| | | | | | | | Agenda Item - 4.g.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | William E. Murray
| | Dept.: | City Manager
| Dept.: | Public Works
| | Subject: | Approval of Agreement with FG Solutions to prepare a Water Rate Study. (Cost: $100,966) (Action Item) | Date: | 9/13/2016 |
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| | | | | | | | OBJECTIVE
To receive City Council approval to enter into an agreement with FG Solutions to prepare a water rate study for the Water Enterprise Fund. |
| | | | | | | | BACKGROUND
Ongoing drought conditions and increasing water conservation efforts by customers in response to current state emergency water conservation regulations have resulted in a continued reduction in water consumption and a corresponding drop in water sales and revenue. Additionally, Proposition 218, a statewide ballot measure adopted by the voters in 1996 requires that municipalities adopt fees that correspond to the cost of providing water service. A water rate study is now required to ensure Proposition 218 compliance and revenue stability.
In April 2016, the City Council approved a cooperative agreement with the Santa Ana Watershed Project Authority for water rate study grant funding. Per the cooperative agreement, the City will receive grant funds in two phases: Phase 1, up to $107,515 for the water rate study and City Council presentation; and Phase 2, up to $107,515 for the implementation of the conservation-based water rate structure. |
| | | | | | | | DISCUSSION
Staff requested proposals from five (5) consulting firms. The following is a summary of the ratings with the highest total being the most qualified:
| Consultant Name |
Final Selection Panel Score |
| FG Solutions |
536 |
| Raftelis |
497 |
| Hawksley |
489 |
| Valor/EFG |
439 |
| Urban Futures |
417 |
The selection panel ranked FG Solutions the highest, based on their in-depth experience with water utility finances, conservation-based water rate structures, and Proposition 218. They are also informed regarding water resources management, water production and distribution system infrastructure. |
| | | | | | | | FINANCIAL IMPACT
There is no impact to the General Fund. This study will be funded from the Water Enterprise Fund and the amount will not exceed $100,966, which was the bid of FG Solutions. Funds have been allocated in the Fiscal Year 2016/17 Water Enterprise budget. The City will receive the reimbursement of funds in the amount of $100,966 from the SAWPA water rate study grant funding. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
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Approve the attached agreement with FG Solutions to prepare a water rate study for the Water Enterprise Fund and authorize the City Manager and City Clerk to execute the agreement on behalf of the City.
By: Katie Victoria, Senior Administrative Analyst
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