Cost of Service Study

The Vendor is required to provide cost of service (COS) study (water, wastewater, reclaimed water, and solid waste) to evaluate current rates and align revenue requirements with necessary operations, maintenance, debt, infrastructure, and reserves.
- COS study for water, wastewater, and reclaimed water is to include:
• Create proposed revenue requirements by customer class, compared to current revenue under existing rates validated against the city rate model projections.
• Prepare analysis of the impact of peak demands on the cost of providing service.
• Discussion of options to modify existing rate structures for more conservation, while still ensuring stable revenue recovery and ease of administration.
• Prepare analysis of base rate and variable rate for water, wastewater and reclaimed water charges, to ensure amounts are reasonable.
• Prepare analysis of fixed monthly base charge vs base and variable rate for wastewater single family and multi-family.
• Review of largest industrial user historical information and current status (based on prior report that justifies they have paid “their fair share” into the system), to validate they are not adding burden on rates today.
• Create a data model that will allow for different scenarios to be looked at including should our largest industrial user increase or decrease their water or wastewater flows by x% that would evaluate those changes to the revenue and rates.
• Provide projected impact that the proposed rate structure will have on future consumption patterns, and the resulting impact on the cost of providing service.
• Develop strategies for implementing significant rate changes in order to reduce the adverse impact on specific customer classes (i.e. Spread rate changes, achieve a certain percentage alignment).
• Customer bill impacts of recommended changes, including monthly bills for typical levels of consumption
• A utility fee comparison to surrounding cities for each customer class using current rates and any proposed changes to rates.
• Prepare analysis of meter installation fees and pretreatment fees for cost recovery
• Draft and final reports summarizing findings, assumptions, methodology and recommendations.
• Rate recommendations should be in both percents and dollars, annual and monthly.
• In person attendance at a kickoff meeting and any meetings deemed critical including city council work session(s) or council meeting(s) where the results will be presented.