HomeMy WebLinkAbout2024 04 08 Consent 301 - 2024 Financial ForecastCONSENT AGENDA ITEM 301
CITY COMMISSION AGENDA | APRIL 8, 2024 REGULAR MEETING
TITLE
2024 Financial Forecast
SUMMARY
The City has requested services to be provided by Raftelis and Kimley-Horn to update
the financial forecast (financial model) to evaluate the ability of the Utility Department
to fund the five-year capital improvement needs as identified by the City and to meet
certain fiscal criteria to promote a strong utility credit / financial position for the City.
The results of the update will include the level of revenues generated from new
monthly water and wastewater rates, suggested changes associated with the projected
financial position of the City, and capital funding strategies.
FUNDING SOURCE
Consulting (410-36-3600-530314) - $78,005.00
RECOMMENDATION
Staff recommends Commission approve Consent Agenda Item for 2024 Financial
Forecast and authorize the Interim City Manager and City Attorney to prepare and
execute all documents consistent with this agenda item.
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kimley-horn.com 200 S Orange Avenue., Suite 600, Orlando, FL 32801 407-898-1511
March 15, 2024
Bilal Iftikhar
Director of Utilities
City of Winter Springs
1126 E State Road 434
Winter Springs, FL 32708
Re: 2024 Utility Department Financial Forecast Update
Kimley-Horn and Associates, Inc. (“Kimley-Horn” or “Consultant”) is pleased to submit this
letter scope (the “Scope”) to the City of Winter Springs, FL (“City”) for providing a updated
Financial Forecast for the Utility Department. This Scope is for a work release authorization
under RFP #01-21 Civil Engineering Continuing Service Contract.
Project Understanding
The City has requested services to be provided include an update to the financial forecast
(financial model) to evaluate the ability of the Utility Department to fund the five-year capital
improvement needs as identified by the City and to meet certain fiscal criteria to promote a
strong utility credit / financial position for the City The results of the update will include the
level of revenues generated from monthly water and wastewater rates, suggested changes
associated with the projected financial position of the City, and capital funding strategies.
Specific Scope of Basic Services
Task 1 – Project Initiation and Management
Kimley-Horn will attend and lead a kick-off meeting with City and Raftelis staff to discuss the
results of the approved utility rates, the revenue forecast, various impacting conditions and
factors, overall goals and objectives for the project.
Kimley-Horn will provide project management services to facilitate the project’s execution,
subconsultant’s efforts and communication among the revenue sufficiency team.
Communication will include regular email updates and progress reports with regard to the
project execution.
Task 2 – Revenue Sufficiency Data Development
Kimley-Horn will support Raftelis in their efforts to update the forecasted utility expenses,
incomes, and expenditures. Our efforts will be limited to review of documents provided by
Raftelis, providing comments for consideration, and support the coordination with the City staff
and Departments.
Kimley-Horn will support Raftelis in their efforts to refine the Capital Improvement Plan
estimated costs, funding analysis, and flow of funds analysis. Our efforts will be limited to
review of documents provided by Raftelis, providing comments for consideration, and support
the coordination with the City staff and Departments.
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kimley-horn.com 200 S Orange Avenue., Suite 600, Orlando, FL 32801 407-898-1511
Task 3 – Commission Meeting Presentations
Kimley-Horn will attend project meetings with City and Raftelis staff to discuss the analysis
findings and results with the intention of drafting a presentation for the Commission.
Kimley-Horn will review and provide comment to Raftelis’ final presentations. All comments
and discussion items will be reviewed with Raftelis for consideration and inclusion within the
final report.
Kimley-Horn will attend and support Raftelis and the City staff at three presentations to the
City Commission. Specific preparation for Commission Meeting presentations.
Schedule
Kimley-Horn will begin services upon receipt of an executed Task Order. This authorization
can be in the form of an email from the City Manager. The above services will be provided as
expeditiously as practicable to meet a mutually agreed upon schedule.
Method of Compensation
Kimley-Horn will complete the above scope of services on a lump sum fee of $78,005.00,
inclusive of office overhead expenses. A breakdown of the fee by task is as follows:
Task Description Lump Sum Fee
Task 1 Project Initiation and Management $6,990.00
Task 2 Projected Statistics $13,225.00
Task 3 Meetings and Presentations $13,790.00
Subconsultant Fee $44,000.00
Total: $78,005.00
Services provided under this will be invoiced on a monthly basis. All invoices will include a
description of services provided.
In an effort to expedite invoices and reduce paper waste, Kimley-Horn submits invoices via
email in an Adobe PDF format. We can also provide a paper copy via regular mail if
requested. Include the invoice number and Kimley-Horn project number with all payments.
Please provide the following information:
Please email all invoices to
Additional Services
Services requested that are not specifically included in the general range of the services listed
above can be provided under an amendment to this authorization or under a new and separate
agreement.
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kimley-horn.com 200 S Orange Avenue., Suite 600, Orlando, FL 32801 407-898-1511
If you concur in all the foregoing and wish to direct us to proceed with the services, please
have authorized persons execute a task authorization for this scope of services and transmit
via email to Julia.Felter@Kimley-Horn.com. We will commence services after we have
received a fully-executed task authorization.
We appreciate the opportunity to provide these services to you. Please contact me at your
earliest convenience with any questions regarding this scope of services.
Sincerely,
KIMLEY-HORN AND ASSOCIATES, INC.
By: Julia Felter, P.E. Lance R. Littrell, P.E.
Project Manager Vice President
Authorization
City of Winter Springs, Florida
By:
,
Philip Hursh, Interim City Manager
(Date)
Philip Hursh
(Print or Type Name)
phursh@winterspringsfl.org
(Email Address)
Attest:
(Print or Type Name)
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Rate $260.00 Rate $195.00 Rate $125.00 Rate $130.00 Rate $95.00
Hours Costs Hours Costs Hours Cost Hours Cost Hours Costs Hours Costs
Task 1 - Project Initiation and Management 4 $1,040.00 15 $3,600.00 15 $1,875.00 0 $0.00 5 $475.00 39 $6,990.00
Kickoff Meeting 2 $520.00 3 $720.00 3 $375.00 $0.00 $0.00
Project Management 2 $520.00 12 $2,880.00 12 $1,500.00 $0.00 5 $475.00
$0.00 $0.00 $0.00 $0.00 $0.00
Subconsultant Oversight/Coordination $0.00 $0.00 $0.00 $0.00 $0.00
Task 2 - Data Update for Analysis 6 $1,560.00 31 $7,440.00 30 $3,750.00 0 $0.00 5 $475.00 72 $13,225.00
Development and Other Revenue $0.00 6 $1,440.00 2 $250.00 $0.00 $0.00
Operating Expenses $0.00 9 $2,160.00 12 $1,500.00 $0.00 $0.00
CIP Cost Update $0.00 8 $1,920.00 8 $1,000.00 $0.00 5 $475.00
Additional Data $0.00 8 $1,920.00 8 $1,000.00 $0.00 $0.00
Quality Control 6 $1,560.00 $0.00 $0.00 $0.00 $0.00
Task 3 - Meetings and Presentations 8 $2,080.00 30 $7,200.00 30 $3,750.00 0 $0.00 8 $760.00 76 $13,790.00
Meetings for Data Results (5) 5 $1,300.00 15 $3,600.00 15 $1,875.00 $0.00 5 $475.00
Presentations for Commission (3) 3 $780.00 15 $3,600.00 15 $1,875.00 $0.00 3 $285.00
$0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00
Subconsultant Fee $ 44,000.00
Project Totals 18 $4,680.00 76 $18,240.00 75 $9,375.00 0 $0.00 18 $1,710.00 187.00 $78,005.00
TotalsTask
ATTACHMENT A
Winter Springs - Financial Forecast
LABOR COSTS
Principal In Charge Analyst Clerical/ Project Admin LaborSenior Designer/ Technical supportProject Manager
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341 N . Maitland Avenue, Suite 300, Maitland, FL 32751
www.raftelis.com
March 5, 2024
Ms. Julia Felter
Kimley-Horn
Subject: Proposal to Provide a 2024 Utility System Financial Review
Dear Ms. Felter:
As requested, Raftelis Financial Consultants, Inc. (“Raftelis”) has prepared the following proposal to provide
utility rate and financial consulting services (the “Proposal”) on behalf of the City of Winter Springs (City), as
a subconsultant to Kimley-Horn. Specifically, the services to be provided include an update to the financial
forecast (financial model) to evaluate the ability of the System to fund the five-year capital improvement needs
as identified by the City and to meet certain fiscal criteria to promote a strong utility credit / financial position
for the System. The results of the update will include the level of revenues generated from monthly water and
wastewater rates, suggested changes associated with the projected financial position of the System, and capital
funding strategies. The proposal includes meetings with utility staff, but does not anticipate presentations to
Council or documentation of findings and results in a technical report or briefing document (PowerPoint). The
financial model will be made available to staff, and worksheets can be provided upon request to represent the
financial forecast and findings of the analysis. Based on our discussions and our understanding of the project,
Raftelis proposes the following:
PROJECT TEAM
With respect to the performance of this engagement, Mr. Tony Hairston would be the project director and
Mr. Joe Williams will be project manager for the engagement and the primary contacts with the City. Michelle
Galvin will serve as the primary analyst, while other financial analysts and administrative personnel with the
firm may be utilized during the engagement as needed.
SCOPE OF SERVICES
The following is a summary of the scope of services and corresponding tasks to be performed by Raftelis by
specific project phase.
Task 1 – Data Request and Data Compilation/Review: Raftelis will prepare a written data request for the
collection of updated financial, customer billing, operating, and planning data necessary to review the most
recent historical financial results of the System and to prepare the financial due diligence review and the update
to the financial model. Information to be requested may include, but is not limited to, historical financial
statements and records, historical customer statistics and development planning information, operating budgets
and capital improvement plans including the status of existing projects considered as construction-work-in-
progress, existing and anticipated debt service schedules allocable to the system facilities, if any, fixed asse t
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Ms. Julia Felter
City of Winter Springs Financial Forecast Update
March 5, 2024
Page 2
information, water / wastewater / plant capacity and flow data, current utility rate ordinances, resolutions and
agreements, and other information that may be relevant to the study.
Task 2 – Financial Forecast Model and Analysis: Based on the updated financial, operational, and statistical
information obtained from the Task 1 activities, Raftelis will prepare a financial projection of the net revenue
requirements of the System which represent the funding requirements derived from the monthly user fee (rate)
revenues for the System. This component of the analysis will include a review of the Fiscal Year 2024 budgeted,
as well as Fiscal Year 2023 actuals, operations and maintenance expenses, updated capital improvement plans,
cash balances by fund / account maintained by the City and the development and the evaluation of key
performance measures or best management “benchmarks” to evaluate the estimated fiscal position of the
System. The forecast will include the projected Fiscal Years 2024 through and including 2029 or 2030 (the
“Forecast Period”). This will include the following:
a. Development of Revenue Forecast: A forecast of rate revenues based on the application of approved
rate adjustments applied uniformly to recent historical results coupled with City-identified System
growth will be developed for the Forecast Period. This task will also include the projection of other
operating revenues typically earned by the System for the Forecast Period.
b. Operating Expense Projections: The escalation of operating expenses by primary line item and
adjusted for any known or anticipated changes in operation (e.g., increased labor due to capital
investment or growth) to be funded from System rates and revenues for the Forecast Period. This
subtask will include an alternative scenario for reviewing the in-housing of staffing as discussed further
in Task 6.
c. Other Revenue Requirement Identification: To identify the total cash outflows of the System and in
support of the capital improvement funding plan review, Raftelis will review the financial aspects of
the City’s utility systems in order to potentially recognize other revenue requirements that need to be
recognized in the Financial Model and revenue sufficiency analysis. This task will include the review
of existing debt service requirements, capital reinvestment needs, transfers to other City Departments,
and other cash outflows of the System.
d. Capital Improvement and Funding Analysis: An updated of the capital funding plan based on the
System’s five-year, or applicable capital improvement program, and other engineering planning
documents, and the performance of a funding analysis to identify available sources of funds for
financing of the capital improvement program and the estimated impact on utility rate revenues
associated with the capital funding program for the Forecast Period. The baseline forecast will be based
on the currently adopted rate plan, with any recommended adjustments identified through this update.
e. Flow of Funds Analysis: The development of a flow of funds analysis to evaluate cash flow balances
in each specific fund of the System and to estimate interest income earned on unrestricted and restricted
fund balances anticipated to be defined in the Bond Resolution for the System (and to assist in
determination of rate covenant compliance).
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Ms. Julia Felter
City of Winter Springs Financial Forecast Update
March 5, 2024
Page 3
Task 3 – Development of Net Revenue Requirements and Rate Adjustment Requirements: Based on the
aforementioned tasks, Raftelis will prepare a summary of the total net revenue requirements of the System and
the accompanying rate impact requirements for each fiscal year of the Forecast Period.
Task 4 – Compliance Analysis and Management Dashboard: The “management dashboard” will be updated
and enhanced to allow for the review of the financial position of the System, evaluation of continued
compliance with the rate covenants delineated in the Bond Resolution authorizing the issuance of the senior
lien bonds, and to meet other best management practices and financial targets as developed with the City.
Task 5 – User Fee Rate Comparison: Raftelis will prepare a single-family residential rate comparison
(represents most common rate class and majority of customers served by the City and other utilities) of the
existing Fiscal Year 2024 and any identified suggested and proposed rates (i.e., recommended adjustments to
proposed Fiscal Year 2024 rates per the analysis) with the rates charged by other neighboring or similar utilities.
Task 6 – Review of in-house operations: Raftelis will work with City staff and the Kimley-Horn team to prepare
a financial forecast including bringing the operating staff and costs in-house, an activity that is currently
outsourced on a contractual basis. This analysis will include development of personnel and operating costs, and
includes an in person meeting with the team to review results.
Meetings – Meetings will also be held throughout the course of this phase of the study with the City to review
the study progress and findings. We have priced in up to four (4) in person meetings, with City staff, for tasks 1
through 5. Additionally, one (1) in person meeting with City staff for Task 6 is included, for a total of five (5)
in-person meetings with staff. Lastly, up to three (3) meetings with City Council are anticipated to assist the
City and Kimley-Horn with providing quarterly updates during public presentations. Web meetings to review
assumptions, forecasts, and preliminary findings will be held as necessary.
Attendance of any additional on-site meetings will be considered as an additional service to this scope of
services.
ADDITIONAL SERVICES
During the study, the City may request that Raftelis provide additional services relative to the review of the
System as delineated in the scope of services which would result in the performance of additional services by
Raftelis. Such services will not be conducted until authorized by the City as mutually agreed between the parties.
Regarding additional services that would be billed by Raftelis, all invoices for additional services will be based
on the hourly rate schedule of the Raftelis project members as identified in this Proposal. Although no additional
services are anticipated for this engagement, examples of additional services may include the following:
1. Attendance of meetings with City staff, City committees or interested parties, or public hearings with
the City Council in addition to what is contemplated in the scope of services.
2. The development of written results and recommendations resulting from the study.
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Ms. Julia Felter
City of Winter Springs Financial Forecast Update
March 5, 2024
Page 4
3. Billing frequency analysis, which is a detailed analysis of each bill sent out over the course of a fiscal
year. This analysis gives the Consultant (and City) a more comprehensive evaluation and
understanding of billed water and wastewater consumption trends and is used to support any potential
rate structure changes that may be warranted or desired. This was completed for the original rate study.
4. Review and calculation of the City’s existing utility capacity fees (service availability fees).
5. Review and design of other existing or new ancillary or miscellaneous service charges.
6. Development of any feasibility disclosure reports for the financing of capital improvements to the
System.
7. Delays in the Project schedule, which may have impacts on analyses performed, and which would
affect the budget for the scope of services reflected herein.
COMPENSATION AND BILLING
Based on the scope of services and the direct labor billing rates and standard cost rates as identified herein, we
propose to establish a not-to-exceed contract to perform the Project on behalf of the City by Raftelis in the
amount of $44,400. Invoices will be submitted monthly based on the time and effort expended.
Task Senior Associate
Activity Ref.Vice President Manager Consultant Consultant Administrative Totals
Project Billing Rates ($/Hr.) $325.00 $290.00 $195.00 $165.00 $75.00
Scope of Services - Revenue Sufficiency Analysis
Data Request and Data Compilation / Review 1 - 4 8 - - 12
Financial Forecast Model and Analysis
Development of Revenue Forecast 2 - 4 10 - - 14
Development of Operating Expense Projections 2 1 6 12 - - 19
Other Revenue Requirement Identification 2 - 2 8 - - 10
Capital Improvement and Funding Analysis 2 - 12 20 - - 32
Flow of Funds Analysis 2 1 5 10 - - 16
Development of Net Revenue Requirements and Rate Adjustments Requirements 3 1 8 16 - - 25
Compliance Analysis and Management Dashboard Development 4 1 4 8 - - 13
User Fee Rate Comparisons 5 - 1 2 5 - 8
Review of in-house Operations 6 2 8 10 - - 20
City Council Quarterly Updates (3) meetings All 15 15
Project Management All - 4 - - - 4
Total Project Hours 6 73 104 5 - 188
Total Direct Labor Cost - All Tasks (Technical Services)1,950$ 21,170$ 20,280$ 825$ -$ 44,225$
Average Hourly Billing Rate 235.24$
Allowance for Other Direct Costs
Telephone / Communication Allowance -$
Transportation Allowance - -
Miscellaneous Expense Allowance (Delivery Charges, Misc. Travel, Rounding, etc.)175
Total Allowance for Other Direct Costs 175$
Total Proposed Project Cost 44,400$
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Ms. Julia Felter
City of Winter Springs Financial Forecast Update
March 5, 2024
Page 5
DISCLOSURE
As a registered Municipal Advisor under the Dodd-Frank Act, Raftelis is required to inform our clients of any
existing or potential conflicts of interest that may be relevant to any proposed scope of services that may include
providing “advice” as that term is defined in the Dodd-Frank Act. As of the date of this engagement letter, no
conflicts of interest are known to exist.
Under the Dodd-Frank Act the definition of “advice” includes providing any opinion, information or
assumptions related to the size, timing and terms of possible future debt issues or borrowing. This type of
information may be integrated into the capital and financial planning components of a financial model
preparation. This definition is applicable regardless of whether this information is developed and used solely
for planning and decision-making purposes. In the preparation of the scope of services as set forth in this
Proposal, Raftelis may rely upon certain assumptions regarding the financing of future capital improvements
using external sources of funds such as the issuance of debt and securing loans. These assumptions shall be
developed in conjunction with the City staff and/or the City's Municipal Financial Advisor. The use of such
capital financing assumptions is solely for utility rate and financial planning purposes only and should not be
interpreted as advice regarding the ultimate sizing, timing and the cost of debt capital. These debt-related
variables are subject to market conditions, as well as the City's credit rating at the time of issuance, and advice
regarding such terms and conditions shall only be provided by the City's registered Municipal Financial
Advisor. As such the actual terms and conditions associated with the issuance of any future debt may vary from
the assumptions used in the rate and financial plan as prepared pursuant to this Proposal. For the services
addressed in the scope of work identified for this engagement, no information to be developed by Raftelis will
fall under this definition of municipal advice.
By accepting this Proposal and in consideration of an agreement between the City and Raftelis, the City
acknowledges that Raftelis is not providing advised with respect to municipal financial products or the issuance
of municipal securities, including advice with respect to the structure, timing, terms and conditions and other
similar matters concerning financial products or issues and is also explicitly acknowledging that Raftelis has
provided the necessary disclosures addressing any conflicts of interest and any limitations on the scope of
Municipal Advisory services to be provided by Raftelis as part of this engagement.
The Municipal Securities Rulemaking Board (“MSRB”) provides significant protections for municipal entities
and obligated persons that are clients of a municipal advisor. To understand the protections provided and how
to file a complaint with an appropriate regulatory authority, visit the MSRB web site at www.msrb.org.
We appreciate the opportunity to submit this Proposal to the City to provide consulting services on behalf of
the City. If this Proposal is acceptable, please provide the necessary contractual documents and the notification
of acceptance that references this Proposal such that we can initiate the Project. The receipt of notification by
the City will serve as our notice to proceed with the Project.
19
Ms. Julia Felter
City of Winter Springs Financial Forecast Update
March 5, 2024
Page 6
Again, we appreciate this opportunity to provide utility rate and financial consulting services on behalf of the
City and look forward to working with the City and you in the near future on the Project.
Very truly yours,
RAFTELIS FINANCIAL CONSULTANTS, INC.
Joe Williams
Senior Manager
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