The Public Works Department regularly undertakes water and wastewater rate studies.  MCA 7-6-1602 requires a review of system development fees every two years and it is necessary to complete this review in fiscal year 2015 to be compliant with state law.  Periodic updates are especially important given the cost magnitude of capital improvements in the water and wastewater capital improvement programs.  This rate study will cover a two year period for the fiscal years 2016 and 2017 to coincide with the system development fee review requirements.  A cost of service rate study is needed to review and recommend appropriate rates for System Development Fees, water and wastewater user rates, resale water rates for the County Water District of Billings Heights, and wholesale rates for the Lockwood Water and Sewer District and Phillips 66 Billings Refinery.  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.  The study will be completed in time to allow the outcome to be reflected in the FY 2016 budget.

A Request for Proposals (RFP) was mailed to four firms from a list of prequalified firms.  Two proposals were received, one from Advanced Engineering and Environmental Services, Inc.(AE2S), and one from HDR Engineering, Inc.  An RFP selection committee was formed to evaluate and rate the two proposals and the committee unanimously voted to recommend awarding the agreement to AE2S. 

• Approve the award of the professional service agreement; or
• Not approve the agreement.  If the City does not approve this agreement, it will be unable to adjust these fees without violating state and case law.