AGENDA CAPTION:
Title
Consider approval of Resolution 2026-36R, approving the award of a contract to Burns & McDonnell Engineering Company, Inc., to independently analyze and assess the utility rate structures for water, wastewater, and electric utility services, determine updated cost of services, and provide recommendations for sustainable cost recovery by customer classes to meet operational, capital, and financial obligations for a five-year term with up to three one-year renewals in the annual amount of $80,000.00; authorizing the City Manager, or her designee, to execute the contract on behalf of the city; and declaring an effective date.
Body
Meeting date: March 3, 2026
Department: Utilities, Director Tyler J. Hjorth through Finance Department
Amount & Source of Funding
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Account or Project Number (C = CIP funds): 21006322.52230, 22006335.52230
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Fiscal Note:
Prior Council Action: Res 2019-101 approving GDS and Associates to provide similar services
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Background Information:
On January 5, 2026, the City issued a Request for Proposals (RFP), 2026-026, for Utility Financial Consulting Services. The City received nine (9) proposals which were evaluated by a City-staffed evaluation committee. The committee determined that Burns & McDonnell Engineering Company, Inc., located in Kansas City, Missouri, is the most qualified firm based on demonstrated competence and qualifications and on fair and reasonable pricing.
The contract is effective for a five (5)-year initial term in the annual amount of $80,000 for a not-to-exceed contract total of $400,000, to provide independent analysis over the City’s current rate structure, determine the cost of service, and provide recommendations for equitable sustainable cost recovery by customer classes. The purpose of this service is to provide the City with technical advisory services that is sufficient to support a recommendation to the City Council for adjustments in utility rates. The contract is subject to three (3) additional one-year renewals for annual not-to-exceed amount of $80,000.
Services may include financial performance analysis, long-term forecasting, capital improvement funding and debt analysis, reserve and liquidity assessment, and periodic review of utility rate structures and cost-of-service relationships to ensure alignment with fairness and equity among customer classes. The City maintains and updates the rate modeling annually to forecast revenues, expenses, and anticipated financial impact towards rates for a five (5) year period with the consultant providing peer review and validation as needed.
Based on the result of the annual rate modeling, SMTXU staff presents proposed budgets and any recommended rate adjustments to the Citizen Utility Advisory Board (CUAB) for review of and approval prior to sending their recommendations to City Council.
Council Committee, Board/Commission Action:
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Recommendation:
Staff recommends awarding this contract to Burns & McDonnell Engineering Company, Inc.