City board to consider rate study contract

City directors will decide whether or not to approve a $120,500 contract to conduct a formal rate study for electric, sewer, solid waste, and water during the city board meeting on Nov. 3.

The purpose of the rate study is to determine if revenues are sufficient to cover the cost of service in each utility, According to a staff report prepared by Public Works Director Steve Gorszczyk on Oct. 26

The study will involve the development of a financial plan for each utility that will assess the impact of funding future operating and capital needs over a five year period, the report states.

A request for qualifications was sent to six consulting firms, the report states. Four of the six companies submitted qualifications and a committee consisting of six city staff members reviewed the qualifications, the report states. Staff members selected 1898 and Company by unanimous vote.

A formal rate study has not been done in at least seven years, the report states. Siloam Springs increased water and sewer rates in 2013 the increase was a structured increase each year until Jan. 1, 2017, at which time the rates would be adjusted annually per city code based on the Consumer Price Index (CPI) plus one

percent, according to the request for qualifications submitted on March 16.

Electric rates began increasing annually based on the CPI on April 1, 2014, the request states. Solid waste increased rates in 2015, the request states. Rates would be adjusted annually based on CPI plus one percent on Jan. 1, 2017, the request states.

There will be a fiscal impact to the city, the report states. The public works and electric department collectively have $92,000 in the 2020 capital outlay budget to cover the $120,500 1898 and Company will charge the city, the staff report states.

The additional $28,500 will come from the $70,000 Final Splitter Motorized Valve and Operator which was budgeted in wastewater for 2020, the report states. The quote for the part was $30,932, but there was a backlog of production on the valve gates due to the coronavirus pandemic, the report states.

The remaining balance of $39,067 of the budgeted amount the staff would like to use for the rate study, the report states. Using these funds will not impact the capital budget, the report states.

City directors will also discuss the following items:

Ordinances

• Placing Ordinance 2028 regarding the annexation of 39.22 acres at 14701 N. Country Club Road on its second reading.

• Placing Ordinance 20-29 concerning the annexation of 6.10 acres at 22000 Hwy. 16 on its second reading.

• Placing Ordinance 2030 regarding rezoning 125 A and B E. Kenwood St. from R-2 (Residential Medium) to C-2 (Roadway Commercial) on its first reading.

• Placing Ordinance 2031 concerning rezoning the Villa View Subdivision from A-1 (Agriculture) to R-1 (Residential Large) on its first reading.

• Placing Ordinance 2032 regarding amending the zoning code to require fence and driveway permits on its first reading.

Consent Agenda

• Budget workshop minutes for Oct. 20.

• Regular meeting minutes for Oct. 20.

• Dedication of utility easements for 1400 Hwy. 412 E.

• Resolution 50-20 for a preliminary plat development permit for 14505 N. Country Club Road.

• Resolution 51-20 for a special event permit for the annual Turkey Trot 5K.

Staff Reports

• Comprehensive Plan update.

• September financials.

• Administrator’s report.