03/28/1994 - Packet ""..••••••••.::>::>-s a =':>`.:<<>-„_••••••••_>:>_<::'><s„...„.:> `„:„. is.•._"".. =:>:::::::i: ::<::3::>....„_`:..:::>::::>::>: »s:?:>:>:<:::: i:<:::.........:..:•....;>:
March 22, 1994
Mr.John Haunsperger, Commissioner
Tigard Water District
Dear John:
You requested that I review the proposals submitted by Black&Veatch and Economic
and Engineering Services, Inc. to prepare a detailed accounting of the assets and
liabilities of the former Tigard Water District. The understanding is that the assets and
liabilities would be divided between the Tigard Water District, the City of Tigard, the
City of Durham and King City.
I have reviewed the proposals submitted by both firms and following are my thoughts and
comments on each of the proposals. The review is in an informal format with comments
on primarily the scope of service presented by each firm.
ECONOMIC &ENGINEERING SERVICES, INC.
o EES has done previous for the TWD and they have a good understanding of the
system.
o The proposal indicates a clear understanding of the purpose of the requested study.
They illustrate that they have knowledge of the Oregon Statutes necessitating the study.
o Their Scope of Services indicates that they understand what is required to develop the
assets and liability distribution.
o For separation of assets EES states that for many assets, such as transmission mains
and reservoirs, the assignment will be straight forward. This is not as simple as it sounds
and how it is approached will have a profound effect upon the outcome. One option to
dividing the joint assets of a pumping station or a reservoir is to divide the whole asset
into the percentages served. That would be convenient,but it would be to the detriment
of TWD. If the TWD requires a particular facility to serve its customers,just because it
lies within the City of Tigard or that facility also serves Tigard or the other cities that
asset cannot be artificially divided up. Considering the facility as a joint asset would not
fairly reflect TWD's need and ownership of the facility. The facilities were originally
owned by TWD and it requires that they be utilized in total to perform their function.
The methodology used to consider joint assets should be carefully thought out.
o EES offers to develop a GIS for TWD and states that 80% of the costs in preparing the
GIS are in developing the data. However, they earlier state that to prepare the maps for
presentation they must obtain the digitized mapping information from TWD. If the info
is already available then what is EES to provide? Also, it isn't TWD that needs the GIS
now, it is the City of Tigard that might have need for such a system.
o They propose to prepare system maps of the division of assets that would make it
easier to visualize the system. The cost for the maps is estimated at approx. $3000, so the
relative value should be considered.
o There are two potential landmines that could greatly affect the cost of the study. The
scope of services assumes the TWI) lists all of their capital assets on a computer. If that
information is not available to be transferred to EES either because it is not available or
because it is in a different format,additional time will be required to list and enter the
data. Additional charges would likely accrue for the extra work. Also,their proposal to
develop system maps to illustrate the different assets is based on the ability to directly
input the base map for the area in digital format. If that info is not available then
additional funds will likely be required to create a presentation map. That map may be of
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lesser quality than that proposed.
o The proposal is reasonably well thought out as to what is sought, how they will provide
it and what the final product will be. However, the reliance on the availability of data
that the TWD may or may not possess presents a risk in the cost of the study. If they are
chosen, the unknowns should be clarified and the cost estimate revised before entering
into contract.
BLACK& VEATCH
o The proposal does not indicate that B&V has a clear idea of what info is available
about the water system and they have no direct knowledge of it from previous work with
TWD. They assume the primary source will be from financial statements. If that is not
available additional work will be required to gather the info.
o They are very vague about the methodology for dividing up the assets. They make no
mention of how they will handle the joint assets that are used by multiple jurisdictions.
o They state that each jurisdiction's proportionate share will be determined following
the agreed upon methodology. There is no mention of what that methodology might be,
who might suggest it or what options there are to consider. Who's responsibility is it to
prepare that? The method chosen to divide the assets is absolutely critical to the best
interests of the TWD.
o They propose a report along with a system map, the proportion of which is not stated
as dependant on TWD data as it is for EES.
o The proposal is not sufficiently detailed to determine just what they will provide nor
how they will provide it.
I would be happy to discuss the proposals if you have any questions or wish claification
on my comments.
Sincerely,
PRESENTATION TO
THE TIGARD WATER DISTRICT
FOR AN
ASSET/LIABILITY
ALLOCATION STUDY
March 28, 1994
Presented by:
Gilbert R. Meigs
and
Randall P. Goff
Economic and Engineering Services,Inc.
4380 S.W. Macadam Avenue, Suite 365
Portland, Oregon 97201
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A. Economic and Engineering Services, Inc.
Economic and Engineering Services, Inc. (EES) was incorporated in 1978 by a group of
professionals with over 17 years of experience in utility planning and management. Since 1978,
EES has been a leader in the Pacific Northwest's water, wastewater, and electrical utility
consulting services, with clients ranging in size from small homeowner associations to large cities.
Currently, the firm consists of over sixty staff members including seven principal owners of the
firm.
Our approach involves a team of experts addressing a common question. This technique enables
the viewing of a situation from several aspects not just the one directly at issue. We are able to
evaluate both the direct effects of a proposed course of action and the indirect social, legislative,
financial, engineering, political, and environmental consequences of those actions.
B. Understanding of the Project
The purpose of this project is to perform a division of assets and liabilities under Oregon law.
This subsequently allows each entity to maintain books and records as independent entities, even
though the City of Tigard will provide for operation of the water system. This requires that a
thorough review of assets and liabilities be undertaken. While Oregon law is unspecific as to
division of jointly owned assets, the District and cities have agreed to a formula approach
pursuant to the intergovernmental agreement. The parties should be congratulated on their ability
to come to a mutual agreement for division of assets and liabilities given that this could have been
a potentially litigious situation.
The final products provided as part of this project will be as follows:
• A listing of assets owned by each jurisdiction.
• A listing of jointly owned assets and the percentage ownership by each jurisdiction.
• An allocation of other intangible assets and liabilities by each jurisdiction.
• A map corresponding to the asset listings which clearly shows those assets which are
jointly owned and those assets which are individually owned by each entity. This map will
be provided in ARC/INFO format for future use by the city and District.
• A report detailing the work accomplished, assumptions made, sources of information and
methodologies utilized in the analysis.
Given these results, each entity can operate separately from a financial standpoint, even through
operation is provided for under an intergovernmental agreement.
EES also understands that time is of the essence in this project. We have reviewed our current
work load and can commit to completion of the project within 90 days.
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C. Scone of Services
Task 1 - Initial Project Meeting
Task 2 -Development of Database
Task 3 - Separation of Assets and Liabilities
Task 4 -Development of System Maps
Task 5 - Reports and Presentations
Task 6 - Computerized Models
Task 7 - GIS System Development (Optional)
D. Manpower Requirements and Protect Fee Estimate
Exhibit V-2
Tigard Water District
Asset Separation Study
Gilbert Randall Doug Nicole CADD Total Total
Task Mcigs Goff Ilowie Smith Specialist Secretarial Hours Fee
Intial Project Meeting 4 4 2 10 S730
Development of Database 4 32 50 86 5,540
Separation of Assets and Liabilities 48 50 98 6,340
Development of System Maps 4 8 40 52 2,960
Reports and Presentations 16 16 4 8 8 52 3,640
Total Project 76 52 12 108 40 10 298 S19,210
Total Project Expenses @10% 51.921
Total Project Fee Estimate $21.131
E. Issues To Be Discussed
Asset Separation - Concepts of"function" and "direction"
Asset Allocation -Use of"formula"
Debt Allocation-Use of assessed value
Absence of Cost Records-"Contributions in aid"; water services, including meters
INTERVIEW PRESENTATION
ASSET AND LIABILITY DIVISION
FOR
CITY OF TIGARD, OREGON
MARCH 28, 1994
BLACK & VEATCH BACKGROUND
• 78 Years of Service
• Over 5,000 Personnel
• Over 20,000 Projects Completed
• Offices in Lake Oswego, and throughout
the United States
• Reputation for:
Integrity
- Client Satisfaction
- Follow- Through Commitment
PROJECT PERSONNEL
RANDY KRUEGER
• Regional Manager for Lake Oswego Office
• 22 Years Experience
• Registered Professional Engineer
• Experienced with Water Master Plans
for Populations of 20,000 to 300,000
PROJECT APPROACH
Ass, .
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Jurisdiction
Allocation
BLACK & VEATCH STRENGTHS
• Extensive Experience in Water Utility
System Design and Finance
• Experienced Project Team ,.
• Local Knowledge and National Perspective
• Committed to Meeting City of Tigard's Needs