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City of Missoula, Montana Item to be Referred to City Council Committee Committee: A & F Item: Award contract to develop a flow based sewer billing model Date: June 18, 2010 Prepared by: Brentt Ramharter Initiated by: Brentt Ramharter Action Required: Council award the contract to update the city's recently developed sewer rate model for flow based sewer billing to Red Oak Consulting, a division of Malcolm Pirnie. Recommended Motion: Council award the contract to update city's recently developed sewer rate model for flow based sewer billing to Red Oak Consulting, a division of Malcolm Pirnie. Timeline: Referral to committee: June 18, 2010 Committee discussion: June 23, 2010 Deadline: ASAP Background and Alternatives Explored: The City of Missoula contracted with Kees Corssmit of Integrated Utilities Group (IUG) to develop a model of our sewer rates and development fees in 1999 and again in 2008. The city is in need of updating the residential flow based sewer rate portion of the model so that we will be able to offer flow-based rates in the future to our residential customers. The use of flow-based rates for residential customers will allow those customers who use less water to pay less. However, up to this point, the city has charged all residential customers on a flat-rate basis. To go to a flow-based rate will require an update of the model. This transition is particularly difficult because the city obtains its data from Mountain Water company. The account setups and location descriptions are sometimes different between Mountain Water's database and the City's database. Much data scrubbing is required and data analysis as well. Thus, we are recommending that the council approve the award of this sewer rate model update to Red Oak Consulting. Financial Implications: The city has negotiated a fee of $19,000 to update the sewer rate model. This contract will be paid from the Sewer R & D fund. Depending on the complexity of the migration to flow-based rates for our residential customers, we would like to be able to move in this direction for either the July, 2011 sewer billing. Attachments: Contract with Red Oak Consulting.