Consider Award of Contract for Comprehensive Utility Plan Updates and Associated Rate Studies

On August 23, 2011 staff met with the City Council in work session to review the City's 2011 development cost study.  This was a comprehensive review of where the City currently stands in relation to other municipalities with regard to development costs (utility trunk fees, building permit fees, escrows, etc.).  During that meeting utility rates were discussed; particularly how those rates are determined.  Rates are determined by taking a comprehensive look at the City's utility system, projecting future growth, and then determining the infrastructure needs to support such growth.  A plan is then developed that outlines potential timelines and costs for infrastructure improvements.  The ultimate costs to construct and maintain that utility system is then evaluated to determine the appropriate funding mechanism to distribute those costs to users.  Revisions to those rates are then adjusted annually, with the adoption of the annual rates and charges, and are based on the construction index related to inflation and construction costs.

On November 15, 2011 the topic of comprehensive utility plan updates, and corresponding rate studies, were discussed by the Public Works Committee.  This conversation was timely, in that the City Council wanted to understand how updates to these plans may impact adoption of the City's annual rates and charges.  The Council wanted to delay action on adopting rates and charges for 2012 until these utility plan updates were completed.  Since that time the 2012 rates and charges were adopted by the City Council in December, with the idea that the utility fees could be revised (if necessary) once the studies were updated and the results of the rate study completed.  The direction from that meeting was to undertake a process to select a consulting firm to perform these needed plan updates.  Staff solicited, and received, quotes from 3 groups within the City consultant pool; the results of which are summarized below:

Staff has reviewed the proposals submitted, and while each firm outlined a different work plan to complete the project, Bolton and Menk effectively covered all items outlined in the Request for Proposal (RFP) for the lowest budgeted amount.  They are the firm that prepared the current comprehensive utility plans in 2004, and have completed many infrastructure projects within the city over the years.  They have always worked well with City staff on projects to date, and are eager to begin work on these comprehensive utility plans.

The first step in this process will be to compile and review existing utility system information.  They will then project future system needs, based upon population projections and City policy goals, to determine appropriate system revisions/expansions.  Following completion of these tasks a 20 year capital improvement program will be created, along with a rate study that identifies funding options to pay for the required improvements.  Throughout the process there will be several meetings scheduled, at both the staff and Council level, to get a firm understanding of the technical requirements of the system and policy direction related to assumptions and distribution of costs.

Staff recommends award of contract to Bolton and Menk, Inc., in an amount not to exceed $28,000, to complete comprehensive utility plan updates (and associated rate studies).

Funding for these comprehensive utility plan updates would come from the corresponding City enterprise funds.

Motion to award a contract to Bolton and Menk, Inc., in an amount not to exceed $28,000, to complete comprehensive utility plan updates (and associated rate studies).