8.3 Agr Water Sewer Rate StudyCITY OF SALINA
REQUEST FOR COMMISSION ACTION DATE TIME
5/19/97 4:00 P.M.
AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR
NO. 8 AGENDA:
Engineering & Utilities
ITEM
BY: Don Hoff BY:,:
ITEM:
Approval of a contract submitted by Wilson & Co. to conduct a Water and Sewer Rate Study.
BACKGROUND:
In 1992 Wilson & Co. prepared a Water and Sewer Rate Study to evaluate primarily the impact of
the construction of the upgrade of the wastewater treatment facilities and the construction of a new
interceptor sanitary sewer upon user charges.
Periodically, our utility rate schedules must be evaluated to insure adequate revenue is generated to
finance the anticipated operation, maintenance, replacement and capital improvement costs of the
water and water utilities. Rates are typically reviewed every five (5) years.
Wilson & Co. has submitted a proposal to perform a rate study projecting our revenue requirements
for the next five (5) years. The study will review the Water and Wastewater Division's past revenue
and consumption records; utilize population projections to estimate water consumption and sewer
usage for the 5 year planning period; develop cost projections for operation, maintenance, capital
improvements, debt retirement, bond coverage and other identified expenditures. A determination
can then be made regarding the adequacy of the existing water and sewer rates to meet projected
revenue requirements.
We have reviewed the scope of services outlined in the proposal and conclude the new rate study
will provide the financial analysis to allow us to establish the water and sewer rates for the next five
(5) years. The lump sum fee of $17,000 appears reasonable for the scope of services to be provided.
RECOMMENDATION:
We recommend the City Commission approve the attached proposal fxom Wilson & Co. to perform
the Water and Sewer Rate Study. The lump sum fee stated shall be full compensation for labor,
expenses, overhead and profit in performing the proposed services.
Resolution Number 97-5157
&COMPANY
1700 £ast Iron Avonuo
Salina, Kansas 67401
P.O. Box 1640 67402-1640
913-827-0433
9 May 1997
Albuquerque
Colorado Spnngs
Denver
Kansas City
Lenexa
Phoenix
Salina
San Diego
Wichita
Don Hoff, P.E.
Director of Engineering and Utilities
City of Salina
300 W. Ash
Salina, KS 67401
Re:
Water and Sewer Rate Study
Salina, Kansas
Dear Mr. Hoff.'
This letter is to serve as our proposal to the City of Salina for the preparation of a Water and
Sewer Rate Study for the Salina Water and Wastewater Department. In particular, this proposal
covers reviewing existing water and sewer revenues and making recommendations for
adjustments that may be required to finance anticipated expenditures of the Water Division and
Wastewater Division for operation, maintenance, capital improvements, debt retirement,
customer services, and administration.
BASIC SERVICES OF ENGINEER
Upon authorization from the City, Engineer will proceed with the work to evaluate the City's
water and sewer rates. A 5-year period will be analyzed for each utility: July 1997 - June 2002
for the sewer rate study; January 1998 - December 2002 for the water rate study. To the extent
possible, information from previous rate analyses and reviews will be utilized for this analysis.
Engineer will review past and present Water and Wastewater Department revenue requirements
and develop projected revenue requirements for the Water Division and the Wastewater
Division for their respective 5-year planning periods. The revenue requirements will include
cost projections for operation, maintenance, capital improvements, debt retirement, bond
coverage, customer service, general, administration, and other expenditures that may be
identified by the City.
Engineer will review existing metered water consumption records and develop metered water
consumption projections for the 5-year study periods. Projected water consumption will be
based on projections of future population. Sanitary sewer usage for the 5-year planning period
will be projected from metered water consumption, billed sewage volume records, or other
applicable data that may be provided by the City.
Engineers & Architects
&COMPANY
Don Hoff, P.E.
9 May 1997
Page 2
Engineer will determine the adequacy of existing water rates and sewer rates to meet projected
revenue requirements and will make recommendations for adjustments to the existing rates that
will be required to generate the required revenue through the 5-year planning periods.
Ten copies of the final report will be delivered to and discussed with the City. The report shall
be a one-volume engineering report consisting of two parts, one part for water and one part for
sewer, which will summarize the study findings and recommendations.
CITY'S RESPONSIBILITIES
The City agrees to make available existing water production and sanitary sewer flow records;
metered water consumption and billed sewage flow records;population projections; capital
improvement schedules; debt retirement schedules for on-going and proposed projects; water
and sewer utility audits, budget data, existing bond ordinances, existing rate ordinances, and
other applicable City records and personnel to assist Engineer with the data collection required
for the rate studies.
PERIOD OF SERVICE
Evaluation of the water and sewer rates will be completed and ready for review with the City by
6 June 1997. The final report, consisting of both the water rate study and the sewer rate study,
will be completed and submitted to the City by 16 June 1997.
If the City requests significant modifications or changes in the scope of services, the time of
performance and amount of compensation shall be adjusted equitably.
PAYMENTS TO ENGINEER
For the services described in this Agreement, the City agrees to pay the Engineer a lump sum
fee of $17,000. Partial payments of the lump sum amount will be requested at monthly intervals
based on progress determined by the Engineer. Payment shall be due within 30 days from date
of invoice. The total lump sum stated shall be full compensation for labor, expenses, overhead,
and profit in performing the proposed services.
Engineers & Architects
&COMPANY
Don Hoff, P.E.
9 May 1997
Page 3
If this proposal is acceptable to the City of Salina, please have the proper signatures affixed at
the end of this letter. Retain two copies and return one copy to us. We will consider the work
authorization date to be the date of the signature. If you consider it necessary for a member of
our firm to be present to discuss this proposal with your Governing Body, we will be available
to do so.
Wilson & Company sincerely appreciates this opportunity to be of service.
OWNER ENGINEER
City of Salina, Kansas
Recommended by:
Director of Engineering & Utilities
Wilson & Company
Engineers & Architects
1700 East Iron Avenue
Salina, KS 67401
Ronald L. Chandler, Officer
By:
Mayor
Attest:
By:
City Clerk
Martha A. Tasker, Project Manager
MAT/slg
Engineer~ & Architect~