Florida Government Utility Authority Case Study
Abstract:The Florida Governmental Utility Authority (FGUA) was created in April 1999 as a governmental entity created for the purposes of owning and operating water and sewer assets in multiple locations. FGUA's objective is to be an entity that provides all of its services through "outsourced" service providers. The goal was to create a win-win situation for all parties involved and be successful at getting the private sector to work for government in a responsive and accountable manner.
Mr. Sheets' presentation in this case study will cover how the FGUA went about "setting the table" to assure success; how they crafted the appropriate invitations for procurement; developed the appropriate evaluation process; and went through several series of negotiations. Mr. Sheets' will also show how they currently are successfully managing those contracts, not just for operations, maintenance and customer service, but engineering, rate consultants and numerous other professional and technical services.
In addition, the discussion will focus on how to provide adequate assurance to the citizens that the FGUA made the correct decision and, is in fact, successfully receiving from the contract providers the services procured.
Florida's communities have recently had new "tax reform" legislation imposed upon them which created great expectations for local governments to do more with less and created a greater scrutiny of the way local governments perform their tasks.
Local governments are starting to look more and more to the private sector to provide alternative means of service delivery since they cannot be expected to have the expertise in every task required.
Since the 1980s, local governments have had a greater reliance on public/private partnerships in areas such as: construction, building maintenance, operations and maintenance, information technology, solid waste and others.
The new trends we have seen across Florida and the southeast have been the creation of corporate communities. These are communities that have just gone through incorporation but have decided to contract out for the majority if not all of municipal services. In addition, the public/private partnerships in such areas as economic development and the actual sell of assets to the private sector for such things as turnpikes, water and sewer and landfills has been on the increase.
In many communities, especially California, since Proposition 13 over 5,000 "single purpose" governmental entities have been created in an effort to provide efficient focus government.
This case study will focus on Florida's first effort in creating a "single purpose" governmental entity in the Florida Governmental Utility Authority.
In 1999, the FGUA was formed by six counties under their home rule power. The FGUA was formed to acquire, own and maintain water and wastewater facilities in the host government's communities. The Board is comprised of members appointed by the host governments such as county managers, utility directors, county attorneys and public works directors. The by-laws prohibit any elected official serving on the Board.
The FGUA, in 2006, served 70,000 water and wastewater customers in five counties and its operating budget in 2007 was over $60 million. The FGUA, in 2006/07, will spend in excess of $100 million in CIP programs. The FGUA has no full time employees.
It has outsourced all functions including the system manager's function, general and utility counsel, customer service and billing, engineering and all other relevant services.
This case study will outline the system manager's role which serves as the executive director, provides all Board support, community service outreach and the system manager's most important role as contract manager for all services.
In the function of contract manager, the system manager oversees procurement and management annually of $20 million in engineering contracts, $80 million in construction projects and $15 million in O& M contracts. The system manager provides construction management for over 150 water and wastewater projects in five counties and performs inspection services on all CIP and R & R programs.
Since the FGUA must operate in the "Sunshine" as any other local government within the state of Florida, all meetings, documents and procedures are done with full accessibility by the community; therefore, this authority has to deal with the same issues as any city or county.
To ensure checks and balances, the performance of the system manager is reviewed by the Board's general counsel. The system manager is responsible for all compliance and management of all other FGUA contracts. The FGUA retains an external auditor for the annual review of internal controls, checks and balances, and the preparation of the Annual Comprehensive Financial Report for which the FGUA received national recognition for excellence in financial reporting.
The abstract will detail how "setting the table" for such an exercise is most important and will go through the steps outlined. In addition, they will describe numerous items and issues in the procurement process such as describing the problem, the objectives and determining the evaluation process. Mr. Sheets will also discuss the relevance and importance of keeping all the stakeholders involved not just including the decision makers and the customers. Mr. Sheets will identify contract essentials that the FGUA has learned through experience that are critical in properly procuring, evaluating and awarding contracts. These essentials have been proven valuable in carrying out the responsibilities of contract management and oversight. The section regarding evaluating the response goes through numerous details and suggestions to make sure the evaluation process has been clearly defined. The utilization of both in-house and outside expertise and methods in which you can minimize any bid protest will be discussed.
This abstract will also focus on issues and suggestions on how to aid and enhance the negotiation process. Finally, critical contract management issues on how successfully managed contracts of this size and complexity can be managed. The session will end on the discussion on how to prove to the community the right decision was made.
Document Type: Research Article
Publication date: October 1, 2007
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