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Staff Report to the Mayor and City Council <br />Subject: Cost of Service Study <br />Date: October 5, 2010 <br />Page 2 <br />The four proposals were evaluated based on the following criteria: (1) Ability of the bidder to <br />perform the specific tasks outlined in the RFP; (2) reasonableness of the fee requested to <br />complete the work within the approved schedule; (3) the bidder's demonstrated record of success <br />on similar work performed previously for the City, other municipalities, or enterprises; and (4) <br />the specific method and techniques to be employed by the bidder on the project. The top two <br />rated firms, Baker Tilly Virchow Krause and Navigant Consulting, Inc., were further interviewed <br />by staff. <br />After receipt of the original proposals, City Council authorized an operational audit of the <br />Electric Utility. Award of a contract to perform an updated cost of service study was placed on <br />hold until this audit was completed. The audit and its recommendations were presented to City <br />Council on June 28, 2010. The audit recommended conducting a new cost of service study, to <br />include electric rates based on various operating scenarios for the Agua Mansa Power Plant. <br />Additionally, City Council has directed staff to consider alternative electric rates with an <br />increased baseline allowance, multiple tiered rates, and rates designed for business attraction and <br />retention. <br />In order to best implement the audit recommendations for a new cost of service study, and to <br />comply with Council direction to look at alternative rates, as mentioned above, staff contacted <br />each of the four proposers, on August 19, 2010, and requested amended proposals based on the <br />added scope (three operating scenarios for AMPP, increased baseline, and business attraction and <br />retention rates). Amended proposals were received on September 2, 2010. All four firms <br />submitted a revised proposal. Each proposal was again evaluated and a Bid Analysis is attached <br />showing the price quoted by each firm. All four firms were found to be experienced and capable <br />of performing the work. Baker Tilly Virchow Krause is the firm with the lowest cost. <br />FISCAL IMPACTS <br />Funds are budgeted and available in the Electric Utility, Administration's Professional Services <br />Account Number 520-8000-8001-2350-0923-000 for FY 10/11. <br />ALTERNATIVES <br />1. City Council may decide not to award the contract to the lowest cost firm, and instead <br />award to one of the other firms. <br />2. City Council may reject all proposals and provide alternate direction to staff. <br />ATTACHEMENTS <br />Bid Analysis <br />Professional Services Agreement <br />