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Utility Billing Division, Finance and Public Works Departments for their sewer enterprise management, administration and inspection services. The City's residents and businesses also pay a regional sewer user fee for treatment and disposal services through DSRSD and LAVWMA. The regional portion of the sewer user fees is included in the total bimonthly fee paid by City sewer customers. The local sewer user fee accounts for approximately one-third and the regional fee represents approximately two-thirds of the current total bi-monthly sewer user fee. Timing of the Local Wastewater (Sewer) User Fee Update City staff recognized the needs for developing a comprehensive study of the wastewater system's local sewer user fee approximately two years ago. However, at the same time, work was just starting on the City's Wastewater Master Plan Update. This Master Plan is now complete and the results of this update will be incorporated in the Local Sewer Fee Update. In addition, a comprehensive Wastewater Replacement and Improvement Study has also been completed (2002). The results of this study will also add to the financial information necessary to conduct this comprehensive review of the ...City's local sewer rates. DISCUSSION Selection Procedure The City received proposals from eight consultants and these eight were narrowed down to three: Craig Lawson, Utility Management Consultant, HF&H Consultants LLC, and HDR Engineering, Inc. All three consultants are known and respected in the utility rate setting industry for their experience and expertise in the field of wastewater financial analysis and rate design. An internal City interview panel consisting of representatives from the City's Public Works, Finance and Economic Development Departments held interviews with the three top consultants in December of last year. The interview panel reviewed and selected HDR Engineering, Inc. as the most qualified firm. Staff has contacted references provided by HDR and all references provided positive feedback for quality of work and responsiveness performed by the consultant for similar sewer rate analysis projects. Project Budget The negotiated scope of work is attached to this staff report and totals $54,947. Since this is the first comprehensive local sewer rate analysis performed for the City by this rate consultant, staff anticipates a number of additional hours will be needed to develop a transition from past rate analysis to this current effort. Hence, staff is requesting a contingency amount of $8,000 (approximately 15%) be added to the scope of services amount to allow for this possibility. Therefore, the total cost for this project, on a time- and-material basis, is estimated at snot-to-exceed amount of $62,947. Page 3 of 4