07-0442R


RESOLUTION AMENDING RESOLUTION 06-0637 FOR PROFESSIONAL ENGINEERING SERVICES WITH ADVANCED ENGINEERING AND ENVIRONMENTAL SERVICES, INC., (AE2S) FOR ADDITIONAL SERVICES TO FINISH A WATER UTILITY COST OF SERVICE STUDY AND RATE DESIGN IN THE AMOUNT OF $8,566 FOR A NEW TOTAL OF $33,454.

BY COUNCILOR JOHNSON:

     RESOLVED, that Resolution 06-0637, passed on September 11, 2006, for professional engineering services with AE2S, Inc., for a water utility cost of service study and water rate design for the city of Duluth and its customers be amended in the amount of $8,566 for a new total of $33,454, to be paid from Water Fund 0510.


STATEMENT OF PURPOSE:  This resolution will amend Resolution 06-0637, which authorized a professional engineering services agreement with AE2S, Inc., for a cost of service and rate study of the city’s water utility. As the project has progressed, a revised capital improvement funding schedule from engineering required major revisions to the revenue adequacy evaluation model. This revised information was not available for the original analysis. It has resulted in additional tasks and meetings with the consultant to complete a comprehensive report and revise rate recommendations for the water utility.


The project team asked AE2S to quantify and explain the economic benefit to customers on the water system of having the paper mill on the system. This task was not included in the original scope of the study.


The city’s water cost of service study and rate design team staff have reviewed the items that require additional work by AE2S, and have determined that the cost is reasonable, and that the final report will provide the city with a comprehensive water cost of service analysis for present and future revenue requirements and rate design. The additional cost will be funded from Water Fund 0510, Department/Agency 500, Organization 1915, Object 5310.