Full Text
Attachment A: Scope of Services The City is completing or has recently completed detailed utility (water, wastewater system, wastewater treatment plant (WWTP)) facility plans that outline requirements for maintaining, operating, upgrading and developing the water, wastewater conveyance, wastewater treatment plant utility systems. The City would like to perform a cost of service analysis and develop corresponding rate structures to generate adequate funds to maintain the same quality of service and fund capital projects to meet the current and future utility needs of a dynamic community. Scope of Work Provide a detailed utility cost of service study followed with a rate design analysis that will provide justifiable and equitable methodologies for appropriate user fees that are adequate to fully fund the expenses including, operations, equipment repair, maintenance, rehabilitation, replacement, debt service, capital, etc. associated with the water, wastewater system, and the wastewater treatment plant. In general, the consultant will: • Participate in City Council workshops and public information meetings. • Perform a complete revenue requirement analysis, cost of service analysis, rate design analysis and provide impact fee development support for the metering and water system, wastewater system, and the WWTP utilities. • Recommend a system of rates, charges and fees for operations, maintenance, replacements and system development that reflect the cost of service, proper allocation of costs, capital expenditure and debt service requirements for currently identified needs and future capacity/growth related needs. • Prepare draft and final reports. Anticipated task may include: 1) COST OF SERVICE STUDY The City desires to ensure that, to the extent practical, it recovers from each customer the cost of providing service to that customer. The cost of service includes recovery of all operating costs, amounts necessary to maintain reasonable operating reserves after funding operations, debt service, and capital projects. a) Planning Criteria i) Review proposed capital improvement plan(s) and total projected project costs. ii) Review financial history, including revenues and expenses, and current rate and fee structure. iii) Develop requisite Revenue Requirement analysis of revenue and expenses as the foundation of the cost of service class analysis. iv) Examine customer database and review current customer classifications. b) Reporting: The selected consultant must present the findings, conclusions and resulting recommendations in the cost of service study final report in a clear and concise manner. A written report is required. c) Presentation: Data gathering and summary presentation to the City Council may also be required during a regularly scheduled public meeting. d) The Consultant shall work with the City to ensure the cost of service study can be updated as needed by City Staff. ---PAGE BREAK--- 2) RATE DESIGN DEVELOPMENT The City seeks to ensure its water and wastewater utility rates cover the true cost of providing utility services to its customers. In doing so, the proposed rate/fee structure must ensure an equitable treatment of all charges on future and current users. a) Specific Issues for Consideration: i) Review of existing rate structures. ii) Consistency between rate schedules and fee schedules. iii) Consideration for Evergreen Sewer District WWTP Rates, out of City service, metering, and high strength surcharges. iv) Adequate and equitable usage, demand, basic charges, surcharges (WWTP). v) Aid to development of impact fees. b) Rate Design Investigation: Evaluation of accepted policies, practices and procedures to ensure model reliability, predictability and rate stability over the long term. Accordingly, the selected consultant must meet with City staff to review and discuss available documentation including, but not limited to, utility billing records, historical budget documents and audit reports, resolutions, policies, Evergreen Sewer District Agreement, operation and maintenance practices. c) Evaluation: Specifically, the selected consultant shall review, analyze, validate the reasonableness, and recommend changes where appropriate for the following: i) Methodologies of fee structure, rates and charges. ii) Repair/Replacement Funding Methodology, considering long-term capital improvement needs, debt service opportunities, impact fee funding, and associated funding sources/levels. d) Rate Design Study to Include: i) Analyze and discuss impact of existing and future capital improvements. ii) Assess revenue needs for specified planning period to include adequate coverage for operations and maintenance, capital projects, program activities and debt service. iii) Analyze existing rate and fee structure and recommend alternatives based on findings. iv) The selected consultant must advise the City on industry-accepted methodologies for allocating costs to the various customer classes. The selected consultant must also provide a breakdown of these expenses and show how they relate to providing water, wastewater collection, and WWTP services. v) Examine current user classes and current rate approaches. vi) Examine the City’s use of debt financing for capital improvements and make recommendations related to its uses and limitations relative to maintaining a proper balance for debt coverage and rate stabilization over a designated period. vii) The selected consultant must recommend a structure for the proposed rate schedules on the basic premise that each customer should be classified and served under a schedule that will cover all costs of that customer’s service plus return a reasonable margin for proper operating reserves, capital improvements, adequate supplies, and contributions to general administrative costs. e) Reporting: The selected consultant must present the findings and conclusions in the rate study final report in a clear and concise manner. The report must include detailed recommendations for changes, if any, to current practices and/or procedures. All work products and reports will conform to applicable State and Federal laws and regulations. f) A summary presentation to the City Council will be required during a regularly scheduled public meeting.