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File #: 19-0075    Version: 1 Name: 2/4/19 Arcadis Cost of Service Review/Alternatives
Type: Resolution Status: Passed
File created: 2/4/2019 In control: City Council
On agenda: 2/4/2019 Final action: 2/4/2019
Enactment date: 2/4/2019 Enactment #: R-19-054
Title: Resolution to Approve a Professional Services Agreement with Arcadis of Michigan, LLC for Rate Study Review and Alternative Rate Design Analysis and to Appropriate Funds from the Water Supply System ($27,495.00) (8 Votes Required)
Attachments: 1. ArcadisPSA_Draft.pdf
Title
Resolution to Approve a Professional Services Agreement with Arcadis of Michigan, LLC for Rate Study Review and Alternative Rate Design Analysis and to Appropriate Funds from the Water Supply System ($27,495.00) (8 Votes Required)
Memorandum
In June 2018, a new rate structure was enacted based on a Cost of Service Study for Water and Wastewater Services.

Subsequent to the rate implementation, City Council adopted a "Resolution Directing the City Administrator to Develop and Present to Council by March 31, 2019 a List of Feasible Alternatives to Revise the Recently-Adopted Water Rate Restructuring Ordinance to Mitigate the Adverse Impacts of the Ordinance of Single-Family Residential Customers" (R-18-499). Due to the urgency of this task, to implement this resolution, the City selected Arcadis of Michigan, LLC as a consultant. Arcadis was a close competitor to perform the original Study, and as a well-established reputation for excellence in this arena. Arcadis' Financial Services Practice Lead, Robert Ryall, has conducted rate studies through the United States, from California to Connecticut, and is a contributor to industry manuals of practice for rate setting, including the American Water Works M1 "Principals of Water Rates, Fees and Charges."

To perform this agreement, Aracadis will receive data from Stantec, which performed the earlier Study, so that it may review the rate design, and its supporting data, and present alternative designs, if the data can justify them. As directed by Council, Stantec, Arcadis and City Staff will generate a report including pros/cons of any feasible, justifiable alternatives including, but not limited to:

* eliminating the 4th Tier in single-family residential
* re-instating the water rate structure in place prior to July 1, 2018 (permanently, or at least until water utility rate increases return to levels approximating inflation)
* adopting volume-based pricing tiers in the commercial customer class
* establis...

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