Memorandum

City of Lawrence

Utilities Department

TO:	David L. Corliss – City Manager Diane Stoddard - Assistant City Manager Casey Toomay – Assistant City Manager Brandon McGuire – Assistant to the City Manager
FROM:	Jeanette Klamm – Management Analyst
CC:	Dave Wagner – Director of Utilities Mike Lawless – Deputy Director of Utilities Philip Ciesielski – Assistant Director of Utilities
DATE:	December 10, 2014
RE:	Agenda Item - Advertise RFP R1417 for rate model and financial services

Background

The Lawrence Department of Utilities currently uses a computer model to help determine the appropriate cost of service rates for water and wastewater services. The model was developed after the completion of the 2002 Master Plan, using the customer characteristics identified in that plan. Each year staff has updated the financial and capital project information in the rate model to determine funding needs. However, it has not had a thorough review and update after the completion of the 2012 Master Plan. Due to the complexity and detail associated with the rate model, there are many aspects of the model that can change as customer use characteristics change. In addition, a thorough review of the Department’s funding plan by a qualified financial consultant and recommendations for financial strategies are prudent for sustaining the current Capital Improvement Plan.

Project Details

Staff has prepared a Request for Proposals for rate model and financial services. Specific project scope and schedule will be determined by staff, but shall include a detailed examination of the current rate model; evaluation of its effectiveness and adequacy for funding cost of water and wastewater service; update of the model to include modifications for operations and maintenance projections for the new wastewater treatment facility and other aspects, based on the 2012 Master Plan; and  review and recommend updates in the Department’s financial strategies, fees and charges, and bond issuance duration.

Project Funding

The project will be funded from the Department of Utilities 2015 Operations & Maintenance fund.

Action Request

Authorize Staff to advertise a Request for Proposals, RFP R1417, for rate model and financial services.