Title
Consider approving Resolution No. 2025-079 authorizing the City Manager to execute a professional services agreement for a stormwater utility fee rate study in the amount of $55,950; and take appropriate action.
Body
REQUESTER:
Public Works Department
BACKGROUND:
A scope study is a financial analysis method that enables decision-makers to explore various rate scenarios when setting stormwater rates. The model illustrates operational and capital infrastructure improvements and funding requirements into future years, pairing those with rate levels that cover capital infrastructure projects through cash, tax-backed General Obligation bonds, or utility system revenue bond funding options.
The scope is developed to ensure that stormwater operations and capital improvements are scheduled and funded in a financially sound manner, considering long-term system requirements and that customers are charged fairly for stormwater services. The primary goal is to determine appropriate rate levels and rate structures that generate sufficient revenue to cover annual operating costs and scheduled capital projects.
The scope will project future operating expenses and capital requirements needed to meet flooding issues, erosion control, regulatory requirements, aging infrastructure, and anticipated growth. It defines rates to allow for the accumulation of sufficient cash reserves to cover unexpected costs, emergencies, and future capital needs.
The scope will examine and make a recommendation for the most appropriate rate structure (e.g., fixed fees, variable charges based on use type) to ensure that customers pay for the services they use in a way that is understandable, equitable, and aligns with the system's financial objectives. A well-conducted scope study provides a defensible basis for proposed rate increases and ensures the system is self-supporting.
DISCUSSION:
The Public Works Department has secured a professional services agreement with Freese & Nichols, Inc. to create a stormwater rate scope. This is the financial side of maintaining a reliable and sustainable stormwater system for the City.
FISCAL IMPACT:
This is a budgeted project that will be funded through the Stormwater Operational account.
DISTRICT:
Citywide
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2025-079 as presented.
2. I move to approve Resolution No. 2025-079 with modifications.
3. I move to table the issue for further study or take no action.
ATTACHMENT(S):
1. Resolution No. 2025-079
2. Professional Services Agreement
3. Scope of Services