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Item No. 10 M'e'moranduin TO: Mayor, Mayor Pro Tem, Council Members FROM: City Manager, Rose Beverly SUBJECT: 2026 CONTRACT WATER & WASTEWATER COST OF SERVICE STUDY DATE: January 12, 2026 BACKGROUND: The City of Paris currently has treated water contracts with four local industries (Campbell Soup, PGEN (Paris Generation, LP), Lamar County Water Supply District, and Daisy Farms). One of the requirements of these contracts is for the City to have an independent rate consultant conduct a cost of service study each year. The study determines what the contract customer water rates should be according to the contract terms. A by-product of the study is that water and wastewater rates are also determined for all other water and wastewater customer classes (residential, commercial, and industrial customers). This study is the basis for any non -contract rate changes recommended to the City Council. The study is an important financial tool enabling the City to maintain the financial integrity of the Water & Sewer (Wastewater) Fund. This annual rate study and the City's rate maintenance policy are looked upon favorably by Moody's and other credit rating agencies when the City is attempting to issue bonded indebtedness. Adjusting the rates in accordance with our 2010 Policy is also critical in attempting to fulfill the basic care and maintenance to our Water and Wastewater system needed for the citizens and businesses of Paris. STATUS OF ISSUE: The City signs a yearly contract with New Gen to perform the city's contractually required water and wastewater cost of service study, and it is time to sign again so New Gen can perform the required work. BUDGET: Cost of the 2026 Study is $36,500.00 RECOMMENDATION: Staff recommends approval of the contract with New Gen for a 2026 Water and Wastewater Cost of Service Study.