Response provided by Tyler Hjorth, Director of Utilities:
Because the financial analysis, which includes the rate model itself, cost of service studies, comparative analysis of other utility rate structures, etc, is used to validate our business model and provide guidance on establishing rates, we have always opted for independent, outside accounting firms. In pure technical terms, this scope could be performed by city staff (although we do not have someone available to take on this large of a task at the current time). So, yes it could be performed in house, but the city has always elected to go outside for the additional validation that our budgets are sound, rates cover cost of service, etc. and our ratepayers have the additional certainty that an independent firm provides. It is also generally accepted industry practice.
A lot of work is required to build the model initially, so we anticipate the full $80K will be required in year one, but subsequent years will be less depending on what services we require of the vendor in any given year beyond just updating the model. An example from 2025, we reviewed all of the Utility Fees so we had extra workload for the vendor in that year. We will do that every three years going forward. And, the new contract also has additional scope that our prior provider did not have, i.e. we are now going to do the complete cost of service analysis each year for one of the three utilities covered. The $80K per year in the proposed amount was based on the RFP pricing for year one; but since the RFP did not ask for subsequent year pricing, but we know that the heavy lift is in year one with building the model and validating it against our old model, and then the price will be well below that amount in most or all the subsequent years.
