HomeMy WebLinkAbout10/27/09"'The man who is prepared has his haftfe haf{ four;ht. " -Mirjue( le Cervantes
AGENDA
HERMOSA BEACH CITY COUNCIL
Tuesday, October 27, 2009-Council Chambers, City Hall
1315 Valley Drive
6:30p.m.-CLOSED SESSION: See attached Closed Session Agenda
7:00p.m.-REGULAR MEETING
MAYOR
Patrick 'Kit' Bobko
MAYOR PROTEM
Michael DiVirgilio
COUNCIL MEMBERS
Michael Keegan
J. R. Reviczky
Peter Tucker
CITY CLERK
Elaine Doerfling
CITY TREASURER
John M. Workman
CITY MANAGER
Stephen R. Burrell
CITY ATTORNEY
Michael Jenkins
All council meetings are open to the public. PLEASE ATTEND.
The Council receives a packet with detailed information and recommendations on nearly every
agenda item.
City Council agendas and staff reports are available for your review on the City's web site
located at www.hermosabch.org.
Complete agenda packets are also available for public inspection in the Police Department, Fire
Department, Public Library and the Office of the City Clerk.
During the meeting, a packet is also available in the
Council Chambers foyer.
Written materials distributed to the City Council within 72 hours of the City Council meeting
are available for public inspection immediately upon distribution in the City Clerk's office at
1315 Valley Drive, Hermosa Beach, Califomia, during normal business hours.
All written communications from the public included in the agenda will be posted with the
agenda on the City's website
To comply with the Americans with Disabilities Act of 1990, Assistive Listening Devices {ALD)
will be available for check out at the meeting.
If you require special assistance to participate in this meeting, you must call or submit your
request in writing to the Office of the City Clerk at {310) 318-0203 at least 48 hours prior to the
meeting.
Your participation in this meeting is in the public domain. Meetings are both cablecast
and streamed live over the Internet. Minutes of this meeting will reflect your participation in
this meeting and are posted on the city's website
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CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLLCALL
CLOSED SESSION REPORT
ANNOUNCEMENTS
PRESENTATIONS
PRESENTATION BY ROBERT FORTUNATO
REGARDING HIS PLANS TO CONSTRUCT A
NET-ZERO HOUSE AT 1556 PROSPECT AVENUE
PUBLIC PARTICIPATION: Although the City Council values your comments, the Brown
Act generally prohibits the Council from taking action on any matter not listed on the posted
agenda as a business item.
1. ORAL AND WRITTEN COMMUNICATIONS
This is the time for members of the public to address the City Council on any items within the
Council's jurisdiction not on this agenda, on items on this agenda as to which public comment
will not be taken, or to request the removal of an item from the consent calendar. Comments on
public hearing items are heard only during the public hearing. Members of the audience may
also speak:
1) during discussion of items removed from the Consent Calendar;
2) during Public Hearings; and,
3) during discussion of items appearing under Municipal Matters.
Comments from the public are limited to three minutes per speaker.
The City Council acknowledges receipt of the written communications listed below. No action
will be taken on matters raised in written communications.
The Council may take action to schedule issues raised in oral and written communications for a
future agenda.
Citizens with comments regarding City management or departmental operations are requested to
submit those comments to the City Manager.
NO WRITTEN COMMUNICATIONS
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2. CONSENT CALENDAR: The following more routine matters will be acted upon by
one vote to approve with the majority consent of the City Council. There will be no
separate discussion of these items unless a Council member removes an item from the
Consent Calendar. Items removed will be considered under Agenda Item 4, with public
comment permitted at that time.
(a) Recommendation to receive and file memorandum regarding City Council minutes.
Memorandrnn from City Clerk Elaine Doerfling dated October 21, 2009.
(b) Recommendation to ratify check register and to approve cancellation of certain
checks as recommended by the Citv Treasurer.
(c) Recommendation to receive and file
1) Tentative Future Agenda Items; and,
2) City Council Directives
(d) Recommendation to receive and file the September 2009 financial reports:
1) Revenue and expenditure report;
2) City Treasurer's report; and,
3) Investment report.
(e) Recommendation to receive and file Project Status Report. Memorandrnn from
Public Works Director Richard Morgan dated October 14, 2009.
(f) Recommendation to receive and file the following dates for the 2009-10 Midyear
Budget Review and the 2010-11 Budget: Midyear Budget Review -Tuesday,
February 9, 2010 at 7:00p.m.; Pre-Budget Meeting with City Council-Thursday,
February 25, 2010 at 7:00p.m.; and, Budget Workshop-Thursday, May 27, 2010 at
7:00p.m .. Memorandrnn from Finance Director Viki Copeland dated October 19, 2009.
(g) Recommendation to deny the following claim and refer it to the City's Liability
Claims Administrator. Memorandrnn from City Manager Stephen Burrell dated
October 20, 2009.
Claimant: Brandeau, Claude
Date of Loss: 09-21-09
Date Filed: 09-28-09
Allegation: Property Damage
(h) Recommendation to authorize staff to issue a change order to Zondiros Corporation
for CIP Project No. 08-425 Sewer Repairs for extra work encountered during
construction; authorize the appropriation of $107,730 from the 160 Sewer Fund;
and, authorize the Director of Public Works to make changes as necessary within
the project budget. Memorandrnn from Public Works Director Richard Morgan dated
October 20, 2009.
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(i) Recommendation to receive and file the action minutes of the Planning Commission
meeting of October 20, 2009.
G) Recommendation to authorize the Mayor to execute the agreement with Tischler-
Bise in the amount of $32,490 to provide the Sewer Financial Plan and Rate Study
and authorize the appropriation of $32,490 from the Sewer Fund 160 to cover
agreement cost. Memorandum from Public Works Director Richard Morgan dated
October 20, 2009.
(k) Recommendation to adopt a resolution approving the form of and authorizing the
execution and delivery of a purchase and sale agreement and related documents
with respect to the sale of the seller's Proposition 1A receivable from the state; and
directing and authorizing certain other actions in connection therewith.
Memorandum from Finance Director Viki Copeland dated October 21, 2009.
(I) Recommendation to accept the award of $15,000 from the Fireman's Fund
Insurance Company Heritage Program granted to the Hermosa Beach Fire
Department and increase the revenue the same amount; and, authorize an
appropriation to be presented in the 2009/10 budget and the expenditure of $15,000
for the purchase of firefighter personal protective equipment (PPE), chain saws,
micro ECGIBP/02 saturation monitor, wildland firefighting equipment, pump
intake valves, and SCBA locking mechanisms. Memorandum from Fire Chief
David Lantzer dated October 21, 2009.
(m) Recommendation to receive and file the action minutes of the Green Task Force
meeting of September 21, 2009.
3. CONSENT ORDINANCES
NONE
4. ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE
DISCUSSION
* Public comments on items removed from the Consent Calendar.
5. PUBLIC HEARINGS-TO COMMENCE AT 7:30P.M.
NONE
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6. MUNICIPAL MATTERS
a. AMENDMENT TO NOISE ORDINANCE REGARDING
CONSTRUCTION NOISE. Memorandum from Community Development
Director Ken Robertson dated October 21, 2009.
RECOMMENDATION: Waive full reading and introduce ordinance to amend
Section 8.24.050 regarding permissible hours of construction.
b. HOME REMODEL AND EXPANSION FOR "NET-ZERO" ENERGY
EFFICIENT HOME AT 1556 PROSPECT A VENUE. Memorandum from
Community Development Director Ken Robertson dated October 7, 2009.
RECOMMENDATION: Consider waiving City fees for this project.
c. LETTER FROM JILL QUATRALE DBA CHILLY JILLY'Z ICE CREAM
VENDOR REQUESTING THREE (3) PERMANENT LOCATIONS IN
THE CITY TO OPERATE THE BUSINESS. Memorandum from City
Manager Stephen Burrell dated October 21, 2009.
RECOMMENDATION: Receive and file the request without any action.
d. CODE AMENDMENT TO CHAPTER 5.74 (MASSAGE THERAPY
BUSINESSES). Memorandum from Community Development Director
Ken Robertson dated October 15,2009.
RECOMMENDATION: Waive full reading and introduce ordinance to amend
Chapter 5. 7 4 updating regulations for massage therapy businesses and
practitioners consistent with recent changes to state law (Senate Bill 731 ).
7. MISCELLANEOUS ITEMS AND REPORTS-CITY MANAGER
a. CITYWIDE HOME SAFETY EMERGENCY PLAN BOOKLET
DISTRIBUTION. Memorandum from City Manager Stephen Burrell dated
October 21, 2009.
RECOMMENDATION: Approve and acknowledge the effort of the Emergency
Preparedness Advisory Commission (EPA C) concerning distribution of the
Emergency Plan Booklet to each home in the City (sample copy of booklet will be
available at the meeting).
8. MISCELLANEOUS ITEMS AND REPORTS -CITY COUNCIL
NONE
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9. OTHER MATTERS -CITY COUNCIL
Requests from Council members for possible future agenda items. No discussion or
debate of these requests shall be undertaken; the sole action is whether to schedule the
item for consideration on a future agenda. No public comment will be taken.
a. Request from Councilmember Tucker to ask the Green Task Force to
develop a program for recycling compact fluorescent lighting (CFL) and
report back.
ADJOURNMENT
6
AGENDA
CLOSED SESSION MEETING
HERMOSA BEACH CITY COUNCIL
Tuesday, October 27, 2009-Couucil Chambers, City Hall
1315 Valley Drive
6:30p.m.
The City Couucil finds, based on advice from legal couusel, that discussion in open session will
prejudice the position of the City in existing and anticipated litigation.
CALL TO ORDER
1. PUBLIC COMMENT: This time has been set aside for members of the public to
address the City Couucil on Closed Session items.
2. MINUTES: Approval of minutes of Closed Session meeting held on October 13,2009.
3. CONFERENCE WITH LEGAL COUNSEL
The City Council finds, based on advice from legal counsel, that discussion in open
session will prejudice the position of the City in the litigation.
Existing Litigation: Government Code Section 54956.9(a)
Name of Case:
Case Number:
Name of Case:
Case Number:
Lorelei Fultz v. City of Hermosa Beach
1005A00012
Lewitt v. City of Hermosa Beach
CV09-2543CAS
4. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Government Code Section 54957
Title: City Manager
Title: City Attorney
ADJOURNMENT
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PROPOSAL FOR
SEWER FINANCIAL PLAN AND RATE STUDY
Prepared For
City of Hermosa Beach, California
AUGUST 19, 2009
43460 RIDGE PARK DRIVE, SUITE 200W
TEMECULA, CA 92590
PHONE: 951‐719‐8478
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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TRANSMITTAL LETTER
August 19, 2009
Richard D. Morgan, P.E.
Director of Public Works/City Engineer
City of Hermosa Beach
1315 Valley Drive
Hermosa Beach, CA 90254‐3885
Re: TischlerBise Proposal for Sewer Financial Plan and Rate Study Consulting Services
Dear Mr. Morgan:
The enclosed proposal responds to your recent Request for Proposal to provide utility rate and
financial plan consulting services for your sewer system. Our proposal addresses your need to
develop a new sewer enterprise fund and subsequent sewer rate structure, but we have also
gone a step further, taking into account your broader objectives. We have developed an overall
plan to:
Develop a new enterprise fund to independently raise revenues through sewer rates to meet
increasing operations and capital expenditures, measure financial performance of the sewer
utility and develop fiscal policies to meet the long‐term needs of the utility.
Create a sewer rate structure supported by a strict cost of service approach to ensure
equitable and sustainable cost recovery by customer class.
Ensure adequate funding for the City’s $9 million CIP and to meet the Wastewater
Discharge Requirements (WDRs) of the State Water Resources Control Board (SWRCB).
Develop alternative financing scenarios to balance funding requirements and customer
impact of a new sewer rate structure. The scenarios will include a “pay as you go”
approach, debt financing approach, and internal City loan approach, or a combination of
these elements.
Provide alternative rate structure scenarios to account for local policies and mitigate “rate
shock” in light of current economic conditions.
Present the analysis and results within a user‐friendly spreadsheet model accessible by City
staff.
We bring several distinct advantages to the process of handing this important financial analysis:
1. Our project team, consisting of myself and Mr. Chris Cullinan, will develop a utility
financial plan for your City that will provide sustainable revenues generated from rates.
The rates will be defensible and equitable across customer classes utilizing strict cost of
service principles that go above and beyond those recommended by the Water
Environment Federation for sewer rate setting. I will bring to this project over 12 years’
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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experience creating revenue programs that are compliant with Proposition 218,
including sewer rate structures. Our project team will be able to guide your project
through the Proposition 218 process from rate design to the final property owner
noticing stage and public hearing presentation.
2. A comprehensive and successful financial planning foundation for rate analyses requires
expertise in a broad array of financial and economic resources. This foundation must
include knowledge of enterprise fund accounting, operational and capital budgeting,
and debt financing principles. Our team has considerable expertise in indirect cost
allocation plans for General Fund reimbursement, capital facilities fee programs and
debt financing principles. In addition, Mr. Cullinan will apply his knowledge of
enterprise funds gained while he was the former Budget Director for the City of
Charlottesville, Virginia.
3. We understand that utility financial plans and rate study results are utilized by many
stakeholders during the course of an analysis and long after project completion. Our
models are designed with the end user in mind‐‐you the agency staff. Your sewer rate
model will be easy to use because our constant communication and collaboration with
you during the course of the project will ensure your understanding of each model’s
basis, development and output.
4. As a small firm, we have the flexibility and responsiveness to meet all deadlines of
your project. We offer you the level of service and commitment that the larger firms
save for their largest clients.
We look forward to working with the City of Hermosa Beach and are committed to providing
you with top‐quality support for your utility rate study at a very competitive price. The result
will be a utility financial plan that promotes revenue stability, is technically defensible, and
supported by a user‐friendly spreadsheet model.
Sincerely,
Brian Jewett, Vice President
TischlerBise
Phone: 951‐719‐8478
E‐mail: brian@tischlerbise.com
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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TABLE OF CONTENTS
TRANSMITTAL LETTER.................................................................................................................... 1
TABLE OF CONTENTS ...................................................................................................................... 3
DESCRIPTION OF STUDY UNDERSTANDING................................................................................... 4
PROJECT APPROACH AND SCOPE OF WORK ................................................................................. 6
PROJECT SCHEDULE ..................................................................................................................... 14
PROJECT BUDGET ......................................................................................................................... 16
PROJECT TEAM ............................................................................................................................. 17
QUALIFICATIONS AND REFERENCES ............................................................................................ 20
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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Reasons for Rate Analysis
Develop long-term, comprehensive sewer
system financial plan leading to the
creation of a new sewer enterprise fund
with appropriate fiscal policies
Develop new sewer rate structure that
generates adequate revenue for
operations, capital needs of $9 million, and
meets new WDR maintenance activities
Ensure rates are cost justified utilizing City
customer characteristics and meet the
procedural and substantive requirements of
Proposition 218
DESCRIPTION OF STUDY UNDERSTANDING
The City of Hermosa Beach provides collection and transmission services of wastewater effluent
throughout the City. The City transmits effluent to the Los Angeles County Sanitation District
for treatment. The City currently has a Special Revenue Fund for sewer operations and capital
needs related to collection and transmission: 160
Sewer Fund.
The primary source of funding for this special
revenue fund is an allocation of utility user tax
revenue in the amount of $700,000 per year with
nominal remaining funding coming from sewer
service charges, use of money and property funds,
and various intergovernmental transfers. The
operating budget and capital outlay items are the
primary expenditure designations.
Over the years, increasing operating budgets and
capital requirements have drawn down the sewer
fund’s reserve balance. However, the estimated
ending fund balance for fiscal year 2009/10 is slated
to increase due to no appropriation for capital outlay
this year. This situation will change as the City has
recently completed a sewer master plan that calls for
approximately $9 million in urgently needed sewer infrastructure repairs.
The City requires that the financial analysis address these issues through the development of a
comprehensive, long‐term financial plan to secure financial stability for the new enterprise
fund, address sewer capital needs, meet regulatory requirements, and generate user rates that
are equitable and defensible under Proposition 218 requirements (Article XIIID of the California
Constitution).
NEW SEWER ENTERPRISE FUND
The City’s current sewer special revenue fund is limited with regard to the sewer services and
costs covered and used primarily to account for annual operating costs. A new enterprise fund
would establish a separate accounting and financial reporting mechanism for City sewer
services. Utilizing enterprise fund accounting, the revenues and expenditures of sewer services
would have their own financial statements and would eliminate the possibility of commingled
revenues and expenses of all other City government activities.
Revenues would be recognized when earned and expenses recognized when incurred, under a
full actual basis of accounting. The advantages to the City of Hermosa Beach in creating an
enterprise fund would give City management and sewer customers the ability to:
measure performance of the sewer enterprise and ensure fiscal policies are being met
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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analyze the impact of financial decisions on the fund and better plan and implement capital
improvements in future years through various approaches including “pay‐as‐you‐go”, debt
financing or internal City loans
determine the true cost of providing sewer service within the City by identifying direct and
indirect costs as well as capital costs related to repair, replacement, upgrade and expansion
of sewer facilities
identify subsidies from the general fund in providing the service
develop fiscal policies for the fund including financial performance standards, reserve levels
for operations, repair/replacement, and capital funding, and ideal debt coverage ratios
should bonds be issued through the fund.
NEW SEWER RATE STRUCTURE
While the City’s RFP requests a 5‐year financial plan/revenue requirement we propose to
develop a longer‐term financial plan encompassing the next 10 fiscal years. Our experience
suggests that longer‐term horizons allow the City to appropriately plan for capital expenses that
typically span 10 years or more. Such a financial model will project all revenues and expenses of
the fund including the regulatory costs associated with the State Water Resources Control
Board’s Wastewater Discharge Requirements (WDRs) and the project costs associated with the
City’s $9 million CIP.
The revenue requirement analysis must include an in‐depth overhead cost allocation
analysis to legitimately collect enough revenue to meet the central services support of the sewer
enterprise fund. This analysis will include looking at all City departments that support the
sewer fund’s operations including but not limited to city management, city council, and finance.
The indirect cost analysis should utilize commonly accepted cost allocation plan approaches
similar to those endorsed by the federal Office of Management and Budget A‐87 Circular for
indirect cost calculations.
This analysis will lead to a comprehensive financial plan to determine how the operations and
capital expenses will be met: through rates alone, debt financing, inter‐fund loans, or a
combination of these components. The City requires a plan that can be tailored to provide an
assortment of these funding scenarios and choose the best one to implement.
COMPREHENSIVE CUSTOMER CLASSIFICATION AND COST OF SERVICE ANALYSIS
The City requires a new rate structure that provides adequate revenues generated from rates, is
defensible and equitable across customer classes, and meets Proposition 218 requirements for
rate setting. To create such a structure requires a functionalization and cost allocation analysis
that distributes the full costs of utility services to customers in proportion to the unique
demands they place on the utility systems. This effort will encompass customer discharge
characteristics related to effluent flow and capacity parameters, infiltration/inflow sources and
number and type of sewer connections within the City service area. To achieve these results, the
rate structure should utilize allocation methodologies endorsed by the leading national
industry organization for sewer rate setting, the Water Environment Federation (WEF).
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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Our project management process has
helped agencies like Hermosa Beach
successfully implement new rate
structures on time and within budget.
PROJECT APPROACH AND SCOPE OF WORK
PROJECT MANAGEMENT PLAN
For our projects, we utilize a project management process that ensures projects are completed
on time, within budget and most importantly yield results that match our clients’ expectations.
Our project management plan utilizes the following principles common to successful projects:
First, we begin by defining the project to be completed. Mr. Jewett will identify the final
project goals and objectives in collaboration with
City staff, list potential challenges to the process,
and develop a plan to ensure successful
outcomes and effective communication.
Second, we will plan the project schedule. Mr.
Jewett will work with you and your staff to
create an agreed upon timetable to meet your
project schedule. Prior to beginning the project,
he will work with Mr. Cullinan and supporting analysts to assign roles that will ensure the
project schedule is met on time and within budget.
Third, we will actively manage the project process. Mr. Jewett has a long history of strong
project management skills that are supported by past project successes (we encourage you
to contact our references regarding this aspect). He will manage the work in progress,
provide guidance and oversight to staff, and will be accountable to you for meeting the
schedule, budget, and technical requirements of the project. Mr. Jewett will collaborate and
frequently communicate with City staff by utilizing regularly‐scheduled progress
memorandums, e‐mail status updates, conference calls and meetings at City offices.
Finally, we will review all project deliverables and communication through a formal
quality assurance process that requires review at the peer level, project manager level, and
executive officer level. Prior to the delivery of work product to you and staff, deliverables
will go through a structured quality assurance process involving up to three levels of review
and utilizing a formal checklist tool. The first level involves a peer‐to‐peer review of
spreadsheet models and documentation initiated by Mr. Cullinan. Next, Mr. Jewett will be
responsible for the second set of reviews comparing the work product to the completed
quality checklist form. If necessary, a senior manager of the firm not related to the project,
may provide a third level review if deemed necessary by Mr. Jewett.
PROJECT APPROACH
The approach, philosophy, and methodology of utility rate setting are as important as the final
outcome. The final rate structures must be defensible, clearly understood by staff as well as the
community, and useful for improving long‐term financial performance. By blending the
following four key components, our utility rate analysis for the City of Hermosa Beach will
support these objectives in simple and user‐friendly terms:
Financial Planning – We will ensure the cost needs of the new sewer fund are met through a
comprehensive revenue requirements analysis. Our model will give you the ability to produce
optional scenarios and sensitivity analyses of various rate alternatives. Once the revenue
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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requirements are identified, we will allocate them across customer classes using strict cost‐
based practices that adhere to, and in several instances exceed, those endorsed by the WEF.
Customer Concerns – When the planning is done, City staff members must be able to deal with
the consequences of any rate analysis. We are sensitive to this point and believe that the process
of reaching the final result is equally as important as the final result itself. We pride ourselves
on our ability to ensure that senior staff members feel confident with the final product through
on‐going collaboration with staff during the entire project and after the rates are implemented.
Community Support – The final step in executing affordable and stable utility rates is gaining
the support of the community. Without this key aspect, all previous work would be in vain. Our
seasoned project team has actively participated in legislative body meetings and citizen rate
committees to educate and lead stakeholders regarding the technical process of rate setting as
well as the benefits and risks associated with new rate policy decisions, particularly during
challenging economic times.
Comprehensive Computer Modeling – Our staff members are experienced computer modelers
who can design and develop a variety of economic models. Along with a solid understanding of
computer modeling, our staff members also have a deep understanding of finance, economics,
and engineering – the foundations of our models.
These key elements are supported through a fundamental process of rate setting that we will
utilize for the utility. This process includes the three major steps to utility rate setting and their
related components as shown below in Figure 1. These steps are more fully explained in our
Scope of Work section following this illustration.
Figure 1, Rate Setting Process
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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SCOPE OF WORK
The following scope of work provides detailed steps to ensure your project is completed
successfully and encompasses our approach and methodology for designing utility rates for
your utility fund. We have designed this work plan to be responsive to your needs and specific
local circumstances.
Task 1: Project Initiation / Data Acquisition, Compilation and Review
Objective: Develop a complete understanding of project goals and request necessary data
and documentation for the project.
Description: During this task, we will meet with City staff to establish lines of
communication, review and discuss project goals and City policies related to the
project, review the project schedule, and revise if necessary, and to request data
and documentation related to the project. The specifics of this initial discussion
are outlined below:
Policy Discussion. Our team will catalog existing City policies and potential
strategies which would guide the work of each subsequent element in this task
plan. Commentary on these policy parameters will be documented for inclusion
in the study report and will be reviewed with City staff to prepare for the work.
Project Timeline. As needed, modify the timeline, included in this submission,
to ensure the project’s milestones are met according to your schedule. Through
our project management tools, our project plan will minimize effort on your City
staff. Naturally, staff effort will be required for data collection, meetings and
review of deliverables. However, we anticipate that our collaborative effort with
the City will keep this effort to a minimum.
Data Request. A typical data request will include the sewer special revenue fund
budgets, audited financial statements, City account profile through sewer
connection records, the recently completed sewer master plan, the new CIP
schedule and related costs. We will provide a comprehensive and detailed data
request memorandum to the City prior to the initial meeting.
Meetings: One (1) meeting with City staff to initiate project.
Deliverables: 1) Data request memorandum. 2) Policy discussion memorandum. 3) Revised
project schedule, if necessary. 4) Project team member contact list including
names, location addresses, phone numbers and e‐mail addresses.
Task 2: Data Analysis / Customer Characteristic Analysis
Objective: The task objective is to develop customer characteristics which will lead to the
creation of appropriate customer classes.
Description: We will review, understand and apply related data and documentation to the
project. Our project team will identify trends in City growth and develop
customer characteristics based on customer class flow discharge estimates, flows
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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and capacity requirements, infiltration/inflow (I/I) sources and number of sewer
connections.
Validate Data and Develop Frequency Analysis. Mr. Jewett and Mr. Cullinan
will generate a database of detailed sewer connection data in bill frequency
format by customer class. Our project team will apply industry flow and capacity
data and any metered records to the data set in order to determine whether the
historical information serves as a valid basis for calculating rates which will
generate the correct amount of revenue. Adjustments to the data set needed to
create a valid rate basis will be made, as identified by our project team and with
the input of City staff.
Generate Customer Statistics. From the final customer data set, we will develop
summary statistics describing future revenue generation, and customer
characteristics. These statistics will provide one resource for illuminating
potential structural scenarios and they will serve as a basis for allocating utility
costs and classifying customers.
Meetings: None.
Deliverables: None.
Task 3: Financial Planning and Revenue Requirements Analysis
Objective: Develop a 10‐year cash flow analysis for the new sewer enterprise fund.
Description: Develop annual revenue requirements for each utility’s operations taking into
consideration the following factors:
Historical and audited financial data and current budgets to project future
operating and capital expenditures. We will escalate expenditures using
historical patterns if appropriate or reasonable assumptions based on our
experience with other utility studies. We will apply a variety of escalation
factors to each budget line item.
Capital improvement projects as identified in the City’s recently completed
sewer system master plan. We will utilize the master plan’s prioritization of
capital project needs in developing financial scenarios for the new enterprise
fund.
Regulatory costs of meeting WDRs including preparation of Sewer System
Management Plans.
Past and future system depreciation schedules.
Development of new reserve policies for operations, rate stabilization and
capital needs.
Adequate coverage ratios should the City decide to issue debt to finance the
$9 million CIP.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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Indirect Cost Allocation Analysis. Create an indirect cost analysis for the new
enterprise fund utilizing generally accepted cost allocation principles. This
analysis will demonstrate the City’s central services support to the new sewer
enterprise fund. Our project team will interview finance and public works staff
regarding time commitment spent by other City departments in supporting the
sewer fund, will review and analyze department budgets and allocate labor and
materials costs according to various factors such as full‐time equivalents (FTE),
agenda items, building square footage and labor effort.
Alternative Financial Scenarios. Develop three alternative financing scenarios to
meet operations and capital needs. The scenarios will consider debt financing
and related coverage ratios, other City fund loans at lower interest rates then
formal debt financing, and “pay as you go” approaches via utility charges.
Scenarios may utilize a combination of these approaches. Our rate model will
allow City staff to develop several “what if” scenarios utilizing these approaches.
Meetings: One (1) meeting with City staff and project team to discuss results of financial
planning and revenue requirement analysis.
Deliverables: Progress memorandum incorporating results of the revenue requirements
analysis for the sewer utility system.
Task 4: Cost of Service Analysis
Objective: Perform a strict cost of service analysis to allocate utility service costs in a
proportionate manner based on functional components and customer
characteristics.
Description: Generate Functional Cost Analysis. Drawing upon documented system
standards and planning criteria, City staff knowledge, and industry expertise,
our project team will determine appropriate cost allocation factors with which to
distribute utility requirements to functional cost categories.
Utilizing principles endorsed by the WEF and following the substantive
requirements of Proposition 218, we will allocate sewer utility cost components
by customer accounts, flow, and capacity characteristics, possibly including
loading factors of strength (biochemical oxygen demand and suspended solids)
where appropriate. Although the City does not treat its effluent, these loading
factors do place a burden on the City’s collection and transmission facilities.
Factors used to distribute costs to these functions will stem from wastewater
flow (using industry standards cross‐referenced to annualized winter water use),
documented system sizing requirements, institutional and/or operating practices
(e.g., staffing allocations), and a subsequent breakdown of utility plant‐in‐service
and/or the capital improvement programs (depending on the test year selected).
Develop Customer Cost Allocations. Each functional cost category developed
above will be further distributed to each existing customer class, based on their
individual demands for the service component (e.g., number of connections,
volumes, etc.) or defined system planning requirements for each class (e.g., flow
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
11
standards and strength). This task will result in the total costs attributable to the
requirements of each customer class, and hence, the amount of annual revenue to
be recovered from the rates for each class.
Develop Unit Costs. Our project team will calculate unit costs of service for each
functional cost component assigned to each customer class, using customer and
operating statistics (e.g., customer counts, volumes, etc.). These unit costs will
serve as the foundation for designing rates.
Meetings: None.
Deliverables: None.
Task 5: Rate Design and Comparative Analyses
Objective: Develop alternative rate schedules for the sewer utility based on strict cost of
service analyses to ensure equitable and understandable customer rates as well
as revenue sufficiency for the utility. Perform comparative analyses of proposed
rates.
Description: The sewer revenue requirements from each customer class will be recovered
through a rate structure designed to stand alone as a separate revenue source.
We will design rate structures that provide equity and ease of implementation
and will only utilize data and figures that can be supported; our models will not
include arbitrary factors for rate design purposes thus strengthening the nexus
with Proposition 218.
Our utility rate model translates the customer class fair share of the revenue
requirement into an actual rate structure for utility services. This type of analysis
addresses critical policy criteria such as:
Financial Sustainability – Does the proposed rate structure reduce the
volatility of revenue, and are all program costs met to assure the financial
feasibility of the system?
Equity – Is the new rate structure equitable to all customer classes within the
context of Proposition 218? There may be social and political concerns that
certain customer classes cannot afford a higher rate structure. However, these
must be balanced with proportionate cost of service principles as required by
state law.
Defensibility – Is the new rate structure compliant with existing legal
requirements and is it truly cost of service‐based?
Administrative Ease – Is the proposed rate structure easy to administer and
simple to explain? Complex rate structures may create unforeseen
administrative challenges or may require significant public outreach to
educate customers on the need for a new rate structure or updated utility
rates.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
12
Alternative Rate Design. We will design up to three alternative rate structures
for the utility by incorporating a 100% variable approach, a fixed/variable
approach, and a fixed/variable approach with tiered variable rates for high
dischargers. Our analyses will present the number of and degree to which
different customers are impacted by changes in the structures.
Comparative Analysis. We will analyze differences in rates and rate structure
design of surrounding jurisdictions. During this task, we will not only gather the
rate structures from other agencies but will ask each agency contact in‐depth
questions about their rate design to ensure an “apples to apples” comparison.
Research will center on such items as last rate update, rate structure type, and
goals and policies surrounding that particular agency’s rate schedule. We have
found this comparative analysis to be a useful tool for elected officials, City staff
and the community in smoothing the transition to new utility rates and avoiding
“rate shock”.
Meetings: One (1) meeting with City staff and project team to discuss cost allocation and
proposed rate designs.
Deliverables: Progress memorandum including proposed rate schedules, rate design
alternatives and comparative analyses.
Task 6: Documentation, Presentations & Rate Model
Objective: To document and present rate analyses and results to facilitate rate
implementation and provide supporting documentation.
Description: Mr. Jewett and Mr. Cullinan will prepare a written report documenting the
methodologies, bases, findings, and recommendations of the study. The report
will include an executive summary, technical appendices and present
information and data in table and graph form where appropriate.
We will develop a draft report and submit copies to City staff for review and
feedback. The contents of the draft report will be delivered in electronic portable
document format for distribution to appropriate reviewers. Upon review, the
team will finalize the report and will publish ten (10) bound copies of the
document. Also delivered will be one (1) unbound master reproducible version
of the report, as well as one (1) electronic copy in portable document format.
We will meet with City Council and staff to present the rate study findings and
results. The reports and presentations will be distributed at least ten (10) days in
advance of meetings.
User Friendly Rate Model. Following final City approval of the rate structures,
we will prepare a user’s manual of the rate model for City use. Rate study results
are used by many stakeholders during the course of an analysis and often long
after project completion. For instance, agency staff implement, use, and
communicate resulting rate structures to a variety of interests. The spreadsheet
models may be used to perform updates or to conduct “what‐if” scenarios.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
13
Legislative officials often communicate the need for rate reviews and increases to
constituents. Utilizing user‐friendly project deliverables such as spreadsheet
models, reports, and presentations enhances these efforts and is critical to the
smooth implementation of the new rate structure.
Our fee models are spreadsheet‐based using Microsoft Excel as the software
platform. Mr. Jewett has designed models with the end‐user in mind, agency
staff. They include full disclosure reporting in the form of coordinated
assumption listings, customer rate impacts and a host of graphical
representations of results. Our model will be customized to your specific agency
requirements while the formats, formulas and navigation of our models are
familiar to all staff. Our experience tells us that these features will make it more
likely that you and your staff will use and therefore benefit from the project in
future years. As staff updates the project structure for changes in future
expenditures and processes, they will be able to easily extract the valuable result
information they need. At project completion, we will prepare a user’s manual to
assist with model navigation and we will conduct an on‐site visit with staff to
demonstrate model operation.
Proposition 218 Procedural Guidance. Mr. Jewett has 12 years’ experience
developing revenue programs in compliance with Proposition 218. He has
created numerous assessment and tax districts, property‐related fee studies for
water, sewer, storm water and refuse utilities, and conducted dozens of balloting
and noticing campaigns for local agencies throughout California. No other rate
consultant in the state has his combination of hands‐on rate study and
Proposition 218 expertise and experience. He will guide the City through the
procedural and substantive requirements of this constitutional provision and will
provide analysis and review of Proposition 218‐related notices created by the
City. As a result of this expertise, you can be assured that your rate structure is
fully compliant with Proposition 218 and meets the procedural requirements
of establishing the new sewer charges.
Meetings: Two (2) meetings with the City Council to present results.
Deliverables: 1) Draft and final reports and presentation materials for meetings. 2) Spreadsheet
model and user’s manual. 3) Sample Proposition 218 notice language.
TOTAL PROJECT MEETINGS
We propose at total of five (5) meetings during the course of this project: three (3) meetings with
City staff and two (2) meetings with the City Council.
STAFF RESOURCE ALLOCATION
Mr. Jewett and Mr. Cullinan have current project workloads that will allow us to commit the
necessary time and resources to meet your project schedule.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
14
PROJECT SCHEDULE
The following project schedule (Figure 2 on the next page) is focused on the first City Council
meeting in January. At this meeting, we will present the financial plan and rate analysis results.
Assuming approval by the Council, the Proposition 218 notices can be mailed to all property
owners affected by the new rate structure. Following the required minimum of 45 days after the
mailing of the notices, the City Council may hold its public hearing (at the first or second
meeting in March) regarding the new rate structure. At this public hearing, we propose to make
another presentation regarding the rate structure. This schedule will ensure the City has the
time it needs to place the new sewer charges on the Los Angeles County Secured Tax Roll by
the early August deadline. Should the City decide to modify this schedule, we will work with
staff to make the appropriate changes.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan 15 Figure 2, Proposed Project Schedule City of Hermosa Beach – Sewer Rate Analysis and Financial PlanProject Schedule and Deliverables31 7 14 21 28 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 1 8 15 22 1 8 15 22 29Project TasksTask 1: Project Initiation/Data Acquisitiona1Task 2: Data Analysis/Customer Statistical AnalysisTask 3: Financial Planning and Revenue Requirements Analysisa2Task 4: Cost of Service AnalysisTask 5: Rate Design and Comparative Analyses a2Task 6: Documentation, Presentations and Rate Model ⌧a3a3Legend: a1:Data Request, Project Team Member Contact List and Revised Project Schedule, if necessarya2:Progress Memo a3:Reports, Presentations and Rate ModelStaff Meeting1st City Council meeting (presentation)⌧Proposition 218 Notices Mailed2nd City Council meeting (Public Hearing presentation at least 45 days after Prop 218 notices are mailed)JanuaryDecember February MarchOctober NovemberSeptember
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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PROJECT BUDGET
The following table presents our proposed project fee schedule for this assignment and
encompasses the tasks, meetings and deliverables identified in our scope of work. Please note
that this is a fixed fee proposal and includes direct expenses related to this project with no
overhead mark‐up.
Project Team Member: Jewett Cullinan
Project
Manager
Rate
Technician
$175 $130 Hours Cost
Task 1: Project Initiation/Data Acquisition 8 8 16 2,440$
Task 2: Data Analysis/Customer Statistical Analysis 6 14 20 2,870
Task 3: Financial Planning and Revenue Requirements Analysis 20 30 50 7,400
Task 4: Cost of Service Analysis 16 26 42 6,180
Task 5: Rate Design and Comparative Analyses 12 22 34 4,960
Task 6: Documentation and Presentations 24 28 52 7,840
Subtotals 86 128 214 31,690$
Project Expenses:800$
Proposed Project Fee: 32,490$
City of Hermosa Beach – Sewer Rate Analysis and Financial Plan
Total
Tasks
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
17
PROJECT TEAM
PROJECT ORGANIZATION CHART
CAPABILITIES AND EXPERIENCE OF OUR PROJECT TEAM
To successfully navigate through your rate and financial analysis, the successful consultant and
their team must possess specific, detailed and customized knowledge of not only the technical
analysis of rate setting, but the context of rate structure implementation in achieving City policy
goals. Our project team has over 25 years of experience performing projects requiring the same
utility financial expertise as that needed to serve the City of Hermosa Beach.
Brian Jewett, Vice President of TischlerBise, will coordinate our project team’s interaction with
the City to ensure that all work is completed properly, on time, and within budget. He will
work closely with Chris Cullinan, developing and reviewing all aspects of the project and
providing overall quality assurance for the project.
Chris Cullinan, Principal at TischlerBise, will support Mr. Jewett with the utility financial plan
and rate analysis. He will utilize his public sector experience with enterprise funds in assisting
the City with establishing the new sewer fund.
Project Roles and Responsibilities: Our project team will provide seamless support to your
project. Mr. Jewett and Mr. Cullinan are already aware of their roles and responsibilities.
Furthermore, our team will meet weekly to assess the status of the project. Mr. Jewett will
ensure that staffing resources are well‐matched to provide the highest quality of work product,
high responsiveness to the City, and to keep your project on schedule. Our approach to
resolving issues that may be encountered during the project is simple: identify the possible
challenges early on and notify all project members in a timely manner. Early identification will
allow the team time to strategize a solution from a proactive, rather than reactive, framework.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
18
Brian Jewett
EXPERIENCE
Brian Jewett has 18 years experience in public administration for local government. He
specializes in fiscal analysis and financial services to local agencies. Much of his work is related
to creating and maximizing new and existing revenue sources to maintain and enhance public
service delivery and fund capital project needs. Based on this expertise, Mr. Jewett has
developed numerous utility financial plans and rate analyses, cost recovery models and a
variety of additional funding mechanisms for cities and special districts in several states. He has
developed innovative analyses for utility rates and user fees to determine proportional cost
structures thus ensuring equity and defensibility in the implementation of funding sources and
compliance with California’s Proposition 218 requirements for rate and fee setting. In several
instances, his expertise has led clients to engage him as a third party reviewer of utility and user
fee funding programs. Of benefit to your rate study project, Mr. Jewett has led and conducted a
variety of financial studies for utilities including:
Water, wastewater, refuse and storm water rate studies
Long‐term financial plans for utilities
Tiered rate analyses to support conservation programs
Drought surcharge development
Water budget analyses
Inter‐fund or General Fund reimbursement analyses (often utilizing OMB A‐87 compliant
approaches)
User fee development
Impact fee development
Citizen committee and stakeholder group facilitation
Mr. Jewett is an active member of the American Water Works Association and is a current
member of AWWA’s Rates and Charge Committee, the industry‐leading organization for
water rate setting in the United States. In addition, he has presented to various industry groups
and government bodies on fiscal and utility related topics and has participated as an occasional
adjunct lecture for the graduate level public administration program at the University of
Southern California.
Prior to joining TischlerBise, Mr. Jewett was Vice President and Manager of Willdan Financial
Services’ Consulting Division. He led a diverse team of financial and economic experts
dedicated to developing sustainable funding programs including impact fee development, fiscal
impact analyses, growth planning, special financing district formations, and utility rate and cost
of service analyses. Mr. Jewett has over five years of experience working for state and local
government, including staff positions within the City and County of San Francisco as well as an
internship position within the City Manager’s office for the City of Poway, California.
EDUCATION
M.P.A., Public Administration, University of Delaware
B.A., Political Science, University of California, Santa Barbara
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
19
REGISTRATIONS & AFFILIATIONS
American Water Works Association, Member AWWA Rates and Charges Committee
SAMPLE SPEAKING ENGAGEMENTS
Water Rate Setting & How to Develop an Effective Communications Outreach Program,
California State Municipal Finance Officers’ Annual Conference
Utility Rate and User Fee Analyses, International City/County Management Association
Annual Conference
Reducing Reliance on Property Taxes, International City/County Management Association
Annual Conference
How to Develop Effective Utility Rates, Washington Finance Officers Association Annual
Conference
Adjunct Lecturer, Graduate School of Public Administration, University of Southern
California, 2005 and 2006
Chris Cullinan
EXPERIENCE
Chris Cullinan conducts fiscal impact analyses, revenue strategy assessments, capital
improvement funding analyses, utility rate analyses, and impact fee studies. He has over ten
years of public finance experience in both the public and private sectors. With TischlerBise, he
has prepared over 125 impact fee programs for local agencies across the United States. He has
completed a number of fiscal impact analyses as well as developed customized fiscal impact
models for many of our firm’s clients. Mr. Cullinan was previously the Budget Director for the
City of Charlottesville, Virginia in which he was involved with budgeting, cost analysis,
revenue analysis and forecasting, long‐term financial planning, and capital improvement
planning.
EDUCATION
M.P.A. Public Finance, Indiana University‐Bloomington
B.A. Political Science, Earlham College
SPEAKING ENGAGEMENTS
Mr. Cullinan developed the curriculum and conducted workshops for appointed and
elected officials in Wyoming and McDowell counties in West Virginia on improving local
government financial management.
American Planning Association, National Conference 2006, “The Cost of Growth: It’s Not
Just the Capital Costs”.
Arizona City/County Management Association, Summer Conference 2006, “Cost of Growth
vs. Fiscal Impact Analysis”.
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
20
QUALIFICATIONS AND REFERENCES
ABOUT TISCHLERBISE
TischlerBise, Inc., formerly Tischler & Associates, Inc., is a corporation with headquarters in
Bethesda, Maryland and a regional office in Temecula, California. We are a fiscal, economic and
planning consulting firm that specializes in utility rate studies and financial planning, impact
fees, fiscal impact analysis, user fees, cost allocation plans, capital improvement planning,
and related revenue strategies. Our firm has been providing consulting services to public
agencies for over 30 years. In this time, we have prepared hundreds of utility‐related financial
analyses throughout the United States. Through our detailed approach, proven methodology
and comprehensive product, TischlerBise is established as a national expert on revenue
enhancement and cost of growth strategies. The map below illustrates the broad geographic
diversity of our client base. Our references demonstrate our ability to successfully manage
projects throughout the country from our Maryland and California offices.
The following table illustrates our experience and expertise with a variety of funding programs
including utility financial analyses as well as utility‐related capital facility financing plans and
impact fee programs. Following this table, we present several specific utility rate study project
descriptions and additional client references.
Utility-related Clients
STATE CLIENT Water Rate Analysis Wastewater Rate Analysis Long‐Term Utility Finance Planning Wastewater Impact Fee Water Impact Fee Tiered Rate Structure Rate Stabilization Fund AR Bentonville
AR Siloam Springs
AZ Apache Junction
AZ Avondale
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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STATE CLIENT Water Rate Analysis Wastewater Rate Analysis Long‐Term Utility Finance Planning Wastewater Impact Fee Water Impact Fee Tiered Rate Structure Rate Stabilization Fund AZ Buckeye
AZ Carefree
AZ Casa Grande
AZ Cave Creek
AZ Coolidge
AZ El Mirage
AZ Eloy
AZ Flagstaff
AZ Florence
AZ Gilbert
AZ Glendale
AZ Holbrook
AZ Queen Creek
AZ Scottsdale
AZ Show Low
AZ Sierra Vista
AZ Surprise
AZ Tolleson
AZ Yuma
CA Arvin
CA Avenal
CA Calexico
CA Chino Hills
CA Claremont
CA Clovis
CA Corcoran
CA Covina
CA Crescent City
CA East Valley Water District
CA Elsinore Water District
CA Encina Wastewater Authority
CA Fort Bragg
CA Fountain Valley
CA Grass Valley
CA Half Moon Bay
CA Hollister
CA Joshua Basin Water District
CA Laguna Beach County Water
District
CA Leucadia Wastewater District
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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STATE CLIENT Water Rate Analysis Wastewater Rate Analysis Long‐Term Utility Finance Planning Wastewater Impact Fee Water Impact Fee Tiered Rate Structure Rate Stabilization Fund CA Lomita
CA McFarland
CA Merced
CA Port Hueneme
CA Rio Vista
CA San Fernando
CA Santa Margarita Water District
CA Seal Beach
CA South Pasadena
CA Stockton
CA Temecula
CA Tulare
CA Vista
CA Westminster
CO Eaton
CO Louisville
DE New Castle Co.
FL Coral Gables
FL Lake Wales
FL North Miami
FL Riviera Beach
FL West Miami
GA Effingham Co.
ID Hailey
ID Kellogg
ID Nampa
IL Evanston
MD Hampstead
MD Salisbury
MD Westminster
MO Nixa
MT Belgrade
MT Big Sky
MT Manhattan
MT Polson
NC Creedmoor
NE Lincoln*
NM Las Cruces
UT American Fork
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
23
Utility rate study project
10-year water and sewer enterprise fund
financial plans
Strict cost of service approach compliant
with Proposition 218
Significant funding of capital projects
utilizing a combination of rates, debt
financing and General Fund loans
Development of formal reserve policies
User-friendly model
STATE CLIENT Water Rate Analysis Wastewater Rate Analysis Long‐Term Utility Finance Planning Wastewater Impact Fee Water Impact Fee Tiered Rate Structure Rate Stabilization Fund UT Clearfield
UT Clinton City
UT Draper
UT Farmington
UT Hyde Park
UT Kaysville
UT Logan
UT North Logan
UT Pleasant Grove
UT South Valley Sewer District
UT Spanish Fork
UT Wellsville
UT West Jordan
UT Woods Cross
VA Suffolk
WI Eau Claire
WY Pinedale
REPRESENTATIVE STUDY DESCRIPTIONS AND CLIENT REFERENCES
Listed below are recent projects that demonstrate our technical abilities for your project and are
similar in approach, scope and results. We encourage you to contact each reference regarding
our rate study consulting services as well as additional firm references provided in the reference
table below these descriptions.
City of Fountain Valley, California
Contact
Mark Lewis
Public Works Director/City Engineer
(714) 593‐4435
Nature of Assignment
Mr. Jewett performs ongoing utility consulting
services for the City for its water and sewer systems.
Most recently, Mr. Jewett conducted an
independent review of the City of Fountain Valley’s
water rate structure. The City has local access to
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
24
Utility rate study project
10-year water enterprise fund financial
plan
General Fund reimbursement analysis
Strict cost of service approach compliant
with Proposition 218
Development of formal reserve policies
Facilitated Water Rate Ad-Hoc Committee
User-friendly model
groundwater and Metropolitan Water District supplies which are resulting in higher water
purchase costs for the City. Furthermore, the City is facing significant capital project investment
needs. The former rate structure was inadequate in providing sufficient revenue to face these
cost pressures. Mr. Jewett developed a ten‐year budget requirement analysis for the City’s
water utility, identified separate fixed and commodity charges through an intensive cost of
service analysis, and developed a reserve policy to provide sufficient funding for future
operational and capital needs through an integrated planning process.
Additionally, the City required the rate analysis be completed in 13 weeks from receipt of notice
to proceed in order to appropriately implement the proposed rates and collect increasing
revenues. In order to adhere to the 13‐week timeline, Mr. Jewett created and maintained a
project delivery schedule to keep all project team members on track and ensure all project
milestones were met. Mr. Jewett submitted frequent memorandums to City staff to demonstrate
progress, initial findings, assumptions used and next steps. These tools assisted the project team
with meeting the objectives requested by the City.
City of Westminster, California
Contact
Marwan Youssef
Public Works Director/City Engineer
(714) 898‐3311 x219
Nature of Assignment
Mr. Jewett was the project manager of this project
for the City involving a water rate study. The City
required a long‐term analysis of its water fund to
ensure the financial stability of the fund in the
future. As part of this effort, Mr. Jewett created a 10‐
year pro forma for the fund, reviewed and revised
the City’s General Fund reimbursement approach and developed formal reserve policies for
operating and capital reserve needs in the future. This approach will help the City plan for its
future needs and minimize future debt financing. Mr. Jewett created a tiered rate structure for
six separate customer classes based on each customer class’ proportionate cost of water service.
Finally, Mr. Jewett led a citizen‐based Water Ad‐Hoc Committee through a series of 6 meetings
to establish buy‐in of the new rate structure. The Committee unanimously approved the new
rate structure.
City of Fort Bragg, California
Contact
Linda Ruffing
City Manager
(707) 961‐2823
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
25
Utility rate study project
10-year water and sewer enterprise fund
financial plan
Strict cost of service approach compliant
with Proposition 218
Development of formal reserve policies
Development of funding programs for
significant capital project needs
User-friendly model
Utility rate study project
10-year water and sewer enterprise fund
financial plan
Strict cost of service approach compliant
with Proposition 218
Development of formal reserve policies
Development of funding programs for
significant capital project needs
User-friendly model
Utility rate study project
10-year water enterprise fund financial
plan
Strict cost of service approach compliant
with Proposition 218
Development of funding program to
support a bond financing for the Cypress
Street Reservoir
Utility rate study project
10-year water enterprise fund financial
plan
Strict cost of service approach compliant
with Proposition 218
Development of funding program to
support a bond financing for the Cypress
Street Reservoir
Nature of Assignment
The City of Fort Bragg owns and operates water
and wastewater utility systems. Mr. Jewett assisted
the City by establishing a ten‐year financial plan,
developing rates to support future bond issues to
replace aging infrastructure, presenting the
findings and recommendations to the City Council
and conducting numerous workshops with the
Council and staff to present the cost‐of‐service
methodologies. The rate studies also assisted the
City in determining an appropriate reserve fund
level for annual operations and maintenance. As
part of this study, Mr. Jewett utilized user‐friendly
illustrations and graphs to depict the reasons for
the rate analysis and rate increases, present rate
comparisons to neighboring jurisdictions and show customer impacts from the new rate
structure.
City of Lomita, California
Contact
Tom Odom
City Manager
(310) 325‐7110 x115
Nature of Assignment
Mr. Jewett was the project manager for the City’s
water rate study. The main reasons for the rate
analysis were to develop a Proposition 218
compliant rate structure and customer rates capable of generating enough funding for a seismic
retrofit of the City’s Cypress Street Reservoir. Mr. Jewett developed a comprehensive 10‐year
financial pro forma of the water enterprise fund that projected the amount of utility revenues
needed to meet increased water purchase costs from Metropolitan Water District as well as
operations, capital and debt service needs. Mr. Jewett supported the City during its bond
pricing effort and prepared several rate scenario adjustments to ensure debt coverage ratios
were adequately met.
City of Flagstaff, Arizona
Contact
Randy Pellatz
Utilities Director
(928) 779‐7618
City of Hermosa Beach, California – Request for Proposals, Sewer Rate Analysis and Financial Plan
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Utility rate and fee study project
10-year water, sewer and reclaimed water
enterprise fund financial plans
Development of formal reserve policies
Development of rate and capacity fee
funding programs for significant capital
project needs
User-friendly model
Nature of Assignment
Mr. Jewett currently manages this project for
water, sewer and reclaimed water rate and fee
analyses. Due to increasing capital costs and a
major downturn in development, the City needs
new rate and capacity fee structures that support
increasing operations costs, significant debt
financing and Water Infrastructure Financing
Authority (WIFA) and State Revolving Fund (SRF)
loan requirements while encouraging water
conservation through a multi‐tiered rate system.
ADDITIONAL REFERENCES
CLIENT PROJECT CONTACT TITLE PHONE
NUMBER
Leucadia Wastewater
District, California
20‐year Special
District Wastewater
Financial Plan
Paul Bushee General Manager (760) 753‐0155
Santa Margarita Water
District/Elsinore Water
District, California
Proposition 218 Rate
Review/Water Rate
Study
John Schatz
General
Manager/Legal
Counsel
(949) 459‐6420
Encina Wastewater
Authority, California
Wastewater
Treatment Plan
Utility Asset
Allocation Modeling
Kevin Hardy General Manager (760) 438‐3941
Laguna Beach County Water
District, California Utility Rate Analysis Renae Hinchey General Manager (949) 494‐1041
City of Avenal, California Water and Sewer
Rate Studies Melissa Whiten City Manager (559) 386‐5766
Cities of Claremont &
Atascadero, California
Sewer Rate
Study/Assessment
District Formations
Jim Lewis Assistant City
Manager
(805) 461‐5000
x3400
Cities of Lancaster &
Tehachapi, California
Fee
Studies/Assessment
District Formations
Jason Caudle Deputy City
Manager (661) 723‐6010