values will 6e used to determine the NPV of Service Fee
costs for 2009/2010.
Since the NPV calculation assumes that Build-Out of the General Plan is attained in the year
201'5/2016, he projected influent values remain constant after that yeaz. Even though the
influent variables remain constant, the costs will continue to be adjusted based on their
respective indexes. Assuming a Commencement Date of July 2000, the end' of the Initial
Term is,June 2030, which is the last.date shown on Table A2.
USE OF'PROJECTED VALUES
The values provided in Tables Al and A2 are for NPV calculations as described in this
document, and are notvalid for any other purposes.
4~e~p q~-339 nlc.S
c:\rfpwwtplpropeval\attach-e.doc
Table,Al
..Ratio of'Annual Average;Daly, Flow to ADWF
Annual Avg.
AllR'F -.llauy: Flaw Ratlo ofAiiiiiaal
Year (mgd) (mQd). -~AGg:~Flow to ADWF
86/87 4.02 -0:16 ~ - 1.03
R7/R8 4.10 4.35 1106
R9/90 - 4;18 4'.29 1:03
90/91 ~ ~ - 4.11 4:34 1.06
91792 ~ 4.18 ~ 4.47 1:07
92/93 4.58 5.02 1:10
93)94 4.54 _4.91 - ~ 1'.08
94195 4.G9 ~ 6:42 1:37
95/9G 4.40 5'.27 F20
AveragcRxlio bf Annual AvgSFlow/ADWP= 1.09
AnnudLAJg. Daily l~lowafBuild-0ul (mgA)= - 7.30
r
e~ ~~-339 ~~es
Note 1: Projected values for P to De Based on historical peak flows.
Ta61eA2
Net Present Value Calculation -Projected Influent Flow and Loading
Cn
Total Annual Total Annual
Annual Avg. Daily InDuent .4imnal Avg:Deily~ InBoeM Anuual Average Touil'Anmiul Sum otMOnthly.Peak
IrttluentBOD BOD`(BOD) InlluenfSS- SS (SS) Da1ty.Flow Flow (Q).., Hourly Flom (P)
Year'. (Ibs/day)'. _ (Ibs) (Itis/day) Pte) (mSd) (mg) (mgd)'.
95/96 10003 3650917 9718 '3546917 5:27 .1925 (see note l)
96/97 10402 3796871 10082 ' 3679821 5:38 1962
97/98 10802 $942825 - 10446 3812725 5.48 '1999
9R/99 11202 40R8779 Q0810 3945629 5.58 2036
99/00 11602 4234734 11174 4078534 5.68 2073
00/O1 12002 4380688 11538 4211438 5'.J8 21]0
01/02 12402 4526642 11902 . 4344342 5:88 ' 2147
02/03; 12802 4672596 _ 12266 4477246 5'98 ~ 2184
03/04 .13202 4818550 12631 4610150 t 6:08 ' _ 2221'
04/05. .13601 4964304
_. . 12995 4743054 ~ 699 - ,225%
OS/06 14001 8110459 13359 4875959 6:29 2^_95
06/07, _ '14401 52564]3 ~ 13723 5008863 6:39 2332
07lOR _ '14801 5402367 14087 ' 5141767 - 6:49 2369
08/09 1520] 5548321 - 14451 ' 527467E 6;59 2406
09/10 15601 5694275 - 14815 5407575 6:69 2443
10/11 76001 5840229 95109 5540479 G.79 2480
11/12 _ 16401 3986183 15544 5673383 6.89 - 2517
12/13 16800 _. 6132138 15908 5806288 7:00 2534
13/14 -17200 ' 6278092 16272 5939192 8.10 2591
14/15 17600 - 6424046 _ 16636 6072096 -7:20 2628
15/16 -18000 6510000 ]7000 6205000 - T.3 -2665
16/17 ~ 18000 6570000 - 17000 6205000 7:3 '2665 ~~
17/18' 18000 6570000 17000 6205000 7.3 2665
18/19. 48000 6570000 17000 6205000 ' 7:3 2665
19/20 - 18000 6370000 17000 6205000 7:3 .2665
20/21 18000 6570000 _ 17000 .6205000 7:3 .2665
21/22 1R000 6570000 17000 6205000 7:3 - ~~ 2665
22/23 18000 6570000 _ 17000 6205000 7:3 2665
23/24 18000 6570000 17000 6205000 7.3 2665
24/25. 18000 6570000 ~ 17000 6205000 73 -2665
25/26 18000 6570000 17000 6205000 7.3 2665
26/27 18000 6570000 17000 6205000 7:3 2665
27/28 18000 ' 6570000 17000 ~ 6205000 7.3 2665
28/29 18000 6570000 17000 6205000 7.3 2665
29130 18000 6570000 17000 6205000 7.3 2665
Mote 1:Projected values for P to be based on historical peak Flows..