Banning City Council
November 12, 2024

November 12, 2024
5:00 p.m.

In Chambers
Council Chambers
99 E. Ramsey Street
Banning, CA 92220

1. CALL TO ORDER

2. AGENDA APPROVAL

3. PRESENTATIONS

3.1 Recycling All-Star Awards

3.2 Quarterly Small Business Recognition - Johnny's Russo Italian Kitchen

4. REPORT ON CLOSED SESSION

5. PUBLIC COMMENTS, CORRESPONDENCE, APPOINTMENTS, AND REPORTS AGENDA

CITY COUNCIL - REGULAR MEETING OF THE BANNING CITY COUNCIL

CITY OF BANNING, CALIFORNIA
The following information comprises the agenda for the regular meeting of the Banning City Council, a joint meeting of the City Council and Banning Utility Authority, and the Banning City Council sitting in its capacity as the Banning Successor Agency Board.

Per the City of Banning Manual of Procedural Guidelines, matters taken up by the Council before 10 p.m. may be concluded, but no new matters shall be taken up except upon a majority vote of the council members present and voting. Such an extension shall only be valid for one hour and each hour thereafter shall require a renewed action for the meeting to continue.

1.1 INVOCATION
Performed by Pastor Nate Rodriguez of Infinite Center

1.2 PLEDGE OF ALLEGIANCE

1.3 ROLL CALL

2.1 AGENDA APPROVAL
Recommendation: Recognize Recycling All-Stars in the community.

Recommendation: Staff respectfully recommends City Council recognize Johnny Russo's Italian Kitchen, an exceptional small business within the City.

Serita Young, City Attorney

5.1 PUBLIC COMMENTS

5.2 CORRESPONDENCE
City Council - Regular Meeting Agenda
November 12, 2024
1 6. CONSENT ITEMS

6.1 Approval of the Meeting Minutes for the October 22, 2024 City Council Meetings

6.2 Consideration of Resolution 2024-173, Approving the City of Banning Electric Utility Power Source Disclosure Annual Report and Power Content Label for Calendar Year 2023

6.3 Consideration of Resolution 2024-174, Awarding a Construction Contract for Project No. 2024-06W Charles Street and Lincoln Street Non-Potable Water Booster Stations and Reservoirs to Pyramid Building and Engineering, Inc. in the amount of $9,236,546 and Approving a 10% Contingency for a Total Project Budget Not-to-Exceed $10,160,200.60

6.4 Consideration of Resolution 2024-175, Approving a Professional Services Agreement with NewGen Strategies and Solutions, LLC for the Banning Electric Utility Cost-of-Service Analysis and Rate Design Study in the Amount of $164,600

6.5 Consideration of Resolution 2024-176, Accepting Community Development Block Grant (CDBG) Funds for Fiscal Year 2024/2025 in the Amount of $159,408 for the Banning Senior Center (5.BN.61-24) in the Amount of $43,144; Dysart Park Improvement Project (5.BN.62- 24) in the Amount of $105,000; And the Banning Peace Center Food Program in the Amount of $11,264, and Rescinding Resolution 2024-159

6.6 Consideration of Resolution 2024-177, Approving a Successor Memorandum of Understanding (MOU) with the International Brotherhood of Electrical Workers (IBEW) Local 47 Representing the Utility Unit Employees, Effective July 1, 2024 through December 31, 2026, and Authorizing the City Manager to Finalize and Execute a Successor Agreement

6.7 Consideration of Resolution 2024-178, Approving Amendment No. 1 to the Professional Services Agreement (C00991) with Aragon Geotechnical, Inc. for Surface Mining Inspection Services to Extend the Contract for an Additional Year and Increase the Contract by $6,082.50 for a Total Not to Exceed $12,165

6.8 Consideration of Resolution 2024-179, Approving a Subdivision Improvement Agreement with RSI Development Banning, LLC for Tract 36939 and Accepting Performance and Labor and Material Bonds for Public Improvements and Exonerate Existing Bonds Submitted by the

5.3 APPOINTMENTS

5.4 CITY COUNCIL COMMITTEE REPORTS

5.5 CITY MANAGER'S REPORT

5.6 CITY ATTORNEY'S REPORT

5.7 CITY TREASURER'S REPORT
The following items have been recommended for approval and will be acted upon simultaneously, unless a member of the City Council/Banning Utility Authority/Successor Agency Board wishes to remove an item for separate consideration.

Recommendation: Approve the minutes of the October 22, 2024 City Council Meetings.

Recommendation: Adopt Resolution 2024-173.

Recommendation: Adopt Resolution 2024-174.

Recommendation: Adopt Resolution 2024-175.

Recommendation: Adopt Resolution 2024-176.

Recommendation: Adopt Resolution 2024-177.

Recommendation: Adopt Resolution 2024-178.

City Council - Regular Meeting Agenda
November 12, 2024
2 Previous Property Owner

6.9 Consideration of Resolution 2024-180, Approving an Easement Purchase and Sale Agreement with Southern California Edison for an Easement in the City of Banning Water Canyon

6.10Consideration of Resolution 2024-181, Amending the Classification and Compensation Plan

6.11Consideration of Resolution 2024-182, Approving Community Development Block Grants (CDBG) for FY 2025-2026

6.12Update on Cost Recovery Services for First Responder (EMS/Fire) Medical Billing Fees Collected by Wittman Enterprises LLC for the City of Banning

6.13Receive and File Annual Fire Inspection Report of Certain Occupancies for Fiscal Year 2023/2024 Pursuant to California Health and Safety Code Section 13146.4

6.14Community Cleanup and Compost Giveaway Event Update

6.15Accept as Complete Various Improvements Related to the Atwell Specific Plan Development and Authorize 90% Reduction of the Improvement Bonds

6.16Consideration of Approving Amendment No. 1 to the Renewable Natural Gas Supply Agreement with AmpRenew Offtake I, LLC

6.17Accept an Easement from Tri Pointe Homes for Electric Utility Purposes on Accessor’s Tract Map No. 37388-3, within the Atwell Development for the Maintenance of the City-Owned Electric Distribution System

7. PUBLIC HEARINGS

8. REPORTS OF OFFICERS

8.1 Consideration of Resolution 2024-183, Making a Determination of Exemption under CEQA Guidelines Section 15301 and Further Making a Determination that the Public Convenience or Necessity Would be Served by the Issuance of Alcoholic Beverage Control License Type 21 (Off-Sale General) for a Market and Deli Located at 263 West Ramsey Street, within the Downtown Commercial Zone and Census Tract 441.01
Recommendation: Adopt Resolution 2024-179.

Recommendation: Adopt Resolution 2024-180.

Recommendation: Adopt Resolution 2024-181.

Recommendation: Adopt Resolution 2024-182.

Recommendation: Receive and file.

Recommendation: Receive and File.

Recommendation: This is informational only; receive and file report.

Recommendation: City Council accepts as complete various improvements related to the Atwell Specific Plan Development and authorize the 90% reduction of the improvement bonds.

Recommendation: Approve Amendment No. 1 to the Renewable Natural Gas Supply Agreement with AmpRenew Offtake I LLC (AmpRenew) and authorize the City Manager, or designee, to execute Amendment No.1 to the Renewable Natural Gas Supply Agreement.

Recommendation: Staff recommends that City Council accepts an easement from Tri Pointe Homes for electric utility purposes for Tract Map No. 37388-3, Lots 12, 18, and 24 within the Atwell Development for the maintenance of the City-owned electric distribution system.

Recommendation: Adopt Resolution 2024-183.

City Council - Regular Meeting Agenda
November 12, 2024
3 8.2 Update on the Sun Lakes Boulevard Extension Project and Consideration of Resolution 2024-184, Approving EA 24-0051, An Initial Study/Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program Pursuant to the California Environmental Quality Act for the Sun Lakes Boulevard Extension Project

8.3 Consideration of Resolution 2024-185, Authorizing the City Manager to Execute Amendment No. 1 to the Transportation Uniform Mitigation Fee Reimbursement Agreement with Western Riverside Council of Governments for up to $13,000,000 for the Sun Lakes Boulevard Extension Project

8.4 Consideration of Resolution 2024-186, Approving a Police Chief Employment Agreement & Swearing In

8.5 Consideration of Resolution 2024-07 UA, Approving a Reimbursement in the Amount of $127,613.58 to the Banning Heights Mutual Water Company for Consultant Expenses Related to the San Gorgonio Flume Project

8.6 Preliminary Results of Operations for Fiscal Year 2023-24

9. DISCUSSION ITEMS

9.1 Consider Animal Shelter Options

9.2 Discuss Options for Use of Zoom During City Council Meetings

10. ANNOUNCEMENTS FROM LEGISLATIVE BODY MEMBERS

11. ITEMS FOR FUTURE AGENDAS

12. ADJOURNMENT
Recommendation: Adopt Resolution 2024-184.

Recommendation: Approve Resolution 2024-185.

Recommendation: Adopt Resolution 2024-186.

Recommendation: Adopt Resolution 2024-07 UA.

Recommendation: Receive and file.

Recommendation: Provide direction to City Manager.

Recommendation: Provide direction to the City Manager regarding use of Zoom for City Council meetings.

11.1 NEW ITEMS

11.2 EXISTING ITEMS

1. Grow Banning (Sanchez)

2. Neighborhood Groups/Identities (Minjares)

3. Update on Community Garden (Flynn)

4. Zencity Contract (Flynn)

5. Zoom Options for Public Meetings (Flynn)

6. Developer Presentation for Sunset Crossroads Project (Flynn)

7. City Manager Evaluation (Flynn)

8. All Active Lawsuits against the City (Flynn)

9. Increased Compensation for City Treasurer and City Clerk (Flynn) Next Regular Meeting – December 10, 2024
AFFIDAVIT • DECLARACIÓN JURADA
IT IS HEREBY CERTIFIED under the laws of the State of California that the above agenda City Council - Regular Meeting Agenda
November 12, 2024
4 was posted on the City's website (www.banningca.gov) as well as the Bulletin Board at Banning City Hall, located at 99 E Ramsey Street, Banning, CA 92220, at least 72 hours in advance of the meeting.
__________________________
Caroline Patton, Administrative City Clerk
Secretario adjunto de la ciudad
PUBLIC NOTICE • NOTICIA PÚBLICA
Meeting Agendas and Notices
Interested in receiving email and/or text notifications of upcoming City Council meetings? Sign up for meeting notifications through the City's website. Pursuant to amended Government Code §54957.5(b), staff reports and other public records related to open session agenda items are available on the City's website (www.banningca.gov/).

Public Comment
Agenda Items
Any member of the public may address this meeting of the City Council on any item appearing on the agenda. A five-minute limitation shall apply to each member of the public and no member of the public shall be permitted to share their time with any other person.

Non-Agenda Items
Any member of the public may address this meeting of the City Council on any item which does not appear on the regular meeting agenda but is of interest to the general public and is an item upon which the City Council may act. A three-minute limitation shall apply to each member of the public and no member shall be permitted to share their time with any other person. No action shall be taken, nor discussion held by the City Council, on any item which does not appear on the agenda, unless the action is otherwise authorized in accordance with the provisions of subdivision (b) of §54954.2 of the Government Code.

Special Assistance/Accessibility Requests
In compliance with the Americans with Disabilities Act, any member of the public may request that the agenda and agenda packet be mailed to them. If you need special assistance to participate in this meeting (such as translation services), please contact the City Clerk's Office. Advanced notification of at least 48 hours prior to the meeting will allow the city to make arrangements to ensure your accessibility.
¿Necesita servicios de traducción para participar? Contacto Oficina del Secretario de la Ciudad.

CONTACT • CONTACTO
City Clerk's Office | 951-922-3102 | [email protected] 99 East Ramsey Street, Banning, California 92220
City Council - Regular Meeting Agenda
November 12, 2024
5 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Holly Stuart, Public Works Program Manager Art Vela, Public Works Director
MEETING DATE: November 12, 2024
SUBJECT: Recycling All-Star Awards
RECOMMENDATION:

Recognize Recycling All-Stars in the community.

BACKGROUND:

City staff along with its partner, Waste Management, would like to take this opportunity to recognize and showcase community members in both residential and commercial sectors for their contributions to the recycling industry and waste reduction efforts.

JUSTIFICATION:

Per the franchise agreement for collection services, the City's hauler, Waste Management, shall identify a member from both the residential and commercial sectors for their extraordinary efforts in participating in recycling programs and provide recognition at the City Council meeting during the month of November.

FISCAL IMPACT:

No impact.

ALTERNATIVES:

No alternatives.

BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. Certificate of Recognition - Waste Management Recycling All Stars 2024.pdf 6 PRESENTED TO
Santana Rubio
The City Council of the City of Banning recognizes you
for your exemplary recycling efforts as part of
Waste Management’s Recycling All Stars Program
by doing your part to Recycle Often and Recycle Right.

Presented on this 12th day of November, 2024
Alberto Sanchez, Mayor
7 PRESENTED TO
John Harrison Contracting
of Banning, California
The City Council of the City of Banning recognizes you
for your exemplary recycling efforts as part of
Waste Management’s Recycling All Stars Program
by doing your part to Recycle Often and Recycle Right.

Presented on this 12th day of November, 2024
Alberto Sanchez, Mayor
8 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Marisol Lopez,
Doug Schulze, City Manager
MEETING DATE: November 12, 2024
SUBJECT: Quarterly Small Business Recognition - Johnny's Russo Italian Kitchen RECOMMENDATION:

Staff respectfully recommends City Council recognize Johnny Russo's Italian Kitchen, an exceptional small business within the City.

BACKGROUND:

Every quarter, the City recognizes one of its outstanding small businesses. The businesses get recognized at a City Council meeting and highlighted on the City's website and social media.

JUSTIFICATION:

California’s small businesses account for over 99% of total businesses in the state and employ more than 7 million people. Small businesses are crucial to the City's local economy.

FISCAL IMPACT:

None
ALTERNATIVES:

N/A
BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. Banning Small Business Recognition - November 2024.pdf 9 City of Banning

PRESENTED TO
Johnny Russo’s
Italian Kitchen
This City of Banning recognizes Johnny Russo’s Italian
Kitchen for being an exceptional small business. The City Council thanks you for showing pride and commitment to
enriching the City of Banning and the Pass Area community.

Presented on this 12th day of November, 2024 Alberto Sanchez, Mayor 10 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Caroline Patton, Administrative City Clerk Doug Schulze, City Manager
MEETING DATE: November 12, 2024
SUBJECT: Approval of the Meeting Minutes for the October 22, 2024 City Council Meetings
RECOMMENDATION:

Approve the minutes of the October 22, 2024 City Council Meetings.

BACKGROUND:

After every meeting, the City Clerk's Office prepares meeting minutes. The City Council reviews and approves these minutes either as presented or with modifications.

JUSTIFICATION:

These minutes have been prepared as Action Minutes in accordance with City Council Resolution 1995- 21 and Government Code Sections 36814, 40801, and 54953(c)(2).

FISCAL IMPACT:

None
ALTERNATIVES:

1. Approve as recommended.

2. Approve with modifications.

BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. 2024 10 22_Minutes_Special Meeting - Closed Session.pdf

2. 2024 10 22_Minutes_Special Meeting - Workshop.pdf

3. 2024 10 22_Minutes_Regular Meeting.pdf
11 The following information comprises the minutes for a special meeting of the City Council, a joint meeting of the Banning City Council and Banning Utility Authority and a joint meeting of the Banning City Council and the Banning City Council sitting in its capacity as the Successor Agency Board.

MINUTES 10/22/2024

CITY COUNCIL SPECIAL MEETING
COUNCIL MEMBERS PRESENT: Council Member Sheri Flynn
Council Member David Happe
Mayor Alberto Sanchez
Council Member Colleen Wallace
COUNCIL MEMBERS ABSENT: Mayor Pro Tem Rick Minjares
OTHERS PRESENT: Doug Schulze, City Manager
Serita Young, City Attorney
Caroline Patton, Administrative City Clerk
Lincoln Bogard, Administrative Services Director
Art Vela, Director of Public Works
Nicole Jews, Human Resources Manager
Oliver Yee, City Counsel (Liebert, Cassidy, and Whitmore) John Z. LaCrosse, City Counsel (Liebert, Cassidy, and Whitmore)

1. CALL TO ORDER
Mayor Sanchez called the special meeting to order at 3:00 p.m.

1.1 Roll Call
COUNCIL MEMBER PRESENT: ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 

2. PUBLIC COMMENT – Agenda Items
None

3. CLOSED SESSION
Serita Young, City Attorney, read the closed session citation.

3.1 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representatives: Doug Schulze, City Manager; Lincoln Bogard, Administrative Services Director; Art Vela, Director of Public Works; Nicole Jews, 12 Special Meeting Minutes 10/22/2024 Page 2 of 2
Human Resources Manager; Oliver Yee, City Counsel (Liebert, Cassidy and Whitmore); John Z. LaCrosse, Liebert Cassidy and Whitmore (City Counsel) Employee Organization: International Brotherhood of Electrical Workers (IBEW) General Unit; International Brotherhood of Electrical Workers (IBEW) Utility Unit; Teamsters; Banning Police Management Association (BPMA)

4. ADJOURNMENT
The Special City Council meeting adjourned at 3:59 p.m.

Minutes Prepared by:

Caroline Patton, Administrative City Clerk
These minutes have been prepared as Action Minutes in accordance with City Council Resolution 1995-21 and Government Code Sections 36814, 40801, and 54953(c)(2).

This entire meeting and all associated documents may be viewed here:
https://banningca.granicus.com/ViewPublisher.php?view_id=1 13 The following information comprises the minutes for a special meeting of the City Council, a joint meeting of the Banning City Council and Banning Utility Authority and a joint meeting of the Banning City Council and the Banning City Council sitting in its capacity as the Successor Agency Board.

MINUTES 10/22/2024

CITY COUNCIL SPECIAL MEETING
COUNCIL MEMBERS PRESENT: Council Member Sheri Flynn
Council Member David Happe
Mayor Alberto Sanchez
Council Member Colleen Wallace
COUNCIL MEMBERS ABSENT: Mayor Pro Tem Rick Minjares
OTHERS PRESENT: Doug Schulze, City Manager
Serita Young, City Attorney
Caroline Patton, Administrative City Clerk
John Garside, Multimedia Specialist

1. CALL TO ORDER
Mayor Sanchez called the special meeting to order at 4:13 p.m.

1.1 Roll Call
COUNCIL MEMBER PRESENT: ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 

2. PUBLIC COMMENT – Agenda Items
• Frank Connolly
• Kathleen Dale

3. WORKSHOP

3.1. Discussion of Creating a Community Revitalization Investment Authority (CRIA) to Operate within the Community
Doug Schulze, City Manager, presented the staff report. Joe Dieguez of Kosmont Companies presented to City Council.

Public Comments
• Kathleen Dale
14 Special Meeting Minutes 10/22/2024 Page 2 of 2
• Frank Connolly

4. ADJOURNMENT
The Special City Council meeting adjourned at 5:21 p.m.

Minutes Prepared by:

Caroline Patton, Administrative City Clerk
These minutes have been prepared as Action Minutes in accordance with City Council Resolution 1995-21 and Government Code Sections 36814, 40801, and 54953(c)(2).

This entire meeting and all associated documents may be viewed here:
https://banningca.granicus.com/ViewPublisher.php?view_id=1 15 The following information comprises the minutes for a regular meeting of the City Council, a joint meeting of the Banning City Council and Banning Utility Authority and a joint meeting of the Banning City Council and the Banning City Council sitting in its capacity as the Successor Agency Board.

MINUTES 10/22/2024

CITY COUNCIL REGULAR MEETING
COUNCIL MEMBERS PRESENT: Council Member Sheri Flynn
Council Member David Happe
Mayor Alberto Sanchez
Council Member Colleen Wallace
COUNCIL MEMBERS ABSENT: Mayor Pro Tem Minjares
OTHERS PRESENT: Doug Schulze, City Manager
Serita Young, City Attorney
Caroline Patton, Administrative City Clerk
John Garside, Multimedia Specialist
Lincoln Bogard, Administrative Services Director
Art Vela, Director of Public Works
David Newell, Community Development Director
Nate Smith, Deputy Director of Public Works/City Engineer Barbara Mason, Purchasing Manager

1. CALL TO ORDER
Mayor Sanchez called the regular meeting to order at 5:40 p.m.

1.1. Invocation – Reverend Cecil Swindell led the invocation.

1.2. Pledge of Allegiance

1.3. Roll Call

COUNCIL MEMBER PRESENT ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 

2. AGENDA APPROVAL

2.1. Approve Agenda
Motion to approve the agenda, moving agenda item 8.3 to follow the Consent Agenda and precede Public Hearings.

Motion by Council Member Wallace
Seconded by Council Member Flynn
16 Regular Meeting Minutes 10/22/2024 Page 2 of 9

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

3. PRESENTATIONS

3.1. Proclamation – First Baptist Missionary Church 75th Anniversary Recognition

4. REPORT ON CLOSED SESSION
Serita Young, City Attorney, reported that as to Agenda Item 3.1, there was discussion and direction provided to staff with no final nor reportable action.

5. PUBLIC COMMENTS, CORRESPONDENCE, APPOINTMENTS, CITY COUNCIL

COMMITTEE REPORTS, CITY MANAGER REPORT, AND CITY ATTORNEY REPORT

5.1. PUBLIC COMMENTS
The following individuals addressed City Council during Public Comment:
• Gladys “Sue” Savage
• Inge Schuler
• Kent Anguiano
• Jack Gunderson
• Bill Hobbs

5.2. CORRESPONDENCE
Two items of correspondence were received and distributed to City Council prior to the meeting.

5.3. APPOINTMENTS
None

5.4. CITY COUNCIL COMMITTEE REPORTS
Council Member Wallace reported on a CalCities Conference and a recent Community Day promoting Public Safety.

Mayor Sanchez reported on the CalCities Conference.

Council Member Flynn reported on the State of the City for Banning and San Jacinto. She also reported on the CalCities Conference.

Council Member Happe reported on the State of the City for Banning,

5.5. CITY MANAGER REPORT
City Manager Schulze reported on the upcoming Christmas Parade and the Trunk or Treat Event hosted by the Parks and Recreation Department. 17 Regular Meeting Minutes 10/22/2024 Page 3 of 9

5.6. CITY ATTORNEY REPORT
City Attorney Young had no report.

5.7. CITY TREASURER REPORT
City Treasurer Geronimo reported on a meeting of the Budget and Finance Committee.

6. CONSENT AGENDA

6.1 Approval of the Meeting Minutes for the October 8, 2024 City Council Meetings

6.2 Receive and File Accounts Payable and Payroll Warrants Issued in the Month of September 2024

6.3 Receive and File Cash and Investments Report for the Month of September 2024

6.4 Receipts, Disbursements, & Fund Balances Reporting for Fiscal Year 2024-25, Period 3, September 2024

6.5 Receive and File Police Department Statistics for the Month of September 2024

6.6 Receive and File Fire Protection Services Statistics for the Month of September 2024

6.7 Public Works Capital Improvement Project Tracking List

6.8 Code Enforcement Update and Statistics for the Month of September 2024

6.9 Receive and File Contracts Approved Under the City Manager’s Signature Authority and Inventory Reports for September 2024

6.10 City Council Travel and Conference Expense Report Year to Date Through September 30, 2024

6.11 Consideration of Resolution 2024-165, Approving of the Grant Agreement Between the City of Banning and the State of California - Office of Traffic Safety (OTS) for the FY 2024-2025 Selective Traffic Enforcement Program (STEP) Grant, and Acceptance of the OTS STEP Grant Award in the Amount of $95,000

6.12 Consideration of Resolution 2024-166, Awarding a Construction Contract for Project No. 2023-15W Ramsey Street Water Main Replacement - Phase 1 to MCC Pipeline, Inc. of Yucaipa, CA in the Amount of $1,199,106.33 and Approving a 10% Contingency for a Total Project Budget of “Not-to-Exceed” $1,319,016.96

6.13 Consideration of Resolution 2024-167, Authorizing the City Manager to Execute an Agreement with the California Board of State and Community Corrections (BSCC) for the Proposition 47 Safe Neighborhoods and Schools Grant Program Public Comment
None
Motion to adopt consent agenda items 6.2 through 6.4, 6.6 through 6.8, 6.11, and 6.13
Motion by Council Member Wallace
Seconded by Council Member Flynn

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
18 Regular Meeting Minutes 10/22/2024 Page 4 of 9
Motion approved by a vote of 4-0, with 1 absence

6.1 Approval of the Meeting Minutes for the October 8, 2024 City Council Meetings Caroline Patton, Administrative City Clerk, reported on a change to the regular meeting minutes for October 8, 2024.

Public Comments
None
Motion to adopt the Meeting Minutes for the October 8, 2024 City Council Meetings.

Motion by Council Member Happe
Seconded by Council Member Wallace

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

6.5 Receive and File Police Department Statistics for the Month of September 2024 Public Comments
None

6.9 Receive and File Contracts Approved Under the City Manager’s Signature Authority and Inventory Reports for September 2024
Barbara Mason, Purchasing Manager, and Lincoln Bogard, Administrative Services Director, answered City Council questions about the report.

Public Comments
None

6.10 City Council Travel and Conference Expense Report Year to Date Through September 30, 2024
Barbara Mason, Purchasing Manager, and Lincoln Bogard, Administrative Services Director, answered City Council questions about the report.

Public Comment
None

6.12 Consideration of Resolution 2024-166, Awarding a Construction Contract for Project No. 2023-15W Ramsey Street Water Main Replacement - Phase 1 to MCC Pipeline, 19 Regular Meeting Minutes 10/22/2024 Page 5 of 9
Inc. of Yucaipa, CA in the Amount of $1,199,106.33 and Approving a 10% Contingency for a Total Project Budget of “Not-to-Exceed” $1,319,016.96 Art Vela, Director of Public Works, reported on a change to the resolution.

Public Comment
• Frank Connolly
Motion to adopt Resolution 2024-166 as amended.

Motion by Council Member Wallace
Seconded by Council Member Happe

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

Reordered under Agenda Item 2.1.

8.3. Consideration of Resolution 2024-172, Denying an Appeal Filed by Two Brothers 14 Corporation of the Denial of a Business License to Operate a Tobacco Sales Retailer Located at 300 South Highland Drive #8A and Making Findings in Support Thereof

David Newell, Community Development Director, presented the staff report.

Public Comment
• Mansour Jafarian, representing the appellant
• Christian Garcia and Mosab Snoubar, appellants
• Juanita Diaz
• Kathleen Dale
• Dorrie Gartzke
• Frank Connolly
Motion to call the question and adopt the Resolution 2024-172.

Motion by Council Member Flynn
Seconded by Mayor Sanchez

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
20 Regular Meeting Minutes 10/22/2024 Page 6 of 9
Motion approved by a vote of 3-1, with 1 absence.

7. PUBLIC HEARING(S)

7.1 Consideration of Resolution 2024-168, Adopting a Proposed Amendment to the Fire City Department and Fee Group Schedule of the City of Banning Master User Fee Schedule to Adopt New and Increase Certain Fees and Charges Related to Annual Fire Inspections, Plan Checks, and Other Fire Prevention Services and Making a Determination of Exemption under CEQA
David Newell, Community Development Director, presented the staff report. Mikki Sherry, Supervising Fire Marshal, assisted with the report.

Mayor Sanchez opened the public hearing.

Public Comment
• Frank Connolly
Mayor Sanchez closed the public hearing.

Motion to adopt Resolution 2024-168.

Motion by Council Member Flynn
Seconded by Council Member Wallace

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

7.2 Consideration of Resolution 2024-169, Approving Electric Rate Increases and Revisions to Certain Electric Rates and Tariffs
Art Vela, Director of Public Works, presented the staff report.

Mayor Sanchez opened the public hearing.

Public Comment
• Cindy Barrington
• Kathleen Dale
Mayor Sanchez closed the public hearing.

Motion to adopt Resolution 2024-169.

Motion by Council Member Wallace
21 Regular Meeting Minutes 10/22/2024 Page 7 of 9
Seconded by Council Member Happe

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

Mayor Sanchez announced a recess at 8:33 p.m. The meeting was reconvened at 8:48 p.m.

8. REPORTS OF OFFICERS

8.1 Consideration of Resolution 2024-170, Approving a Reimbursement Agreement with SFPP, L.P., a Delaware Limited Partnership, for Costs Associated with the Design and Relocation of Pipeline Facilities Owned and Operated by SFPP in Relation to the Sun Lakes Boulevard Extension Project

Nate Smith, Deputy Director of Public Works/City Engineer, presented the staff report.

Public Comment
None
Motion to adopt Resolution 2024-170.

Motion by Mayor Sanchez
Seconded by Council Member Wallace

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

8.2 Consideration of Resolution 2024-171, Approving Replacement of NeoGov Human Resources Information System (HRIS) and Related Modules with Paylocity Human Capital Management (HCM) Including Payroll, Time & Labor, Benefits, Human Resources, Talent, Employee Experience, Insights & Reporting, and Customer Service

Lincoln Bogard, Administrative Services Director, presented the staff report.

Public Comment
None
22 Regular Meeting Minutes 10/22/2024 Page 8 of 9
Motion to adopt Resolution 2024-171.

Motion by Council Member Wallace
Seconded by Council Member Happe

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

9. DISCUSSION ITEM(S)
None

10. ITEMS FOR FUTURE AGENDAS

10.1. New Items:

None

10.2. Pending Items:

1. Grow Banning (Sanchez)

2. Neighborhood Groups/Identities (Minjares)

3. Update on Community Garden (Flynn)

4. Zencity Contract (Flynn)

5. Zoom Options for Public Meetings (Flynn)

6. Developer Presentation on Sunset Crossroads Project (Flynn)

7. City Manager Evaluation (Flynn)

8. All Active Lawsuits against the City (Flynn)

9. Increased Compensation for City Treasurer and City Clerk (Flynn)

11. ADJOURNMENT
Motion to adjourn.

Motion by Mayor Sanchez
Seconded by Council Member Wallace

COUNCIL MEMBER YES NO ABSTAIN RECUSE ABSENT
Flynn, Sheri 
Happe, David 
Minjares, Rick 
Sanchez, Alberto 
Wallace, Colleen 
Motion approved by a vote of 4-0, with 1 absence.

The meeting was adjourned at 9:07 p.m.
23 Regular Meeting Minutes 10/22/2024 Page 9 of 9
Minutes Prepared by:

Caroline Patton, Administrative City Clerk
These minutes have been prepared as Action Minutes in accordance with City Council Resolution 1995-21 and Government Code Sections 36814, 40801, and 54953(c)(2).

This entire meeting and all associated documents may be viewed here:
https://banningca.granicus.com/ViewPublisher.php?view_id=1 ATTACHMENTS:

Exhibit A – Public Comment Received
Exhibit B – Agenda Item 5.5: City Manager’s Report
Exhibit C – Agenda Item 8.3: Staff Presentation
Exhibit D – Agenda Item 7.1: Staff Presentation
Exhibit E – Agenda Item 7.2: Staff Presentation
24 _ To: The Banning City Council
The residents of Sun Lakes Country Club chose to move into the community because it met the needs of these residents who were entering the latter stages of their life. The surrounding community offered a slower pace of life with adequate resources for their everyday needs. The air quality was good. The traffic was moderate. The neighbors were nice. The city was looking after the public health, safety, and welfare of its citizens and the community.

This approach to choosing where you live is likely not so different from how some members of the City Council choose the homes they live in. They want a safe, clean neighborhood with a quality school close to home for their children and not too far from work. We ask the Council:

If your children's school is shut down or there was a factory constructed across the street from the school that produced constant fumes and noise surrounding the playground, would you consider re-locating to another neighborhood? As a person who is 30 to 50 years younger than most Sun Lakes residents, you nave the option to re-locate.

We, in Sun Lakes, are not in our prime earning years and our options are limited due to health issues and reduced income. We ask the City Council to delay any vote on the Banning Point Project until after they take into consideration that Sun Lakes Country Club alone represents nearly 20 percent ofBanning's total residential population, and this population is going to be negatively affected by the development of the Banning Point Project for the rest of their natural lives.

We ask the Banning City Council to also take into consideration that the City is still looking for land to develop low density and/or medium density housing. A small apartment complex built to house our own Banning seniors whose income would not allow them to purchase or rent homes in Sun Lakes would be a godsend to many. The City is also trying to encourage the reopening of a new Department of Motor Vehicles building. With so many seniors within a twoor three-mile radius of this property, a medical facility providing medical specialists would be well supported. A facility like this would bring residents from many of the surrounding cities to take advantage ofBanning's Specialist facility. Any of these options could be developed on the Banning Point 4 7 acres. Consider promoting and soliciting developers for these types of projects. Allow the current developer to re-locate to an area farther away from existing, mature developments designed to house seniors, and allow the current developer to negotiate with the owners of one of the many empty warehouses already collecting dust.

P.R£1VY1 YOO,R HM££ S£$V YOOJ? HAM£ STJ?££J7 AOOJ?£SS
°&V£Riy?./k.� &.�� M/J/ fi&-ltiu_ �IVED {_tJ•S-:.,:t'f

CITY OF BANNING
OCT IO 2024

CITY MANAGER'S OFFICE
BY:

Exhibit A
25 26
Gladys "Sue" Savage comments for Oct 22, 2024 Banning City Council meeting commencing at 5:00 pm.

My name is Gladys Sue Savage.

When is Banning going to be held accountable to obey the law? At the last City Council meeting, the city manager denied discussing the Treasurer in July. The city clerk has copies of the July staff report when the City Manager did discuss Banning's City Treasurer. He states other cities are not complying with California law for Treasurers either. Attending the July 2022 meeting were City Council members Mary Hamlin, Kyle Pingree, Alberto Sanchez and Colleen Wallace. David Happe was absent. Kevin Ennis was city attorney. Doug Schultz was city manager. Carolyn Patton was deputy city clerk. Should these people be held accountable for disregarding California law? I, Gladys Sue Savage, am campaigning for Banning City Treasurer to perform the seven Lawful Treasurer duties listed on the City Manager's July 2022 staff report.

Including:

1. (Section 41001) Receiving and safely keeping all money into my hands as treasurer including the investment portfolio;

2. (Section 41002) Complying with all laws governing the deposit and securing of public funds, and the handling of trust funds in my treasurer possession;

3. (Section 41003) Paying out money only on warrants signed by legally designated persons;

4. (Section 41004) Providing a written report accounting for all receipts, disbursements and fund balances;

5. (Section 41005) Performing duties of collection of city taxes and license fees as are prescribed by Banning city ordinance;

6. (Section 41006) Appointing deputies for whose actions I and the city bondsman are responsible;

7. (Section 41007) The deputies serve at the pleasure of the Treasurer and receive compensation as is provided by City Council.

I am campaigning to be Department Head of the Banning Treasurer Department and as such, I expect to be fairly, equitably and commensurately compensated.

I request my comments be included in tonight's City Council Meeting minutes.

Thank you.
27 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
MEETING DATE: July 12, 2022
SUBJECT: Report on City Treasurer Duties and Responsibilities/Scope of Comments under Brown Act
RECOMMENDATION:

No action requested.

BACKGROUND:

During the June 28, 2022 City Council meeting, a request was made to discuss the Elected City Treasurer time allowed for comment during meetings of the City Council.

Questions have been raised regarding the City Treasurer's ability to participate in City Council meetings without time limitations/restrictions.

First, it is important to understand the duties and responsibilities of a City Treasurer, as established in California Government Code Sections 41001-41007, Chapter 3. The duties and responsibilities are:
• 41001. The city treasurer shall receive and safely keep all money coming into his hands as treasurer.
• 41002. He shall comply with all laws governing the deposit and securing of public funds and the handling of trust funds in his possession. • 41003. He shall pay out money only on warrants signed by legally designated persons.
• 41004. Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances. He shall file a copy with the legislative body. • 41005. The city treasurer shall perform such duties relative to the collection of city taxes and license fees as are prescribed by ordinance.
• 41006. The city treasurer may appoint deputies for whose acts he and his bondsmen are responsible.
• 41007. The deputies shall hold office at the pleasure of the city treasurer and receive such compensation as is provided by the legislative body.

The elected city treasurer position for the City of Banning does not perform these duties as they are all performed by the City Finance Department under the direction of the 41 28
The fo llowing information comprises th e minutes for a regular meeting of the City Council, a joint meeting of the Banning City Council and Banning Utility Authority and a joint meeting of the Banning City Council and the Banning City Council sitting in its capacity as the Successor Agency Board.

MINUTES

CITY COUNCIL
7/12/2022

REGULAR MEETING
COUNCIL MEMBERS PRESENT: Council Member Mary Hamlin
Mayor Kyle Pingree
Council Member Alberto Sanchez
Mayor Pro Tern Colleen Wallace
COUNCIL MEMBERS ABSENT: Council Member David Happe
OTHERS PRESENT:
*Participated via Zoom.

1. CALL TO ORDER
Doug Schulze, City Manager
Kevin Ennis, City Attorney
Marie Calderon, City Clerk
Caroline Patton, Deputy City Clerk
Art Vela, Director of Public Works
Lincoln Bogard , Finance Director
Thomas Miller, Electric Utility Director
Adam Rush, Community Development Director
Laurie Sampson, Ass istant City Manager
John Garside, Multimedia Specialist
Mayor Pingree called the regular meeting to order at 5:00 p.m.

1.1. Invocation - Matthew Hamner, Chief of Police, performed the invocation.

1.2. Pledge of Allegiance - Mayor Pro Tern Wallace led the Pledge of Allegiance.

1.3. Roll Call

COUNCIL MEMBER
Hamlin, Mary
Happe, David
Pingree, Kyle
Sanchez, Alberto
Wallace, Colleen

PRESENT
X
X
X
X
ABSENT
X
29 10/7/24, 4:24 PM
Metropolitan News-Enterprise
Thursday, August 8, 2024

Court of Ap_P-eal:

City May Not Strip Elected Officer of Duties by Ordinance City May Not Strip Elected Officer of Duties by Ordinance Opinion Says Oxnard 's Actions to Reduce Authority of Treasurer Amounted to 'Un-Electing' of Candidate
By Kimber Cooley, Associate Editor
Div. Six of this district's Court of Appeal held yesterday that actions by the City of Oxnard to strip its elected treasurer of certain duties-and substantially reduce his compensation-impermissibly undermined the statutory authority provided to the office under the Government Code. "A city treasurer deprived of the office's duties is tantamount to no treasurer," Presiding Justice Arthur Gilbert said in an unpublished opinion. "The City may not through legerdemain un-elect the office of city treasurer and defeat the choice of the voters."
Justices Kenneth Vegan and Hernaldo J. Baltodano joined in the opm1on.

Inappropriate Comments
The dispute arose after the municipality placed Treasurer Phillip Molina on administrative leave in October 2019 following an 83-page investigative report looking into allegations that Molina made inappropriate comments toward female employees, such as suggesting that they go home and cook for their husbands and wondering if they would give him mouth-to-mouth resuscitation if he suffered a heart attack.

During a May 2020 City Council meeting, Oxnard leaders voted to strip Molina of the bulk of his responsibilities by passing a series of resolutions and ordinances. They also shifted Molina's 19-member staff to a newly created department and reduced his salary from a range of $114,656.88 to $157,652.98 to a fixed $20,418.08, equal to the remuneration of city council members.

At the meeting, Molina accused City Manager Alex Nguyen of running the city like a "dictator."
www.metnews.com/articles/2024/electedofficial_080824.htm 1/3 30 10/7/24, 4:24 PM City May Not Strip Elected Officer of Duties by Ordinance relies on section 34004 authorizing a transfer of the treasurer's duties .... The City points to no applicable general law that charges the director of finance with duties of the same character as the treasurer's ... duty under section 41004."
He continued:
"A report on the City finances by a treasurer who is directly answerable to the voters is not the same as a report by the director of finance who is answerable to other city officials. The treasurer is independent and can provide a check on other city officials, including the City counsel and the director of finance."
Deletion of Duties
Gilbert reasoned that the deletion of certain duties from a list of responsibilities belonging to the treasurer is without legal effect, saying:
"The duties mandated by state law remain notwithstanding their deletion by the ordinance. For example, one of the duties deleted by the ordinance is to '[p ]erform such duties relative to the collection of City taxes and license fees as are prescribed by ordinance.' That is a duty mandated by section 41005. The deletion of that duty by ordinance does not nullify the statutory duty to collect city taxes and license fees." Finding that the actions by the city to strip ·authority from the elected treasurer were unfounded, the jurist declared:
"The Government Code calls for an elected treasurer. Molina was duly elected. The ordinances as a whole have the intent and effect of removing Molina from his office. For this reason, we reverse. All the challenged ordinances are void and Molina's duties as treasurer are restored. Molina's salary is restored to its previous compensation, including restoration of compensation withheld pending resolution of this case." The case is Molina v. Nguyen, B327286.

Copyright 2024, Metropolitan News Company
www.metnews.com/articles/2024/electedofficial_080824.htm 3/3 31 10/19/24, 5:23 PM
•• Outlook
Re: District 4 Detailed City Map
From sue savage <[email protected] >
Date Wed 10/16/2024 10:24 AM
To Caroline Patton <[email protected]>
Ms. Patton,
Thank you for your help regarding these matters !
Sue Savage, Banning City Treasurer Candidate
From: Caroline Patton <cpatton@banningca .gov>
Sent: Wednesday, October 16, 2024 9:54 AM
To: sue savage <sue. [email protected]>
Subject: RE : District 4 Detai led City Map
Ms. Savage,
Mail - sue savage - Outlook
The contact is [email protected]. Ye!:! may submtt your comments in person,..at the m~etin$.

Caroline Patton, MPA, CMC
Administrative City Clerk
City of Banning
Offi ce. 95 1-922-3102
Fax . 951-922-3128
99 E. Ramsey Street
Banning, CA 92220
www.banningca.gov
The information contained in this email message is intended only for the use of the individual or entity to which it is addressed and may contain information that is legally privileged and/or confidential. If the reader of this message is not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, if you have received this communication in error, please notify us immediately by telephone. Thank you. https://ouilook. live. com/mail/0/id/ AQ M kADAwATZiZm YAZC05OGM2LWY0YzQtM DAC L TAwCg BGAAAD FNgockm ITU iY9Xp0Bkw9 1 wcAC R 1 mfZh Y x Uac%2 F xKktK%2 FkcQAAAgEJAAAAC R 1 mfZh YxUac. . . 1 32/4 CITY MANAGER’S
REPORT
October 22, 2024
Cowboy Christmas Parade & Tree
Lighting Festival
• Saturday, December 7
• 4p – 8p
• Ramsey/San Gorgonio
• Parade Step-Off 5:30p
• Food Vendors
• Tree Lighting 7:00p
• Santa Photos
• Gift Giveaway
• Snow Sledding Parade
Registration
Exhibit B
33 Banning Community Calendar
34 CITY COUNCIL
REPORT OF OFFICERS ITEM NO. 8.3
OCTOBER 22, 2024
Consideration of Resolution 2024-172, Denying an Appeal Filed by Two Brothers 14 Corporation of the Denial of a Business License to Operate a Tobacco Sales Retailer Located at 300 South Highland Drive #8A; and Making Findings in Support Thereof Background
• 07/08/24 – the applicant/appellant submitted a business license application to operate a tobacco store at 300 S. Highland Drive, #8A • 07/15/24 – a business license certificate was issued by online system • 09/19/24 – the applicant was notified by Community Development Department that the business is not permitted in Specific Plan • 09/30/24 – the applicant filed a timely appeal under BMC Section

5.04.170
Exhibit C
35 Allowable Uses at Sun Lakes Village
• Site is located within Sun Lakes Village Specific Plan, which provides a list of permissible uses in Section VI (Permitted Land Uses) • Under the Commercial/Office list of permitted uses, several types of commercial-retail uses are allowed by right, such as art stores, bookstores, donut shops, florists, gift shops, supermarkets, etc. • Specific Plan Section B.1.a.(89) allows other uses determined to be similar in character, accessory to or compatible by the Director Appeal
The applicant/appellant identifies five reasons for granting the appeal:

1. Inconsistent Issuance. After applying, the applicant received emails stating balance due and a fire inspection and tobacco retail license are required, but nothing regarding a zoning issue. A license was issued, and per BMC 5.04.110(B) the business is located proper zoning.

Staff’s Response: Section 5.04.030 states “any person required to pay a business tax for transacting and carrying on any business under this chapter shall...remain subject to the regulatory provisions of other ordinances.” Section 5.04.010 defines a business license certificate: "'Certificate' means the business tax payment certificate issued to the taxpayer upon the payment of the business tax. It is not a permit to engage in business. It is the document issued upon the payment of the business tax.”

2. Compliance with Local Ordinances. The applicant believes the proposed business is fully compliant with all local, state and federal regulations, in order to operate. The alleged zoning issue clearly existed when the certificate was originally issued.

Staff’s Response: As referenced by code requirements above, a zoning clearance was not provided at any time and the collection of a business tax does not constitute a right to forego zoning compliance and engage in business. 36 Appeal (cont’d.)

3. Financial Impact and Operational Impact. The applicant states that the rejection of the business license has caused significant financial strain, due to the reliance on the certificate issued by the city.

4. Improper Internal Procedure to Issue Business License. The applicant contends that even if a zoning restriction exists, the City should have verified compliance before issuing the certificate.

5. Request for Clarification. The applicant seeks clarification of any specific concerns, requirements, documentation or adjustment to comply with City regulations, that have arisen since the certificate issuance and notes a willingness to cooperate.

Staff's Response, Items 3, 4 and 5: While understanding of the applicant's frustration, the City is obligated to uphold the current law and ensure all businesses are property located based on municipal and zoning requirements. The proposed tobacco retail store is not listed in the Permitted Land Uses (Section VI) of the Sun Lakes Village Specific Plan. Should they wish to pursue the proposed use in the proposed location, the Applicant may submit an amendment to the Specific Plan to properly permit or conditionally permit the use in the Plan area.

Recommendation
• Adopt Resolution 2024-172, Denying an Appeal Filed by Two Brothers 14 Corporation of the Denial of a Business License to Operate a Tobacco Sales Retailer Located at 300 South Highland Drive #8A; and Making Findings in Support Thereof
• Alternatively, the Council may accept the appeal and direct staff to return with a Resolution approving the business license. 37 Questions?
Contact Information
David A. Newell, AICP, Community Development Director
[email protected]
38 RESOLUTION 2024-169

APPROVING ELECTRIC RATE INCREASE AND REVISIONS TO

CERTAIN ELECTRIC RATES AND TARIFFS
Background
Electric Utility’s most recent utility-wide rate increase occurred in 2013 • Most recent rate adjustment occurred in 2022 when some customer categories’ rates increased while others decreased, but there was no net increase in the overall rates During the last 10 years, the Electric Utility has seen increasing pressure from operating expense inflation, power purchase costs, and capital expenditures • Pressures have resulted in a negative ~$9 million fund balance and have required the Electric Utility to borrow from other funds to make required debt service payments on outstanding debt
Electric Utility’s negative cash balance and declining debt service coverage caused S&P to lower the rating from “A- to “BB” – (i.e., “junk” bonds rating) Exhibit D
39 $0
$2
$4
$6
$8
$10
$12
$14
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (Est.) Millions
Acquisition & Construction of Capital Assets
$3.5M Annual Avg $10M Annual Avg
-$15
-$10
-$5
$0
$5
$10
$15
$20
$25
$30
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (Est.) Millions
Unrestricted Cash & Investments
$11M Cash Reserve Policy
Negative ~$9.2M balance
40 Rate Increase Objective •Electric Utility rate increases will:
• Cover ongoing operating expenses and eliminate an existing annual structural deficit.
• Repay back other City funds that were used to fund the Electric Utility’s cash shortage.
• Comply with the minimum debt service coverage commitment to bond investors and avoid default on bonds.
• Begin restoring the Electric Utility’s reserves.

Rate Increase Options – 8/27/24
Option 1 Option 2 Option 3 A/B Option 4A
Description
No Action
Fund balance remains
negative; likely debt
coverage covenant
default in FY 2025
Maintain Services
Fund balance remains
negative; avoids debt
coverage covenant
default in FY 2025
Maintain Services +
Replenish Cash with
Rate Revenues
Fund balance remains
negative for 12-24
months; avoids debt
coverage covenant
default in FY 2025
Maintain Services +
Replenish Cash with
~$10M Bond
Fund balance becomes
positive in 3-4 months;
avoids debt coverage
covenant default in FY
2025
Rate Increases
Needed
None 13% in FY 2025 64% in FY 2025
OR
22%/year for 2 years
13% in FY 2025
41 Rate Increase Options – 9/24/24
Option 3 B Option 3 C Option 4B
Description
Maintain Services +
Replenish Cash with Rate
Revenues
Fund balance remains
negative for 12-24 months;
avoids debt coverage
covenant default in FY 2025
Maintain Services +
Replenish Cash with Rate
Revenues
Fund balance remains
negative for 24-36 months;
avoids debt coverage
covenant default in FY 2025
Maintain Services +
Replenish Cash with
~$6M Bond
Fund balance remains
negative for 12 months;
avoids debt coverage
covenant default in FY 2025
Rate Increases
Needed

22.7%/year for 2 years 14.7% for 3 years 13.9% for 2 years 0%
100%
200%
300%
400%
500%
2024-25 2025-26 2026-27 2027-28 2028-29
BEU Projected Debt Service Coverage
Scenario 3B (2 Yr Recovery)
Scenario 3C (3 Yr Recovery)
Scenario 4B (Taxable & Tax-Exempt Bonds)
Minimum Required Coverage
2026-27 2027-28 2028-29
Future Years are Subject to Adjustment pending COSS
42 -$15.0
-$10.0
-$5.0
$0.0
$5.0
$10.0
$15.0
$20.0
2024-25 2025-26 2026-27 2027-28 2028-29
Millions
BEU Projected Ending Cash Balance
Scenario 3B (2 Yr Recovery)
Scenario 3C (3 Yr Recovery)
Scenario 4B (Taxable & Tax-Exempt Bonds)
$11M Cash Reserve Policy
2026-27 2027-28 2028-29
YR )
Future Years are Subject to Adjustment pending COSS
Average Customer Billing
CUSTOMER TYPE (kWh) CURRENT 11/1/2024 11/1/2025
Residential (520) $ 110.59 $ 125.30 $ 142.32
General Service Single Phase (2,276) $ 361.55 $ 405.31 $ 459.04 Small Commercial Muti-Phase (1,730) $ 300.03 $ 324.61 $ 367.67 Medium Commercial Services (11,138) $ 1,584.56 $ 1,774.68 $ 2,009.81 Industrial Services (38,843) $ 4,748.08 $ 5,352.14 $ 6,058.49 43 $0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
$450.00
$500.00
$550.00
Utility
Total Monthly Electric Bill at 520 kWh
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
$450.00
$500.00
$550.00
Utility
Total Monthly Electric Bill at 520 kWh
44 Rate Implementation • Rate increases are not in excess to meet financial targets:
• Operational expenses have been reduced to limit impacts on rate payers. • Capital expenses have been deferred to limit impacts on rate payers. • Rate increases avoid discrimination by applying to all customer classes equally.
• A full detailed cost of service/rate study (COS) analysis will be completed and presented to Council possibly before the implementation of the second increase (i.e. November 1, 2025).
• Recommendation for award of COS expected on November 12, 2024.

Resolution 2024-169 •Staff recommends the following next steps:
• Open the public hearing
•Approve Resolution 2024-169
• Revisions to certain electric rates and tariffs
• 13.9% electric rate increase effective November 1, 2024 • 13.9% electric rate increase effective November 1, 2025 45 Thank You
46 RESOLUTION 2024-170
Reimbursement Agreement with SFPP, L.P. for Costs Associated with Pipeline Relocation Necessary for the Sun Lakes Boulevard Extension Project
Background
• August 4, 1955: Southern Pacific Pipelines (and future assignees) was granted an easement for oil pipeline facilities along an undeveloped portion of Westward Ave between Highland Home Ave and Sunset Ave. • September 17, 1990: Parcel Map 25541 offers Right of Way to the City of Banning for the extension of Sun Lakes Boulevard between Highland Home Ave and Sunset Ave.
• This offered alignment was coincident with the pipeline easement from 1955, and the 1955 easement holds senior rights.

Exhibit E
47 Background
• Sun Lakes Boulevard Extension Actions
• Resolution 2020-21: Accepting Lettered Lots A, D, E, F, and G from PM 25514, bringing the offered Right of Way under City of Banning control. • Resolution 2020-48: Award of Profession Services Agreement for the Design of Sun Lakes Boulevard Extension in the Alignment from PM 25541
• Resolution 2020-97: Execution of a TUMF Reimbursement Agreement for design related actions for the Sun Lakes Boulevard Extension Project.
48 • The Relocation of Utilities where the local agency is responsible for the relocation is reimbursable
through TUMF.
• City staff will seek additional reimbursement
commitments from TUMF for eligible expenses
related to the roadway construction.
49 Reimbursement Schedule • Phase 1: $128,938 to Kinder Morgan for design services. Due Now.
• Phase 2 (Estimate): $42,735 due at
completion of Phase 1 for Right of Way
Services and Construction Permitting
• Phase 3 (Estimate): $3,428,466 for
construction phase. Due prior to
commencement of construction phase,
estimated mid-2025.
• Phase 4 (Estimate): $111,000 for
inspection services post construction.

Recommendation
• Adopt Resolution 2024-170, approving a reimbursement agreement with SFPP, L.P., a Delaware Limited Partnership, for costs associated with the design and relocation of pipeline facilities owned and operated by SFPP in relation to the Sun Lakes Boulevard Extension Project
50 Thank You
Nate Smith, PE
Deputy Director of Public Works/City Engineer
[email protected]
51 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Jim Steffens, Deputy Director of Electric
Art Vela, Director of Public Works
MEETING DATE: November 12, 2024
SUBJECT: Consideration of Resolution 2024-173, Approving the City of Banning Electric Utility Power Source Disclosure Annual Report and Power Content Label for Calendar Year 2023
RECOMMENDATION:

Adopt Resolution 2024-173.

BACKGROUND:

On October 11, 2009 the Governor signed California State Assembly Bill 162 (“AB 162”), which amended the Power Content Label reporting requirements originally set forth in Senate Bill 1305. The amendments changed the reporting requirements from quarterly to annual, and require that utilities report actual power content information instead of projected.

The information must be provided to the utility’s customers through either printed or electronic means, including posting it on the City’s website. The Utility will provide it by posting an electronic copy of the Power Content Label on the City’s website.

The California Energy Commission (CEC), which has oversight authority for this requirement, has stated that the governing body of each locally owned public utility must approve both the Power Source Disclosure Annual Report and the annual Power Content Label for the utility(s) under its jurisdiction.

Therefore, staff is requesting that the City Council adopt Resolution 2024-173, approving both the Utility’s Power Source Disclosure Annual Report, attached as Exhibit “A” to the Resolution, and the Utility’s Power Content Label, attached as Exhibit “B” to the Resolution.

JUSTIFICATION:

AB 162 requires that all load serving electric utilities develop and provide to its customers on an annual basis an approved Power Content Label. The Power Content Label shows the percentages of each type of energy resource that is used to serve an electric utility’s customers. The regulation has been amended beginning in calendar year 2019, requiring the governing body of each locally owned public utility to approve both the Power Source Disclosure Annual Report and the Power Content Label.

FISCAL IMPACT:

None
ALTERNATIVES:

Do not adopt Resolution 2024-173, and provide alternative direction to staff. 52 BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. Resolution 2024-173, Power Content Label.docx

2. Exhibit A - TN256051_20240429T152417_2023 PSD Annual Report City of Banning.pdf

3. TN259310_20240926T105245_2023 Power Content Label City of Banning.pdf 53 Resolution 2024-173

RESOLUTION 2024-173

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING THE CITY OF BANNING ELECTRIC UTILITY POWER SOURCE DISCLOSURE ANNUAL REPORT AND POWER CONTENT LABEL FOR CALENDAR YEAR 2023 WHEREAS, the City of Banning owns and operates its own Municipal Electric Utility; and WHEREAS, California State Senate Bill 1305 and Assembly Bill 162 have certain reporting requirements pertaining to electric utility Power Source Disclosure Annual Report and Power Content Labels; and
WHEREAS, the Banning Electric Utility (“Utility”) is subject to these reporting requirements; and
WHEREAS, the California Energy Commission, which has oversight authority for this requirement, has stated that the governing body of each locally owned public utility must approve both the Power Source Disclosure Annual Report and the Power Content Label for the utility(s) under its jurisdiction.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The City Council approves the Utility’s Power Source Disclosure Annual Report and the Power Content Label for Calendar Year 2023, attached hereto as Exhibit “A” and Exhibit “B,” respectively.

SECTION 2. The City Council authorizes the Electric Utility Deputy Director, or his or her designee, to disseminate the information included on the Power Content Label to the Utility’s customers in compliance with the requirements of Senate Bill 1305 and Assembly Bill 162.

SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 12th day of November 2024.

Alberto Sanchez, Mayor
City of Banning
ATTEST:

Caroline Patton, Administrative City Clerk
City of Banning
54 Resolution 2024-173

APPROVED AS TO FORM:

Serita R. Young, City Attorney
Richards, Watson & Gershon
55 Resolution 2024-173

CERTIFICATION:

I, Caroline Patton, Administrative City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2024-173, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 12th day of November 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Administrative City Clerk
City of Banning, California
56 Resolution 2024-173

EXHIBIT A
Power Source Disclosure Annual Report
57 Resolution 2024-173

EXHIBIT B
Power Content Label
58 59
60 61
62 63
2023 POWER CONTENT LABEL
City of Banning Electric Utility
banningca.gov/124/Power-Content-Label
Greenhouse Gas Emissions
Intensity (lbs CO2e/MWh) Energy Resources
Electricity
Portfolio
Name
2023 CA
Power Mix
Eligible Renewable1 55.6% 36.9%
Biomass & Biowaste 19.8% 2.1%
483 373 Geothermal 35.4% 4.8%
Eligible Hydroelectric 0.0% 1.8%
Solar 0.4% 17.0%
Wind 0.0% 11.2%
Coal 0.0% 1.8%
Large Hydroelectric 0.8% 11.7%
Natural Gas 0.0% 36.6%
Nuclear 11.1% 9.3%
Other 0.0% 0.1%
Unspecified Power2 32.5% 3.7%
TOTAL 100.0% 100.0%
Percentage of Retail Sales Covered by
Retired Unbundled RECs3
:
0%
1 The eligible renewable percentage above does not reflect RPS compliance, which is determined using a different methodology.
2 Unspecified power is electricity that has been purchased through open market transactions and is not traceable to a specific generation source.
3 Renewable energy credits (RECs) are tracking instruments issued for renewable generation.

Unbundled renewable energy credits (RECs) represent renewable generation that was not delivered to serve retail sales. Unbundled RECs are not reflected in the power mix or GHG emissions intensities above.

For specific information about
this electricity portfolio, contact:

City of Banning Electric Utility
(951) 922-3260
For general information about the
Power Content Label, visit:
https://www.energy.ca.gov/programs-andtopics/programs/power-source-disclosure-program City of Banning Electric
Utility
2023 CA Utility
Average
0 200
400
600
800
1000
City of Banning
Electric Utility
2023 CA Utility
Average
64 CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Patrick Safari, Capital Improvement Projects Manager Art Vela, Director of Public Works
MEETING DATE: November 12, 2024
SUBJECT: Consideration of Resolution 2024-174, Awarding a Construction Contract for Project No. 2024-06W Charles Street and Lincoln Street Non-Potable Water Booster Stations and Reservoirs to Pyramid Building and Engineering, Inc. in the amount of $9,236,546 and Approving a 10% Contingency for a Total Project Budget Not-to-Exceed $10,160,200.60 RECOMMENDATION:

Adopt Resolution 2024-174.

BACKGROUND:

The City recently completed the construction of a non-potable water main trunk that will deliver nonpotable water from the newly constructed Well NP-1 located at the east end of the City of Banning to Sun Lakes Country Club (SLCC) located at the west end of the City of Banning.

Two (2) booster stations ("Project") are needed to achieve the delivery of non-potable water to SLCC.

The Charles Street Booster Station will pump non-potable water from Well NP-1 to Lincoln Street Booster Station. The Lincoln Booster Station will then pump non-potable water to SLCC for the use on the SLCC golf courses.

On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law by the President establishing the Coronavirus State Fiscal Recovery Fund intended to provide support to state, local and tribal governments in responding to the economic impact of COVID-19. The funds were intended to be used for public health emergencies as well as for necessary investments in water infrastructure projects.

On September 13, 2022, the City Council approved Resolution 2022-123, "Approving a Funding Agreement between the County of Riverside and the City of Banning in the Amount of $5,049,202 for Two Non-Potable Water Infrastructure Projects", ("ARPA Funding Agreement") funded by the County of Riverside's ARPA funding allocations.

On August 23, 2024, staff released an Invitation for Bids (IFB) for the Project on the City’s public bidding platform. The bids were due on October 9, 2024. In response to the IFB, six (6) bids were received from the following companies:

Contractor Amount
1) Pyramid Building & Engineering, Inc. $9,236,546
2) Canyon Springs Enterprises $9,382,500
3) RE Chaffee Construction, Inc. $9,394,080
65 4) Myers & Sons Construction, LLC $10,075,300
5) SCW Contracting Corp. $10,333,847
6) Metro Builders & Engineers Group, Ltd $11,675,375
The Project scope will consist of the construction of a Non-Potable Booster Pump Station at Charles Street which will include two (2) vertical turbine pumps housed in a masonry building, an emergency engine generator and 54’ diameter, 27’ high above ground steel tank. The scope will also include the construction of a Non-Potable Booster Pump Station at Lincoln Street which will include two (2) vertical turbine pumps housed in a masonry building and a 24” diameter, 24” high Forebay Tank.

JUSTIFICATION:

The non-potable water infrastructure projects will provide benefits to the City including reduction in demand for potable water for activities such as irrigation of golf courses and public parks and continuous provision of non-potable irrigation water during drought times. The Project also completes a master planned improvement identified in the City's Integrated Master Plan.

The Invitation for Bids (IFB) is based on the lowest cost from the pool of responsive qualified bidders.

As a result, staff recommend the award of a Construction Contract to Pyramid Building and Engineering, Inc. in the amount of $9,236,546.

FISCAL IMPACT:

If approved, the construction contract with Pyramid Building and Engineering, Inc. will be in the amount of $9,236,546 and with a 10% contingency in the amount of $923,654.60 there will be a total “not-toexceed” project budget of $10,160,200.60.

The contract will be funded by the following sources and appropriations:

Fund Account No. Appropriation From Fund
Balance Needed
Approximate Fund Balance
Water
Operations
Fund
660-6300-471.95-08
(Special Utility Cap
Items/Wells/Pumping
Equipment)
$7,360,200.60 $26,505,216.35
Irrigation Water
Fund
662-6300-471.95-08
(Special Utility Cap
Items/Wells/Pumping
Equipment)
$1,400,000.00 $1,401,778.29
BUA Water
Capital Fund
663- $1,400,000.00 $1,462,304.90
TOTAL $10,160,200.6
The project will be partially funded through reimbursements from Riverside County related to the ARPA Funding Agreement in the amount of $5,049,202, which will be received and accounted for in Fund 660, which will reduce Fund 660 contribution to the project to a maximum of $2,310,998.60.

ALTERNATIVES:

Do not approve Resolution 2024-174 and provide alternative direction to staff.

BUDGETED?:

No
CONTRACT/AGREEMENT:

Yes
66 ATTACHMENTS:

1. Resolution_2024-174.docx

2. C01093 Pyramid - PW Charles and Lincoln Booster Station.docx

3. Resolution No. 2022-123.pdf

4. Funding Agreement_COR & City of Banning.pdf

5. Pyramid Bid Proposal.pdf
67 Resolution 2024-174

RESOLUTION 2024-174

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA, AWARDING A CONSTRUCTION CONTRACT FOR PROJECT NO. 2024-06W CHARLES

STREET AND LINCOLN STREET NON-POTABLE WATER BOOSTER STATIONS AND RESERVOIRS TO PYRAMID BUILDING AND ENGINEERING, INC. IN THE AMOUNT OF $9,236,546 AND APPROVING A 10% CONTINGENCY FOR A TOTAL PROJECT BUDGET OF “NOT-TO-EXCEED” $10,160,200.60
WHEREAS, the City recently completed the construction of a non-potable water main trunk that will deliver non-potable water from the newly constructed Well NP-1 located at the east side end of the City of Banning to Sun Lakes Country Club (SLCC) located at the west end of the City of Banning; and
WHEREAS, two (2) booster stations are needed to achieve the delivery of non-potable water to the end users; and
WHEREAS, on March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law by the President establishing the Coronavirus State Fiscal Recovery Fund intended to provide support to state, local and tribal governments in responding to the economic impact of COVID-19 including necessary investments in water infrastructure projects; and WHEREAS, on September 13, 2022, the City Council approved Resolution 2022-123, "Approving a Funding Agreement between the County of Riverside and the City of Banning in the Amount of $5,049,202 for Two Non-Potable Water Infrastructure Projects", ("ARPA Funding Agreement") funded by the County of Riverside's ARPA funding allocations; and WHEREAS, on August 23, 2024, staff released an Invitation for Bids (IFB) for Charles Street and Lincoln Street Non-Potable Water Booster Stations/Reservoir Construction on the City’s public bidding platform and received six (6) bid proposals ranging in price from $9,236,546 to $11,675,375; and
WHEREAS, the scope will consist of the construction of a Non-Potable Water Booster Pump Station at Charles Street which will include two (2) vertical turbine pumps housed in a masonry building, an emergency engine generator and 54’ diameter, 27’ high above ground steel tank; the construction of a Non-Potable Water Booster Pump Station at Lincoln Street which will include two (2) vertical turbine pumps housed in a masonry building and a 24” diameter, 24” high Forebay Tank, and
WHEREAS, staff recommend awarding a Construction Contract to Pyramid Building and Engineering, Inc. in the amount of $9,236,546 and approving a 10% contingency in the amount of $923,654.60 for a total “not-to-exceed” project budget of $10,160,200.60; and WHEREAS, the project will be funded by appropriations from Fund 660 ($7,360,200.60), Fund 662 ($1,400,000.00) and Fund 663 ($1,400,000); and WHEREAS, the project will be partially funded through reimbursements from Riverside County related to the ARPA Funding Agreement in the amount of $5,049,202, which will be received and accounted for in Fund 660.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:
68 Resolution 2024-174

SECTION 1. The City of Banning approves the Construction Contract between Pyramid Building and Engineering, Inc. and the City of Banning.

SECTION 2. The City Council authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to the Construction Contract with Pyramid Building and Engineering, Inc.

SECTION 3. The City Council authorizes the City Manager to make non-substantive changes and to execute the Construction Contract with Pyramid Building and Engineering, Inc. on behalf of City Council.

SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 12th day of November 2024.

Alberto Sanchez, Mayor
City of Banning
ATTEST:

Caroline Patton, Administrative City Clerk
City of Banning

APPROVED AS TO FORM AND
LEGAL CONTENT:

Serita R. Young, City Attorney
Richards, Watson & Gershon
69 Resolution 2024-174

CERTIFICATION:

I, Caroline Patton, Administrative City Clerk of the City of Banning, do hereby certify that the foregoing Resolution 2024-174, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 12th day of November 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Administrative City Clerk
City of Banning, California
70 Resolution 2024-174

Exhibit A
Construction Contract with Pyramid Building and Engineering, Inc. 71 C-1
CONTRACT (C01093)

CITY OF BANNING CONTRACT FOR

CHARLES STREET AND LINCOLN STREET NON-POTABLE WATER BOOSTER PUMP STATIONS & RESERVOIR/TANK PROJECT & IFB 24-082
THIS CONTRACT (“Contract”) is made and entered this ___________________ (“Effective Date”), by and between the CITY OF BANNING, a California municipal corporation (“City”) and Pyramid Building & Engineering, Inc. (“Contractor”). Contractor’s California State Contractor’s license number is 782024; Class A,B,C-8). Contractor’s DIR registration number is 1000003470.

In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1. Contract Documents. The Contract Documents consist of this Contract, the Notice Inviting Bids, Instructions to Bidders, Bid (including documentation accompanying the Bid and any post-Bid documentation submitted before the Notice of Award), the Bonds, permits from regulatory agencies with jurisdiction, General Provisions, Special Provisions, Plans, Standard Plans, Standard Specifications, Reference Specifications, Addenda, Change Orders, and Supplemental Agreements. The Contract Documents are attached hereto and incorporated herein by reference.

2. Scope of Services. Contractor shall perform the Work in a good and workmanlike manner for the project identified as Charles Street and Lincoln Street Non-Potable Water Booster Pump Stations & Reservoir/Tank Project (IFB 24-082) (“Project”), as described in this Contract and in the Contract Documents.

3. Compensation. In consideration of the services rendered hereunder, City shall pay Contractor a not to exceed amount of Nine Million Two Hundred Thirty-Six Thousand Five Hundred Forty-Six Dollars ($9,236,546.00) in accordance with the prices as submitted in the Bid.

4. Incorporation by Reference. All of the following documents are attached hereto and incorporated herein by this reference: Workers’ Compensation Certificate of Insurance, Additional Insured Endorsement (Comprehensive General Liability), Additional Insured Endorsement (Automobile Liability), and Additional Insured Endorsement (Excess Liability).

5. Antitrust Claims. In entering into this Contract, Contractor offers and agrees to assign to City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. § 15) or under the Cartwright Act (Business and Professions Code Section 16700 et seq.) arising from purchases of goods, services, or materials pursuant to the Contract. This assignment shall be made and become effective at the time City tenders final payment to Contractor without further acknowledgment by the parties.

6. Prevailing Wages. City and Contractor acknowledge that the Project is a public work to which prevailing wages apply.

7. Workers’ Compensation. Labor Code Sections 1860 and 3700 provide that every contractor will be required to secure the payment of compensation to its employees. In accordance with the provisions of Labor Code Section 1861, by signing this Contract, the Contractor certifies as follows:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the Work of this Contract.”
72 C-2

8. Titles. The titles used in this Contract are for convenience only and shall in no way define, limit or describe the scope or intent of this Contract or any part of it.

9. Authority. Any person executing this Contract on behalf of Contractor warrants and represents that he or she has the authority to execute this Contract on behalf of Contractor and has the authority to bind Contractor to the performance of its obligations hereunder.

10. Debarment or Suspension.Contractor represents and warrants that, as of the Effective Date of this Agreement, Contractor is not debarred or suspended pursuant to any applicable Federal or State law providing for the debarment of contractors. Contractor shall not perform the Services with any subcontractor that has been debarred or suspended pursuant to any applicable Federal or State law providing for the debarment. Contractor and its subcontractors shall not be debarred or suspended throughout the Term of this Agreement pursuant to any applicable Federal or State law providing for the debarment of contractors. If Contractor or any subcontractor becomes debarred or suspended during the Term of this Agreement, Contractor shall immediately notify City.

11. Entire Agreement. This Contract, including the Contract Documents and any other documents incorporated herein by specific reference, represents the entire and integrated agreement between City and Contractor. This Contract supersedes all prior oral or written negotiations, representations or agreements.

This Contract may not be modified or amended, nor any provision or breach waived, except in a writing signed by both parties that expressly refers to this Contract.

12. Counterparts. This Contract may be executed in counterpart originals, duplicate originals, or both, each of which is deemed to be an original for all purposes.

IN WITNESS WHEREOF, the parties hereto have executed the Contract the day and year first above written.

CITY OF BANNING
City Council Approval: ______________ By:

City Manager Date
ATTEST: APPROVED AS TO FORM:

By: By:

Administrative City Clerk Date City Attorney Date
(“CONTRACTOR”)
By:

Name: Date
Title:

By:

Name: Date
Title:
73 RESOLUTION 2022- 123

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING A FUNDING AGREEMENT BETWEEN THE COUNTY OF RIVERSIDE AND THE CITY OF BANNING IN THE AMOUNT OF $ 5,049,202 FOR TWO NONPOTABLE WATER INFRASTRUCTURE PROJECTS WHEREAS, on March 11, 2021, President Biden signed into law a $ 1.9 trillion economic stimulus bill also known as the COVID- 19 Stimulus Package or the American Rescue Plan Act ( ARPA), with the intent to accelerate the United States recovery from the economic and health impacts of the COVID- 19 pandemic; and WHEREAS, Riverside County' s share of the American Rescue Plan funding is estimated to be $ 479 million; and
WHEREAS, on February 8, 2022, the Riverside County Board of Supervisors approved establishing the ARPA infrastructure funding category in the amount of $82 million which included an allocation of $5,049 ,202 to the City of Banning for two nonpotable water infrastructure projects.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The Funding Agreement between the County of Riverside and the City of Banning is hereby approved; and
SECTION 2. The City Council hereby authorizes and directs the City Manager to execute the Funding Agreement on behalf of the City of Banning.

PASSED, APPROVED AND ADOPTED this 13th day of September 2022.

ATTEST:

Caroline Patton, De
City of Banning
Resolution 2022- 123

Colleen Wallace, Mayor
City of Banning
74 APPROVED AS TO FORM AND
LEGAL CONTENT:

Kevin G. Ennis , City Attorney
Richards , Watson & Gershon
Resolution 2022- 123

75 CERTIFICATION:

I, Caroline Patton, Deputy City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2022- 123, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 13th day of September 2022 by the following vote, to wit:

AYES: Happe, Minjares, Sanchez, and Wallace.

NOES:

ABSENT:

ABSTAIN:

Resolution 2022- 123

Caroline Patton, De y City Clerk
City of Banning, Californ'i~
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CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Jim Steffens, Deputy Director of Electric
Art Vela, Public Works Director
MEETING DATE: November 12, 2024
SUBJECT: Consideration of Resolution 2024-175, Approving a Professional Services Agreement with NewGen Strategies and Solutions, LLC for the Banning Electric Utility Cost-of-Service Analysis and Rate Design Study in the Amount of $164,600
RECOMMENDATION:

Adopt Resolution 2024-175.

BACKGROUND:

The City of Banning’s Electric Utility (“Utility”) is currently running a fiscal deficit and has negative cash on hand. One of the reasons for these financial issues is that the Utility has not implemented a true rate increase since 2013. The Utility is currently in the process of implementing an emergency rate increase to immediately address the inadequate revenue issues and mitigate the negative consequences of its current financial situation. However, the emergency rate increase is a stop-gap measure and is not a long-term solution. The proper long-term procedure is to have a Cost-of-Service Analysis and Rate Design Study (“Study”) performed. The Study involves building a detailed financial model to determine the Utility’s revenue requirements. Once the revenue requirements are determined, an analysis is performed to determine how the Utility’s costs should be allocated amongst different customer classes based upon cost causation, thereby being in compliance with California regulations including Proposition

26. Different rate designs are then presented and analyzed. Once the optimal rate design is chosen, a model is developed to calculate the proper rates for each of the customer classes. Both the financial model and the rate model become the property of the Utility, allowing the Utility to utilize the models to update rates in the future.

A Request for Proposal (“RFP”) for the Study was posted publicly on August 26, 2024 and sent to qualified consulting firms having experience in conducting a comprehensive Study. Two firms responded to the RFP and submitted proposals by the October 1, 2024 deadline. The consulting firms were evaluated based on the following factors: Qualifications (25%) Pricing (15%) Experience (20%) Professional References (10%) Approach and Methodology (25%) Value Added Services (5%).

Upon review of proposals, it was determined that NewGen Strategies and Solutions, LLC is the best qualified, as per the guidelines set forth in the RFP and based on the evaluation criteria as given in the aggregate scores below.

CONSULTANT SCORE
195
NewGen Strategies and Solutions, LLC 86
Utility Financial Solutions, LLC 78
The proposed Study shall include, but not be limited to the following major tasks:

Task 1: Kickoff Meeting/Study Objectives
Task 2: Develop Utility Revenue Requirements
Task 3: Cost of Service
Task 4: Municipal Utility Rate Trends Review
Task 5: Rate Design Model and Recommendation
Task 6: Pro Forma Financial Model Development
Task 7: Public Participation/Stakeholder Engagement
Task 8: Policy/Resolution Review
Task 9: Final Report
JUSTIFICATION:

The Utility is facing fiscal challenges, and one of the reasons for these challenges is that there hasn’t been a true rate increase since 2013. There have been several rate restructurings, but these restructurings were intended to be revenue neutral. Although the Utility is currently implementing an emergency rate increase to address the immediate revenue shortfalls and to meet the Utility’s bond covenants, a long-term solution is needed. Performing an updated Cost-of-Service Analysis and Rate Design Study is a vital step in developing a long-term solution.

The Study will perform a detailed financial analysis to determine the Utility’s revenue requirements moving forward. The Study also analyzes the cost causation factors of each of the different customer classes, to determine which costs should be allocated to each of the customer classes. This cost analysis ensures that the Utility’s new rates are compliant with California regulations, including Proposition 26. Different rate designs are presented and analyzed, and the optimal rate design is developed. Lastly, a final model is developed to calculate the appropriate rates that will ensure that (1) the Utility’s ongoing revenue requirements are met, therefore maintaining long-term financial stability; (2) the Utility’s rates are fair and defensible; (3) stakeholder interests are addressed; and (4) the rates consider arising issues such as rooftop solar penetration, EV charging, and the Utility's changing load profile.

NewGen Strategies and Solutions, LLC submitted the highest ranked proposals as a response to the City's RFP.

FISCAL IMPACT:

If approved, the professional services agreement with NewGen Strategies and Solutions, LLC in the amount of $164,600 will be funded by Account No. 673-7000-473.33-11 (Professional Services), which has an available balance of $274,999.65 for the remainder of fiscal year 2024/2025.

ALTERNATIVES:

Do not approve Resolution 2024-175 and provide alternative direction to staff.

BUDGETED?:

Yes
CONTRACT/AGREEMENT:

Yes
ATTACHMENTS:

1. Resolution 2024-175, Electric COSA.docx

2. Exhibit A - C01088- NewGen PSA for Cost of Service Analysis.pdf 196

3. rfp_24_073_cost_of_service_analysis_and_rate_design_study-2024-10-24-16-37-38.pdf

4. Banning_RFP-24-073_COSA_and_Rate_Design_Study_NewGen_Proposal_10.01.24 (9).pdf

5. Banning_RFP-24-073_COSA_and_Rate_Design_Study_NewGen_Price_Proposal_10.01.24 (9).pdf 197
Resolution 2024-175

RESOLUTION 2024-175

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH NEWGEN STRATEGIES

AND SOLUTIONS, LLC FOR THE ELECTRIC UTILITY COST-OF-SERVICE ANALYSIS AND RATE DESIGN STUDY IN THE AMOUNT OF $164,600
WHEREAS, the City of Banning owns and operates its own Municipal Electric Utility (“Utility”); and
WHEREAS, the last time the Utility had a true rate increase was 2013; and WHEREAS, the lack of timely rate increases has contributed to the Utility having fiscal issues, including operating deficits and cash shortfalls; and WHEREAS, as a short-term solution to the Utility’s fiscal issues, the Utility is in the process of implementing an emergency rate increase; and
WHEREAS, the Utility desires to have a Cost-of-Service Analysis and Rate Design Study (“Study”) performed which would set the foundation for a rate structure that would provide longterm solutions to the Utility’s revenue needs and which would be compliant with California regulations, including Proposition 26; and
WHEREAS, staff solicited proposals from qualified consultants on August 26, 2024 for a Study; and
WHEREAS, NewGen Strategies and Solutions, LLC was scored as the most qualified, responsible, and responsive consulting firm based upon the Request for Proposal for the project; and
WHEREAS, the Professional Services Agreement with NewGen Strategies and Solutions, LLC will be for an amount of $164,600. The expenditure is included as part of the Fiscal Year 2024/2025 approved budget and available in Account No. 673-7000-473.33-11 (Professional Services).

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The City Council approves the Professional Services Agreement with NewGen Strategies and Solutions, LLC for the Cost-of-Service Analysis and Rate Design Study in an amount of $164,600, attached hereto as Exhibit A.

SECTION 2. The City Council authorizes the City Manager to make non-substantive changes to the Professional Services Agreement and to execute the Agreement with NewGen Strategies and Solutions, LLC on behalf of the City Council.

SECTION 3. The City Council authorizes the City Manager, or his designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution.

SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. 198
Resolution 2024-175

PASSED, APPROVED AND ADOPTED this 12th day of November 2024.

Alberto Sanchez, Mayor
City of Banning
ATTEST:

Caroline Patton, Administrative City Clerk
City of Banning
APPROVED AS TO FORM:

Serita R. Young, City Attorney
Richards, Watson & Gershon
199
Resolution 2024-175

CERTIFICATION:

I, Caroline Patton, Administrative City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2024-175, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 12th day of November 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Administrative City Clerk
City of Banning, California
200
Resolution 2024-175

EXHIBIT A
Agreement for Cost-of-Service Analysis and Rate Design Study 201
-1-
AGREEMENT FOR PROFESSIONAL SERVICES (C01088) FOR

ELECTRIC COST OF SERVICE ANALYSIS AND RATE DESIGN

STUDY BY AND BETWEEN CITY OF BANNING AND NEWGEN

STRATEGIES AND SOLUTIONS, LLC
THIS AGREEMENT FOR PROFESSIONAL SERVICES (herein “Agreement”) is made and entered into this day: ___________________, (“Effective Date”) by and between the CITY OF BANNING, a California municipal corporation (“City”) and NewGen Strategies and Solutions, LLC, a Colorado Limited Liability Company (“Consultant”). City and Consultant are sometimes hereinafter individually referred to as “Party” and hereinafter collectively referred to as the “Parties.”

RECITALS
A. City has sought by a Request for a Proposal (RFP #24-073) for the performance of the services for Electric Cost of Service Analysis and Rate Design Study and as further defined and described particularly in Article 1 of this Agreement.

B. Consultant, following submission of a proposal for the performance of the services defined and described particularly in Article 1 of this Agreement, was selected by City to perform those services.

C. The Parties desire to formalize the selection of Consultant for performance of those services defined and described particularly in Article 1 of this Agreement and desire that the terms of that performance be as particularly defined and described herein.

D. Pursuant to the City of Banning’s Municipal Code, City has authority to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1. SERVICES OF CONSULTANT

1.1 Scope of Services.

In compliance with all terms and conditions of this Agreement, Consultant shall provide those services specified in the “Scope of Services” attached hereto as Exhibit A and incorporated herein by this reference, which services may be referred to herein as the “Services” hereunder. As a material inducement to City entering into this Agreement, Consultant represents and warrants that it has the qualifications, experience, and facilities necessary to properly perform the Services required under this Agreement in a thorough, competent, and professional manner, and is experienced in performing the Services contemplated herein. Consultant shall at all times faithfully, competently and to the best of its ability, experience and talent, perform all Services described herein. Consultant covenants that it shall follow the highest professional standards in performing the Services required hereunder and that all materials will be of good quality, and fit 202
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for the purpose intended. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first-class firms performing similar work under similar circumstances.

1.2 Contract Documents and Exhibits.

This Agreement includes the Request for Proposal and Consultant’s accepted proposal (“Contract Documents”), both of which are on file with the City and incorporated herein by this general reference as though fully set forth herein. Exhibit A (Scope of Services), Exhibit B (Special Requirements), Exhibit C (Schedule of Compensation), and Exhibit D (Schedule of Performance) also constitute a part of this Agreement and are incorporated into this Agreement by this reference. Except as set forth in Section 1.10 regarding Exhibit B, this Agreement controls over the Contract Documents and the provisions in Exhibits A, B and C.

1.3 Compliance with Law.

Consultant shall keep itself informed concerning all ordinances, resolutions, statutes, rules, and regulations of City and any Federal, State or local governmental entity having jurisdiction in effect at the time service is rendered, and shall render all Services hereunder in accordance therewith.

1.4 Licenses, Permits, Fees and Assessments.

Consultant shall obtain and maintain during the term of this Agreement, at its sole cost and expense, all necessary licenses, permits, certificates and approvals required by law for the performance of Services under this Agreement, including a City business license. Consultant shall have the sole obligation to pay for all fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and which arise from or are necessary for Consultant’s performance of the Services required by this Agreement. Consultant shall indemnify, defend and hold harmless City, its officers, employees or agents, against all such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder.

1.5 Familiarity with Services.

By executing this Agreement, Consultant warrants that Consultant: (i) has thoroughly investigated and considered the Scope of Services to be performed, (ii) has carefully considered how the Services should be performed, and (iii) fully understands the facilities and any difficulties and restrictions attending performance of the Services under this Agreement. If the Services involve work upon any site, Consultant warrants that Consultant has or will investigate the site and is or will be fully acquainted with the conditions existing therein, prior to commencement of Services hereunder. Should Consultant discover any latent or unknown conditions, which will materially affect the performance of the Services hereunder, Consultant shall immediately inform City of such fact and shall not proceed except at Consultant’s risk until written instructions are received from the Contract Officer (defined in Section 1.12. A). 203
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1.6 Prevention of Loss and Damages.

Consultant shall adopt reasonable methods during the Term (defined in Section 3.4) to furnish continuous protection to the work product, and the equipment, materials, papers, documents, plans, studies and/or other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the Services by City, except such losses or damages as may be caused by City’s own negligence.

1.7 Further Responsibilities of Parties.

Both Parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both Parties agree to act in good faith to execute all instruments, prepare all documents and take all actions as may be reasonable necessary to carry out the purposes of this Agreement. Unless hereafter specified, neither Party shall be responsible to perform the Services of the other.

1.8 Additional Services.

City shall have the right at any time during the performance of the Services, without invalidating this Agreement, to order extra services beyond that specified in the Scope of Services or to make changes by altering, adding to or deducting from the Services. No such extra services may be undertaken unless a written order is first given by the Contract Officer to Consultant, which written order incorporates therein an adjustment in (i) the Contract Sum (as defined in Section

2.1), and/or (ii) the Schedule of Performance, (as defined in Section 3.2), and which written order is approved in writing by Consultant. Any increase in compensation of up to ten percent (10%) of the Contract Sum, or $25,000, whichever is less; or in the Schedule of Performance of up to one hundred eighty (180) days may be approved by the Contract Officer. Any greater increases, taken either separately or cumulatively, must be approved by City Council. It is expressly understood by Consultant that the provisions of this Section shall not apply to Services which are specifically set forth in the Scope of Services or which are reasonably contemplated therein. Consultant hereby acknowledges that it accepts the risk that the Services to be provided pursuant to the Scope of Services may be more costly or time consuming than Consultant anticipates and that Consultant shall not be entitled to additional compensation therefor.

1.9 Facilities and Equipment.

Except as otherwise provided, Consultant shall, at its own cost and expense, provide all facilities and equipment necessary to perform the Services required by this Agreement. City shall make available to Consultant only physical facilities such as desks, filing cabinets, and conference space (“City Facilities”), as City deems, in its sole discretion, to be reasonably necessary for Consultant’s use while consulting with City employees and reviewing records and the information in possession of City. The location, quality, and time of furnishing City Facilities shall be in the sole discretion of City. In no event shall City be required to furnish any facilities that may involve incurring any direct expense, including but not limited to a computer, long distance telephone, network data, internet or other communication charges, vehicles and reproduction facilities. 204
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1.10 Special Requirements.

Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the “Special Requirements” attached hereto as Exhibit B and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit B and any other provisions of this Agreement, the provisions of Exhibit B shall govern.

1.11 Corrections.

In addition to the indemnification obligations set forth in Article 4, and Sections 1.4, 1.13,

5.3, 5.4, and 6.3, Consultant shall correct, at its expense, all errors in the Services which may be disclosed during City’s review of Consultant’s report or plans. Should Consultant fail to make such correction(s) in a reasonably timely manner, such correction(s) may be made by City, and the cost thereof shall be charged to Consultant. In addition to all other available remedies, City may deduct the cost of such correction(s) from any retention amount held by City, or may withhold payment otherwise owed Consultant under this Agreement up to the amount of the cost of correction(s), as provided in Section 6.3.

1.12 Party Representatives.

A. Contract Officer: For the purposes of this Agreement, the Contract Officer shall be the City Manager, or such other person designated in writing by the City Manager (“Contract Officer”). Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority, if specified in writing by the City Manager, to sign all documents on behalf of City required hereunder to carry out the terms of this Agreement.

B. Principals and Personnel of Consultant.
1) Consultant Representative: The following principal of Consultant is hereby designated as being the Consultant Representative authorized to act on Consultant’s behalf regarding the Services specified herein and make all decisions in connection therewith:

Name Title
Scott Burnham Partner
It is expressly understood that the experience, knowledge, capability and reputation of the foregoing Consultant Representative were a substantial inducement for City to enter into this Agreement. Therefore, the foregoing Consultant Representative shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the Services hereunder. All personnel of Consultant, and any authorized agents, shall at all times be under the exclusive direction and control of the Consultant Representative. For purposes of this Agreement, the foregoing Consultant Representative may not be replaced nor may their responsibilities be substantially reduced or reassigned by Consultant without the express written approval of City. It shall be Consultant’s responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the Services, and Consultant shall refer any decisions which must be made by City to the Contract Officer. 205
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2) Consultant’s Personnel: Consultant has, or will secure at its own expense, all personnel required to perform the Services required under this Agreement. All of the Services required under this Agreement shall be performed by Consultant or under its supervision, and all personnel engaged in the Services shall be qualified to perform such Services. Consultant shall make every reasonable effort to maintain the stability and continuity of Consultant’s staff and sub-contractors, if any, assigned to perform the Services required under this Agreement.

Consultant shall notify City of all changes in Consultant’s staff and sub-contractors, if any, assigned to perform the Services required under this Agreement, prior to and during any such performance. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires to reassign any staff or sub-contractor of Consultant, City shall give notice as set forth in Section 8.1. Consultant shall, immediately upon the receipt of the notice to re-assign staff from City, reassign such person or persons.

1.13 Independent Contractor.

A. Consultant is an independent contractor and not an employee of City.

Consultant shall have no power to incur any debt, obligation, or liability on behalf of City. All Services provided pursuant to this Agreement shall be performed by Consultant or under its supervision. Consultant will determine the means, methods, and details of performing the Services. Any additional personnel performing Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.

B. Consultant shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs and expenses of any nature to the extent arising from Consultant’s personnel practices. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant’s failure to promptly pay to City any reimbursement or indemnification arising under this Section.

1.14 Prohibition Against Subcontracting or Assignment.

The experience, knowledge, capability and reputation of Consultant, the Consultant Representative and employees were a substantial inducement for City to enter into this Agreement.

Therefore, Consultant shall not contract with any other entity to perform in whole or in part the Services required hereunder without the express written approval of City. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of City. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty-five percent (25%) of the present ownership and/or control of Consultant, taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy proceeding, this 206
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Agreement shall be void. No approved transfer shall release Consultant or any surety of Consultant of any liability hereunder without the express consent of City.

1.15 Debarment or Suspension.

Consultant represents and warrants that, as of the Effective Date of this Agreement, Consultant is not debarred or suspended pursuant to any applicable Federal or State law providing for the debarment of contractors. Consultant shall not perform the Services with any subcontractor that has been debarred or suspended pursuant to any applicable Federal or State law providing for the debarment. Consultant and its subcontractors shall not be debarred or suspended throughout the Term of this Agreement pursuant to any applicable Federal or State law providing for the debarment of contractors. If Consultant or any subcontractor becomes debarred or suspended during the Term of this Agreement, Consultant shall immediately notify City.

ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT.

2.1 Contract Sum.

Subject to any limitations set forth in this Agreement, as full compensation for Services satisfactorily rendered, City shall pay Consultant at the hourly rates set forth in the “Schedule of Compensation” attached hereto as Exhibit C and incorporated herein by this reference. In no event shall Consultant be paid more than One Hundred Sixty-Four Thousand Six Hundred Dollars ($164,600.00) (the “Contract Sum”). The Contract Sum shall include the attendance of Consultant at all project meetings reasonably deemed necessary by City. Coordination of the performance of the Services with City is a critical component of the Services. If Consultant is required to attend additional meetings to facilitate such coordination, Consultant shall not be entitled to any additional compensation for attending those meetings.

2.2 Method of Compensation.

The method of compensation may include: (i) a lump sum payment upon completion of the Services, (ii) payment in accordance with specified tasks or the percentage of completion of the Services, (iii) payment for time and materials based upon Consultant’s rates as specified in the Schedule of Compensation, provided that time estimates are provided for the performance of sub tasks, but not exceeding the Contract Sum or (iv) such other methods as may be specified in the Schedule of Compensation.

2.3 Reimbursable Expenses.

City shall only reimburse Consultant for those actual and necessary expenses expressly set forth in Exhibit C. Reimbursable expenses may include reimbursement for actual and necessary expenditures for reproduction costs, telephone expenses, and travel expenses approved by the Contract Officer in advance, or actual sub-contractor expenses of an approved sub-contractor pursuant to Section 1.14, and only if specified in the Schedule of Compensation.

2.4 Unauthorized Services and Expenses.
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City will not pay for any Services or reimburse for any expenses incurred which are not specified in the Scope of Services, unless authorized in writing as set forth in Section 1.8 of this Agreement. City shall make payment for such authorized additional Services and expenses in accordance with Article 2 of this Agreement.

2.5 Invoices.

Each month Consultant shall furnish to City an original invoice for all Services performed and expenses incurred during the preceding month. Each such invoice shall contain all of the information set forth in Section III of Exhibit C to this Agreement. By submitting an invoice for payment under this Agreement, Consultant is certifying compliance with all provisions of the Agreement. Consultant shall not invoice City for any duplicate Services performed by more than one person.

City shall independently review each invoice submitted by Consultant to determine whether the Services performed and expenses incurred are in compliance with the provisions of this Agreement. City will use its best efforts to cause Consultant to be paid within thirty (30) days of receipt of Consultant’s correct and undisputed invoice, except as to any charges for Services performed or expenses incurred by Consultant which are disputed by City, or as provided in Section 6.3. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Consultant for correction and resubmission. Review and payment by City of any invoice provided by Consultant shall not constitute waiver of any rights or remedies provided herein or any applicable law.

2.6 Waiver.

Payment to Consultant for Services performed pursuant to this Agreement shall not be deemed to waive any defects in Services performed by Consultant.

ARTICLE 3. PERFORMANCE SCHEDULE

3.1 Time of Essence.

Time is of the essence in the performance of this Agreement; provided, however, that the foregoing shall not be construed to limit or deprive a Party of the benefits of any grace or use period allowed in this Agreement.

3.2 Schedule of Performance.

Consultant shall commence the Services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all Services within the time period(s) established in the “Schedule of Performance” attached hereto as Exhibit D and incorporated herein by this reference.

3.3 Force Majeure.

The time period(s) specified in the Schedule of Performance for performance of the Services rendered pursuant to this Agreement may be extended because of any delays due to 208
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unforeseeable causes beyond the control and without the fault or negligence of Consultant. Such unforeseeable consequences include, but are not restricted to, acts of God or public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including City, if Consultant shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the Services for the period of the enforced delay when and if in the judgment of the Contract Officer such delay is justified, subject to the provisions of Section 1.8. The Contract Officer’s determination (or the City Council’s determination, in the event the period of enforced delay exceeds the period specified in Section

1.8) shall be final and conclusive upon the Parties to this Agreement. In no event shall Consultant be entitled to recover damages against City for any delay in the performance of this Agreement, however caused; Consultant’s sole remedy shall be the extension of the Agreement pursuant to this Section.

3.4 Term.

The Term of this Agreement shall be from the Effective Date through June 30, 2026, unless sooner terminated as provided in Article 6 of this Agreement or extended as provided in Sections

1.8 and 3.3 of this Agreement. Maximum term and any subsequent amendment or modification shall not exceed five (5) years.

ARTICLE 4. INSURANCE AND INDEMNIFICATION

4.1 Minimum Scope and Limits of Insurance.

Consultant shall procure and at all times during the term of this Agreement carry, maintain, and keep in full force and effect, insurance as follows:

A. Commercial General Liability Insurance with a minimum limit of $1,000,000.00 per occurrence for bodily injury, personal injury and property damage and a general aggregate limit of $2,000,000.00 per project or location. If Consultant is a limited liability company, the commercial general liability coverage shall be amended so that Consultant and its managers, members, affiliates, employees, agents and other persons necessary or incidental to its operation are insureds.

B. Automobile Liability Insurance for any owned, non-owned or hired vehicle used in connection with the performance of this Agreement with a combined single limit of $1,000,000.00 per accident for bodily injury and property damage. If Consultant does not use any owned, non-owned or hired vehicles in the performance of Services under this Agreement, Consultant shall obtain a non-owned auto endorsement to the Commercial General Liability policy.

C. Workers’ Compensation Insurance as required by the State of California and Employer’s Liability Insurance with a minimum limit of $1,000,000.00 per accident for bodily injury or disease. If Consultant has no employees while performing Services under this Agreement, workers’ compensation policy is not required; however, Consultant shall execute a declaration that it has no employees.
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D. Professional Liability/Errors and Omissions Insurance with minimum limits of $1,000,000.00 per claim and in the aggregate.

4.2 Acceptability of Insurers.

The insurance policies required under this Article shall be issued by an insurer admitted to write insurance in the State of California with a rating of A:VII or better in the latest edition of the A.M. Best Insurance Rating Guide. Self-insurance shall not be considered to comply with the insurance requirements under this Article.

4.3 Additional Insured.

The commercial general and automobile liability policies shall contain an endorsement naming City, its officers, employees, agents and volunteers as additional insureds.

4.4 Primary and Non-Contributing.

The insurance policies required under this Article shall apply on a primary noncontributing basis in relation to any other insurance or self-insurance available to City. Any insurance or self-insurance maintained by City, its officers, employees, agents or volunteers, shall be in excess of Consultant’s insurance and shall not contribute with it.

4.5 Consultant’s Waiver of Subrogation.

The insurance policies required under this Article shall not prohibit Consultant and Consultant’s employees, agents or sub-contractors from waiving the right of subrogation prior to a loss. Consultant hereby waives all rights of subrogation against City.

4.6 Deductibles and Self-Insured Retentions.

Any deductibles or self-insured retentions must be declared to and approved by City. At City’s option, Consultant shall either reduce or eliminate the deductibles or self-insured retentions with respect to City; or Consultant shall procure a bond guaranteeing payment of losses and expenses.

4.7 Cancellations or Modifications to Coverage.

Consultant shall not cancel, reduce or otherwise modify the insurance policies required by this Article during the term of this Agreement. The commercial general and automobile liability policies required under this Agreement shall be endorsed to state that should the issuing insurer cancel the policy before the expiration date, the issuing insurer will endeavor to mail 30 days’ prior written notice to City. If any insurance policy required under this Article is canceled or reduced in coverage or limits, Consultant shall, within two (2) Business Days (as defined in Section 8.12) of notice from the insurer, phone, fax or notify City via certified mail, return receipt requested, of the cancellation of or changes to the policy.

4.8 City Remedy for Noncompliance.
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If Consultant does not maintain the policies of insurance required under this Article in full force and effect during the term of this Agreement, or in the event any of Consultant’s policies do not comply with the requirements under this Article, City may either immediately terminate this Agreement or, if insurance is available at a reasonable cost, City may, but has no duty to, take out the necessary insurance and pay, at Consultant’s expense, the premium thereon.

Consultant shall promptly reimburse City for any premium paid by City, or City may withhold amounts sufficient to pay the premiums from payments due to Consultant.

4.9 Evidence of Insurance.

Prior to the performance of Services under this Agreement, Consultant shall furnish the City Clerk with a certificate or certificates of insurance and all original endorsements evidencing and effecting the coverages required under this Article. The endorsements are subject to City’s approval. Consultant may provide complete, certified copies of all required insurance policies to City. Consultant shall maintain current endorsements on file with the City Clerk.

Consultant shall provide proof to the City Clerk that insurance policies expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Consultant shall furnish such proof at least two (2) weeks prior to the expiration of the coverages.

4.10 Indemnity Requirements not Limiting.

Procurement of insurance by Consultant shall not be construed as a limitation of Consultant’s liability or as full performance of Consultant’s duty to indemnify City under this Agreement.

4.11 Sub-contractor Insurance Requirements.

Consultant shall require each of its sub-contractors that perform Services under this Agreement to maintain insurance coverage that meets all of the requirements of this Article.

4.12 Indemnification, Hold Harmless, and Duty to Defend.

A. Indemnification of City.
1) To the fullest extent permitted by law, Consultant shall, at its sole cost and expense, defend, hold harmless and indemnify City and its elected officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those City agents serving as independent contractors in the role of City officials (collectively “Indemnitees”), from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including fees of accountants, attorneys, or other professionals and all costs associated therewith and the payment of all consequential damages (collectively “Liabilities”), at law or in equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant, its officers, agents, servants, employees, sub-contractors, materialmen, consultants or their officers, agents, servants or employees (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising 211
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from the sole negligence or willful misconduct of the Indemnitees as determined by court decision or by the agreement of the Parties. Consultant shall defend the Indemnitees in any action or actions filed in connection with any Liabilities with counsel of the Indemnitees’ choice, and shall pay all costs and expenses, including all attorneys’ fees and experts’ costs actually incurred in connection with such defense. Consultant shall reimburse the Indemnitees for any and all legal expenses and costs incurred by Indemnitees in connection therewith.
2) Consultant shall pay all required taxes on amounts paid to Consultant under this Agreement, and indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Consultant shall fully comply with the workers’ compensation law regarding Consultant and Consultant’s employees. Consultant shall indemnify and hold City harmless from any failure of Consultant to comply with applicable workers’ compensation laws. City may offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant’s failure to promptly pay to City any reimbursement or indemnification arising under this subparagraph A.2. 3) Consultant shall obtain executed indemnity agreements with provisions identical to those in this Article from each and every sub-contractor or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this Agreement.

If Consultant fails to obtain such indemnity obligations, Consultant shall be fully responsible and indemnify, hold harmless and defend the Indemnitees from and against any and all Liabilities at law or in equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant’s sub-contractor, its officers, agents, servants, employees, sub-contractors, materialmen, consultants or their officers, agents, servants or employees (or any entity or individual that Consultant’s sub-contractor shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees as determined by court decision or by the agreement of the Parties.

B. Workers’ Compensation Acts not Limiting. Consultant’s indemnifications and obligations under this Article, or any other provision of this Agreement, shall not be limited by the provisions of any workers’ compensation act or similar act. Consultant expressly waives its statutory immunity under such statutes or laws as to City, its officers, agents, employees and volunteers.

C. Insurance Requirements not Limiting. City does not, and shall not, waive any rights that it may possess against Consultant because of the acceptance by City, or the deposit with City, of any insurance policy or certificate required pursuant to this Agreement. The indemnities in this Article shall apply regardless of whether or not any insurance policies are determined to be applicable to the Liabilities, tax, assessment, penalty or interest asserted against City.

D. Survival of Terms. Consultant’s indemnifications and obligations under this Article shall survive the expiration or termination of this Agreement. 212
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ARTICLE 5. RECORDS, REPORTS, AND RELEASE OF INFORMATION

5.1 Service Records.

Consultant shall keep, and require sub-contractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the disbursements charged to City and Services performed hereunder (the “Service Records”), as shall be necessary to perform the Services required by this Agreement and enable the Contract Officer to evaluate the performance of such Services. Any and all such Service Records shall be maintained in accordance with generally accepted accounting principles and shall be complete and detailed. The Contract Officer shall have full and free access to such Service Records at all times during normal business hours of City, including the right to inspect, copy, audit and make copies and transcripts from such Service Records. Such Service Records shall be maintained for a period of three (3) years following completion of the Services hereunder, and City shall have access to such Service Records in the event any audit is required. In the event of dissolution of Consultant’s business, custody of the Service Records may be given to City, and access shall be provided by Consultant’s successor in interest (“Consultant’s Successor”). If custody of the Service Records is given to Consultant’s Successor, Consultant shall give written notice to City of the transfer of the Service Records to Consultant’s Successor. The notice shall include contact information (address and telephone number) for Consultant’s Successor, and access shall be provided to City by Consultant’s Successor.

5.2 Reports.

Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the Services required by this Agreement as the Contract Officer shall require. Consultant hereby acknowledges that City is greatly concerned about the cost of Services to be performed pursuant to this Agreement. For this reason, Consultant agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the Services contemplated herein, Consultant shall promptly notify the Contract Officer of that fact, circumstance, technique or event and the estimated increased or decreased cost related thereto.

5.3 Ownership of Documents.

All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents and other materials (the “Consultant Documents”) prepared by Consultant, its employees, sub-contractors and agents in the performance of this Agreement shall be the property of City and shall be delivered to City upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership use, reuse, or assignment of the Consultant Documents hereunder. Any use, reuse or assignment of such completed Consultant Documents for other projects and/or use of uncompleted Consultant Documents without specific written authorization by Consultant will be at City’s sole risk and without liability to Consultant, and Consultant’s guarantee and warranties shall not extend to such use or assignment. Consultant may retain copies of such Consultant Documents for its own use. Consultant shall have an unrestricted right to use the concepts embodied therein. All 213
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sub-contractors shall provide for assignment to City of all Consultant Documents prepared by them; and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom.

5.4 Confidentiality and Release of Information.

A. All information gained or work product produced by Consultant in performance of this Agreement shall be considered confidential, unless such information is in the public domain or already known to Consultant. Consultant shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from the Contract Officer.

B. Consultant, its officers, employees, agents or sub-contractors, shall not, without prior written authorization from the Contract Officer or unless requested by the City Attorney, voluntarily provide documents, declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the Services performed under this Agreement. Response to a subpoena or court order shall not be considered “voluntary” provided Consultant gives City notice of such court order or subpoena.

C. If Consultant, or any officer, employee, agent or sub-contractor of Consultant, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Consultant for any damages, costs and fees, including attorneys’ fees, caused by or incurred as a result of Consultant’s conduct.

D. Consultant shall promptly notify City should Consultant, its officers, employees, agents or sub-contractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any Party regarding this Agreement and the Services performed thereunder. City retains the right, but has no obligation, to represent Consultant or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, this right to review any such response does not imply or mean the right by City to control, direct, or rewrite the response.

ARTICLE 6. ENFORCEMENT OF AGREEMENT AND TERMINATION

6.1 California Law.

This Agreement, and any dispute arising from the relationship between the Parties to this Agreement, shall be interpreted, construed and governed both as to validity and to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in Riverside. 214
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6.2 Disputes; Default.

A. In the event that City determines Consultant is in default under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any Services performed after the date of default. In addition to the provisions of Section 4.8, and the right to terminate pursuant to Section 6.7, if the City Manager determines that Consultant is in default in the performance of any of the terms or conditions of this Agreement, City may serve Consultant with written notice of the default. Consultant shall have ten (10) calendar days after service upon it of the notice in which to cure the default by rendering a satisfactory performance.

In the event that Consultant fails to cure its default within such period of time, City may, notwithstanding any other provision of this Agreement, terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement.

B. In the event of termination pursuant to this Section, City may take over the Services and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the Services required hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to Consultant for the purpose of set-off or partial payment of the amounts owed City as provided in Section 6.3.

6.3 Retention of Funds.

Consultant hereby authorizes City to deduct from any amount payable to Consultant (whether or not arising out of this Agreement): (i) any payment amount of which may be in dispute hereunder or which is necessary to compensate City for any losses, costs, liabilities, or damages suffered by City, (ii) all amounts retained pursuant to the provisions of Section 4.8, (iii) all amounts for which City may be liable to third parties, by reason of Consultant’s acts or omissions in performing or failing to perform Consultant’s obligation under this Agreement, and (iv) all payments due or that become due to Consultant during the period that Consultant or any of its sub-contractors fail to maintain any required insurance in full force and effect, until notice is received by City that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to City, as provided in Section 4.9, above. In the event that any claim is made by a third party, the amount or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, City may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or to withhold shall not, however, affect the obligations of Consultant to insure, indemnify, and protect City as elsewhere provided herein.

6.4 Waiver.

Waiver by any Party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any Party of any breach of the provisions of this Agreement shall not constitute a waiver of any other provision or a waiver of any subsequent breach or violation of any provision of this Agreement.

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provisions of this Agreement. No delay or omission in the exercise of any right or remedy by a non-defaulting Party on any default shall impair such right or remedy or be construed as a waiver.

Any waiver by either Party of any default must be in writing, and shall not be a waiver of any other default concerning the same or any other provision of this Agreement.

6.5 Rights and Remedies are Cumulative.

Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.

6.6 Legal Action.

In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. Notwithstanding any contrary provision herein, Consultant must file a statutory claim pursuant to Government Code Sections 905 et seq. and 910 et seq., in order to pursue a legal action against City under this Agreement.

6.7 Termination Prior to Expiration of Term.

This Article 6 shall govern any termination of this Agreement except as specifically provided in Section 6.2 for termination for default of Consultant. City reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days’ written notice to Consultant, except that where termination is due to the fault of Consultant, the period of notice may be a shorter time as may be determined by the Contract Officer. In addition, Consultant reserves the right to terminate this Agreement at any time, with or without cause, upon sixty (60) days’ written notice to City, except that where termination is due to the fault of City, the period of notice may be a shorter time as Consultant may determine. Upon receipt of any notice of termination, Consultant shall immediately cease all Services hereunder except such as may be specifically approved by the Contract Officer. Except where Consultant has initiated termination, Consultant shall be entitled to compensation for all Services rendered prior to the effective date of the notice of termination and for any Services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 6.3. In the event Consultant has initiated termination, Consultant shall be entitled to compensation only for the reasonable value of the work product actually produced hereunder. In the event of termination without cause pursuant to this Section, the terminating Party need not provide the non-terminating Party with the opportunity to cure pursuant to Section 6.2.

6.8 Attorneys’ Fees.

In any litigation or other proceeding by which a Party seeks to enforce its rights under this Agreement (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing Party in such action or proceeding, in addition to any other 216
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relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys’ fees. Attorneys’ fees shall include attorney’s fees on any appeal, and in addition the Party entitled to attorneys’ fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment.

ARTICLE 7. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION

7.1 Non-liability of City Officers and Employees.

No officer or employee of City shall be personally liable to Consultant, or Consultant’s Successor, in the event of any default or breach by City or for any amount which may become due to Consultant or Consultant’s Successor, or for breach of any obligation of the terms of this Agreement.

7.2 Conflict of Interest.

Consultant covenants that neither it, nor any officer or principal of its firm, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Consultant’s performance of Services under this Agreement. Consultant further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent or sub-contractor without the express written consent of the Contract Officer. Consultant agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement.

No officer or employee of City shall have any direct or indirect financial interest in this Agreement within the scope of Government Code section 1090, nor shall any such officer or employee make, participate in making, or use his or her official position to influence, any City decision relating to the Agreement which has a material financial effect on his or her financial interests or the financial interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given, and will not pay or give any third party any money or other consideration for obtaining this Agreement.

Consultant and its officers, employees, associates and sub-contractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Consultant’s Services under this Agreement, including the Political Reform Act (Gov. Code § 81000, et seq.) and Government Code Section 1090. During the term of this Agreement, Consultant may perform similar services for other clients; but Consultant and its officers, employees, associates and subcontractors shall not, without the Contract Officer’s prior written approval, perform services for another person or entity for whom Consultant is not currently performing services that would require Consultant or one of its officers, employees, associates or sub-contractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Consultant shall incorporate a clause substantially similar to this Section into any subcontract that Consultant executes in connection with the performance of this Agreement. 217
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7.3 Covenant Against Discrimination.

Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, or ancestry in the performance of this Agreement.

Consultant shall take affirmative action to insure that applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry, or other protected class.

7.4 Unauthorized Aliens.

Consultant hereby promises and agrees to comply with all of the provisions of the Federal Immigration and Nationality Act, 8 U.S.C.A. §§ 1101, et seq., as amended, and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Consultant so employ such unauthorized aliens for the performance of Services covered by this Agreement, and should the any liability or sanctions be imposed against City for such use of unauthorized aliens, Consultant hereby agrees to and shall reimburse City for the cost of all such liabilities or sanctions imposed, together with any and all costs, including attorneys’ fees, incurred by City.

ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1 Notices.

Any notice, demand, request, document, consent, approval, bill, invoice, report or other communication required or permitted under this Agreement shall be in writing and conclusively deemed effective: (a) on confirmed delivery by courier service or overnight delivery service during Consultant’s and City’s regular business hours; or (b) three (3) Business Days after deposit in the United States mail, by certified or registered mail, and addressed to the Party to be notified as set forth below:

If to City Attn: Art Vela
Director of Public Works
City of Banning
99 East Ramsey Street
Banning, California 92220
Email: [email protected]
With a courtesy copy to: Serita R. Young, City Attorney Richards, Watson & Gershon
350 South Grand Avenue, 37th Floor
Los Angeles, California 90071
Email: [email protected]
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If to Consultant: Attn: Scott Burnham,
Partner
NewGen Strategies and Solutions, LLC
225 Union Boulevard, Suite 450
Denver, CO 80228
Email: sburnham!newgenstrategies.net

8.2 Interpretation.

The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply.

8.3 Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument.

8.4 Integration; Amendment.

This Agreement, and all exhibits referred to in this Agreement, constitute the final, complete and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all other and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the Parties, and none shall be used to interpret this Agreement. No Party has been induced to enter into this Agreement by, nor is any Party relying on, any representation or warranty except those expressly set forth in this Agreement. No amendment to or modification of this Agreement, nor any provision or breach hereof waived, shall be valid unless made in writing and approved by Consultant and by City Council. The Parties agree that this requirement for written modifications cannot be waived and that any attempted waiver shall be void.

8.5 Severability.

In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties hereunder unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.

8.6 Mutual Cooperation.

A. City’s Cooperation. City shall provide Consultant with all pertinent data, documents and other requested information as is reasonably available for Consultant’s proper performance of the Services required under this Agreement. 219
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B. Consultant’s Cooperation. In the event any claim or action is brought against City relating to Consultant’s performance of Services rendered under this Agreement, Consultant shall render any reasonable assistance that City requires.

8.7 No Third Party Beneficiaries Intended.

This Agreement is made solely for the benefit of the Parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement.

8.8 Final Payment Acceptance Constitutes Release.

The acceptance by Consultant of the final payment made under this Agreement shall operate as and be a release of City from all claims and liabilities for compensation to Consultant for anything done, furnished or relating to Consultant’s Services. Acceptance of payment shall be any negotiation of City’s check or the failure to make a written extra compensation claim within ten (10) calendar days of the receipt of that check. However, approval or payment by City shall not constitute, nor be deemed, a release of the responsibility and liability of Consultant, its employees, sub-contractors and agents for the accuracy and competency of the information provided and/or Services performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by City for any defect or error in the Services prepared by Consultant, its employees, sub-contractors and agents.

8.9 Non-Appropriation of Funds.

Payments to be made to Consultant by City for Services performed within the current fiscal year which are within the current fiscal budget and within an available, unexhausted fund. In the event that City does not appropriate sufficient funds for payment of Consultant’s Services beyond the current fiscal year, this Agreement shall cover payment for Consultant’s Services only to the conclusion of the last fiscal year in which City appropriates sufficient funds and shall automatically terminate at the conclusion of such fiscal year.

8.10 Headings.

The headings in this Agreement are included solely for convenience of reference and shall not affect the interpretation of any provision of this Agreement or any of the rights or obligations of the Parties to this Agreement.

8.11 Word Usage.

Unless the context clearly requires otherwise, (a) the words “shall,” “will” and “agrees” are mandatory and “may” is permissive; (b) “or” is not exclusive; and (c) “includes” or “including” are not limiting.

8.12 Business Days.
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“Business Days” refers to days that the Banning City Hall is open for business.

8.13 Corporate Authority.

The persons executing this Agreement on behalf of the Parties hereto warrant that (i): such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of that Party, (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which that Party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the Parties.

8.14 Electronic Signatures.

Each Party may adopt as its signature an electronic identification consisting of a symbol or code that is affixed to or contained in each document transmitted by such Party (“electronic signature”). The Parties hereto herby agree that electronic signatures are acceptable, shall have the same force and effect under the law as original wet signatures, and shall be sufficient to verify that the Parties have executed this Agreement and such other documents transmitted by the Parties.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement the day and year first hereinabove written.

CITY OF BANNING CONSULTANT

Douglas Schulze, Date
City Manager
NAME: Date
TITLE:

NAME: Date
TITLE:

ATTEST:

Tax ID No.

Caroline Patton Date
Administrative City Clerk

Address:

APPROVED AS TO FORM:

Richards, Watson & Gershon
City Council Approval: _____________
Serita R. Young Date
City Attorney

NOTE: PROOF OF AUTHORITY TO BIND CONTRACTING PARTY REQUIRED. APPROPRIATE

ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY.
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EXHIBIT “A”

SCOPE OF SERVICES
I. Consultant will perform the following Services in connection with providing Electric Cost of Service Analysis and Rate Design Study prepared in connection therewith:

II. As part of the Services, Consultant will prepare and deliver the following tangible work products and services to City:
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PROPOSAL
Statement of Understanding and Approach
Banning Electric Utility (BEU) is seeking the development of a series of financial and economic models to develop a defensible basis for its retail rate offerings. The models will need to be designed to address changes in power supply costs and sources, including integrating renewable energy sources, as well as increasing operations and maintenance (O&M) costs, capital needs, stranded investments, sales and revenue projections, and customer needs. The rates developed for BEU’s Cost of Service Analysis and Rate Design Study (Study) must adequately balance its short- and long-term financial sustainability.

Recommended rates and rate structures must meet BEU’s ongoing operating expenditures, bond covenants, capital improvement needs, debt recovery, and fund reserve requirements, which may need to be reviewed and established for this Study. Additionally, the Study and its results must follow accepted industry standards, best practices, and California law, including Proposition 26. Further, BEU is seeking to understand the rate design and electric pricing trends occurring across the country, including how municipal utilities are approaching strategic rate design to recover costs, manage their load, and offer targeted programs to end-use customers. Specific retail rate elements to address in this Study include:
 Time of Use (TOU) rates
 Customer Self-Generation (Non-net energy metering [NEM], or NEM 2.0)  Metered Rates for Electric Vehicle (EV) — Residential and Public  Recovery Adjustments for new Renewable Energy and Purchase Power Agreements (PPA)  Low-Income Assistance Program cost recovery
Models developed for this Study need to have the flexibility to support rate recommendations based on changing factors such as power supply resources, capital investment, and retail sales. Further, these models will become the property of BEU and the City of Banning (City) upon completion and will be provided along with the necessary training and documentation to allow for continued use after the Study is completed. NewGen Strategies and Solutions, LLC (NewGen) will summarize the recommended rate changes from the Study for BEU, the City, City Council Committee, and City Council consideration, as well as present the results to the community to solicit feedback.

NewGen is well equipped to provide the service and deliverables that BEU is requesting for this assignment. We have developed pro forma financial models for various clients and integrated the results with tailored cost of service analysis (COSA) models while working diligently with management and staff to develop comprehensive rate plans. We are well versed in developing electric rate recommendations for California municipalities, as well as utilities across the country, and in the various strategies regarding compliance with Proposition 26, as well as other mandates for power supply. We are active in the California regulatory arena as we are currently representing several of the Community Choice Aggregators (CCAs) as they challenge the big three investor-owned utilities (IOUs) in the state.

Our vision for the Study is to develop a collaborative response with BEU management and staff to create a multiyear pro forma financial model, develop a comprehensive COSA model to incorporate future test years, and develop a rate design model that quantifies the impacts of rate changes on each of BEU’s EXHIBIT "A" EXHIBIT "A"-2
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customer classes. This vision results in a series of deliverables, which will be developed in the following Implementation Plan:
 Create Strategic Rate Design document: a living document developed at the initial project meeting to establish the goals, objectives, and issues to be resolved during the Study.  Develop BEU’s multiyear pro forma financial model to incorporate data as appropriate into the COSA model to form the basis for the Test Year Revenue Requirement.  Create a comprehensive, flexible, user-friendly COSA model. Include the development of dashboards and scenario management to facilitate communication of model results.  Report on the Revenue Requirement analysis and associated allocated costs by customer class for review and comment.
 Conduct a rate trend analysis of how other municipal and other power entities are addressing electricity pricing, implementation challenges/strategies, and potential barriers/issues for customer adoption of rate designs.
 Create rate design recommendations based on feedback from rate trends analysis discussions as they apply to BEU’s existing and future rate classes.
 Develop a user-friendly rate design model to incorporate BEU’s billing database for analysis of all customers in all classes; this will include dashboards and a scenario development tool.  Develop a written report detailing findings and recommendations from the Study, as well as presentations to Council and/or Council Committee and Community Stakeholder groups, as identified and requested.

Study Vision
NewGen’s vision is to develop and integrate three primary planning models for BEU to optimize its rate setting processes, including a standalone pro forma financial model, a COSA model, and a rate design model. NewGen will be responsible for the development of all three models and will integrate the results of these models as appropriate. The following graphic illustrates our vision for the Study:

EXHIBIT "A" EXHIBIT "A"-3
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Multi-Year Pro Forma Financial Model
The multi-year pro forma financial standalone model will be designed to incorporate historical and projected financial and sales data to produce reliable and timely information on the health of the utility.

Our vision for this Study is to develop a multiyear financial model for BEU, the results of which will be incorporated into the COSA model, and to facilitate updates by BEU staff for future use. We propose to work with BEU to review its model assumptions for energy sales forecasts, customer growth, operating and non-operating revenues and expenses, capital improvement program plans (and funding mechanisms), and debt service payments, as well as the resulting financial metrics (cash position) for the utility. These metrics include maintaining adequate and appropriate reserve levels and guidelines provided by BEU’s Fiscal Policy and Cash Reserve Policy or working the BEU to develop appropriate guidelines. These metrics may include days cash on hand (DCOH), debt service coverage ratios, and others. NewGen will work with BEU to evaluate these metrics as they apply to the projected cash needs of the electric utility going forward. The results from the pro forma financial model will be incorporated into the COSA model as the annual projected revenue requirement, load forecast, and revenue forecast over the projected five-year rate period, as well as the multi-year forecast period. The pro forma financial model will become the property of BEU upon completion of the Study, and NewGen will be available to advise BEU staff on future updates and model functionality, as appropriate.

Cost of Service Analysis Model
The COSA model develops a Test Year Revenue Requirement that is functionally unbundled, classified, and allocated to customer classes to determine cost-based rates. NewGen’s vision for the BEU COSA model is to develop a standalone analysis that is comprehensive, detailed, and defensible. This will include adding to the model capabilities to incorporate marginal costs and new proposed rate classes, as appropriate, based on the annual cash needs of the utility. We will design a series of dashboards for the COSA model and include the ability to save several scenario analyses for evaluation into the model.

Further, our vision includes a seamless interface between the COSA model and the pro forma financial EXHIBIT "A" EXHIBIT "A"-4
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model to transfer appropriate data and minimize opportunities for transcription errors. The COSA model review process will include analysis of the current cost allocation methodology to provide a defensible basis for the cost factors to be utilized for this Study, including those identified by California’s Proposition

26. The cost allocation methods will be evaluated in light of changes in the utility’s operations, usage characteristics, and other items, as appropriate and in coordination with the BEU Team. The results from the COSA model which will be incorporated into the rate design model will include the class revenue requirements, the percentage rate change (by class), and the unbundled and functionalized COS-based rates for each rate class.

Rate Design Model
Rate Trend Analysis
BEU seeks to understand trends in the evolving national approach to electric rates, pricing, and program design and implementation. NewGen’s vision for the rate trend analysis is to provide an overview of innovative pricing and program design methodologies across the country, including a focus on California utilities. Our vision includes descriptions of various pricing programs for both traditional electric service as well as those serving emerging technologies, such as EVs, TOU rates, and customer-sited generation and storage systems. We recognize that rate implementation challenges exist. Many rate offerings require system infrastructure upgrades, such as metering and billing systems, as well as expensive communications or meter data management systems. Utilities will also be reviewed for their low-income assistance programs and how those programs are funded as well as potential applications for BEU.

Further, utilities are often limited in their rate offerings because of political pressure and resistance to change. Each implementation challenge is unique for each utility, and solutions must be tailored for the demographic for which the rate is designed. The rate trend analysis will provide a matrix summary of implementation challenges by rate class and their relative advantages and disadvantages.

Customer Impact Rate Design Model
Our vision for BEU’s Customer Impact rate design model is to create a Microsoft Excel- (Excel) based interactive model for all customers served by BEU to evaluate the impacts from rate and rate structure changes as a result of the COSA process and rate recommendations developed for this Study. Our rate design model will be based on the rate design model that NewGen developed for BEU in a previous project but will be derived from BEU’s full customer billing system, excluding specific customer names and addresses. The advantage of our Customer Impact rate design model is that it provides the entire range of impacts to customers as a result of changes in rates and rate structures rather than focusing on representative customers. By developing a histogram of the rate impacts for each customer within a rate class, the City can determine a course of action with a complete understanding of those impacts, either as a percentage of current bills or a monthly dollar change. Additionally, by identifying those accounts with significant changes, BEU can proactively reach out to specific customers to determine if a utility-led program may be appropriate for their premise.

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The results of the Customer Impact rate design
model will include an evaluation of the
recommendations and their alternatives for various
rate designs. The revenue generated by each rate
design will be compared to the projected revenue
needs of the utility to ensure revenue adequacy for
the Test Year period. The resulting system revenues
and rate changes will be combined into an exported
spreadsheet for the purpose of integrating with the
pro forma financial model. NewGen will provide
instruction to BEU management and staff on the use
of the Customer Impact rate design model to
facilitate its use after completion of the Study.

Outreach and Public Engagement
A cornerstone of the purpose of public power is that the utility is connected to its customers and communities. All phases of the scope of work will be designed to showcase the advantages of BEU as a reliable and trusted community member. Our vision for Outreach and Public Engagement is to establish an open and transparent dialogue for BEU’s rate setting process. NewGen will work with BEU to define its stakeholder groups, which may include the public, City staff, the City Council Committee, and City Council, as well as other groups and interested parties. This engagement is designed to facilitate consensus on the strategic direction for the Study’s rate design recommendations. NewGen believes that starting the Outreach and Public Engagement process early in the development of the Study will benefit BEU by allowing it to communicate how rates are determined and the challenges BEU faces in providing reliable power to the community.

Scope of Work
NewGen proposes the following scope of work, which closely follows BEU’s Request for Proposal (RFP) as well as approaches and methodologies utilized for all of our COSA and rate design studies. Therefore, BEU can be assured that the proposed work plan has been tested and proven in numerous studies across the state and nation. It is understood that if selected, the Project Team will refine, customize, and finalize the work plan with BEU upon award of the project. Further, we will adhere to and incorporate best practices as well as the governance and guidance of any California regulations pertaining to such studies and final recommendations, including Proposition 26. We also note that we will not need to use, lease, purchase, or rent any City-owned facilities or property for this project; with the exception of in-person meetings and presentations, our work will be conducted from our office in Colorado.

This scope of work follows BEU’s RFP by developing a series of project phases:
 Phase I: This will include Task 1 (Kickoff), Task 2 (Revenue Requirement), and Task 3 (Cost of Service Analysis).
 Phase II: This will include Task 4 (Rate Trends Study), and Task 5 (Rate Design).  Phase III: This will consist of Task 5 (Financial Planning Model).  Phase IV: This will consist of Task 7 (Stakeholder Engagement/Public Participation), Task 8 (Policy/Resolution Review), and Task 9 (Draft and Final Report).

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 Phase V: This will consist of enhancements to the Study as requested by BEU.

Phase I – Kickoff/Revenue Requirement/Cost of Service Analysis Task 1 – Kickoff Meeting/Study Objectives
Within two weeks of notice to proceed, NewGen will provide a Data Request to BEU, which will include a list of requested utility-related data, reports, documents and schedules. Further, NewGen will schedule an on-site meeting with BEU to review data and establish objectives and milestones for the Study. The kickoff meeting will be attended by up to two members of the NewGen Project Team.

The purpose of the meeting will be to review the rate making process; establish communication protocols including biweekly status calls; and discuss BEU’s financial and rate strategies, objectives, and goals.

Additionally, we will discuss the Study timeframe and verify milestones for completion of the deliverables identified herein. The on-site meeting also includes discussions of the principles and methodologies developed in previous studies, as recommended changes will be based on legal requirements (Proposition 26, among others), industry rate setting practices, and BEU’s unique rate setting objectives and customer usage characteristics.

NewGen will request the most recent update to the City’s Electric System Master Plan (ESMP) and will incorporate the findings to date into the Study. During the kickoff meeting, NewGen will discuss key issues that impact BEU’s fiscal health and available data, including City and customer demographics, rate values like equity and affordability, availability of Advanced Metering Infrastructure (AMI) data, funding for Public Benefit Programs (as mandated by the state, as well as others that the City may have developed), and other legal requirements. Based on this discussion, NewGen will advise BEU of the impact of the current COSA and provide strategic guidance on how to proceed with various degrees of uncertainty. The elements of the discussion from the kickoff meeting as well as the data received will be memorialized into a Strategic Rate Design Document.

The Strategic Rate Design Document will state the purpose of the Study, issues to address, and specific rates to be developed and/or evaluated, and will develop project controls (including financial updates on budget) and the proposed schedule. This is intended to be a “living document” that is updated on a biweekly basis to include the discussions and decisions made during the ongoing status conference calls between the NewGen and BEU project teams.

This document will also serve as a status report to identify outstanding issues to be addressed by either the NewGen or the BEU project team and the strategy and schedule for their resolution. We will keep and distribute meeting minutes which will summarize our discussions and include “action items” for NewGen and BEU team members to maintain project momentum and ensure timely responses.

Ultimately, the Strategic Rate Design Document will also serve to inform the basis for the rate recommendations proposed by this Study.

Task 1 Deliverables
 Kickoff meeting attended by up to two members of the Project Team to review data received, discuss project milestones, and clarify Study objectives.
 Initial draft of Strategic Rate Design document.
 Updates to preliminary Data Request, as needed.

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Task 2 – Develop BEU Revenue Requirement
Task 2 will include development of BEU’s Test Year Revenue Requirement based on historical information and including appropriate known and measurable adjustments. The basis for the Test Year will be determined in consultation with BEU and will include actual expenses for the 12 months ending the most recent Fiscal Year (FY) (presumably FY 2024). The projected Test Year will include budgeted expenses for FY 2025 and projections for FY 2026 through FY 2030 (as appropriate and in discussions with BEU). The projected Test Year period will depend on the date of anticipated rate implementation and the period of time for which they will be designed. Such decisions will be determined in discussions with BEU during the kickoff meeting and will be included in the Strategic Rate Design document.

The Test Year will rely on the data gathered from the data requests, discussions with BEU staff and management, and the pro forma financial model (see Phase III). NewGen will review the Test Year Revenue Requirement with BEU to assess and quantify potential known and measurable adjustments that should be made to any accounts or utility operations. The Test Year Revenue Requirement will be the basis for the COSA and represents all costs that will be recovered through BEU’s retail rates for the Study period.

NewGen will develop cash flow projections of revenues and revenue requirements for the electric utility, including those for power supply, transmission, distribution, and customer related expenses. This will include development of the total revenue required to adequately cover projected operations and maintenance (O&M) costs, debt service, debt recovery, capital outlays, and capital reserves. NewGen will evaluate revenues and expenses for BEU based on historical records and expected growth rates and will design the revenue requirement to have the ability to consider variations in power supply resources and electric usage patterns.

The cash flow analysis will incorporate BEU's budget and other financial documents, including but not limited to the capital budget from BEU’s Capital Improvement Plan (CIP) as well as any specific reserve policies or financial metric requirements or objectives (such as increased DCOH). This will include identifying appropriate reserve requirements for O&M and capital programs and recommendations as appropriate to establish target reserve levels based on discussions with the BEU project team. The cash flow analysis will evaluate assignment and allocation of all the revenue sources to operating and capital expenses, as appropriate. NewGen will establish cash flow projections, which will include allocated costs from the COSA, as appropriate, and BEU-specific data provided through billing records, AMI data, and other BEU sources.

The revenue requirement and cash flow analysis will be included within the COSA analysis as the primary source of cash needs for the utility and those elements which need to be recovered in rates as a result of this Study. NewGen will develop a white paper explaining the elements of the revenue requirements and cash flow analysis, which will be provided to BEU management and staff for comment and review.

Elements of this revenue requirements document will be incorporated as appropriate into the final report for this Study.

The COSA model will be developed to reflect revised revenue requirements for the Test Year (to be defined as the period for which rates will be designed), changes in customer usage characteristics and underlying cost allocations, proposed rate class changes, and other elements as described herein. The COSA model will be integrated with the pro forma financial model (Phase III) by means of the projected system revenue requirement, future billing determinants by customer class (load), and projected average rates and revenues by class. NewGen will coordinate integration of the models and provide BEU with a EXHIBIT "A" EXHIBIT "A"-8
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detailed description of how these two models are designed to operate individually as well as collectively.

These models are designed to provide insight into BEU’s financial situation and to provide potential solutions to address financial concerns.

Example Financial Model Dashboard for Revenue Requirement (this is a combined utility) Task 2 Deliverable
 Revenue requirement white paper explaining the cost elements to be recovered by rates for this Study, including appropriate cash flow metric requirements.

Task 3 – Cost of Service
There are three key steps to completing the COSA after completing the Test Year Revenue Requirement:

1. Unbundle or functionalize the revenue requirement into utility functions (i.e., purchased power or production, transmission, distribution, and customer);

2. Classify costs (e.g., energy, demand, customer); and

3. Allocate the costs to the customer classes.

Included in the three steps of the COSA is the creation of allocation factors to spread “shared” costs between different functions or classifications, and eventually across each customer class. NewGen will review the demand allocation factors developed for the previous study as well as develop unique allocation factors for BEU’s consideration.

The model will use Excel tools such as reference tables, pull-down menus, and lists for inputs and adjusting selections such as allocation methodologies or specific allocators. The COSA model and three interconnected components are described in further detail below.

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Cost of Service Model
Component A – Functional Unbundling
Functional unbundling will provide detailed descriptions of BEU’s Test Year Revenue Requirement by core utility function. For each item, if adjusted for known and measurable changes, the amount of the adjustment is identified with an associated workpaper. Once the detailed Test Year Revenue Requirement has been established, this amount is assigned to the production, transmission, distribution, and customer functions. Assignments are made either through direct assignments or other allocation methodology.

The results of the analyses for each function of the Test Year Revenue Requirement are expressed on a functional basis. An illustration of the revenue requirement and functional unbundling is included in the Cost of Service Model graphic above.

Component B – Sub-functional Unbundling
Sub-functionalizing the production, transmission,
distribution, and customer functions provides
additional detail and accuracy to BEU’s costs. In this
process, costs are classified as demand related,
energy related, customer related, revenue related,
or a direct assignment. Similar to functionalizing,
sub-functionalization is accomplished either through
direct assignments or other allocation methodology.

Specific allocation factors are included at the bottom
of each sub-function worksheet; NewGen will review
and incorporate these allocation factors in the COSA
model, as appropriate. These analyses result in the
Test Year Revenue Requirement expressed on a subfunctional basis for each cost classification (e.g., Production Demand or Production Energy Costs). The graphics illustrate the COS sub-functionalization and classification of costs.

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Component C – Allocated Cost of Service
Next, the Test Year sub-functionalized and classified Revenue Requirement is allocated to each of the proposed rate classes using various customer class allocation methodologies. Where appropriate, costs may be directly assigned to a particular rate class. Allocations will be based on customer usage characteristics, such as contribution to peak demand, or weighted customer cost factors. All allocations will be defined and the rationale for their use will be explained in the COSA report. An illustration of the COSA model allocations to customer classes is included below.

The final COSA results are summarized on an aggregate basis for each customer class and compared to projected Test Year revenues to identify rate adjustments needed to meet the cost of service.

Additionally, we will summarize more detailed analyses of an unbundled COSA such as the wires demand, wires customer, and power supply costs per customer class and by unit. All costs incurred by BEU will be classified as fixed or variable according to their underlying nature.

BEU’s COSA will utilize an embedded or average cost of service approach to developing rates. The process described herein will include conducting analyses for data provided by BEU, and additional workpapers will be developed to analyze certain marginal costs to inform specific rate offerings. A more detailed discussion of marginal cost evaluation is provided in a subsection below.

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NewGen has proven experience building models that are adopted and utilized long term by our clients.

Our team will apply our experience developing embedded instructions and guidance that can be accessed within the model’s customized menus for BEU staff to reference in updating and checking the data and calculation validity. Embedding the instructions and checking within the model enhances the user experience, improves accuracy, and helps ensure knowledge transfer for those working in the model.

Custom ribbons in Excel will be created to provide functionality and instructions in addition to pop-up windows with additional capability to “drill down” into specific areas for instructions. Error checking will also include the ability for update notifications, user updates logs, and version control/dates. Examples of the instructions and automated checking of calculations are included in the following graphics.

Workpapers
Workpapers for supporting adjustments and allocations are included as additional Excel worksheets in the model for reference, and NewGen will create COSA model workpapers, as necessary. These workpapers generally include supporting calculations such as customer class contributions to system load and peak demands, minimum system calculations for customer and demand classifications of the distribution costs, asset-related data such as transformer inventory or miles of lines, and/or purchased power cost detail.

We will develop new workpapers as appropriate to meet the needs of the Study.

NewGen will rely on available BEU customer usage data to generate the summary-level statistics for each customer class (i.e., total kilowatt-hour [kWh] sales, sum of maximum demands, monthly non-coincident peak [NCP], and monthly coincident peak [CP]). This analysis may include a review of historical sales, available AMI data, or potential feeder load analysis. To the extent that similar customer usage data can be obtained from Southern California Edison (SCE), NewGen will discuss its use in this Study with BEU.

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revenues by customer class. This comparison will provide valuable information and data to support and facilitate the development or adjustment of BEU’s rate structures, including potential revisions to its NEM 2.0 rates, as appropriate.

NewGen will provide a draft COSA model to BEU for review, initial feedback, and approval prior to completing the final COSA. We will also facilitate a virtual meeting with BEU staff to review the draft results of the COSA model including individual customer class costs and related allocations. Feedback from the meeting and appropriate BEU requested modifications will be integrated into the final COSA results. Development of specific workpapers for this Study include an analysis and development of NEM

2.0 rate development, marginal cost analysis, and high voltage customer rates, as discussed below.

Net Energy Metering 2.0
Changes to NEM rate structures (NEM 2.0) are allowed by the State of California for utilities that have achieved greater than 5% of their load served under existing NEM rates. NewGen will create a workpaper (or series of workpapers) to develop NEM reform (NEM 2.0) rate offerings utilizing the Study’s COSA analysis, including the recognition of marginal costs, as appropriate, and including the rate associated with compensating self-generating customers for net surplus generation and any other data informing a potential NEM 2.0 rate structure. These rate offerings will be consistent with the methodology and structures previously developed by BEU to ensure that the City is maintaining fair and equitable rates for all customers.

This workpaper will evaluate the potential impacts to future NEM 2.0 customers as result of the rate changes. Additionally, it will determine the potential change in cost recovery and quantify the change in the projected rate subsidy compared to existing NEM rates. NewGen will work with BEU to determine a projection for NEM customers in the service territory, which may be impacted as a result of the NEM 2.0 rate changes.

Marginal Cost Analysis
The COSA will utilize an embedded or average cost basis. However, it is possible that certain new rates and rate offerings could incorporate a marginal cost element, which can either be a marginal cost incurred for an incremental unit obtained or a marginal cost avoided, depending on the nature of the application.

NewGen will develop a workpaper (or series of workpapers) as an expansion of the COSA model to address specific marginal costs for the utility. This will include the development of an estimated marginal cost of production, which may be time-differentiated and based on wholesale market electricity pricing (CAISO) for the region, as well as BEU’s cost of production. Marginal production costs can serve as the basis for NEM 2.0 rates and can be applied to targeted and specific future load growth (such as EV rates, electrified space conditioning and/or water heating loads, and/or customer-sited energy storage, as appropriate).

Additionally, NewGen will work with BEU to evaluate applications for marginal costs for the transmission and distribution functions of the utility. Alternatively, depending on discussions with BEU to inform the Strategic Rate Design Document, the marginal costs may be incorporated into the general rate-making approach. NewGen will describe the relative advantages and disadvantages of a marginal cost approach for general rate making and will work with BEU to determine an appropriate approach for the use of marginal costs in this Study.

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High Voltage Customers
Customers who receive service at high voltage (either through the primary distribution system or directly from the transmission system) should not incur costs associated with the secondary distribution system.

This cost differential arises between customers in the same class (typically larger industrial customers) because of how they utilize various portions of the distribution system. NewGen will work with BEU to develop a defensible cost basis to create a discounted rate for those customers that take service at a higher voltage than other customers within their class. The COSA model structure that assigns costs to the various functions provides a sound economic basis for those customers that take service at the transmission level. A detailed analysis of the costs associated with the primary and secondary system (both capital and ongoing O&M) will serve as the basis for those customers taking service at the higher voltage within the distribution system.

COSA Training Workshop
NewGen will work with BEU management and staff to develop the COSA model. As such, NewGen will provide ongoing training on the model mechanics during its development. Additionally, NewGen will develop a half-day workshop specifically to review and provide insight into the COSA model for BEU staff.

This workshop will include the development of a series of presentation materials as well as hands-on review of the various scenario development and analysis within the COSA. This will also include a review of the output from the pro forma financial model and how that information is integrated into the COSA.

The intent of this training is to provide sufficient insight and guidance to allow BEU staff to update the COSA after completion of the Study. This workshop may be conducted online or in person, depending on how BEU would like to proceed.

NewGen will provide the Excel COSA model to BEU for its use upon finalization of the Study and will include a written report providing a description of the COSA methodology and the rationale for the cost allocation applications, as appropriate. The written report will summarize BEU’s revenue requirements by customer class, the fixed and variable nature of the costs and the exiting cost recovery, and the projection of existing rates’ ability to recover costs over the Test Year period. NewGen will provide a draft report and will solicit comments from BEU management and staff to be incorporated, as appropriate, into a final COSA report.

Task 3 Deliverables
 Summary of current fixed and variable costs in Test Year Revenue Requirement compared to fixed and variable revenues.
 Virtual meeting to discuss draft COS results with BEU staff.  COSA model with workpapers for specific analyses regarding NEM 2.0, Marginal Cost Analysis, New Rate Classes, and High Voltage Customer rates, as appropriate.  COSA Training workshop (online or in person).
 Written report summarizing BEU revenue requirement by class, classification process and rationale, and cost allocation.

Phase II – Municipal Utility Rate Trends Review/Rate Design Phase II will include development of a review of municipal rate trends (Task 4) and creation of recommended rate designs for BEU (Task 5).

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Task 4: Municipal Utility Rate Trends Review
NewGen will develop an evaluation and analysis of emerging or expected future rate structures and trends that may be considered by BEU for this Study. This analysis will include the evaluation of emerging municipal utility rate structures, technologies, and trends that impact the way electricity is priced for the industry and how those trends may apply to BEU. We will identify the advantages and disadvantages of various alternative rate structures, including the potential risks associated with each specifically for BEU’s operations and finances.

NewGen will include descriptions of various pricing programs for both traditional electric service and those serving emerging technologies, such as EVs and customer-sited distribution systems (i.e., DER such as rooftop photovoltaic [PV]). This review will include both embedded and marginal cost pricing for rates and rate pricing, including market-based pricing seen in Real Time Pricing (RTP) and Critical Peak Pricing (CPP) programs. Our review will include an assessment of various solutions for pricing electricity to and from distributed energy resources (DERs) to mitigate cross-subsidies, as well as pricing for emerging technologies (i.e., EV rate and rate riders, net metering and NEM 2.0 rate structures, and solar rates).

Unbundled rate strategies, which may combine power supply and delivery services, are also a more prevalent trend and will be reviewed for this Study. Additionally, NewGen will review low-income rate programs and how these programs are funded by other jurisdictions in California, as well as across the country.

The rate trends analysis will focus on municipal and cooperative utilities (public power); however, we may include some elements from IOU rate structures and rate programs that are used to recover costs for operations and historical, current, and future capital investments. This includes reviewing trends in customer charges, the potential for residential demand changes, multi-family service options, best practices in commercial rate designs, and how classes are defined and categorized (small, medium, large, energy only, and energy and demand charges). Other trends under review will include the development of high-voltage discounts, static and dynamic TOU pricing, power factor recovery charges, and green pricing programs. We will discuss the rate trends to be included in this review and summarized in the Strategic Rate Design Document during the kickoff meeting.

This Study will focus on specific utilities identified in coordination with BEU management and staff, including up to eight municipal (or public power) entities and two IOUs (if requested). These utilities may vary by rate structure and the list of utilities may be expanded to adequately capture the trends occurring across the country. For this Study, we have identified three primary groups of rates and rate types that will be explored. These include rate types focused on non-traditional forms of cost recovery, new services, and optional rates. These groups are somewhat arbitrary as all rates are designed to recover costs and support utility operations. This assessment of various alternative rates will include a comparison of these rates and rate structures to BEU’s current rates.

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Groups of Rates and Rate Types
NewGen recognizes that many innovative rates face implementation challenges both in terms of customer acceptance and technology requirements of the utility. As part of this analysis, NewGen will identify those challenges and potential solutions, such as device-centric rates (e.g., EV-Only rates) and trends regarding “opt-in” and “opt-out” rate program options for implementation. Further, customer elasticity of demand is an important consideration for rate design as some applications have a greater response to pricing differentials than others.

Technology implementation challenges also include the investments for both the utility and the customer to be able to fully optimize the rate structure, such as dynamic TOU pricing and the communication systems required to send the price signal. Our review will evaluate the costs of the requisite technologies and other potential barriers to offering the proposed rates. This will include a qualitative and quantitative assessment of the utility and customer costs at a planning level estimate to determine the extent to which rate structures and rate programs identified in this analysis would be applicable to BEU. NewGen will utilize the information obtained from the Rate Trends survey to develop a matrix of the results, which will evaluate the applicable nature of each rate to BEU and its list of criteria. This criteria list will be developed in coordination with the BEU project team and may include the following elements:

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NewGen will work with BEU to develop a quantitative scoring system to apply each criterion to each new rate and or rate group. This may include a scaling factor (e.g., 1–10, with 1 being the lowest cost or lowest barrier and 10 being the highest cost or barrier). We will develop a standalone report that will include the results of the evaluation of the emerging alternative rate structures and how they would or potentially could apply to BEU. This report will include the evaluation matrix discussed and the development of the criteria. Further, this report will evaluate each rate or rate offering as to how it may be recommended for BEU over a short-term or long-term action. We will review the draft report with BEU, solicit comments and suggestion as appropriate from management and staff, and discuss next steps. NewGen will be available to present the findings of the rate trends analysis to the City Council Committee if requested.

Task 4 Deliverables
 Presentation of rate trend analysis findings and conclusions to BEU management and staff.  Development of draft rate trend analysis report for comment and inclusion in final Study deliverable.  Updated Strategic Rate Design Document, as appropriate.

Task 5 – Rate Design Model and Recommendation
Rates will be designed to follow the evolving Strategic Rate Design Document, support the BEU and City Council rate philosophy, and closely follow the COSA results with the categorization of customer-, demand-, and energy-related costs for each customer class. New innovative rate structures or policies (i.e., TOU, demand side management programs, and other innovative approaches to enhance customer choice and promote energy efficiency) identified in Phase II may be integrated into the rate design model, as appropriate and in consultation with BEU. This will include the rationale and assumptions for any recommendations for existing or new rates and/or rate structures for BEU. This will also include the development of an implementation path from current rates and allocations to the development and implementation of new rate alternatives for the proposed rates. As part of this task, NewGen will develop a list of viable alternative designs along with the costs and benefits of each rate design, including BEU's current rate design. The intent of the proposed rates is to provide for the annual revenue requirements over a five-year period (Rate Study Period).

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The recommended rates will be used to forecast and calculate the annual rate revenue generated for each customer class; comparing it to the class and total system cost of service will prove the revenue adequacy of the new rates. We recommend the development of a Customer Impact rate design model (see Enhancements to the Study) that will augment the rate design model to include impacts to all customers utilizing BEU’s billing database and more information as described below. All proposed rates will be evaluated for potential “rate shock” to individual customers, either as representative users from their class or across all customers. If the representative approach is preferred, NewGen will evaluate the proposed rates and rate differences for BEU customers as well as those served by neighboring and similar electric utilities in the region. This analysis will be used to develop a statistical analysis of bill impacts by each customer rate class for the entire range of usage patterns for the class.

The rate design model will be a user-friendly, Excel-based model that will be designed to provide BEU management and staff the ability to adjust rates as necessary after completion of the Study. This model will include calculations of the revenues expected from current rates as a comparison to the current revenues recorded in the audited FY records and will make adjustments as necessary to tie those values, in coordination with the BEU team. The rate design model will include the ability to develop and evaluate multiple rate scenarios, all of which will ensure that revenue requirements are met and BEU is aware of short-term and long-term risks to each rate design alternative along with the probability for each risk component to be realized. This will allow NewGen and BEU to assess the impacts of various rate designs and pricing structures on different customer classes, revenue stability, and the overall financial sustainability of the utility.

Proposed rates will recognize the social and economic
factors of the community as well as the underlying expenses incurred to provide electric service to the different
customer classes. All rates will be designed to be compliant with Proposition 26 regulations as well as the general
policies and objectives of BEU. Rates will be designed to recover projected annual revenue requirements (with
proposed rates and projected usage characteristics) and the model will have the ability to recalculate the latest year of historical revenues by customer class using current rates and historical customer usage. This information will be summarized in the model for each customer class and for the system total. An example of TOU rate structure options available in our rate design model is provide in the graphic to the left.

NewGen will evaluate the underlying fixed and variable
nature of the cost of service compared to the fixed and variable nature of the cost recovery (rates). BEU, like many utilities across the country, has high fixed costs
(investments, labor, etc.) and relatively low variable costs (energy); however, most rates are designed to recover costs on a variable basis. We will work with BEU to examine this relationship to better align its cost recovery with its costs.

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appropriate or provide an alternative rate design scenario such as a phase-in of rate changes or adjustments in customer/demand/energy rate components.

NewGen’s modeling capabilities include the development of visual dashboards typically incorporated into our rate design models. These dashboards are designed to manage, manipulate, and evaluate large amounts of data for each customer within customer classes. The dashboards instantly and easily convey the key financial metrics, load profile changes, customer impacts, and rate structures to management and stakeholders. These dashboards also provide the capability to instantly evaluate scenarios and review the results and impacts of the scenarios for management, Council, and/or other stakeholders. The graphic below provides an illustration of the proposed rate changes that could be included in a rate model dashboard.

The rate design model will include scenarios that consider the phasing in of various rate plans (e.g., over a five-year period) based on the availability of data and customer impacts. Additionally, NewGen will work with the BEU team to evaluate how recommended rate designs will be compatible with its customer information (billing) system (or CIS) and BEU's business processes, and if change management processes need to be implemented. Specific rate design components from this Study may include the following:
 Solar Customer Rates
 TOU Rates
 EV Rates
 Recovery for Renewable Energy, such as PPA Rates, both Fixed and Variable  Low-Income Assistance Rates
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Task 5 Deliverables
 Review of existing BEU rates and any recommended structural modifications based on rate survey results.
 Revenue adequacy including phase-in of rates, if desired.  Recommendations for new rate structures and service offerings.  Virtual meeting to review recommended rates and revenue adequacy with BEU staff.  Customer and system economic impact analysis
 Rate design model and training provided to BEU management and staff.

Phase III – Pro Forma Financial Model
Task 6 – Pro Forma Financial Model Development
NewGen will develop an Excel-based electric utility pro forma financial model based on BEU’s budgeting system and accounts to support periodic updates and alignment with the COS and planning models, including its ESMP. The pro forma financial model will forecast revenues by customer class and expenses for 30 years to evaluate potential rate, debt, and capital related impacts. Additionally, the model will serve as an ongoing repository for historical data and financial information provided by BEU for a period of five years and will become the property of BEU upon completion of the Study. The model will include the development of a “dashboard” designed to manage, manipulate, and evaluate large amounts of data.

The dashboard easily conveys the key financial metrics, load profile changes, customer impacts, and rate structures to stakeholders and staff. The dashboard is designed to quickly perform scenario analyses which provide BEU flexibility in determining the appropriate mix of rate changes, capital projects, and debt issuances to meet budgetary or capital constraints and to support utility decision making. The model will be fully documented and relatively simple for BEU staff to administer. The customized tools within the pro forma financial model allow for dynamic and complete analysis of the various aspects of the Study and produce easy-to-understand tables and graphs that aid in communication with various stakeholders.

The model will be designed to automatically produce summary reports and visualizations with toggles for scenarios including but not limited to:
 Long-term cash position
 Demand forecast projections by customer type
 Sales forecast by customer type
 Consideration of capital financing plan and alternatives (pay-go, borrowing, or grants)  Average bill by customers
 Cash reserves compared to targets or sub-fund reserve levels for management review  Growth factors and one-time changes in any year
Additionally, the model will be designed for a single input worksheet to make changes and updates, to reduce confusion and opportunities for errors. Further, the model will include consideration of elasticity of demand (response from customers to pricing signals in rates) and allow for mid-year rate adjustments, including the ability for changes/additions to rate and surcharges. Based on discussions with BEU, the EXHIBIT "A" EXHIBIT "A"-20
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model will include several scenarios designed to accommodate a “phased-in” rate plan, as developed in Task 3. The final model provided to BEU at the completion of the Study will provide the basis for electric rates for the proposed rate plan period and will be configured to accommodate evolving energy policy requirements.

During the model development process, designated BEU staff will be included in periodic progress updates and will provide feedback on draft versions of the model. The model will include a pro forma operating results worksheet, a balance sheet, the aforementioned dashboard, capital improvement plan sheet, debt service schedule, and up to six scenarios as defined in coordination with the BEU team. The results of the financial model will be summarized in a report and presented to BEU staff.

The financial planning model will include embedded instructions and guidance that can be accessed within the model’s customized menus. The model will feature integrated error and data validity checking. This error checking feature will include the ability for update notifications, user updates logs, and version control/dates.

Task 6 Deliverables
 Draft pro forma financial model for review by BEU management and staff.  Final pro forma financial model, including embedded documentation for model use and updating.  Three two-hour training sessions for BEU management and staff on the use of the pro forma financial model (virtual).

Phase IV – Results Presentation
Phase 4 consists of Task 7 (Public Participation/Stakeholder Engagement), Task 8 (Policy/Resolution Review), and Task 9 (Final Report).

Task 7 – Public Participation/Stakeholder Engagement
NewGen will work closely with BEU staff to develop and implement a public participation plan to increase customer awareness and understanding of rate development and the Study results. The public participation plan will present successful and innovative communication strategies employed by similarly situated electric utilities based on our experience and potential discussions with previous successful client projects. As part of the plan, NewGen will prepare materials for and facilitate up to five public meetings (in person or virtually, depending on the direction of BEU. For purposes of budgeting, we have assumed three in-person meetings). Additionally, we will develop a variety of materials and content for website, social media, and other communication tools, which will be communicated by BEU. NewGen and BEU will focus on engaging hard-to-reach communities, such as disadvantaged and low-income communities, while working closely with the City’s Public Information Officer. Materials will be provided in advance for staff review at least two weeks prior to any public event; however, NewGen understands that City Council schedule and posting requirements may accelerate the timelines needed.

Task 8 – Policy/Resolution Review
NewGen will work closely with BEU staff, the City Attorney's Office, and other City partners as needed to ensure that all language in the proposed rate resolution is consistent with the new rate design and with California Law, as appropriate. This may include consideration of future year revisions included in resolution submissions. NewGen will provide ongoing support as necessary to explain and defend BEU’s EXHIBIT "A" EXHIBIT "A"-21
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CITY OF BANNING, CA
RFP-24-073

COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY
Thoughtful Decision Making for Uncertain Times 21
rates and charges, including before City Council. This support may include the preparation of schedules or other documents that detail the calculations and assumptions made in arriving at the rates and charges under examination.

Task 9 – Final Report
Upon completion of the analysis portion of the Study, NewGen will deliver the COSA and the Customer Impact rate design model(s) for BEU’s future use, including all workpapers, spreadsheets, reports, and computations used in the analyses. We will provide final copies of the presentations developed for management and the City Council/Council Committee and the customer outreach efforts. Additionally, NewGen will provide a draft and final copy of a comprehensive written report, which will include a description of the analysis completed for the COSA/Rate Study for the five-year period and rate recommendations. We will collaborate with BEU to review comments provided by BEU legal counsel on the draft report to incorporate into the finalized work product. A Microsoft Word version of the report will be provided to facilitate edits and comments from the BEU project team.

NewGen will develop and provide presentations of the preliminary Study results to BEU’s City Council and/or Council Committee to solicit feedback on the proposed rate structures and charges. It is anticipated that feedback from BEU staff and management, as well as the Council/Board, will be included in the final recommended rate plan. Our proposed budget includes three on-site visits for this presentation. However, if additional on-site meetings are required, we will work with BEU to accommodate its requests.

BEU will coordinate development of the Outreach and Public Engagement process, select the attendees, and host the meetings in coordination with NewGen. The intent of these events is to solicit input and provide transparency for representative customer groups regarding the rate-making process. NewGen will develop materials and will facilitate up to five of these events in coordination and combination with BEU management and staff. The updated Strategic Rate Design Document will include details of these events throughout the Study, as appropriate. NewGen will lead or support the presentation(s) of results directly to BEU customers or customer groups, as requested by BEU.

Tasks 7, 8, and 9 Deliverables
 Stakeholder Engagement documents and materials (such as agendas and facilitation plan), as well as collateral, social media schedule, and effective graphics for BEU’s social media use.  Redlined version of proposed rate resolutions (Word version) as well as white paper detailing significant proposed changes, restructures, rationale, and analysis (as well as presentation materials).  Delivery of final work products including workpapers, spreadsheets, and models.  Delivery of draft/final report for the Study.
 In-person presentation of preliminary/final Study results to City Council/Committee.  Preparation and support for development of five (for purposes of budgeting, we have assumed three in-person meetings) presentation materials for customer (or customer groups) outreach efforts and presentation(s) by NewGen.

EXHIBIT "A" EXHIBIT "A"-22
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22 Thoughtful Decision Making for Uncertain Times
Phase V – Enhancements to the Study
NewGen proposes to develop enhancements to the Study in Phase IV. These enhancements include developing a Customer Impact rate design model along with the recommended rates and rate structures.

We will design a robust and dynamic Customer Impact rate design model for the entire BEU billing database which conducts an analysis of rate impacts and provide a comprehensive and complete view of all rate impacts to all customers. This is an enhancement to the Phase III – Rate Design efforts which would be limited to representative customers within each rate class. The customer impact analysis will provide detailed information on rate impacts for all classes and individual customers, and will support the broader communication, understanding, and endorsement of Study results and potential rate changes.

This billing database and impact analysis includes customer class rate curves based on load factor for each class and will show
individual customer class
bill impacts (i.e.,
histograms). Such
impacts may be filtered to
screen for specific
customer groups (e.g.,
low-income customer
impacts, if data is
available), for entire
classes, or for the full BEU
system. The example
graphic provides a
summary of the output
regarding customer load
impact analysis available.

The Customer Impact rate design model will have the ability to design rates within current rate classes.

NewGen will develop an export file to transfer revenue and customer class data to the pro forma financial model, as appropriate. We will incorporate a “rate calculator tool” into the rate design model that is designed to show the effects of rate design options on customers by similar groupings or sub-groupings, such as schools, government, etc. (as defined by BEU). The rate calculator tool will evaluate the rate impacts to these customers as well as the effect of those rate impacts on other classes to generate the same level of revenue requirement. Similar to the proposal for Phase III – Rate Design recommendations, this enhanced approach will serve as the basis for a statistical analysis of bill impacts by each customer for the entire range of usage patterns for the class.

NewGen understands that the proposed enhancements described above and recommendations to the project scope are not part of the originally requested scope and may be considered by the City and included in the Scope of Work at its discretion. NewGen will proceed with proposed enhancements only at the express written consent of BEU.

EXHIBIT "A" EXHIBIT "A"-23
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CITY OF BANNING, CA
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COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY
Thoughtful Decision Making for Uncertain Times 23
Proposed Study Schedule
NewGen proposes to complete the Study within a six-to-nine-month period, depending on availability of data, and in coordination with BEU and the City. The following graphic provides a summary of the proposed schedule by task.

Phase I includes Task 1 (Kickoff), Task 2 (Revenue Requirement), and Task 3 (Cost of Service Analysis).

Task 1 is anticipated to be completed within two weeks of notice to proceed and contract authorization.

Task 2 will require approximately one month to complete, depending on the availability of the data provided by BEU and the City. Task 3 is anticipated to require approximately two months to complete and will also depend on the availability and quality of data provided by BEU.

Phase II includes Task 4 (Rate Trends Study), and Task 5 (Rate Design). Task 4 will require approximately one month to complete (to draft) and will be conducted concurrently with Task 3. To the extent that any additional rate designs may be requested as a result of the Rate Trends Study, they may extend the timeframe for completion of the COSA model. Task 5 will require approximately two months to complete, as there will likely be significant discussions with BEU during the process and before the development of recommended rates.

Phase III consists of Task 5 (Financial Planning Model), which will begin concurrent with Task 2 (Revenue Requirement) and will require approximately four to five months to complete, as it will incorporate the results of the COSA and the rate design model.

EXHIBIT "A" EXHIBIT "A"-24
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CITY OF BANNING, CA
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COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY
24 Thoughtful Decision Making for Uncertain Times
Phase IV consists of Task 7 (Stakeholder Engagement/Public Participation), Task 8 (Policy/Resolution Review), and Task 9 (Draft and Final Report). We would recommend that Task 7 begin when the COSA model is nearing completion to allow for input from stakeholder groups into the cost allocation process and other considerations. The Stakeholder Engagement Process will require approximately 3 months to complete, depending on the objectives of the process. Task 8 will be dependent on the completion of Task 5 and is anticipated to require two weeks to complete. Task 9 will begin upon completion of the previous tasks and is expected to require approximately one month to complete from draft report to final report, and presentation of the results to BEU staff and City Committee or City Council, as appropriate.

NewGen proposes bi-weekly (every other week) on-line status calls with the BEU project team to maintain project momentum and address issues that arise during the course of the Study.

Quality Assurance Efforts
NewGen recognizes that the quality of our analysis and work product is paramount when serving as a trusted advisor to our clients. To ensure that our work is of the highest caliber, we have established a robust quality assurance/quality control (QA/QC) program that permeates every phase of our projects.

NewGen's internal QA/QC program involves three levels of review and an implementation phase:

Level 1 – Personal
At the base level of our QA/QC program, consultants are personally responsible for their work product.

Deliverables should be considered "client-ready" before being submitted to higher management levels for review. To aid our consultants in ensuring their work product meets these standards, NewGen utilizes our internally designed CHECK-UP process, as illustrated in the figure below. This acronym encourages NewGen's consultants to apply each listed standard to every analysis and deliverable.

EXHIBIT "A" EXHIBIT "A"-25
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Thoughtful Decision Making for Uncertain Times 25
Level 2 – Peer
Level 2 of NewGen's process involves a peer review of all analyses and deliverables. As part of this effort, NewGen has designated experts in each subject matter area to serve as "qualified reviewers." Each analysis and deliverable undergoes a quailed review before transmission to the client.

Level 3 – Professional Product
The final level in our QA/QC review ensures that our final products reflect our firm's high standards.

NewGen's administrative staff reviews all deliverables to ensure consistency, safeguard our brand, and deliver a consistent experience to our clients. Additionally, our models integrate automated calculation and formula checks to ensure they operate correctly and concisely. This automation also notifies users if the model has been updated or if errors exist.

Implementation
By adhering to strict quality control measures, NewGen can mitigate variations or deviations that could lead to inconsistencies in the final product or service. NewGen regularly reminds staff at meetings about the importance of QA/QC and the proper application of our CHECK-UP procedures. In the event of deviations, we take prompt and corrective actions. Our team is adept in implementing corrections, documenting actions taken, and verifying their effectiveness.

NewGen actively fosters a culture of continuous improvement, drawing on lessons learned and stakeholder feedback. This enables us to refine our processes, integrate best practices, and stay at the forefront of quality control.

EXHIBIT "A" EXHIBIT "A"-26
248
Exhibit “A”-27
III. In addition to the requirements of Parts I and II of this Scope of Services, during the performance of the Services, Consultant will keep City appraised through periodic status reports regarding the performance of the Services under this Agreement as set forth below and in Section 5.2, by the following means:
a. In-person meetings and/or teleconferences.
b. Email updates/questions to applicant team and City while reviews are underway.
c. Conference calls.

IV. All work product is subject to review and acceptance by City. If the City determines that any work product is unacceptable, for any reason, it must be revised by Consultant without additional charge to City until found satisfactory and accepted by City. 249
Exhibit “B”-1
EXHIBIT “B”

SPECIAL REQUIREMENTS

TERMS FOR COMPLIANCE WITH CALIFORNIA LABOR LAW REQUIREMENTS

1. This Agreement calls for services that, in whole or in part, constitute “public works” as defined in Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code (“Chapter 1”). Further, Consultant acknowledges that this Agreement is subject to (a) Chapter 1 and (b) the rules and regulations established by the Department of Industrial Relations (“DIR”) implementing such statutes. Therefore, as to those Services that are “public works,” Consultant shall comply with and be bound by all the terms, rules and regulations described in 1(a) and 1(b) as though set forth in full herein.

2. California law requires the inclusion of specific Labor Code provisions in certain contracts. The inclusion of such specific provisions below, whether or not required by California law, does not alter the meaning or scope of Section 1 above.

3. Consultant shall be registered with the Department of Industrial Relations in accordance with California Labor Code Section 1725.5, and has provided proof of registration to City prior to the Effective Date of this Agreement. Consultant shall not perform work with any subcontractor that is not registered with DIR pursuant to Section 1725.5. Consultant and subcontractors shall maintain their registration with the DIR in effect throughout the duration of this Agreement. If the Consultant or any subcontractor ceases to be registered with DIR at any time during the duration of the project, Consultant shall immediately notify City.

4. Pursuant to Labor Code Section 1771.4, Consultant’s Services are subject to compliance monitoring and enforcement by DIR. Consultant shall post job site notices, as prescribed by DIR regulations.

5. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages for each craft, classification, or type of worker needed to perform the Agreement are on file at City Hall and will be made available to any interested party on request. Consultant acknowledges receipt of a copy of the DIR determination of such prevailing rate of per diem wages, and Consultant shall post such rates at each job site covered by this Agreement.

6. Consultant shall comply with and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. The Consultant shall, as a penalty to City, forfeit $200.00 for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the DIR for the work or craft in which the worker is employed for any public work done pursuant to this Agreement by Consultant or by any subcontractor.

7. Consultant shall comply with and be bound by the provisions of Labor Code Section 1776, which requires Consultant and each subcontractor to: keep accurate payroll records and verify such records in writing under penalty of perjury, as specified in Section 1776; certify and make such payroll records available for inspection as provided by Section 1776; and inform City of the location of the records.
250
Exhibit “B”-2

8. Consultant shall comply with and be bound by the provisions of Labor Code Sections 1777.5, 1777.6 and 1777.7 and California Administrative Code Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects. Consultant shall be responsible for compliance with these aforementioned Sections for all apprenticeable occupations.

Prior to commencing work under this Agreement, Consultant shall provide City with a copy of the information submitted to any applicable apprenticeship program. Within 60 days after concluding work pursuant to this Agreement, Consultant and each of its subcontractors shall submit to City a verified statement of the journeyman and apprentice hours performed under this Agreement.

9. The Consultant shall not perform Work with any Subcontractor that has been debarred or suspended pursuant to California Labor Code Section 1777.1 or any other federal or state law providing for the debarment of contractors from public works. The Consultant and Subcontractors shall not be debarred or suspended throughout the duration of this Agreement pursuant to Labor Code Section 1777.1 or any other federal or state law providing for the debarment of contractors from public works. If the Consultant or any subcontractor becomes debarred or suspended during the duration of the project, the Consultant shall immediately notify City.

10. Consultant acknowledges that eight hours labor constitutes a legal day’s work.

Consultant shall comply with and be bound by Labor Code Section 1810. Consultant shall comply with and be bound by the provisions of Labor Code Section 1813 concerning penalties for workers who work excess hours. The Consultant shall, as a penalty to City, forfeit $25.00 for each worker employed in the performance of this Agreement by the Consultant or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code section 1815, work performed by employees of Consultant in excess of eight hours per day, and 40 hours during any one week shall be permitted upon public work upon compensation for all hours worked in excess of eight hours per day at not less than one and one-half times the basic rate of pay.

11. California Labor Code Sections 1860 and 3700 provide that every employer will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, Consultant hereby certifies as follows:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.”
Date______________ Signature___________________________ 251
Exhibit “B”-3

12. For every subcontractor who will perform work on the project, Consultant shall be responsible for such subcontractor’s compliance with Chapter 1 and Labor Code Sections 1860 and 3700, and Consultant shall include in the written contract between it and each subcontractor a copy of those statutory provisions and a requirement that each subcontractor shall comply with those statutory provisions. Consultant shall be required to take all actions necessary to enforce such contractual provisions and ensure subcontractor’s compliance, including, without limitation, conducting a periodic review of the certified payroll records of the subcontractor and upon becoming aware of the failure of the subcontractor to pay his or her workers the specified prevailing rate of wages. Consultant shall diligently take corrective action to halt or rectify any failure.
252
Exhibit “C”-1
EXHIBIT “C”

SCHEDULE OF COMPENSATION
I. Consultant shall perform the following tasks (“Tasks”) at the following rates as attached as Exhibit C-1.

II. Within the budgeted amounts for each Task, and with the approval of the Contract Officer, funds may be shifted from one Task sub-budget to another so long as the Contract Sum is not exceeded per Section 2.1, unless Additional Services are approved per Section 1.8.

III. City will compensate Consultant for the Services performed upon submission of a valid invoice. Each invoice is to include:

A. Line items for all personnel describing the Services performed, the number of hours worked, and the hourly rate.

B. Line items for all materials and equipment properly charged to the Services.

C. Line items for all other approved reimbursable expenses claimed, with supporting documentation.

D. Line items for all approved sub-contractor labor, supplies, equipment, materials, and travel properly charged to the Services. 253
Exhibit “C-1”-1
EXHIBIT “C-1”
CONSULTANT’S BILLING RATE AND TASK SCHEDULE
254
Exhibit “D”- 1
EXHIBIT “D”

SCHEDULE OF PERFORMANCE
I. Consultant shall perform all Services timely, and deliver the specified tangible work products to City in accordance with the schedule attached as Exhibit D-1.

II. The Contract Officer may approve extensions for performance of the Services in accordance with Sections 1.8 and 3.3.
255
Exhibit “D-1”- 1
III.EXHIBIT “D-1”

PROPOSED PROJECT SCHEDULE
256
Exhibit “D-1”- 2
257

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY RFP-24-073

CITY OF BANNING, CA
http://www.banningca.gov
RELEASE DATE: August 26, 2024
DEADLINE FOR QUESTIONS: September 17, 2024
RESPONSE DEADLINE: October 1, 2024, 11:59 pm
RESPONSES MAY BE SUBMITTED ELECTRONICALLY TO:
https://secure.procurenow.com/portal/banning-ca
258
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY I. Notice ........................................................................................

II. Introduction ..............................................................................

III. Prerequisites .............................................................................

IV. Scope of Work ...........................................................................

V. Vendor Questionnaire...............................................................

VI. Submission Instructions And Inquiries......................................

VII. Evaluation Criteria.....................................................................

VIII. Resulting Contract.....................................................................

IX. Terms And Conditions...............................................................

Attachments:

A - Professional Services Agreement Template with Prevailing Wage - provided by RWG 4-24-23
259
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY I. Notice

REQUEST FOR PROPOSALS (RFP)
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY Dear Proposers:

The City of Banning (hereinafter referred to as the “City”) is requesting proposals from a qualified public entity or private firm, to establish a contract for the scope of services outlined in this request for proposals.

NOTICE IS HEREBY GIVEN that online price and document submittals must be uploaded to the online bidding system in accordance with the instructions included herein, on or before the time and date set forth in the schedule of events. It shall be the responsibility of the proposer to upload their proposal before the announced time. However, responses may be submitted at any time prior to the deadline. (Submitted proposals may be withdrawn and resubmitted at any time prior to the deadline, and cannot be viewed by City staff until the close date and time.) SOLICITATION DOCUMENTS: To obtain a copy of the solicitation documents, please visit https://procurement.opengov.com/portal/banning-ca. If you are not currently registered with the City of Banning through OpenGov, please create an account and subscribe to this project for notifications. Proposals may only be submitted by companies who are listed as a prospective bidder on the electronic bidding website for each project that they wish to submit a response to.

Firms must also check the web site periodically for addenda information as failure to download and acknowledge any and all addenda in the submittal will result in proposer disqualification.

RESPONSIVE PROPOSALS: Once listed on the prospective bidders list, companies may submit their proposals on the electronic bidding system. The City will not accept proposals submitted by companies who are not on the prospective bidders list, or from companies who have submitted a proposal via facsimile, email, mail, or any other format not permitted by this solicitation.

Further instructions for submitting proposals are explained in this solicitation. Companies are to adhere to all of the submittal instructions and requirements outlined in this solicitation in order to be considered responsive to this request for proposals. 260
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY II. Introduction
II.A Summary
The City of Banning’s Electric Department (“Banning Electric Utility” or “BEU”) is conducting a search for an experienced technical/financial consulting firm (“Contractor,” "Consultant," or "Proposer") to complete a Cost-of-Service Analysis (“COS”) and develop and design a robust financial model and rate structure.

The purpose of this project is to develop a rate restructuring proposal that ensures revenue adequacy and fair and equitable allocation of costs while balancing customer affordability and impacts to customers. The resulting rate structure must comply with California Law.

The project is expected to result in a financial planning model that can be used for rate design under different scenarios. The financial model will also be developed to support future decision making for rates and structures as conditions change; the plan will reflect iterative design components that will provide BEU with resilient financial resources in order to support long-term sustainability. The project will also entail engagement with the public to garner understanding of and support for the chosen rate design.

Proposals are requested from Contractors that have a demonstrated ability to perform the tasks identified in the “Scope of Work” section contained within this Request for Proposal (“RFP”).

II.B Background
The City of Banning is located in the northwestern portion of Riverside County, approximately 25 miles east of downtown Riverside and approximately 30 miles west of the City of Palm Springs.

The City is bounded by the San Bernardino Mountains to the north; Cherry Valley to the northwest; the City of Beaumont to the west and southwest; unincorporated County area to the south; the San Jacinto Mountains to the southeast; and the Morongo Band of Mission Indians and unincorporated community of Cabazon to the east. The City’s total land area is 14,848 acres or 23.2 square miles.

According to the Department of Finance (2023) the resident population of the City is 31,250. The City is currently experiencing a peak population and it continues to grow due to residential development activity. In 2020, the City was considered the fastest growing City in California, with a population of 30,000.

BEU
The City of Banning owns and operates its own electric utility. Originally established in 1913 as a private utility, the City of Banning purchased the utility in 1922 and has been providing electric service to its residents since that time. Banning’s energy resource base includes portions of nuclear, geothermal, solar, landfill gas-to-energy, and hydro generating plants, that provide the majority of electricity required to meet its summer peak demand of 51 MW. 261
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY Through agreement with Southern California Edison Company, the BEU’s electric system utilizes Edison’s sub-transmission system in bringing power from the California Independent System Operator (“CAISO”) controlled high voltage transmission grid to the BEU’s distribution system at Banning Substation. BEU owns three 34.5kV sub-transmission circuits totaling approximately eighteen miles which feed each of the BEU’s six substations.

These six substations have 27 circuits feeding approximately 147 miles of overhead and underground lines of 7,200/12,470 volts. Underground lines total approximately 63 miles or 43% of the total.

The following table sets forth information concerning voltages, capacities, and circuits for the Electric System’s six substations.

Substation
34 - 12kV
Voltage Capacity
(MW)
Distribution
Feeders
Circuit Capacity
(Amps)
22nd Street 34.5-7.2/12.47 15.00 3 600
Midway 34.5-7.2/12.47 15.00 4 400
San Gorgonio 34.5-7.2/12.47 20.00 4 600
Sunset 34.5-7.2/12.47 25.00 8 600
Ivy 34.5-7.2/12.47 25.00 4 600
Stagecoach 34.5-7.2/12.47 10.00 4 600
The City supports clean-energy and is committed to additional renewable energy resources to its already diverse portfolio. The utility met/exceeded the renewable energy requirements of Compliance Period #1, Compliance Period #2, and Compliance Period #3 of the State’s RPS program. The Utility was 81 percent renewable in 2022, already exceeding the current State mandate of 60 percent by 2030.

The Banning Electric Utility is a member of the Southern California Public Power Authority (SCPPA) enjoying the benefits of joint action through cost effective planning, construction, management, and operations of electrical energy resources.

Power Revenues
BEU provides electric service to approximately 13,500 customers, consisting of around 12,200 residential and 1,300 commercial customers. All meters are typically read on a monthly cycle.

Presently, BEU’s meter reading processes utilize Automatic Meter Reading technologies. In Fiscal Year (“FY”) 2023, power sales for BEU totaled approximately 150,000 MWh.

Revenues from power sales were $28 million in FY 2023.

In October 2018, BEU changed the residential rate design to a flat rate design due to customer unrest with extended utility billing time frames in relation to a tiered rate structure. This rate change was revenue neutral and well received by BEUs customers. 262
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY BEU restructured its rates again in October 2021. See the staff report, starting on page 30 (Link), Resolution 2021-102 (first attachment on the staff report) for BEU’s for the current schedule of electric utility tariffs, charges, general provisions and rate riders effective January 1, 2022 Current Initiatives
Electric System Master Plan (“ESMP”)
The City is currently in the process of hiring a consultant to develop an ESMP, which will likely be underway before the COS is kicked off. The ESMP will be a long-term planning document to ensure a safe, reliable and cost-effective power delivery system. The key focuses of the ESMP will include:
• Land Use and Population Projections
• Load Forecast
• Regulatory Impacts
• Demand/Capacity Analysis
• System Model Updates
• System Evaluation (Transmission/Substation/Distribution) • Capital Improvement Plan (Existing and Future Facilities) II.C Contact Information
Barbara Mason
Purchasing Manager
99 E. Ramsey Street
Banning, CA 92220
Email: [email protected]
Phone: (951) 922-3121
Department:

Purchasing Division
II.D Timeline
This request for proposal will be governed by the following tentative schedule. All dates are subject to change at the discretion of the City.

Release Project Date August 26, 2024
263
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY Pre-Proposal Meeting (Non-Mandatory) September 10, 2024, 11:00am Teams Meeting
https://teams.microsoft.com/l/meetupjoin/19%3ameeting_MjdiM2FjZTgtMzg5NS00O DZmLWFmYjktYmI3N2I2OWZkYjMy%40thread.
v2/0?context=%7b%22Tid%22%3a%2228cb6a6
f-78fe-445d-acfdcf07066168f7%22%2c%22Oid%22%3a%228e16
e855-140b-4487-b7c7-19b383cbe4be%22%7d
Meeting ID: 270 005 574 155
Passcode: WLzLtE
Question Submission Deadline September 17, 2024, 11:59pm Proposal Submission Deadline October 1, 2024, 11:59pm
Anticipated Vendor Selection Date October 22, 2024
264
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY III. Prerequisites
Proposals will only be considered from Companies that meet the following prerequisites:

III.A Years of experience
Have at least five (5) years’ of experience, within the past five (5) years under a legally registered business name, in providing services of a similar type and scope as described in the Scope of Services. Have not filed for bankruptcy under any business name over the past five (5) years.

III.B OpenGov Registration
Have created an account on OpenGov. Companies can register at:
https://procurement.opengov.com/portal/banning-ca
Once registered, Companies must download this solicitation in order to appear on the Bidder’s List as a “Prospective Bidder.” Companies that fail to specifically download this solicitation will not appear on the Bidders’ List and will be unable to participate or be considered for this RFP.

III.C Non-Mandatory Pre-Proposal Meeting
All prospective Companies are strongly encouraged to attend the non-mandatory pre-proposal meeting on Tuesday, September 10, 2024 at 11:00 am to be held at:

Teams Meeting https://teams.microsoft.com/l/meetupjoin/19%3ameeting_MjdiM2FjZTgtMzg5NS00ODZmLWFmYjktYmI3N2I2OWZkYjMy%40thread.v2 /0?context=%7b%22Tid%22%3a%2228cb6a6f-78fe-445d-acfdcf07066168f7%22%2c%22Oid%22%3a%228e16e855-140b-4487-b7c7-19b383cbe4be%22%7d Meeting ID: 270 005 574 155 Passcode: WLzLtE
III.D Licenses
If applicable, Company and/or its key personnel, shall hold an appropriate license for the Company’s discipline and the Services on the date the Proposal is submitted.

III.E Department of Industrial Relations Registration
If applicable, Company shall have registered with the Department of Industrial Relations and any other required organizations.
265
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY IV. Scope of Work
IV.A 1. BEU COS & Rate Design - Objective
BEU COS & Rate Design - Objective
BEU’s goal is to develop and adopt a series of electric rate designs that are based on cost-ofservice principles.

The intent of the cost-of-service analysis and rate design evaluation is to:

A. Perform a comprehensive review of BEU’s power system costs, allocations and categories;
B. Assess customer characteristics and classifications; C. Design, then evaluate the impact of various rate structures and their impacts on customers, and
D. Develop and produce a flexible non-proprietary working model that will be conveyed to the City of Banning and the public.

The working model will be able to accommodate adjustments to factors such as integration of renewable energy sources; rising operating, maintenance and capital needs; stranded investments; normal to extreme weather patterns; overall sales, and customer demands.

Each rate structure option will adequately balance BEU’s short and long-term financial sustainability. The proposed rate structure must meet the electric utility’s ongoing operating expenditures, bond covenants, capital improvement needs, debt recovery, and fund reserve requirements. It must also follow accepted industry standards, best practices and California Law.

The recommended rate design will align policy goals with pricing strategies to encourage customer behavior that benefits the utility system.

The findings of the analysis and the proposed rate designs should provide the basis for electric rates for a ten-year period, and should be configurable to accommodate evolving energy policy requirements. In developing and updating electric rates, Consultant will consider the following:
• Time of Use (“TOU”)
• Customer Self-Generation (Non-NEM)
• Metered Rate for Electric Vehicle (“EV”) — Residential and Public • Recovery Adjustments for new Renewable Energy and Purchase Power Agreements (“PPA”)
• Low-Income Assistance Programs
The following are some of the key factors Consultant will incorporate into its rate recommendations:
• Advanced Metering Infrastructure (“AMI”) program implementation and data 266
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY • Solar Energy
• Energy Storage
• Compliance with California Constitution Proposition 26 • Capital Improvement Plan
• Other issues as appropriate
BEU staff and Consultant will present the findings of the analysis and proposed rate design to City Council Committee(s) and Banning City Council for review and approval.

IV.B 2. Summary
The City of Banning is seeking to select a consultant to perform an electric Cost-of-Service Analysis (“COS”) and provide rate design services for the electric system at BEU. The goal of the COS and rate design is to review BEU’s operations, capital investment plan, debt recovery, reserve requirements and customer characteristics to develop a cost-of-service analysis, which will provide adequate funding while managing customer rate impacts.

Consultant will perform the COS to determine the cost of providing electric service based on usage patterns by customer class. Consultant shall collect and analyze the necessary BEU data, including—but not limited to—current electricity rates by customer class; surcharges; fees; detailed customer characteristics and billing information; operating and capital revenue requirements; electric supply sources and electric use characteristics.

In addition, the COS will consider the current contractual relationship with Southern California Edison for power delivery.

Consultant will provide/develop a financial model that will capture and provide the basis for analysis of all relevant data related to revenue requirements, costs, customer characteristics and any other applicable information. The model will be flexible with the ability to support rate recommendations based upon changing factors such as power supply resources, capital investment and retail sales. The model will not be proprietary to Consultant and will be conveyed to BEU along with the necessary training and documentation to allow for its continued use after the COS and rate design are completed.

BEU and Consultant will develop proposed rates for relevant City Council Committee and City Council consideration. Consultant shall assist BEU with the approval process for the proposed rates including preparing presentations and providing support/comments during such meetings.

Consultant will be integral to addressing community feedback. Consultant will also assist in any adjustments to the Rate Resolution as appropriate for the proposed rates.

IV.C Tasks and Enhancements
BEU has broken down the COS and rate design project into a list of nine (9) enumerated "Tasks." Consultant will be instrumental in devising and executing strategies to successfully complete or fulfill each Task, with tangible products in the form of technical memorandums (“TM”), 267
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY presentations, meetings (including agendas and minutes), community outreach, preparation materials, financial models (including staff training), and other deliverables. These efforts will culminate in a Final Report, with drafts available for BEU staff review and comment throughout the project duration, ultimately leading to potential Rate Resolution updates.

Consultant will undertake the following tasks:
▪ Task 1 – Review of previous rate adjustments and BEU Planning Documents and Key Issues Impacting BEU and Utility Rates.
▪ Task 2 – Revenue Requirements
▪ Task 3 – Cost-of-Service Analysis
▪ Task 4 – Research on Comparable Municipal Electric Utilities ▪ Task 5 – Rate Design
▪ Task 6 – Financial Planning Model
▪ Task 7 – Public Participation
▪ Task 8 – Policy/Resolution Review and Revisions and Testimony ▪ Task 9 – Final Report
At its discretion, BEU will additionally consider enhancements or other recommended services suggested by the Consultant but not otherwise captured by the enumerated Tasks.

Project Management
BEU will look to Consultant for project management responsibilities, including timeline and schedule management, identifying number of meetings for each Task and coordination of participation among subject matter experts within the utility and on the consulting team.

Consultant's project management duties will be carried out in close consultation with BEU staff.

Consultant will be responsible for submitting timely, detailed itemized invoices to BEU, so that BEU may evaluate the overall project progression and use of resources.

IV.D Task Details
Task 1 – Review of Previous Rate Adjustments and BEU Planning Documents and Key Issues Impacting Utility Rates
Within the first two weeks following the Notice to Proceed ("NTP"), the selected consultant shall submit a list of requested reports, documents, schedules and other data. Consultant shall review the principles and methodology in the prior study and recommend any changes to the approach based on current legal requirements, prevailing industry rate-setting practices, BEU's rate setting objectives, and changes in BEU customer usage patterns and demand profiles. Consultant will also consider active work on the ESMP.

In addition to existing planning documents and studies, Consultant should study key issues that impact BEU's fiscal health and data availability, including, but not limited to:
268
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY ▪ City and customer base demographics
▪ Community rate values such as rate equity and affordability ▪ Advanced Metering Infrastructure (“AMI”) available data ▪ Public benefit programs
▪ Compliance with California Constitution Proposition 26 Taking these and other factors into account, Consultant will advise BEU of the impact on the current COS, and will provide strategic guidance on how to proceed in the face of uncertainty.

Deliverables: White paper on findings and presentation to BEU staff.

Task 2 – Revenue Requirements
Consultant will develop cash flow projections of revenues and revenue requirements for the electric utility, incorporating BEU's budget and other financial documents, including but not limited to the capital budget. Consultant will evaluate assignment of all the revenue sources to operating and capital expenses, working with BEU staff to select a test year to be used for all financial, operating and customer data requirements and calculations. In establishing cash flow projections, as well as allocating costs in accordance with Task 3 below, Consultant will review BEU-specific data provided through billing records, AMI data, and other BEU sources.

Deliverables: TM on revenue requirements and preliminary findings to be expounded upon and incorporated into the final report (see Task 9).

Task 3 – Cost-of-Service Analysis
Consultant will perform a cost-of-service analysis, examining BEU-specific data, including data on current customer classes and evaluating time of use rates and the energy service charge.

Consultant will explore potential alternative billing methodologies for feasibility and consistency with legal requirements and accepted industry methodologies.

The COS methodology employed should develop an equitable allocation of costs to the various classes of service, comprising the following sub-tasks or industry best practices as advised by the Consultant:

A. Determine the total revenue required to adequately cover projected operations and maintenance (“O&M”) costs, debt service, debt recovery, capital outlays and capital reserves. Revenues and expenses may be based on historical records and expected growth rates, but projections should also consider variations in power supply resources and electric usage patterns.

B. Identify reserve requirements for O&M and capital programs and recommend appropriate target reserve levels.
269
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY C. Functionalize expenses by major and sub functions relating to the activities performed in the operation of the electric utility system.

D. Functionalize expenses to cost components: energy costs, and other direct costs.

E. Classify capital investment by categories: transmission, distribution, energy storage, power resource, automation and facilities and services.

F. Classify O&M costs, including administrative, engineering, power supply, power distribution, debt service, and reserve fund requirements.

G. Allocate costs to each customer class.

H. Derive marginal unit costs for designing class of service rates, taking into account peak demand for customer classes.

I. Identify revenues to be generated from fixed and variable charges.

Deliverables: TM and staff presentation.

Task 4 – Research on Comparable Municipal Electric Utilities Consultant will gather detailed information on electric rates and rate structures of comparable, municipally- owned electric utilities. Areas of focus should include policy-level decisions related to previously-identified factors, as well as a comparison of the average monthly bill for various customer classes.

Research topics should cover a range of issues that allows BEU to make accurate comparisons between the sample of utilities, such as fixed charges versus volumetric consumption charges, customer classes, TOU rates, NEM, regulatory surcharges, and cost recovery for anticipated increased needs for power supply purchases. Consultant should review the specific research topics with BEU staff to ensure all priority issues are included.

Deliverables: TM on findings and staff presentation.

Task 5 – Rate Design
In collaboration with BEU staff, consultant will develop schedules of electric rates intended to recover the proportionate cost-of-service allocated to each customer class consistent with legal requirements and accepted industry methodologies. The consultant will explore innovative rate design strategies that align with evolving industry best practices to align pricing with customer behavior that benefits the utility system. This includes considering time-of-use pricing, demandside management programs, and other innovative approaches to enhance customer choice and promote energy efficiency. These strategies will be developed in coordination with BEU's broader goals. The consultant will provide a list of viable alternative designs along with costs and benefits of each rate design, including BEU's current rate design. The study will involve the development of multiple rate models and the exploration of different scenarios. All scenarios must ensure revenue requirements are met and that the utility is aware of short-term and long270 City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY term risks to each rate design alternative along with the probability for each risk component to be realized. This allows BEU to assess the impacts of various rate designs and pricing structures on different customer classes, revenue stability, and the overall financial sustainability of the utility. The consultant will also develop scenarios to consider the phasing (e.g. over a five year period) of implementation of rate designs based on the availability of data and customer impacts. The consultant will also provide how rate designs will be compatible with CIS and BEU's business processes or need change management processes implemented.

Some known rate design components may include:
▪ Solar Customer Rates
▪ Time of Use (“TOU”) Rates
▪ Electric Vehicle (“EV”) Rates
▪ Recovery for Renewable Energy, such as Purchase Power Agreement (“PPA”) Rates, both Fixed and Variable
▪ Low-Income Assistance Programs
Deliverables: TM and staff presentation.

Task 6 – Financial Planning Model
As part of this project, Consultant will develop new financial planning models that are fully documented and relatively simple for BEU staff to administer. These models should require minimal, if any annual licensing fees and/or setup/updates from the consultant. Consultant's proposal shall document any proprietary issues or requirements concerning the models to be provided.

The financial planning models should address the following requirements, including but not limited to:
▪ Microsoft Excel-based (or alternative system must be explicitly proposed and approved by Staff)
▪ Financial planning horizon of 30 or more years with monthly resolution/data inputs for the current Fiscal Year and the preceding fiscal year. ▪ Historical data for 5 years
▪ Automatically produced summary reports and visualizations with toggles for scenarios including but not limited to:
• Long-term cash position
• Demand forecast projections by customer type
• Sales forecast by customer type
• Consider capital financing plan and alternative (pay-go, borrowing, or grants) 271
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY • Average bill by customers
• Cash reserves compared to targets
o Sub-fund reserve levels for management review
▪ Only requires the user to enter data in a single input worksheet to make changes and updates
▪ Allows for growth factors and for one-time changes in any year ▪ Considers elasticity of demand
▪ Allows for mid-year rate adjustments
▪ Flexible enough to allow for changes/additions to rate and surcharges. • May include several versions to accommodate a phased in structure if that is what is decided
The model submitted for the final product should provide the basis for electric rates for a tenyear period and should be configurable to accommodate evolving energy policy requirements.

Deliverables: Draft financial model for review, final model, documentation for model use and updating procedures, and staff training assuming three, two-hour training sessions.

Task 7 – Public Participation
In close coordination with BEU staff, Consultant will develop and implement a public participation plan to increase customer awareness and understanding of rate development. The plan will present successful and innovative communication strategies employed by similarlysituated electric utilities. Consultant will prepare for, provide material for, attend and facilitate up to five (5) public meetings, in addition to which Consultant will also prepare a variety of materials for website, social media and other communication tools. Extra consideration should be given to engaging hard-to-reach communities, such as disadvantaged and low-income communities. Consultant will work closely with the City of Banning’s Public Information Officer.

Deliverables: Meeting planning documents and materials (such as agendas and facilitation plan).

All written collateral, social media schedule, and effective graphics. BEU expects Consultant to provide planning and meeting documents in advance for staff review at a minimum two weeks prior to any public event; however, Council schedule and posting requirements may accelerate the timelines needed.

Task 8 – Policy/Resolution Review and Revisions and Testimony Consultant will work with BEU staff, City of Banning’s City Attorney's Office and other City partners as needed to ensure that all language in the proposed resolution is consistent with the new rate design, and with California Law. If a recommendation results in resolution changes 272
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY being adopted in future years, all future year revisions will be written into the resolution submissions.

Consultant will provide ongoing support as necessary to explain and defend BEU’s rates and charges, including before City Council. Such support may also involve the preparation of schedules or other documents that detail the calculations and assumptions made in arriving at the rates and charges under examination.

Deliverables: Microsoft Word version with redlined proposed changes for adoption, TM detailing significant proposed changes and restructures and rationale and analysis and staff presentation.

Task 9 – Final Report
The consultant shall prepare a final report which summarizes the work conducted in Tasks 1-8.

The report will be used to support the adoption of rates. This includes the Consultant writing the related agenda report to be submitted to the City Council for rate adoptions. The final report will serve as the administrative record for the rates and charges.

Deliverables: Final report document in draft form, with three weeks for staff review. Final document and associated Microsoft Word and Excel Files and any other supporting schedules.

Enhancements or Other Related Services:

Consultant may include enhancements or recommendations for consideration to the project scope that the Consultant deems appropriate. Consultant will include descriptions and examples of the services, pricing for the services, and deliverables. Proposed enhancements and recommendations to the project scope may be considered by the City and included in the Scope of Work. The Consultant shall proceed with proposed enhancements only at the express written consent of BEU.
273
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY V. Vendor Questionnaire
Proposals should be prepared in such a way as to provide a straightforward, concise delineation of capabilities to satisfy the requirements of this RFP. Responses should emphasize the Company’s demonstrated capability to perform work of this type. Emphasis should be concentrated on completeness and clarity of content. Proposals shall adhere to the following format for organization and content. Proposals must be typed and arranged/divided in the following sequence to facilitate evaluation.

V.A Cover Letter*
The cover letter shall include a brief general statement of intent to perform the services and confirm that all elements of the RFP have been reviewed and understood. The letter shall include a brief summary of Company’s qualifications and Company’s willingness to enter into a contract under the terms and conditions prescribed by this RFP and in the Sample Agreement. The letter must identify a single person for contact during the RFP review process. *Response required
V.B Proposal*
A. Statement of Understanding and Approach
o This section must demonstrate an understanding of the Services. It should describe the general approach, organization and staffing required for the Services requested. If necessary, preliminary investigations, due diligence, and research shall be discussed in this section.
o This section should include the following:
▪ An implementation plan that describes in detail (i) the methods, including controls by which your firm or entity manages projects of the type sought by this RFP; (ii) methodology for soliciting and documenting views of internal and external stakeholders; (iii) and any other project management or implementation strategies or techniques that the respondent intends to employ in carrying out the work.
▪ Detailed description of efforts your firm or entity will undertake to achieve client satisfaction and to satisfy the requirements of the "Scope of Work" section. ▪ Detailed project schedule, identifying all tasks and deliverables to be performed, durations for each task, and overall time of completion, including a complete transition plan. Include your plan to deal with fluctuation in service needs and any associated price adjustments.
274
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY ▪ Detailed description of specific tasks you will require from City staff. Explain what the respective roles of City staff and your staff would be to complete the tasks specified in the Scope of Work.
▪ Proposers are encouraged to provide additional innovative and/or creative approaches for providing the service that will maximize efficient, cost-effective operations or increased performance capabilities. In addition, the City will consider proposals that offer alternative service delivery means and methods for the services desired.
▪ Proposers are also requested to identify any City owned facilities or property which Proposer would propose to use or lease, purchase, or rent from the City in connection with the services to be performed, including information about the terms of any proposed lease, purchase or use of such equipment and facilities, and how this proposed structure affects the overall cost proposal to the City, if applicable.

B. Company Information
o This section shall include contact person information, address and telephone number of the company main office and branch offices. Each Company shall identify itself as to the type of organizational entity (corporation, sole proprietorship, partnership, joint venture, etc.). Any supplemental information that Company believes may be pertinent to the selection process may be provided.
o The Proposal shall identify any litigation, mediation, or arbitration, regarding the performance of any services similar to the Services, in which the Company has been involved in the past five (5) years. If the Services require a license or certification, the Proposal shall include any claims or disciplinary action taken against Company or any of Company’s key personnel within the past five years.

C. Company Personnel
o This section shall contain names, contact numbers and description of experience, including licenses and/or certifications, of all key personnel who would be assigned to perform the Services. Members of the Company’s professional team (managers, contact person, etc.) should be identified by name, title, phone number, and description of the portion of work they will be assigned to perform under this Agreement. Also include major subcontractors (if any) and their degree of involvement in this program. If the Company is including any subcontractors, the Company shall identify how long the Company has worked with the subcontractor. o An affirmative statement should be included that the proposer and all assigned key professional staff are properly licensed to practice in California.

D. Disclosure
o Please disclose any and all past or current business and personal relationships with any current Banning elected official, appointed official, City employee, or family 275
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY member of any current Banning elected official, appointed official, or City employee.

Any past or current business relationship may not disqualify the firm from consideration.

E. Experience and References
o The Proposal must demonstrate that the Company, or its key personnel, meets the minimum experience requirement in #Prerequisites with a legally registered business name, that provides services of a similar type and scope as described in the Scope of Services. A Company shall not have filed for bankruptcy under any business name over the past five (5) years.
o Company shall provide at least 3 references, within the past 5 years, of clients for whom services have been performed that are comparable in quality and scope to that specified in this RFP. The references shall include client names, addresses, telephone numbers and e-mail addresses of the clients for whom prior work was performed and include an explanation of the services provided along with project start and end dates.
*Response required
V.C Price Proposal*
All proposals submitted shall have a stated dollar bid amount for providing the services outlined in the Scope of Services. The total shall be an all-inclusive maximum price and to contain all direct and indirect costs including all out-of-pocket expenses with a full and complete breakdown of all said costs, and proposed fees including but not limited to hourly rates, reimbursable expenses and/or rates, mileage and/or travel cost, miscellaneous fees, etc., for the first year's audit engagement.

In addition, a statement must be included in this section that if the proposer is charging travel costs, the proposer's charges invoiced to the City for travel, lodging and subsistence shall not exceed the current IRS rates.
*Response required
V.D Value Added Services
Please describe any value-added services your company offers that may be of use to the City V.E Evidence of Insurance*
In addition, the Company shall provide evidence of possession of insurance in the coverage and amounts listed in the Sample Agreement.

City requires that licensees, lessees, and vendors have an approved Certificate of Insurance (not a declaration or policy) or proof of legal self-insurance on file with the City for the issuance of a permit or contract. Within ten (10) consecutive calendar days of award of contract, successful Proposer must furnish the City with the Certificates of Insurance proving coverage as specified in contract sample.
276
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY *Response required
V.F Vendor Forms
Please download the below documents, complete, and upload. • New_Vendor_Packet.pdf
V.G Type of Business*
☐ C Corporation
☐ S Corporation
☐ Limited Liability C Corporation
☐ Partnership
☐ Limited Liability Partnership
☐ Sole Proprietor/Individual
☐ Other
*Response required
V.H Type your Legal Company Name Here*
State your Company's Name Here. This will be verified against the California Secretary of State's Website.
*Response required
V.I EX PARTE COMMUNICATIONS CERTIFICATION*
I certify that Bidder and Bidder’s representatives have not had any communication with a City Councilmember concerning this IFB at any time after the date and time that this IFB was publicly advertised.
☐ Yes
☐ No
*Response required
V.J EX PARTE COMMUNICATIONS CERTIFICATION CONTINUED*
If stated "Yes" above, please explain the circumstances in the following space, or state "None." *Response required
V.K DEBARRED, SUSPENDED, DISQUALIFIED QUESTIONNAIRE*
Has the Company, any officer of the Company, or any employee of the Company who has proprietary interest in the Company, ever been debarred, suspended, disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of a violation of law or safety regulation? ☐ Yes
☐ No
277
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY *Response required
V.L DEBARRED SUSPENDED DISQUALIFIED QUESTIONNAIRE CONTINUED* If stated "Yes" above, please explain the circumstances in the following space, or state "None." *Response required
V.M DISCLOSURE OF GOVERNMENT POSITIONS*
Each Bidder shall disclose below whether any owner or employee of the firm currently hold positions as elected or appointed officials, directors, officers, or employees of a governmental entity or held such positions in the past twelve months. List below or state "None." *Response required
V.N CERTIFICATION COMPLIANCE*
Please download the below documents, complete, and upload. • Certification-Compliance_wi...
*Response required
V.O CARB Compliance Form*
Please download the below documents, complete, and upload. • CARB_Compliance_(NEW_01-01-...
*Response required
278
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY VI. Submission Instructions And Inquiries
VI.A Inquiries
If prior to the date fixed for submission of Proposals, a prospective Company discovers any ambiguity, conflict, discrepancy, omission or other errors in this RFP or any of its appendices, exhibits or attachments, the Company shall immediately notify the City of such error in writing and request modification or clarification of the document. Modifications shall be made by written Addenda to the RFP.

If a Company fails to notify the City, prior to the date fixed for submissions of Proposals, of an error in the RFP known to the Company, or an error that reasonably should have been known to the Company, the Company shall submit its Proposal at its own risk, and if the Company is awarded a Contract, it shall not be entitled to additional compensation or time by reason of the error or its later correction.

All communications regarding technical, scope, and/or project related questions and requests for clarifications, changes, exceptions, and deviations to the terms and conditions set forth in this RFP shall be submitted via “Q&A” through the City’s Electronic Bidding System, OpenGov, before the deadline and according to these specifications herein. Any and all other bidding communications shall only be with Barbara Mason, Purchasing Manager, at (951) 922-3121.

The Final day for receipt of questions from the Proposer shall be on or before the due date indicated in the schedule of events section. To ensure fairness and avoid misunderstandings, all communications must be in written format and submitted only in the format set forth above.

Any verbal communications will not be considered or responded to. All questions received by the due date will be logged and reviewed and if required, a response will be provided via an addendum to the RFP that will be posted on the City’s website. Any communications, whether written or verbal, with any City Councilmember, City staff, or RFP evaluation panel member other than the individual indicated above, prior to award of a contract by City Council, is strictly prohibited and the Proposer shall be disqualified from consideration.

VI.B Completion Of Proposal
Proposals shall be completed in all respects as required by this RFP. A proposal may be rejected if conditional or incomplete, or if it contains any alterations or other irregularities of any kind, and will be rejected if any such defect or irregularity can materially affect the quality of the proposal. Proposals which contain false or misleading statements may be rejected. If, in the opinion of the City’s Selection Committee, such information was intended to mislead the City in its evaluation of the proposal, and the attribute, condition, or capability is a requirement of this RFP, the proposal will be rejected. Statements made by a Company shall also be without ambiguity, and with adequate elaboration, where necessary, for clear understanding.

Unauthorized conditions, exemptions, limitations, qualifications, or provisions attached to a Proposal will render it non-responsive and will cause its rejection. 279
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY The Company, in responding to this RFP, must submit Proposals in the format identified in this RFP. The Proposal must address all requirements of the RFP even if a “no response” is appropriate.

Costs for developing Proposals are entirely the responsibility of the Company and shall not be chargeable to the City. The City shall not be liable for any costs incurred in response to this RFP, including but not limited to, costs for any interviews, presentations, or other follow-up information necessary as part of the selection process. All costs shall be borne by the Company responding to this RFP. The Company responding to this RFP shall hold the City harmless from any liability, claim, and expense whatsoever incurred by or on behalf of the Company.

VI.C Delivery / Submission Of Proposals
The Final day for submission of proposals shall be on or before the due date indicated in the schedule of events section.

Companies shall register on the City’s Electronic Bidding System, https://www.banningca.gov/bids. Once registered, Companies must download the RFP while logged in under their own name and identification number to appear on the Current Prospective Bidders List as a “Prospective Bidder.” Companies that fail to download the RFP will not appear on the Current Prospective Bidders List and their proposals will be considered non-responsive. If a Company is unable to register or download the RFP from the bidding website, a representative may contact ProcureNow.

All proposal documents and supplementary documents must be uploaded using the City’s bidding website prior to event date and time as instructed in this solicitation. Once file(s) have been uploaded and the Submission Status shows as “Submitted” the submission is complete. At that point respondents will receive an email confirmation from the bidding website.

The City reserves the right to reject any and all proposals and to waive information and minor irregularities in any proposal received.

Acceptance of Terms and Conditions - Submission of a proposal pursuant to this RFP shall constitute acknowledgment and acceptance of all terms and conditions hereinafter set forth in this RFP.

The time and date are fixed, and extensions will not be granted unless specifically stated by the City in an addendum to this RFP. Proposals not received before the bid event time will not be accepted.

VI.D Alternative Proposals
Only one proposal is to be submitted by each Company for this RFP. Multiple simultaneous proposals will result in rejection of all Proposals submitted by Company. A Company may, prior to the proposal due date and time, withdraw a proposal and submit a new proposal, so long as the new proposal is submitted before the proposal due date and time. 280
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY VI.E Examination Of RFP And Sites Of Work
The Company shall carefully examine the RFP and all sites, if applicable, of the work contemplated. The submission of a Proposal shall be conclusive evidence that the Company has investigated and is satisfied as to the conditions to be encountered, as to the character, quality, and quantities of work to be performed and materials to be furnished, the difficulties to be encountered, and to the requirements of the Proposal, RFP, and other Contract Documents.

By submitting a Proposal, the Company hereby certifies that it has: examined the local conditions, read each and every clause of this RFP, included all costs necessary to complete the specified work in its proposed prices, and agrees that if it is awarded the Contract it will make no claim against the City based upon ignorance of local conditions or misunderstanding of any provision of the Contract. Should the conditions turn out otherwise than anticipated by it, the Company agrees to assume all risks incident thereto.

VI.F Addenda
Unless otherwise specified, any addenda issued during the time of bidding must be acknowledged electronically via the City’s Bidding Website, which will be made part of the proposal. Addenda notifications will be provided to those listed on the Electronic Prospective Bidder’s List via email.

VI.G Withdraw Of Proposals
All proposals shall be firm offers and may not be withdrawn for a period of one hundred twenty (120) days following the deadline date for submission of proposals noted herein. Submitted Proposals may be withdrawn at any time prior to the submission deadline.

VI.H Pre-Proposal Meeting
There will be a mandatory pre-proposal meeting on Tuesday, September 10, 2024 at 11:00 am.

The meeting will be located at Teams Meeting https://teams.microsoft.com/l/meetupjoin/19%3ameeting_MjdiM2FjZTgtMzg5NS00ODZmLWFmYjktYmI3N2I2OWZkYjMy%40thread.v2 /0?context=%7b%22Tid%22%3a%2228cb6a6f-78fe-445d-acfdcf07066168f7%22%2c%22Oid%22%3a%228e16e855-140b-4487-b7c7-19b383cbe4be%22%7d Meeting ID: 270 005 574 155 Passcode: WLzLtE. Attendance is required in order to submit a proposal.
281
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY VII. Evaluation Criteria
The City reserves the right to amend, withdraw, and cancel this RFP. The City also reserves the right to reject all responses to this RFP at any time prior to agreement execution. Furthermore, the City reserves the right to request additional information about any and all Proposals, that in City’s opinion, is necessary to assure that the Company’s competence, number of qualified employees, business organization, experience, and financial resources are adequate to perform the Services.

All Proposals shall be reviewed to verify that the Company has met the minimum requirements as stated in this RFP. Proposals that have not followed the rules, do not meet minimum content and quality standards, and/or do not provide references will be rejected as non-responsive.

Responsive proposals will be evaluated on the basis of the criteria below. If needed, interviews will be scheduled during or after the week indicated in the “Schedule of Events” section.If needed, interviews will be conducted by the same members on the proposal evaluation panel.

Dates, times, and a location will be coordinated at that time if interviews are deemed necessary after the evaluation of responsive proposals. If interviews are deemed necessary, candidates who have submitted the highest scoring proposals within a competitive range as determined by the City will be invited to participate in the interview process.

The selected Company shall then enter into exclusive negotiations with the City to formalize the Scope of Service and Compensation. Recommendation for award is contingent upon the successful negotiation of final contract terms. Negotiations shall be confidential and not subject to disclosure to competing Proposers unless an agreement is reached. If the City is unable to obtain a fair and reasonable price or cannot reach agreement regarding the terms for the Scope of Services, then the City will end negotiations with that Company and begin negotiations with the next Company which best meets the needs of the City, and so on until a City and the Company reach agreement.

The City intends to select the Company that offers the best value to the City based on the criteria outlined above.

No. Evaluation Criteria Scoring Method Weight (Points)

1. Qualifications Points Based 25
(25% of Total)

2. Pricing Points Based 15
(15% of Total)

3. Experience (Projects of similar size and scope) Points Based 20 (20% of Total)

4. Professional References Points Based 10
(10% of Total)
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REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY

5. Approach and Methodology Points Based 25
(25% of Total)

6. Value Added Services Points Based 5
(5% of Total)
283
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY VIII. Resulting Contract
VIII.A CONTRACT TERM
The term of the Agreement is until the project is completed per the RFP requirements.

VIII.B CONTRACT DOCUMENTS
In submitting a Proposal, the Company agrees to enter into an Agreement with the City without exceptions to the City’s standard agreement. The City’s standard agreement is non-negotiable, and a copy of the standard agreement is attached herein. Any change to the standard agreement will deem the Proposal non-responsive. In the event of a conflict exists between documents the following order of precedence shall apply:
• Agreement
• City of Banning’s Request For Proposals
• Company’s Response to the Request For Proposals
VIII.C EXECUTION OF AGREEMENT
After contract award, the following shall be signed and returned to the City within fourteen (14) calendar days from the date the City mails, or by other means delivers said documents to the Company:
• The Agreement in the form included herein, properly executed by the Company. • Certificates of Insurance and Additional Insured Endorsement evidencing coverage as specified in the sample agreement.
• Confirmation of current business tax certificate.
• Bonds, if required.

In any event that day fourteen (14) of calendar days falls on Saturday, Sunday, a legal holiday for the State of California, or on days when the City is closed, the Contract Documents shall be delivered by the following working day.

No Agreement shall be binding upon the City until all documents are fully executed by the Company and the City.

VIII.D FAILURE TO EXECUTE THE AGREEMENT
Failure to execute the Agreement and furnish the required insurance and business tax certificate, within the required time period shall be just cause for the rescission of the award. If bonds are also required, failure to furnish sufficient bonds shall cause rescission of the award. If 284
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY the successful Company refuses or fails to execute the Agreement, the City may award the Agreement to the next qualified Company.
285
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY IX. Terms And Conditions
IX.A Contract Terms And Conditions
The successful company will be required to execute the City's standard agreement (“Agreement”). A sample is attached herein. The successful company must meet all insurance requirements in the Agreement. All terms and conditions of the Agreement are non-negotiable.

Companies must possess valid City of Banning Business License throughout the term on the contract. Failure to execute the Agreement and furnish the required insurance within the required time period shall be just cause for the rescission of the award. If any of the successful Companies refuse or fail to execute the Agreement, the City may award the Agreement to the next most qualified Company.

IX.B Public Records
All Proposals submitted in response to this RFP become the property of the City and pursuant to the Public Records Act (Gov. Code, § 6250 et seq.) are public records, and as such may be subject to public review at least 10 days before selection.

The Company must notify the City in advance of any proprietary or confidential materials contained in the Proposal and provide justification for not making such material public. The City shall have sole discretion to disclose or not disclose such material subject to any protective order that the Company may obtain. Note that under California law, price proposal to a public agency is not a trade secret.

Submission of a proposal shall indicate that, if Proposer requests that the City withhold from disclosure information identified as confidential, and the City complies with the Proposer’s request, Proposer shall assume all responsibility for any challenges resulting from the nondisclosure, indemnify and hold harmless the City from and against all damages (including but not limited to attorney’s fees that may be awarded to the party requesting the Proposer information), and pay any and all costs and expenses related to the withholding of Proposer information. Proposer shall not make a claim, sue, or maintain any legal action against the City or its directors, officers, employees, or agents concerning the disclosure, or withholding from disclosure, of any Proposer information. If Proposer does not request that the City withhold from disclosure information identified as confidential, the City shall have no obligation to withhold the information from disclosure and may release the information sought without any liability to the City.

The City reserves the right to make use of any information or idea contained in the Proposal. All materials, ideas and formats submitted in response to this RFP will become the property of the City upon receipt.
286
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY IX.C Conflict Of Interest
The Proposer warrants and represents that it presently has no interest and agrees that it will not acquire any interest which would present a conflict of interest under California Government Code sections 1090 et seq., or sections 87100 et seq., during the performance of services under any Agreement awarded. The Proposer further covenants that it will not knowingly employ any person having such an interest in the performance of any Agreement awarded. Violation of this provision may result in any Agreement awarded being deemed void and unenforceable.

IX.D Rejection Of Proposals
The City may reject any/or all Proposals and may waive any immaterial deviation in a Proposal.

The City’s waiver of an immaterial defect shall in no way modify this RFP or excuse the Company from full compliance with this RFP and/or the Contract Documents if awarded the Contract.

Proposals that include terms and conditions other than City’s terms and conditions may be rejected as being non-responsive. The City may make investigations as deemed necessary to determine the ability of the Company to perform the work, and the Company shall furnish to the City all such information and data for this purpose as requested by the City. The City reserves the right to reject any proposal if the evidence submitted by, or investigation of, such Company fails to satisfy the City that such Company is properly qualified to carry out the obligations of the Agreement and to complete the work described herein.

IX.E Protest Procedures
Failure to comply with the rules set forth herein may result in rejection of the protest. Protests based upon restrictive specifications or alleged improprieties in the proposal procedure which are apparent or reasonably should have been discovered prior to receipt of proposals shall be filed in writing with the RFP Facilitator at least 10 calendar days prior to the deadline for receipt of proposals. The protest must clearly specify in writing the grounds and evidence on which the protest is based.

Protests based upon alleged improprieties that are not apparent or which could not reasonably have been discovered prior to submission date of the proposals, such as disputes over the staff recommendation for contract award, shall be submitted in writing to the RFP Facilitator, within forty-eight hours from receipt of the notice from the City advising of staff’s recommendation for award of contract. The protest must clearly specify in writing the grounds and evidence on which the protest is based. The RFP Facilitator will respond to the protest in writing at least three days prior to the meeting at which staff’s recommendation to the City Council will be considered.

Should Proposer decide to appeal the response of the RFP Facilitator, and pursue its protest at the Council meeting, it will notify the RFP Facilitator of its intention at least two days prior to the scheduled meeting.
287
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY IX.F Cancellation
The City retains the right to cancel this RFP at any time, should it be deemed to be in the best interest of the City. No obligation either expressed or implied exists on the part of the City to make an award based on the submission of any proposals. 288
City of Banning

REQUEST FOR PROPOSAL
RFP-24-073 COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY IN WITNESS WHEREOF the Parties hereto have executed this Agreement the day and year first hereinabove written.

CITY OF BANNING CONSULTANT
Douglas Schulze, Date
City Manager
NAME: Date
TITLE:

NAME: Date
TITLE:

ATTEST:

Tax ID No.

Caroline Patton Date
Deputy City Clerk
Address:

APPROVED AS TO FORM:

Richards, Watson & Gershon
City Council Approval: _____________
Kevin G. Ennis, Esq., Date
City Attorney

NOTE: PROOF OF AUTHORITY TO BIND CONTRACTING PARTY REQUIRED. APPROPRIATE ATTESTATIONS SHALL BE

INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY. 289
OCTOBER 1, 2024
www.newgenstrategies.net

COST OF SERVICE

ANALYSIS AND RATE

DESIGN STUDY

PROPOSAL
REQUEST FOR PROPOSAL 24-073
Prepared for:

Ms. Barbara Mason - Purchasing Manager
Purchasing Division
99 E. Ramsey Street
Banning, CA 92220
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
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Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Table of Contents

COVER LETTER
PROPOSAL ....................................................................................................................................... 1 Statement of Understanding and Approach.............................................................................................1 Study Vision...............................................................................................................................................2 Multi-Year Pro Forma Financial Model.................................................................................................3 Cost of Service Analysis Model .............................................................................................................3 Rate Design Model................................................................................................................................4 Scope of Work...........................................................................................................................................5 Phase I – Kickoff/Revenue Requirement/Cost of Service Analysis.......................................................6 Phase II – Municipal Utility Rate Trends Review/Rate Design............................................................13 Phase III – Pro Forma Financial Model................................................................................................19 Phase IV – Results Presentation..........................................................................................................20 Phase V – Enhancements to the Study ...............................................................................................22 Proposed Study Schedule .......................................................................................................................23 Quality Assurance Efforts........................................................................................................................24 Company Information.............................................................................................................................26 Litigation Statement............................................................................................................................28 Company Personnel................................................................................................................................28 Disclosure................................................................................................................................................31 Experience and References.....................................................................................................................31 California Experience ..........................................................................................................................31 List of Companies for Whom NewGen has Provided Similar Services................................................32 Project Descriptions............................................................................................................................33 ADDITIONAL INFORMATION......................................................................................................... 35 APPENDIX A – RESUMES
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
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PROPOSAL
Statement of Understanding and Approach
Banning Electric Utility (BEU) is seeking the development of a series of financial and economic models to develop a defensible basis for its retail rate offerings. The models will need to be designed to address changes in power supply costs and sources, including integrating renewable energy sources, as well as increasing operations and maintenance (O&M) costs, capital needs, stranded investments, sales and revenue projections, and customer needs. The rates developed for BEU’s Cost of Service Analysis and Rate Design Study (Study) must adequately balance its short- and long-term financial sustainability.

Recommended rates and rate structures must meet BEU’s ongoing operating expenditures, bond covenants, capital improvement needs, debt recovery, and fund reserve requirements, which may need to be reviewed and established for this Study. Additionally, the Study and its results must follow accepted industry standards, best practices, and California law, including Proposition 26. Further, BEU is seeking to understand the rate design and electric pricing trends occurring across the country, including how municipal utilities are approaching strategic rate design to recover costs, manage their load, and offer targeted programs to end-use customers. Specific retail rate elements to address in this Study include:
 Time of Use (TOU) rates
 Customer Self-Generation (Non-net energy metering [NEM], or NEM 2.0)  Metered Rates for Electric Vehicle (EV) — Residential and Public  Recovery Adjustments for new Renewable Energy and Purchase Power Agreements (PPA)  Low-Income Assistance Program cost recovery
Models developed for this Study need to have the flexibility to support rate recommendations based on changing factors such as power supply resources, capital investment, and retail sales. Further, these models will become the property of BEU and the City of Banning (City) upon completion and will be provided along with the necessary training and documentation to allow for continued use after the Study is completed. NewGen Strategies and Solutions, LLC (NewGen) will summarize the recommended rate changes from the Study for BEU, the City, City Council Committee, and City Council consideration, as well as present the results to the community to solicit feedback.

NewGen is well equipped to provide the service and deliverables that BEU is requesting for this assignment. We have developed pro forma financial models for various clients and integrated the results with tailored cost of service analysis (COSA) models while working diligently with management and staff to develop comprehensive rate plans. We are well versed in developing electric rate recommendations for California municipalities, as well as utilities across the country, and in the various strategies regarding compliance with Proposition 26, as well as other mandates for power supply. We are active in the California regulatory arena as we are currently representing several of the Community Choice Aggregators (CCAs) as they challenge the big three investor-owned utilities (IOUs) in the state.

Our vision for the Study is to develop a collaborative response with BEU management and staff to create a multiyear pro forma financial model, develop a comprehensive COSA model to incorporate future test years, and develop a rate design model that quantifies the impacts of rate changes on each of BEU’s 294

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customer classes. This vision results in a series of deliverables, which will be developed in the following Implementation Plan:
 Create Strategic Rate Design document: a living document developed at the initial project meeting to establish the goals, objectives, and issues to be resolved during the Study.  Develop BEU’s multiyear pro forma financial model to incorporate data as appropriate into the COSA model to form the basis for the Test Year Revenue Requirement.  Create a comprehensive, flexible, user-friendly COSA model. Include the development of dashboards and scenario management to facilitate communication of model results.  Report on the Revenue Requirement analysis and associated allocated costs by customer class for review and comment.
 Conduct a rate trend analysis of how other municipal and other power entities are addressing electricity pricing, implementation challenges/strategies, and potential barriers/issues for customer adoption of rate designs.
 Create rate design recommendations based on feedback from rate trends analysis discussions as they apply to BEU’s existing and future rate classes.
 Develop a user-friendly rate design model to incorporate BEU’s billing database for analysis of all customers in all classes; this will include dashboards and a scenario development tool.  Develop a written report detailing findings and recommendations from the Study, as well as presentations to Council and/or Council Committee and Community Stakeholder groups, as identified and requested.

Study Vision
NewGen’s vision is to develop and integrate three primary planning models for BEU to optimize its rate setting processes, including a standalone pro forma financial model, a COSA model, and a rate design model. NewGen will be responsible for the development of all three models and will integrate the results of these models as appropriate. The following graphic illustrates our vision for the Study:
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Multi-Year Pro Forma Financial Model
The multi-year pro forma financial standalone model will be designed to incorporate historical and projected financial and sales data to produce reliable and timely information on the health of the utility.

Our vision for this Study is to develop a multiyear financial model for BEU, the results of which will be incorporated into the COSA model, and to facilitate updates by BEU staff for future use. We propose to work with BEU to review its model assumptions for energy sales forecasts, customer growth, operating and non-operating revenues and expenses, capital improvement program plans (and funding mechanisms), and debt service payments, as well as the resulting financial metrics (cash position) for the utility. These metrics include maintaining adequate and appropriate reserve levels and guidelines provided by BEU’s Fiscal Policy and Cash Reserve Policy or working the BEU to develop appropriate guidelines. These metrics may include days cash on hand (DCOH), debt service coverage ratios, and others. NewGen will work with BEU to evaluate these metrics as they apply to the projected cash needs of the electric utility going forward. The results from the pro forma financial model will be incorporated into the COSA model as the annual projected revenue requirement, load forecast, and revenue forecast over the projected five-year rate period, as well as the multi-year forecast period. The pro forma financial model will become the property of BEU upon completion of the Study, and NewGen will be available to advise BEU staff on future updates and model functionality, as appropriate.

Cost of Service Analysis Model
The COSA model develops a Test Year Revenue Requirement that is functionally unbundled, classified, and allocated to customer classes to determine cost-based rates. NewGen’s vision for the BEU COSA model is to develop a standalone analysis that is comprehensive, detailed, and defensible. This will include adding to the model capabilities to incorporate marginal costs and new proposed rate classes, as appropriate, based on the annual cash needs of the utility. We will design a series of dashboards for the COSA model and include the ability to save several scenario analyses for evaluation into the model.

Further, our vision includes a seamless interface between the COSA model and the pro forma financial 296

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model to transfer appropriate data and minimize opportunities for transcription errors. The COSA model review process will include analysis of the current cost allocation methodology to provide a defensible basis for the cost factors to be utilized for this Study, including those identified by California’s Proposition

26. The cost allocation methods will be evaluated in light of changes in the utility’s operations, usage characteristics, and other items, as appropriate and in coordination with the BEU Team. The results from the COSA model which will be incorporated into the rate design model will include the class revenue requirements, the percentage rate change (by class), and the unbundled and functionalized COS-based rates for each rate class.

Rate Design Model
Rate Trend Analysis
BEU seeks to understand trends in the evolving national approach to electric rates, pricing, and program design and implementation. NewGen’s vision for the rate trend analysis is to provide an overview of innovative pricing and program design methodologies across the country, including a focus on California utilities. Our vision includes descriptions of various pricing programs for both traditional electric service as well as those serving emerging technologies, such as EVs, TOU rates, and customer-sited generation and storage systems. We recognize that rate implementation challenges exist. Many rate offerings require system infrastructure upgrades, such as metering and billing systems, as well as expensive communications or meter data management systems. Utilities will also be reviewed for their low-income assistance programs and how those programs are funded as well as potential applications for BEU.

Further, utilities are often limited in their rate offerings because of political pressure and resistance to change. Each implementation challenge is unique for each utility, and solutions must be tailored for the demographic for which the rate is designed. The rate trend analysis will provide a matrix summary of implementation challenges by rate class and their relative advantages and disadvantages.

Customer Impact Rate Design Model
Our vision for BEU’s Customer Impact rate design model is to create a Microsoft Excel- (Excel) based interactive model for all customers served by BEU to evaluate the impacts from rate and rate structure changes as a result of the COSA process and rate recommendations developed for this Study. Our rate design model will be based on the rate design model that NewGen developed for BEU in a previous project but will be derived from BEU’s full customer billing system, excluding specific customer names and addresses. The advantage of our Customer Impact rate design model is that it provides the entire range of impacts to customers as a result of changes in rates and rate structures rather than focusing on representative customers. By developing a histogram of the rate impacts for each customer within a rate class, the City can determine a course of action with a complete understanding of those impacts, either as a percentage of current bills or a monthly dollar change. Additionally, by identifying those accounts with significant changes, BEU can proactively reach out to specific customers to determine if a utility-led program may be appropriate for their premise.
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The results of the Customer Impact rate design
model will include an evaluation of the
recommendations and their alternatives for various
rate designs. The revenue generated by each rate
design will be compared to the projected revenue
needs of the utility to ensure revenue adequacy for
the Test Year period. The resulting system revenues
and rate changes will be combined into an exported
spreadsheet for the purpose of integrating with the
pro forma financial model. NewGen will provide
instruction to BEU management and staff on the use
of the Customer Impact rate design model to
facilitate its use after completion of the Study.

Outreach and Public Engagement
A cornerstone of the purpose of public power is that the utility is connected to its customers and communities. All phases of the scope of work will be designed to showcase the advantages of BEU as a reliable and trusted community member. Our vision for Outreach and Public Engagement is to establish an open and transparent dialogue for BEU’s rate setting process. NewGen will work with BEU to define its stakeholder groups, which may include the public, City staff, the City Council Committee, and City Council, as well as other groups and interested parties. This engagement is designed to facilitate consensus on the strategic direction for the Study’s rate design recommendations. NewGen believes that starting the Outreach and Public Engagement process early in the development of the Study will benefit BEU by allowing it to communicate how rates are determined and the challenges BEU faces in providing reliable power to the community.

Scope of Work
NewGen proposes the following scope of work, which closely follows BEU’s Request for Proposal (RFP) as well as approaches and methodologies utilized for all of our COSA and rate design studies. Therefore, BEU can be assured that the proposed work plan has been tested and proven in numerous studies across the state and nation. It is understood that if selected, the Project Team will refine, customize, and finalize the work plan with BEU upon award of the project. Further, we will adhere to and incorporate best practices as well as the governance and guidance of any California regulations pertaining to such studies and final recommendations, including Proposition 26. We also note that we will not need to use, lease, purchase, or rent any City-owned facilities or property for this project; with the exception of in-person meetings and presentations, our work will be conducted from our office in Colorado.

This scope of work follows BEU’s RFP by developing a series of project phases:
 Phase I: This will include Task 1 (Kickoff), Task 2 (Revenue Requirement), and Task 3 (Cost of Service Analysis).
 Phase II: This will include Task 4 (Rate Trends Study), and Task 5 (Rate Design).  Phase III: This will consist of Task 5 (Financial Planning Model).  Phase IV: This will consist of Task 7 (Stakeholder Engagement/Public Participation), Task 8 (Policy/Resolution Review), and Task 9 (Draft and Final Report). 298

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 Phase V: This will consist of enhancements to the Study as requested by BEU.

Phase I – Kickoff/Revenue Requirement/Cost of Service Analysis Task 1 – Kickoff Meeting/Study Objectives
Within two weeks of notice to proceed, NewGen will provide a Data Request to BEU, which will include a list of requested utility-related data, reports, documents and schedules. Further, NewGen will schedule an on-site meeting with BEU to review data and establish objectives and milestones for the Study. The kickoff meeting will be attended by up to two members of the NewGen Project Team.

The purpose of the meeting will be to review the rate making process; establish communication protocols including biweekly status calls; and discuss BEU’s financial and rate strategies, objectives, and goals.

Additionally, we will discuss the Study timeframe and verify milestones for completion of the deliverables identified herein. The on-site meeting also includes discussions of the principles and methodologies developed in previous studies, as recommended changes will be based on legal requirements(Proposition 26, among others), industry rate setting practices, and BEU’s unique rate setting objectives and customer usage characteristics.

NewGen will request the most recent update to the City’s Electric System Master Plan (ESMP) and will incorporate the findings to date into the Study. During the kickoff meeting, NewGen will discuss key issues that impact BEU’s fiscal health and available data, including City and customer demographics, rate values like equity and affordability, availability of Advanced Metering Infrastructure (AMI) data, funding for Public Benefit Programs (as mandated by the state, as well as others that the City may have developed), and other legal requirements. Based on this discussion, NewGen will advise BEU of the impact of the current COSA and provide strategic guidance on how to proceed with various degrees of uncertainty. The elements of the discussion from the kickoff meeting as well as the data received will be memorialized into a Strategic Rate Design Document.

The Strategic Rate Design Document will state the purpose of the Study, issues to address, and specific rates to be developed and/or evaluated, and will develop project controls (including financial updates on budget) and the proposed schedule. This is intended to be a “living document” that is updated on a biweekly basis to include the discussions and decisions made during the ongoing status conference calls between the NewGen and BEU project teams.

This document will also serve as a status report to identify outstanding issues to be addressed by either the NewGen or the BEU project team and the strategy and schedule for their resolution. We will keep and distribute meeting minutes which will summarize our discussions and include “action items” for NewGen and BEU team members to maintain project momentum and ensure timely responses.

Ultimately, the Strategic Rate Design Document will also serve to inform the basis for the rate recommendations proposed by this Study.

Task 1 Deliverables
 Kickoff meeting attended by up to two members of the Project Team to review data received, discuss project milestones, and clarify Study objectives.
 Initial draft of Strategic Rate Design document.
 Updates to preliminary Data Request, as needed.
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Task 2 – Develop BEU Revenue Requirement
Task 2 will include development of BEU’s Test Year Revenue Requirement based on historical information and including appropriate known and measurable adjustments. The basis for the Test Year will be determined in consultation with BEU and will include actual expenses for the 12 months ending the most recent Fiscal Year (FY) (presumably FY 2024). The projected Test Year will include budgeted expenses for FY 2025 and projections for FY 2026 through FY 2030 (as appropriate and in discussions with BEU). The projected Test Year period will depend on the date of anticipated rate implementation and the period of time for which they will be designed. Such decisions will be determined in discussions with BEU during the kickoff meeting and will be included in the Strategic Rate Design document.

The Test Year will rely on the data gathered from the data requests, discussions with BEU staff and management, and the pro forma financial model (see Phase III). NewGen will review the Test Year Revenue Requirement with BEU to assess and quantify potential known and measurable adjustments that should be made to any accounts or utility operations. The Test Year Revenue Requirement will be the basis for the COSA and represents all costs that will be recovered through BEU’s retail rates for the Study period.

NewGen will develop cash flow projections of revenues and revenue requirements for the electric utility, including those for power supply, transmission, distribution, and customer related expenses. This will include development of the total revenue required to adequately cover projected operations and maintenance (O&M) costs, debt service, debt recovery, capital outlays, and capital reserves. NewGen will evaluate revenues and expenses for BEU based on historical records and expected growth rates and will design the revenue requirement to have the ability to consider variations in power supply resources and electric usage patterns.

The cash flow analysis will incorporate BEU's budget and other financial documents, including but not limited to the capital budget from BEU’s Capital Improvement Plan (CIP) as well as any specific reserve policies or financial metric requirements or objectives (such as increased DCOH). This will include identifying appropriate reserve requirements for O&M and capital programs and recommendations as appropriate to establish target reserve levels based on discussions with the BEU project team. The cash flow analysis will evaluate assignment and allocation of all the revenue sources to operating and capital expenses, as appropriate. NewGen will establish cash flow projections, which will include allocated costs from the COSA, as appropriate, and BEU-specific data provided through billing records, AMI data, and other BEU sources.

The revenue requirement and cash flow analysis will be included within the COSA analysis as the primary source of cash needs for the utility and those elements which need to be recovered in rates as a result of this Study. NewGen will develop a white paper explaining the elements of the revenue requirements and cash flow analysis, which will be provided to BEU management and staff for comment and review.

Elements of this revenue requirements document will be incorporated as appropriate into the final report for this Study.

The COSA model will be developed to reflect revised revenue requirements for the Test Year (to be defined as the period for which rates will be designed), changes in customer usage characteristics and underlying cost allocations, proposed rate class changes, and other elements as described herein. The COSA model will be integrated with the pro forma financial model (Phase III) by means of the projected system revenue requirement, future billing determinants by customer class (load), and projected average rates and revenues by class. NewGen will coordinate integration of the models and provide BEU with a 300

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detailed description of how these two models are designed to operate individually as well as collectively.

These models are designed to provide insight into BEU’s financial situation and to provide potential solutions to address financial concerns.

Example Financial Model Dashboard for Revenue Requirement (this is a combined utility) Task 2 Deliverable
 Revenue requirement white paper explaining the cost elements to be recovered by rates for this Study, including appropriate cash flow metric requirements.

Task 3 – Cost of Service
There are three key steps to completing the COSA after completing the Test Year Revenue Requirement:

1. Unbundle or functionalize the revenue requirement into utility functions (i.e., purchased power or production, transmission, distribution, and customer);

2. Classify costs (e.g., energy, demand, customer); and

3. Allocate the costs to the customer classes.

Included in the three steps of the COSA is the creation of allocation factors to spread “shared” costs between different functions or classifications, and eventually across each customer class. NewGen will review the demand allocation factors developed for the previous study as well as develop unique allocation factors for BEU’s consideration.

The model will use Excel tools such as reference tables, pull-down menus, and lists for inputs and adjusting selections such as allocation methodologies or specific allocators. The COSA model and three interconnected components are described in further detail below. 301

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Cost of Service Model
Component A – Functional Unbundling
Functional unbundling will provide detailed descriptions of BEU’s Test Year Revenue Requirement by core utility function. For each item, if adjusted for known and measurable changes, the amount of the adjustment is identified with an associated workpaper. Once the detailed Test Year Revenue Requirement has been established, this amount is assigned to the production, transmission, distribution, and customer functions. Assignments are made either through direct assignments or other allocation methodology.

The results of the analyses for each function of the Test Year Revenue Requirement are expressed on a functional basis. An illustration of the revenue requirement and functional unbundling is included in the Cost of Service Model graphic above.

Component B – Sub-functional Unbundling
Sub-functionalizing the production, transmission,
distribution, and customer functions provides
additional detail and accuracy to BEU’s costs. In this
process, costs are classified as demand related,
energy related, customer related, revenue related,
or a direct assignment. Similar to functionalizing,
sub-functionalization is accomplished either through
direct assignments or other allocation methodology.

Specific allocation factors are included at the bottom
of each sub-function worksheet; NewGen will review
and incorporate these allocation factors in the COSA
model, as appropriate. These analyses result in the
Test Year Revenue Requirement expressed on a subfunctional basis for each cost classification (e.g., Production Demand or Production Energy Costs). The graphics illustrate the COS sub-functionalization and classification of costs.
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Component C – Allocated Cost of Service
Next, the Test Year sub-functionalized and classified Revenue Requirement is allocated to each of the proposed rate classes using various customer class allocation methodologies. Where appropriate, costs may be directly assigned to a particular rate class. Allocations will be based on customer usage characteristics, such as contribution to peak demand, or weighted customer cost factors. All allocations will be defined and the rationale for their use will be explained in the COSA report. An illustration of the COSA model allocations to customer classes is included below.

The final COSA results are summarized on an aggregate basis for each customer class and compared to projected Test Year revenues to identify rate adjustments needed to meet the cost of service.

Additionally, we will summarize more detailed analyses of an unbundled COSA such as the wires demand, wires customer, and power supply costs per customer class and by unit. All costs incurred by BEU will be classified as fixed or variable according to their underlying nature.

BEU’s COSA will utilize an embedded or average cost of service approach to developing rates. The process described herein will include conducting analyses for data provided by BEU, and additional workpapers will be developed to analyze certain marginal costs to inform specific rate offerings. A more detailed discussion of marginal cost evaluation is provided in a subsection below. 303

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NewGen has proven experience building models that are adopted and utilized long term by our clients.

Our team will apply our experience developing embedded instructions and guidance that can be accessed within the model’s customized menus for BEU staff to reference in updating and checking the data and calculation validity. Embedding the instructions and checking within the model enhances the user experience, improves accuracy, and helps ensure knowledge transfer for those working in the model.

Custom ribbons in Excel will be created to provide functionality and instructions in addition to pop-up windows with additional capability to “drill down” into specific areas for instructions. Error checking will also include the ability for update notifications, user updates logs, and version control/dates. Examples of the instructions and automated checking of calculations are included in the following graphics.

Workpapers
Workpapers for supporting adjustments and allocations are included as additional Excel worksheets in the model for reference, and NewGen will create COSA model workpapers, as necessary. These workpapers generally include supporting calculations such as customer class contributions to system load and peak demands, minimum system calculations for customer and demand classifications of the distribution costs, asset-related data such as transformer inventory or miles of lines, and/or purchased power cost detail.

We will develop new workpapers as appropriate to meet the needs of the Study.

NewGen will rely on available BEU customer usage data to generate the summary-level statistics for each customer class (i.e., total kilowatt-hour [kWh] sales, sum of maximum demands, monthly non-coincident peak [NCP], and monthly coincident peak [CP]). This analysis may include a review of historical sales, available AMI data, or potential feeder load analysis. To the extent that similar customer usage data can be obtained from Southern California Edison (SCE), NewGen will discuss its use in this Study with BEU.

The unbundled COSA and related workpapers will provide the data required to evaluate and compare the fixed and variable costs (i.e., customer-, demand-, and energy-related costs) with the fixed and variable 304

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revenues by customer class. This comparison will provide valuable information and data to support and facilitate the development or adjustment of BEU’s rate structures, including potential revisions to its NEM 2.0 rates, as appropriate.

NewGen will provide a draft COSA model to BEU for review, initial feedback, and approval prior to completing the final COSA. We will also facilitate a virtual meeting with BEU staff to review the draft results of the COSA model including individual customer class costs and related allocations. Feedback from the meeting and appropriate BEU requested modifications will be integrated into the final COSA results. Development of specific workpapers for this Study include an analysis and development of NEM

2.0 rate development, marginal cost analysis, and high voltage customer rates, as discussed below.

Net Energy Metering 2.0
Changes to NEM rate structures (NEM 2.0) are allowed by the State of California for utilities that have achieved greater than 5% of their load served under existing NEM rates. NewGen will create a workpaper (or series of workpapers) to develop NEM reform (NEM 2.0) rate offerings utilizing the Study’s COSA analysis, including the recognition of marginal costs, as appropriate, and including the rate associated with compensating self-generating customers for net surplus generation and any other data informing a potential NEM 2.0 rate structure. These rate offerings will be consistent with the methodology and structures previously developed by BEU to ensure that the City is maintaining fair and equitable rates for all customers.

This workpaper will evaluate the potential impacts to future NEM 2.0 customers as result of the rate changes. Additionally, it will determine the potential change in cost recovery and quantify the change in the projected rate subsidy compared to existing NEM rates. NewGen will work with BEU to determine a projection for NEM customers in the service territory, which may be impacted as a result of the NEM 2.0 rate changes.

Marginal Cost Analysis
The COSA will utilize an embedded or average cost basis. However, it is possible that certain new rates and rate offerings could incorporate a marginal cost element, which can either be a marginal cost incurred for an incremental unit obtained or a marginal cost avoided, depending on the nature of the application.

NewGen will develop a workpaper (or series of workpapers) as an expansion of the COSA model to address specific marginal costs for the utility. This will include the development of an estimated marginal cost of production, which may be time-differentiated and based on wholesale market electricity pricing (CAISO) for the region, as well as BEU’s cost of production. Marginal production costs can serve as the basis for NEM 2.0 rates and can be applied to targeted and specific future load growth (such as EV rates, electrified space conditioning and/or water heating loads, and/or customer-sited energy storage, as appropriate).

Additionally, NewGen will work with BEU to evaluate applications for marginal costs for the transmission and distribution functions of the utility. Alternatively, depending on discussions with BEU to inform the Strategic Rate Design Document, the marginal costs may be incorporated into the general rate-making approach. NewGen will describe the relative advantages and disadvantages of a marginal cost approach for general rate making and will work with BEU to determine an appropriate approach for the use of marginal costs in this Study.
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High Voltage Customers
Customers who receive service at high voltage (either through the primary distribution system or directly from the transmission system) should not incur costs associated with the secondary distribution system.

This cost differential arises between customers in the same class (typically larger industrial customers) because of how they utilize various portions of the distribution system. NewGen will work with BEU to develop a defensible cost basis to create a discounted rate for those customers that take service at a higher voltage than other customers within their class. The COSA model structure that assigns costs to the various functions provides a sound economic basis for those customers that take service at the transmission level. A detailed analysis of the costs associated with the primary and secondary system (both capital and ongoing O&M) will serve as the basis for those customers taking service at the higher voltage within the distribution system.

COSA Training Workshop
NewGen will work with BEU management and staff to develop the COSA model. As such, NewGen will provide ongoing training on the model mechanics during its development. Additionally, NewGen will develop a half-day workshop specifically to review and provide insight into the COSA model for BEU staff.

This workshop will include the development of a series of presentation materials as well as hands-on review of the various scenario development and analysis within the COSA. This will also include a review of the output from the pro forma financial model and how that information is integrated into the COSA.

The intent of this training is to provide sufficient insight and guidance to allow BEU staff to update the COSA after completion of the Study. This workshop may be conducted online or in person, depending on how BEU would like to proceed.

NewGen will provide the Excel COSA model to BEU for its use upon finalization of the Study and will include a written report providing a description of the COSA methodology and the rationale for the cost allocation applications, as appropriate. The written report will summarize BEU’s revenue requirements by customer class, the fixed and variable nature of the costs and the exiting cost recovery, and the projection of existing rates’ ability to recover costs over the Test Year period. NewGen will provide a draft report and will solicit comments from BEU management and staff to be incorporated, as appropriate, into a final COSA report.

Task 3 Deliverables
 Summary of current fixed and variable costs in Test Year Revenue Requirement compared to fixed and variable revenues.
 Virtual meeting to discuss draft COS results with BEU staff.  COSA model with workpapers for specific analyses regarding NEM 2.0, Marginal Cost Analysis, New Rate Classes, and High Voltage Customer rates, as appropriate.  COSA Training workshop (online or in person).
 Written report summarizing BEU revenue requirement by class, classification process and rationale, and cost allocation.

Phase II – Municipal Utility Rate Trends Review/Rate Design Phase II will include development of a review of municipal rate trends (Task 4) and creation of recommended rate designs for BEU (Task 5).
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Task 4: Municipal Utility Rate Trends Review
NewGen will develop an evaluation and analysis of emerging or expected future rate structures and trends that may be considered by BEU for this Study. This analysis will include the evaluation of emerging municipal utility rate structures, technologies, and trends that impact the way electricity is priced for the industry and how those trends may apply to BEU. We will identify the advantages and disadvantages of various alternative rate structures, including the potential risks associated with each specifically for BEU’s operations and finances.

NewGen will include descriptions of various pricing programs for both traditional electric service and those serving emerging technologies, such as EVs and customer-sited distribution systems (i.e., DER such as rooftop photovoltaic [PV]). This review will include both embedded and marginal cost pricing for rates and rate pricing, including market-based pricing seen in Real Time Pricing (RTP) and Critical Peak Pricing (CPP) programs. Our review will include an assessment of various solutions for pricing electricity to and from distributed energy resources (DERs) to mitigate cross-subsidies, as well as pricing for emerging technologies (i.e., EV rate and rate riders, net metering and NEM 2.0 rate structures, and solar rates).

Unbundled rate strategies, which may combine power supply and delivery services, are also a more prevalent trend and will be reviewed for this Study. Additionally, NewGen will review low-income rate programs and how these programs are funded by other jurisdictions in California, as well as across the country.

The rate trends analysis will focus on municipal and cooperative utilities (public power); however, we may include some elements from IOU rate structures and rate programs that are used to recover costs for operations and historical, current, and future capital investments. This includes reviewing trends in customer charges, the potential for residential demand changes, multi-family service options, best practices in commercial rate designs, and how classes are defined and categorized (small, medium, large, energy only, and energy and demand charges). Other trends under review will include the development of high-voltage discounts, static and dynamic TOU pricing, power factor recovery charges, and green pricing programs. We will discuss the rate trends to be included in this review and summarized in the Strategic Rate Design Document during the kickoff meeting.

This Study will focus on specific utilities identified in coordination with BEU management and staff, including up to eight municipal (or public power) entities and two IOUs (if requested). These utilities may vary by rate structure and the list of utilities may be expanded to adequately capture the trends occurring across the country. For this Study, we have identified three primary groups of rates and rate types that will be explored. These include rate types focused on non-traditional forms of cost recovery, new services, and optional rates. These groups are somewhat arbitrary as all rates are designed to recover costs and support utility operations. This assessment of various alternative rates will include a comparison of these rates and rate structures to BEU’s current rates.
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Groups of Rates and Rate Types
NewGen recognizes that many innovative rates face implementation challenges both in terms of customer acceptance and technology requirements of the utility. As part of this analysis, NewGen will identify those challenges and potential solutions, such as device-centric rates (e.g., EV-Only rates) and trends regarding “opt-in” and “opt-out” rate program options for implementation. Further, customer elasticity of demand is an important consideration for rate design as some applications have a greater response to pricing differentials than others.

Technology implementation challenges also include the investments for both the utility and the customer to be able to fully optimize the rate structure, such as dynamic TOU pricing and the communication systems required to send the price signal. Our review will evaluate the costs of the requisite technologies and other potential barriers to offering the proposed rates. This will include a qualitative and quantitative assessment of the utility and customer costs at a planning level estimate to determine the extent to which rate structures and rate programs identified in this analysis would be applicable to BEU. NewGen will utilize the information obtained from the Rate Trends survey to develop a matrix of the results, which will evaluate the applicable nature of each rate to BEU and its list of criteria. This criteria list will be developed in coordination with the BEU project team and may include the following elements:
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NewGen will work with BEU to develop a quantitative scoring system to apply each criterion to each new rate and or rate group. This may include a scaling factor (e.g., 1–10, with 1 being the lowest cost or lowest barrier and 10 being the highest cost or barrier). We will develop a standalone report that will include the results of the evaluation of the emerging alternative rate structures and how they would or potentially could apply to BEU. This report will include the evaluation matrix discussed and the development of the criteria. Further, this report will evaluate each rate or rate offering as to how it may be recommended for BEU over a short-term or long-term action. We will review the draft report with BEU, solicit comments and suggestion as appropriate from management and staff, and discuss next steps. NewGen will be available to present the findings of the rate trends analysis to the City Council Committee if requested.

Task 4 Deliverables
 Presentation of rate trend analysis findings and conclusions to BEU management and staff.  Development of draft rate trend analysis report for comment and inclusion in final Study deliverable.  Updated Strategic Rate Design Document, as appropriate.

Task 5 – Rate Design Model and Recommendation
Rates will be designed to follow the evolving Strategic Rate Design Document, support the BEU and City Council rate philosophy, and closely follow the COSA results with the categorization of customer-, demand-, and energy-related costs for each customer class. New innovative rate structures or policies (i.e., TOU, demand side management programs, and other innovative approaches to enhance customer choice and promote energy efficiency) identified in Phase II may be integrated into the rate design model, as appropriate and in consultation with BEU. This will include the rationale and assumptions for any recommendations for existing or new rates and/or rate structures for BEU. This will also include the development of an implementation path from current rates and allocations to the development and implementation of new rate alternatives for the proposed rates. As part of this task, NewGen will develop a list of viable alternative designs along with the costs and benefits of each rate design, including BEU's current rate design. The intent of the proposed rates is to provide for the annual revenue requirements over a five-year period (Rate Study Period).
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The recommended rates will be used to forecast and calculate the annual rate revenue generated for each customer class; comparing it to the class and total system cost of service will prove the revenue adequacy of the new rates. We recommend the development of a Customer Impact rate design model (see Enhancements to the Study) that will augment the rate design model to include impacts to all customers utilizing BEU’s billing database and more information as described below. All proposed rates will be evaluated for potential “rate shock” to individual customers, either as representative users from their class or across all customers. If the representative approach is preferred, NewGen will evaluate the proposed rates and rate differences for BEU customers as well as those served by neighboring and similar electric utilities in the region. This analysis will be used to develop a statistical analysis of bill impacts by each customer rate class for the entire range of usage patterns for the class.

The rate design model will be a user-friendly, Excel-based model that will be designed to provide BEU management and staff the ability to adjust rates as necessary after completion of the Study. This model will include calculations of the revenues expected from current rates as a comparison to the current revenues recorded in the audited FY records and will make adjustments as necessary to tie those values, in coordination with the BEU team. The rate design model will include the ability to develop and evaluate multiple rate scenarios, all of which will ensure that revenue requirements are met and BEU is aware of short-term and long-term risks to each rate design alternative along with the probability for each risk component to be realized. This will allow NewGen and BEU to assess the impacts of various rate designs and pricing structures on different customer classes, revenue stability, and the overall financial sustainability of the utility.

Proposed rates will recognize the social and economic
factors of the community as well as the underlying expenses incurred to provide electric service to the different
customer classes. All rates will be designed to be compliant with Proposition 26 regulations as well as the general
policies and objectives of BEU. Rates will be designed to recover projected annual revenue requirements (with
proposed rates and projected usage characteristics) and the model will have the ability to recalculate the latest year of historical revenues by customer class using current rates and historical customer usage. This information will be summarized in the model for each customer class and for the system total. An example of TOU rate structure options available in our rate design model is provide in the graphic to the left.

NewGen will evaluate the underlying fixed and variable
nature of the cost of service compared to the fixed and variable nature of the cost recovery (rates). BEU, like many utilities across the country, has high fixed costs
(investments, labor, etc.) and relatively low variable costs (energy); however, most rates are designed to recover costs on a variable basis. We will work with BEU to examine this relationship to better align its cost recovery with its costs.

We will conduct virtual meetings with BEU staff and management to review the draft rate model and the proposed rates. Based on feedback from this rate review, we will revise the proposed draft rates as 310

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appropriate or provide an alternative rate design scenario such as a phase-in of rate changes or adjustments in customer/demand/energy rate components.

NewGen’s modeling capabilities include the development of visual dashboards typically incorporated into our rate design models. These dashboards are designed to manage, manipulate, and evaluate large amounts of data for each customer within customer classes. The dashboards instantly and easily convey the key financial metrics, load profile changes, customer impacts, and rate structures to management and stakeholders. These dashboards also provide the capability to instantly evaluate scenarios and review the results and impacts of the scenarios for management, Council, and/or other stakeholders. The graphic below provides an illustration of the proposed rate changes that could be included in a rate model dashboard.

The rate design model will include scenarios that consider the phasing in of various rate plans (e.g., over a five-year period) based on the availability of data and customer impacts. Additionally, NewGen will work with the BEU team to evaluate how recommended rate designs will be compatible with its customer information (billing) system (or CIS) and BEU's business processes, and if change management processes need to be implemented. Specific rate design components from this Study may include the following:
 Solar Customer Rates
 TOU Rates
 EV Rates
 Recovery for Renewable Energy, such as PPA Rates, both Fixed and Variable  Low-Income Assistance Rates
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Task 5 Deliverables
 Review of existing BEU rates and any recommended structural modifications based on rate survey results.
 Revenue adequacy including phase-in of rates, if desired.  Recommendations for new rate structures and service offerings.  Virtual meeting to review recommended rates and revenue adequacy with BEU staff.  Customer and system economic impact analysis
 Rate design model and training provided to BEU management and staff.

Phase III – Pro Forma Financial Model
Task 6 – Pro Forma Financial Model Development
NewGen will develop an Excel-based electric utility pro forma financial model based on BEU’s budgeting system and accounts to support periodic updates and alignment with the COS and planning models, including its ESMP. The pro forma financial model will forecast revenues by customer class and expenses for 30 years to evaluate potential rate, debt, and capital related impacts. Additionally, the model will serve as an ongoing repository for historical data and financial information provided by BEU for a period of five years and will become the property of BEU upon completion of the Study. The model will include the development of a “dashboard” designed to manage, manipulate, and evaluate large amounts of data.

The dashboard easily conveys the key financial metrics, load profile changes, customer impacts, and rate structures to stakeholders and staff. The dashboard is designed to quickly perform scenario analyses which provide BEU flexibility in determining the appropriate mix of rate changes, capital projects, and debt issuances to meet budgetary or capital constraints and to support utility decision making. The model will be fully documented and relatively simple for BEU staff to administer. The customized tools within the pro forma financial model allow for dynamic and complete analysis of the various aspects of the Study and produce easy-to-understand tables and graphs that aid in communication with various stakeholders.

The model will be designed to automatically produce summary reports and visualizations with toggles for scenarios including but not limited to:
 Long-term cash position
 Demand forecast projections by customer type
 Sales forecast by customer type
 Consideration of capital financing plan and alternatives (pay-go, borrowing, or grants)  Average bill by customers
 Cash reserves compared to targets or sub-fund reserve levels for management review  Growth factors and one-time changes in any year
Additionally, the model will be designed for a single input worksheet to make changes and updates, to reduce confusion and opportunities for errors. Further, the model will include consideration of elasticity of demand (response from customers to pricing signals in rates) and allow for mid-year rate adjustments, including the ability for changes/additions to rate and surcharges. Based on discussions with BEU, the 312

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model will include several scenarios designed to accommodate a “phased-in” rate plan, as developed in Task 3. The final model provided to BEU at the completion of the Study will provide the basis for electric rates for the proposed rate plan period and will be configured to accommodate evolving energy policy requirements.

During the model development process, designated BEU staff will be included in periodic progress updates and will provide feedback on draft versions of the model. The model will include a pro forma operating results worksheet, a balance sheet, the aforementioned dashboard, capital improvement plan sheet, debt service schedule, and up to six scenarios as defined in coordination with the BEU team. The results of the financial model will be summarized in a report and presented to BEU staff.

The financial planning model will include embedded instructions and guidance that can be accessed within the model’s customized menus. The model will feature integrated error and data validity checking. This error checking feature will include the ability for update notifications, user updates logs, and version control/dates.

Task 6 Deliverables
 Draft pro forma financial model for review by BEU management and staff.  Final pro forma financial model, including embedded documentation for model use and updating.  Three two-hour training sessions for BEU management and staff on the use of the pro forma financial model (virtual).

Phase IV – Results Presentation
Phase 4 consists of Task 7 (Public Participation/Stakeholder Engagement), Task 8 (Policy/Resolution Review), and Task 9 (Final Report).

Task 7 – Public Participation/Stakeholder Engagement
NewGen will work closely with BEU staff to develop and implement a public participation plan to increase customer awareness and understanding of rate development and the Study results. The public participation plan will present successful and innovative communication strategies employed by similarly situated electric utilities based on our experience and potential discussions with previous successful client projects. As part of the plan, NewGen will prepare materials for and facilitate up to five public meetings (in person or virtually, depending on the direction of BEU. For purposes of budgeting, we have assumed three in-person meetings). Additionally, we will develop a variety of materials and content for website, social media, and other communication tools, which will be communicated by BEU. NewGen and BEU will focus on engaging hard-to-reach communities, such as disadvantaged and low-income communities, while working closely with the City’s Public Information Officer. Materials will be provided in advance for staff review at least two weeks prior to any public event; however, NewGen understands that City Council schedule and posting requirements may accelerate the timelines needed.

Task 8 – Policy/Resolution Review
NewGen will work closely with BEU staff, the City Attorney's Office, and other City partners as needed to ensure that all language in the proposed rate resolution is consistent with the new rate design and with California Law, as appropriate. This may include consideration of future year revisions included in resolution submissions. NewGen will provide ongoing support as necessary to explain and defend BEU’s 313

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rates and charges, including before City Council. This support may include the preparation of schedules or other documents that detail the calculations and assumptions made in arriving at the rates and charges under examination.

Task 9 – Final Report
Upon completion of the analysis portion of the Study, NewGen will deliver the COSA and the Customer Impact rate design model(s) for BEU’s future use, including all workpapers, spreadsheets, reports, and computations used in the analyses. We will provide final copies of the presentations developed for management and the City Council/Council Committee and the customer outreach efforts. Additionally, NewGen will provide a draft and final copy of a comprehensive written report, which will include a description of the analysis completed for the COSA/Rate Study for the five-year period and rate recommendations. We will collaborate with BEU to review comments provided by BEU legal counsel on the draft report to incorporate into the finalized work product. A Microsoft Word version of the report will be provided to facilitate edits and comments from the BEU project team.

NewGen will develop and provide presentations of the preliminary Study results to BEU’s City Council and/or Council Committee to solicit feedback on the proposed rate structures and charges. It is anticipated that feedback from BEU staff and management, as well as the Council/Board, will be included in the final recommended rate plan. Our proposed budget includes three on-site visits for this presentation. However, if additional on-site meetings are required, we will work with BEU to accommodate its requests.

BEU will coordinate development of the Outreach and Public Engagement process, select the attendees, and host the meetings in coordination with NewGen. The intent of these events is to solicit input and provide transparency for representative customer groups regarding the rate-making process. NewGen will develop materials and will facilitate up to five of these events in coordination and combination with BEU management and staff. The updated Strategic Rate Design Document will include details of these events throughout the Study, as appropriate. NewGen will lead or support the presentation(s) of results directly to BEU customers or customer groups, as requested by BEU.

Tasks 7, 8, and 9 Deliverables
 Stakeholder Engagement documents and materials (such as agendas and facilitation plan), as well as collateral, social media schedule, and effective graphics for BEU’s social media use.  Redlined version of proposed rate resolutions (Word version) as well as white paper detailing significant proposed changes, restructures, rationale, and analysis (as well as presentation materials).  Delivery of final work products including workpapers, spreadsheets, and models.  Delivery of draft/final report for the Study.
 In-person presentation of preliminary/final Study results to City Council/Committee.  Preparation and support for development of five (for purposes of budgeting, we have assumed three in-person meetings) presentation materials for customer (or customer groups) outreach efforts and presentation(s) by NewGen.
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Phase V – Enhancements to the Study
NewGen proposes to develop enhancements to the Study in Phase IV. These enhancements include developing a Customer Impact rate design model along with the recommended rates and rate structures.

We will design a robust and dynamic Customer Impact rate design model for the entire BEU billing database which conducts an analysis of rate impacts and provide a comprehensive and complete view of all rate impacts to all customers. This is an enhancement to the Phase III – Rate Design efforts which would be limited to representative customers within each rate class. The customer impact analysis will provide detailed information on rate impacts for all classes and individual customers, and will support the broader communication, understanding, and endorsement of Study results and potential rate changes.

This billing database and impact analysis includes customer class rate curves based on load factor for each class and will show
individual customer class
bill impacts (i.e.,
histograms). Such
impacts may be filtered to
screen for specific
customer groups (e.g.,
low-income customer
impacts, if data is
available), for entire
classes, or for the full BEU
system. The example
graphic provides a
summary of the output
regarding customer load
impact analysis available.

The Customer Impact rate design model will have the ability to design rates within current rate classes.

NewGen will develop an export file to transfer revenue and customer class data to the pro forma financial model, as appropriate. We will incorporate a “rate calculator tool” into the rate design model that is designed to show the effects of rate design options on customers by similar groupings or sub-groupings, such as schools, government, etc. (as defined by BEU). The rate calculator tool will evaluate the rate impacts to these customers as well as the effect of those rate impacts on other classes to generate the same level of revenue requirement. Similar to the proposal for Phase III – Rate Design recommendations, this enhanced approach will serve as the basis for a statistical analysis of bill impacts by each customer for the entire range of usage patterns for the class.

NewGen understands that the proposed enhancements described above and recommendations to the project scope are not part of the originally requested scope and may be considered by the City and included in the Scope of Work at its discretion. NewGen will proceed with proposed enhancements only at the express written consent of BEU.
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Proposed Study Schedule
NewGen proposes to complete the Study within a six-to-nine-month period, depending on availability of data, and in coordination with BEU and the City. The following graphic provides a summary of the proposed schedule by task.

Phase I includes Task 1 (Kickoff), Task 2 (Revenue Requirement), and Task 3 (Cost of Service Analysis).

Task 1 is anticipated to be completed within two weeks of notice to proceed and contract authorization.

Task 2 will require approximately one month to complete, depending on the availability of the data provided by BEU and the City. Task 3 is anticipated to require approximately two months to complete and will also depend on the availability and quality of data provided by BEU.

Phase II includes Task 4 (Rate Trends Study), and Task 5 (Rate Design). Task 4 will require approximately one month to complete (to draft) and will be conducted concurrently with Task 3. To the extent that any additional rate designs may be requested as a result of the Rate Trends Study, they may extend the timeframe for completion of the COSA model. Task 5 will require approximately two months to complete, as there will likely be significant discussions with BEU during the process and before the development of recommended rates.

Phase III consists of Task 5 (Financial Planning Model), which will begin concurrent with Task 2 (Revenue Requirement) and will require approximately four to five months to complete, as it will incorporate the results of the COSA and the rate design model.
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Phase IV consists of Task 7 (Stakeholder Engagement/Public Participation), Task 8 (Policy/Resolution Review), and Task 9 (Draft and Final Report). We would recommend that Task 7 begin when the COSA model is nearing completion to allow for input from stakeholder groups into the cost allocation process and other considerations. The Stakeholder Engagement Process will require approximately 3 months to complete, depending on the objectives of the process. Task 8 will be dependent on the completion of Task 5 and is anticipated to require two weeks to complete. Task 9 will begin upon completion of the previous tasks and is expected to require approximately one month to complete from draft report to final report, and presentation of the results to BEU staff and City Committee or City Council, as appropriate.

NewGen proposes bi-weekly (every other week) on-line status calls with the BEU project team to maintain project momentum and address issues that arise during the course of the Study.

Quality Assurance Efforts
NewGen recognizes that the quality of our analysis and work product is paramount when serving as a trusted advisor to our clients. To ensure that our work is of the highest caliber, we have established a robust quality assurance/quality control (QA/QC) program that permeates every phase of our projects.

NewGen's internal QA/QC program involves three levels of review and an implementation phase:

Level 1 – Personal
At the base level of our QA/QC program, consultants are personally responsible for their work product.

Deliverables should be considered "client-ready" before being submitted to higher management levels for review. To aid our consultants in ensuring their work product meets these standards, NewGen utilizes our internally designed CHECK-UP process, as illustrated in the figure below. This acronym encourages NewGen's consultants to apply each listed standard to every analysis and deliverable. 317

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Level 2 – Peer
Level 2 of NewGen's process involves a peer review of all analyses and deliverables. As part of this effort, NewGen has designated experts in each subject matter area to serve as "qualified reviewers." Each analysis and deliverable undergoes a quailed review before transmission to the client.

Level 3 – Professional Product
The final level in our QA/QC review ensures that our final products reflect our firm's high standards.

NewGen's administrative staff reviews all deliverables to ensure consistency, safeguard our brand, and deliver a consistent experience to our clients. Additionally, our models integrate automated calculation and formula checks to ensure they operate correctly and concisely. This automation also notifies users if the model has been updated or if errors exist.

Implementation
By adhering to strict quality control measures, NewGen can mitigate variations or deviations that could lead to inconsistencies in the final product or service. NewGen regularly reminds staff at meetings about the importance of QA/QC and the proper application of our CHECK-UP procedures. In the event of deviations, we take prompt and corrective actions. Our team is adept in implementing corrections, documenting actions taken, and verifying their effectiveness.

NewGen actively fosters a culture of continuous improvement, drawing on lessons learned and stakeholder feedback. This enables us to refine our processes, integrate best practices, and stay at the forefront of quality control.
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For the Study, Jill Schuepbach will be primarily responsible for ensuring the QA/QC process is upheld.

Company Information
NewGen is a management and economic consulting firm specializing in serving the utility industry and market. Established as a Limited Liability Company in August 2012, NewGen primarily serves public sector utilities and provides nationally recognized expertise in load forecasting, utility cost of service and rate design studies, financial feasibility studies, municipalization efforts, depreciation and appraisal studies, litigation support for state and federal regulatory proceedings, utility financial planning, and stakeholder engagement for electric, water, wastewater, solid waste, and natural gas utilities.

NewGen was created by consultants who are dedicated to our clients’ missions and recognized as experts in our respective fields of service. “Thoughtful Decision Making for Uncertain Times” succinctly describes our capability to provide our clients solutions and recommendations tempered with our keen insight into the growing role of stakeholders, resource availability (including renewables), environmental concerns, cost of providing utility services, and economic conditions. This ensures an integrated approach to delivering our products and services.

We recognize the need for strategic intent behind our clients’ actions by applying the latest market insights, technologies, and tactics to support our recommendations. Our results empower decision makers to implement sound public policy, incorporating community input, market direction, and regulatory mandates.

Understanding your community, your organization, and your data are the three essential elements to developing actionable strategies to maximize the future. NewGen believes that strategy dictates everything. Our approach utilizes your data, markets, and communities to provide an integrated view designed to make long-term decisions with confidence. We leverage our modeling technology and market expertise in energy, water, wastewater, stormwater, and solid waste to solve your most complicated issues. Through proactive collaboration, we upgrade or design strategies for you to ensure they are responsive, transparent, and reliable while paving the way for successful buy-in across all your stakeholders. Our approach has three important features:

1. Client/Stakeholder Communications: NewGen simplifies complex concepts by combining visual tools and our training expertise to ensure that clients have a deep understanding of how the issues and underlying data drive our recommendations. This directly impacts the evaluation of the scenarios we present, streamlines decision making, and successfully obtains buy-in from elected officials, customers, regulatory bodies, and senior management.

2. Operational Insights: NewGen makes data operational, resulting in actionable decisions with defensible results. We harness existing and untapped data to optimize operations, develop demand management strategies, estimate the impacts of distributed generation, and identify the rational nexus underlying pricing decisions. We help our clients recover costs, improve service delivery, and respond to changing market conditions.

3. Expert Witness/Credentials: We have served as expert witnesses in over 200 regulatory and civil proceedings, and we employ 26% of the ASA accredited public utility appraisers in the United States.

Unlike other firms, NewGen integrates the insights of nationally recognized experts into our models, both of which have been pressure tested through the regulatory and civil process. 319

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NewGen employs over 60 professional and administrative staff. Our current staff has the capability to work on simultaneous assignments, and we have the capacity to add staff and/or expand support from a network of teaming partners, if needed. NewGen has 13 offices located nationwide.

Mr. Scott Burnham will serve as the primary point of contact and Project Manager for this effort. Below is Scott’s contact information along with the branch office locations and phone numbers. Please note:
these are for our physical office locations; the other locations on the map are our remote employees working from their remote offices.

Primary Point of Contact
Scott Burnham, Partner
225 Union Boulevard, Suite 450
Denver, CO 80228
Office: (720) 259-1762
[email protected]
Branch Office Locations and Telephones
Annapolis Office
Phone: (410) 266-9101
Address: 900 Bestgate Rd., Ste. 402
Annapolis, Maryland 21401
Austin Office
Phone: (512) 479-7900
Address: 8140 N Mopac Expy, Bldg. 1, Ste. 240
Austin, Texas 78759
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Branch Office Locations and Telephones
Dallas Office
Phone: (972) 680-2000
Address: 275 W Campbell Rd., Ste 440
Richardson, Texas 75080
Denver Office
Phone: (720) 633-9514
Address: 225 Union Blvd., Ste. 450
Lakewood, Colorado 80228
Nashville Office
Phone: (615) 922-5996
Address: 49 Music Square West, Ste. 505
Nashville, Tennessee 37203
Litigation Statement
NewGen has not been involved with any litigation, mediation, or arbitration regarding performance of services within the past five years and has not had any claims/disciplinary action taken against NewGen or any of our key personnel within the past five years.

Company Personnel
NewGen evaluates the needs of each project and responds by assembling a Project Team of knowledgeable professionals who are uniquely qualified to provide the services needed. The Project Team includes widely recognized COSA, rate-making, and financial forecasting experts who possess unique knowledge of electric utility resources. This includes knowledge of industry trends as well as best practices for electric utilities.

The proposed Project Team organizational chart indicates the lines of communication and responsibility and is included below.
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Brief summaries of the Project Team’s experience and qualifications follow. In addition, full resumes for each of the proposed team members are included as Appendix A. NewGen does not propose to work with any subcontractors for this project. We affirm that the proposer and all assigned key professional staff are properly licensed to practice in California as the company is licensed to work in California; our DIR registration number is PW-LR-1000817140.

Scott Burnham, Partner | Project Role: Project Manager | Phone Number: (720) 259-1762 Scott Burnham, Partner at NewGen, offers over 20 years of experience in the areas of project management, cost of service and rate design, asset valuation, and financial feasibility analysis. Scott leads efforts to create financial models that develop revenue requirements, cost allocation, financing for strategic capital and operating objectives, and rate/rate structure alternatives, ensuring our clients have reliable and defensible results. Additionally, Scott routinely presents study findings and recommendations to utility management, boards, city councils, and other governing bodies. He has developed and reviewed pro forma financial models to determine projected revenue and costs associated with various projects and financing approaches for a variety of power generation facilities. Scott is well-versed in cost allocation theories and methodologies, rate design concepts, and approaches, and in providing summary analyses and recommendations to industry clients. Scott co-leads the semi-annual Cost of Service and Rate Design 322

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class through EUCI, an industry conference organization, which is routinely attended by all types of utility stakeholders.

Jill Schuepbach, Principal | Project Role: QA/QC Review | Phone Number: (720) 924-7134 Jill Schuepbach has over 20 years of experience as a utility consultant to the public utility industry. Jill has provided project management and financial expertise in the areas of utility cost of service and rate design, financial planning, economic and financial analysis, engineer of record, and pole attachment fees. In addition, Jill has experience with feasibility studies, litigation support, and preparation of expert witness testimony.

Her project experience includes work for municipal, investor-owned, and memberowned utility clients.

Tia Carnes, Senior Consultant | Project Role: Stakeholder Engagement Lead | Phone Number: (615) 800-8916
Tia Carnes joined the firm in February 2020. During her tenure, she has provided financial modeling, appraisal/valuation support, cost of service and rate design analyses, and, most notably, support to the organizational review and workshop development projects. Her experience includes leadership training and development, team assessment, and financial analysis. Ms. Carnes came to NewGen with a strong background in customer service, logistics, and high-volume task management.

Jack Buckley, Senior Consultant | Project Role: Lead Analyst | Phone Number: (303) 557-7700 Jack Buckley joined NewGen in December 2021. He assists on cost of service and rate design projects, with an emphasis on data driven analytics. Jack was responsible for the development of the rate trends study for the City of Riverside evaluation, as well as the COS and rate design modeling and the development of the draft and final reports. He conducted the rate research, developed an analytical method to apply evaluation criterion to the data, and proposed recommendations to the client, which were incorporated into the final reports.

Noah Healy, Consultant | Project Role: Analyst | Phone Number: (720) 452 0370 Noah Healy joined NewGen as a full-time consultant in November 2022. He assists on cost of service and rate design projects, emphasizing data-driven analytics and applying his financial modeling skills. Noah’s experience includes investment analysis, R programming, and Microsoft Excel modeling.

Brody Liebler, Consultant | Project Role: Analyst | Phone Number: (720) 749-1205 Brody Liebler joined NewGen as a full-time consultant in July 2024. He assists on cost of service and rate design projects, emphasizing data-driven analytics and applying his econometric analysis skills. Brody’s experience includes financial modeling, rate calculation, cost allocation analysis, and Microsoft Excel. 323

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Disclosure
NewGen and our employees have no past or current business or personal relationships with any current Banning elected official, appointed official, City employee, or family member of any current Banning elected official, appointed official, or City employee to disclose.

Experience and References
California Experience
NewGen is well qualified to provide BEU with the services identified in the RFP. We have significant national and local California experience, including our previous work with the City of Riverside, and we have completed numerous cost of service analyses and electric rate studies, financial planning and analysis (FP&A) analyses, expert witness testimony filings, appraisals and depreciation studies, and strategic planning projects for electric utility clients in California as shown in the following graphic. We also understand the nuances of California’s wholesale power market as we routinely provide financial and utility consulting services for the growing number of CCA entities. 324

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Our team members have substantial experience navigating the dynamic electric market in the state of California, primarily with CCAs and public power clients who maintain diligent benchmarking against the state’s IOUs. Our experience includes:
 A wide range of publicly owned power utilities in California such as CCAs, cities just beginning to offer service (e.g., Moreno Valley), established public power utilities (e.g., Alameda Municipal Utilities), and communities considering municipalization (e.g., San Francisco).  Multiple COSA and rate studies completed for public power utilities in California, as well as strategic planning efforts, depreciation studies, and performance benchmarking studies.  Evaluation of assets for possible acquisition from California IOUs. Our franchise, municipalization, and acquisition work includes the City of San Francisco, the City of San Diego, and South San Joaquin Irrigation District.
 Unique insight into CCA efforts and cost-related issues or concerns as we support CCAs’ intervention in IOU regulatory proceedings before the California Public Utilities Commission (CPUC). We have assisted CCAs with their review and protest of Power Charge Indifference Adjustment (PCIA) rate applications for Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). We have also evaluated PG&E’s general rate case on behalf of CCA clients, focusing on the functionalization or unbundling of costs at PG&E and underlying issues that will further benefit the CCAs’ cost structure and strategic goals.

NewGen’s engagement with California public power clients often involves understanding the evolution of the California energy market as it pertains to increasing Renewable Portfolio Standards, DER impacts, NEM 2.0 successor tariffs, and end-use customers’ desire for greater flexibility and control in choosing clean power resources for their energy consumption. We also are very aware of the issues surrounding Proposition 26 and have developed various strategies and solutions in coordination with internal and external counsel, including representatives from Colantuono, Highsmith & Whatley, P.C. We have supported our clients in navigating the convergence of multiple DERs including solar, fuel cells, energy storage, and electric vehicles as it pertains to their operations, financial condition, and planning efforts.

List of Companies for Whom NewGen has Provided Similar Services NewGen has national expertise and local California experience, having completed numerous COSA and rate studies, appraisals and depreciation studies, and strategic planning projects for electric utility clients.

We have had over 100 Municipal/Public Utility Clients in various utility areas.

Our specific electric experience includes:
 Completion of 50 projects in the past five years in California. Specifically, members of the NewGen team were involved in COS and/or rate-related studies for the following California entities (some of which are similar in size and scope as the City of Banning:
 City of Alameda (2015–2020)
 City of Anaheim (2016–2017 and 2019)
 City of Glendale (2017–2018 and Ongoing)
 City of Pasadena (2018–Ongoing)
 City of Redding (2016–2017, 2020, and 2023)
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 City of Riverside (2016–2018 and 2022–2023)
 City of Santa Clara (2020–2021)
 City of San Francisco (2020–2021)
 City of Vernon (2015, 2017–2019, and Ongoing)
 Confidential Client (2017–2019 and Ongoing)
 Imperial Irrigation District (2020–Ongoing)
 Merced Irrigation District (2015–2019)
 Turlock Irrigation District (2015)
 NewGen was retained in early 2019 by the Joint Community Choice Aggregators (Joint CCAs) to provide expert witness services in the PG&E General Rate Case. The Joint CCAs also engaged NewGen to review PG&E’s ERRA filings, the projected PCIA rates, and compliance with the Portfolio Allocation Balancing Account (PABA).
 NewGen was engaged by San Diego Community Power to review the San Diego Gas & Electric forecast for ERRA, PCIA, and PABA.
 NewGen was retained by a confidential California CCA to assist with the development of initial analytics for AMI data.
 NewGen is working with California Community Choice Association (CalCCA) to build an analytical tool to dynamically project PCIA rates for multiple IOUs and to assist CCAs with their own financial planning and analysis, including potential impacts on customers’ rates.

Project Descriptions
The Project Team is well qualified to provide BEU with the services identified in the RFP. As described above, we have worked with a large number of utilities and other entities in California. In addition, we have worked with other utilities and other entities around the country on cost of service and rate issues, as well as load and load shape forecasting, distributed generation economic feasibility and electric bill savings, and AMI data analytics.

Following are three project descriptions related to client engagements that NewGen has completed which we believe are relevant to the City’s Study. We affirm that NewGen has not filed for bankruptcy under any business name over the past five years.

City of Riverside | Cost of Service and Utility Rate Design Contact Information:Brian Seinturier, Utilities Fiscal Manager, Revenue/Rates | Address: 3750 University Avenue, Suite 300, Riverside, CA 92501 | Email: [email protected] | Phone: (951) 826-2215 | Contract Duration: 2017, 2022–2023 Members of the NewGen Project Team completed an electric utility cost of service and rate design effort on behalf of the City of Riverside and Riverside Public Utilities (RPU) in 2018 and were engaged to provide a revised study for 2023. In 2016, RPU initiated efforts to greatly increase its technology and system investment under an ambitious plan referred to as “Utility 2.0.” Under this strategic plan, RPU realized its rates and rate structures were not well suited for the pending changes to its system. Further, the investment needed to support the strategic plan exceeded the revenue generated from the existing rates 326

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and rate structures. The NewGen Project Team created a Test Year Revenue Requirement and developed a defensible cost allocation methodology to apply the utility’s costs equitably to its customer classes. This effort included analyzing the impacts of Proposition 26, California’s so-called “Stop Hidden Taxes Initiative,” and the Net Energy Metering (NEM) reform within the State of California. The study included an innovative fixed cost recovery mechanism based on energy usage known as the Network Access Charge (NAC). The NAC recovers costs on a fixed monthly basis, depending on the customer class, and is reflective of the distribution demand costs incurred by various levels of energy usage.

More recently, NewGen worked with RPU staff and management to update its revenue requirements and cost of service analysis, and developed updated rate schedules to be effective January 1, 2024, with annual updates over the next four years. Rates were approved by the Riverside City Council in September 2023.

Glendale Water & Power Department | Electric Cost of Service and Rate Design Contact Information:Craig Kuennen, Assistant General Manager | Address: 141 No. Glendale Ave., 4th Floor, Glendale, CA 91206 | Phone: (818) 548-3369 | Email: [email protected] | Contract Duration: 2021– 2024 Members of the NewGen team completed an electric utility COS and rate design study on behalf of Glendale Water and Power (GWP). GWP is considering a large capital project for the repowering of an existing power plant. The NewGen team created a dynamic and interactive five-year financial forecast to assist GWP in projecting revenues and expenses in addition to understanding the effects of the repowering project on rates, debt, and reserve balances. The forecast model includes dynamic and instantaneous scenario analysis and comparisons, dashboards, and financial statements/reporting to summarize performance, selected financial metrics, and key performance indicators (KPIs). A Test Year Revenue Requirement was developed based on the financial forecast and used in the COS. The COS process and model included functionalization, classification, and allocation of costs to each customer class. The resulting costs to serve each class were compared to projected revenues to recommend rate changes. Detailed AMI data for each class was analyzed and used to support more accurate and defensible customer class allocations of costs. This AMI data was also used in an innovative TOU rate design model that includes an interactive and dynamic dashboard to select the months and hours for the specific rate design while evaluating the expected shift in consumption and evaluating bill impacts.

City of Redding | Cost of Service and Utility Rate Design Contact Information: Joseph Bowers, Electric Manager – Financial Services | Address: 3611 Avtech Parkway, Redding, CA 96002 | Phone: (530) 339-7377 | Email: [email protected] | Contract Duration: 2023 The NewGen team led Redding Electric Utility’s (REU) COS and rate design efforts in 2015 and 2017, and most recently in 2023. Members of the NewGen team created a Test Year Revenue Requirement and developed a defensible cost allocation methodology to apply the utility costs equitably to its customer classes. Factors impinging on the project included consideration of Proposition 26 (relative to the in-lieuof-tax payment) and concerns over potential interclass subsidies. Additionally, REU sought guidance for potential rate design and rate structure alternatives. NewGen designed a detailed rate impact model for REU’s Large Customers to evaluate the impact from rate structure changes. This model utilized the entirety of the Large Customer Class database and involved significant validation and modification efforts.

In the 2023 study, members of the NewGen team were involved in a citizen’s advisory group and stakeholder process designed to solicit input that was used to inform the design of the retail rates. The 2023 staff recommendations and final NewGen letter report were adopted by City Council in November 2023.
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ADDITIONAL INFORMATION
 Price Proposal: Our price proposal is included as a separate upload on the bid site.  Value Added Services: We have included our Value Added services in the Phase V – Enhancements to the Study, as well as in our proposed Scope of Services. Additional services may be requested by the City and would be considered in addition to the proposed estimated budget provided herein.  Insurance: NewGen possesses insurance in the coverage and amounts listed in the Sample Agreement (Exhibit B). A copy of our Master Certificate of Insurance is included as a separate upload on the bid site. We affirm that if awarded the contract, we will obtain an approved Certificate of Insurance providing coverage as specified in the sample agreement and provide it to the City.  Vendor Forms: NewGen’s vendor forms are included as a separate upload on the bid site, and our additional forms (Certification Compliance and CARB Compliance Form) are uploaded individually there as well. NewGen will be performing our work from our Denver, Colorado office, and if on-site work is necessitated by the Study, we will obtain the City of Banning Business Tax Certificate if we are awarded the proposal. We affirm that if awarded the contract, we will obtain an approved Certificate of Insurance providing coverage as specified in the sample agreement and provide it to the City; a copy of our Master Certificate of Insurance is provided in the Evidence of Insurance upload.

NewGen is licensed to do business in California; our DIR registration number is PW-LR-1000817140. 328
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APPENDIX A:

RESUMES

COST OF SERVICE ANALYSIS

AND RATE DESIGN STUDY
REQUEST FOR PROPOSAL 24-073
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SCOTT H. BURNHAM
Partner
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Blvd., Ste 450
Lakewood, Colorado 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Business Administration in
Finance, University of Colorado
Master of Public Affairs and Master of
Science, Indiana University
Bachelor of Science, Texas A&M
University

KEY EXPERTISE
Economic Evaluation
Feasibility and Financial Analyses
Rates Negotiation
Retail Rate and Cost of Service
Unbundled Cost Analysis
Mr. Scott Burnham joined NewGen Strategies and Solutions, LLC (NewGen) in April 2016. He offers over 25 years of experience in cost of service (COS) and rate design analysis, financial feasibility, municipalization studies, and restructuring for electric utilities. Mr. Burnham leads the comprehensive and independent review of cost of service and retail rate design practices for various electric utilities, including analyzing the impacts of net metering, electric vehicle charging, and ways to enhance fixed cost recovery in the face of increasing levels of distributed generation on clients’ systems. Additionally, he has taught numerous classes on cost of service and rate design methodology, including semi-annual courses for EUCI, an industry conference organization.

Mr. Burnham conducts acquisition, privatization, and competitive assessments, which include the development and evaluation of financial models that provide clients with an assessment of the impacts associated with several technical and financial feasibility alternatives. These analyses include impacts on projected net operating results from potential financings, investments, and other client actions. His efforts have involved assessing public versus private utility ownership, developing sales and revenue summaries, analyzing utility investment options, and reviewing power price trends.

RELEVANT EXPERIENCE
Cost of Service and Rate Design
Mr. Burnham participates in and leads the review of cost of service and retail rate design practices for numerous electric utilities. The services provided include the development of historical and projected revenue requirements and defensible cost allocation methodologies to apply to clients' customer classes.

He has utilized COS methodologies, unbundling approaches, cost classification techniques, cost allocation methods, and rate design alternatives. He has provided the technical and financial analysis associated with the utility's distribution, transmission, and generation functions.

Mr. Burnham has led projects requiring re-classification of large energy users within the system from contract rates to tariff rates. Mr. Burnham has determined fixed cost allocation by customer class from detailed feeder analysis, provided testimony supporting revenue requirements in a litigated hearing process, and developed testimony to support utility cost allocation methodologies.

Mr. Burnham has provided the methodology and analysis to determine the value associated with various distributed solar technologies. He has also explored rate options designed to improve fixed cost recovery in the face of increasing levels of distributed generation on clients' systems. This has included working with clients on reforming existing net energy metering rates. He has also reviewed existing COS analysis associated with electric vehicle charging, street lighting and traffic lighting retail rate classes. He has developed specific rates and rate programs for the industrial customer base, including developing interruptible rate offerings that benefit both the industrial customer and the client.

Mr. Burnham has been responsible for leading the analysis and development of the presentations and reports and presenting results and recommendations, including proposed rates, before city councils and governing boards. 332
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Thoughtful Decision Making for Uncertain Times 2
Cost of Service and Rate Design (cont.)
Additionally, he has facilitated citizen advisory groups and stakeholder processes to solicit input into rate design.

Mr. Burnham’s cost of service and rate design clients include:
▪ American Samoa Electric
Utility, American Samoa
▪ Arizona Public Service
Company, AZ
▪ Aurora, CO
▪ Austin Energy, TX
▪ Brenham, TX
▪ Brownfield, TX
▪ City of Longmont (CO) /
Longmont Power and
Communications (LPC)
▪ Colorado Springs Utilities, CO
▪ Dover Electric System, DE
▪ Farmington Electric Utility
System, NM
▪ Fayetteville Public Works
Commission (NC)_
▪ Fort Collins Utilities, CO
▪ Georgetown Electric Utility, TX
▪ Lafayette Consolidated
Government, LA
▪ New England States
Committee on Electricity
(NESCOE)
▪ Peninsula Clean Energy, CA
(CCA)
▪ Pedernales Electric
Cooperative, Inc.
▪ Platte River Power
Authority, CO
▪ Port of Oakland, CA
▪ Redding Electric Utility, CA
▪ Riverside Public Utilities, CA
▪ San Francisco Public Utility
Commission, CA
▪ Silicon Valley Power, CA
▪ South Carolina Public Service
Authority (Santee Cooper), SC
▪ Turlock Irrigation District, CA
▪ Vermont Public Service
Department, VT
▪ Virgin Islands Water and
Power Authority, U.S. Virgin
Islands
Feasibility Studies and Financial Analyses
Mr. Burnham has developed financial models to inform clients’ decisions regarding the associated impacts of multiple technical and financial feasibility scenarios. Mr. Burnham reviews clients’ financial projections and structures. He also develops pro forma financial models to determine projected revenue and costs associated with various projects and financing approaches for power generation and distribution facilities. These financial models focus on developing operating results, debt service coverage ratios, and other applicable financial metrics within the terms of a proposed financing effort. His models and associated reports have been relied upon to assess investment decisions in capital markets.

Mr. Burnham has developed projected operating results for consulting engineering reports and associated financing certifications. Further, he provided financial models that included the technical, financial, and economic input parameters to optimize the value of multiple generation sitting alternatives. He also developed a pro forma financial model for portfolio financing over 7,500 megawatts of generation capacity. Clients include:
▪ Arizona Public Service, AZ
▪ Black Hills Energy, CO
▪ Brownsville Public Utilities
Board, TX
▪ City of San Diego, CA
▪ City of Slayton, MN
▪ City of Valley Center, KS
▪ CORE Electric Company, CO
▪ Duke Energy, NC
▪ Lafayette Consolidated
Government, LA
▪ Vistra Energy
▪ Wyoming Municipal Power
Agency, WY
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SCOTT H. BURNHAM
Partner
NewGen Strategies and Solutions, LLC 3
▪ Central Electric
Cooperative, SC
▪ City of Ann Arbor, MI
▪ City of Chicago, IL
▪ City of Decorah, IA
▪ El Paso County, CO
▪ Ember Infrastructure LLC, NY
▪ Escalante H2 Power, TX
▪ Fortis Capital Corp.,
Santiago, Chile

WORKSHOPS AND PRESENTATIONS
Mr. Burnham has given numerous presentations and participated in training and workshops. These activities have focused on cost of service, ratemaking, and distributed energy resources. Host organizations and the topics Mr. Burnham presented are displayed below.

Electric Utility Consultants, Inc. (EUCI)
▪ Introduction to Cost of Service Concepts and Techniques for Electric Utilities ▪ Distributed Energy – Cost / Benefit Analysis Summary / Methodology ▪ Introduction to Rate Design for Electric Utilities
Indiana State Bar Association – Utility Law Section
▪ Electric Ratemaking Workshop (CLE Credit Course)
Municipal Electric System of Oklahoma (MESO)
▪ Distributed Energy Resources Workshop
▪ Cost of Service / Rate Design Workshop
American Public Power Association
▪ Review of AMI Investment Decision (with LUS)
RMEL (formerly Rocky Mountain Electrical League)
▪ Cost of Service and Utility Rate Design
Western Load Research Association
▪ Integrating Load Analyses into the Cost of Service and Rate Design Process (with Redding Electric Utility) Northwest Public Power Association
▪ Blue Sky Rates Facilitation Workshop
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JILL SCHUEPBACH
Principal
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Blvd., Ste 450
Lakewood, Colorado 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Business Administration,
University of Colorado
Bachelor of Science in Mechanical
Engineering, University of Missouri

PROFESSIONAL REGISTRATIONS/

CERTIFICATIONS/COMMITTEES
Registered Professional Engineer (PE)
Mechanical, Colorado

KEY EXPERTISE
Economic and Financial Analysis
Engineer of Record and Consulting
Engineer
Expert Witness and Litigation Support
Financial Forecast, Cost of Service and
Rate Design
Independent Review
Pole Attachment and Conduit Fees
Project Financing
Transmission Revenue Requirement
Filings
Ms. Jill Schuepbach has over 25 years of experience as a utility consultant in the public utility industry, working with electric municipal utilities, cooperatives, industrial customers, law firms, and regulatory bodies. Ms. Schuepbach has provided utility economic and financial analysis, financial planning, cost of service, rate design, customer billing impacts, distributed generation value of solar and avoided costs, engineer of record, revenue bond financing support, and pole attachment fees. In addition, Ms. Schuepbach has experience with feasibility studies, litigation support, and preparation of expert witness testimony. She has provided expert witness testimony in Florida and Texas regarding demand-side management programs, distribution line losses, and transmission revenue requirement compliance filings.

RELEVANT EXPERIENCE
Financial Forecasts, Cost of Service, and Rate Design
With a wealth of experience, Ms. Schuepbach has successfully executed numerous utility financial forecasts, cost of service, and rate design projects. Her proficiency in financial forecasting includes developing models to balance capital spending, debt issuance, and rate increases. These efforts support compliance with debt covenants and assist with general short-term and long-term decisionmaking. Cost of service tasks include developing revenue requirements, functionalizing and classifying costs, and allocating costs to customer classes.

Ms. Schuepbach’s rate design expertise includes a review of existing customer class criteria, design, billing impacts, tariff development, and transitioning models for the client’s future use. Additionally, Ms. Schuepbach evaluates miscellaneous charges and fees based on the utility’s costs and local and state policy. She has facilitated training and workshops on cost of service and rate design theory, industry practice, and rate strategies. Her presentations of rate study results and financial recommendations to governing bodies, boards, and city councils demonstrate her ability to communicate complex information effectively.

Ms. Schuepbach’s knowledge spans various utility sectors, including electric, natural gas, and photovoltaic cost of service. She has also provided valuable support in contract negotiations, developing a rate to serve a large industrial load and unbundled transmission costs. Her diverse client base for financial forecast, cost of service, and rate design services include:
 Brownsville Public Utilities
Board, TX
 Bryan Texas Utilities, TX
 Burbank Water & Power, CA
 Conway Corporation, AR
 Denton Municipal Electric, TX
 Farmington Electric Utilities
System, NM
 Glendale Water and Power, CA
 Greenville Electric Utility System
(GEUS), TX
 Lafayette Utilities System, LA
 Lafayette Public Power
Authority, LA
 Loup Power District, NE
 Navajo Tribal Utility
Authority, AZ
336

JILL SCHUEPBACH
Principal
Thoughtful Decision Making for Uncertain Times 2
Financial Forecasts, Cost of Service, and Rate Design (cont.)  Pedernales Electric
Cooperative, TX
 Port of Oakland, CA  Turlock Irrigation District
She has also evaluated General Service class energy consumption profiles using advanced metering infrastructure (AMI) data and checked billing accuracy, base operations, contract terms, and rate options.

Additionally, Ms. Schuepbach has evaluated distributed generation options and asset/facility upgrades related to energy efficiency/demand response.

Specialty Rate Design
Ms. Schuepbach has designed specialty rates for municipal clients. These include electric vehicle rates, distributed generation rates, avoided costs and value of solar rates for distributed generation, industrial rates, and highdensity load rates (data mining).

Miscellaneous Fee Development
Ms. Schuepbach has evaluated and updated miscellaneous charges and fees based on the utility’s costs and local and state policy. Miscellaneous fees include line extensions, remote and on-site connect and disconnect, tampering, special trip, and other fees.

Her clients for Miscellaneous Fees include:
 Cleveland Public Power, OH  Denton Municipal Electric, TX  Farmington Electric Utility System, NM
Transmission Revenue Requirement Compliance Filings
Ms. Schuepbach has assisted with multiple transmission rate filings at the Regional Transmission Organization (RTO) level and at the Federal Energy Regulatory Commission (FERC) regarding Annual Transmission Revenue Requirements (ATRR) and methodologies for determining rates. Ms. Schuepbach’s clients include:
 Bryan Texas Utilities, TX
(ERCOT)
 City of College Station, TX
(ERCOT)
 Denton Municipal Electric, TX
(ERCOT)
 Garland Power and Light, TX
(ERCOT)
 Greenville Electric Utility
System (GEUS), TX (ERCOT)
 Independence Power & Light,

MO (SPP)
 Lubbock Power and Light, TX
(ERCOT)
 New Braunfels Utilities, TX
 Texas Municipal Power
Agency, TX (ERCOT)
Engineer of Record and Consulting Engineer Reports
Ms. Schuepbach has assisted in developing Consulting Engineer Reports and associated ordinance-required reviews for municipal utilities. These reviews typically require an annual assessment of each utility’s financial and physical operations for the bond period. The field review consists of determining the condition of the utility’s physical assets, including a review of the utility’s budgeting and planning process. As Engineer of Record, Ms. Schuepbach has prepared Consulting Engineer Reports for the Official Statements, annual Comprehensive Engineering Reports, and annual continuing disclosures. Her clients include:
 Lafayette Public Power
Authority, LA
 Lafayette Utilities System, LA
337

JILL SCHUEPBACH
Principal
NewGen Strategies and Solutions, LLC 3
Economic and Financial Analysis
Ms. Schuepbach has provided economic analyses for municipal utilities involving generation projects. These evaluations included reviewing the costs and operation of new generation units added to the existing generation resources and financial analysis of the proposed generation on retail rates.

Independent Review
The New York State Legislative Commission retained Ms. Schuepbach on the Future of the Long Island Power Authority to (1) conduct an independent review of the reasonableness of the projected financial savings identified by the Commission as associated with transitioning Long Island Power Authority (LIPA) to a “true publicly owned” power authority from its current structure utilizing a third-party service contractor, PSEG Long Island LLC (PSEGLI), and (2) analyze the transition’s potential rate impact on LIPA’s customers.

Pole Attachment Fees
Ms. Schuepbach has developed pole attachment fees for several clients. She employs various methodologies, including those recommended by the Federal Communications Commission (FCC), the American Public Power Association (APPA), the Arkansas Method, and the Tennessee Valley Authority (TVA). She has recommended rates for cable and communications companies based on the type of poles to which they are attached. Her work also includes a review of the contract or agreement between the utility and the customer. Ms. Schuepbach’s clients include:
 Central Electric Power
Cooperative, Inc., SC
 Denton Municipal Electric, TX
 El Paso County, CO (conduit
fees)
 Farmington Electric Utilities
System, NM
 Kerrville Public Utility
Board, TX
 Keys Energy Services, FL
 Navajo Tribal Utility
Authority, AZ
 Navopache Electric
Cooperative, AZ and NM
 Pedernales Electric
Cooperative, TX
 Santee Cooper, SC
Financing of Public and Private Projects
Ms. Schuepbach has provided pro forma analysis supporting revenue bond financing for utilities and commercial bank financing of privately developed projects. She developed and reviewed pro forma financial models for technical and economic feasibility. The investment community that provides funding for these projects relies upon these models. In addition, Ms. Schuepbach has experience with financial modeling for municipal clients and alternative expansion plans for industrial clients interested in self-generation. Ms. Schuepbach’s responsibilities have included updating and reviewing budgets, financial statements, capital plans, and other financial inputs to the pro forma model. She has also reviewed technical and financial inputs to the pro forma model, including financial modeling of utility operations to determine rate adequacy, future capital funding sources, and compliance with bond covenants.

Expert Witness and Litigation Support
Ms. Schuepbach has assisted in litigation support and provided expert witness testimony in Texas, Louisiana, Missouri, Florida, and Indiana. Her testimony support is related to revenue requirements, cost of service, rate design, and the proper allocation of costs given a system’s unique characteristics. Ms. Schuepbach’s expert witness and litigation support experience include:
338

JILL SCHUEPBACH
Principal
Thoughtful Decision Making for Uncertain Times 4
Indiana Utility Regulatory Commission
 Indiana Michigan Power Company; Cause No.
45576, Cause No. 45546, and Cause No. 45235
 Northern Indiana Public Service Company; Cause
No. 45159, Cause No. 44733-TDSIC,
Cause No. 44688; Cause No. 45933
Federal Energy Regulatory Commission
 City of Independence (MO) Power and Light;
Docket No. ER15-1499-001
Public Utility Commission of Texas
 Bryan Texas Utilities; Docket No. 54945,
Docket No. 51623, Docket No. 48123, Docket No.
44467, and Docket No. 41920.
 Brownsville Public Utilities Board;
Docket No. 38556.
 Denton Municipal Electric; Docket No. 52449,
Docket No. 56102, Docket No 52715, and Docket
No. 56102.
 GEUS; Docket No. 51556, Docket No. 42581,
Docket No. 37180, Docket No. 27789, and Docket
No. 56357.
 New Braunfels Utilities; Docket No. 56440.
 Southwestern Public Service Company
Docket No. 54634.

Florida Public Service Commission
 Orlando Utilities Commission; Docket No. 010142
15th Judicial District Court, Parish of Lafayette, Louisiana  Entergy Gulf States, Inc.; Docket No. 00994490
California Public Utilities Commission
 San Diego Gas and Electric (SDGE) 2021 ERRA
Forecast
 Southern California Edison (SCE) 2023 ERRA
Forecast
 Southern California Edison (SCE) 2024 ERRA
Forecast

PRESENTATIONS AND WORKSHOPS
Electric Utility Consultants, Inc. (EUCI)
 Introduction to Cost of Service Concepts and Techniques for Electric Utilities  Introduction to Rate Design for Electric Utilities
California Public Utilities Commission
 Cost of Service Concepts for Electric Utilities
339
Tia Carnes
Senior Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Blvd., Ste 450
Lakewood, Colorado 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Business Administration,
Belmont University
Bachelor of Science in Bible/Biblical
Studies, Cairn University

KEY EXPERTISE
Appraisals and Valuation
Cost of Service and Rate Design
Financial Planning & Budgeting Model
Organizational Effectiveness
Rate Benchmarking & Analysis
Ms. Tia Carnes joined the firm as a Consultant in February 2020. During her tenure, she has provided financial modeling, appraisal/valuation support, cost of service and rate design analyses, and most notably, support to the organizational review and workshop development projects. Her experience includes leadership training and development, team assessment, and financial analysis. Ms. Carnes came to NewGen with a strong background in customer service, logistics, and high-volume task management.

RELEVANT EXPERIENCE
Cost of Service and Rate Design
Ms. Carnes performs cost of service and rate design studies for electric, wholesale, and retail water, reclaimed water, wastewater, drainage, and natural gas utilities. She assists clients in understanding their service offerings’ financial and operational impacts and develops rates intended to fully recover operating costs. Her clients include:

Organizational Effectiveness
Ms. Carnes conducts a high-level review of an organization to determine best practices, areas for improvement, and recommend solutions. Her contributions include analysis of survey results determining the organizational health of the client and facilitating workshops to build team skills and organizational effectiveness. Her clients include:

Appraisals and Valuation
Ms. Carnes performs appraisal analyses to develop value indicators using the income, cost, and market valuation approaches. Her appraisal projects include:

Power Generation Assets
Power Distribution Assets
▪ City of Austin, TX
▪ City of Brea, CA
▪ City of Charlottesville, VA
▪ City of Coachella Valley, CA
▪ City of Corpus Christi, TX
▪ City of Henderson, KY
▪ City of Lewisville, TX
▪ City of Maryville, MO
▪ City of Orland Park, IL
▪ City of Springfield, MO
▪ City of Waco, TX
▪ City of Austin, TX
▪ City of Denton, TX
▪ CPS Energy, TX
▪ DEMCO, LA
▪ Somervell County Appraisal
District, TX
▪ Robbins Schwartz
340

TIA CARNES
Senior Consultant
Thoughtful Decision Making for Uncertain Times 2
▪ City of Harrisonburg, VA
Water and Wastewater Systems
▪ Town of Lexington, SC
Power Supply Contracts
▪ Basic Management, Inc., NV
Other Projects
Public Power Feasibility
▪ City of San Diego, CA
Facilities Rates Study
▪ City of Phoenix, AZ
Community Engagement
▪ City of Redding, CA
341

JACK BUCKLEY
Senior Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Boulevard, Suite 450
Lakewood, CO 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master’s Degree of Science in
Architectural Engineering, University of
Nebraska-Lincoln – Omaha, NE
Bachelor’s Degree of Science in
Architectural Engineering, University of
Nebraska-Lincoln – Omaha, NE
Engineering Study Abroad Program,
Luleå University of Technology – Luleå,
Sweden

KEY EXPERTISE
Data Analysis
Cost of Service Analyses
Financial Forecast Modeling
Rate Design
Mr. Jack Buckley joined NewGen as a full-time consultant in December 2021. He assists with cost of service and rate design projects, emphasizing data-driven analytics. Mr. Buckley has an M.S. and B.S. in Architectural Engineering. Prior to joining NewGen, Mr. Buckley provided professional design services, mechanical building calculations, and building models to assist project managers.

RELEVANT EXPERIENCE
Cost of Service and Rate Design – Electric & Gas
Mr. Buckley assists with cost of service and rate design studies for electric utility clients. He conducts load analysis for solar and non-solar data, billing, and distributed generation analysis, as well as proforma development.

Mr. Buckley’s cost of service and rate design clients include:

Financial Modeling
Mr. Buckley assists with financial forecast modeling for electric utility clients. He conducts 5 and 10-year financial forecasts with detailed cash flow analysis and measurement of financial metrics.

Mr. Buckley’s financial forecast modeling clients include:
 Central Coast Community
Energy
 City of Austin, TX
 City of Brenham, TX
 City of Denton, TX
 City of Glendale, CA
 City of Riverside, CA
 City of Vernon, CA
 City of Victorville, CA
 City of Weatherford, TX
 Clean Power Alliance
 Farmington Electric Utility
System
 Fayetteville Public Works
Commission
 Imperial Irrigation District
 Merced Irrigation District
 Port of Oakland
 Southern Minnesota Municipal
Power Agency
 Turlock Irrigation District
 Tri-State Generation and
Transmission Association, Inc.
 Wyoming Municipal Power
Agency
 3CE
 City of Riverside, CA
 City of Weatherford, TX
 Turlock Irrigation District
 Wyoming Municipal Power
Agency
342

JACK BUCKLEY
Senior Consultant
Thoughtful Decision Making for Uncertain Times 2
Other Analysis
Mr. Buckley is currently conducting a variety of other analyses to assist organizations in litigation and FERC filings.

These clients include:
 Bose McKinney
 Ewell, Brown, Blanke &
Knight, LLP
 Exponential Engineering
Company
 HR Green Fiber &
Broadband, LLC
 Keyes & Fox, LLP
 Peninsula Clean Energy
 Platte River Power Authority
 Tri-State Generation and
Transmission Association, Inc.
343

NOAH HEALY
Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Boulevard, Suite 450
Lakewood, CO 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Science in Finance, University
of Colorado Boulder, Leeds School of
Business
Bachelor of Science in Psychology,
Colorado State University, College of
Natural Sciences

PROFESSIONAL REGISTRATIONS/

CERTIFICATIONS/ AWARDS
Series 65

KEY EXPERTISE
Financial Analysis
Microsoft Excel Modeling
R Programming
Mr. Noah Healy joined NewGen as a full-time Consultant in November 2022. He assists on cost of service and rate design projects, emphasizing data-driven analytics and applying his financial modeling skills. Mr. Healy’s experience includes investment analysis, R programming, and Microsoft Excel modeling.

RELEVANT EXPERIENCE
Cost of Service & Rate Design – Electric & Water
Mr. Healy assists with cost of service and rate design studies for electric utility clients.

He conducts billing analysis, as well as proforma development.

Mr. Healy’s cost of service and rate design clients include:

Other Analysis
Mr. Healy is currently conducting a variety of other analyses to assist organizations in litigation.

These clients include:
▪ City of Bryan, TX
▪ City of Garland, TX
▪ City of Greenville, TX
▪ City of Turlock, CA
▪ City of Vernon, CA
▪ City of Weatherford, TX
▪ City of Westlake, TX
▪ Lubbock Power & Light, TX
▪ Orange County Power Authority
▪ Pedernales Electric Cooperative
▪ Peninsula Clean Energy
▪ Silicon Valley Clean Energy
▪ 3CE
▪ Bose McKinney
▪ Office of Public Utility Counsel
344
345

BRODY LIEBLER
Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Boulevard, Suite 450
Lakewood, CO 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Bachelor of Science in Business
Administration, Marquette University
International Business Immersion
Program, Universidad Loyola

KEY EXPERTISE
Economic Analysis
Rate Studies
Financial Modeling
Mr. Brody Liebler joined NewGen as a Consultant in July 2024. He assists on cost of service and rate design projects, emphasizing data-driven analytics and applying his econometric analysis skills. Mr. Liebler’s experience includes financial modeling, rate calculation, cost allocation analysis, and Microsoft Excel.

PRIOR RELEVANT EXPERIENCE
Honey Smoked Fish Co.

Sales and Marketing Coordinator
The Martec Group
Market Analyst
 Provided strategic direction to all outsourced partners including social, email, design, experiential, and public relations agencies. Ensured consumer-facing content aligned with the company’s brand standards and positioning.
 Managed syndicated data platforms, including Nielsen Byzzer, Costco CRX, and 8451 OnDemand/Stratum (Kroger).
 Responsible for presenting KPI’s, velocity lifts, and returns on marketing investments to leadership team.
 Coordinated all company events and experiential activations. Notable projects include Natural Product ExpoWest and Costco Roadshows.  Supported launch and development of the first refrigerated seafood snack pack to market, Honey Smoked Salmon Stackers®, now sold nationwide.
 Executed 20+ commercial due diligence engagements for private equity clients across various industries including ESG utility management, renewable energy, building & construction, food & beverage, healthcare, chemical manufacturing, automotive, and professional associations.  Conducted in-depth qualitative and quantitative research through 500+ in-depth interviews, focus groups, online discussion boards, and surveys, producing comprehensive data analyses and strategic recommendations tailored to client needs.
 Composed 20+ market research reports and PowerPoint presentations. 346

BRODY LIEBLER
Consultant
Thoughtful Decision Making for Uncertain Times 2
Huron Capital Partners
Private Equity Intern
 Examined CIMs for potential platform and add on acquisitions for Flagship and Flex Equity Funds.  Engaged in calls with bankers regarding logistics of companies to better understand their investment thesis and value proposition.
 Conducted detailed diligence on prospective investments, including analysis of business model and assisted in financial modeling to value potential targets. 347
THANK YOU!
225 Union Boulevard, Suite 450, Lakewood, CO 80228
Phone: (720) 259 1762
Email: [email protected]
www.newgenstrategies.net
348
OCTOBER 1, 2024
www.newgenstrategies.net

COST OF SERVICE

ANALYSIS AND RATE

DESIGN STUDY

PRICE PROPOSAL
REQUEST FOR PROPOSAL 24-073
Prepared for:

Ms. Barbara Mason - Purchasing Manager
Purchasing Division
99 E. Ramsey Street
Banning, CA 92220
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
349
350

CITY OF BANNING, CA
RFP-24-073

COST OF SERVICE ANALYSIS AND RATE DESIGN STUDY
Thoughtful Decision Making for Uncertain Times 1

PRICE PROPOSAL
NewGen Strategies and Solutions, LLC (NewGen) proposes to conduct the Scope of Services for the City of Banning’s (City) RFP-24-073 Cost of Service Analysis and Rate Design Study (Study) on a time and materials basis for an estimated not-to-exceed budget of $164,600 which includes all estimated labor and expenses, including reasonable travel-related expenses.

The following tables breaks down all the direct and indirect costs for this project. NewGen affirms that our charges invoiced to the City for travel, lodging, and subsistence shall not exceed the current IRS rates.

Phase
Labor
Estimate
Travel
Expense
Estimate Total
Phase I – KO, Strategic Plan, Rev Req, COS $57,000 $1,500 $58,500 Phase II – Rate Design $35,200 $0 $35,200
Phase III – Financial Model $27,600 $0 $27,600
Phase IV – SE Engagement, Reports, Presentations $36,100 $7,200 $43,300 Total Estimated Budget $155,900 $8,700 $164,600
*Numbers may not add due to rounding.

Phase
Burnham
$290
Schuepbach
$280
Buckley
$185
Carnes
$190
Healy
$175
Liebler
$165
Admin
$130
Travel
Expenses Total
Phase I 72 16 108 8 32 16 16 $1,500 $58,500
Phase II 32 8 56 8 40 24 8 $35,200
Phase III 16 12 60 4 24 16 8 $27,600
Phase IV 56 4 32 46 8 4 16 $7,200 $43,300
Estimated
Hours/Budget
176 40 256 66 104 60 48 $164,600
*Numbers may not add due to rounding.
351
352
THANK YOU!
225 Union Boulevard, Suite 450, Lakewood, CO 80228
Phone: (720) 259 1762
Email: [email protected]
www.newgenstrategies.net
353

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Laurie Sampson, Assistant City Manager
MEETING DATE: November 12, 2024
SUBJECT: Consideration of Resolution 2024-176, Accepting Community Development Block Grant (CDBG) Funds for Fiscal Year 2024/2025 in the Amount of $159,408 for the Banning Senior Center (5.BN.61-24) in the Amount of $43,144; Dysart Park Improvement Project (5.BN.62-24) in the Amount of $105,000; And the Banning Peace Center Food Program in the Amount of $11,264, and Rescinding Resolution 2024-159
RECOMMENDATION:

Adopt Resolution 2024-176.

BACKGROUND:

On October 8, 2024, the City Council approved Resolution 2024-159, accepting the Supplemental Agreement for the Community Development Block Grant for FY 2024-2025.

On October 31, 2024, the Riverside County Housing and Workforce Solutions representative contacted the Assistant City Manager and requested the resolution be amended to include language that designates with agreement be executed by the Mayor.

JUSTIFICATION:

The updated language will allow the agreement to be executed by the Mayor.

FISCAL IMPACT:

None
ALTERNATIVES:

Reject Resolution 2024-176 and forfeit CDBG funds for FY 2024-25.

BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. Resolution 2024-176, CDBG Supplemental Agreement.docx

2. CDBG Supplemental Agreement 2024-2025.pdf
354
Resolution 2024-176