Financial Plan, Rate Analysis, and Cost of Services Study

The City of Chesapeake is soliciting proposals from qualified offerors to complete a Financial Plan to include a Rate analysis and Cost of Services Study for the City’s Public Utilities Department (the Department).

The Financial Plan (that is created per awarded contract as a result of this solicitation) shall cover a minimum of ten (10) years of rate plan forecasting from July 1, 2026.

The time frame required for the initial project shall be from October 15, 2026, through February 15, 2027.

The term of the formal contract shall be for one (1) year, with an additional six (6) one (1)-year renewal options available upon mutual agreement of both parties.

Background

The Department of Public Utilities owns and maintains the municipal water and sanitary sewer collection systems. The treatment of sanitary sewage (wastewater) is provided by another agency Hampton Roads Sanitation District (HRSD).

The following is a review of the population and customer growth beginning FY2020 through FY2025:

The City’s water system contains components for the production, treatment, transmission and distribution, and delivery of water to its customers. Below is the status of each of these components:

Water Production and Treatment: The City’s water resources include treated surface water from the Northwest River, treated ground water from several wells, surplus raw water purchased from the City of Norfolk to supply the Lake Gaston Water Treatment Plant (LGWTP), the In-Town Lakes Facility, and bulk finished water purchased from the neighboring cities of Norfolk and Portsmouth. In addition, Chesapeake’s one-sixth share of the Lake Gaston partnership with the City of Virginia Beach is being reserved for future usage. Based on current projections, it is estimated that the City has a supply adequate to meet its needs through the year 2040.

Bulk Finished Water Purchases: Since 1965, the City has obtained a portion of its water supply through bulk water purchases from the cities of Norfolk and Portsmouth. Since June 12, 2002, the City has been operating under a 40-year contract with Norfolk (Norfolk Contract) to purchase bulk water from Norfolk’s surplus finished water supply. The Norfolk Contract will expire on December 31, 2042. The FY2025 current rate is $8.596 per thousand gallons and purchases in fiscal year 2025 have averaged 2.0 MGD. The Portsmouth bulk water contract (Portsmouth Contract) was effective on January 1, 1990, updated on June 12, 1996, updated July 1, 2017, and expires on June 30, 2047. The FY 2025 rate under the Portsmouth Contract is $7.187 per thousand gallons for purchases up to 3.0 MGD.

Treated Surface Water from the Northwest River: Beginning in 1980, a portion of the City’s water supply has been provided by water from the Northwest River and treated at the Northwest River Water Treatment Plant (NWRWTP).  The NWRWTP was upgraded during the period 1996 to 1999 to include ground and surface water reverse osmosis capability including four deep wells. It became, and remains, one of the most advanced and complex plants of its size on the East Coast.

Well Water: In order to supplement its existing water supply and provide an alternate supply of fresh water in the event of saltwater intrusion in the Northwest River prior to an upgrade of the NWRWTP in the late 1990’s, the City developed four wells during the period 1987 to 1989 (one of the original wells has since been removed from service). These wells are located in the western portion of the City and are referred to collectively as the Western Branch Well System. The Western Branch Well System consists of four deep wells, one of which is an Aquifer Storage and Recovery (ASR) well. The ASR well allows more efficient use of the City’s existing water in an underground aquifer. During periods of high demand, this water is retrieved, retreated for manganese removal, disinfected and pumped to customers after being blended with finished water from the LGWTP. The ASR well is not a new water source but rather a water storage operation. Each well has a 3.0 MGD capacity.

Surplus Raw Water Purchases from the City of Norfolk for the LGWTP: In December 2002, the City of Chesapeake entered into a 30-year surplus raw water purchase contract with Norfolk to supply raw water to the LGWTP. The rate is adjusted yearly in accordance with the annual average Consumer Price Index. The current rate is $1.68 per thousand gallons and was effective July 1, 2025.  Initially, the contract allows for the purchase of 7.0 MGD of raw surplus water. In the future, this contract amount can be increased up to a total of 10.0 MGD with the mutual agreement of both parties, provided Norfolk has further surplus raw water available to accommodate the increase.

In-Town Lakes Facility: Two large former borrow pits are owned by the Department to serve as a supplemental, temporary supply of raw water for the LGWTP. The need for such a facility was envisioned based on the possibility of damage to the raw water main, which normally conveys water to the LGWTP from its point of connection with Norfolk’s raw water transmission mains. With sufficient storage to supply 7.0 MGD to the LGWTP for approximately 100 days, the In-Town Lakes are an important part of the City’s water resources. The water stored at this location is routinely “freshened” with raw water purchased from Norfolk to ensure consistent quality and a state of readiness. Numerous trials have been run utilizing this water to supply the LGWTP.  Experience has demonstrated that the raw water supply can easily be changed from its normal source (directly from the City of Norfolk) to the In-Town Lakes without causing any undesirable operational impacts to the treatment plant.

In 1987, the City entered into an agreement with the City of Virginia Beach for the development of a water supply from Lake Gaston on the Virginia-North Carolina border. Under the terms of the agreement, the City would pay one-sixth of the development costs and was guaranteed one-sixth of the water transported by the pipeline from Lake Gaston. The project is currently permitted for withdrawals up to 60.0 MGD. The pipeline was placed in service in November 1997. Since then, Lake Gaston water has been providing drinking water for the City of Virginia Beach. Chesapeake’s share of the water is available for the City to transport into Chesapeake’s corporate limits for treatment. As stated above, this supply will now be held in reserve for the future while the City addresses its intermediate demands via the Norfolk surplus raw water contract.

Water Distribution System: The physical property of the water system as of June 30, 2024, included approximately 973 miles of transmission and distribution lines varying in size from 2 inches to 36 inches in diameter, 6,209 fire hydrants, five elevated water tanks, eight ground storage tanks, seven wells and two water treatment plants. The water system is fully metered, with meter sizes ranging from 5/8 inch to 10 inches.

The daily average water consumption in gallons (in MGD) during the last six audited fiscal years:             

The Sewer System: Chesapeake’s sanitary sewer (wastewater) collection system became operational with the acquisition of assets of six sanitary districts existing within Chesapeake’s corporate limits at the time of the creation of the City in 1963.  Since that time, the City, through the Department, has expanded the sewer system, which consists of 281 pumping (lift) stations, 132 miles of force main, 773 miles of the gravity collection system, nearly 17,612 manholes and nearly 1,964 sewer clean outs as of June 30, 2024.

The following table shows the increase in sanitary sewer connections over the last five audited fiscal year:

* In FY2024, Public Utilities went through a system conversion to Hampton Roads Sanitation District’s (HRSD) Customer Care and Billing (CC&B) software. The previously utilized Customer Information System (CIS) reporting system included new development premises in the overall active number of accounts even before they were provided individual service. The new CC&B report excludes the new development premises from the count until the service is established at each property location . The difference is reflected in the reduction of active accounts from FY2023 to FY2024.

Renewal and upgrading of the sewer system and appurtenances are priorities of the Department.  In addition to the renewal of certain areas of the system, new construction continues as raw land is developed and the system is extended to areas of the City currently served by septic tanks.

To maintain the high degree of responsiveness and assurance of uninterrupted service to its customers, the Department has purchased state-of-the-art maintenance equipment. The Department operates four high pressure washer/vacuum sewer cleaner trucks, one pump and dump truck and three television inspection/grout trucks to clear stoppages of main lines, to remove sludge and debris from manholes and pumping station wet wells, and to visually inspect main lines for breaks and cracks and grout those defects when grouting is possible.  In addition, the Department has six portable generators that can be delivered to pumping stations that are not equipped with standby generators and connected to such pumping stations to restore power to the pumping station during periods of power outages. All of the City’s pumping stations are equipped with telemetry to alert the Department of power outages.

Wastewater Treatment:  Wastewater treatment is provided by the Hampton Roads Sanitation District (HRSD), an entity of the Commonwealth of Virginia acting under the direction of the HRSD Commission. The Department collects connection fees as agent for the HRSD Commission. Because such fees are passed through to the HRSD Commission, they do not constitute Revenues of the System.

Billing: HRSD offers a joint billing service. This joint billing is known as Hampton Roads Utility Billing Service.

(HRUBS) allows the respective jurisdictions’ charges for both water and sewer (wastewater) service, and HRSD’s charges for wastewater treatment to appear on the same bill. Chesapeake joined this regional program in 1997. Billing information is transmitted electronically from the City to HRSD. HRSD then uses the City’s meter reading information to calculate their charges for wastewater treatment. Customers send their payments to HRSD and HRSD transmits funds due to the City.

Project Details

• Reference ID: 26-054-2230
• Department: Public Utilities
• Department Head: TBD (TBD)

Important Dates

• Questions Due: 2026-03-23T20:00:10.491Z

Addenda

• Addendum #1 (released 2026-03-25T21:00:43.390Z) —

  Addendum #1- Questions received and Responses given  

Evaluation Criteria

• Specialized experience, expertise, and qualifications of the FIRM AND SUB -CONSULTANT FIRMS to be used on this contract (25 pts)
• Specialized experience, expertise and qualifications and depth of KEY PROJECT AND TEAM MEMBERS who will be assigned to this contract. (25 pts)
• Record of the firm in accomplishing work on other projects in the required time and within estimated consultant cost for similar work as this project. (15 pts)
• Quality of work previously performed by the firm for the City, or similar sized governmental agency. (15 pts)
• Whether the proposal meets the needs of the desired services that the City is seeking. (10 pts)
• Price/Cost (10 pts) —

  Offeror shall provide a firm, hourly rate/fee structure with the proposal.  Price/fee proposal shall cover all work detailed in this RFP and be a firm fixed price for the initial contract period of ONE YEAR.

  Cost will be evaluated and scored using the following calculation: (lowest amount/highest amount) x the maximum amount of points available.

Submission Requirements

• Proposal Response (without Cost) (required)
• Cost Proposal (required) —

  Please download the below Pricing/Fee Schedule: complete, and upload.

• Do you take exceptions to the scope of work and/or terms and conditions (both General and Specific)? (required)
• Submit exceptions here (required) —

  Please enter any exceptions taken by listing the item and submitting alternate proposed language using microsoft word.

• Are There Any Supplemental Agreements? (required) —

  Supplementary agreements, such as Master Service Agreements (MSAs), Service Level Agreements (SLAs), Non-Disclosure Agreements (NDAs), or other relevant documents that you would like considered for the final contract, must be submitted along with your response. 

• If you answered “Yes” to the above question, please upload your supplemental agreements here and submit with your proposal response.  (required)
• Certification of Compliance with Immigration Laws and Regulations (required) —

  Please download the below documents, complete and have notarized. An online notarization option will be provided for you when responding.

• Virginia State Corporation Commission (SCC) Registration Information (required) —

  AUTHORIZATION TO CONDUCT BUSINESS IN THE COMMONWEALTH: A contractor organized as a stock or non-stock corporation, limited liability company, business trust, or limited partnership or registered as a registered limited liability partnership shall be authorized to transact business in the Commonwealth as a domestic or foreign business entity if so, required by Title 13.1 or Title 50 of the Code of Virginia or as otherwise required by law. Any business entity described LISTED that enters into a contract with a public body pursuant to the Virginia Public Procurement Act shall not allow its existence to lapse or its certificate of authority or registration to transact business in the Commonwealth, if so required under Title 13.1 or Title 50, to be revoked or cancelled at any time during the term of the contract. A public body may void any contract with a business entity if the business entity fails to remain in compliance with the provisions of this section.

  Pursuant to Code of Virginia, §2.2-4311.2 subsection B, a bidder or offeror organized or authorized to transact business in the Commonwealth pursuant to Title 13.1 or Title 50 is required to include in its bid or proposal the identification number issued to it by the State Corporation Commission (SCC).  Any bidder or offeror that is not required to be authorized to transact business in the Commonwealth as a foreign business entity under Title 13.1 or Title 50 or as otherwise required by law must indicate by selecting one of the following reasons why the bidder or offeror is not required to be so authorized:

• Litigation Disclosure Form —

  Respond to each of the questions below by checking the appropriate box. Failure to fully and truthfully disclose the information required by this Litigation Disclosure Form may result in the disqualification of your bid or proposal from consideration or termination of the contract, once awarded. For purposes of this disclosure form, “you” means the individual or entity in whose name the bid or proposal is submitted.

• Have you or any principal, officer or director of your company, or any individual who will be assigned to work under any contract awarded pursuant to this solicitation, been convicted of a felony, or a misdemeanor involving moral turpitude, during the last ten (10) years? (required)
• Have you or any principal, officer or director of your company, or any individual who will be assigned to work under any contract awarded pursuant to this solicitation, been terminated from any work being performed for the City of Chesapeake or any other governmental entity in the Commonwealth of Virginia during the last ten (10) years? (required)
• Have you or any principal, officer or director of your company, or any individual who will be assigned to work under any contract awarded pursuant to this solicitation, been involved in any claim or litigation with the City of Chesapeake or any other governmental entity in the Commonwealth of Virginia during the last seven (7) years? (required)
• Has any parent company or wholly owned subsidiary of your company been involved in any claim or litigation with the City of Chesapeake or any other governmental entity in the Commonwealth of Virginia during the last seven (7) years? (required)
• If you answered “Yes” to any of the above questions, please state the name(s) of the person(s), the nature, and the status and/or outcome of the conviction, termination, claim or litigation, as applicable. Any such information should be provided on a separate page, attached to this form and submitted with your bid or proposal.
• STATE CORPORATION COMMISSION IDENTIFICATION NUMBER (required) —

  Pursuant to Code of Virginia, §2.2-4311.2 subsection B, a bidder or offeror organized or authorized to transact business in the Commonwealth pursuant to Title 13.1 or Title 50 is required to include in its bid or proposal the identification number issued to it by the State Corporation Commission (SCC). Any bidder or offeror that is not required to be authorized to transact business in the Commonwealth as a foreign business entity under Title 13.1 or Title 50 or as otherwise required by law is required to include a statement describing why the bidder or offeror is not required to be so authorized.

• Small, Women-Owned, Minority-Owned (SWaM) and Service Disabled Veteran-Owned Business —

  A certified SWaM Business is one that holds a current certification from the Virginia Department of Small Business and Supplier Diversity (SBSD), the U.S. Small Business Association (SBA), the Women’s Business Enterprise National Council (WBENC), National Minority Supplier Development Council (NMSDC) or from other U.S. State and some Local Government Supplier Diversity Programs.

• Is your company a certified Small, Woman or Minority Owned (SWaM) Business or Disadvantaged Business Enterprise? (required)
• Certification Type —

  If applicable, what is your company’s certification type?

• SWaM Certificate/Supporting Documentation —

  If applicable, attach any supporting documentation, including certificates, in regards to your company's SWaM status.

• Does this solicitation include any background information in section "Summary and Background"? (required)
• Projected Contract Value ($) (required) —

  Enter the estimated dollar amount for the entire contract period including renewal options.