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Title
The Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to grant an increase in the amount of $4,275,000.00 and a time extension of 191 calendar days to DWSD Contract No. DWS-894 "Water Shut-Off/Turn-On Project" with Homrich Wrecking, Inc., and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
Body
Agenda of August 3, 2016
Item No. 16-0116
Contract No. DWS-894
Proposed Change Order No. 4
Price Increase: $4,275,000.00
Time Extension: 191 Calendar Days
TO: The Honorable
Board of Water Commissioners
City of Detroit, Michigan
FROM: Gary Brown, Director
Water and Sewerage Department
RE: DWSD Contract No. DWS-894 Proposed Change Order No. 4
"Water Shut-Off/Turn-On Project"
Contractor: Homrich Wrecking, Inc.
Designer: DWSD
MOTION
Upon recommendation of Gary Brown, Director, the Board of Water Commissioners authorizes the Director to grant an increase in the amount of $4,275,000.00 and a time extension of 191 calendar days to DWSD Contract No. DWS-894, "Water Shut-Off/Turn-On Project" with Homrich Wrecking, Inc. (Contractor), and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
JUSTIFICATION
DWSD historically has a significant amount of uncollectable water and sewage sales/accounts. The DWS-894 contract is utilized for assisting DWSD staff in turning on/off delinquent customer accounts and has been proven to be successful.
The delinquent account program has been instrumental to stabilizing DWSD revenue as well as changing customer behavior. This has contributed to a significant increase in the long term collection rate, currently estimated at 88% - 90% for retail accounts (versus an assumption of 85%). Maintaining these collections rates could increase DWSD cashflows $7 million - $11 million. Further, to the extent the retail system performs better th...
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