A $62,800 contract has been approved with Black & Veatch Ltd. covering a water & wastewater system capital cost recovery study for the city of Ann Arbor. The city council’s action came at its June 16, 2014 meeting.
Background to this contract was a June 3, 2013 city council action to change the calculation of the water and sanitary improvement charges for properties connecting to city water mains or sanitary sewers – but only for a two-year period, from July 1, 2013, through June 30, 2015.
The effect of the council’s action was to reduce the connection charges considerably. It was understood at the time that the two-year period would allow for the hiring of a consultant to review the city’s fees and charges for connections to the water and sanitary sewer systems and make recommendations for revision. That’s why the Black & Veatch item appeared on the council’s June 16 agenda.
The principles at stake are described in the staff memo accompanying the item as follows:
When making future changes to improvement charges and connection fees, it is important that various competing elements are satisfied. The fees must be easy to explain and easy to understand to be accepted by the users. The fees must recover costs equitably. The fees must not result in either an undue burden on existing rate payers of the systems or an undue burden on new customers connecting to the systems. The fees must be easily understood and neither over recover costs nor under recover costs. Any under-recovery of costs would place undue and inequitable financial burdens on current rate payers. To meet these goals and gain the experiences of other utilities, it is desirable to contract with a consulting firm that has nationwide experience in this area.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.