FOR: Water Subcommittee Meeting [March 27, 2024]
TO: Honorable Water Subcommittee Members
APPROVAL: Stephen Dopudja, P.E., Interim Utilities Manager
Toyasha Sebbag, Assistant to the City Manager
...Title
Water and Wastewater Rate Study.
RECOMMENDATION
Request that the Water Subcommittee provide feedback on Water and Wastewater Rate Model. (ACTION)
...Body
BACKGROUND
The agenda includes a discussion and presentation during the meeting by F.G. Solutions, the City's Water and Wastewater Consultant, regarding the ongoing development of the updated rate model.
ANALYSIS/DISCUSSION
At the February 27, 2024, City Council Meeting staff requested that the item pertaining to a public hearing under Proposition 218 to adjust water and wastewater rates be tabled until a future date to be determined. It was further explained that City staff would bring back for City Council consideration to set a new public hearing with new and proper 218 notification materials.
Subsequently, staff requested a 2023 Water and Wastewater Rate Study Amendment 1 (ATTACHMENT 1) to a professional services agreement with FG Solutions, LLC with a timeline to update rate calculations with rates effective January 1, 2025, 2026, 2027, 2028, and 2029. Below is the proposed milestone schedule:
|
Proposed Milestones |
Date |
|
Notice to Proceed |
03/08/2024 |
|
Draft Rate Proposal to City Staff |
03/26/2024 |
|
Water Subcommittee Meeting |
03/27/2024 |
|
Attend Various Meetings |
TBD |
|
Final Rate Proposal Developed |
04/09/2024 |
|
Council Sets Proposition 218 Hearing |
04/23/2024 |
|
Preliminary Draft Report Delivered |
05/16/2024 |
|
Final Draft Report Delivered |
05/31/2024 |
|
Proposition 218 Public Hearing |
06/25/2024 |
|
1st Rate Adjustment |
01/01/2025 |
Any requirement to produce more than one iteration of a rate proposal will result in delay of all scheduled milestones.
FINANCIAL IMPACT
Operating Budget
Funds are available in water and wastewater contract services operating accounts, with funds split based on the number of accounts served.
The 2023 Water and Wastewater Rate Study Amendment 1 costs will be split as follows:
|
Water with approximately 12,500 (37%) accounts |
$24,291 |
|
Wastewater with approximately 21,470 (63%) accounts |
$41,360 |
|
Amendment 1 Costs |
$65,651 |
The Original Professional Services Agreement (PSA) awarded on April 11, 2023, was for $138,297. The PSA Amendment 1 is for $65,651, bringing the total contract cost to $203,948. Amendment 1 is within the signature authority of Arron Brown, Assistant City Manager because it is for under $100,000 and did not need to return to the City Council for authorization.
Capital Improvement Budget
The proposed action will not impact the Capital Improvement Budget.