HomeMy WebLinkAbout7-Consideration of a Contract with HDR, IncAgenda Item # 7
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Public Utility District
CONSENT
To: Board of Directors
From: Robert Mescher
Date: August 21, 2013
Subject: Consideration of a Contract with HDR, Inc. to Review and Update
the District's Water Rate Study
1. WHY THIS MATTER IS BEFORE THE BOARD
Board approval is required for expenditures in excess of $15,000.
2. HISTORY
An unfunded state mandate, AB 2572, required the District to begin billing its
residential customers volumetrically.
The December 3, 2008 Board Meeting, the Board adopted a $5 monthly meter
surcharge for five years, ending December 31, 2013 to help fund the installation of
residential water meters.
In 2009, the District contracted with HDR, Inc. to complete a comprehensive cost of
service and water rate study in preparation for residential volumetric billing. The study
ensured revenue was failrly charged to customers and was sufficient to meet all of the
District's obligations, while providing quality service to the customers.
At the September 16, 2009 Board Meeting, the Board adopted HDR's water rate study.
As recommended by HDR, the water rates were increased an average of 1.75% per
year in FY10 and FY11.
Water rates remained unchanged in FY12 and FY13.
3. NEW INFORMATION
The $5 monthly meter surcharge will end December 31, 2013. The surcharge
represents about 7% of revenue for the past five years.
Without the meter surcharge and with inflationary increases to operating costs, the
water rates may have to be modestly increased 2% to 3% per year for the next two
years.
HDR has submitted a proposal to review and update the 2009 water rate study for a
cost of $28,875. The proposal is included as Attachment 1.
Since the 2009 rate study, the District has collected residential volumetric data since
2009. This data will facilitate fine-tuning the water rate model.
HDR can use the 2009 study as a basis, and update the model with today's
information to ensure the revenue will continue to be fairly charged to customers and
will be sufficient to meet all of the District's obligations, while providing quality service
to the customers.
4. FISCAL IMPACT
The cost of the proposed water rate study update is $28,875. There are sufficient
funds in the FY13 Budget for this update.
5. RECOMMENDATION
Award a contract to HDR, Inc. to update the District's 2009 water rate study for an
amount of $28,875.
Robert Mescher
Administrative Services Manager
Michael D. Holley
General Manager