Res 037-2001 4/17/2001RESOLUTION NO. 3n' 1,N) l
RESOLUTION TO APPROVE THE CONTRACT WITH WILLIS, GRAVES
AND ASSOCIATES, INC. FOR THE PHASE II WATER AND SEWER
COST OF SERVICE AND RATE STUDY; FINDING AND DETERMINING
THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED
WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW.
WHEREAS, the City of Wichita Falls provides water and sewer utility services for
its citizens and for certain wholesale customers; and
WHEREAS, the rate for such services are based on the Cost of Service; and
WHEREAS, it is necessary periodically to review the Cost of Service and adjust
rates accordingly; and
WHEREAS, the Council has examined a proposed contract from the consulting
firm of Willis, Graves and Associates, Inc. whereby the firm will conduct a Cost of
Service and Rate Study.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
SECTION 1. Phase II of the said contract with the consulting firm of Willis,
Graves and Associates, Inc. to perform a Water and Sewer Cost of Service and Rate
Study is hereby approved with the maximum fee of $14,200 for contracted services.
The City Manager is authorized to execute the contract for the City of Wichita Falls.
SECTION 2 It is hereby officially found and determined that the meeting at
which this resolution was passed was open to the public as required by law.
PASSED AND APPROVED this the 17th day of April 2001.
ATTEST:
City Clerk
AYOR
WILLIS, GRAVES & ASSOCIATES, INC.
6101 W. COURTYARD DRIVE
Telephone SUITE 221 Telecopier
(512) 346 -8240 AUSTIN, TEXAS 78730 (512) 346 -2817
March 16, 2001
Mr. David Lehfelt, Utility Operations Manager
City of Wichita Falls
P. O. Box 1431
Wichita Falls, Texas 76307 -7531
Re: Contract for Phase II of Utility Rate Study of Water and Sewer Utilities
for the City of Wichita Falls
Dear Mr. Lehfelt:
Pursuant to your request, we are pleased to submit the following proposed letter
agreement for Phase II of the Retail Water and Sewer Cost of Service and Rate Study for the City
of Wichita Falls. We are prepared to start working on the study within one week of being
authorized to proceed.
The Phase I Study involved the determination of the cost of service and revenue
requirements required to support the financing of approximately $118 million in additional water
revenue bonds along with the current operational requirements as are defined in the FY 2001
Budget. Phase I Study assumed the rate making principals from the prior rate analysis were not
to be changed. The Phase II Study will at a minimum address the three revisions set out below,
with the possibility of addressing additional scenarios which might arise during the course of the
study.
It is anticipated that the Phase II Study will be revenue neutral, only modifying the rate
structure but not the cost of service or revenue requirements. However, is .there are significant
changes in costs or timing brought about in the issuance of the additional debt or the capital
improvements plan, we will certainly modify the cost of service as necessary to reflect the most
current data.
As detailed in this contract, our fee for Phase II will be based on the actual number of
hours and costs required to accomplish the required tasks. Our estimate of the proposed
maximum fee for the Phase II project is somewhat open at this time due to the uncertainty as to
what changes in the cost of service may be required or what additional scenarios may be desired.
Based on the tasks described below, we would anticipate a level of effort that would suggest a
contract maximum of $14,200.
The following terms and conditions are proposed:
Mr. David Lehfelt
March 16, 2001
SCOPE OF SERVICES
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It is our understanding that the primary objective in performing this study is to examine
several rate alternatives which have previously been identified by the City Council or the City
Staff and to present the rate impact on the City's customers of modifying the rate structure to
incorporate any or all of the recommendations. The currently identified alternatives to be
addressed are as follows:
Quantify the rate impact of revising the billings to the City water and sewer accounts,
whereby enterprise fund accounts will be brought up to standard rates over a three -year
period. The non enterprise funds will be left as is.
2. Quantify the rate impact of billing Weeks Park Golf Course for raw water at the standard
raw water rate, phased in over a three -year period.
3. Quantify the rate impact of phasing out the declining block rates for water service for
commercial customers over a three -year period. As an alternative, design an ascending
block rate structure for both residential and commercial which would have a lower basic
block with one or more ascending blocks. This also would be phased in over a three -year
period.
It is anticipated that one or more Council workshops will be required to discuss the
results of the study and determine if additional scenarios might be examined. A presentation
before Council is also anticipated.
Work products will include a draft report, a formal report setting out recommended rate
revisions and a computer model of the cost of service and rate design for each of the utilities for
use in future rate studies.
COMPENSATION
Services performed under this agreement will be billed on the basis of man-hours actually
expended to complete the tasks in accordance with the following schedule of rates and fees:
Fee Schedule
Professional services (Principal) $ 150.00 per man -hour
Professional services (Associate) $ 100.00 per man-hour
Clerical /word processing $ 30.00 per man-hour
Out -of- pocket expenses Actual Cost
Mr. David Lehfelt
March 16, 2001
Cost Estimate
Man -hours - Principal
Professional Fees @ $150.00
Man -hours - Associate
Professional Fees @ $ 100.00
Out -of- pocket expenses (travel, phone
fax, reproduction & miscellaneous
Total estimated fees
48
$ 7,200
60
$ 6,000
1,000
14,200
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The estimated travel includes a maximum total of three trips to Wichita Falls, two trips
for council workshops and one trip to make a final presentations. Any additional trips may
require supplemental billings.
BILLING AND PAYMENT
Billings will be rendered monthly for services performed and expenses incurred during
the month immediately preceding, and will be payable upon receipt.
MAXIMUM TOTAL BILLING
It is our customary practice to bill on an hourly basis for man -hours require to accomplish
the goals of the study. The hours above indicate our estimate of the level of effort and billing for
the services and items described above. We would suggest a budget for Phase II with a
maximum not to exceed to exceed $14,200. In no case will cost for the Phase 11 Study be
incurred in excess of the amounts authorized without the written approval of the City.
Authorization for payment of any billing in excess of the maximum will be requested in writing,
and such request will state in detail the reasons for the request and the specific items giving rise
to the excess billing.
TIME FOR COMPLETION
Work under this agreement can begin within one week of receipt of authorization to
proceed and will be completed within eight weeks.
Mr. David Lehfelt
March 16, 2001
If the above terms and conditions are acceptable to you, please execute in the space
provided and return one executed copy to Willis, Graves & Associates, Inc. at 6101 West
Courtyard Drive, Suite 221, Austin, Texas 78730.
Respectfully submitted,
WILLIS, GRAVES & ASSOCIATES, INC.
By
Searcy F. Willis, Jr.
Vice President
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ATTEST:
City
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