08.01 - Water/Sewer Rate Study - Laserfiche WebLink

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June 28, 2006 The Honorable Mayor and City Council City of Pequot Lakes 4368 County Road 11 Pequot Lakes, MN 56472 RE: Engineering Services Proposal Utility Rate Study Dear Mayor and Members of the Council: The City of Pequot Lakes is considering a rate study for its municipal sanitary sewer and water services. Rates that accurately reflect the cost of providing these services, including maintenance and depreciation, are essential to avoiding future financial difficulties or an inadequately maintained, aged system. We propose to work together with the City's present auditor, financial/bond consultant, and staff to utilize a wealth of knowledge that presently exists on the City's finances and infrastructure. In this manner, we propose the following scope of services for completing the above work: 1. Preparation of a Draft Capital Improvements Plan. Working in conjunction with City Staff, we will lay out 5- and 10-year plans for replacement and possible expansion of the present City sanitary sewer and water systems. 2. Coordination with Finances Working on conjunction with City Staff and its present auditor and financial/bond consultant, we will adjust the Draft Capital Improvements Plan as necessary to work within budgetary constraints. 3. Rate Review As part of a parallel process with the above tasks, we will assist City Staff and its auditor and financial/bond consultant in determining utility rates which reflect most closely the actual cost of each system, including operation, maintenance, and depreciation. WSN proposes to perform the above work on an hourly basis in accordance with the attached fee schedule. To perform the above tasks, we estimate our effort at $6,700.