By Stephanie Eaton
The Platte City Board of Aldermen will have a professional study performed on the city’s water and sewer rates and connection fees.
During Tuesday night’s meeting, the board unanimously approved during the consent agenda a resolution awarding a bid for a $15,000 water and wastewater rate and fee study to Shafer, Kline and Warren.
“A goal of the study is to ensure that city water and wastewater rates and capital connection fees are set appropriately to meet board direction that current residents rates are not increased to fund water and wastewater expansion on the east side of Interstate 29,” city officials said in a staff report.
According to city officials, the fiscal year 2013 budget approved the study and authorized the funding. The study was delayed with funding in the amount of $22,000 and was carried over in the 2014 water and wastewater budgets.
In October 2013, city officials requested bids. In December, responses were received from three firms.
“Responses were received in early December from Shafer, Kline and Warren (SKW), Carl Brown Consulting, and Bartlett and West,” city officials said. “Although all three proposals were sound, SKW provided the most thorough response which best addressed the need to study and evaluate both the current cost component and the future cost components of the city's rate and fee structure.”
After city officials selected SKW's proposal, SKW officials were invited to submit a detailed scope of service and fee proposal.
“The scope of service met the city's requirements and the fee proposal of $15,000 is reasonable for the proposed service and within the appropriated budget amount of $22,000.”
The last water and wastewater rate and fee study was in 1998.
“Over the past 15 years, there have been significant changes in the city water and wastewater system as well as significant changes in the city's anticipated need for future capacity and service extensions,” city officials said.
City officials said the passage of time has made it difficult for the city to validate its current fees and the study will help with the city's expansion plans.
“The combination of the passage of time and the utilities' changing circumstances make it difficult to determine or defend the validity of the city's current rate and connection fee structure in correctly funding the future related cost components of the water and wastewater system. An updated water and wastewater rate study will assist the city in making funding decisions related to the replacement of existing infrastructure as well as the costs of expanding infrastructure east of Interstate 29.”
According to city officials, revenue raised by each of the separate utility enterprises are intended to generate revenue to pay for annual operations and maintenance, debt service, replacement of existing assets, future capacity and service extensions. A major revenue source for Platte City's utilities come from monthly user charges, investment income, use of assets, and connection fees.
“As part of each budget process, the city annually reviews utility rates and fees to determine if existing rates and fees are sufficient to provide the revenue needed to maintain the utilities as self supporting entities,” city officials said. “This annual review is generally sufficient to ensure the utility generates enough revenue to cover annual operating costs and debt service payments.”
While city officials make sure that utilities pay for their ongoing or current costs during the annual budget review, it does not allow for city officials to fully account for changes in future system costs.
“A more rigorous engineering based cost study is necessary to periodically determine if the city's water and wastewater utilities are saving enough money on an annual basis to fund all or a portion of their future costs.”