08.01 - Request for Proposals for Water/Sewer Rate Study

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Carl grown Consulting, LLC Proposal to Perform User Charge Analyses for the City of Pequot Lakes, Minnesota Purpose This proposal describes the need,responsibilities,timing,investment and other issues for user charge analyses to be performed by Carl Brown Consulting,LLC(later referred to as"I")for the city of Pequot Lakes,Minnesota(later referred to as"you"). Need As a preliminary step to planning future capital improvements and acquiring funding,and in order to adequately fund current operation of your system,you need to analyze your rates and fees,set them appropriately and periodically reset them.The analysis services proposed are intended to satisfy those needs. Services That Will be Included or That you may Select,at Your Option • The base service package is the water user charge analysis.This analysis will include output from modeling of your current financial situation and several proposed rate scenarios that depict rate structures and other variables you may want to consider. • Option 1 is the sewer user charge analysis and includes the same features as the water user charge analysis.Option i is a service you may select,at your discretion. • Option 2 is one on-site visit.Most likely,this visit would be to meet with the council to go over the analyses and assure no last minute changes are needed in the afternoon and then hold an evening public meeting to present the results of the analyses to all who are interested.Option 2 is a service you may select,at your discretion. • Option 3 is one follow-up examination available for each of the subsequent two fiscal years—This examination will determine if your finances,repair and replacement performance and capital improvement plans and actions were predicted accurately enough in the initial analyses to allow you to adjust all rates by a simple index factor.If so,I will recommend that rate adjustment factor to you.If this examination will not yield adequate financial assurance during one of those years,I will inform you that a full rate analysis is indicated and submit a proposal to perform that rate analysis for you,if you desire.Under this option you may choose,on the low end,one financial examination for one system for one year,which would total one financial examination,or one examination for each system for the next two years totaling four examinations on the high end. Option 3 is a service you may select,at your discretion. Methodology I intend to produce the majority of the user charge analysis output using my proprietary software called CBGreatRates©.You will receive the output electronically in Portable Document Format(pdf). Expected Results With the completion of the analyses you should be able to do the following: 1. Successfully settle upon desired financial performance levels for your systems and arrive at new user charge rates and fees to achieve those levels of performance, 2. Successfully inform and promote to your council and to your ratepayers and property owners the need to adjust rates and fees now and to keep them current,and 3. Successfully acquire needed funding for any capital improvement projects depicted in the analyses and/or fund improvements from system reserves. Estimation of Return on Investment Based upon the investments detailed in this proposal,my services would provide you several benefits or returns,most of which are difficult to reduce to dollars or percentage gains.You will enjoy several un- measurable benefits: 1. My recommendations and step-by-step action plan will guide you through the key actions you should take to make the projected outcomes happen. 1014 Carousel Drive,Jefferson City,Missouri 65101 www.caribrownconsulting.com carIbrown@mchsi.com (573)619-3411