City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: November 21, 2022
FROM: Patrick Dobbins, Acting City Manager
THROUGH: Carmen Gil, Interim City Manager
SUBJECT: Resolution No. 2022-80 Authorizing Execution of a Master Services Agreement with Lechowicz & Tseng and Approving Task #1 for Preparation of Water and Sewer Rate Studiesfor a Not-To-Exceed Fee of $68,000 Which Includes a Contingency Budget of $8,410
RECOMMENDATION
It is recommended that the City Council Adopt Resolution No. 2022-80 A Resolution of the City Council of the City of Gonzales Authorizing Execution of a Master Services Agreement with Lechowicz & Tseng and Approving Task #1 for Preparation of Water and Sewer Rate Studies for a Not-To-Exceed Fee of $68,000, which Includes a Contingency Budget of $8,410.
BACKGROUND
By law, the City’s water and sewer rates must cover the costs to operate, maintain, and upgrade the water and wastewater utilities. The rates also must be sufficient to service debt obligations and fund reserve accounts. To confirm rates are compliant with state law, it is necessary to perform periodic reviews of the rates. It has been a number of years since the city last conducted a rate study and that is why staff is bringing this item forward.
In addition to confirming conformance with state law, the State Revolving Fund loan application process construction of the Industrial Wastewater System requires that the city demonstrate that the sewer rates are adequate to cover the required costs plus the anticipated costs to cover repayment of the loan.
The city’s water and sewer rates are included in the city’s “Cost of Services” and are adjusted each year based on the Consumer Price Index. The objectives of the Water and Sewer Rate Studies are to:
AGENDA
ITEM
16 • Provide recommendations to adequately fund the city’s current and projected water and sewer operations.
• Ensure that revenues are adequate to meet any debt used to finance capital improvements. • Address funding maintenance of infrastructure by incorporating reasonable projections for facility replacement within the revenue requirements and rate calculations. • Review city financial policies and make recommendations where appropriate with respect to adequate reserves for operations, rate stabilization, and capital improvements. • Affirm the appropriateness of existing user categories and/or develop new or combine categories to simplify rates and ensure equity among users.
• Provide recommended rate structures based on the cost of service and State requirements • The rate structures shall be in compliance with State Proposition 218.
REVIEW & ANALYSIS
The water and sewer rate studies will be based on a comprehensive review of the City’s water and sewer funds and budgets, Wastewater Collection System and Wastewater Treatment Plant Master Plans, capital improvement plans, current usage data, future growth of the City and other relevant information.
On August 10, 2022 staff issued a Request for Proposals to eight consultant firms with experience in preparing water and sewer rate studies. Proposals were received by the September 8, 2022 deadline from the following four firms:
• Lechowicz & Tseng
• Willdan Financial Services
• Robert D. Niehaus, Inc.
• Bartle Wells Associates
A review committee comprised of city staff, Mike Howard, and Chris Davenport of Psomas (Program Manager on city sewer projects) reviewed and ranked the submitted proposals. Three firms were shortlisted and interviewed on November 8. The review committee ranked Lechowicz & Tseng as the top firm based on their proposal, interview, and reference checks.
Lechowicz & Tseng’s proposal is attached to this staff report. Staff recommends the Council authorize a $68,000 Master Services Agreement with Lechowicz & Tseng to prepare Water and Sewer Rate Studies for a not-to-exceed fee of $68,000.
This contract will be funded with a combination of Water and Sewer Enterprise funds. A future task under their Master Services Agreement will be preparation of a rate study for the city’s new industrial wastewater system (pipeline and treatment facility) expected to begin construction in 2023 and completed in 2024.
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.
Explain: Preparing the water and sewer rates will provide for adequate funding of the city’s current and projected water and sewer operations.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: The recommended rate structures are based on the cost of service and State requirements.
City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing X Yes No N/A
• Recreation Yes X No N/A
• Environment Yes X No N/A
• Education Yes X No N/A
Explain: See Vision above.
ALTERNATIVES
1. Direct staff to not prepare Water and Sewer Rates Studies at this time.
2. Direct staff to seek additional proposals for this work.
3. Amend or modify staff recommendation.
BUDGET IMPACT
This contract will be funded with a combination of Water and Sewer Enterprise funds.
CONCLUSIONS
It is recommended that the City Council Adopt Resolution No. 2022-80 A Resolution of the City Council of the City of Gonzales Authorizing Execution of a Master Services Agreement with Lechowicz & Tseng and Approving Task #1 for Preparation of Water and Sewer Rate Studies for a Not-To-Exceed Fee of $68,000, which Includes a Contingency Budget of $8,410.
Attachments:
1. Resolution No. 2022-80
2. Master Service Agreement
3. Lechowicz & Tseng Proposal