Agenda, closed session, first session — Crescent City City Council, December 18, 2023 (part 2 of 2)

16.8. VERIFICATION OF COVERAGE. CONSULTANT must provide with Certificates of Insurance for all required coverages as well as Declarations and applicable Endorsement Pages prior to commencement of work.

However, failure to obtain the required documents prior to the commencement of work will not operate to waive CONSULTANT’s obligation to provide them at any time thereafter when requested. CITY reserves the right to demand complete, certified copies of all required insurance policies, including endorsements, required by the specifications, at any time.

16.9. SUBCONTRACTORS. CONSULTANT must require and verify that all subcontractors, if any, maintain insurance meeting all of the requirements stated herein. CONSULTANT must endure that CITY, its elected and appointed officials, employees, agents and volunteers are additional insureds on all policies as required herein.

16.10. LACK OF COVERAGE. In the event that any required policy is canceled prior to the completion of the Project and CONSULTANT does not furnish a new Certificate of Insurance prior to cancellation, CITY may obtain the required insurance and deduct the premium(s) from contract monies due to CONSULTANT.

17.WORKERS' COMPENSATION.

17.1. COVENANT TO PROVIDE. CONSULTANT warrants that it is aware of the provisions of the California Labor Code which require every employer to be insured against liability for workers' compensation or to undertake selfinsurance in accordance with the provisions of that Code. CONSULTANT further agrees that it will comply with such provisions before commencing the performance of the work under this Agreement.

17.2. WAIVER OF SUBROGATION. CONSULTANT and CONSULTANT'S insurance company agree to waive all rights of subrogation against CITY, its elected or appointed officials, agents, and employees for losses paid under

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CONSULTANT'S workers’ compensation insurance policy which arise from the work performed by CONSULTANT for CITY.

18. PROPOSAL. The proposal submitted by CONSULTANT is attached hereto as Exhibit “C” and incorporated herein by reference to the extent that it does not conflict with this Agreement.

19. GENERAL PROVISIONS.

19.1. INDEMNIFICATION. CONSULTANT agrees to indemnify, defend and save harmless CITY, its elected and appointed officers, agents, employees, and volunteers from any and all claims and losses, whatsoever, accruing or resulting to any person or other legal entity who may be injured or damaged resulting from any wrongful acts, errors and omissions, or negligence of CONSULTANT, its agents and employees, pertaining to the performance of this Agreement. CONSULTANT’S liability arising out of the performance of its obligations hereunder will be limited to the fees paid by CITY to CONSULTANT for services contemplated by this Agreement. This liability limitation does not apply to claims made by any third party, nor does it apply in the event of the willful misconduct or gross negligence of CONSULTANT, its principals, employees or agents.

19.2. CONFLICT OF INTEREST. CONSULTANT must exercise reasonable care and diligence to prevent any actions or conditions which could result in a conflict with CITY’s interest. CONSULTANT must immediately notify CITY of any and all violations of this Section upon becoming aware of such violation.

19.3. TIME OF THE ESSENCE. CONSULTANT understands and agrees that time is of the essence in the completion of the work and services described herein.

19.4. SEVERABILITY. If a court of competent jurisdiction or subsequent preemptive legislation holds or renders any of the provisions of this Agreement unenforceable or invalid, the validity and enforceability of the remaining provisions, or portions thereof, will not be affected.

19.5. GOVERNING LAW AND CHOICE OF FORUM. This Agreement must be administered and interpreted under California law as written by both parties.

Any litigation arising from this Agreement must be brought in the Superior Court of California, in and for Del Norte County.

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19.6. COSTS AND ATTORNEYS' FEES. If either party commences any legal action against the other party arising out of this Agreement or the performance thereof, the prevailing party in such action will be entitled to recover its reasonable litigation expenses, including court costs, expert witness fees, discovery expenses, and attorneys' fees.

19.7. NO ASSIGNMENT. This Agreement and any amendments hereto are not assignable by CONSULTANT either voluntarily or by operation of law without the prior written consent of CITY. Any attempt to assign this Agreement will be legally void.

19.8. INTEGRATION. This Agreement constitutes the entire agreement of the parties and supersedes and prior negotiations, agreements, understandings, representations or statements.

19.9. SURVIVAL. The parties' obligations under Sections 8 [confidential information], 16.3 [primary coverage] and 19.1 [indemnification] will survive the termination or expiration of this Agreement.

19.10. AUTHORITY. The signatories to this Agreement hereby represent and warrant that they have been duly authorized to legally bind and execute this Agreement on behalf of their respective parties.
[END OF AGREEMENT]

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SIGNATURE PAGE – PROFESSIONAL SERVICES AGREEMENT
SEWER RATE STUDY – WILLDAN FINANCIAL SERVICES
Executed by CITY and CONSULTANT by their duly authorized representatives on this ______ day of ______________________, 20______.

CITY OF CRESCENT CITY CONSULTANT – WILLDAN FINANCIAL
SERVICES.
_______________________________
By: Eric Wier, City Manager
_______________________________
By:

Its:

ATTEST:
_______________________________
Robin Altman, City Clerk
APPROVED AS TO FORM:
_______________________________
Martha D. Rice, City Attorney

EXHIBITS
The following exhibits are attached hereto and incorporated herein by reference:

Exhibit A- Scope of Services
Exhibit B- Compensation
Exhibit C- Willdan Proposal dated October 26, 2023

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EXHIBIT A

SCOPE OF WORK

1. PROJECT INITIATION
TASK 1.1 – DATA COLLECTION AND REVIEW
Task 1.1.1 – Data Collection. CITY will be provided with an initial list of basic data needed to conduct the study. The data request may include, but will not be limited to:
• Financial and operating data (budgets, audits, financial statements, cash balances, etc.);
• Customer account and billing data;
• Related reports prepared by others (i.e., Master Plans); • Capital improvement programs, fixed asset records;
• System operating data for the utility;
• Bond statements, debt service schedules;
• Ordinances, previous rate studies, City codes; and
• City financial, debt and reserve policies.

Task 1.1.2 – Data Review. CONSULTANT proposes to conduct initial data collection and review prior to the kickoff meeting to allow for a more meaningful discussion during the meeting. This will allow for CONSULTANT’S review of data in advance of the meeting so that we can request clarifications or follow-up information, as necessary. However, if CITY’S preference is to conduct the kickoff prior to collecting data, CONSULTANT will accommodate that request. The data will be reviewed for completeness and to ensure a sufficient understanding of historical utility operations. The data collection and review process will be ongoing throughout the process as the need for additional information arises.

TASK 1.2 – KICKOFF MEETING AND PLANNING DISCUSSION
Task 1.2.1 – Project Kickoff. Following initial data collection and review, CONSULTANT will conduct a kick-off meeting with CITY staff. During this meeting we will discuss goals and objectives of the study, the schedule, constraints, or challenges that may be encountered, stakeholder considerations and objectives, and political concerns.

Discussions may center around the following:
• Review of previous rate study and existing rate structure and areas where existing rates have been successful and/or specific areas of focus; • Review of recent financial performance for the utility; • Discussion of anticipated significant events (i.e., loss or gain of any major customers);

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• Components to incorporate into the updated revenue requirements, such as, capital improvements, debt repayment, reserves, annual repair and replacement, ongoing maintenance, etc.;
• Strategy and level of effort for outreach and education; • Conduct a detailed review of the data used in the baseline financial forecast; and • Review and resolve (or develop a plan for resolving) data issues and questions.

For further efficiency and collaboration, the kick-off meeting will include a financial policy discussion. This will serve to address and document CITY’S financial policies for the utility to be studied. Topics of discussion may include:
• Rate design approaches and alternatives;
• Rate policy objectives;
• Reserve options and target levels (operating, debt services, rate stabilization, repair, and replacement);
• Capital Improvement Plan (CIP) financing options – i.e., PAYGO vs. debt; • Cost of service factors; and
• Proposition 218.

2. SEWER RATE STUDY
TASK 2.1 – REVENUE REQUIREMENTS AND RATE DETERMINANTS
Task 2.1.1 – Historical Billing Data Analysis. The data request document will provide instructions for the development of historical customer billing information. It is anticipated that the billing information will be provided in a format necessary to summarize the sewer system accounts and billable flows and strengths by customer class for a recent historical period for which audited revenues exist. The customers, flows and strengths provide the basis on which operating revenues are derived and are therefore the primary factors utilized in reviewing the user rates and charges. As such, the historical billing data provides an important basis for analyses that will be used to develop assumptions for projecting revenues under existing and/or proposed rates.

Given the critical nature of this task, the CONSULTANT’S Project Team will work closely with assigned CITY staff members to ensure that the customer and flow data is as accurate as possible.

Task 2.1.2 – Customer and Flow Projections. The sewer system account and billable flows and strengths will be forecasted for a five-year (5) planning period. Such projections will be developed by considering historical growth trends, peak demands, local economic conditions, potential for adding/losing major utility customers, changes in customer class usage patterns over time, and experienced judgment. The billable flow projections will be based on the projected number of utility accounts and a usage per

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account analysis to differentiate the historical effects of account growth and increased (decreased) average usage by customer class.

Task 2.1.3 – Projected Revenues Under Existing Rates. Projections of utility system revenues under existing rates for the five-year (5) planning period will be developed for sewer, recognizing projected accounts, flow volumes, and usage patterns by customer class (as determined in the billing analysis under the previous tasks). Such revenue projections will assume that the existing user rates and rate structures remain constant at the existing levels. Projections will then be expanded out to ten years (10) for forecasting and planning purposes.

Task 2.1.4 - Projected Revenue Requirements. Revenue requirements (i.e., system expenditures) will be developed for the utility systems based on an analysis of historical, currently budgeted, and anticipated operating and capital expenditures. The revenue requirements will be projected on a fiscal year cash flow basis, considering expected operational changes, changes in staffing or operating expenditures for new facilities, system growth occurring from new development, anticipated extraordinary expenses, and allowances for inflation. The projections will include, but not be limited to, the following:
• Operation and maintenance expenses;
• Direct and Indirect Costs;
• Debt service and reserve requirements on existing and anticipated debt instruments;
• Outlay for annual capital additions and replacements; • Projected overhead incorporated into the ongoing Cost Allocation Plan development; and
• Other expenditures and transfers.

Task 2.1.5 – Projected Operating Results Based on Existing Rates. The projected revenues and revenue requirements will be summarized into a five and ten-year cash flow statement providing the projected operating results of the sewer system under the existing rates.

The cash flow statement will be used to estimate annual adjustments in utility revenues necessary to fund operating and capital expenditure requirements, meet bond covenant requirements, and maintain prudent utility management practices. The estimated timing and magnitude of future debt issues required, if any, to finance proposed capital improvements will also be shown.

Concurrent with the development of the projected operating results, the study will review the general financial health of the utility operations and, as necessary, make recommendations for changes in fund balances, reserves, and debt service coverage ratios to maintain financial integrity and a stable bond rating.

TASK 2.2 – CAPITAL IMPROVEMENT PLAN ANALYSIS

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Task 2.2.1 – Review Capital Improvement Program (CIP). CITY’S existing utility system five-year (5) CIP will be reviewed in conjunction with conversations with CITY staff. The objective of such a review is to gain an understanding of the types of projects scheduled; the timing associated with such projects, associated expenditure requirements and the sources of funding each project. The results of the financial plan will also help the City to prioritize projects identified within the CIP.

Task 2.2.2 – Develop Capital Needs Plan. Based on the findings made in the previous task and the Projected Operating Results described in Task 2.1.5, a plan will be developed to provide for the anticipated capital expenditure activities, including debt issuances, relative to the CIP. Such a plan will include consideration for the use of restricted and unrestricted funds, surplus operating reserves, capital recovery fees, and future rate adjustments. The analysis will also develop a projection of reserve fund balances and level of liquidity.

Task 2.2.3 – Capital Projects Model. The CIP will drive the future funding options and will directly impact rates. Therefore, the rate analysis will incorporate CITY’S current fiveyear CIP. The rate model will have the ability to run various CIP funding scenarios and quickly show the estimated impact on utility rates. Since we are not acting as the financial/municipal advisor to CITY for this project, we will rely on information relative to proposed debt or financing structures provided by the City or its designated financial/municipal advisor.

TASK 2.3 – COST-OF-SERVICE ALLOCATIONS
Task 2.3.1 – Functional Cost Allocations. The analysis will allocate the Test Year revenue requirement (i.e., costs of providing service) to the various cost/rate components that constitute functional classifications of the types of service provided. The functional cost allocations will evaluate such aspects as fixed costs, customer related costs and volumetric/usage related costs.

Task 2.3.2 – Determination of Revenue Adequacy. Comparisons of revenues under the existing sewer rates with the allocated costs of service will be evaluated in order to determine the degree of cost recovery by the various cost components, and to identify areas that may possibly require adjustments to align the revenues from each rate component with the allocated costs.

TASK 2.4 – RATE ANALYSIS AND DESIGN
Task 2.4.1 – Evaluation of Existing Rate Structure. The existing rate structure will be further evaluated for its effectiveness in equitably recovering costs of utility service from each customer class. CITY’S current rate structure will be evaluated, and recommendations will be made for potential modifications to the current rates.

Based on these discussions, the analysis will develop and recommend a rate design and philosophy that best meets the objectives of CITY. The analysis model will be developed

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in a dynamic manner allowing CITY to compare alternative annual incremental/phasing adjustments to achieve funding goals. Basic standards for rate design accepted by the industry are:

Full Cost Recovery – rate revenue should provide sufficient income so that, when combined with other sources of funds, covers all the funding requirements for the system including, all current long-term liabilities, debt obligations and future expansion-related and R&R-related capital needed to replace aging and infrastructure.

Fairness and Equity – based on cost responsibility as reflected in cost-of-service allocations, in accordance with industry standards.

Technically Defensible – apply industry proven standards and methodologies to help shield the City from potential legal challenges associated with the proposed utility rates.

Administrative Efficiency – rates should be understandable to customers and efficiently administered by staff.

Customer Acceptance – customers understand the rates, view them as fair, and consider them to be reasonable compared to other costs and other utilities.

Public Health and Welfare – rates are structured so that essential service usage is encouraged through affordability.

Task 2.4.2 – Rate Structure Alternatives. The rate model will be developed in a dynamic manner such that CONSULTANT and CITY staff will be able to analyze “what if” scenarios detailing the financial impacts under each scenario utilizing an iterative dashboard view.

Baseline rate structures will be recommended as required to fund the utility system, and consider annual inflationary, indexed adjustments to rates as needed. As necessary, alternative rate structure scenarios will also be identified, and the financial impacts associated with planned capital expenditures and/or implementation of mandated regulatory requirements will be estimated. Any alternative rate structures will be based on common industry standards and will be consistent with CITY’S goals and objectives.

Task 2.4.3 – Projected Operating Results Based on Proposed Rates. The proposed user rates and/or rate structures will be applied to the projected customers and flows in order to estimate the revenues to be generated from the proposed rates for the Test Year and the subsequent years of the projection period. In addition, similar to the process described in Task 2.1, the 5-year forecast will identify annual adjustments in utility system revenues necessary to meet bond covenant requirements, prudent management practices, and/or sound capital financing considerations.

Task 2.4.4 – Typical Bill Comparison. Comparisons of typical utility bills under the existing and proposed rates will be developed for each customer class under various levels of usage. The selected customer class usage levels will reflect the results of the billing

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analysis so as to better demonstrate rate impacts on typical customer accounts in each class.

Task 2.4.5 – Neighboring Utility Comparison. A comparison will be prepared, with no more than ten utilities, to assess the difference between the existing and proposed rates of CITY with those of other comparable Del Norte County municipal utility systems.

3. REPORTS AND DELIVERABLES
TASK 3.1 – PRELIMINARY DRAFT REPORT
Task 3.1.1 – Preliminary Draft Report. A draft report will be developed to address the study findings and the proposed recommendations. Contents will also include assumptions relied upon for the projection of customers and usage characteristics, revenue requirements, revenues, operating results, the cost recovery profile for each class, the results of the fully allocated cost of service analyses and any proposed adjustments to the utility rates. Upon completion, an electronic PDF copy and ten (10) copies of the draft report will be provided to staff for review. The report and presentations will also include a comparison of Crescent City current and proposed rates with five (5) other public agencies.

TASK 3.2 – FINAL REPORT.

Task 3.2.1 – Final Report. Based on comments received from staff and other participants during the presentation of the Preliminary Draft Report, the Final Report will be revised to incorporate the agreed upon changes. Upon completion, an electronic PDF copy and ten copies of the Final Rate Study Report, as well as the Dashboard Model spreadsheet will be provided to CITY.

4. PROPOSITION 218 NOTICE*
*Costs for printing and mailing Prop 218 notices is not included as part of this agreement.

An estimate will be provided at a later date, and the costs will be billed directly to CITY at the time of mailing once the actual costs are known.

TASK 4.1 – PROPOSITION 218 NOTICE AND PUBLIC OUTREACH MATERIALS Task 4.1.1 – Proposition 218 Notices. Based on CONSULTANT’S 30-year history with Proposition 218 compliance, CONSULTANT will assist with the drafting of the notices that will explain:
• The purpose of the rates;
• The reason for the increases;
• How the rates are structured;
• The date, time, and place of the public hearing; and

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• Details on what constitutes the existence of a majority protest, as it relates to the implementation of a new/increased utility rate structure.

Task 4.1.2 – Proposition 218 Notice Processing. CONSULTANT will assist CITY in the development of the materials, create a parcel database of properties subject to the new proposed rates, and coordinate the printing and mailing of the materials in conjunction with a mailing house that CONSULTANT typically works with on these types of projects.

5. MEETINGS AND PRESENTATIONS
TASK 5.1 – MEETINGS AND PRESENTATIONS
Task 5.1.1 – Project Kick-Off. As detailed in phase one, a kick-off conference call will be scheduled with CITY staff at the start of the project to discuss project requirements, finalize project scheduling/milestones and reporting requirements, and receive overall project direction. This discussion will provide the opportunity to review current sewer rates, fees, charges, issues, and deficiencies with staff.

Task 5.1.2 – Project Progress Web Conferences. During the project, and prior to meetings with the City Council, team web conferences will be scheduled to present the progression of the analysis to staff in order to obtain input and feedback associated with any rate adjustments that may be presented. These web-meetings will assist in the completion of rate design for the utility system and guide the development of the draft report.

Task 5.1.3 – Draft Financial Planning. The results of the Preliminary Financial Plan and Revenue Requirements will be presented to staff for comments, feedback, and direction.

Task 5.1.4 – Draft Study / Final Report Meetings. The draft report will be reviewed with City Staff to discuss findings and recommendations, gather feedback and address questions, then presented to the Council during one (1) City Council meeting.

Task 5.1.5 – Public Hearing. CONSULTANT will attend the (1) Public Hearing before the City Council, as required by Proposition 218 on the proposed rates. CONSULTANT’S Principal-in-Charge / Project Manager will be present to address any questions or concerns raised during the public hearings.

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EXHIBIT B

COMPENSATION
Reimbursable Costs
CITY shall reimburse CONSULTANT for any costs Willdan incurs, including without limitation, copying costs, digitizing costs, travel expenses, employee time and attorneys' fees, to respond to the legal process of any governmental agency relating to the City or relating to this project. Reimbursement shall be at Willdan's rates in effect at the time of such response.

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Hours will be billed at the rate in effect at the time the work is performed. The rates listed above are the current hourly rates.

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PROFESSIONAL SERVICES AGREEMENT EXHIBIT C - PG. 1

EXHIBIT C
Willdan Financial Services Proposal
Dated October 26, 2023
Attached
Proposal for
Sewer Utility Rate Study
City of Crescent City
EXHIBIT C: PROPOSAL
T 951.587.3500 ▪ 800.755.6864 | F 951.587.3510 ▪ 888.326.6864 | 27368 Via Industria, Suite 200, Temecula, CA 92590 | www.willdan.com October 26, 2023
Mr. Eric Weir, PE via email: [email protected]
City Manager
City of Crescent City
377 J Street
Crescent City, CA 95531
Re: Proposal to Conduct a Sewer Rate Study for the City of Crescent City Dear Eric:

Based on our recent conversation and your request, Willdan Financial Services (“Willdan”) is pleased to submit the following proposal to conduct a Sewer Rate Study on behalf of the City of Crescent City (“City”).

Willdan’s interactive approach will result in a customized Excel financial model, that the City will retain, as well as a focused and tailored analysis of the City’s current rates, revenues, capital project and operational expenditures, debt commitments, reserve funding, and other financial data. The culmination of our analysis will be a comprehensive financial management plan that develops projected system operating results for the next ten (10) fiscal years, and suggested rates for up to five (5) years. We will employ our proven interactive approach, supported with advanced financial modeling techniques, to develop a sophisticated and flexible financial model to help us guide the City through operating and financial scenarios, while evaluating the impact of policy assumptions, and performing sensitivity analysis on utility rates and financial strategies.

Our ability to focus on the financial aspects of operating publicly owned utility systems is coupled with recognized leadership in strategic planning and operations and enables us to bring unmatched value to our clients. Our team brings a set of nationally recognized qualifications and experts that sets us apart. These qualifications include:

Direct Experience with the City of Crescent City — Willdan successfully partnered with the City of Crescent City on the previous Utility Rate Study. We maintain the model and the data from this previous project, which will provide us critical insight and basis for comparison as we undertake this updated study, and the City with continuity in approach.

Our team will bring the same level of professionalism and expertise the City has come to expect, and our knowledge of the City’s organization and systems to this proposed engagement. Where possible, we will leverage our understanding of the City’s operations and key staff to gather information and facilitate this study in a cost effective and efficient manner; focusing less time on data gathering, and more on analysis.

Unique Approach — Our approach to the development of utility rates has been carefully honed over the years.

We will work collaboratively with City staff to carefully assess and understand the City’s unique utility system concerns and issues, clarify goals and objectives for the study, and develop a tailored approach that will best serve your needs. We do not use a “cookie-cutter” approach, but rather bring a combination of planning and financial expertise providing a thorough understanding of utility operations and management.

A key to our approach is the use of a sophisticated and dynamic model and dashboard that allows us to quickly evaluate alternatives resulting from changes in assumptions and input variables, to address different policy and financial objectives. This allows us to work collaboratively and transparently, to provide comprehensive business solutions. Our objective is to educate and inform throughout the process, not just at the completion of the project.

Unmatched Experience Developing and Implementing Utility Rates — Willdan is nationally recognized for its expertise in developing and implementing utility system financial planning, rate, and impact fee studies, and has extensive experience in California implementing Proposition 218 compliant rate structures.

We recently completed successful comprehensive studies for the Cities of Lakeport, Dinuba, McFarland, La Palma, Guadalupe, Sebastopol, and Grover Beach, and the McKinleyville Community Services District; we are currently working with the Cities of Vacaville, Calexico, Arvin, and Fillmore, with objectives and experience that relate closely to the goals of the City’s proposed study.

Mr. Eric Weir, PE, City Manager
City of Crescent City
Proposal to Conduct a Sewer Rate Study
October 26, 2023 | Page ii
Communicating the Results — Sound technical analysis is only one element of this process. It will be equally important to effectively communicate results and implications of the proposed rate structure to City staff, City Council, key stakeholders, and ultimately to those that will be subject to new rates.

Most of our projects incorporate significant community and/or stakeholder involvement and education efforts, and our experienced consultants are able to communicate complicated technical analysis in a manner that is easy to follow and understand.

The intuitive setup of our financial models allows Willdan to discuss and present critical information in a way that maximizes engagement and facilitates outreach. Our reports and presentations provide a solid understanding of the project and the rationale behind the development of the rates.

I, Chris Fisher, will serve as the primary contact person for this proposal; as an officer of the firm, I am authorized to negotiate and bind Willdan Financial Services. Provided in the table below is my contact information.

Willdan Financial Services
Proposal Contact
Chris Fisher
Vice President / Director
27368 Via Industria, Suite 200 | Temecula, CA 92590
Tel#: (951) 587-3500 | Email: [email protected]
Willdan maintains exceptional experience in utility cost of service and rate analysis and is excited about this opportunity to use our skills and expertise to serve the City of Crescent City once again.

Sincerely,

WILLDAN FINANCIAL SERVICES
Chris Fisher
Vice President / Director
Sewer Rate Study iii
City of Crescent City, CA
Table of Contents
Table of Contents..............................................................................................................................................iii Scope of Services.................................................................................................................................................1 Project Understanding ...........................................................................................................................1 Project Approach ....................................................................................................................................2 Project Methodology ..............................................................................................................................2 Scope of Work.........................................................................................................................................7 City Staff Support / Responsibilities...................................................................................................12 Project Disclaimer.................................................................................................................................12 Project Management and Quality Assurance/Control Approach ....................................................13 Project Schedule .............................................................................................................................................. 15 Fee Proposal.......................................................................................................................................................16 Sewer Rate Study..................................................................................................................................16 Proposition 218 Fees............................................................................................................................16 Qualifications and Experience...................................................................................................................18 Firm Profile ............................................................................................................................................18 Background Experience.......................................................................................................................19 References.............................................................................................................................................21 Project Team ..................................................................................................................................................... 23 Project Team Organization ..................................................................................................................23 Resumes ................................................................................................................................................23 Chris Fisher.............................................................................................................................................24 Michael Cronan.......................................................................................................................................25 Sewer Rate Study 1
City of Crescent City, CA
Scope of Services
Project Understanding
The following project approach and scope of services is based on our understanding of the City’s current financial situation with respect to the utility and the services requested. We are confident that our proposed work plan will effectively address the City’s objectives and if necessary, a final scope and schedule will be determined following further discussions with City staff.

A critical component of this project will be the development of a financial plan and model that starts with five (5) years of projections, and extends to ten (10) years, which will allow us to present and discuss findings with the City on a timely and efficient basis. During meetings we can make adjustments on-the-fly to evaluate different assumptions and approaches, to ensure the final financial plan and recommendations address the financial challenges and objectives for the utility, including funding of operating and maintenance costs, capital repairs and improvements, and funding of appropriate reserves.

The project will entail three primary phases. The first is the development of the financial plan for the utility, with projections for the next five years for the purposes of recommending rate adjustments and extended out to ten years to provide a longer view of potential utility needs, particularly capital projects. The purpose of the financial plan is to arrive at the required revenue for the utility, which serves as the basis for recommendations going forward, and the development of updated rates if necessary. Then, once the results of the financial plan are reviewed with City Staff, we will proceed with the cost-of-service analysis and development of rates, and preparation of a report.

When developing the financial plan, it will be important to take into consideration updated costs of operating and maintaining the systems, as well as planned capital projects. We will produce financial analysis and recommendations to account for these critical needs, while balancing them with the potential impact on customers, Willdan will develop a comprehensive financial plan that considers updated forecasts for sewer operating expenses, as well as capital expenses, and provides for:
▪ Sufficient and stable revenue for operations and routine maintenance; ▪ Coverage for direct and indirect costs;
▪ Adequate debt service coverage for existing and/or proposed debt; ▪ Sufficient funds to support new debt issuance, if necessary; ▪ Accumulation and maintenance of appropriate reserves; ▪ Anticipated and routine repair and replacement of existing aging pipelines and infrastructure; and ▪ Major and minor capital projects.

This financial plan will serve as the basis for the second and third phases of the project, which is the full cost of service analysis and ultimately the development of recommendations for updated rates. The cost-of-service analysis will be conducted to ensure any new recommended rates will comply with the requirements of Proposition 218. We will also examine current customer categories and rate categories to find opportunities to simplify the administration of the sewer rates and make the categories more understandable and practical.

The financial plan will be created using a highly flexible and interactive model and dashboard that will allow us to work collaboratively with the City to present and evaluate different financial scenarios, and quickly make changes in underlying assumptions based on feedback and discussions. Our goal will be to arrive at a financial plan that meets the City’s objectives, and that provides understanding and education to City staff and ultimately the Council, as they make decisions regarding proposed rates.

Sewer Rate Study 2
City of Crescent City, CA
Project Approach
The following project approach and scope of services is based on Willdan’s current understanding of the City of Crescent City’s needs and objectives for the sewer rate study. While this approach and scope is informed by our initial research, we will begin this project by working with the City to complete this research and understanding of the City’s current financial situation and conducting meaningful discussions to more fully understand your objectives and priorities for this study.

Our objective is to provide Staff and the City Council with the information it needs to fully understand the utility current and projected financial condition, evaluate options for moving forward, and make informed decisions based on this process.

The intent of the study is to independently evaluate the City’s current utility rates and develop an updated schedule of rates that are simple, equitable, and most importantly, structured to meet the future financial needs of the utility.

The proposed rate structure must adequately fund the
ongoing operating, maintenance and capital improvement
needs of the utility.

For this project it will be critical to take a deeper look at the financial performance of the previous five years and project results forward, taking into account capital projects and anticipated debt, to evaluate the ability of current rates to provide sufficient revenue. We will
create a comprehensive financial plan and model that
allows us to work with the City to evaluate and test
alternatives and demonstrate the impact of capital and
reserve funding scenarios and their associated impacts on overall financial performance.

The City wishes to undertake this study to review sewer rates from both a policy and analytical standpoint. Willdan will prepare a comprehensive ten (10) year financial plan and analysis of rate alternatives; evaluate the current rate structure; and determine whether adjustments in the rates are necessary going forward. This analysis will include development of the financial plan and cost of service analysis necessary to arrive at informed recommendations and defensible Prop 218 compliant rates. We will also identify potential challenges and issues associated with implementing new rates, and work with the City to develop strategies to address these.

Project Methodology
As described herein, and detailed in our work plan, our approach to this sewer rate study is built around three primary objectives:

Primary Objectives
Working collaboratively with the
City of Crescent City to develop the
comprehensive financial plan and
model for the utility
Using the model to develop and
evaluate various rate, financial
and capital funding scenarios
Arriving at a final plan and set of
recommended rates that have a clear
and transparent rationale and basis
We propose to conduct this process in a way in which staff and stakeholders gain understanding throughout the process of how the plan is developed, and how policy and financial decisions affect it, so that we can clearly communicate the process and results to the City Council and the community. The communication part of the process is critical in gaining acceptance and understanding of the broader community.

Our rate study analysis will include comprehensive financial management plan alternatives for the next ten fiscal years to support the proposed five-year rate plan. Div Description

GENERAL MANAGER DIVISION
2010 GENERAL MANAGER
2020 COMMUNICATIONS AND PUBLIC AFFAIRS
2030 HUMAN RESOURCES

ADMINISTRATIVE SERVICES DIVISION
3010 ADMINISTRATIV E SERV ICES
3020 FINANCE & ACCOUNTING
3030 CUSTOMER SERV ICE
3040 OFFICE SUPPORT
3050 PURCHASING
3060 METER OPERATIONS
3070 INFORMATION TECHNOLOGY

ENGINEERING & ENVIRONMENTAL SERVICES DIVISION
5010 ENV IRONMENTAL & ENGINEERING SERV ICES ADMINISTRATION 5020 SAFETY
5110 ENGINEERING DESIGN & CONSTRUCTION SUPERV ISION
5120 CIV IL & STRUCTURAL DESIGN
5140 CONSTRUCTION MANAGEMENT
5210 OPS SUPERV ISION
5220 ENGINEERING PLANNING
5250 WATER SYSTEM OPERATIONS
5310 ENGINEERING SUPPORT SUPERV ISION
Incorporates City’s
data and account
structure creating
transparency
Sewer Rate Study 3
City of Crescent City, CA
As part of this analysis, Willdan will develop a comprehensive financial analysis — which incorporates the following:
▪ Revenue requirements such as operating expenses, transfers, reserve requirements; ▪ Major and minor capital expenses;
▪ Cash and debt-funded major capital expenditures, with annual debt service expenses; ▪ Adequate funding of designated reserves including operating and debt service, and other reserves as outlined in the City’s financial policies; and
▪ Functional cost breakdown consistent with Proposition 218 requirements.

The culmination of the revenue requirements analysis, which will include a capital project financing plan, and cost of service allocations, will be alternative rate plans which will provide sufficient revenue to meet the ongoing funding needs of the system, while recovering costs from customers in a manner which is fair, equitable and within reasonable customer impact parameters.

We will develop a robust 10-year pro forma financial model to demonstrate the results of various analyses and aid detailed policy and education discussions with City staff and City Council. It will serve as the basis for developing rate structures that provide for long-term financial stability, reflect levels of service demand for different customer classes, and comply with the requirements of Proposition 218.

During this project, we will utilize our Microsoft Excel-based model, with its interactive dashboard, as a comprehensive financial tool to allow planning and evaluation of variable inputs and assumptions, thereby creating a thorough analysis of revenue requirements to address the City’s goal of ensuring predictable and stable revenue. This analysis is then seamlessly integrated with the rate development component of the model to demonstrate and project various rate design alternatives, and the effects they would have on the City’s financial outlook.

The model is used in meetings, in order to efficiently cycle through rate scenarios and establish the most viable rate plans for the City. During these interactive meetings, we invite City staff to participate in scenario planning / “what-if” sessions, where we use the dashboard to demonstrate and evaluate the financial/rate impact of alternative data (CIP, operating costs, etc.) and assumptions (interest rates, customer growth, cost escalation, etc.) in real-time to focus on the most critical drivers of the analysis. This ensures the resulting rate plan alternatives are viable from a financial, operational, managerial, and political perspective.

To the extent revenues are not projected to be sufficient to meet requirements including operating expenses, debt service payments and coverage requirements, planned capital expenditures and targeted operating reserves, the model can be used to evaluate variable outcomes and alternatives, providing basis for meaningful discussions with elected officials and stakeholders well in advance of the actual rate increase process.

Real-Time Financial Modeling
The goal of financial forecasting is to provide clear vision regarding the potential financial outcomes of current management decisions, or just as importantly, potential decisions. Willdan’s approach helps the City staff mold the existing knowledge base into a viable financial management and capital financing plan.

Any model is only as effective as the expertise of those who develop it; our state-of-the-art financial modeling techniques allow us to incorporate our considerable experience by asking the correct questions, evaluating, and incorporating appropriate data, providing interactive consulting services, and evaluating multiple scenarios with the City in a real-time setting.

Because our interactive model will be populated with specific data from the City (i.e., division and account structure), each alternative reviewed in real-time during interactive meetings with the City can be done with a complete understanding of specific customer impacts. Further, our experience ensures that the data loaded into the model is vetted and validated, and that the baseline results from which forecasts are developed are fully understood from the beginning, so that more time is spent on evaluation of potential solutions, rather than questioning whether the underlying data and assumptions are correct.

The Financial Planning
component of the model provides
transparency, such that users can
develop a viable financial plan
and understand the reasons for
needed revenue adjustments.

Sewer Rate Study 4
City of Crescent City, CA
Model Development as Part of the Consulting Process
The financial planning model will be designed with the following elements:
▪ Graphical dashboard to clearly show the results of various scenarios to the user; ▪ Easily reviewed and modified assumptions;
▪ Validated data tables generated from the City’s financial and operational information; and ▪ A powerful calculation engine.

The model will be “baselined” after an initial meeting with staff to ensure that we have the correct data and a basic understanding of the financial dynamics of your system. We will then conduct interactive financial planning sessions with the City staff.

After validating our data, calculation approach, and
baseline assumptions, we will explore alternative
scenarios, varying a number of assumptions and
financial planning techniques including:
▪ Rate increase magnitude and timing;
▪ Alternative timing of capital projects;
▪ Alternative financing options (alternative
combinations of pay-as-you-go, revenue bond
debt and other debt, for example);
▪ Alternative growth/demand forecasts and other
“what if” analyses such as the impact of a loss of
one or more service areas or significant
customers; and
▪ Effect of increases in other sources of funds.

Given any combination of cost requirements (both
operating and capital), non-rate sources of funds, and
forecast assumptions, the Willdan team will work with
the City to develop a financial plan that:
▪ Meets specified reserve targets;
▪ Addresses identified benchmarks or key performance indicators; ▪ Fully funds capital expenditures using specified financing techniques; and ▪ Meets legal, policy and contractual requirements that are financially measurable, such as debt service coverage on revenue bonds.

Subsequent to careful development and validation of the baseline forecast, a series of alternative forecasts will be prepared illustrating various results in the following general categories:
▪ What if things turn out differently? These alternatives will demonstrate the sensitivity of the forecast to the significant assumptions used. This results in a sound understanding of areas where a conservative forecast approach is warranted;
▪ What happens when we try this? This series of alternatives focuses on different financial management approaches. For example, the use of different financing techniques such as capitalized interest, interim shortterm financing, and capital appreciation bonds may be explored; ▪ What can we do to make it better? This approach to forecasting identifies the factors that may be causing significant rate increases in a given year and explores alternatives. For example, if a large capital project in a single year is the culprit, we would work with staff and the consulting engineers to determine whether this project could be phased or delayed; and
▪ How will any adjustments affect our customers? In examining rate structure alternatives, we will demonstrate and discuss how users in various categories or classifications will be impacted. Our consultants will use our rate design model to explore the impact of various rate structures on bills for each customer class over the relevant consumption range. 0% FY 04 FY 05 FY 06 FY 07 FY 08 D/S Cov-Rcov 2.19 2.36 1.04 1.16 0.84 D/S Cov-Parity NA NA 1.04 NA 0.84 another dialog box for: Level Other
RATE INCR.% 3.0% 3.0% 3.0% 3.0% 3.0%
Sample Utility
Revenue Sufficiency Analysis Dashboard
Rate Revenue Increase Required

3.0% 3.0% 3.0% 3.0% 3.0%

0.0%

10.0%

20.0%

3.0% 3.0% 3.0% 3.0% 3.0%

0.0%

10.0%

20.0%

30.0%
Rate Incr 3.0% 3.0% 3.0% 3.0% 3.0%
Last
FY 04 FY 05 FY 06 FY 07 FY 08
Working Capital
- 20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
Actual 94,509,622 54,544,605 21,300,439 20,421,433 14,244,837 Last Target 20,077,706 20,680,037 21,300,439 21,939,452 22,597,635 FY 04 FY 05 FY 06 FY 07 FY 08
3 Working Capital Target (Expressed as Months of O&M) Capital Projects -
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
CIP 45,000,000 45,000,000 85,000,000 45,000,000 45,000,000 Last FY 04 FY 05 FY 06 FY 07 FY 08
Percent of CIP Spent 100%
Debt Funded Capital
-
50,000,000
100,000,000
150,000,000
CIP - - 97,831,133 - 88,750,000 Last
FY 04 FY 05 FY 06 FY 07 FY 08
Yrs to Bundle Debt 2
Sewer Rate Study 5
City of Crescent City, CA
Communication as Part of the Consulting Process
Willdan’s experienced professionals are accustomed to communicating with a variety of stakeholder groups, from management and staff, boards, and commissions, as well as the community. Our analytical and modeling approach will be customized to the City’s specific needs. As mentioned, the custom graphical interfaces imbedded in our models allow our consultants to easily track key performance metrics and work through alternative scenarios with the City staff and management. Features of the Excel-based analysis model include the ability to incorporate line-item data and assumptions that are then summarized in a graphic dashboard to show key financial indicators for the utility systems.

The sample dashboard below illustrates how we can summarize data, assumptions, and calculations into an easy-tounderstand graphical interface that updates with each alternative scenario evaluated. A copy of the final dashboard model will be provided to the City upon completion of the project.

Sewer Rate Study 6
City of Crescent City, CA
Rate Study Objectives
The overarching rate study objectives are outlined below.

Rate Setting Process
The graphic below summarizes the standard approach commonly employed to develop utility rates. Willdan’s ratesetting process and model has been developed through the completion of many successful studies over the course of time and continues to be the basis for developing proven, well-balanced financial plans that are supported by equitable rate structures. Willdan’s combination of consulting experience and technical expertise helps distill the complex decisions into a clear and easy-to-understand process. As there are often competing objectives, for a successful rate study it is necessary to understand not only the technical details and corresponding rates, but also the social and political corollaries that can often jeopardize the implementation of a technically sound rate structure.

Our rate experience goes beyond simply “running the numbers” by creating numerous scenarios and considering stakeholder considerations, such as customer impact (ability to pay) to ensure a complete and unimpeded rate analysis.

Each step of the three-step approach is typically performed in tandem. Although presented sequentially, the overall analysis is circular – as variables in one analysis may influence another. Thus, it is imperative to constantly review assumptions to determine if variables are fixed (i.e., debt service) or flexible (i.e., consumption or treatment) and monitor how changes in certain variables affect the overall analysis.

Sewer Rate Study 7
City of Crescent City, CA
Scope of Work
The following proposed work plan is intended to capture the goals and objectives of the City. Willdan is confident our proposed work plan will effectively meet project objectives. A final scope and schedule will be determined following the selection of a consultant and based on further discussions with staff.

Willdan’s work plan will culminate in the successful development of utility rates for five years, a ten-year financial plan, and the education of Staff and key stakeholders.

Project Initiation
Task 1.1 – Data Collection and Review
Task 1.1.1 – Data Collection. The City will be provided with an initial list of basic data needed to conduct the study.

The data request may include, but will not be limited to:
▪ Financial and operating data (budgets, audits, financial statements, cash balances, etc.)
▪ Customer account and billing data;
▪ Related reports prepared by others (i.e., Master Plans); ▪ Capital improvement programs, fixed asset records;
▪ System operating data for the utility;
▪ Bond statements, debt service schedules;
▪ Ordinances, previous rate studies, City codes;
and
▪ City financial, debt and reserve policies.

Task 1.1.2 – Data Review. We propose to conduct initial data collection and review prior to the kickoff meeting to allow for a more meaningful discussion during the meeting. This will allow for our review of data in advance of the meeting so that we can request clarifications or follow-up information, as necessary. However, if the City’s preference is to conduct the kickoff prior to collecting data, we will accommodate that request. The data will be reviewed for completeness and to ensure a sufficient understanding of historical utility operations. The data collection and review process will be ongoing throughout the process as the need for additional information arises.

Task 1.2 – Kickoff Meeting and Planning Discussion
Task 1.2.1 – Project Kickoff. Following initial data collection and review, Willdan will conduct a kick-off meeting with City Staff. During this meeting we will discuss goals and objectives of the study, the schedule, constraints, or challenges that may be encountered, stakeholder considerations and objectives, and political concerns. Discussions may center around the following:
▪ Review of previous rate study and existing rate structure and areas where existing rates have been successful and/or specific areas of focus;
▪ Review of recent financial performance for the utility; ▪ Discussion of anticipated significant events (i.e., loss or gain of any major customers); ▪ Components to incorporate into the updated revenue requirements, such as, capital improvements, debt repayment, reserves, annual repair and replacement, ongoing maintenance, etc.; ▪ Strategy and level of effort for outreach and education; ▪ Conduct a detailed review of the data used in the baseline financial forecast; and ▪ Review and resolve (or develop a plan for resolving) data issues and questions.

For further efficiency and collaboration, the kick-off meeting will include a financial policy discussion. This will serve to address and document the City's financial policies for the utility to be studied.

Topics of discussion may include:
▪ Rate design approaches and alternatives;
▪ Rate policy objectives;
▪ Reserve options and target levels (operating, debt
services, rate stabilization, repair, and
replacement);
▪ Capital Improvement Plan (CIP) financing options
– i.e., PAYGO vs. Debt;
▪ Cost of service factors; and Proposition 218.

Sewer Rate Study 8
City of Crescent City, CA
Sewer Rate Study
Task 2.1 – Revenue Requirements and Rate Determinants
Task 2.1 encompasses the development of the comprehensive financial plan and model, with specific factors and areas of focus identified below.

Task 2.1.1 – Historical Billing Data Analysis. The data request document will provide instructions for the development of historical customer billing information. It is anticipated that the billing information will be provided in a format necessary to summarize the sewer system accounts and billable flows and strengths by customer class for a recent historical period for which audited revenues exist. The customers, flows and strengths provide the basis on which operating revenues are derived and are therefore the primary factors utilized in reviewing the user rates and charges. As such, the historical billing data provides an important basis for analyses that will be used to develop assumptions for projecting revenues under existing and/or proposed rates.

Given the critical nature of this task, the Willdan Project Team will work closely with assigned staff members to ensure that the customer and flow data is as accurate as possible.

Projections will then be expanded out to ten years (10) for forecasting and planning purposes.

Task 2.1.4 – Projected Revenue Requirements. Revenue requirements (i.e., system expenditures) will be developed for the utility systems based on an analysis of historical, currently budgeted, and anticipated operating and capital expenditures. The revenue requirements will be projected on a fiscal year cash flow basis, considering expected operational changes, changes in staffing or operating expenditures for new facilities, system growth occurring from new development, anticipated extraordinary expenses, and allowances for inflation. The projections will include, but not be limited to, the following:
▪ Operation and maintenance expenses;
▪ Direct and Indirect Costs;
▪ Debt service and reserve requirements on
existing and anticipated debt instruments
▪ Outlay for annual capital additions and replacements; ▪ Projected overhead incorporated into the ongoing
Cost Allocation Plan development; and
▪ Other expenditures and transfers.

Sewer Rate Study 9
City of Crescent City, CA
The graphic below demonstrates the general rate study methodology and major components of the rate process.

Task 2.2 – Capital Plan Analysis
Task 2.2.1 – Review Capital Improvement Program (CIP). The City’s existing utility system five-year (5) CIP will be reviewed in conjunction with conversations with City staff. The objective of such a review is to gain an understanding of the types of projects scheduled; the timing associated with such projects, associated expenditure requirements and the sources of funding each project. The results of the financial plan will also help the City to prioritize projects identified within the CIP.

Task 2.3.3 – Capital Projects Model. The CIP will drive the future funding options and will directly impact rates.

Therefore, the rate analysis will incorporate the City’s current five-year CIP. The rate model will have the ability to run various CIP funding scenarios and quickly show the
estimated impact on utility rates.

Since we are not acting as the financial/municipal advisor to the City for this project, we will rely on information relative to proposed debt or financing structures provided by the City or its designated financial/municipal advisor.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2017 2018 2019 2020 2021
Projected Unrestricted Reserves
Operation and
Maintenance Expense
Total Revenue
Requirements
Capital & Other
Expenditures Debt Service
Rate Design Other
Revenues
Customer Accounts
Revenues Under
Existing Rates
Bid Tabulation & Existing Rates
Usage/Flow Volumes
Sewer Rate Study 10
City of Crescent City, CA
Task 2.3 – Cost-of-Service Allocations
Task 2.3.1 – Functional Cost Allocations. The analysis will allocate the Test Year revenue requirement (i.e., costs of providing service) to the various cost/rate components that constitute functional classifications of the types of service provided. The functional cost allocations will evaluate such aspects as fixed costs, customer related costs and volumetric/usage related costs.

Task 2.4 – Rate Analysis and Design
Task 2.4.1 – Evaluation of Existing Rate Structure. The existing rate structure will be further evaluated for its effectiveness in equitably recovering costs of utility service from each customer class. The City’s current rate structure will be evaluated, and recommendations will be made for potential modifications to the current rates.

Based on these discussions, the analysis will develop and recommend a rate design and philosophy that best meets the objectives of the City. The analysis model will be developed in a dynamic manner allowing the City to compare alternative “annual incremental/phasing adjustments to achieve funding goals. Basic standards for rate design accepted by the industry are:

Fairness and Equity – based on cost responsibility as reflected in cost-of-service allocations, in accordance with industry standards.

Technically Defensible – apply industry proven standards and methodologies to help shield the City from potential legal challenges associated with the proposed utility rates.

Administrative Efficiency – rates should be understandable to customers and efficiently administered by staff.

Customer Acceptance – customers understand the rates, view them as fair, and consider them to be reasonable compared to other costs and other utilities.

Public Health and Welfare – rates are structured so that essential service usage is encouraged through affordability.

Task 2.4.2 – Rate Structure Alternatives. The rate model will be developed in a dynamic manner such that Willdan and City staff will be able to analyze “what if” scenarios detailing the financial impacts under each scenario utilizing an iterative dashboard view. Baseline rate structures will be recommended as required to fund the utility system, and consider annual inflationary, indexed adjustments to rates as needed. As necessary, alternative rate structure scenarios will also be identified, and the financial impacts associated with planned capital expenditures and/or implementation of mandated regulatory requirements will be estimated. Any alternative rate structures will be based on common industry standards and will be consistent with the City’s goals and objectives.

Utility 1
Existing Rates
Utility 2
Utility 3
Utility 4
Proposed Rates
Utility 5
Utility 6
Utility 7
Utility 8
Utility 9
Utility 10
Utility 11
Utility 12
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Comparison With Other Utility Systems
6,000 Gallons Per Month
Average of Other Utilities
Sewer Rate Study 11
City of Crescent City, CA
Task 2.4.4 – Typical Bill Comparison. Comparisons of typical utility bills under the existing and proposed rates will be developed for each customer class under various levels of usage. The selected customer class usage levels will reflect the results of the billing analysis so as to better demonstrate rate impacts on typical customer accounts in each class.

Task 2.4.5 – Neighboring Utility Comparison. A comparison will be prepared, with no more than ten utilities, to assess the difference between the existing and proposed rates of the City with those of other comparable Del Norte County municipal utility systems.

Reports and Deliverables
Task 3 is the development of the rate report.

Task 3.1 – Preliminary Draft Report
Task 3.1.1 – Preliminary Draft Report. A draft report will be developed to address the study findings and the proposed recommendations. Contents will also include assumptions relied upon for the projection of customers and usage characteristics, revenue requirements, revenues, operating results, the cost recovery profile for each class, the results of the fully allocated cost of service analyses and any proposed adjustments to the utility rates.

Upon completion, an electronic PDF copy and ten (10) copies of the draft report will be provided to staff for review.

The report and presentations will also include a comparison of Crescent City current and proposed rates with five (5) other public agencies.

Task 3.2 – Final Report
Task 3.2.1 – Final Report. Based on comments received from staff and other participants during the presentation of the Preliminary Draft Report, the Final Report will be revised to incorporate the agreed upon changes. Upon completion, an electronic PDF copy and ten copies of the Final Rate Study Report, as well as the Dashboard Model spreadsheet will be provided to the City.

Proposition 218 Notice
Tasks provided for reference - separate quote to be provided once rate study is complete.

Task 4.1 – Proposition 218 Notice and Public Outreach Materials Task 4.1.1 – Proposition 218 Notices. Based on our 30-year history with Proposition 218 compliance, we will assist with the drafting of the notices that will explain:
▪ The purpose of the rates;
▪ The reason for the increases;
▪ How the rates are structured;
▪ The date, time, and place of the public hearing; and
▪ Details on what constitutes the existence of a majority protest, as it relates to the implementation of a new/increased utility rate structure.

Task 4.1.2 – Proposition 218 Notice Processing. We will assist the City in the development of the materials, create a parcel database of properties subject to the new proposed rates, and coordinate the printing and mailing of the materials in conjunction with a mailing house that we typically work with on these types of projects. Our cost proposal does not include these direct printing and mailing costs. An estimate will be provided in the separate quote for these services, and the costs would be billed directly to the City at the time of the mailing once the actual costs are known.

Meetings and Presentations
Task 5.1 – Meetings and Presentations
Task 5.1.1 – Project Kick-Off. As detailed in phase one, a kick-off conference call will be scheduled with City staff at the start of the project to discuss project requirements, finalize project scheduling/milestones and reporting requirements, and receive overall project direction. This discussion will provide the opportunity to review current sewer rates, fees, charges, issues, and deficiencies with staff.

Sewer Rate Study 12
City of Crescent City, CA
Task 5.1.3 – Draft Financial Plan Meeting. The results of the Preliminary Financial Plan and Revenue Requirements will be presented to Staff for comments, feedback, and direction.

Task 5.1.4 – Draft Study/Final Report Meetings. The draft report will be reviewed with City Staff to discuss findings and recommendations, gather feedback and address questions, then presented to the Council during one (1) City Council meeting.

Task 5.1.5 –Public Hearing Willdan will attend the (1) Public Hearing before the City Council, as required by Proposition 218 on the proposed rates. Willdan’s Principal-in-Charge / Project Manager will be present to address any questions or concerns raised during the public hearings.

City Staff Support / Responsibilities
Willdan recommends that the City of Crescent City assign a key individual as a project manager. As our analysis is developed, the City’s appointed project manager will:
▪ Coordinate responses to informational requests;
▪ Coordinate review of work products; and
▪ Identify appropriate staff members for participation in meetings and facilitate in scheduling.

We will ask for responses to initial information, follow-up requests and comments on reports within five business days or otherwise agreed upon timetable. If there are delays, the project manager will follow up with the parties involved to establish an estimated date for the delivery of information and/or feedback.

To ensure continued progression, the project manager will reconvene with the rest of the team to identify tasks that can be started while waiting for requested data.

Project Disclaimer
The City of Crescent City further represents, acknowledges, and agrees that:
(i) The City uses, or may use, the services of one or more municipal advisors registered with the U.S. Securities and Exchange Commission (“SEC”) to advise it in connection with municipal financial products and the issuance of municipal securities;
(ii) The City is not looking to Willdan to provide, and City shall not otherwise request or require Willdan to provide, any advice or recommendations with respect to municipal financial products or the issuance of municipal securities (including any advice or recommendations with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues);
(iii) The provisions of this proposal and the services to be provided hereunder as outlined in the scope of services are not intended (and shall not be construed) to constitute or include any municipal advisory services within the meaning of Section 15B of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations adopted thereunder;
(iv) For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cashflow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the City, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto; and
(v) Notwithstanding all of the foregoing, the City recognizes that interpretive guidance regarding municipal advisory activities is currently quite limited and is likely to evolve and develop during the term of the potential engagement and, to that end, the City will work with Willdan throughout the term of the potential Agreement to ensure that the Agreement and the services to be provided by Willdan hereunder, is interpreted by the parties, and if necessary amended, in a manner intended to ensure that the City is not asking Willdan to provide, and Willdan is not in fact providing or required to provide, any municipal advisory services.

Sewer Rate Study 13
City of Crescent City, CA
Project Management and Quality Assurance/Control Approach Project Management
At Willdan, we utilize a Project Management Process/Approach that ensures projects are completed on time, within budget and most importantly yield results that match our clients’ expectations. We will document discussions leading to important policy decisions and/or the choice of critical assumptions used in constructing the analysis and model.

Following key stakeholder discussions, we will schedule a call to summarize findings and direction with City staff, to make certain that we are in agreement with stated objectives, and that feedback is incorporated as appropriate.

Through the process of providing regular updates and conducting status conference calls, potential issues will be highlighted, discussed, and resolved. Any deviances from the project timeline will be identified and plans will be developed for course corrections. If necessary, changes in approach or strategy will be discussed with City staff, to meet the needs of the City of Crescent City. In doing this, we will ensure the project stays on track and evolves, based upon current thinking and outside dynamics.

Project Management
Define the
Project Plan the Project Manage the Project
Review the
Project
Communicate the
Project
▪ Identify the project
scope, set
objectives, list
potential
constraints,
document
assumptions.
▪ Define a course of
action and develop
an effective
communication
plan.
▪ Provide a forum for
applying the team’s
collective expertise
to solving difficult
analytical issues
that arise in
complex projects.
▪ Collaborate with
the project team
and client staff and
agree upon
timeline to meet the
estimated project
timeline.
▪ Assign workload
functions to
appropriately
qualified staff to
ensure milestones
are met, on time.
▪ Pre-schedule
quality control
meetings with
project team to
maintain the
progressive motion
of the project.
▪ Manage the
execution of the
project.
▪ Direct existing and
upcoming project
tasks.
▪ Control and monitor
work in progress.
▪ Provide feedback to
client and project
team.
▪ Identify and resolve
deviances from
project timeline.
▪ Review all work
product and
deliverables.
▪ Utilize structured
quality
assurance
process
involving up to
three levels of
review at the
peer level,
project manager
level.
▪ Procure
executive officer
level review.
▪ Communicate with
the client regarding
work status and
progress.
▪ Ensure client is in
receipt of regular
status updates.
▪ Schedule regular
conference calls to
touch base.
▪ Inform client of
roadblocks, work
outside of projected
scope.

Sewer Rate Study 14
City of Crescent City, CA
Quality Assurance / Quality Control Process
Our quality control program is incorporated as a required element of Willdan’s day-to-day activities. There are three levels of reviews incorporated for our deliverables:
1) Peer review;
2) Project Manager review; and
3) Final quality assurance
manager review.

Peer reviews involve one analyst
reviewing the work of another,
while project manager reviews
are conducted prior to delivery to
the quality assurance manager.

The quality assurance manager
then performs a final review. This
assures that our final product has
been thoroughly evaluated for
potential errors; thus, providing
quality client deliverables, and
high levels of integrity and
outcomes.

The primary mission of our quality control plan is to provide staff with the technical and managerial expertise to plan, organize, implement, and control the overall quality effort, thereby ensuring the completion of a quality project within the time and budget established.

Quality Assurance Goals
Goal Lead Task
Quality Assurance /
Control Process Chris Fisher
▪ Establish a set of planned and systematic actions for maintaining a high level of quality in the professional services performed; Emphasize quality in every phase of work;
▪ Ensure efficient use of resources;
▪ Establish a consistent and uniform approach to the services performed; and
▪ Implement appropriate quality control measures for each work task of the project.

Quality Control Plan Chris Fisher
▪ Contract deliverables;
▪ Specific quality control procedures;
▪ Special quality control emphasis;
▪ Budget and manpower requirements;
▪ Overall project schedule and budget; and
▪ Project documentation requirements.

Sewer Rate Study 15
City of Crescent City, CA
Project Schedule
The following outlines the estimated number of weeks to complete each task outlined in our scope of services. A specific project schedule will be developed following consultation with, and in concert with, City staff. 4 11 18 25 1 8 15 22 29 5 12 19 26 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24 Task 1.1 Data Collection and Review
Task 1.2 Kick-off Meeting and Planning Discussion
Task 2.1 Revenue Requirements and Rate Determinants
Task 2.2 Capital Plan Analysis
Task 2.3 Cost-of-Service Allocations
Task 2.4 Rate Analysis and Design
Task 3.1 Preliminary Draft Report
Task 3.2 Final Report
Task 4.1 Proposition 218 Notice Preparation and Mailing Task 5.1 Meetings and Presentations
Meetings and Presentations
Reports and Deliverables
Proposition 218 Notice and Public Outreach Materials
Public Hearing (June 2024)
Prop 218 Notice Period
City of Crescent City
Sewer Rate Study
Project Timeline
Scope of Work
Project Initiation
Sewer Rate Study
December January February March April May June
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City of Crescent City, CA
Fee Proposal
Sewer Rate Study
Based on our work plan provided in the scope of services, we propose a fixed fee of $21,930. The table below provides a breakdown of this fee by task and project team member.

Proposition 218 Fees
The fixed fee does not include direct costs associated with the printing, processing, and mailing of Proposition 218 notices. We will bill the City for these at our cost, plus 10 percent (10%), based on actual quotes provided by our mailing house. These costs are estimated at ¢.75 per mailed piece.

Notes
▪ The City will be invoiced on a monthly percentage-completion basis. ▪ Invoices will include a description of services, as well as a summary of costs to date by task. ▪ We will perform additional tasks, outside our scope of services, as requested and authorized by the City for an additional fee.
▪ Willdan will rely on the validity and accuracy of the City’s data and documentation to complete our analysis. Willdan will rely on the data as being accurate without performing an independent verification of accuracy, and that we will not be responsible for any errors that result from inaccurate data provided by the client or a third party. ▪ The City shall reimburse Willdan for any costs Willdan incurs, including without limitation, copying costs, digitizing costs, travel expenses, employee time and attorneys' fees, to respond to the legal process of any governmental agency relating to the City or relating to this project. Reimbursement shall be at Willdan's rates in effect at the time of such response. C. Fisher
Principal-inCharge
M. Cronan
Analytical
Support
$250 $165 Hours Cost
Task 1.1 Data Collection and Review 1.0 10.0 11.0 $ 1,900 Task 1.2 Kick-off Meeting and Planning Discussion 1.0 1.0 2.0 415 Task 2.1 Revenue Requirements and Rate Determinants 6.0 40.0 46.0 8,100 Task 2.2 Capital Plan Analysis 1.0 2.0 3.0 580
Task 2.3 Cost of Service Allocations 2.0 4.0 6.0 1,160
Task 2.4 Rate Analysis and Design/Comparisons 2.0 8.0 10.0 1,820 Task 3.1 Preliminary Draft Report 2.0 12.0 14.0 2,480
Task 3.2 Final Report 2.0 3.0 5.0 995
Task 4.1 Proposition 218 Notice Preparation and Mailing - - - - Task 5.1 Meetings and Presentations 10.0 12.0 22.0 4,480 Total Cost Proposal 27.0 92.0 119.0 $ 21,930
Scope of Work
Total
City of Crescent City
Sewer Rate Study
Project Budget
Project Initiation
Meetings and Presentations
Proposition 218 Notice and Public Outreach Materials
Sewer Rate Study
Reports and Deliverables
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City of Crescent City, CA
Hourly Rates
Additional services may be authorized by the City and will be billed at our then-current hourly rates. Our current hourly rates are listed below.

Willdan Hourly Rate Schedule
Position Team Member Hourly Rate
Vice President - Director Chris Fisher $250
Managing Principal $240
Principal Consultant $210
Senior Project Manager $185
Project Manager Michael Cronan $165
Senior Project Analyst $135
Senior Analyst $125
Analyst II $110
Analyst $100
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City of Crescent City, CA
Qualifications and Experience
Firm Profile
Willdan Financial Services, a California Corporation, is an operating division within Willdan Group, Inc. (WGI), which was founded in 1964 as an engineering firm working with local governments. Today, WGI is a publicly traded company
(WLDN). WGI, through its divisions, provides professional technical and consulting services that ensure the quality, value and security of our nation’s infrastructure, systems, facilities, and environment. The firm has pursued two primary service objectives since its inception—ensuring the success of its clients and enhancing its communities.

A financially stable company, Willdan has approximately 1,500 employees working in more than 50 offices across the U.S. Our employees include a number of nationally
recognized Subject Matter Experts for all areas related to the broadest definition of connected communities—two of whom are committed to contribute their expertise throughout
the duration of the City of Crescent City’s Sewer Utility Rate Study engagement.

We have solved economic, engineering and energy
challenges for local communities and delivered industryleading solutions that have transformed government and commerce. Today, Willdan is leading our clients into a future accelerated by a change in resources, infrastructure,
technology, regulations, and industry trends.

Willdan Financial Services
Established on June 24, 1988, Willdan Financial Services, is a national firm and is one of the largest public sector economic and financial analysis consulting firms in the United States. Since that time, we have helped over 800 public agencies successfully address a broad range of infrastructure challenges.

Our staff of 80 full-time employees support our clients by conducting year-round workshops and on-site training to assist them in keeping current with the latest developments in our areas of expertise. Willdan assists local public agencies by providing the following services:

Willdan Financial Services
Services
▪ Utility rate and cost of service studies;
▪ User fee studies;
▪ Cost allocation plan studies;
▪ Real estate economic analysis;
▪ Municipal advisory services;
▪ District administration services;
▪ Property tax audits;
▪ Economic development strategic plans;
▪ Development impact fee establishment and analysis;
▪ Tax increment finance district formation and
amendment;
▪ Feasibility studies;
▪ Housing development and implementation strategies;
▪ Arbitrage and continuing disclosure services;
▪ Debt issuance support; and
▪ Long-term financial plans and cash flow modeling.

Sewer Rate Study 19
City of Crescent City, CA
Background Experience
For over two decades, Willdan team members have provided professional consulting services, which entail financial planning; rate and cost-of-service studies including wholesale analysis; alternative and feasibility analyses; and operational and management studies for water, reclaimed water, sewer, solid waste, and stormwater utility clients across the United States.

Willdan team members are involved with the development of the rate-setting methodologies set forth in the American Water Works Association (AWWA) M1 manual “Principles of Water Rates, Fees and Charges,” and the AWWA M29 manual, “Water Utility Capital Financing.” Willdan is nationally recognized for its expertise with team members frequently being called upon to speak or instruct on utility financial matters, as subject matter experts, including at the AWWA Utility Management conference.

We are also deeply familiar with the procedural and substantive requirements of Proposition 218. Willdan staff (including Mr. Fisher, proposed as the principal-in-charge for this engagement) speak regularly to California industry groups such as the California Special Districts Association (CSDA) and the California Society of Municipal Finance Offices (CSMFO). Further, we recently completed a water and wastewater study for the City of Lakeport where the same team proposed for this engagement worked closely with a leading Proposition 218 law firm in the state to update their tiered water rate structure to be compliant with the requirements of Proposition 218 and the City of San Juan Capistrano decision. We will bring this recent experience and insight to the City of Crescent City.

Willdan team members are experienced in a broad range of utility planning services and therefore understand the importance of an approach that integrates elements of utility planning, engineering, and finance. Willdan team members possess considerable experience in utility rate and cost-of-service studies and have performed these services for hundreds of utilities throughout the country. Our team includes staff with public sector experience spanning 30 years, and staff on the forefront of utility ratemaking and rate-modeling. In addition, team members have held positions as finance directors, deputy city managers, and auditors, and therefore understand the financial, operational, and political realities faced by governmental staff and management; we craft solutions which are sensitive to this.

Willdan Financial Services
Utility Experience and Expertise
▪ Retail and wholesale rate studies
▪ Revenue sufficiency analyses
▪ Utility management and policy assistance
▪ Connection fee / tap fee studies
▪ Miscellaneous fee and charge studies
▪ Renewal and replacement sufficiency analyses
▪ Comprehensive alternatives analyses
▪ Capital project funding studies
▪ Interactive rate model development with dashboards
showing key performance indicators
▪ CIP financial scenario planning
▪ Rate ordinance drafting
▪ Billing system validation/rate testing
▪ Bond feasibility reports
▪ Valuation/divestiture studies
▪ Life Cycle Costs Analyses
Willdan will work with the City to identify and prioritize operational and fiscal objectives, and match these to specific rate attributes; and use this information throughout the engagement to develop a comprehensive financial plan and design utility rates that effectively meet these goals. The culmination of our analyses will be rate policies that guide the rate setting process, and a financial management plan that develops projected system operating results for the utilities for the forecasted period. Willdan will employ its proven interactive approach, coupled with advanced financial modeling techniques to design rates and a financial plan that meets established goals and performance criteria. These modeling techniques serve as a powerful decision-making tool and provide the City with genuine business solutions and recommendations as to the strategic direction of its utility.

During rate and financial planning projects we employ tools and techniques which focus on consensus building among stakeholders to ensure the team understands the future financial implications of current management decisions. Our extensive project expertise is bolstered by our unique interactive financial planning process and model.

At present Mr. Kevin Burnett of
Willdan is involved in the current
update to the M1 manual.

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City of Crescent City, CA
Experience Map
A graphical representation of Willdan’s geographical client presence is depicted below of recent utility rate and financial projects completed within the last few years.

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City of Crescent City, CA
References
Provided below are recent project descriptions, including client contact information, project team, and project hours that are similar in nature to those requested by the City. We are proud of our reputation for customer service and encourage you to contact our past clients regarding our commitment to completing these assignments within the agreed upon project budget and schedules.

McKinleyville Community Services District, CA
Water & Sewer Rate & Capacity Fee Study
Willdan recently assisted MCSD with a water and sewer rate study, where rates were successfully adopted for five years, for both utilities. The project included a rigorous evaluation of the CIPs for both utilities, testing of scenarios to understand the financial impacts on customers and mitigate rate increases. The District takes a conservative and aggressive approach to completing capital projects and accumulating reserves to protect itself from unanticipated events, so our modeling included multiple provisions to present, discuss and evaluate options.

The project included the preparation of the comprehensive model and financial plan, which analyzed projections for both utilities for ten years, preparation of reports, preparation and mailing of Prop 218 notices, and presentation of results to the Board of Directors. Rates were successfully adopted in November 2022.

Client Contact: Patrick Kaspari, PE, General Manager
1656 Sutter Road, McKinleyville, CA 95519
Tel #: (707) 839-3251 | Email: [email protected] City of Lakeport, CA
Water and Sewer Rate Study
Willdan assisted the City of Lakeport with the development of a water and wastewater utility rate study. The scope of services included development of the financial plan, model, and reports, including the adjustment of the tiered rate structure. The City was in the position of needing potentially significant rate increases, so we worked collaboratively with them throughout the process to evaluate options for the financial plan to address the needs of the utilities, while balancing the impact on ratepayers.

Willdan team members worked closely with the City’s Proposition 218 legal counsel to update the City’s water rate structure while ensuring compliance with the applicable provisions of the California Constitution, as well as the San Juan Capistrano court decision.

Client Contact: Nick Walker, Assistant City Manager, Finance Director 225 Park Street, Lakeport, CA 95453
Tel #: (707) 263-5615 x 301 | Email: [email protected] City of La Palma, CA
Water and Wastewater Utility Rate Study
In 2021, Willdan was re-selected to work with the City on its latest water and sewer rate study. This followed our previous work with the City in 2016/17. Our team worked with City Staff to evaluate alternatives for both utilities, particularly for water, where the City is preparing for the drilling and completion of a new well in eight years. We evaluate options to help them prepare for this key capital project. The study included the development of a comprehensive financial plan and model, the evaluation of alternatives for rate adjustments, and the preparation of reports and Prop 218 documents.

Willdan gathered and validated financial data for the project, including budget, fund balances, capital plans, historical financial results, and policy documents. The study also included the required cost-of-service analysis and entailed some adjustments based on changing customer usage characteristics.

We guided the City through the Proposition 218 process and developed and mailed Prop 218 notices. The study was completed, and the Public Hearing conducted in April 2022.

Client Contact: Mike Belknap, Community Development Director 7822 Walker Street, La Palma, CA 90623
Tel #: (714) 690-3356 | Email: [email protected] Sewer Rate Study 22
City of Crescent City, CA
City of Dinuba, CA
Water and Wastewater Utility Rate Study
Willdan worked with the City of Dinuba to complete a utility rate study for its water and wastewater enterprises. The study included the development of a comprehensive financial plan and model, and the evaluation of alternatives for rate adjustments. The City had not increased its rates for several years, including the COVID period, and was facing increased costs of operations, needs for additional staffing, and multiple capital projects. We presented numerous alternative scenarios, with adjustments and changes based on feedback from City Staff.

Willdan gathered and validated financial data for the project, including budget, historical financial results, and capital plans, evaluated adjustments to the base water and wastewater rate structures, prepared a comprehensive financial model, and presented alternatives and scenarios to City Staff. The updated rates were successfully adopted in September 2023.

Client Contact: George Avila, Interim Public Works Director 1088 E. Kamm Avenue, Dinuba, CA 93618
Tel #: (559) 591-5924 | Email: [email protected]
City of Grover Beach, CA
Water and Wastewater Rate Study
Willdan was selected in 2020 to complete a water and sewer rate study for the City of Grover Beach. The project included the completion of a comprehensive financial plan, along with cost-of-service analysis and development of updated rates. We collected and evaluated the necessary data, prepared the financial plan with various options and scenarios for City staff’s consideration, including shifting from a uniform water rate structure to either a two- or three-tiered structure, and prepared and submitted the rate study report with the selected approach.

The City’s utilities were in relatively good health, so major increases were not recommended. Currently the City Council has received the rate report and recommendations, the date has been set for the Public Hearing as required by Proposition 218.

Client Contact: Deanne Purcell, Administrative Services Director 154 South 8th Street, Grover Beach, CA 93433
Tel #: (805) 473-4555 | Email: [email protected] City of Hercules, CA
Wastewater Rate and Connection Study
Willdan was engaged by the City of Hercules to prepare a comprehensive financial plan for its wastewater utility. The objective of this initial engagement is to study the financial condition of the utility, evaluate revenue and funding scenarios to provide information to City Management.

The initial financial plan, with several revisions and updates, was completed, with follow up analysis that evaluated various options and alternatives. A report of the findings was provided to City Staff and presented to the City Council.

No rate changes were immediately recommended. Willdan will work with the City to monitor the utility’s financial performance on an ongoing basis and update the analysis and potentially prepare a more complete study of the existing rates, and recommendations for adjustments moving forward.

The initial project was successfully completed, and Willdan was recently re-selected to complete and update.

Client Contact: Mike Roberts, Public Works Director/City Engineer 111 Civic Drive, Hercules, CA 94547
Tel #: (510) 799-8241 | Email: [email protected] Sewer Rate Study 23
City of Crescent City, CA
Project Team
Project Team Organization
Our management and supervision of the project team is very simple: staff every position with experienced, capable personnel in sufficient numbers to deliver a superior product to the City, on time and on budget. With that philosophy in mind, we have selected experienced professionals for this engagement. We are confident that our team possesses the depth of experience that will successfully fulfill your desired work performance.

City of Crescent City
Project Team
Team Member Project Role Responsibility to the Engagement Chris Fisher
Vice President/Director
Principal-in-Charge /
Project Manager
▪ Technical guidance;
▪ Project oversight;
▪ Responsible for project deliverables;
▪ Stakeholder outreach;
▪ Produce key elements of the analysis;
▪ Model development; and
▪ Meeting and presentation attendance.

Michael Cronan
Project Manager
Financial Analyst
▪ Collect, coordinate, interpret, and analyze key data; ▪ Assistance with model development; and
▪ Report preparation.

Staff Continuity
Mr. Fisher has been assigned to serve as the City’s representative; he has been selected for this role due to his extensive experience, which includes the preparation and supervision of numerous fee studies, as well as his experience presenting to governing bodies, stakeholders, and industry groups.

Resumes
Resumes are provided on the following pages.

It is important to note that
Mr. Fisher has been with Willdan for
over 24 years, ensuring the
City of Crescent City of continuity and
dedication in staffing during the
completion of the project.

Sewer Rate Study 24
City of Crescent City, CA
Chris Fisher
Principal-in-Charge / Project Manager
Mr. Chris Fisher has been selected to serve as the Principal-in-Charge of the City of Crescent City’s engagement, due to his extensive experience managing multi-disciplinary teams. He also possesses extensive knowledge regarding Proposition 218 compliance.

Mr. Fisher is the Vice President and Financial Consulting Services Director at Willdan Financial Services. With 24 years at Willdan, he has managed an array of financial consulting projects for public agencies throughout California, Arizona, Texas, Colorado, and Florida; coordinating the activities of resources within Willdan, as well as those from other firms working on these projects.

Select Relevant Experience
City of Pinole, CA — Sewer Utility Rate Study: Mr. Fisher served as the principal-in-charge for the City’s sewer rate study, providing technical assistance throughout the project. He oversaw the development of the comprehensive financial plan, and preparation of rate alternatives and analysis. This engagement included the development of a comprehensive financial model and updated sewer rates, including rates of comparable jurisdictions, comparative rate, and cost analysis.

McKinleyville Community Services District, CA – Water and Wastewater Capacity Fee Study: Mr. Fisher served as principal-in-charge of this project. The prior connection fees had not been updated for a number of years and were relatively low in comparison to similar agencies. In addition, there were several new local development projects in the planning stages requiring the District to provide utility services; placing even greater demand upon existing facilities and possibly requiring expansion of existing facilities, or construction of new ones. Willdan worked with staff to compile a list of proposed capital improvements and their estimated cost and conducted an analysis of existing and proposed development within the District’s service boundaries.

City of Richmond, CA — Wastewater Rate Study: Mr. Fisher led the City of Richmond engagement as the principal-in-charge. The objective of the study was to prepare a comprehensive financial plan and updated wastewater rates to address funding for capital and operating needs. Our effort included development of a comprehensive financial model and report, and preparation of rate scenarios, including revised scenarios to address the impacts of the COVID pandemic, for evaluation by Staff and the City Council. Mr. Fisher and the project team project is complete and pending the completion of the Proposition 218 approval process.

City of Twentynine Palms, CA — Sewer Treatment Facility Fair Share and Sewer Rate Analysis: Mr. Fisher served as the Principal-in-Charge/Project Manager on the City of Twentynine Palms’ sewer treatment facility fair share analysis. The purpose of this analysis was to develop an allocation of costs associated with the completion of a wastewater treatment plant (and other related costs) project, in the downtown area of the City, as well as the development of specialized sewer rates who will be served by the new treatment plant. The team developed a model and numerous scenarios for evaluation by the City and presented results to the City Council.

City of Grover Beach, CA — Water and Wastewater Rate Study: In the role of principal-incharge, Mr. Fisher led the City’s utility rate study, which included the preparation of a comprehensive financial plan, along with cost-of-service analysis and development of updated rates. The financial plan prepared contained various options and scenarios for City Staff’s consideration, including shifting from a uniform water rate structure to either a two- or three-tiered structure. The City’s utilities were in relatively good health, so major increases were not recommended.

Town of Apple Valley, CA — Wastewater Rate Study: Mr. Fisher oversaw a comprehensive wastewater rate study for the Town. The study encompassed the preparation of a financial plan and rate model, and a thorough review and update of the Town’s rate structure. The Town had seen significant scrutiny of its water rates, so it wanted to be sure the wastewater rates and the report were thorough and defensible. The Town uses an EDU based rate structure, which Willdan evaluated and adjusted where necessary. This engagement also included comparison of current and proposed rates, and rates of similar agencies. Mr. Fisher provided technical assistance throughout this project, including the preparation of the rate report. The analytical portion of the project is complete and pending the completion of the Proposition 218 approval process.

Education
Bachelor of
Science, Finance;
San Francisco State
University
Areas of Expertise
Multi-disciplinary Team
Management
Special District
Formations
Cost of Service
Studies
Proposition 218
Utility Rate Studies
Affiliations
California Society of
Municipal Finance
Officers
Municipal Management
Association of
Northern California
California Municipal
Treasurers Association
24 Years’ Experience
Sewer Rate Study 25
City of Crescent City, CA
Education
Bachelor of Arts
and Science;
University of Central
Florida
Areas of Expertise
Utility Rate Studies
User Fee Studies
Financial Forecast
Modeling
6 Years’ Experience
Michael Cronan
Financial Analyst
Mr. Michael Cronan is a Project Manager with 6 years of experience within Willdan’s Financial Consulting Services group. His primary function is to support project managers and senior analysts with utility rate studies. He specializes in analysis for a variety of clients, including cities, water districts, and public utilities.

Outlined below is relevant project experience for Mr. Cronan.

Select Relevant Experience
City of Richmond, CA — Wastewater Rate Study: Mr. Cronan served as the project analyst and provided support for the City’s rate study. He gathered and verified data for the project manager and lead project consultant and played a significant role in the development of the customer database and financial model.

City of Lakeport, CA — Water and Sewer Rate Study: Mr. Cronan provided analytical support to the senior project team members and led the development of the financial model as the project analyst for the City’s utility rate study. He worked directly with staff at the City to evaluate financial plan alternatives, particularly for sewer where years of deferred rate increases, and a significant capital plan required careful consideration. He also led the revamp of the City’s cost-of-service approach, working closely with a leading Prop 218 attorney to ensure rates were compliant with State law.

McKinleyville Community Services District, CA — Water and Sewer Utility Rate Study:

Willdan was retained to update the models, develop the CSD’s water and sewer rates and assist with the required Proposition 218 noticing process. Mr. Cronan provided analytical support to the project’s senior team and provided the same support for the ongoing update to the previous study.

City of La Palma, CA — Water and Wastewater Utility Rate Study: Mr. Cronan was assigned to the La Palma engagement as the lead financial analyst. He worked directly with staff at the City to conduct financial analysis, which included the evaluation of alternatives for rate adjustments that incorporated different capital funding scenarios and operating budget assumptions, as well as the preparation of reports and Prop 218 documents. He was also instrumental in the development of the financial model.

City of Guadalupe, CA – Water and Wastewater Rate Study: Mr. Cronan provided analytical support for the City’s utility rate study. He was responsible for gathering and verifying data, as well as assisting with the development of the model. He also worked directly with City Staff to present results and options and develop alternatives.

City of Claremont, CA — Sewer Rate Study: Mr. Cronan provided analytical support for the City’s sewer rate study. He gathered and verified data for the project manager and principal consultant.

City of Twentynine Palms, CA — Sewer Treatment Facility Fair Share and Sewer Rate Analysis: Mr. Cronan provided analytical support in the development of the model to support to the project’s senior team on the City of Twentynine Palms’ sewer treatment facility fair share analysis. This study also included a sewer rate study, specific to the new treatment plant and its customers.

City of Denver, CO — Sanitary Sewer and Storm Drainage Benchmarking and Storm Drainage Impact Fee Study: Mr. Cronan served as the lead analyst on a benchmarking study to review and compare the City’s current rate structures to those of other front range and national utilities. The intent of the study was to identify potential areas for refinement to the City’s current rate structures. Mr. Cronan also served as the lead analyst for developing and implementing first time storm drainage impact fees for the City.

City of Fruita, CO — Sewer Rate Study: Mr. Cronan provided analytical support to the project manager and principal consultant for the City’s comprehensive sewer rate study. The study sought to determine the costs of operating the utility for a five-year period while equitably recovering costs from each customer class. An evaluation of changing the current flat rate approach for residential customers to a volume based average winter consumption approach was also evaluated. 27368 Via Industria, Suite 200
Temecula, CA 92590-4856
951.587.3500 | 800.755.6864 | Fax: 951.587.3510
www.willdan.com
CITY OF CRESCENT CITY RESOLUTION NO. 2023-92 Page 1
RESOLUTION NO. 2023-92

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CRESCENT CITY AMENDING THE FISCAL YEAR 2023-24 BUDGET OF THE CITY OF CRESCENT CITY WHEREAS, the budget for the fiscal year beginning July 1, 2023, as submitted by the City Manager, was reviewed by the City Council and a public hearing was held thereon the 5 th day of June 2023; and
WHEREAS, the City Council adopted said budget and has the authority to amend said budget from time to time; and
WHEREAS, the City of Crescent City owns the Wastewater Treatment Plant (WWTP) and WHEREAS, The WWTP provides service to approximately 3,900 accounts within the City limits and adjacent unincorporated areas served by the County Service Area (CSA) and; WHEREAS, The WWTP was originally constructed in 1958 and has undergone four major retrofits since then; and
WHEREAS, The most recent upgrade was a 2007 $40+ million-dollar project in response to 1997 cease and desist orders associated with plant effluent violations; and WHEREAS, The City’s sewer fund is in a structural deficit and a sewer utility rate study is required to correct this trend; and
WHEREAS, the FY2023-24 Budget does not contain a planned expense to conduct this necessary study; and
WHEREAS, fulfillment of these priorities requires an amendment to the operating budget.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CRESCENT CITY AS FOLLOWS:

1. That the Fiscal Year 2023-24 City of Crescent City Annual Budget is hereby amended and appropriated in the amounts identified below:

Revenue Increase (Decrease) Expenditure Increase (Decrease) Sewer Fund $29,000
APPROVED and ADOPTED and made effective the same day at a meeting of the City Council of the City of Crescent City held on the 18
th day of December 2023 by the following polled vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
_______________________________
Blake Inscore, Mayor
ATTEST:
_____________________________
Robin Altman, City Clerk

Crescent City City CouncilDecember 18, 2023

Crescent City City Council
December 18, 2023