Title
Proposed Amendment to GLWA Contract CS-195 effective July 1, 2023 with The Foster Group for Annual Financial Management Consulting at a not-to-exceed amount of $525,000 for a one-year contract, and for task order Bond Transaction System Consultant Services not-to-exceed $325,000
Body
Agenda of: June 28, 2023
Item No.: 2023-182
Amount: N/A
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: June 28, 2023
RE: Proposed Amendment to GLWA Contract CS-195 effective July 1, 2023 with The Foster Group for Annual Financial Management Consulting at a not-to-exceed amount of $525,000 for a one-year contract, and for task order Bond Transaction System Consultant Services not-to-exceed $325,000
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer & Treasurer, the Board of Directors of the Great Lakes Water Authority authorizes the Chief Executive Officer (CEO) to enter into Contract No. CS-195 effective July 1, 2023 with The Foster Group LLC for Annual Financial Management Consulting Services for a period of one (1) year, and for task order Bond Transaction System Consultant Services not-to-exceed $325,000; and authorizes the CEO to take such action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The Foster Group LLC currently operates under a contract originally approved by the Great Lakes Water Authority Board of Directors in June of 2017. The Board has subsequently approved four (4) extensions to this contract ensuring the continuation of Financial Management Services as well as System Consulting Service (Financing Transaction Services).
The current fixed fee, fixed cost contract with The Foster Group expires June 30, 2023. The Foster Group provides critical services including:
• Member Partner outreach, engagement, and work group support,
• Annual cost of service study encompassing preparation of revenue requirements, cost of service allocations, and charge development studies and scenarios,
• Highly technical as needed analysis that bridges finance and engineering,
• Charge methodology strategic services to support Planning Group efforts,
• Financial management coordination and assistance for GLWA and DWSD and their respective consultants,
• General Counsel resource, and
• Long-term financial planning support to the Great Lakes Water Authority (GLWA).
It should be noted that there are open GLWA initiatives that depend on The Foster Group’s services to support the Member Partners and GLWA - most notably the water charges methodology work group and the sewer charges methodology work group. It is anticipated that these two work groups may be able to reach a consensus within the next year.
This proposed procurement is considered a specialized procurement, defined by the GLWA Procurement Policy as “a procurement in which there may be multiple sources of supply, but one Vendor possesses the unique ability or capability to meet the particular requirements of the Solicitation and/or where a unique expertise is provided by a Vendor that is unattainable in the market in a competitive environment”.
JUSTIFICATION
The GLWA Board is asked to consider an extension of The Foster Group contract to carry forward these critical tasks without disruption. This contract extension is intended to be the fifth (5th) and final contract extension for The Foster Group. Upon its proposed expiration of June 30, 2024, Bart Foster, President of The Foster Group intends to retire.
The proposed fee is a fixed annual fee paid as a pro-rata monthly lump sum which includes all expenses.
It should be noted that GLWA is insourcing some of the historical knowledge and work performed by The Foster Group to GLWA Financial Services staff and will continue to do so to the extent possible. Examples include the stand up of the Charges Outreach and Modeling team, addition of the Financial Management Planning Director and assignment of added responsibilities for the Deputy Chief Financial Officer - although two of the four positions that this transition plan depend upon presently remain vacant given the labor market and recruitments that have been ongoing for nearly two years. However, given the expert level of service provided Financial Services Area leadership believes the future state beyond this contract period will rely upon a balance between increased internal capacity and separate procurements for charges consulting and system consultant services for bond transactions. Presently a request for proposal is being drafted for solicitation in the next 30 days. The selection panel will include representatives of GLWA, DWSD, and Member Partner communities.
BUDGET IMPACT
The proposed Foster Group contract amendment is divided equally between the Financial Planning & Analysis Group FP&A (Contractual Professional Services line 5910-884113.000-617903-WS7900) and the Public Finance Group (Public Finance Consulting Services 5910-884141.000-617903-WS7900) in the Financial Services Area.
COMMITTEE REVIEW
This matter was reviewed by the GLWA Audit Committee at its meeting on May 26, 2023. The Audit Committee unanimously recommends that the Great Lakes Water Authority Board of Directors approve the proposed Amendment to GLWA Contract CS-195 effective July 1, 2023 with The Foster Group for Annual Financial Management Consulting at a not-to-exceed amount of $525,000 for a one-year contract, and for task order Bond Transaction System Consultant Services not-to-exceed $325,000 as presented.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD. It should be noted that fees for bond transactions are deducted from a pro-rata percentage of the bond proceeds when a market-based transaction encompasses funding for DWSD. DWSD also reimburses GLWA for SRF transaction costs incurred. DWSD is not charged for services related to annual financial planning alignment.
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