Background:
The City of Sunrise owns and operates a water and wastewater utility providing service to approximately 62,000 metered accounts. The City’s utility service area includes the City of Sunrise, City of Weston, parts of the Town of Southwest Ranches, and portions of the Town of Davie.
The Town of Davie owns and operates a water and wastewater utility serving approximately 10,000 metered accounts. The Town of Davie recently expressed interest in exploring the purchase of the Town’s utility by the City of Sunrise. The current boundary for this potential acquisition area is illustrated in Figure 1 as “Davie Utilities”, and includes two water treatment plants, two wastewater treatment plants, approximately 165 miles of water transmission and distribution system piping, a wastewater collection system with 103 wastewater lift stations, and a 3.5 million gallon per day wastewater reclamation treatment facility (producing reclaimed water).
Detailed technical and financial evaluations, and a rate study are needed in order to determine whether such an acquisition is feasible for either party. It is critical that the perform adequate due diligence to determine the appraised value, the conditions and remaining lifecycle, and cost to repair/replace and sustain the Town’s assets. Furthermore, evaluate and identify any synergies that can be expected through the consolidation of the City of Sunrise's and Town of Davie's water and wastewater utilities as part of the Phase I analysis. If the Phase I analysis determines the consolidation is feasible, a Phase I optional administration and operational analysis of the consolidation of the utilities will be brought back for future Commission consideration. This optional analysis will include an examination of staffing resources, as well as, workloads to observe relative impacts and any advantages or critical concerns.
The Utilities Department prepared Project Agreement No. 21-016-HS with Hazen and Sawyer, P.C., one of the City's Water and Wastewater Design Consultants for completing the technical due diligence steps needed for this preliminary (Phase I) evaluation. Hazen and Sawyer, P.C. recently completed the City of Sunrise's 2019 Master Plan update and has a significant amount of knowledge and understanding of the overall utility system. A separate agreement will be prepared with Raftelis, the City's utility financial consultant, and will be submitted as a separate item a future City Commission Meeting to examine the financial implications with preparation of a final report or technical memorandum in support of such a transaction, as well as assisting in the preparation of required Chapter 180.1 Florida Statutes provisional documents and hearings as part of a Phase I progressive due diligence effort.
The Phase I analysis is included within Item 42 of RFQ 20-03-05-VH for Continuing Consultant Services by Hazen and Sawyer, P.C.
Authorization is requested to initiate the technical Phase I determinations necessary to ascertain whether proceeding to a Phase II effort of the necessary acquisition the Town of Davie's existing assets is warranted.