Public Works typically conducts a rate study every two years.  This corresponds with MCA 7-6-1602 which requires a review of system development fees every two years.  A periodic update is especially important given the cost magnitude of capital improvements in the water and wastewater capital improvement programs.  The last full scale rate study was performed in FY 2011.  A cost of service rate study is needed to review and recommend appropriate rates for System Development Fees, Wastewater resale customers, Lockwood Sewer, Water resale customers, and the County Water District of Billings Heights.  In order to comply with State law and meet projected operation and maintenance costs, as well as fund major capital project needs, adjustments are needed for both the system development fees and user rates.  A Request for Proposals (RFPs) was mailed to four firms from a list of prequalified firms.  Only one of these firms, CDM Smith Inc., submitted a response.  Staff believes CDM Smith , Inc. is qualified and has relevant experience with resale and  wholesale rate studies, as well as system development fee studies, including performing the previous rate study for the City of Billings in FY 2011.  The study will be completed in time to allow the outcome to be reflected in the FY 2014 budget.