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Meeting Date:	12/12/2018
Rate Adjustment Cost of Service Update
Submitted for:	Adrian Montemayor	Submitted By:	Adrian Montemayor
Department:	Water Utilities

Subject:

Discussion and possible action to award a contract to Superior Water Management of Texas in an amount not to exceed $7,500 to revise and update the existing Webb County Utilities Rate Study and makefor determining recommendations to adjust the rate structure for the Webb County utility customers and in accordance with the Texas Local Government Code; Section 262.024 (Discretionary Exemptions) (a.)(4) professional services exemption. [Funds are available under the 2016 Bond Accounts to be funded by Accounts #7220-7280-001-432001 and #7220-7270-001-432001 (Professional Services)]

Issue: Cost of service has been increasing significantly in the past years of operation. Prior year rate studies have identified significant gaps in the operational and capital costs needed to operate a water and wastewater system, and the revenue produced from existing rates. An updated analysis of the revenue requirements needed is due to determine the direction the County will pursue adjusting old rates.

Solution: Hire prior year rate study professionals to evaluation cost of service and update rate revenue requirements for the County water and wastewater system for operation, maintenance, and future capital needs.

Result: Award this contract.

Background:

Since the inception of Webb County assuming the operation of the water and wastewater system for Rio Bravo and El Cenizo in 1997, rates for service have remained very stable. Although this benefits the communities consumption costs, it very negatively affects the systems ability to maintain and provide the necessary improvements to meet the ever-increasing water costs and requirements set forth by the State.

The cost of service or the budget necessary to at minimum operate the water and wastewater system has increased significantly.. Since the inception of the County's operation of the water system, an increase to the minimum charge has been only $1.50 per month in the last 21 years. This increase equals only a $0.07 per year increase or 0.65% increase.

Our residential customers consume on average 12,000 gallons per month and there different of cost for Webb County and our neighbor to the north is above $20.00 per month. $55.10 for Webb County and $75.17 for Laredo.

Previous Court Action:

Fiscal Impact

Budget Account Number:	7220-7270-001-432001
Funding Source:	2016 Bond Series
Balance:	NA
Financial Impact:
Split 50% into the following accounts 7220-7270-001-432001 7220-7280-001-432001

Attachments
Proposal
Rate Study Consulting Agreement - Superior Water Management - Executed