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<br />REQUEST FOR COUNCIL ACTION <br />Date: 2/26/2024 <br />Item No.: 10.g. <br />Department Approval City Manager Approval <br /> <br /> <br />Item Description: Approve utility rate study contract <br />1 <br />2 Background <br />3 The city hired Ehlers to perform the first utility rate study for the City in 2020, for <br />4 establishment of the 2021 utility rates for the Water and Stormwater funds. In 2022, Ehlers <br />5 updated the utility rate study for the Water and Stormwater funds and a new rate study was <br />6 added for the Sanitary Sewer fund. This study established the utility rates for 2023. Based <br />7 on changing capital project needs that are identified in the capital improvement plan (CIP) <br />8 and based on cost increases from St. Paul Regional Water and Met Council Environment <br />9 Services, an update of the utility rate study should be conducted periodically. <br />10 <br />11 As Ehlers is familiar with Roseville utility operations and has built a financial model to <br />12 analyze usage and cost recovery in our utility systems, staff felt it was best to continue <br />13 working with Ehlers. Engaging with another firm to conduct the utility study would cost <br />14 more and take more time due to the need for a new firm to set up and input Roseville data <br />15 into their financial model. As a result, staff requested a cost proposal from Ehlers to <br />16 examine the operational and capital expenditures using current CIP and other cost drivers. <br />17 They will examine the allocation of charges to ensure those customers who use the system <br />18 are paying for the system in proportion to their consumption. <br />19 <br />20 Attached is the cost proposal from Ehlers which outlines the process and deliverables. The <br />21 not-to-exceed cost of the utility rate study is $22,800, which will be covered by the Water, <br />22 Sanitary Sewer and Stormwater funds. <br />23 <br />24 Policy Objectives <br />25 To provide a basis for establishing utility rates based on operational and capital equipment <br />26 and infrastructure needs. <br />27 <br />28 Racial Equity Impact Summary <br />29 No racial equity impacts are expected with this action. <br />30 <br />31 Budget Implications <br />32 The costs for this study will be paid by the Water, Sanitary Sewer, and Stormwater Funds. <br />33 <br />34 Staff Recommendations <br />35 Staff recommends the Council approve the contractwith Ehlers for the updated utility rate <br />Page 1 of 2 <br />Qbhf!312!pg!335 <br /> <br />