HomeMy WebLinkAboutAgenda Report - September 4, 2013 C-11AGENDA ITEM C -0 t I
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Approving Task Order No. 4 with The Reed Group, Inc., of
Sacramento, for Wastewater Utility Financial Planning and Rate Setting Services
($25,000) and Appropriating Funds ($35,000)
MEETING DATE: September 4, 2013
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Adopt resolution approving Task Order No. 4 with The Reed Group,
Inc., of Sacramento, for wastewater utility financial planning and rate
setting services in the amount of $25,000 and appropriating funds in
the amount of $35,000.
BACKGROUND INFORMATION: Staff and the City's consultants are continuing the financial planning
and rate setting analyses for the wastewater utility related to the
installation of residential meters and the conversion from flat rate to
metered rate billing.
On July 21, 2010, City Council adopted the usage -based residential rate structure. An objective of that
rate structure is that it be revenue neutral compared to the existing flat rate structure. It is a prerequisite
that regular monitoring of revenues be performed to assure that revenues are kept in line with current
and planned expenditures.
Task Order No. 4 of The Reed Group Master Professional Services Agreement is attached as Exhibit A.
The principal services covered by this task order are listed below.
1. Complete the current wastewater rate analyses that will lead to usage -based wastewater rates
for all customer classes.
2. Prepare and present wastewater rate recommendations to the City Council in both a
Shirtsleeve meeting and public hearing to adopt new wastewater rates.
3. Assist in preparing the required public hearing notice required by Proposition 218.
4. Continue to monitor waste usage characteristics as water meters are installed and monitor the
performance of the new wastewater rates.
5. Assist staff with utility billing issues that may arise with the transition to the new rate structure.
6. Provide other services related to the wastewater utility as requested by City staff.
Staff recommends City Council approve Task Order No. 4 that will assist staff through the course of the
Water Meter Program and the conversion from flat to usage -based billings.
FISCAL IMPACT: Cost of Services is included in the Wastewater Utility budget.
FUNDING AVAILABLE: Requested Apprgpriation: Wastewater Operating (170) - $35,000
Jordan Ayers /
Deputy City Manager/Internal S ices Director
F. Wally Soidelin
Public Works Director
FWS/pmf
Attachment j
w..;e D
rtlam, City Manager
KMMUTILITY RATES\W VV MCReedTaskNo 4.doc
8/19/2013
Exhibit A
Task Order No. 4
City of Lodi
Wastewater Utility Financial Planning, Rate Setting Services
The Reed Group, Inc.
In accordance with the Task Order Agreement for Professional Services between the City of
Lodi (Client) and The Reed Group, Inc. (Consultant), Consultant is authorized to complete the
work scope defined in the Task Order according to the schedule and budget defined herein.
The mutually agreeable terms and conditions for the above -referenced agreement shall prevail.
WORK SCOPE
The scope includes financial planning and rate setting for the City's wastewater utility, in
accordance with the attached proposal dated August 12, 2013.
BUDGET
The costs for Consultants services as defined herein shall not exceed $25,000.
COMPENSATION
Compensation shall be in accordance with the provisions of the Task Order Agreement between
Client and Consultant and the billing rate schedule contained in the attached letter proposal,
SCHEDULE
The work will be completed in accordance with the attached letter proposal.
THE REED GROUP
ROBERT REED
President
Date
APPROVED AS TO FORM:
D. STEPHEN SCHWABAUER
City Attorney
CITY OF LODI
KONRADT BARTLAM
City Manager
Date
ATTEST:
RANDI JOHL-OLSON
City Clerk
KAMUTILITY RATES%W WMReedTaskOrder4.doc 8/18!2013
THE REED GROUP, INC.
August 12, 2013
Wally SandeIin
City of Lodi
221 West Pine Street
P.O. Box 3006
Lodi, CA 95241-1910
Subject: Task Order No. 4 - Wastewater Utility Financial Planning and
Rate Setting Assistance
Dear Wally,
In August 2008, the City of Lodi and The Reed Group, Inc. entered into a Task Order
Agreement to provide services related to the City's water and wastewater financial
plans and user rates. Since that time we have provided a variety of services related to
both water and wastewater. At present, the budget for Task Order No. 2, related to
wastewater financial planning and user rates, is nearing its limit. Current work to
update the City's wastewater rates based on metered water usage is not yet complete,
and it will be several more months before new rates will be adopted. To complete the
current effort, as well as allow for additional assistance as the City continues with its
metering program, we respectfully request approval of Task Order No. 4 to perform
additional assistance with respect to the City's wastewater utility in the areas of financial
planning and rate setting. Below is a Iist of the areas of additional assistance suggested
for the City.
• Complete the current wastewater rate analyses, which will lead to usage -based
wastewater rates for all customer classes
• Prepare and present wastewater rate recommendations to the City Council in
both a shirt sleeve meeting and a public hearing to adopt to new wastewater
rates
• Assist in preparing the required public hearing notice required by Proposition
218
• Assist staff in periodically updating and evaluating the multi-year financial plan
for the wastewater utility
• Continue to monitor water usage characteristics and water meters are installed,
and monitor the performance of new wastewater rates
WALLY SANDELIN
AUGusT 12, 2013
&�� PAGE 2
Assist staff with utility billing issues that may arise with the transition to new
rate structures
• Other services related to the wastewater utility, as requested by the City.
It is proposed that these services be performed on a time and expense basis, subject to a
not -to -exceed budget limit. Because of the ongoing nature of services being provided, it
is not possible to provide a firm estimate of the total costs that might be involved. My
best guess is that costs may range from $10,000 to $25,000 annually. At your suggestion,
Task Order No. 4 includes a budget of $25,000.
My 2013 hourly billing rate is $275 and it is subject to change each January. Other
expenses related to my work for the City are nominal.
As you know, it is our practice to bill clients no more frequently than monthly for actual
time and expenses incurred since the prior invoice. Payment is due within 30 days.
If you have any questions regarding this Task Order No. 4, please call me at (916) 444-
9622. I appreciate being of continued service to the City.
Sincerely,
P<'=� V�->
Robert Reed
The Reed Group, Inc.
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C MY OF WDE,
APPIWPIRIATI 0-NASLISTED BELOW
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PR �NAD UW
FUND # BUS. UNIT # ACCOUNT# ACCOUNT TITLE AMOUNT
A.
SOURCE OF
FINANCING
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TO:
Internal Services Dept, - Budget Division
3, FROM:
lRebecca Areida-yadav 15. DATE:
8119/2131113
,4. DEPARTMENT/DIVISION: Public Works
6.-REQUEST'AUJUSTMENT6011F
APPIWPIRIATI 0-NASLISTED BELOW
FUND # BUS. UNIT # ACCOUNT# ACCOUNT TITLE AMOUNT
A.
SOURCE OF
FINANCING
170 3205 Fund Balance $ 35,000.00
B.
USE OF
FINANCING
170 170401 7323 Wastewater Admin - Prof.Services $ 35,000.00
�Please provide a description of the project, the total cost of the project, as well as justification for the
requested adjustment. If you need more space, use an additional sheet and attach to this form.
Order No. 4 with The Reed Group for wastewater utility financial planning and rate setting services.
ncil has authorized the appropriation adjustment, complete the following:
Date: ReV40; I Attach copy of resolution to this form.
Head Signature:
187 AP --I MAU
-WONATUR
Deputy City Manager/Internal Services Manager Date
Submit completed form to the Budget Division with any required documentation.
Final approval will be provided in electronic copy format,
RESOLUTION NO. 2013-161
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING AND
AUTHORIZING THE CITY MANAGER TO EXECUTE TASK ORDER
NO. 4 WITH THE REED GROUP, INC., FOR WASTEWATER
UTILITY FINANCIAL PLANNING AND RATE SETTING SERVICES
AND FURTHER APPROPRIATING FUNDS
------------------------------------------------------------------------
------------------------------------------------------------------------
WHEREAS, staff and the City's consultants are continuing the financial planning and
rate setting analyses for the wastewater utility related to the installation of residential meters and
the conversion from flat rate to metered rate billing; and
WHEREAS, in August 2008, the City and The Reed Group, Inc., entered into a Task
Order Agreement to provide services related to the City's water and wastewater financial plans
and user rates; and
WHEREAS, on July 21, 2010, the City Council adopted the usage -based residential rate
structure. An objective of that rate structure is that it be revenue neutral compared to the
existing flat rate structure. It is a prerequisite that regular monitoring of revenues be performed
to assure that revenues are kept in line with current and planned expenditures; and
WHEREAS, staff recommends The Reed Group continue its financial planning and rate
setting services and assist City staff through the course of the Water Meter Program and the
conversion from flat to usage -based billings.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve
Task Order No. 4 with The Reed Group, Inc., of Sacramento, California, for wastewater utility
financial planning and rate setting services in the amount of $25,000; and
BE IT FURTHER RESOLVED that the City Council does hereby authorize the
City Manager to execute Task Order No. 4; and
BE IT FURTHER RESOLVED that funds in the amount of $35,000 be appropriated for
the project from the Wastewater Operating account.
Dated: September 4, 2013
------------------------------------------------------------------------
------------------------------------------------------------------------
I hereby certify that Resolution No. 2013-161 was passed and adopted by the City Council of
the City of Lodi in a regular meeting held September 4, 2013, by the following vote:
AYES: COUNCIL MEMBERS — Hansen, Johnson, Katzakian, Mounce, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — No�JOHL-OLSON
City Clerk
2013-161