Explanation
1. BACKGROUND: This legislation authorizes the Director of Public Utilities to enter into a professional services agreement with Arcadis, Inc. in the amount of $165,000.00 for the development and update of cost of service studies; comprehensive rates, fee, and charge analysis; and general financial analysis services for the Director’s Office - Fiscal Section of the Department of Public Utilities.
The Department of Public Utilities has contracted with professional services firms over the years to perform independent cost of service studies and to perform a variety of financial analysis studies. As utility services expand so does the cost of these services. Cost of Service studies, fee analysis, and general financial analysis services assist the Department in generating sufficient revenues to pay for water, sewer, storm, and power capital improvement projects and operating and maintenance expenses in an equitable manner. The Department strives to maintain pricing objectives that maintain customer class equity, low income affordability, revenue stability, business retention, and public understanding and acceptance.
Specific services under this contract consist of: 1) reviewing existing cost of service studies and rate models currently in place; 2) recommending and implementing changes to the structures of the rate models, updating the models with current data, and developing new financial rate models and cost of service studies as needed; 3) providing comparative data regarding current rate model structures, and rates and fees for a minimum of 10 other communities and utilities of similar size and complexity; 4) analyzing all current and existing fees and charges for services, and analyzing the need for new fees and charges for services and recommending appropriate changes and comparisons of charges in other utilities; 5) reviewing the Power Cost Reserve Adjustment including the power cost base and the operating reserve allocation component and m...
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