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Sparks City Council Meeting 9/10/2012

General Business: 6.5

Title: Consideration and possible approval of a contract for Sewer, Storm Drain, and Effluent Systems’ Rate Study Analysis with FCS Group in the amount of $137,651.
Petitioner/Presenter: John Martini, P.E., Assistant Community Services Director/Andrew Hummel, P.E., Utility Manager
Recommendation: Staff recommends the City Council approve the contract for Sewer, Storm Drain, and Effluent Systems’ Rate Study Analysis with FCS Group in the amount of $137,651.
Financial Impact: The total contract amount is $137,651. Budget appropriations of $100,000 is approved in the FY13 CIP in the following programs: $65,000 in 13-6504 Sewer Utility Rate Study, $30,000 in 13-6703 Drains Utility Rate Study, and $5,000 in 13-6900 Effluent Utility Rate Study. To offset the shortfall of $37,651, a budget adjustment will be done in the following amounts: $24,473.15 from 13-6604, Sewer Emergency Funds, $11,295.30 from 13-6805, Storm Drains Emergency, and $1,882.55 from 13-7000, Effluent Emergency.
Total Costs: $137,651.00
Fund: Sanitary Sewer Operations Fund    Account: 603242
Program: Utility Rate Study (13-6504)
Amount: $137,651.00    Budget Status: Budget Exists
Business Impact (Per NRS 237):
    
A Business Impact Statement is not required because this is not a rule.
Agenda Item Brief: The City enacted a 5-year rate increase in January of 2008, with the last increase occurring January of 2012. Staff requested proposals from interested and qualified firms to perform a Rate Study Analysis. Six firms responded, through a proposal review and interview process FCS Group was selected to perform the work. A scope of services was negotiated in the amount of $137,651. It is anticipated that this work will require 6-9 months to complete. Staff recommends approval.


Background: FCS Group finalized a Financial Rate Study for the City of Sparks in May of 2008. With this previous study, a five-year rate was enacted, which was completed in January of 2012. Since the 2008 study, numerous economic and regulatory changes have occurred requiring a detailed analysis of the Utility Rates, Policy, and Code. To proceed with a new rate study, staff placed $100,000 in budget within the 2012/13 approved CIP for this work. An RFP for a new fee study was prepared and published May 9th, 2012 with six firms responding by the May 30th, 2012 due date. The six responding firms were: Farr West Engineering FCS Group Hansford Economic Consulting Raftelis Financial Consultants Stepwise Utility Advisors Sustainable Resource Engineering The six proposals were reviewed and ranked by four staff members from Community Services Engineering, TMWRF, and Finance. Based on the initial reviews, three firms were ranked closely at the top, and an interview process was determined to be the best way to make the final selection. The three firms selected for interview were: Farr West Engineering FCS Group Raftelis Group After the interviews, it was determined that FCS Group was best suited to provide the services required. FCS Group is teamed with CH2MHill on this work. A scope of services has been prepared and fee negotiated. It is anticipated that preliminary results will be available for review within 6 months followed by final reporting in 9 months. The results of the study will be presented to City Council in the second quarter of 2013.

Analysis: The proposal provided by FCS Group provides the services needed to evaluate and recommend changes for the City’s Utility rates, policies, and ordinances.

Alternatives: 1. City Council could approve the contract to perform rate analysis as outlined by Staff. 2. City Council could reject the contract to provide rate analysis and provide direction to the City Manager.

Recommended Motion: I move to approve the contract for a Sewer, Storm Drain, and Effluent Systems’ Rate Study Analysis with FCS Group in the amount of $137,651.

Attached Files:
     Sparks Rate Study Scope.pdf
     FCS Contract- Rate Study.pdf

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