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AI# 11429  Regular City Council Meeting 6.7. 03/21/2023:

Information

Agenda Item

Resolution - Water Utilities: Consider a resolution authorizing the Mayor to execute Professional Services Agreement, Contract No. 17201, with New Gen Strategies and Solutions, LLC, for services related to updating and evaluating water and wastewater cost of services and rate models.

Item Summary

The periodic evaluation of the City of Lubbock’s current water and wastewater rate structure is an essential step in optimizing 3 objectives associated with water rates. These 3 objectives include: 1) revenue stability, 2) affordability, and 3) water conservation. Bond rating agencies strongly encourage utilities to evaluate their cost of services, rates, and rate structures periodically.  The City’s most recent comprehensive water and wastewater rate evaluation was performed in 2016 by New Gen Strategies.  The City’s water and wastewater cost of services was updated, and the water and wastewater rate structures were evaluated to determine whether objectives were being met through the existing rate structures.  New Gen Strategies worked with staff and the Water Advisory Commission to develop rate recommendations. In September 2017, the City Council adopted recommended modifications to the residential water rate structure.  In addition, the City Council adopted recommended wastewater rates for all customer classes without changing the wastewater rate structure.  Changes to the commercial water rate structure were not considered. This agreement with New Gen Strategies is for continued support to staff in updating cost of services, revenue requirements, financial forecasting, and rate model enhancement for the Water and Wastewater enterprise fund.  Staff recommends award of this Professional Service Agreement to New Gen Strategies based on their qualifications and reasonable pricing.  The fees for the related services shall not exceed $152,586.

Fiscal Impact

Sufficient funds have been allocated in the Water and Wastewater FY2022-23 Operating Budget for this project.

Staff/Board Recommending

Erik Rejino, Assistant City Manager L. Wood Franklin, Division Director of Public Works

Attachments NewGen- Resolution NewGen- Contract

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