September 8, 2022
Patrick Dobbins, Public Works Director/City Engineer
City of Gonzales
147 Fourth Street
Gonzales, CA 93926
Dear Mr. Patrick Dobbins,
Lechowicz & Tseng Municipal Consultants (L&T) is pleased to submit a proposal for Water and Sewer Rate Studies to the City of Gonzales (City). Established in 2017 and operated as a limited liability company (LLC), Lechowicz & Tseng Municipal Consultants is a women-owned firm founded by Alison Lechowicz and Catherine Tseng that focuses on financial planning, rate and fee studies, and management consulting for public agencies. Alison and Catherine have 30 years combined experience in municipal consulting and public finance and have completed over 100 studies compliant with Propositions 218 and
26. We are also a municipal financial advisory firm registered with the Securities Exchange Commission and Municipal Securities Rulemaking Board. We offer a breadth of expertise from financial planning to utility rate design.
We are a small firm that focuses on rate and fee studies for public agencies serving populations of 30,000 or fewer. Our recent experience includes completing similar projects for the Cities of Chowchilla, Kerman, San Fernando, and Waterford and the Templeton Community Services District, among others. These communities are facing similar issues as the City of Gonzales. Templeton CSD, for example, did not have an underlying cost of service analysis to justify its water rate tiers. To comply with Proposition 218 and recent legal rulings, L&T restructured the agency’s tiers to conform with various sources of supply, how the district uses each source throughout the year, and the cost to deliver each source to customers. Amongst other issues, for the City of Wasco (Kern County), we are currently evaluating the sewer rates of a major almond packing facility and an agricultural chemical manufacturer. These customers contribute to intense usage of the system and must be charged fairly to avoid shifting costs to residential customers. We will bring this recent experience to our work for the City of Gonzales.
To provide a comprehensive analysis, L&T will focus on the following:
o Financial Analysis: L&T analyzes revenue streams to meet immediate cash flow needs as well as to plan for future capital projects and deferred maintenance. We will provide the City with a dashboard of financial variables that will clearly illustrate how various considerations such as drought, grant vs. loan funding, high vs. low growth, and high vs. low inflation among others will impact utility cash flows. As a registered municipal financial advisor, we can also conduct detailed reviews of debt obligations and debt capacity. Our final report will provide the City with a financial roadmap that fully documents the cost of service. 909 Marina Village Parkway #135
Alameda CA 94501
(510) 545-3182
LTmuniconsultants.com
o Utility Rate Design: L&T will ensure the City’s rate structure achieves compliance with conservation mandates (SB 606/AB 1668) and Proposition 218 proportionality requirements.
We will ensure that the City’s tiered water rate structure is based on actual costs and appropriately reflects sources of supply. L&T will also review ratepayer equity between existing customers vs. new development as well as industrial customers vs. residential customers. Each customer group should pay its fair share based on how it uses the water and sewer systems.
Existing customers should not subsidize growth and residential customers should not subsidize large food producers.
o Public Outreach: As the City’s last rate study was conducted some time ago, public outreach and education will be critical in gaining public acceptance. We provide value to our clients by taking the lead in data collection, analysis, and outreach. L&T has extensive experience drafting Proposition 218 notices, educating Council members, and explaining the need for rate adjustments. Our approach is to understand any “hot button” issues in local service areas and respect political sensitivities. In particular, we recommend outreach to large industrial customers and developers who may have a high level of engagement with City services. Our final documents will stress the value of the City’s infrastructure, explain why costs are increasing, and describe cost saving measures.
The firm of Lechowicz & Tseng Municipal Consultants and its employees have no personal or professional financial or other interests which could be a conflict of interest.
Our proposal to conduct the utility rate study is attached. As requested, our cost proposal is provided separately. If you have any questions, please contact us.
Sincerely,
Lechowicz & Tseng Municipal Consultants
Alison Lechowicz, Principal and Authorized Representative 909 Marina Village Parkway #135
Alameda, CA 94501
510-545-3182
[email protected]
Firm Overview................................................................................................................... 1 Who We Are................................................................................................................................................................. 1 Services............................................................................................................................................................................ 2 Project Team Organizational Chart.......................................................................................................................... 3 Recent Experience ........................................................................................................................................................ 3 Technical Approach .......................................................................................................... 4 Scope of Work ................................................................................................................... 7 Project Management..................................................................................................................................................... 7 Scope of Services........................................................................................................................................................... 7 Schedule......................................................................................................................................................................... 13 Meetings......................................................................................................................................................................... 13 Project Team ................................................................................................................... 14 References ........................................................................................................................ 22 Templeton Community Services District.............................................................................................................. 22 Town of Discovery Bay ............................................................................................................................................. 23 City of Chowchilla ...................................................................................................................................................... 24 City of Wasco.............................................................................................................................................................. 25 Disclosures........................................................................................................................ 26 No Conflicts of Interest ............................................................................................................................................ 26 Municipal Securities Rulemaking Board ................................................................................................................. 26
TABLE OF CONTENTS
1 WHO WE ARE
FIRM OVERVIEW
Our objective is to provide financial consulting and management services to local governments. Alison and Catherine have over 30 years combined experience in municipal consulting and public finance.
Catherine has a background in urban planning and worked for the City of Oakland before becoming a consultant. Alison has experience working for a civil engineering firm and a background in public administration. Lechowicz & Tseng is registered with the Municipal Securities Rulemaking Board (MSRB) and Securities and Exchange Commission (SEC) as a municipal financial advisory firm. Alison holds the Series 50 (Municipal Advisor Representative) and Series 54 (Municipal Advisor Principal) qualifications.
Lechowicz & Tseng Municipal Consultants is a women-owned firm founded by Alison Lechowicz and Catherine Tseng.
L&T is committed to providing
professional services with superior
value and responsiveness. By utilizing a
small team approach, our clients
receive greater one-on-one attention
and can be assured that the work is
conducted by highly qualified
professionals. Our clients are provided
direct communication with the
principal consultants who guide the
project through each step.
Nature of firm: Women-owned firm
organized as an LLC serving public
agencies
Services: Utility Rate & Fee Studies,
Financial Planning, Capacity Fee Studies,
Utility Appraisal, Expert Witness, Public
Approval Process
Size of firm: Three staff members
Location of office: Alameda, CA
Registrations: Small Business
Enterprise, Women-owned business,
Municipal advisory firm registered with
the Municipal Securities Rulemaking
Board and the Securities and Exchange
Commission
Other languages spoken by staff:
Spanish
2 SERVICES
Employer Identification Number (EIN): 82-0928239
California Small Business #: 2006322
Municipal Securities Rule Making Board #: K1236
Utility Rate & Fee Studies
Utility rate studies deriving both traditional
and innovative rate structures that comply
with cost of service principles and Proposition
218 requirements. Address policy goals,
customer acceptance, and social influences.
Impact Fee/Capacity
Charge Studies
Development impact fees and capacity charge
studies that offset the cost of expanding
infrastructure to serve new development
without placing a burden on existing
customers.
Financial Planning & Modeling
Comprehensive financial plans focused on
immediate needs as well as the long-term
viability of agencies. Our financial models are
flexible and user-friendly to allow for cash
flow sensitivity analysis and to illustrate the
impacts of policy decisions.
Public Approval Process
Lead informational workshops to educate the
public about municipal finance. We provide
start-to-finish assistance in the rate and fee
approval process, including presentations to
decision makers, publication of reports, and
printing and mailing of notices (as applicable).
Utility Appraisal
Develop an inventory of utility assets and
determine fair market value. We assist public
agencies with negotiating the purchase or sale
of utility property.
Expert Witness
Testify on behalf of public agencies to defend
against lawsuits. We also represent public
agencies as streetlight customers of
California's electric utility providers in rate
cases at the CA Public Utilities Commission.
3 PROJECT TEAM ORGANIZATIONAL CHART
RECENT EXPERIENCE
Provided below is a sampling of L&T’s recent projects for agencies of similar size.
AGENCY
ACCOUNTS
OR PARCELS PROJECT
Nipomo CSD (Blacklake) 559 Blacklake Sewer Rate Study (2018) Blacklake Streetlight Rate Study (2022)
McMullin Area GSA 1,150 Groundwater Fee Study (2018)
City of Rio Dell 1,300 Water and Sewer Rate Study (2022) City of Brisbane 2,000 Water and Sewer Rate Study (ongoing) City of Waterford 2,500 Sewer Rate Study (2019)
Templeton CSD 2,800 Water (4 Tiers) and Sewer Rate Study (2018) City of Tehachapi 3,000 Water and Sewer Connection Fee Study (2020) Parks and Civic Connection Fee Study (2021)
City of Anderson 3,500 Water Rate Study (2021)
City of Kerman 3,800 Water and Sewer Rate Study (2018)
City of Chowchilla 3,900 Utilities Rate Study (2020)
City of San Fernando 5,000 Water and Sewer Rate Study (2019) City of Wasco 5,200 Water and Sewer Rate Study (ongoing) Town of Discovery Bay CSD 6,200 Water and Wastewater Rate Study (2020) Water and Wastewater Capacity Fee Study (2022)
Root Creek Water District 6,800 Multiple studies since 2017 CSD – Community Services District; GSA – Groundwater Sustainability Agency
CATHERINE TSENG
Principal - Peer Review
SOPHIA MILLS
Financial Analyst
ALISON LECHOWICZ
Principal / Main Contact Person
4 Project Overview
L&T’s objective for this rate study is to provide compliance with legal requirements while ensuring that the City’s water and wastewater utilities are self-sufficient. Changes in legislation have resulted in many agencies having to make modifications their rate structures. Stringent regulations and aging infrastructure require increased operating expenses and capital investment. We are proponents of simplicity and respecting the current financial and political climate while phasing-in rate adjustments.
Our study will include a comprehensive review of each utility’s finances, including operating costs, reserve funds, and deferred maintenance and capital funding needs to ensure that the water and sewer rates cover the full cost of providing service. Our analysis will review the cost justification for the current water tiers to ensure that the water rates are sufficient to cover expenses while factoring in the impacts of the pandemic and Statewide drought. We will update the sewage strength loading and customer categories. L&T will evaluate rate structure modifications, assess the financial and other impacts of any changes, including the bill impacts to customers, and recommend adjustments if warranted. Additionally, the study will evaluate and update the other utility service charges and fees.
It is key that our final deliverables are easy for the City to understand and implement. We propose to organize our cash flows based on existing budget categories to allow for the easy import or export of data between documents. L&T also structures our reports with reader-friendly executive summaries to allow the general public to grasp key concepts. Our financial models are designed to provide tables and charts that can be pasted into presentations to give visual representations of our work. L&T will also ensure that the City’s billing system can accommodate proposed rate structure adjustments.
Financial Planning
Our approach to financial planning will be to adjust rates to keep up with inflationary cost increases, ensure funding is available for capital projects, meet debt coverage requirements, and model the impacts of growth. L&T will provide cash flow analyses in an Excel-based model fed by a financial dashboard showing how each of these factors impact the City’s bottom line.
In particular, we will model various growth scenarios and impacts on utility services. Costs of expanding facilities should be covered by impact or connection fees from new development. However, there can be delays between when facilities are constructed and when revenues are collected. Moreover, expanded or improved infrastructure may face more stringent regulations and be more costly to operate. Growth in the City’s service area will also have implications for staffing costs, engineering, depreciation, and property insurance. All of these factors will be incorporated into L&T’s cash flows.
We use industry-standard methodologies recommended by the American Water Works Association and our projects include financial models to predict cash flows and rate impacts. We are comfortable building our own Excel-based models as well as reviewing the work of other consulting firms. For
TECHNICAL APPROACH
5 instance, we recently provided a financial master plan and custom model for the Fresno Irrigation District, which has six inter-linked funds and an annual budget of about $18 million.
Screenshot of a recent financial dashboard created by L&T for a public agency client Registered Municipal Advisor
Lechowicz & Tseng Municipal Consultants is registered with the Municipal Securities Rulemaking Board (MSRB) and the Securities Exchange Commission (SEC). We are able to provide detailed advice regarding the timing and structure of debt and the adequacy of rate revenues to meet debt coverage requirements. As a registered advisor, Principal Alison Lechowicz can provide a detailed comparison of financing options and make recommendations, if appropriate.
Rate Design
Subsequent to the San Juan Capistrano court case, volume rates, tiered pricing, and conservation rates are under increased scrutiny in California. Agencies may no longer adopt usage rates to meet conservation objectives without a supporting cost analysis. At the same time, SB 606 and AB 1668 require water purveyors to gradually reduce indoor, residential water use. L&T will guide the City through compliance with these regulations and can provide options to ensure the City’s water usage tiers meet Proposition 218 proportionality requirements.
Currently, residential and commercial customers are charged for water service according to a fourtiered rate structure. Industrial customers are charged for usage based on a single tier. Our approach is to evaluate current levels of consumption for each customer class and compare with the existing water tiers. Some possible water rate structure modifications may include the addition of a monthly fixed charge, changing the tier breakpoints, reducing the number of tiers, and developing a separate rate for commercial customers. The key to success is demonstrating actual costs attributable to higher levels of use such as higher electricity costs due to peak pumping, upsizing of equipment, conservation compliance or programs, and/or imported water costs.
6 The City’s customer base is unique in that the majority of usage is attributed to several industrial and commercial customers. The goal of the rate design will be to ensure that each customer class pays their proportionate share of their impact on each system. For example, agricultural customers and food manufacturers typically have peak water usage and sewer flows during the late
summer/early fall harvest season which could spike usage of the City’s water and sewer infrastructure. Food manufacturers typically have high BOD but do not necessarily contribute to other wastewater pollutants such as TSS. These customers should pay for their peak flows and pollutant loading such that residential customers are not burdened with these costs.
If modifications to the current rate structure are needed or desired, we will work with the project team to phase in modifications, clearly explain why the changes are needed, and minimize the impact on ratepayers. Additionally, we will take into consideration staff’s time and capabilities to administer any changes and will ensure that the City’s billing system can accommodate proposed rate structure adjustments.
Public Approval
L&T has a breadth of experience with controversial rate, fee, and tax increases. We are equipped to handle many of the administrative tasks such as drafting, printing, and mailing notices, if appropriate.
Alison and Catherine performed similar services for the cities of Anderson, Chowchilla, San Fernando, Waterford, the McMullin Area Groundwater Sustainability Agency, and the Town of Discovery Bay.
We find that when the ratepayers understand the need for the fees and the basis of costs they are more accepting of increases. Outreach is particularly important for smaller public agencies as they have a greater risk of ratepayers garnering a 50% majority protest to deny a rate adjustment. L&T’s strategy is to meet with interested stakeholders early in the assignment to hear concerns and clearly explain the need for fees. The City of Gonzales has several large commercial customers that may be more likely to challenge any rate adjustments as it impacts their bottom line. We highly recommend targeted outreach to these entities to address any critical issues early in the study.
This process has been extremely beneficial in other studies that we’ve completed. As example, Alison conducted Public Works workshops for the Cities of Berkeley and Modesto. She also met with developers regarding rate and fee studies conducted for the Town of Discovery Bay and the Templeton Community Services District. Catherine Tseng worked with the 15-member Water Advisory Committee in the City of Davis. The objective is to demonstrate the value of the City’s services to ratepayers. We will draft public notices, newsletters, and web or social media postings as appropriate.
L&T is happy to lead public presentations.
7 PROJECT MANAGEMENT
Our approach to our work is simple – we roll up our sleeves and get the job done. When initiating a project, it’s impossible to know every twist and turn an assignment may take. Unexpected issues may arise, out of scope tasks may be required, and political sensitivities may become uncovered. L&T strives to be flexible and responsive to our clients. We remain available to take on additional tasks, coordinate between departments, agencies, and contractors, attend evening meetings, make presentations, and provide clerical support such as printing and mailing of public notices. Successful projects consist of both major deliverables and many small administrative tasks. Lechowicz & Tseng maintains high client satisfaction because we take responsibility for all aspects of our assignments.
We have an excellent track record of completing assignments on-time. L&T will be responsible for all project analysis and the preparation of meeting and presentation materials for the project team and Council meetings. L&T strives to be flexible and responsive to our clients. During project initiation, we will finalize the schedule and set deliverables by working backwards from the desired Proposition 218 hearing date. We will provide bi-weekly check-ins and monthly billing summaries to ensure that the project is on schedule and within budget.
SCOPE OF SERVICES
Provided below is our suggested scope of services which elaborates on our project approach and methodology. L&T will work with the City to finalize a scope tailored to meet your needs.
SCOPE OF WORK
Task 1:
Data Gathering
Task 2:
Financial Plan
Task 3:
Cost Allocation
Task 4:
Rate Design
Task 5:
Reports &
Model
Task 6:
Meetings &
Presentations
Task 7:
Prop 218
Assistance
8 Task 1 – Project Kickoff and Data Gathering
Kickoff Meeting
L&T will meet with City staff for a project kickoff meeting to review study goals, milestones, identify project team members, and determine roles and responsibilities.
Data Gathering
Assemble the necessary data to complete the study. The goal is to understand the City’s financial standing, current rate structure, and utility billing information. A data needs list will be provided to City staff prior to the kickoff meeting.
Task 2 – Financial Plan
Annual Revenue Requirements
With staff input, we will estimate future operating and capital expenditures to estimate annual revenue needs. We will factor in projections of growth, repairs and replacements, cost escalation, sewer flows, conservation, regulatory compliance, and operational changes to ensure that all future expenses are included.
Review Reserve Fund Targets
This subtask involves reviewing the current operating and capital reserve balances for each utility and evaluating reserve targets for emergency reserves, rate stability reserves, long term capital reserves, short term capital reserves, or other categories as appropriate. At minimum, our analysis will review the age and condition of the systems, annual depreciation costs, debt service reserves, and expenses related to emergencies.
Evaluate Debt Service Coverage
L&T will review budgets, audits, and bond disclosure documents to understand current debt obligations.
We will determine current coverage ratios based on net operating revenues compared to annual debt service expenses. We will also evaluate if the utilities have capacity to take on additional debt at the current revenues. Our final rate recommendations will include projections to meet coverage requirements in the years to come.
9 Review Capital Improvement Needs
Our cash flow analysis will isolate the impacts of
capital funding separate from increases needed to
fund other utility expenses. Typically, L&T
suggests three capital funding scenarios: 1) bare
bones: fund only critical improvements, 2) priority
funding: fund critical projects plus high-priority,
level of service improvements, and 3) full funding:
fund all proposed projects. We will work with the
agency to determine project affordability and
adjust our rate recommendations accordingly.
L&T will review various financing options to fund
capital needs, including pay-as-you-go/cash funding and other debt financing alternatives, such as State loans/grants, bank loans, and certificates of participation/bonds.
Cash Flow Projections
Annual revenue requirements and capital funding needs will be used to develop long-term cash flow projections summarizing the financial position of the utilities over the next 10 years. The cash flow projections will estimate rate increases needed to meet annual revenue requirements, debt obligations, and reserve fund targets.
Sensitivity Analysis
Based on input from the project team, L&T will incorporate rate sensitivity analysis to determine affordability. We will determine rate impacts under various scenarios, possibly including cash funding of projects, debt funding of projects, water cutbacks, etc. Sensitivity analysis can often become an iterative process. L&T is flexible to run additional scenarios as needed.
Task 3 – Cost Allocation
Evaluate Customer Billing Data
We will evaluate historical and current water consumption, wastewater flow, pollutant loading, and other billing data to estimate future drought and normal year water demands. A key aspect of this task is to determine the amount of water use and revenue collected from meter charges and volume rates.
Functionalize Costs
Functionalization is the allocation of expenses by major operating activities for the utilities, including water supply, peak pumping, treatment, storage, transmission, overhead, and administration. Sewer categories will consist of customer service, flow, BOD, and TSS.
Allocation to Customer Classes
After costs have been categorized by function, costs are then allocated to each customer class based on water demand and sewer flow and loading characteristics. The result produces fixed and variable revenue requirements for each customer class which can be recovered via fixed charges and usage rates. 10 The allocation to customer classes will be based on American Water Works Association best practices and meet the proportionality requirements of Proposition 218.
Tiered Rate Review – If needed
In this subtask, L&T will review tier breakpoints and determine costs that can be assigned to each tier.
Task 4 – Rate Design
Assess Current Rate Structure and
Customer Classifications
Review the current rate structures and
customer classifications to assess the advantages
and disadvantages of the existing systems and to
determine compliance with industry standards
and court rulings. While compliance with
Proposition 218 will guide all our
recommendations, additional criteria may
include: the impact on customer bills, public
understanding, revenue stability, ease of
implementation, compatibility with the existing
billing system, and staff effort needed for
administration.
Rate Alternatives
Based on the criteria developed with staff and the cost of service analysis, we will identify two (2) alternative rate structures or modifications to the current water and sewer rate structures. In particular, L&T will ensure that any tiered rate options are cost-justified and compliant with recent court rulings. We intend to provide a detailed analysis to assess the appropriateness of desired tiers and to ensure compliance with the requirements of Proposition 218. We will determine if usage rates align with projected water sources and costs. It may be prudent to phase-in adjustments over time.
For our sewer recommendations, we will fully document all underlying flow and pollutant estimates used in our analysis. We will outline the advantages and disadvantages of each option. This task includes a legal review of current and proposed rate design alternatives. As needed, we will coordinate with legal counsel. For the final study, we will present rate structure options that both meet the agency’s needs and relevant legal requirements. L&T will compare all our estimates and recommendations with those used by other local entities.
Bill Impacts
Based on the recommended rates, calculate the bill impacts for a sample of typical customers including both residential and industrial. If needed, develop an implementation plan to phase in adjustments.
Survey of Local Rates
We will prepare a survey comparing current
and proposed bills to other local agencies.
The survey will be summarized in tables and
charts that can be used for outreach,
presentations, and the final report. We will
also prepare a bill comparison for different
levels of water use and different customer
classes. The final list of surveyed agencies will
be determined by the City and will include at
least 6 agencies.
11 Finalize Recommendations
Our rate recommendations will include multi-year rate increases and rate design adjustments. The final plan will show projected rates for each customer class for each year.
Review and Update Other Service Charges
Administrative fees for miscellaneous services are subject to Proposition 26 and should be based on the reasonable cost of service. L&T will review the City’s current service charges (including fees for backflow devices, plan reviews, hydrant meters, etc.) and update the charges based on current costs. If warranted, L&T will interview staff to determine staff time and materials needed to provide each service.
We will calculate fully burdened hourly rates, vehicle and equipment expenses (if applicable), and administrative overhead. We can also provide a survey of surrounding agencies to gauge whether the current miscellaneous fees are in line with other utilities. Moreover, L&T will work with the project team to determine whether additional fees and charges are necessary.
Task 5 – Reports & Model
Submit a draft summary report for review and feedback. The report will summarize findings and recommendations and discuss key alternatives when applicable. We will then incorporate all staff comments and update recommendations accordingly. The final report will reflect input received from staff and elected officials. Our reports are intended to serve as the administrative record and will be compliant with Propositions 218 and 26.
L&T will also submit an Excel-based financial model at the conclusion of the study including all rate calculations and a user-friendly data entry dashboard pre-loaded with our financial planning assumptions.
L&T focuses on straightforward reports and models that easily convey information. If planning assumptions change after the assignment is complete, the City will have the underlying information to change course and make adjustments. All study materials including the final Excel-based financial model will be submitted to the agency in their native format (Word, Excel, Powerpoint, etc.). L&T’s materials do not contain any proprietary information or specialized software.
Task 6 – Meetings & Presentations
L&T proposes six (6) in-person meetings and bi-weekly virtual check-in meetings. For the in-person meetings, a sample meeting schedule could include: one (1) kickoff meeting, one (1) meeting for the presentation of the draft rate structure alternatives to City Council, two (2) community outreach workshops, one (1) meeting for the presentation of the final rate study report to City Council, and one (1) meeting for the Proposition 218 hearing.
12 Task 7 – Proposition 218 Procedural Assistance
L&T is available to provide comprehensive Proposition 218 procedural assistance including arranging the printing and mailing of the Proposition 218 notice. We recommend public agencies use the Proposition 218 notice as an outreach opportunity to explain why the rate adjustments are needed and to highlight what has been done to help reduce costs.
We will coordinate and conduct all deliverables associated with compliance with Proposition 218 including: aggregating the ratepayer and property owner mailing lists, drafting the Proposition 218 notice, translating the notice into other languages such as Spanish, printing the notices, and certifying the mailing of the notices. The actual cost of mailing the Proposition 218 notice is a separate charge and will be based on the number of mailers & printing costs.
RATE STUDY DELIVERABLES
o Data request list
o Review of prudent reserves and recommended reserve fund levels o Cash flows with anticipated funding sources and cost recovery o Ten-Year Financial Plan
o Analysis of fixed and variable operating and capital costs o Evaluation of customer characteristics including water use/sewer flow, strength loading, and number of accounts
o Rate design alternatives (at least 2 presented to Council as per RFP) o Final five-year rate projections
o Bill impacts and rate survey of local agencies (at least 6 other cities) o Recommended updates to other utility service charges (Proposition 26 fees) o Draft and final reports
o Financial Model in Excel
o Proposition 218 public notice draft and/or educational materials o Six (6) in-person meetings/presentations with the City o Bi-weekly virtual progress meetings with staff and action items distributed to the project team o Printing and mailing of the Proposition 218 public notice 13 SCHEDULE
Provided below is Lechowicz & Tseng’s draft schedule for the rate study. We propose the following schedule with the Proposition 218 hearing in June 2023 and new rates going into effect July 1, 2023. We are happy to adjust the schedule as needed.
V – virtual meeting with staff; 1- 6 – in-person meetings; D – draft report submitted; F – final report submitted
MEETINGS
Provided below is a sample meeting schedule for our proposed in-person meetings that will be updated with input from the project team. In addition to six (6) in-person meetings, our proposal includes biweekly virtual meetings for progress meetings with staff.
Meeting #1 Kickoff meeting with Project Team
Meeting #2 Present draft findings and alternative rate structure options to City Council Meeting #3 Community outreach meeting
Meeting #4 Community outreach meeting
Meeting #5 Present final report to City Council; initiate Proposition 218 process Meeting #6 Proposition 218 Public Hearing to adopt rates
PROJECT TASK
1. Kickoff & Data Gathering
2. Financial Plan
3. Cost Allocation
4. Rate Design
5. Reports & Model D F
6/7. Meetings & Prop 218 1 V V 2 V 3 V 4 V 5 PROP 218 6
NOV DEC JAN FEB MAR APR MAY JUN
14 Alison Lechowicz will serve as the Principal-in-Charge and main contact person. Catherine Tseng will provide peer review. Sophia Mills will serve as financial analyst. No subconsultants are needed for this assignment.
Analyst - Sophia Mills
15 years consulting experience
Master of Public Administration
Testified as an expert witness at the
CA Public Utilities Commission
Series 50 and 54 – Municipal Advisor
Representative and Municipal Advisor
Principal Qualifications
Project Manager
and Lead Analyst
Financing alternatives and
cash flow projection
Rate recommendations
Public presentations
Alison Lechowicz
PRINCIPAL
QUALIFICATIONS Responsibilities
Catherine Tseng
PRINCIPAL
15 years consulting experience
Master of Urban Planning
Bachelor of Architecture
Peer Review
Methodological review
Review of draft and final reports
Substitute for Ms. Lechowicz if
needed
QUALIFICATIONS Responsibilities
PROJECT TEAM
15 Alison Lechowicz
EDUCATION
o Columbia University
Master of Public Administration
o University of California, Berkeley
Bachelor of Science
Conservation & Resource Studies
REPRESENTATIVE ASSIGNMENTS
o 15 years consulting experience: 5 years
Co-founder and Principal at L&T Municipal
Consultants, 7 years as Principal and
Financial Analyst at Bartle Wells
Associates, 3 years as Financial Analyst at
Carollo Engineers
o Testified as an expert witness at the
CA Public Utilities Commission in electric
rate cases of Pacific Gas & Electric,
Southern California Edison, and
San Diego Gas & Electric
o Municipal Securities Rulemaking Board,
Series 50 & 54 – Municipal Advisor
Representative and Municipal Advisor
Principal
EXPERIENCE
[email protected]
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 545-3182
Templeton Community Services District:
Completed a water and sewer rate study.
Conducted an analysis of the District’s four water
sources, determined the marginal cost of each
source, and assigned each source to a water rate
tier. Evaluated the transition of the District from
regional wastewater treatment to local treatment.
____________________________________
Nipomo Community Services District:
Conducted sewer and street light rate studies for
the Blacklake service area. Evaluated interim sewer
rates prior to regionalization of treatment facilities.
Determined lighting costs and options for
converting to LED.
____________________________________
Town of Discovery Bay: Consultant for the
Town for over ten years having conducted multiple
water and sewer rate studies and capacity fee
studies. Assisted the Town in recovering costs for
new wastewater regulatory requirements.
___________________________________
City of Kerman: Completed a water and sewer
rate study for the City. Updated winter water use
estimates for single family residential sewer rates.
Phased-out discounts for multifamily sewer
customers.
____________________________________
Root Creek Water District (Madera County):
Financial plan for the District’s groundwater basin
and agricultural water service. Water, sewer, and
storm drain rates and development fees for
municipal service.
____________________________________
Stege Sanitary District (Contra Costa
County): Sewer rate and connection fee study.
Conducted extensive review of water usage
patterns to determine flow rates of customer
classes. Proposed a 5-year phase-in for a new
multifamily rate.
16 Provided below is a sampling of Alison Lechowicz’s project experience since 2010. Prior to 2010, Ms. Lechowicz worked for a civil engineering firm conducting financial analysis for master plans.
CLIENT PROJECT DATE COMPLETED
City of Alameda Sewer Financial Plan and Rate Study May 2015 City of Anderson Water and Sewer Rate Study February 2021 Town of Apple Valley Water System Acquisition Feasibility Analysis July 2011 City of Berkeley Sanitary Sewer Rate Study June 2015
City of Carmel-by-the-Sea Bond Refinancing October 2010 CA City County Street Light
Association
Rate economist and expert witness March 2010 to present (ongoing)
City of Chowchilla Water, Sewer, Storm Drain, and Solid Waste Rate Study
June 2020
City of Chula Vista
Wastewater Capacity Fee Study
Salt Creek Sewer Basin Impact Fee Study
Depreciation Review
May 2014
June 2015
July 2018
City of Clovis Water User Rates and Fee Study February 2016 City of Colfax Sewer Rate Affordability Review June 2010 City of Colusa Development Impact Fee Study
Water System Valuation
June 2011
September 2014
Contra Costa Water District Water Rate Study February 2015 City of Cotati Water and Sewer Rate Study February 2013 Town of Discovery Bay Water and Sewer Rate and Capacity Fee Studies Multiple studies since 2012 City of Emeryville Sewer Rate Study November 2016
Fresno Irrigation District Financial Master Plan Ongoing City of Hemet
Water and Sewer Rate Studies and System
Valuations
Water Fund Rental Fee Analysis
July 2015
August 2018
Home Gardens Sanitary
District
Sewer Rate and Capacity Fee Study May 2015
Indian Wells Valley Water
District Bond Refinancing December 2012
City of Kerman Water and Sewer Rate Study October 2018
City of Kingsburg Solid Waste Rate Study Ongoing
Kings River E. GSA Groundwater Fee Study February 2018
City of Lancaster Streetlight Valuation June 2014
17 CLIENT PROJECT
DATE
COMPLETED
Napa Berryessa Resort
Improvement District Water and Sewer Assessment July 2012 Newhall County Water District Water Rate Litigation Support November 2012 Nipomo CSD Blacklake Sewer Rate Study
Blacklake Streetlight Rate Study
January 2019
March 2022
Novato Sanitary District Capacity Fee Study
Sewer Rate Study
March 2016
April 2016
City of Palmdale Sewer Service Charge Analysis May 2011 City of Rio Dell Wastewater Rate Study
Water and Sewer Rate Study
May 2014
April 2022
Root Creek Water District Water, Sewer, and Storm Drain Rate Study and Financial Plan
On-call consulting services
April 2016
Ongoing
San Diego County Water
Authority
Cost Allocation Review May 2011
City of San Fernando Water and Sewer Rate Study December 2019 San Joaquin County Utility Appraisal
Utility Appraisal Update
November 2018
January 2022
City of Santa Clarita Sewer Maintenance Feasibility Study June 2014 Saticoy Sanitary District Bank Loan Financing September 2013 South Tahoe Public Utility
District
Sewer Bond Refunding September 2012
Stege Sanitary District Multiple sewer rate and connection fee studies Multiple studies since 2010 Sunnyslope County Water
District
Water and Sewer Bond Refinancing October 2014
Tahoe Truckee Sanitation
Agency
Sewer Fee Ordinance Review May 2010
City of Tehachapi Water and Sewer Connection Fee Study
Parks and Civic Impact Fee Study
February 2020
March 2021
Templeton CSD Water and Sewer Rates and Capacity Fee Study Parks and Fire Impact Fees
November 2018
Triunfo Sanitation District Water Infrastructure Financing Automated Meter Financing
February 2011
May 2014
Tulare Lake Drainage District Project Financing
Project Financing
March 2012
January 2013
City of Wasco Water and Sewer Rate Study Ongoing
City of Waterford Sewer Rate Study June 2019
18 Catherine Tseng
EDUCATION
o Columbia University
Master of Urban Planning
o University of California, Berkeley
Bachelor of Arts
Architecture
REPRESENTATIVE ASSIGNMENTS
o 5 years Co-founder and Principal at L&T
Municipal Consultants
o 10 years prior consulting experience:
Vice President at Bartle Wells Associates
o 2 years civil servant: City of Oakland
o Specializes in utility rates, capacity charge,
and financing plans for public works
projects, and Proposition 218 compliance
EXPERIENCE
catherine@
LTmuniconsultants.com
(510) 858-9228
909 Marina Village Parkway #135
Alameda, CA 94501
City of Chowchilla: Completed a water, sewer,
storm drain, and solid waste rate study. Rates will
support the City’s recent bond issuances and
overcome prior deficit spending for the solid waste
enterprise.
_____________________________________
City of San Fernando: Water and sewer financial
plan and rate study and Proposition 218 printing and
mailing. Offered rate options to meet affordability
criteria including funding of only high priority
projects.
____________________________________
City of Anderson: Completed a water rate study
to address depleting reserves. Analyzed multiple
rate scenarios to minimize impacts to customers.
____________________________________
City of Brisbane: Currently conducting a water
and sewer rate study. The City last updated rates in
2013 but has not done a comprehensive cost of
service analysis since 2001. The 2021 update will
also evaluate rates for a new development area that
will double the City’s service area.
____________________________________
City of Rio Dell: Conducted a water and sewer
rate study to fund mandated capital projects and
eliminate operating deficit.
____________________________________
City of Davis: Water financial plan and rate study
assessing various conservation-oriented water rate
structures and developed drought surcharge.
Worked closely with citizens’ advisory committee
to develop recommendations to City Council.
19 Provided below is a sampling of Catherine Tseng’s project experience since 2006.
CLIENT PROJECT DATE COMPLETED
Alameda County Water
District Water Development Fee Study January 2012
City of Anderson Water and Sewer Rate Study February 2021 Armona Community Services
District Water and Sewer Rate Study March 2008
City of Benicia
Raw Water Rate Study and Update
Water Rate and Connection Fee Study and Update
Drought Rate Study
August 2013 and Sept 2015
February 2013
September 2014
Big Bear City Community
Services District Water, Sewer, and Solid Waste Rate Study May 2015 City of Brisbane Water and Sewer Rate Study Ongoing
City of Chowchilla Water, Sewer, Storm Drain, and Solid Waste Rate Study June 2020
Coastside County Water
District
Water Financing Plan
Water Rate Study
August 2009
January 2010
Crestline Sanitation District Wastewater Rate Study June 2015 City of Davis Water Rate Study
Water Rate Study Update
March 2013
September 2014
Diablo Water District Water Bond Financing
Bond Refinancing
August 2010
April 2013
El Dorado Irrigation District Development Impact Fee Study Water Rate Study
October 2008
January 2009
Elk Grove Water District Water Financial Plan and Rate Study December 2007 Fairbanks North Star Borough Bond Refinancing November 2011 and September 2013
Fresno Irrigation District Financial Master Plan Ongoing City of Glendale Water Rate Study May 2015
Town of Hillsborough Water and Sewer Rate Study December 2006 City of Hanford Water Financing December 2007
Humboldt Bay Municipal
Water District Water Financial Plan April 2011
Indian Wells Valley Water
District
Water Rate Study
Bond Financing
Water Rate Cost of Service and Development
Impact Fee Study
January 2007
August 2009
January 2012 and 2015
20 CLIENT PROJECT DATE COMPLETED
City of Menlo Park Water Rate Study
Recycled Water Analysis
May 2015
October 2015
Montara Water & Sanitary
District Water and Sewer Rate Studies Multiple studies since 2006 Montecito Water District Drought Rate Study February 2015 Novato Sanitary District Bond Financing October 2011
Olivehurst Public Utilities
District Water Rate Study and Updates 2007, 2009 and 2014 City of Patterson Water and Sewer Rate and Capacity Fee Studies Multiple studies since 2010 City of Rio Dell Water and Sewer Rate Study April 2022
Root Creek Water District Financial Policy Manual July 2017 Running Springs Water District Water, Sewer, Fire and Ambulance Rate Studies July 2010 City of San Bruno Water and Sewer Rate Study April 2012 City of San Fernando Water and Sewer Rate Study December 2019 Sanitary District No. 5 -
Tiburon Financial Review September 2013
Sausalito-Marin City Sanitary
District Wastewater Facilities Financing Plan May 2016
Selma Kingsburg Fowler
Sanitation District Capital Improvements Program Study March 2008 Solano County Water Agency Reserve Fund Study May 2007
Sonoma County Water Agency Sewer Service Charge and Volumetric Sewer Rate Study August 2012
City of Tulare Bond Financing 2010, 2012, 2013, and 2015 Union Sanitary District Sewer Capacity Fee Study October 2010 City of Vacaville Water and Drought Rate Study October 2015 Town of Yountville Water and Sewer Rate Study
Recycled Water Rate Study
February 2011
April 2012
21 Sophia Mills
EDUCATION
o Davidson College
Bachelor of Arts
Economics, Spanish
REPRESENTATIVE ASSIGNMENTS
Town of Discovery Bay CSD: Water and sewer
rate study. Assisted the Town in rate updates to
accommodate new wastewater regulatory
requirements and capital project funding. Also
completed a water and sewer capacity fee study.
____________________________________
City of Anderson: Completed a water rate study
to address depleting reserves. Analyzed multiple
rate scenarios to minimize impacts to customers.
_____________________________________
City of Rio Dell: Conducted a water and sewer
rate study to fund mandated capital projects and
eliminate operating deficit. Analyzed impacts of alternative rate structures for each utility. ____________________________________
City of Tehachapi: Recently completed a parks
and recreation development impact fee study as well
as a civic impact fee study based on a 20-year
planning horizon.
____________________________________
City of Brisbane: Currently conducting a water
and sewer rate study. The City last updated rates in
2013 but has not done a comprehensive cost of
service analysis since 2001. The 2022 update will
also evaluate rates for a new development area that
will double the City’s service area.
____________________________________
sophia@
LTmuniconsultants.com
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 529-8056
o Fluent in Spanish
o Proficient in Python 2.7, SAS (statistical
analysis software), ArcGIS, HTML, and
CSS
OTHER SKILLS