McFarland City Council
January 26, 2023

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
hereto and incorporated herein as though fully set forth at length, collectively hereinafter referred to as “Described Services.”

2.2. Consultant shall perform all work required to accomplish the Described Services in conformity with applicable requirements of Federal, State and Local law.

2.3. Consultant is hired to render the Described Services and any payments made to Consultant are compensation fully for such services.

2.4. Consultant shall maintain professional certifications as required to properly comply with all City, State, and Federal law.

2.5. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. If the City, in good faith, at any time during the term of this Agreement, desires the removal of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, cause the removal of such person or persons.

2.6. If a license or certification of any kind is required of Consultant, its employees, agents, or subcontractors by federal, state or law and regulation, Consultant warrants that such license has been obtained, is valid and in good standing, and shall keep in effect at all times during the term of this Agreement, and that any applicable bond has been posted in accordance with all applicable laws and regulations.

2.7. Consultant shall provide the City with timely written reports of all significant developments or delays arising during performance of its services.

3. PAYMENT FOR SERVICES (ATTACHMENT B).

3.1. Payment to Consultant to perform its Scope of Work is set forth in Attachment B, attached hereto and incorporated herein. The payments provided in this Section are full compensation for the Scope of Work as described in Attachment A.

3.2. Consultant shall submit monthly bills to the City, describing its services and costs provided during the previous month, based upon percentage of task completed. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Consultant's monthly bills shall include the following information to which such services or costs pertain:
- a description of services performed;
- the date the services were performed;
- the number of hours spent and by whom;
- a description of all costs incurred, and the Consultant's signature.

Consultant agrees to use every appropriate method to contain fees and costs under this Agreement. Once invoice is submitted and approved by the City, City payment will be made within 30 days of approval.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

3.3. The amount set forth in Attachment B may be modified or amended only by a written document executed by both Consultant and authorized City representative prior to the performance of the additional work. Such document shall expressly state that it is intended by the parties to amend the terms and conditions of this Agreement.

4. SUBCONTRACTING.

4.1. Consultant will not subcontract any portion of its Scope of Work without prior written approval of City. If Consultant subcontracts for any of the work to be performed under this Agreement, Consultant shall be as fully responsible to the City for the acts and omissions of Consultant’s subcontractors/subconsultants and for the persons either directly or indirectly employed by the subcontractors/subconsultants, as Consultant is for the acts and omissions of persons directly employed by Consultant. Nothing contained in the Agreement shall create any contractual relationship between any subcontractor/subconsultant of Consultant and the City. Consultant will be responsible for payment of subcontractors/subconsultants. Consultant shall bind every subcontractor/subconsultant to the terms of the Agreement applicable to Consultant’s work unless specifically noted to the contrary in the subcontract in question and approved in writing by the City. Consultant agrees that the City is an intended third-party beneficiary of any services agreement entered into between Consultant and any subcontractor or subconsultant.

5. PROJECT SCHEDULE AND COMPLETION DATE (ATTACHMENT C).

5.1. Attachment C is the project schedule that Consultant shall strictly meet, including benchmark dates and completion date, which is attached hereto and incorporated herein.

Consultant agrees to diligently prosecute the services to be provided under this Agreement to completion and in accordance with the schedule specified herein. In the performance of this Agreement, time is of the essence.

5.2. Consultant shall promptly notify the City of any anticipated or unforeseen delays to the project schedule. Extensions to the project schedule and to this Agreement shall not be made without the prior written approval of the City. All requests for extensions to the project schedule shall be by written request only and submitted to the City prior to the commencement of such work.

6. CHANGES IN WORK AND EXTRA WORK. Consultant shall not change the scope or duration of work or perform work in excess of the Scope of Work without the prior, written approval of the City by an executed Change Order, describing in detail the revision to Scope of Work, revisions in payment and/or time, fully executed by both parties. Failure to obtain a Change Order prior to the commencement of any revision waives Contractor’s right to payment for such additional services.

7. RESPONSIBILITIES OF AND TASKS TO BE PERFORMED BY CITY. City designates Kenny Williams, its City Manager, to represent the City in all matters within the scope of this Contract relating to the conduct and approval of the work to be performed. Whenever the term “approval of City,” “consult with City,” “confer with City,” or similar terms are used, they

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
shall refer to the City Manager. The City Manager may designate an assistant to act in his/her stead.

The CITY shall furnish upon request, without charge, all standard plans and specifications and any other information which the City now has in its files that may be of use to Consultant.

8. VERBAL AGREEMENT OR CONVERSATION. No verbal agreement or conversation with any officer, agent, or employee of the City, either before, during or after the execution of this Agreement, shall affect or modify any of the terms or obligations herein contained nor shall such verbal agreement or conversation entitle Consultant to any additional payment whatsoever.

9. TERMINATION OF AGREEMENT.

9.1. Termination for Convenience City may terminate this Contract for City’s convenience at any time by providing Consultant thirty days written notice. Upon receipt of the notice of termination, Consultant shall immediately take action not to incur any additional obligations, costs or expenses, except as may be necessary to terminate its activities. City shall pay Consultant its reasonable and allowable costs through the effective date of termination and those reasonable and necessary costs incurred by Consultant to effect the termination. Thereafter, Consultant shall have no further claims against City under this Contract. All finished and unfinished documents and materials procured for or produced under this Contract, including all intellectual property rights City is entitled to, shall become City property upon the date of the termination. Consultant agrees to execute any documents necessary for City to perfect, memorialize, or record City’s ownership of rights provided herein.

9.2. Termination for Breach of Contract.

9.2.1. Except as provided in Attachment “C”, if Consultant fails to perform any of the provisions of this Contract or so fails to make progress as to endanger timely performance of this Contract, City may give Consultant written notice of the default.

City’s default notice will indicate whether the default may be cured and the time period to cure the default to the sole satisfaction of City. Additionally, City’s default notice may offer Consultant an opportunity to provide City with a plan to cure the default, which shall be submitted to City within the time period allowed by City. At City’s sole discretion, City may accept or reject Consultant’s plan. If the default cannot be cured or if Consultant fails to cure within the period allowed by City, then City may terminate this Contract due to Consultant’s breach of this Contract.

9.2.2. If the default under this Contract is due to Consultant’s failure to maintain the insurance required under this Contract, Consultant shall immediately: (1) suspend performance of any services under this Contract for which insurance was required; and (2) notify its employees and Subconsultants of the loss of insurance coverage and Consultant’s obligation to suspend performance of services. Consultant shall not recommence performance until Consultant is fully insured and in compliance with City’s requirements.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

9.2.3. If a federal or state proceeding for relief of debtors is undertaken by or against Consultant, or if Consultant makes an assignment for the benefit of creditors, then City may immediately terminate this Contract.

9.2.4. If Consultant engages in any dishonest conduct related to the performance or administration of this Contract or violates City’s laws, regulations or policies relating to lobbying, then City may immediately terminate this Contract.

9.2.5. Acts of Moral Turpitude.
a. Consultant shall immediately notify City if Consultant T or any Key Person, as defined below, is charged with, indicted for, convicted of, pleads nolo contendere to, or forfeits bail or fails to appear in court for a hearing related to, any act which constitutes an offense involving moral turpitude under federal, state, or local laws (“Act of Moral Turpitude”). b. If Consultant or a Key Person is convicted of, pleads nolo contendere to, or forfeits bail or fails to appear in court for a hearing related to, an Act of Moral Turpitude, City may immediately terminate this Contract. c. If Consultant or a Key Person is charged with or indicted for an Act of Moral Turpitude, City may terminate this Contract after providing Consultant an opportunity to present evidence of Consultant’s ability to perform under the terms of this Contract.
d. Acts of Moral Turpitude include, but are not limited to: violent felonies as defined by Penal Code Section 667.5, crimes involving weapons, crimes resulting in serious bodily injury or death, serious felonies as defined by Penal Code Section 1192.7, and those crimes referenced in the Penal Code and articulated in California Public Resources Code Section 5164(a)(2); in addition to and including acts of murder, rape, sexual assault, robbery, kidnapping, human trafficking, pimping, voluntary manslaughter, aggravated assault, assault on a peace officer, mayhem, fraud, domestic abuse, elderly abuse, and child abuse, regardless of whether such acts are punishable by felony or misdemeanor conviction.
e. For the purposes of this provision, a Key Person is a principal, officer, or employee assigned to this Contract, or owner (directly or indirectly, through one or more intermediaries) of ten percent or more of the voting power or equity interests of Consultant.

9.2.6. In the event City terminates this Contract as provided in this section, City may procure, upon such terms and in the manner as City may deem appropriate, services similar in scope and level of effort to those so terminated, and Consultant shall be liable to City for all of its costs and damages, including, but not limited to, any excess costs for such services.

9.2.7. If, after notice of termination of this Contract under the provisions of this section, it is determined for any reason that Consultant was not in default under the provisions of this section, or that the default was excusable under the terms of this Contract, the rights and obligations of the parties shall be the same as if the notice of termination had been issued pursuant to Article 8 Termination for Convenience.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

9.2.8. The rights and remedies of City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Contract.

9.3. In the event that this Contract is terminated, Consultant shall immediately notify all employees and Subconsultants, and shall notify in writing all other parties contracted with under the terms of this Contract within five (5) working days of the termination.

10. COVENANTS AGAINST CONTINGENT FEES. Consultant warrants that it has not employed or retained any company or person, other than a bona fide employee working for Consultant, to solicit or secure this Agreement, and that Consultant has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, the City shall have the right to terminate this Agreement without liability or, at the City’s discretion, to deduct from the Agreement price or consideration, or otherwise recover the full amount of such fee, commission, percentage, brokerage fee, gift or contingent fee.

11. OWNERSHIP OF DOCUMENTS.

11.1. All computer data, computer drawing files, plans, studies, sketches, drawings, reports, specifications, and all work product produced by Consultant under this Agreement are the property of the City, whether or not the City completes the Scope of Work or proceeds with the project for which such documents are prepared.

11.2. This Agreement creates a nonexclusive and perpetual right or license for City to copy, use, modify, reuse, and sublicense any and all copyrights, designs, and other intellectual property embodied in the writings prepared by Consultant, and Consultant subcontractors, under this Agreement. In the event the City should ever desire to undertake a project or review other proposed projects based upon the documents, the Consultant agrees that the City shall have the right to reuse all or any portion of the documents at no additional compensation to the Consultant.

12. INDEPENDENT CONTRACTOR.

12.1. The Consultant shall perform the services provided for herein in a manner of Consultant's own choice, as an independent Contract and in pursuit of Consultant's independent calling, and not as an employee of the City. Consultant shall be under control of the City only as to the result to be accomplished and the personnel assigned to the Project.

12.2. If the Consultant subcontracts any of the work to be performed under this Agreement pursuant to the terms of this Agreement, Consultant shall be as fully responsible to the City or the acts and omissions of the Consultant's subcontractor and of the persons either directly or indirectly employed by the subcontractor, as Consultant is for the acts and omissions of persons directly employed by Consultant. Nothing contained in the Agreement shall create any contractual relationship between any subcontractor of Consultant and the City. The Consultant shall bind every subcontract by the terms of the

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
Agreement applicable to Consultant's work, including indemnity and insurance requirements.

13. HOLD HARMLESS AND INDEMNIFICATION.

13.1. Indemnification - It is understood and agreed that Consultant has the professional skills, experience, and knowledge necessary to perform the work agreed to be performed under this Agreement and that City relies upon the professional skills of Consultant to do and perform Consultant's work in a skillful and professional manner, and Consultant thus agrees to so perform the work.

13.2. Acceptance by City of the work performed under this Agreement does not operate as a release of said Consultant from such professional responsibility for the work performed. It is further understood and agreed that Consultant is apprised of the scope of the work to be performed under this Agreement and Consultant agrees that said work can and shall be performed in a fully competent manner.

13.3. Consistent with California Civil Code section 2782.8, when the services to be provided under this Agreement are design professional services to be performed by a design professional, as that term is defined under said section 2782.8, Consultant shall, to the fullest extent permitted by law, indemnify, protect, immediately defend, and hold harmless City, and its officers, employees, agents, and volunteers, from and against all claims, demands, damages, costs, or liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, or costs of any kind, interest, defense costs, and expert witness fees) arising out of, pertaining to, or relating to the negligence, recklessness, or willful misconduct of Consultant, its officers, employees, subcontractors, subconsultants or agents during the performance this Agreement, or from any violation of any federal, state, or municipal law or ordinance to the extent caused, in whole or in part, by the negligence, reckless, or willful misconduct of Consultant or its employees, subcontractors, or agents, or by the quality or character of Consultant’s work, excepting only liability arising from the sole negligence, sole active negligence, or intentional misconduct of City, its officers, employees, agents, and volunteers.

13.4. Other than in the performance of professional services by a design professional, which law shall be solely as addressed in subparagraph 12.3 above, and to the fullest extent permitted by law, Consultant shall indemnify, protect, defend, and hold harmless City, and its officers, employees, agents, and volunteers, from and against any claims, demands, damages, costs, or liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, or costs of any kind, interest, defense costs, and expert witness fees) arising out of the performance of this Agreement by Consultant, its officers, employees, agents, subcontractors and subconsultants, excepting only that resulting from the sole negligence, sole active negligence, or intentional misconduct of City, its officers, employees, agents, and volunteers. It is understood that the duty of Consultant to indemnify and hold harmless includes the duty to defend as set forth in section 2778 of the California Civil Code.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

13.5. Acceptance of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages.

14. ASSIGNMENT OF AGREEMENT. Consultant is without right to and shall not assign this Agreement or any part thereof or any monies due hereunder without the prior written consent of the City.

15. INSURANCE.

15.1. Insurance. On or before beginning any of the services or work called for by any term of this Agreement, Consultant, at its own cost and expense, shall carry, maintain for the duration of the Agreement (including all extensions provided), and provide proof thereof that is acceptable to the City the insurance specified in subsections (A) through (F) below with insurers and under forms of insurance satisfactory in all respects to the City.

Consultant shall not allow any subcontractor to commence work on any subcontract until all insurance required of the Consultant has also been obtained for the subcontractor. The Certificate of Insurance shall clearly identify the project name and number in the space labeled “Description of Operations/Locations/Special Items” on the form.

A. Commercial General and Automobile Liability. Consultant, at Consultant's own cost and expense, shall maintain commercial general and automobile liability insurance for the period covered by this Agreement in an amount not less than one million dollars ($1,000,000) per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles.

Coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 and Insurance Services Office Automobile Liability form CA 0001 Code 1 (any auto).

Each of the following shall be included in the insurance coverage or added as an additional insured endorsement to the policy: City, its officers, employees, agents, and volunteers are to be covered as insured’s as respects each of the following: liability arising out of activities performed by or on behalf of Consultant, including the insured's general supervision of Consultant; products and completed operations of Consultant; premises owned, occupied or used by Consultant; or automobiles owned, leased, hired, or borrowed by Consultant. In

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
the event that Consultant purchases automobiles during the term of this Agreement, said automobiles shall be likewise covered. The coverage shall contain no special
An endorsement must state that coverage is primary insurance and that no other insurance affected by the City will be called upon to contribute to a loss under the coverage.

Insurance is to be placed with California-admitted insurers with a Best's rating of no less than A:VII.

B. Professional Liability. Consultant shall obtain, and during the term of this Agreement shall maintain, a policy of professional liability insurance that shall:
i. Be from an insurance company authorized to be in business in the State of California;
ii. Be in an insurable amount of not less than $1,000,000 for each occurrence; and
iii. Provide that the policy shall remain in full force during the full term of this Agreement and shall not be canceled, terminated, or allowed to expire without thirty (30) days prior written notice to the City from the insurance company.

C. Workers' Compensation. Statutory Workers' Compensation Insurance and Employer's Liability insurance for any and all persons employed directly or indirectly by Consultant shall be provided with limits not less than one million dollars. In the alternative, Consultant may rely on a self-insurance program to meet these requirements so long as the program of self-insurance complies fully with the provisions of the California Labor Code. The insurer, if insurance is provided, or the Consultant, if a program of self-insurance is provided, shall waive all rights of subrogation against the City for loss arising from work performed under this Agreement.

D. Deductibles and Self-Insured Retentions. During the period covered by this Agreement, upon express written authorization of City Risk Manager, Consultant may increase such deductibles or self-insured retentions with respect to City, its officers, employees, agents, and volunteers. The City may condition approval of an increase in deductible or self-insured retention levels upon a requirement that Consultant procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them.

E. Notice of Reduction in Coverage. In the event that any coverage required under subsections (A), (B), or (C) of this section of the Agreement is reduced, limited,

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
or materially affected in any other manner, Consultant shall provide written notice to City at Consultant's earliest possible opportunity and in no case later than five day after Consultant is notified of the change in coverage.

F. Other Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option:
i. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement; ii. Order Consultant to stop work under this Agreement or withhold any payment which becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof;
iii. Terminate this Agreement.
iv. Exercise of any of the above remedies, however, is an alternative to other remedies City may have and is not the exclusive remedy for Consultant's failure to maintain insurance or secure appropriate endorsements.

16. DISPUTES.

16.1. If a dispute should arise regarding the performance of this Agreement, the following initial dispute resolution procedures shall be used:

A. Within twenty (20) City working days after a dispute regarding the performance of this Agreement arises, it shall be reduced to writing at staff level by the complaining party setting forth the nature of the dispute in detail, along with all pertinent back up documentation in support. The writing shall be delivered to the receiving party by first class mail or personal delivery directly to the party’s project manager, along with recommended methods of resolution.

B. The party receiving the letter shall reply to the letter with a detailed response, along with a recommended method of resolution, if any, within ten (10) City working days of receipt of the letter.

16.2. If the dispute is not resolved at staff level in accordance with Section 16.1, within five (5) City working days of the receiving party response (or longer if agreed between the parties) , the aggrieved party, through its respective project manager shall deliver to the General Manager’s office a letter outlining the dispute for the General Manager’s review. The receiving party may submit further response, if required, to the General Manager within five (5) City working days thereafter. The General Manager, at his/her sole discretion may respond as he/she deems appropriate, including recommendations for

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
resolution, discussions or rejection of the dispute within fifteen (15) working days of receipt of the complaint.

16.3. If the dispute remains unresolved and the parties have exhausted the procedures outlined in this section, the parties may then seek remedies available to them under this Agreement and at law, including, but not limited to, under the termination procedures.

This provision does not relieve Consultant of its obligation and Consultant is required to timely comply with all applicable provisions of the Government Claims Act before initiating any legal proceeding against City.

17. CONFLICT OF INTEREST. Contractor warrants and covenants that it presently has no interest in, nor shall any interest be hereinafter acquired in, any matter which will render the services required under the provisions of this Agreement a violation of any applicable state, local, or federal law, including, but not limited to, Government Code section 1090. If any principal provider of services is a "consultant" for the purposes of the Fair Political Practices Act (Gov. Code § 81000 et seq.), each such person shall comply with Form 721 Statement of Economic Interests filing requirements in accordance with state or City local Conflict of Interest Code. In addition, if any other conflict of interest should nevertheless hereinafter arise, Consultant shall promptly notify City of the existence of such conflict of interest so that the City may determine whether to terminate this Agreement.

18. CONSULTANT’S BOOKS AND RECORDS.

18.1. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant.

18.2. Consultant shall maintain all documents and records which demonstrate performance under this Agreement for a minimum period of three (3) years, or for any longer period required by law, from the date of termination or completion of this Agreement.

18.3. Any records or documents required to be maintained pursuant to this Agreement shall be made available for inspection or audit, at any time during regular business hours, upon written request by the City General Counsel, City Auditor, General Manager, or a designated representative of any of these officers. Copies of such documents shall be provided to City for inspection when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at Consultant's address indicated for receipt of notices in this Agreement.

18.4. City may, by written request by any of the above-named officers, require that custody of the records be given to City and that the records and documents be maintained in the General Manager's office. Access to such records and documents shall be granted to any party authorized by Consultant’s representatives, or Consultant’s successor in interest.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

19. WRITTEN NOTIFICATION. Any notice, demand, request, consent, approval or communication that either party desires or is required to give to the other party shall be in writing and either served personally or sent by prepaid, first-class mail. Any such notice, demand, etc. shall be addressed to the other party at the address set forth below. Either party may change its address by notifying the other party of the change of address. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section.

If to City: City of McFarland
Attn: City Manager
401 W. Kern Avenue
McFarland, CA 93250
If to Consultant: Willdan Financial Services
Attn: Chris Fisher
27368 Via Industria, Suite 200
Temecula, CA 92590
Any party may change any of the foregoing as it relates to the party by giving written notice to the other party of the change in the manner set forth herein.

20. GENERAL PROVISIONS.

20.1. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement.

20.2. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.

20.3. This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in a state court in the County of Kern.

20.4. Time is of the essence with regard to each covenant, condition and provision of this Agreement.

20.5. This Agreement constitutes the entire agreement between the parties with regard to the subject matter herein and supersedes any prior oral and written agreements and understandings between the parties with respect thereto.

20.6. This Agreement may not be altered, amended, or modified except by a writing executed by duly authorized representatives of all parties.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

20.7. In the event any action or proceeding is instituted arising out of or relating to this Agreement, the prevailing party shall be entitled to its reasonable attorney's fees and actual costs.

20.8. This Agreement may be executed in counterparts. A facsimile or electronic copy of this Agreement shall be as effective as the original for all purposes.

20.9. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective heirs, successors, and assigns. Notwithstanding the foregoing, Consultant shall not assign this Agreement or any part thereof to any other entity or individual.

20.10. City and Consultant each acknowledge that each party and their respective legal counsel have reviewed this Agreement and agree that this Agreement is the product of negotiations between the parties. This Agreement shall be interpreted without reference to the rule of interpretation of documents that uncertainties or ambiguities therein shall be determined against the party so drafting the Agreement.

20.11. All references to a statute or ordinance, shall incorporate any, or all, successor statute or ordinance enacted to govern the activity now governed by the statute or ordinance, noted herein to the extent, however, that incorporation of such successor statute or ordinance does not adversely affect the benefits and protections granted to the Developer under this Agreement.

21. CONSULTANT'S CERTIFICATION OF AWARENESS OF IMMIGRATION REFORM AND CONTROL ACT. Consultant certifies that Consultant is aware of the requirements of the Immigration Reform and Control Act of 1986 (8 USC §§ 1101-1525) and has complied and will comply with these requirements, including but not limited to, verifying the eligibility for employment of all agents, employees, subcontractors and consultants that are included in this Agreement.

22. ACCESS AND ACCOMMODATIONS

22.1. Consultant shall comply with the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C.

Section 701 et seq., the Fair Housing Act, and its implementing regulations and any subsequent amendments, and California Government Code Section 11135;

22.2. Consultant shall not discriminate on the basis of disability or on the basis of a person’s relationship to, or association with, a person who has a disability;

22.3. Consultant shall provide reasonable accommodation upon request to ensure equal access to CITY-funded programs, services and activities;

22.4. Construction, if any, will be performed in accordance with the Uniform Federal Accessibility Standards (UFAS), 24 C.F.R. Part 40; and

22.5. The buildings and facilities used to provide services under this Contract are in compliance with the federal and state standards for accessibility as set forth in the 2010 ADA Standards, California Title 24, Chapter 11, or other applicable federal and state law.

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
Consultant understands that City is relying upon these certifications and representations as a condition to funding this Contract. Any subcontract entered into by Consultant for work to be performed under this Contract must include an identical provision. [Signature Page Follows]

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the day and year written below.

CITY CONSULTANT*

CITY OF MCFARLAND,
a municipal corporation
By: __________________________
Name: ________________________
Title: _________________________

Dated: _______________, 202__
ATTEST:

Francisca Alvarado,
City Clerk

WILLDAN FINANCIAL SERVICES
a corporation
By: ____________________________
Name: __________________________
Title: ___________________________
Dated: ______________, 202__
By: ____________________________
Name: __________________________
Title: ___________________________
Dated: ______________, 202__
*Signatures of consultant must be notarized. Need
two signatures if contractor is a corporation.

Attach acknowledgement
APPROVED AS TO FORM:
____________________________
Nathan M. Hodges,
City Attorney

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
“ATTACHMENT “A”

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
ATTACHMENT “B”
Payment for Services
Once an invoice is submitted and approved by the City, City payment will be made within 30 days of approval. The payment provided is full compensation for the DESCRIBED SERVICES

PROFESSIONAL CONSULTANT SERVICES AGREEMENT

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
ATTACHMENT “C”
Project Schedule and Completion Date

PROFESSIONAL CONSULTANT SERVICES AGREEMENT
Neither party shall be liable for its delay or failure to perform any obligation under and in accordance with this Contract, if the delay or failure arises out of fires, floods, earthquakes, epidemics, quarantine restrictions, other natural occurrences, strikes, lockouts (other than a lockout by the party or any of the party’s Subconsultants), freight embargoes, terrorist acts, insurrections or other civil disturbances, or other similar events to those described above, but in each case the delay or failure to perform must be beyond the control and without any fault or negligence of the party delayed or failing to perform (these events are referred to in this provision as "Force Majeure Events").

Notwithstanding the foregoing, a delay or failure to perform by a Subconsultant of Consultant shall not constitute a Force Majeure Event, unless the delay or failure arises out of causes beyond the control of both Consultant and Subconsultant, and without any fault or negligence of either of them. In such case, Consultant shall not be liable for the delay or failure to perform, unless the goods or services to be furnished by the Subconsultant were obtainable from other sources in sufficient time to permit Consultant to perform timely. As used in this Contract, the term “Subconsultant” means a subconsultant at any tier. In the event Consultant’s delay or failure to perform arises out of a Force Majeure Event, Consultant agrees to use commercially reasonable best efforts to obtain the goods or services from other sources, and to otherwise mitigate the damages and reduce the delay caused by the Force Majeure Event.

REQUESTS FOR PROPOSAL
City Cost Allocation Plan and Rate Studies for Water, Sewer and Solid Waste Operations, and Optional Rate Study for Street Sweeping Operations 2023
Issued by Diego Viramontes, Finance Director
Kenny Williams, City Manager
City of McFarland
401 W. Kern Avenue
McFarland CA 93250
ISSUED: Sunday December 5, 2022
DUE DATE: Wednesday January 4, 2023 at 2:00 p.m.

NOTICE OF REQUESTS FOR PROPOSALS

CITY COST ALLOCATION PLAN AND RATE STUDIES FOR WATER, SEWER, SOLID WASTE OPERATIONS, AND OPTIONAL RATE STUDY FOR STREET SWEEPING OPERATIONS 2023 1) The City of McFarland (hereinafter “CITY”) is soliciting proposals for a qualified consultant to prepare a cost allocation plan and sewer, water and solid waste rate studies. In addition, the City is requesting that all proposals include an optional street sweeping rate study. 2) The services to be performed by the successful proposer are described in the Request for Proposal in the Project Scope of Work Section. Copies of the Request for Proposal are available from the CITY at:

City of McFarland City Hall
401 W. Kern Avenue
McFarland CA 93250
(661) 792-3091
3) All responses shall be submitted to the City Clerk of the City of McFarland on or before, Wednesday January 4, 2023 at 2:00 p.m. Please submit one (1) original and four (4) copies of and one (1) electronic copy sent by email to:

City Clerk
Attn: Francisca Alvarado
City of McFarland
401 W. Kern Ave.

McFarland, CA 93250
[email protected]
4) All responsive proposals shall be reviewed and evaluated by the CITY in order to determine which proposer best meets the CITY’s needs for service. The criteria by which the CITY shall evaluate proposals are set forth in the Request for Proposals. 5) The CITY reserves the right to reject any and all proposals or waive any irregularities in any proposal or the proposal process.
6) In the event that it becomes necessary to revise any part of the RFP, written addenda will be issued.

INTRODUCTION:

The City of McFarland (hereinafter “City”) is soliciting proposals for a qualified consultant to prepare a cost allocation plan and water, sewer and solid waste rate studies.

TENTATIVE TIMELINE AND SCHEDULE OF EVENTS:
 Request for Proposal Available – December 5, 2022
 Inquiry Deadline (no questions after this date) – December 21, 2022  Proposals Due – 2:00pm on Wednesday, January 4, 2023
 Evaluation of Proposals – Scheduled to begin January 6, 2023  Oral Interviews (Conducted at City Discretion) – January 9, 2023 (Week of)  Final Selection – By January 13, 2023
 City Council Recommendation – January 26, 2023
 Notice to Proceed (Tentative) – February 1, 2023
SCOPE OF WORK:

1.0 INTRODUCTION

1.1 PROJECT DESCRIPTION AND OBJECTIVES
The City of McFarland (City) is soliciting proposals from qualified consulting firms to conduct a comprehensive cost allocation plan and rate studies for water, sewer and solid waste operations. In addition, the City is requesting that all proposals include an optional rate study for street sweeping operations.

Full Cost Allocation Plan Services – The purpose of this project is to ensure that the City of McFarland has a basis of applying comprehensive overhead rates and is accurately accounting for the true cost of providing various services by department. A Cost Allocation Plan allocates all direct and indirect costs between funds, as appropriate. Additionally, best practices, accounting standards and OMB 2 CFR part 225 make it necessary for the City to maintain a well-documented cost allocation plan to appropriately allocate general and administrative costs in its budget; properly identify overhead rates that can be used in the calculation of billable hourly rates for federal and state grants, user fees, and reimbursements from other governmental agencies. The City does not have an existing cost allocation plan.

Rate Study Services for Water, Sewer and Solid Waste Operations - The focus of the rate studies is to ensure the City’s water, sewer and solid waste utilities have sufficient, defensible funding to meet their operational, capital, current and proposed debt service obligations and those utility rates are set proportionate to the cost of providing service to each customer class. In addition, the consultant will provide a financial model showing rate impacts created by new capital and operational requirements. This model will be useable by City staff for future financial planning. The City is responsible for providing water, sewer and solid waste services to approximately 3,000 customers. Water and Sewer services are City operated while all solid waste services have been outsourced since 2020. The most recent water and sewer rate study was completed in 2019 and the last rate increase is scheduled on January 1, 2023. The City has not conducted a rate study for Solid Waste that incorporates the cost to provide the service with a third-party hauler.

Optional Rate Study Services for Street Sweeping Operations – The scope of work for this optional rate study would be identical to those of the water, sewer and solid waste operations. The City currently performs street sweeping on all roads within City limits.

The City’s General Fund currently absorbs the cost of providing this service. The City desires to establish an appropriate customer base and establish a rate that is proportionate to the cost of providing service to these customers.

2.0 FULL COST ALLOCATION PLAN SERVICES

2.1 SCOPE OF SERVICES
The consultant will prepare the City’s Cost Allocation Plan, which may include the following elements (if the consultant feels that additional tasks are warranted, they must be clearly identified in the consultant’s proposal):

Task 1 - Work and meet with the selected City staff to refine the project scope, purpose, uses and goals of the City’s Cost Allocation Plan to ensure that the study will be both accurate and appropriate to the City’s needs. Review project schedule and answer any questions pertaining to the successful development of the study.

Task 2 - Meet with staff and conduct interviews as needed to gain an understanding of the City’s processes and operations. This includes where certain services and functions are performed together or shared through cooperation between different departments.

Costs should be identified so they can be allocated to and tracked by the appropriate department.

Task 3 - Identify the total cost of providing each City service at the appropriate activity level and in a manner consistent with all applicable laws, statutes, rules and regulations governing the collection of fees, rates, and charges by public entities including, but not limited to, the State Controller’s Office Guidelines for Cost Claiming and OMB 2 CFR Part 225 standards.

Task 4 - Develop a Cost Allocation Model using FY 2022-23 budget and/or actual data for calculation of the full costs of providing each City service. The requirements of the model should allow for:
 Additions, revisions, or removal of direct and overhead costs so the cost allocation plan can be easily adapted to a range of activities, both simple and complex.  The ability of the City to continuously update the model and full cost allocation plan from year to year as organization and/or service model changes occur over time.  The addition of hypothetical service area information for future service enhancements, and the ability to calculate the estimated cost of provide the service under consideration (i.e. ad-hoc analysis).

Task 5 - Report on other matters that surface during the evaluation that the City should consider.

Task 6 - Present the plan to the City’s management group and make necessary adjustments as requested.

Task 7 -Prepare and deliver presentation to the Council to facilitate their understanding of the plan and its implications to the City.

Task 8 - Work with the Finance Department in developing service provisions, cost categories, and allocation criteria for current and future programs.

Task 9 - Provide the City with an electronic copy of the final comprehensive review, including related schedules and cost documentation in a format such as Microsoft Word and Excel that can be edited and updated by City staff to accommodate changes in the organization or changes in cost.

Task 10 - Provide a computer-based model in Excel for adjusting these fees and charges for the City’s current and future needs and provide the City with an electronic copy of the final comprehensive study, including related schedules and cost documentation in a format that can be edited and updated by City staff to accommodate changes in the organization or changes in costs.

Task 11 - Consult with City staff should the need arise to defend the cost allocation plan as a result of audits or other challenges.

3.0 RATE STUDY SERVICES – WATER, SEWER AND SOLID WASTE
(OPTIONAL RATE STUDY SERVICES FOR STREET SWEEPING) *

3.1 SCOPE OF SERVICES
Consultants will conduct a detailed comprehensive cost-of-service analysis of existing water, sewer and solid waste rates and charges, current enterprise fund balances, adequacy of reserves and debt service coverage, and impacts of potential debt financing for future capital projects.

Consultants will produce a Water, Sewer and Solid Waste Utility Rate Study Report that includes a long-term (10-year) financial plan projecting revenues, operational and maintenance costs, capital improvement costs, reserve funding, debt service costs and a five-year rate schedule that appropriately distributes costs across customer classes in compliance with Proposition 218, Proposition 26 and other state and federal regulations. *In addition, the City would like the consultant to provide a proposal that includes the option of a street sweeping rate study. The scope of work for this optional rate study would be identical to those of the water, sewer and solid waste operations Major tasks require to complete the study are outlined below.

Task 1 – Coordinate and conduct a project kick-off meeting with City staff to discuss project priorities, data needs and the project schedule. Consultant will also need to prepare a data requirements list that will be discussed during the meeting and delegated to specific City staff.

Task 2 – Develop a 10-year financial plan model for the Water, Sewer and Solid Waste Enterprise Funds. The financial plans should include revenue requirements based on projected revenues, operating and maintenance expenditures including capital improvements, debt service coverage and reserve funding policies as well as any other policy consideration that the City determines are priorities.

Task 3 – Prepare a comprehensive cost-of-service analysis and provide options for a fiveyear rate structure that fairly and equitably allocates costs to customer classes while adequately funding revenue requirements including operations and maintenance, capital improvements, reserves, and debt service. The analysis must ensure that rates and charges are defensible and comply with the requirements of Proposition 218, Proposition 26, and other applicable laws.

Task 4 – Provide a comparative analysis that illustrates how the City of McFarland’s rate structure and costs compare to neighboring utilities and any other utilities the Consultant may find appropriate.

Task 5 – Recommend rate and fee structures/options for potable water, sewer and solid waste utilities that will fairly recover allocated costs and adequately fund reserves. Rate structure recommendations should consider the following: current and future operations and maintenance costs, projected demands, water supply, and capital improvement requirements. Recommended rate structures should include water conservation pricing and drought surcharges and methodology.

Task 6 – Review impacts of projected new development and redevelopment rates. As part of this review, the consultant should concentrate on capital costs associated with rehabilitation and replacement of existing facilities and not on the improvements required for expansion of service as a result of new development.

Task 7 – Prepare draft and final reports that summarize the results and recommendations of the study and serve as a document of record in compliance with Proposition 218. Draft and final deliverables shall be made available in Word, Excel, and PDF file formats. Word and Excel formats shall be editable by City staff.

Task 8 – Provide “sample bills” for all customer categories illustrating recommended rate increases, which will analyze impacts to the customers.

Task 9 – Conduct minimum of three (3) rate workshops with City Council and staff and three (3) to five (5) community outreach meetings.

Task 10 – In addition to meetings identified in Task 9, Consultant will develop the Proposition 218 notice of public hearing and conduct a minimum of two (2) community meetings to inform the public of proposed rate structure prior to the Proposition 218 hearing.

Task 11 – The scope should include any additional meetings or webinars that the consultant deems necessary to ensure that the City is well informed as to the status of the project and to discuss major milestones of the project.

SUBMITTAL REQUIREMENTS:

A. Delivery of Proposal
It is the Proposer’s responsibility to ensure that the proposal is received by the City prior to the hour and date of the submission deadline specified in the Notice of Request for Proposal. Any proposals received by the City after the hour and date shell rejected and returned unopened.

B. Format of Proposal
All proposals shall be typewritten or printed in ink clearly and legibly, in conformance with the Request for Proposal and submitted in an envelope plainly marked outside:
“City Cost Allocation Plan and Rate Studies for Water, Sewer and Solid Waste Operations, and Optional Rate Study for Street Sweeping Operations 2023”. Five (5) copies of the proposal are required.

C. Quality of Proposal
Unnecessarily elaborate or glossy proposals are neither expected nor desired. The emphasis of the proposal should be responding to the requirements set forth in this Request for Proposal.

D. Contents of Proposal
The proposer shall include in its proposal, at a minimum, the following information presented in a clear and concise format, in order to demonstrate the proposer’s related experience, competence and professional qualifications in performing the services outlined in the Scope of Work.
1) Introduction (transmittal letter)
a. A brief statement of the Responder’s understanding of the scope of work to be performed.
b. A confirmation that the Respondent meets the appropriate state licensing requirements to practice in the State of California.
c. A confirmation that, if awarded the contract, the Respondent acknowledges its complete responsibility for the entire contract, including payment of any and all charges resulting from the contract.
d. Any other information that the Respondent feels appropriate. e. The signature of an individual who is authorized to provide information of this nature in the name of the Respondent submitting the Request for Proposal. f. A statement which discloses any past, ongoing or potential conflicts of interest which the Respondent may have as a result of performing the work on this project.
2) Background and Experience
a. A list of the most recent projects for which the Respondent’s has performed services of similar size, scope and complexity. The list shall include the name, contact person, address and phone number of each party for whom the service was provided, as well as a description of the service performed and the dollar amount of the contract and the date of the performance. b. Describe any issue the characteristics of which would be uniquely relevant in evaluating the experience of Respondent’s firm to handle the proposed project(s).
c. Provide current information on professional errors and omissions coverage carried by Respondent’s firm, including amount of coverage. 3) Specialized Knowledge
a. Describe their knowledge and experience in the particular types of projects described in Part One
4) Personnel/Professional Qualifications
a. A list of the Respondent’s principals, employees, agents and sub-consultants (project team) which Respondent anticipates assigning to the project and the approximate number of hours each will devote to the project. b. Include resumes or curriculum vitae of each such staff member designated above, including name, position, telephone number, fax number, email address, education, and years and type of experience.
5) Total Projected Cost of the Project
a) Breakdown of cost per task.
b) Breakdown of cost per associate working on project.
c) Timeline for project per task.

E. Interpretations of the Request for Proposals
If the Proposer is in doubt as to the meaning of any part of the RFP, or finds discrepancies in or omissions from the RFP, the Proposer shall submit to the City a written or email request for an interpretation or clarification a minimum of forty eight (48) hours prior to the time Proposals are due. All such requests should be sent to:

City of McFarland
401 W. Kern Avenue
McFarland CA 93250
Attn: Diego Viramontes, Finance Director
[email protected]
The City shall not be responsible for any explanations or interpretations of the RFP other than by written addendum delivered to each Proposer. No oral interpretations of any provision in the RFP shall be binding upon the City.

F. Review of Proposals and Evaluation Criteria
After the Responses are received and opened by the City, a selection committee shall review and evaluate all proposals for responsiveness to the RFP in order to determine whether the Respondent possesses the professional qualifications necessary for the satisfactory performance of the services required. The City shall also investigate qualifications of all Respondents to whom the award is contemplated, and the City may request clarification of proposals directly from one or more of the Respondents. It is anticipated this review period will last approximately one (1) to two (2) weeks. In reviewing the proposals, the City may consider the following:
a. The Respondents understanding of the proposed project; b. The experience and past performance of the Respondent and its employees, agents and sub-consultants (project team) in completing similar project in type, size and complexity. The City may consider the Respondent’s timely and accurate completion of similar projects within budget. c. The feasibility of the proposal based upon performance, delivery schedules and methodology to be used by the Respondent. This includes a demonstration of the dedication of resources to undertake and complete the Scope of Work within a reasonable time and budget.
d. The Respondent’s responsiveness to the RFP, and clarity and creativity in their proposal.

After completion of the review of the proposals, the City will rank the firms based on the demonstrated competence and qualifications in accordance with established/advertised criteria. The ranking criteria are as follows:
a. Understanding of work to be done (20 points)
b. Quality of past performance on similar projects (20 points) c. Qualifications of project team (20 points)
d. Knowledge of local conditions and the project area (10 points) e. Familiarity with State and Local procedures (10 points) f. Cost of Proposal without Optional Items (20 points)
Selection committee results will only be available through submission of a public records request to the City Clerk’s office at (661) 792-3091.

AWARD OF AGREEMENT
Upon completion of the review period, the City shall notify the Respondent selected for the Responder so notified may be required to provide specific documentation to the City. Any delay caused by the Respondent’s failure to respond to direction from the City may lead to a rejection of the proposal.

If the City decides, after evaluation and negotiation, to award the agreement, a contract shall be sent to the successful Respondent for signature. No proposal shall be binding upon the City until after the Agreement is signed by duly authorized representatives of both the Respondent and the City. The City reserves the right to reject any or all proposals and to waive any irregularities.

ANTI-LOBBYING

CERTIFICATION
The undersigned certifies, to the best of his or her knowledge or belief, that:
a. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;
b. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL," Disclosure Form to Report Lobbying," in accordance with its instructions.

Signature Date
City of McFarland
Proposal
Cost Allocation Plan and
Utility Rate Study
Cost Allocation Plan and Utility Rate Studies i
City of McFarland
Table of Contents
1) INTRODUCTION ...................................................................................................................................................... II 2) BACKGROUND AND EXPERIENCE................................................................................................................. 1 Project Descriptions and References ......................................................................................................................1 Cost Allocation Plan Project Experience .................................................................................................................6 Utility Rate Project Experience ..............................................................................................................................10 Insurability..............................................................................................................................................................11 3) SPECIALIZED KNOWLEDGE............................................................................................................................12 Firm Summary .......................................................................................................................................................12 Firm Qualifications and Experience .......................................................................................................................13 4) PERSONNEL / PROFESSIONAL QUALIFICATIONS................................................................................16 Project Roles..........................................................................................................................................................16 Chris Fisher........................................................................................................................................................... 17 Tony Thrasher....................................................................................................................................................... 19 Priti Patel............................................................................................................................................................... 20 Robert Quaid......................................................................................................................................................... 21 Michael Cronan..................................................................................................................................................... 22 Jeffrey McGarvey.................................................................................................................................................. 23 Kevin Burnett, MA................................................................................................................................................. 24 5) TOTAL PROJECTED COST OF THE PROJECT.......................................................................................... 25 Scope of Services ..................................................................................................................................................25 Cost Allocation Plan Methodology .........................................................................................................................29 Utility Rate Study Project Methodology .................................................................................................................30 Cost Allocation Plan Work Plan.............................................................................................................................34 Water, Sewer, and Solid Waste Utility Rate Study Work Plan ..............................................................................36 Optional Street Sweeping Cost-of-Service Study Work Plan ................................................................................41 Communicating Results - Presentations & Meetings ............................................................................................44 City Staff Support / Responsibilities.......................................................................................................................45 Project Disclaimer..................................................................................................................................................45 Project Management and Quality Assurance/Control Approach ...........................................................................46 Fee Proposal..........................................................................................................................................................48 Project Timelines ...................................................................................................................................................51 REQUIRED FORM ........................................................................................................................................................54 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 1) Introduction
January 3, 2023
Mr. Diego Viramontes
Finance Director
City of McFarland
401 W Kern Avenue
McFarland, CA 93250
Re: Proposal in Response to RFP – Cost Allocation Plan and Utility Rate Study for the City of McFarland Dear Mr. Viramontes;
Due to the extended shutdown of much of the economy as a result of the Covid-19 outbreak, now more than ever municipalities are challenged with doing more with less. Accounting for indirect overhead support to operating groups, revenue funds and enterprises is a key component of developing the fully burdened cost of providing services that policymakers need to clearly understand as they make cost recovery and fee-setting decisions.

Further, the development of comprehensive financial plans and Rate Studies for the Water, Sewer and Solid Waste utilities will ensure that these enterprises will have the financial resources to meet operating and capital needs over the next five years. Recognizing this, the City of McFarland (“City”) is requesting proposals for a Cost Allocation Plan (“CAP”) and Utility Rate Studies for Water, Sewer, and Solid Waste.

Willdan’s interactive approach will result in dynamic and customized Excel financial models, 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 analyses 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 rate 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:

Experience with McFarland — Willdan has partnered successfully with the City of McFarland for many years on multiple projects including the annual administration of the City’s Community Facilities Districts and Landscaping and Lighting District and the ongoing Development Impact Fee Study. We will bring this same level of professionalism and expertise to this proposed engagement. Our knowledge of the City, and our relationships with Staff, will allow us to effectively gather data and information and clarify questions. We will leverage our knowledge of the City of McFarland operations and key staff to facilitate this study in a cost-effective and efficient manner; focusing less time on data gathering, and more on analysis, resulting in lower project cost and a higher value.

Recent Experience with Cities Facing Capital Funding Challenges Similar to McFarland, and Projects with Similar Objectives — The City’s most recent Adopted Annual Operating Budget outlines financial challenges facing the Water and Sewer Enterprises; specifically, the need to fund significant capital projects for both utilities.

Over the past year, Willdan has worked with several cities, including Dinuba, Lomita, and Blythe, among others, who are facing this exact challenge. For these cities and their utility enterprises, we developed comprehensive models that facilitated the examination of various financial plans and capital funding scenarios. Each of these scenarios incorporated different funding sources and alternative timing and/or inclusion of projects, so that we could work collaboratively with the cities to evaluate the impacts of these changes on the overall financial plans for, and most importantly, understand the impact on customers.

Willdan has also worked with cities near McFarland, and throughout California, on Cost Allocation and Rate Study projects with objectives very much like those for this study. Our local knowledge will help us bring valuable perspective and knowledge of other cities’ approaches and policies to accounting for and allocating overhead costs and developing financial plans and cost-of-service rates for utilities. Recent Cost Allocation and Rate Study projects studies include Guadalupe, Soledad, Lindsay, Lakeport, La Palma, Lomita, the McKinleyville CSD, Goleta, Pismo Beach, Gilroy, Fillmore, Chino Hills, Pomona, Eastvale, Claremont, Stanton, Rosemead, Richmond, Sebastopol, and Grover Beach; and are currently working with the Cities of Dinuba, Vacaville, and Fillmore, with objectives and experience that relate closely to the goals of the City’s proposed study.

Mr. Diego Viramontes, Finance Director
City of McFarland
Proposal in Response – Cost Allocation Plan and Utility Rate Study January 3, 2023 | Page iii
Unique Combination of Services and Expertise/Public Engagement — Willdan is a team of 80 professionals who provide essential financial consulting services throughout the United States. Willdan has provided the requested services to municipal clients for two decades; and is the only firm providing these types of consulting services that also has a long history of providing contract staff support to public agencies for the delivery of municipal services.

This direct experience as “agency staff” provides us with firsthand understanding of City operations and is uniquely useful in determining the full effort associated with service delivery.

Collaborative Approach and User-friendly Models and Reports — Willdan prides itself on working closely with City Staff to develop an approach that is targeted toward your specific objectives and accounts for your reality.

We create user-friendly Excel-based models that the City can retain and conduct our analysis and develop the model collaboratively with City Staff. Rather than using an inflexible proprietary software program, we construct our models from the ground up, mirroring the City’s budget format wherever possible.

Our Cost Allocation Model is straightforward and intuitive and includes both the full-cost and OMB-cost approaches in one streamlined presentation. The data and analysis is contained in one model, with a simple toggle to switch from one approach to the other.

As a result, the information contained in our models is easy for City Staff to interpret, and the familiar software ensures ease of navigation. This also allows for easy on-the-fly adjustments and updates, inclusion of updated budgets, or changes in organizational structure. Our model and project approach are geared toward delivering work on schedule and presenting results at public meetings and City Council workshops. The Willdan Team is experienced at communicating complex analytical results in a manner that is easy to understand by non-finance-oriented individuals and facilitates discussion. We have coordinated or participated in numerous public and staff workshops regarding fees and cost of service-based charges.

Our objective is to provide useful, detailed information to the City Council and City Staff, so that they have the information necessary to make important decisions. Our experience ensures that we can meet this objective. Whether policymakers are considering subsidizing or increasing fees, the process may be subject to public discussion among City Council members and community stakeholders.

Due to ongoing policies related to COVID, we have adopted a flexible policy regarding in person versus virtual meetings. We can work in either format at the option of the client, and have in the past few years completed many fee updates completely virtually where desired.

Willdan acknowledges herein that it maintains all required licensing to conduct business in the state of California; and will be responsible for completing the contract and subordinate payments resulting from this project. Willdan is not aware of any direct past, ongoing or potential conflicts of interest that would impair or impede our ability to conduct the Cost Allocation Plan and Utility Rate Studies objectively for the City of McFarland.

As an officer of the firm, I am authorized to bind the firm to the terms of this proposal, as well as the subsequent agreement. My contact information is provided in the table below:

Contact Information
Principal-in-Charge
Chris Fisher
Director / Vice President
27368 Via Industria, Suite 200, Temecula, CA 92590
Tel#: (800) 755-6864 | Email: [email protected]
Sincerely,

WILLDAN FINANCIAL SERVICES
Chris Fisher
Director / Vice President
Our Cost Allocation methodologies and
models have been recently reviewed
and approved by the US Army and the
US Department of Housing and Urban
Development, providing evidence of our
thorough and defensible approach to
the development of Cost Allocation
strategies and fully burdened personnel
rates for grant reimbursement.

Cost Allocation Plan and Utility Rate Studies 1
City of McFarland
2) Background and Experience
Project Descriptions and References
We are proud of our reputation for customer service and encourage you to contact these clients regarding our commitment to completing the projects within budget and agreed upon timelines.

Combined Study
City of Lomita, CA
Water Rate Study and Comprehensive User Fee Study and Full Cost Allocation Plan Willdan recently completed a Water Rate Study, Cost Allocation Plan and User Fee Study for the City of Lomita.

The Cost Allocation Plan was completed to allocate the cost of shared support services to all operating funds and programs in the City, and the User Fee Study resulted in an updated Master Fee Schedule for the City.

The Water Rate Study included development of a comprehensive financial plan and model that incorporated a detailed analysis of operating and maintenance budgets, fund balances, as well as the capital plan. Using this model, we prepared and presented multiple financial scenarios for evaluation, which showed alternatives for inclusion/exclusion and timing of capital projects, different funding sources, and demonstrated the effects of these proposed plans on rate payers. During the course of the Rate Study, the City was finalizing its Water Master Plan update. As a result, the Rate Study was put on hold until the Master Plan was completed, and the Capital Improvement Plan was updated based on information presented in the completed Master Plan. This was the primary driver for the creation and evaluation of the scenarios described here.

Once the process of evaluating alternatives was finalized, a cost-of-service analysis was completed, and updated rates were developed and presented. Willdan prepared the report, created, and mailed the Prop 218 Notice, and attended all required meetings, including the City Council meeting and Public Hearing.

Client Contact: Ryan Smoot, City Manager
Tel #: (310) 325-7110, ext. 121 | Email: [email protected] Susan Kamada, Administrative Services Director
Tel #: (310) 325-7110, ext. 127 | Email: [email protected] 24300 Narbonne Avenue, Lomita, CA 90717
Project Dates: October 2020 - October 2022
Cost Allocation Plan
Housing Authority of San Bernardino County, CA
Cost Allocation Plan
The Housing Authority of San Bernardino County engaged Willdan to complete a full and OMB compliant cost allocation plan. This engagement was triggered by unfavorable audit findings that the Housing Authority received from the Office of the Inspector General, for a grant program. Willdan’s work resulted in the audit findings being cleared.

Furthermore, Willdan was re-selected, through a competitive solicitation, to provide ongoing Cost Allocation Plan updates.

Client Contact: Jesse Diaz, Finance Manager
715 E. Brier Drive, San Bernardino, CA 92408
Tel #: (909) 332-6323 | Email: [email protected]
Project Dates: April 2020 - Ongoing
Cost Allocation Plan and Utility Rate Studies 2
City of McFarland
City of Monterey, CA
Cost Allocation Plan and Indirect Cost Rates
Willdan completed a cost allocation plan for the City of Monterey. The objective of this project was to determine the appropriate allocation of indirect costs from City General Fund Central Service Departments to the General Fund operating departments/programs and the Non-General Fund departments/programs, which includes enterprise funds.

The project involved the development of a full Cost Allocation Plan model, and development of indirect and fully burdened rates for use in projects and services related to the Presidio. Recommended procedures included: analyze expenditures, interview staff, review the comprehensive annual financial report, and other financial documents.

Willdan was re-selected, through competitive bid, to update the Cost Allocation Plan and to calculate fully burdened hourly staff labor rates.

Client Contact: Jordan Cupps, CPA, Assistant Finance Director 580 Pacific Street, Monterey, CA 93940
Tel #: (831) 646-3724 | Email: [email protected]
Project Dates: October 2014 - Ongoing
City of Goleta, CA
Cost Allocation Plan Update and Comprehensive User Fee Study The City of Goleta was seeking an outside consultant to complete a review and update of their current cost allocation plan and the preparation of a comprehensive user fee study for the development of its master list of fees. Our primary objective for the cost allocation study was to ensure that general government costs were fairly and equitably allocated to appropriate programs and funds, which are based on tailored and well thought out allocation factors.

For the Fee Study, the primary objective was to ensure that fees for requested services were calculated to account for the full cost of providing the services, and set appropriately, given City policy and financial objectives.

The cost allocation plan is complete, and Willdan is utilizing the final report to conduct the comprehensive user fee study at this time.

Client Contact: Luke Rioux, Finance Director
130 Cremona Drive, Suite B, Goleta, CA 93117
Tel #: (805) 562-5508 | Email: [email protected]
Project Dates: February 2013 – March 2018
City of San Marcos, CA
Cost Allocation Plan and Indirect Cost Rates
Willdan was engaged by the City of San Marcos to complete a full and OMB compliant cost allocation plan and preparation of Indirect Cost Rate proposals. Our primary objective for the cost allocation study was to ensure that general government costs were fairly and equitably allocated to appropriate programs and funds, which are based on tailored and well thought out allocation factors.

Models were created, which contained all City personnel and expenditures broken down into the ICRP tables that are needed for a report; once approved individual ICRP’s will be created for each department individually.

This project is ongoing.

Client Contact: Jeffrey Jorgenson, Accountant
1 Civic Center Drive, San Marcos CA 92069
Tel #: (760) 744-1050, ext. 3123 | Email: [email protected] Project Dates: June 2020 - Ongoing
Cost Allocation Plan and Utility Rate Studies 3
City of McFarland
City of Salinas, CA
Comprehensive User Fee Study and Full & OMB Cost Allocation Plan Willdan was hired by the City of Salinas to prepare an OMB A-87-compliant full cost allocation plan, and comprehensive fee study for the development of a master list of fees. The Willdan Team led an all-departments overview meeting, where the framework and general process was reviewed, and global practical and policy questions were addressed. Immediately following the overview meeting, individual meetings were held with representatives from each department to discuss their specific fee related activities and gather necessary information to update fees.

The Willdan Team worked to identify and take into account direct and indirect costs, along with changes in staffing, structure, and service delivery methods. User-friendly Excel-based models were prepared, so that City staff can easily update in the future to determine the proper allocation of expenditures and ongoing full cost of City-provided services.

Willdan was re-selected to provide an update to the Cost Allocation Plan.

Client Contact: Matt Pressey, CPA, Budget & Finance Director 200 Lincoln Avenue, Salinas, CA 93901
Tel #: (831) 758-7420 | Email: [email protected]
Project Dates: February 2013 – March 2018
City of Irvine, CA
Full Cost Allocation Plan and Comprehensive User Fee Study Willdan completed a comprehensive user fee study and full cost allocation plan for the City of Irvine. The cost allocation plan was also OMB compliant, whereas the user fee study focused on the community development/ planning, city clerk, public safety, and public works departments.

In addition to identifying the true costs of City-provided services, Willdan staff worked with each department to identify opportunities in recovering costs of services for which no fee had previously been collected. Willdan also conducted the City’s previous study and was selected to conduct a Building & Safety User Fee.

Willdan was recently re-selected, through competitive bid, to conduct a Master User Fee Study and Cost Allocation Plan, with annual updates, for three years.

Client Contact: Amy Roblyer, Senior Management Analyst
One Civic Center Plaza, Irvine, CA 92606
Tel #: (949) 724-6255 | Email: [email protected] Project Dates: May 2017 – Ongoing
Utility Rate Studies
City of Lomita, CA
Water Rate Study and Comprehensive User Fee Study and Full & OMB Cost Allocation Plan 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] Project Dates: February 2021 - October 2021
Cost Allocation Plan and Utility Rate Studies 4
City of McFarland
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] Project Dates: February 2021 - October 2021
McKinleyville Community Services District, CA
Water & Sewer Rate and Capacity Fee Studies
MCSD’s 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 MCSD 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 boundaries. Finally, the team analyzed existing demand on the current utility systems and calculated remaining capacity in order to develop fair and equitable capacity fees.

In addition to the capacity fee study, Willdan assisted MCSD in developing cost-based water and sewer rates in order to maintain requirements with state revolving fund loans.

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 also 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] Project Dates: Sewer Rate Study, June 2014 – May 2015 | Capacity Fee Update, February – June 2016 Water and Wastewater Rate Study, April 2018 – November 2018 Water & Sewer Rate Study, December 2021 – November 2022 Cost Allocation Plan and Utility Rate Studies 5
City of McFarland
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 is complete, and the Public Hearing was 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] Project Dates: Water and Wastewater Utility Rate Study, February 2015 – January 2016 Water and Wastewater Utility Rate Study, March 2021 – April 2022 City of Guadalupe, CA
Water and Wastewater Utility Rate Study
In 2021, Willdan worked with the City of Guadalupe 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.

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.

We guided the City through the Proposition 218 process and completed a study report and developed and mailed Prop 218 notices. The study is complete and Public Hearing was conducted in January 2022 Client Contact: Shannon Sweeney, Director of Public Works 918 Obispo Street, Guadalupe, CA 93434
Tel #: (805) 356-3910 | Email: [email protected] Project Dates: February 2021 – January 2022
Cost Allocation Plan and Utility Rate Studies 6
City of McFarland
Cost Allocation Plan Project Experience
Provided in the table below, is a list of the public agencies in which similar services are currently in progress, or have been completed, in the previous five years, and conducted and managed from the Temecula office.

Willdan Financial Services
Five Year Cost Allocation Plan and User Fee Study Experience Client Project Description
City of Amarillo, TX Cost Allocation Plan
City of Arcadia, CA Cost Allocation Plan and Comprehensive User Fee Study City of Arroyo Grande, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
City of Aurora, CO Cost Allocation Plan and Comprehensive User Fee Study City of Barstow, CA Cost Allocation Plan
City of Bedford, TX Cost Allocation Plan
City of Belmont, CA Development Services User Fee Study City of Bellflower, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
City of Benicia, CA Cost Allocation Plan and Comprehensive User Fee Study City of Blythe, CA Cost Allocation Plan and Comprehensive User Fee Study City of Brighton, CO Cost Allocation Plan
City of Burbank, CA Comprehensive User Fee Study
City of Canyon Lake, CA Comprehensive User Fee Study
City of Chino, CA Comprehensive User Fee Study, Cost Allocation Plan and Indirect Cost Rate Studies
City of Chino Hills, CA Cost Allocation Plan and Comprehensive User Fee Study, and Updates City of Claremont, CA Cost Allocation Plan and User Fee Study City of Clermont, FL Building & Safety Department User Fee Study City of Coalinga, CA User Fee and Rate Study
City of Colton, CA User Fee Study
City of Commerce City, CO Comprehensive User Fee Study and Development Impact Fee Study City of Coppell, TX Full Cost Allocation Plan
City of Cudahy, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
City of DeSoto, TX Comprehensive User Fee Study
City of Dinuba, CA Cost Allocation Plan & User Fee Study City of El Centro, CA Comprehensive User Fee Study
City of El Cerrito, CA Cost Allocation Plan and Community Development Department User Fee Study
City of El Monte, CA Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
Cost Allocation Plan and Utility Rate Studies 7
City of McFarland
Willdan Financial Services
Five Year Cost Allocation Plan and User Fee Study Experience Client Project Description
City of Eastvale, CA Cost Allocation Plan, OMB Compliant Plan, and Comprehensive User Fee Study
City of Encinitas, CA Development Services User Fee Study and Cost Allocation Plan City of Escondido, CA
Cost Allocation Plan, OMB Compliant Plan,
and Comprehensive User Fee Study
City of Fillmore, CA Cost Allocation Plan, OMB Compliant Plan, and User Fee Study City of Foster City, CA Cost Allocation Plan, OMB Compliant Plan, and Comprehensive User Fee Study
City of Fountain Hills, AZ Comprehensive User Fee Study City of Fontana, CA Building & Safety User Fee Study
City of Fullerton, CA Community Development Department User Fee Study City of Galt, CA Cost Allocation Plan and OMB Compliant Plan City of Georgetown, TX Cost Allocation Plan
City of Gilroy, CA Cost Allocation Plan, OMB Compliant Plan, and Comprehensive User Fee Study
City of Goleta, CA Cost Allocation Plan, OMB Compliant Plan, and Comprehensive User Fee Study
City of Hayward, CA Comprehensive Master User Fee Study, Full Cost Allocation Plan, and updates, and Rental Inspection Program Fee Analysis
City of Hollister, CA User Fee Study
City of Indian Wells, CA Comprehensive User Fee Study
City of Irvine, CA Overhead Cost Allocation, OMB Compliant Plan, Comprehensive User Fee Study and Building & Safety Fee Update City of Irwindale, CA Cost Allocation Plan, User Fee Study and Development Impact Fee Study City of Kingsburg, CA Cost Allocation Plan
City of La Puente, CA Cost Allocation Plan, OMB Compliant Plan, and User Fee Study City of Laguna Hills, CA Comprehensive User Fee Study and Cost Allocation Plan Update City of Lake Elsinore, CA User Fee Study and Cost Allocation Plan and Updates City of Lindsay, CA Cost Allocation Plan, User Fee Study, and Impact Fee Analysis City of Lomita, CA
Cost Allocation Plan, OMB Compliant Plan,
User Fee Study and Development Impact Fee Analysis
City of Los Altos, CA Cost Allocation Study, OMB Compliant Plan, and Comprehensive User Fee Study
City of Los Angeles, CA Building & Safety User Fee Study City of Los Banos, CA Full Cost Allocation Study, OMB Compliant Plan, and Comprehensive User Fee Study
City of Lynwood, CA User Fee Study and Cost Allocation Plan, and Updates City of Manteca, CA Cost Allocation Plan and Comprehensive User Fee Study Cost Allocation Plan and Utility Rate Studies 8
City of McFarland
Willdan Financial Services
Five Year Cost Allocation Plan and User Fee Study Experience Client Project Description
City of Mesquite, TX Cost Allocation Plan and OMB Compliant Plan City of Mission Viejo, CA Comprehensive User Fee Study and Cost Allocation Plan, and Updates City of Missouri City, TX Full and OMB Compliant Cost Allocation Plan and User Fee Study City of Montebello, CA Cost Allocation Plan and User Fee Study City of Monterey Park, CA Cost Allocation Plan and User Fee Study, and Updates City of Monterey, CA Cost Allocation Plan and Indirect Cost Rate City of Murrieta, CA Comprehensive User Fee Study, Cost Allocation Plan, and OMB Compliant Plan and Updates
City of Napa, CA Comprehensive User Fee Study, Full Cost Allocation Plan, and OMB Compliant Plan
City of National City, CA
Cost Allocation Plan, OMB Compliant Cost Allocation Plan, User Fee Study, and ISF Allocation Study
City of Oroville, CA Cost Allocation Plan and Updates
City of Oviedo, FL Cost Allocation Plan
City of Palm Desert, CA Cost Allocation Plan and Comprehensive User Fee Study City of Patterson, CA
Comprehensive User Fee Study, Full Cost Allocation Plan, and OMB Compliant Plan
City of Petaluma, CA Cost Allocation Plan, User Fee Study, CIP Admin Rate & Work Order Rate Analysis, Hourly Overhead Rates, and ISF Allocation Study, and Updates City of Pismo Beach, CA Cost Allocation Plan, OMB Compliant Plan, and User Fee Study City of Pittsburg, CA User Fee Study and Cost Allocation Plan City of Pomona, CA Master Fee Schedule Update and Development Impact Fee Review City of Rocklin, CA User Fee Study
City of Richmond, CA
Cost Allocation Plan, OMB Compliant Plan,
User Fee Study and Development Impact Fee Study
City of Rosemead, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
City of St. Helena, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
City of Salinas, CA Full Cost Allocation Plan and Comprehensive Fee Study City of San Anselmo, CA Cost Allocation Plan and Comprehensive User Fee Study City of San Bruno, CA
Comprehensive User Fee Study, Cost Allocation Plan,
and OMB Compliant Plan
City of San Dimas Cost Allocation Plan and Comprehensive User Fee Study City of San Fernando, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study, and Updates
City of San Jacinto, CA
Cost Allocation Plan, OMB Compliant Plan, User Fee Study and Development Impact Fee Study
Cost Allocation Plan and Utility Rate Studies 9
City of McFarland
Willdan Financial Services
Five Year Cost Allocation Plan and User Fee Study Experience Client Project Description
City of San Luis, AZ Cost Allocation Plan
City of San Marcos, CA Cost Allocation Plan, Indirect Cost Rate Studies and Comprehensive Citywide User Fee Study
City of Santa Ana, CA User Fee Study
City of Santa Cruz, CA Citywide Overhead Cost Allocation Plan, Santa Cruz Library Cost Allocation Plan, and Fleet and Facility Services Cost Allocation Plan
City of Signal Hill, CA Comprehensive User Fee Study, Cost Allocation Plan, and OMB Compliant Plan
City of Soledad, CA User Fee Study
City of Stanton, CA Comprehensive User Fee Study, Cost Allocation Plan, and OMB Compliant Plan
City of Surprise, AZ Full Cost Allocation Plan
City of Tamarac, FL Building & Safety Department User Fee Study City of Tulare, CA Comprehensive User Fee and Rate Study, Full Cost Allocation Plan, and OMB Compliant Plan
City of Tustin, CA Comprehensive User Fee Study
City of Twentynine Palms, CA
Comprehensive User Fee Study, Full Cost Allocation Plan, and OMB Compliant Plan
City of Upland, CA Cost Allocation Plan and Comprehensive User Fee Study City of Watsonville, CA
Comprehensive User Fee and Rate Study, Cost Allocation Plan, and OMB Compliant Plan, and Updates
City of West Hollywood, CA Cost Allocation Plan and User Fee Study City of West Sacramento, CA Cost Allocation Plan, OMB Compliant Plan, and Comprehensive User Fee Study
City of Yucaipa, CA Comprehensive User Fee and Rate Study, Full Cost Allocation Plan, and OMB Compliant Plan
County of Mono, CA Comprehensive User Fee Study
County of Placer, CA Land Development Fee Study
County of San Benito, CA Comprehensive User Fee Study and Development Impact Fee Study Housing Authority of the
City of Alameda, CA Cost Allocation Plan and Updates
Housing Authority of the County
of San Bernardino, CA Cost Allocation Plan and Updates
Town of Apple Valley, CA Cost Allocation Plan
Town of Paradise Valley, AZ Master User Fee Study
Town of San Anselmo, CA Full Cost Allocation Plan and Comprehensive User Fee Study Town of Sunnyvale, TX Comprehensive User Fee Study
Town of Yucca Valley, CA Comprehensive User Fee Study
Cost Allocation Plan and Utility Rate Studies 10
City of McFarland
Utility Rate Project Experience
Provided in the table below, is a list of the public agencies in which similar services are currently in progress, or have been completed, in the previous five years, and conducted and managed from the Temecula office.

Willdan Financial Services
Five Year Utility Related Experience
Client Project Description
City of Albany, CA Sewer Rate Study
City of Avenal, CA Water and Sewer Rate Study
City of Blythe, CA Water and Wastewater Rate Study
City of Brighton, CO Potable Water Rate Study
City of Calexico, CA Water and Sewer Rate Study
City of Claremont, CA Sewer Rate Study
City of Delano, CA Water, Sanitary Sewer, Solid Waste Utility Rate Study City & County of Denver, CO Sanitary Sewer & Storm Drainage Benchmarking and Storm Drainage Impact Fee Study
City of Dinuba, CA Water, Sewer, & Solid Waste Rate Study City of Durango, CO Water and Wastewater Rate Study
City of Fillmore, CA Water and Sewer Rate Study
City of Fruita, CO Sewer Rate Study
City of Grover Beach, CA Water, Wastewater, and Stormwater Financial Plan and Utility Rate Study
City of Guadalupe, CA Water and Sewer Rate Study
City of Hercules, CA Wastewater Financial Plan and Connection Fee Study City of Kingman, AZ Water and Sewer Rate Study
City of La Palma, CA Water and Sewer Rate Study
City of Lakeport, CA Water and Sewer Rate Study, and Connection Fee Study City of Lomita, CA Water Rate Study
City of Norwalk, CA Water Rate Study
City of Pinole, CA Wastewater Rate and Fee Study
City of Richmond, CA Wastewater Rate Study
City of Sebastopol, CA Water and Wastewater Fee Study
City of Soledad, CA Water Rate Study Consulting Services City of Tulare, CA Water and Wastewater Rate Study
City of Twentynine Palms, CA Sewer Treatment Facility Fair Share and Sewer Rate Analysis County of San Diego, CA Sewer Rate and Standby Charge Study McKinleyville CSD, CA Water and Wastewater Rate and Capacity Fee Study Mission Springs Water District, CA Water and Sewer Rate and Fee Study Monte Vista Water District, CA Connection Fee Study
Phelan Piñon Hills CSD, CA Water Rate and Fee Study
Rainbow Municipal Water District, CA Water and Wastewater Asset Cost and Capacity Fee Study Town of Apple Valley, CA Sewer Rate and Nexus Study
Town of Gilbert, AZ Water and Sewer Rate Study
Cost Allocation Plan and Utility Rate Studies 11
City of McFarland
Insurability
With a rating of A+XV, Willdan maintains insurance from top-rated companies. Upon award of contract, a certificate of insurance and endorsements will be provided to the City of McFarland specific to this engagement. Provided below is a current certificate of insurance for the ongoing Development Impact Fee study.

Cost Allocation Plan and Utility Rate Studies 12
City of McFarland
3) Specialized Knowledge
Firm Summary
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 a dozen states 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 — seven of whom are committed
to contribute their expertise throughout the
duration of City of McFarland’s Cost
Allocation Plan and Utility Rate Studies
engagement.

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

Willdan Financial Services Capabilities
Our staff supports 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 Provided
▪ User fee studies;
▪ Cost allocation plan studies;
▪ Development impact fee establishment and
analysis;
▪ Real estate economic analysis;
▪ Municipal advisory services;
▪ District administration services;
▪ Property tax audits;
▪ Economic development strategic plans;
▪ Utility rate and cost of service studies;
▪ 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.

Cost Allocation Plan and Utility Rate Studies 13
City of McFarland
Firm Qualifications and Experience
Cost Allocation Plan Experience
Willdan Financial Services is a team of professionals who provide essential financial consulting services throughout the USA. Our direct experience as “agency staff” provides us with firsthand understanding of City operations and is uniquely useful in determining the full effort associated with service delivery and in developing a fee schedule that is easy to communicate and implement.

Willdan has provided User Fee Study and Cost Allocation Plan services to municipal clients for over 20 years. The project team has prepared user fee studies, cost allocation plans and OMB compliant cost allocation plans for clients throughout California, and the United States. Willdan’s proven and successful track-record conducting user fee studies and cost allocation plan services for public agencies dates to 1998.

Since that time, we have developed the expertise to
successfully integrate this service into the Financial Consulting Services group’s primary functions.

Willdan has extensive experience with a range of fee studies and the typical pros, cons, and challenges, both in
implementation and management. Willdan will be bring its expertise to the City’s process of considering financial, practical, and policy issues in deciding on its future fee program. Our record of success within the industry provides assurance of the professionalism and capability we will bring to this engagement.

Utility Rate Experience
Willdan’s professional staff has provided professional consulting services, including financial planning; rate and cost-of-service studies; alternative and feasibility analyses; and operational and management studies for water, reclaimed water, wastewater, solid waste, and stormwater utility clients across the United States.

Additionally, Willdan staff are involved with the development of the rate-setting methodologies set forth in the American Water Works Association (AWWA) M-1 manual “Principles of Water Rates, Fees and Charges,” and the AWWA M-29 manual, “Water Utility Capital Financing.” Willdan is nationally recognized for its expertise with staff frequently being called upon to speak or instruct on utility financial matters, as subject matter experts, including 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 McFarland.

Cost Allocation Plan and Utility Rate Studies 14
City of McFarland
Willdan staff is 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 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 utility 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 meet 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 utilities.

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.

National and International Presence
For over 30 years, Willdan’s professional staff has provided utility rate, financial, economic, management and capital planning consulting services to utilities and governmental entities across the country. A representation of Willdan’s geographical client presence is depicted in the graphic below. Our client base extends from the south shores of Florida to the inside passage of Alaska, and for five sovereign nations.

Cost Allocation Plan and Utility Rate Studies 15
City of McFarland
Firm Distinctiveness
Key distinct advantages that Willdan brings to the City include the following:

Proven Professionals
The Team’s quality is often as important as the consulting firm’s reputation. Willdan is known for its personal, customized service. Our team will work with the City’s professional staff to provide the long-term service, that is our prime goal.

Willdan is the only firm providing these types of consulting services that also have a long history of providing contract staff support to public agencies for the delivery of municipal services.

Project Dedication
Willdan has assembled a project team of seven (7) subject matter experts within the Financial Consulting Services group, to conduct the City’s Cost Allocation Plan and Utility Rate Studies engagement.

This team has coordinated or participated in numerous public stakeholder and staff workshops regarding fees and cost of servicebased charges.

The Financial Consulting Services group is made up of over 20 professionals who can be called upon as needed; we are confident that our team possesses the depth of experience that will successfully fulfill the desired work performance.

Community Investment
Much of our success in developing effective programs and studies is due to our experiences in meeting with citizen / stakeholder groups and elected officials. Our ability to explain technical information in a concise, understandable manner is a fundamental reason for our high degree of success. Willdan staff takes the time to include and inform the Community.

Extensive Public Sector Experience
Willdan Group Inc. has delivered industry-leading financial, energy and engineering solutions that have transformed government and commerce for 58 years. Willdan Financial Services advises governments throughout the United States and abroad about financial and economic consulting. We serve all levels of government and collaborate with government staff, constituents, developers, officials, and other professional services firms.

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. Willdan as a whole is composed of approximately 1,500 employees, including a cadre of public finance experts.

As needed, the team can recruit additional, qualified individuals from our employee roster to assist with the completion of this engagement to deliver the final materials on time and within budget. We do not anticipate staffing changes during the course of the project, however, should the situation arise, any change in team members will be discussed with and approved by the City prior to the change being made, to meet the needs of the City. In doing this, we will ensure the project stays on track and evolves, based upon current thinking and outside dynamics.

The team presented within this proposal
has worked collectively on numerous
projects, such as the one requested by the
City; an established work practice between
the team members has been forged, this
proven long-standing system has
benefited our clients.

It is important to note that
Mr. Fisher has been with Willdan
for more than 23 years, ensuring
City of McFarland of continuity
and dedication in staffing during
the completion of the project.

Cost Allocation Plan and Utility Rate Studies 16
City of McFarland
4) Personnel / Professional Qualifications
Project Roles
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.

City of McFarland Project Team
Team Member Project Role Contact Information Responsibility to the Engagement Principal-in-Charge
Chris Fisher
Vice President/Director
Overall Engagement
Principal-in-Charge &
Utility Rate Study
Project Manager
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Technical guidance;
▪ Project oversight;
▪ Quality assurance & control; and
▪ Meeting and presentation attendance.

Cost Allocation Plan Team
Tony Thrasher
Principal Consultant Project Manager
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Task oversight;
▪ Model development;
▪ Produce key elements of the analyses;
▪ Responsible for project deliverables;
▪ Report evaluation; and
▪ Meeting and presentation attendance.

Priti Patel
Senior Project Analyst Financial Analyst
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Collect, interpret, and analyze key data;
▪ Assistance with model development; and
▪ Report preparation.

Robert Quaid
Principal Consultant
Quality Assurance
Technical Advisor
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Third party reviewer; and
▪ Report evaluation.

Utility Rate Study Team
Michael Cronan
Senior Analyst
Lead Financial
Analyst
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Collect, coordinate, interpret, and
analyze key data;
▪ Model development;
▪ Responsible for project deliverables;
▪ Stakeholder outreach; and
▪ Report preparation.

Jeff McGarvey
Managing Principal
Quality Assurance &
Technical Support
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Quality assurance & control; and
▪ Ensures procedural integrity;
Kevin Burnett, MA
Senior Project Manager
Technical Advisor &
Utility Expertise
[email protected]
Tel #: (800) 755-6864
Fax #: (951) 587-3510
▪ Model and report review and technical
guidance;
▪ Review of project deliverables;
▪ Selected meeting and presentation
attendance.

Resumes
Resumes for Willdan’s project team are presented on the following pages. We are confident that our team possesses the depth of experience that will successfully fulfill your desired work performance.

Cost Allocation Plan and Utility Rate Studies 17
City of McFarland
Education
San Francisco State
University, Bachelor of
Science, Finance
Areas of Expertise
Cost of Service
Analyses
Multi-disciplinary Team
Management
Special District
Formations
Client Presentations
Proposition 218
Affiliations
California Society of
Municipal Finance
Officers
Municipal Management
Association of
Northern California
California Municipal
Treasurers Association
23 Years’ Experience
Chris Fisher
Principal-in-Charge/Project Manager
Mr. Chris Fisher, Vice President / Director of Willdan’s Financial Consulting Services group, will serve as the overall Principal-in-Charge for the City’s combined engagement and Project Manager for the Utility Rate Study. He will also share his extensive knowledge related to cost-of-service principles with members of the project team.

Mr. Fisher joined Willdan in April of 1999, and during that time has managed an array of financial consulting projects for public agencies in California, Texas, Arizona, Colorado, and Florida, coordinating the activities of resources within Willdan, as well as those from other firms working on these projects. He is one of the firm’s leading experts for special district financing related to public infrastructure, maintenance, and services, including public safety.

Select Related Experience
City of San Marcos, CA — Cost Allocation Plan, Indirect Cost Rate Proposals & Comprehensive User Fee Study: Mr. Fisher is the principal-in-charge for the City’s full and OMB compliant cost allocation plan, preparation of Indirect Cost Rate proposals, and Comprehensive user Fee Study engagement. The project is ongoing, and the User Fee Study is now underway.

City of Santa Cruz, CA – Cost Allocation Plan Update and Fully Burdened Hourly Rate Study:

Mr. Fisher is overseeing the City of Santa Cruz engagement; this is an ongoing study.

City of San Fernando, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Mr. Fisher served as the principal-in-charge for the City’s cost allocation plan, OMB compliant plan and comprehensive user fee study engagement. Willdan has recently, through competitive bid, been re-selected to update the cost allocation plan.

Housing Authority of the County of San Bernardino – Cost Allocation Plan: Mr. Fisher is the principal-in-charge for the Authority’s full and OMB cost allocation plan engagement, and the ongoing update. Willdan was brought in and worked with the Housing Authority and HUD to respond to unfavorable OIG audit findings related to the Authority’s’ approach to the allocation of overhead costs. We developed a new Cost Allocation Plan and are currently working on an update to that plan. The initial work resulted in the clearance of the HUD findings with no penalty to the Housing Authority.

City of Irvine, CA — OMB Cost Allocation Plan and Comprehensive User Fee Study: Willdan completed a cost allocation plan and user fee study for the City of Irvine. Mr. Fisher managed and provided quality assurance to this project, ensuring the accuracy of the models, as well as the final reports. He also presented the results to the City’s Finance Commission and to the City Council.

The City of Irvine has recently re-engaged, through competitive bid, Willdan to complete an updated Cost Allocation Plan and User Fee Study.

City of Palm Desert, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Mr. Fisher is the principal-in-charge for the ongoing full cost allocation plan and user fee study.

Willdan’s work includes the gathering of necessary data and information, interviews with City Staff to identify overhead support services and how they are used and interviews to gather information related to fee-based services. We are also developing financial models to calculate overhead allocations and personnel rates and the full cost of services for which fees are charged. We are working with Staff to finalize cost recovery targets, prepare reports and present the results.

City of Murrieta, CA — Cost Allocation & OMB Compliant Plan and Comprehensive User Fee Study: Mr. Fisher served as the project manager on the City’s fee study. The primary objective for the cost allocation study was to ensure that general government costs were fairly and equitably allocated to appropriate programs and funds. The City has recently re-engaged Willdan to conduct an update to both studies.

City of Pomona, CA – Master Fee Schedule Update: Mr. Fisher was the principal-in-charge for the City’s master fee schedule update and update of the development impact fees. Mr. Fisher provided quality control and served as the primary contact with the City.

Cost Allocation Plan and Utility Rate Studies 18
City of McFarland
City of Lakeport, CA – Water and Wastewater Fee Study: Mr. Fisher led the engagement for Lakeport in the role of the principal-in-charge. The project included the completion of a comprehensive financial model, with multiple iterations and alternatives to address a situation where the City had not increased rates in several years. He led discussions with staff to outline the options and make adjustments as necessary. He also worked closely with the City and its legal counsel to update rates and to incorporate tiers while ensuring compliance with Proposition 218 and the San Juan Capistrano Court decision.

City of Grover Beach, CA – Water and Wastewater Rate Study: In the role of principal-in-charge, 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.

City of Sebastopol, CA – Water and Wastewater Rate Study: Mr. Fisher led the City of Sebastopol engagement in the role of the principal-in-charge. The objective of the study was to update water and wastewater rates to address capital needs for both utilities, and ensure rates provided adequate funding for ongoing operations and maintenance. Project work included development of a comprehensive financial model and preparation of rate scenarios for evaluation by staff and the City Council. Mr. Fisher and the project team presented the results to the City Council and instructed staff on the use of the model.

City of Guadalupe, CA – Water and Sewer Utility Rate Study: Mr. Fisher served as the principalin-charge for the City’s recent water and sewer rate study, providing technical assistance throughout the project, conducting working discussions with City Staff to evaluate financial and rate options, and coordinating 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 water and sewer rates, including identification of the rates of comparable jurisdictions and a comparative rate and cost analysis.

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.

The 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 presented the results to the City Council, whereby rate increases were approved.

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.

C. Fisher
Resume Continued
Cost Allocation Plan and Utility Rate Studies 19
City of McFarland
Education
Bachelor of Science
in Economics;
California State
Polytechnic University,
Pomona
Areas of Expertise
Cost Allocation Plans
Fiscal Analysis for
User Fees and Rates
District Administration
Services
Utility Rate Studies
13 Years’ Experience
Tony Thrasher
Cost Allocation Plan Project Manager
Due to his cost allocation and user fee analyses experience, Mr. Tony Thrasher has been selected to serve as Project Manager for the Cost Allocation Plan portion of the City’s engagement.

Mr. Thrasher is a Principal Consultant within the Financial Consulting Services group, whereby his responsibilities include managing projects and conducting fiscal analyses for cost allocation plans, user fees, and utility rate studies.

Mr. Thrasher’s prior employment was as a financial analyst working in bond, equity, and mortgagebacked security markets for Wells Fargo Bank, Bank of New York Mellon, and Deutsche Bank. His experience includes portfolio accounting, differential analysis, and forecasting.

Select Related Experience
City of San Marcos, CA — Cost Allocation Plan, Indirect Cost Rate Proposals & Comprehensive User Fee Study: Mr. Thrasher is the project manager for the City of San Marcos’ full and OMB compliant cost allocation plan, preparation of Indirect Cost Rate proposals, and Comprehensive User Fee Study engagement. He is instrumental in model development which contained all City personnel and expenditures broken down into the ICRP tables. The project is ongoing, and the User Fee Study is now underway.

City of Monterey, CA — Cost Allocation Plan: Mr. Thrasher is the technical project manager for the City of Monterey Cost Allocation Plan engagement and updates. He is assisting in the development of the City’s general overhead allocation plan, whereby he applies his expertise on alternative allocation methods.

City of Santa Cruz, CA – Cost Allocation Plan Update and Fully Burdened Hourly Rate Study:

Mr. Thrasher is serving as the project manager for the City of Santa Cruz’ engagement; this is an ongoing study.

Housing Authority of the County of San Bernardino — Cost Allocation Plan: Mr. Thrasher served as the project manager for the completion of the Authority’s full and OMB cost allocation plan and is currently completing an update to that plan. This engagement was triggered by OIG findings that questioned the Housing Authority’s cost allocation methods. The project resulted in a new cost allocation plan approved by the OIG and HUD and clearance of the audit findings with no penalty or returned grant funding.

City of San Fernando, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Mr. Thrasher was the project manager for the City’s cost allocation plan, OMB compliant plan and comprehensive user fee study engagement. Willdan has recently, through competitive bid, been re-selected to update the cost allocation plan.

City of Chino Hills, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Mr. Thrasher is the technical project manager for the City’s Cost Allocation Plan and Comprehensive User Fee Study. He is working directly with the City contact throughout the engagement.

City of Irvine, CA —Cost Allocation Plan and Comprehensive User Fee Study: Serving as the project’s project manager and lead analyst, Mr. Thrasher oversaw the development of the model and led analytical efforts; and designed micro-level allocation models to ensure full-cost recovery for public safety, public works, community development, community services, and administrative departments. The City of Irvine has recently re-engaged, through competitive bid, Willdan to conduct a Cost Allocation Plan and User Fee Study.

City of Palm Desert, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Mr. Thrasher is currently serving as the technical project manager for the City’s full cost allocation plan and user fee study. He is directly responsible for the creation of both models for the study, gathering and verification of the data, managing the analysts working to support him and presenting results to the City.

City of Mission Viejo, CA — Cost Allocation Plan and User Fee Study: Mr. Thrasher was assigned to work with the City on this project, providing analytical support, gathering data, working with staff to make refinements, and developing cost allocation and fee models to ensure full-cost recovery for building and safety, planning, community development, and public works departments Cost Allocation Plan and Utility Rate Studies 20
City of McFarland
Education
Bachelor of Arts;
Business
Management,
Information Systems
and
International Business,
University of Cincinnati
Areas of Expertise
Cost Allocation Plans
User Fee Studies
Proposition 218
9 Years’ Experience
Priti Patel
Cost Allocation Plan Senior Financial Analyst
Ms. Priti Patel is a Senior Analyst within the Financial Consulting Services group, whereby she supports project managers in conducting utility rate analyses, fee studies, cost allocation plans, monitoring Proposition 218 compliance, and forming special districts.

Coordinating and conducting activities associated with Cost Allocation Plans and User Fee Studies, including database integration and manipulation, revenue and expenditure analyses, and documentation preparation are just some of Ms. Patel’s duties. With these duties, she interacts with clients on a regular basis.

Ms. Patel joined Willdan as an analyst with the District Administration Group, while with DAS she performed research and analysis needed for local government financial issues related to district administration, including document data entry and updating, database management, research, and report preparation. She also provided general information on questions pertaining to Assessment Districts and special taxes (such as Mello-Roos Pools), as well as the status of property delinquencies.

Select Related Experience
City of San Marcos, CA — Cost Allocation Plan, Indirect Cost Rate Proposals & Comprehensive User Fee Study: Ms. Patel is the financial analyst assigned to the City of San Marcos’ engagement to complete a full and OMB compliant cost allocation plan and preparation of Indirect Cost Rate proposals engagement.

City of Monterey, CA — Cost Allocation Plan: Ms. Patel is serving as the financial analyst for the Monterey Cost Allocation Plan and updates. In this role she is responsible for obtaining updated information and data, reviewing overhead structure and functions, and preparing the updated model and report. The City originally hired Willdan for the creation of the first Cost Allocation Plan and has hired us for multiple updates since then.

City of Santa Cruz, CA – Cost Allocation Plan Update and Fully Burdened Hourly Rate Study:

Ms. Patel is assisting the project manager in this ongoing study.

City of San Fernando, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Ms. Patel provided support to senior team members in the preparation of a cost allocation plan, OMB compliant plan and comprehensive user fee study. Willdan has recently, through competitive bid, been re-selected to update the cost allocation plan.

Housing Authority of the County of San Bernardino — Cost Allocation Plan: Ms. Patel was the assigned financial analyst that assisted the principal-in-charge and project manager with the completion of the Authority’s full and OMB cost allocation plan.

Rainbow Municipal Water District, CA — Cost Allocation Plan and OMB Compliant Plan:

Ms. Patel provided analytical support to ensure that the District’s Cost Allocation Plan and OMB compliant cost allocation model and plan fairly allocated general and administrative overhead service costs to appropriate activities and departments.

City of Chino Hills, CA — Cost Allocation Plan and Comprehensive User Fee Study: Providing analytical support in the preparation of a cost allocation plan and comprehensive fee study, Ms.

Patel worked to identify and take into account direct and indirect costs, along with changes in staffing, structure, and service delivery methods. She also assisted in the preparation of userfriendly Excel-based models that City staff can easily update in the future to determine the proper allocation of expenditures and ongoing full cost of City-provided services.

City of National City, CA — Cost Allocation Plan, OMB Compliant Cost Allocation Plan, User Fee Study, and ISF Allocation Study: Ms. Patel provided analytical support in the preparation of this study, her primary duties included development of the models, finalizing model figures and results, and generating reports.

City of Laguna Hills, CA — Cost Allocation Plan and Comprehensive User Fee Study:

Ms. Patel provided analytical support in the preparation of a full cost allocation plan and comprehensive fee study for the development of a master list of fees.

Cost Allocation Plan and Utility Rate Studies 21
City of McFarland
Education
Bachelor of Science,
University of Southern
California
Areas of Expertise
Fiscal Analysis for User
Fees and Rates
Cost Allocation Plans
Acquisition Audit
Services
Statutory Financial
Reporting
Fund Audits
Quality Review of
Community Facilities,
Lighting & Landscaping,
and Assessment
Districts
Affiliations
California Society of
Municipal Finance
Officers
35 Years’ Experience
Robert Quaid
Cost Allocation Plan Quality Assurance/Technical Advisor With his 35 years of extensive experience in public financing, Mr. Robert Quaid has been selected to provide quality assurance/quality control in the role of technical advisor. In his position as a Principal Consultant at Willdan, Mr. Quaid provides project management, procedural support, technical support, and quality review for Willdan’s District Administration group, as well as the Financial Services Consulting group specific to cost allocation plans, user fee studies, and special financial analysis.

Prior to joining Willdan, Mr. Quaid worked in the private industry of real estate accounting and finance. He began his career with the public accounting firm formerly known as Haskins & Sells (currently known as “Deloitte & Touche”). His experience includes financial statement analyses, asset administration, computer conversion, and reporting to the Securities and Exchange Commission for several public real estate partnerships. In 1979, Mr. Quaid became a licensed California CPA.

Select Related Experience
City of Thousand Oaks, CA — Cost Allocation Plan: Mr. Quaid served as project manager for the development of an OMB A-87 compliant cost allocation plan model using fiscal year actual costs as the basis for the allocations. He was responsible for the preparation of the Cost Allocation Plan report and provided cost allocation model training to City staff.

Cities of Fontana, Gardena and Hawthorne, CA — Cost Allocation Plan Projects: For each of these cities, Mr. Quaid served in the role of task manager for the development of an OMB A-87 compliant cost allocation plan model using Microsoft Excel. He was responsible for the preparation of the cost allocation plan report and trained City staff on how to use the cost allocation model.

City of Cathedral City, CA — Comprehensive User Fee Study: Mr. Quaid served as project manager for a user fee study that required updating fees for Planning, Engineering, Building, Police, Fire, City Clerk, and Finance.

Mr. Quaid has provided Quality Assurance and Quality Control to multiple clients. Provided below are a few examples of clients in which services have been provided in the previous five years. ▪ City of Aurora, CO
▪ City of Bedford, TX
▪ City of Belmont, CA
▪ City of Cerritos, CA
▪ City of Claremont, CA
▪ City of Coalinga, CA
▪ City of DeSoto, TX
▪ City of El Cerrito, CA
▪ City of Galt, CA
▪ City of Hayward, CA
▪ City of Indian Wells, CA
▪ City of Mesquite, TX
▪ City of Missouri City, TX
▪ City of Monterey, CA
▪ City of Petaluma, CA
▪ City of Rocklin, CA
▪ City of St. Helena, CA
▪ City of San Fernando, CA
▪ City of San Bruno, CA
▪ Sacramento Public Library, CA
▪ City of Salinas, CA
▪ City of Union City, CA
▪ City of Watsonville, CA
▪ City of Yucaipa, CA
Cost Allocation Plan and Utility Rate Studies 22
City of McFarland
Education
Bachelor of Arts
and Science;
University of Central
Florida
Areas of Expertise
Utility Rate Studies
User Fee Studies
Financial Forecast
Modeling
5 Years’ Experience
Michael Cronan
Utility Rate Study Lead Financial Analyst
Mr. Michael Cronan is a senior analyst with five 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.

Select Related Experience
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 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 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.

City of College Station, TX — Electric Rate Study: Mr. Cronan was the analyst for the City’s electric retail rate and cost-of-service study.

GRU/Gainesville, FL — Combined Utility Rate Project: Mr. Cronan assisted senior project staff on Willdan’s recent combined utility rate project conducted for Gainesville Regional Utilities, in Gainesville, Florida and included a comprehensive revenue requirement, cost of service analysis, and rate design for their electric, water, wastewater, and natural gas utility systems.

Cost Allocation Plan and Utility Rate Studies 23
City of McFarland
Education
Bachelor of Science,
Finance, University
of Central Florida
Areas of Expertise
Alternatives Analysis
Strategic Planning
Rate Studies
Cost of Service
Studies
Revenue Bonds
Feasibility Analyses
Capital Funding
Acquisitions
Valuation Analyses
Affiliations
American Water
Works Association
The Water
Environment
Federation
The Utility
Management
Conference
The WateReuse
Foundation
31 Years’ Experience
Jeffrey McGarvey
Utility Rate Study Technical Support/Quality Control
Mr. Jeffrey McGarvey is a Managing Principal in Willdan’s Financial Consulting Services group, and for more than 31 years, has provided professional consulting services to municipal water, wastewater, solid waste, electric, and natural gas utilities throughout the country. He possesses a broad range of municipal utility systems experience, including special expertise in complex alternatives analyses; utility rate analyses; utility valuations and acquisitions; regionalization and consolidation studies; debt issuance support, such as the preparation of financial feasibility analyses associated with revenue bond issuance; capital financing analyses; strategic planning; rate and regulatory assistance; and instituting financial mechanisms to provide for the sufficient recovery of operating and capital costs.

Mr. McGarvey has extensive experience in utility rates and cost of service studies for water, wastewater, solid waste, electric and natural gas systems. This experience generally relates to performing budget analyses, customer and usage analyses, development of revenue requirements, cost of service allocations and sensitivity analyses related to the implementation of rate structures designed to promote desired usage characteristics.

Select Related Experience
Phelan Piñon Hills Community Services District (Phelan, CA) – Water Rate and Fee Study:

Mr. McGarvey served in the role of technical advisor for this comprehensive revenue requirement analysis and financial plan, which provided targeted rate and fee structure recommendations. A comprehensive proforma financial analysis was prepared focusing on primary rate and financial objectives. The analysis resulted in rate structures that provided adequate revenue to fund operations; and created a secure and reliable funding source for future capital improvements.

McKinleyville Community Services District, CA – Water and Wastewater Capacity Fee Study:

Mr. McGarvey provided technical support, as well as quality assurance/quality control, to this engagement. 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 boundaries. Finally, the team analyzed existing demand on the current utility systems and calculated remaining capacity in order to develop fair and equitable capacity fees.

Mission Springs Water District, CA – Comprehensive Water and Wastewater Financial Plan and Rate Study: Mr. McGarvey provided technical support for the District’s comprehensive financial plan and rate study. He was also responsible for quality control. A key focus of this study was on the need to address the Chromium 6 detected in the groundwater. Willdan developed a comprehensive financial model, and updated water and wastewater rates. Mr. McGarvey oversaw the development of the financial model prepared for the District.

City of Flagstaff, AZ – Water, Wastewater and Reclaimed Water Rate Study: Mr. McGarvey served as the technical advisor of the City of Flagstaff’s utility rate analysis. In the wake of six water main breaks, the City was faced with decreasing revenues and increasing capital and operational costs. The proposed rates developed by Willdan reversed the City’s trajectory of a falling operating reserve and provide the City with sufficient revenue to cover existing and future operations, maintenance, and debt service; all while being financially prudent and responsive to the concerns of the City’s Water Commission. The proposed residential inclining block rate appropriately spreads the burden of increased costs based on a comprehensive analysis of customer demands.

City of Durango, CO – Water and Wastewater Rate Study: Mr. McGarvey led the preparation of a long-term financial plan, cost of service-based rates and updated plant investment fees. The City needs to perform $50 million in improvements to the wastewater treatment plant to comply with State wastewater treatment standards and to provide available capacity for new growth. A balanced financial plan was developed incorporating rate increases and anticipated debt to fully fund requirements and minimize customer impact.

Cost Allocation Plan and Utility Rate Studies 24
City of McFarland
Kevin Burnett, MA
Utility Rate Study Technical Advisor & Utility Expertise Mr. Kevin Burnett is a senior project manager with 21 years of utility analysis experience, possessing extensive experience with rate and cost of service studies for retail and wholesale use.

He has been selected to serve as Project Manager for the Utility Rate Study portion of the City’s engagement. His project experience includes water, wastewater, reuse, and stormwater rate studies using state-of-the-art utility financial planning tools. He has developed both short and longterm financial plans for utilities of all sizes – including regional water authorities and regional wastewater providers with individual wholesale service contracts.

Select Related Experience
City of Sebastopol, CA – Water and Wastewater Fee Study: Mr. Burnett served as the lead project consultant for the City’s water and wastewater utility rate study. The objective of the study was to update utility rates to address capital needs for both utilities, and ensure rates provided adequate funding for ongoing operations and maintenance. Mr. Burnett led the development of the financial model and scenarios for the City and presented the report and results to the Council.

City of Grover Beach, CA – Water and Wastewater Rate Study: Mr. Burnett led the City’s water and wastewater rate study, which included the preparation of a comprehensive financial plan, along with cost-of-service analyses and development of updated rates. He presented the financial plan and outlined the various options and scenarios for City Staff’s consideration, including shifting from a uniform water rate structure to a two-tiered structure.

City of Calexico, CA – Water and Sewer Rate and Capacity Fees Study: As lead project consultant, Mr. Burnett conducted a water and sewer rate study for the City of Calexico. Their previous rate study was dated, and the City wished to complete a new study to meet future revenue requirements and planned substantial capital improvement projects, and to ensure new rates followed Proposition 218 cost of service requirements. The City also requested the establishment of capacity fee charges. Mr. Burnett created the financial and rate model, completed the technical analysis, and worked through financial scenarios and options with City Staff. He was also responsible for the preparation of the report and other study documents.

City of Tulare, CA – Water and Wastewater Rate Study: As project manager Mr. Burnett led the model and rate development, in addition to facilitating presentations to both the City Council and Public Utilities Board in preparation of the City’s water and wastewater utility rates. He generated updated rate structures for the City, which met the requirements of Proposition 218.

City of Avenal, CA – Water and Sewer Rate Study: Served as project manager for the City’s rate study. The objectives of this analysis were to develop a tiered rate structure for customers that: 1) generate sufficient revenues to meet operating and capital expenses associated with water in response to the rising cost of purchased water; 2) technically defensible and equitable across customer classes (Proposition 218 compliant); and 3) developed within spreadsheet models that are user-friendly and can be easily updated by City Staff in the future.

City of Fillmore, CA – Water and Sewer Rate Study: The City’s rates were outdated and not generating sufficient revenue needed to operate, maintain, and enhance the system. As project manager, Mr. Burnett led the Willdan Team and worked closely with the City, to redesign the rate structure. Willdan was responsible for the model and rate development, and generation of multiple alternative rate structures.

City of Dinuba, CA – Water, Sewer, and Solid Waste Rate Study: The City had undergone a period of declining net revenues and an inability to fully fund capital repair and replacement needs.

In the role of lead analyst, Mr. Burnett worked with City Staff to update the rate structures to ensure class cost of service-based water rates that promote conservation and adhere to Proposition 218 requirements. Multiple water and sewer financial plans were developed and presented to Council for consideration.

Education
Master of Arts,
Economics, State
University of New
York, Buffalo
Bachelor of Arts,
University of
Waterloo, Ontario
Areas of Expertise
Financial Planning
Cost of Service
Studies
Rate Design
Impact Fees
Bond Feasibility
Affiliations
American Water
Works Association
21 Years’ Experience
Cost Allocation Plan and Utility Rate Studies 25
City of McFarland
5) Total Projected Cost of the Project
Scope of Services
Willdan is confident that we can meet the City of McFarland’s request for services for Cost Allocation Plan and Utility Rate Studies Services.

Cost Allocation Plan Project Understanding
Over the past several years, many public agencies have responsibly focused on the many challenges created by the prior recession and the Covid pandemic. Through the course of reorganizing staff functions and departments, shifting resources, implementation of new processes and/or new software, and/or reducing staff, it is important to continually revisit the manner and methodology by which indirect overhead costs are distributed to the operating departments and, as appropriate, other chargeable funds and programs (e.g., enterprise funds, grant programs, capital programs internal service funds, etc.).

The City needs a cost allocation plan that will ensure the fair and equitable allocation of internal service costs to appropriate external-facing operations such as: enterprises, special revenue funds, departments, and programs, while utilizing tailored and well thought out allocation factors that reflect current staffing and processes.

We will prepare a full CAP, based upon the City’s 2022/23 budget or actual financial data, as well as an OMB CAP that will be compliant with 2 CFR Part 200 Federal regulations related to cost reimbursement and grant funding, formerly known as OMB A-87 and 2 CFR Part 225 guidelines, which have now been superseded by the Omni Circular. The new circular did not completely overhaul the guidelines, and the intent is still the same, but it did add new limitations to consider and incorporate into a compliant CAP.

The end-product will include a user-friendly Excel-based model which City Staff will retain, and which can be easily updated in the future to determine the proper allocation of expenditures. Most importantly, we will ensure that the results and recommendations are clear and understandable, defensible, and easily implementable.

The purpose of this engagement is to establish the CAP
methodology and model that ensures the City is properly allocating costs associated with indirect overhead support services, such as Accounting, Finance, Purchasing, Human Resources, among others, to identified operating departments, as well as enterprise and other chargeable funds, internal service funds, and projects; to ensure that those organizations can account for the true cost of providing services, including indirect overhead.

We will also develop updated Indirect Cost Rates for specific purposes and hourly overhead rates for staff in general. We will work closely with City Staff in identifying the functions of indirect staff and the proper balance of appropriate allocation factors for the City. To achieve cost recovery objectives, the City must have a method of identifying and distributing administrative overhead costs that is fair, comprehensive, well documented, and defensible. This cost allocation plan will enable the City to achieve this goal.

For this study, we will meet directly with departmental representatives at the City, to discuss the approach and process for the study. Discussions will include ways to combine tasks and efforts among the Cost Allocation Plan components to maximize efficiencies and ensure adherence to specified timelines.

For a successful and effective engagement, it is important to have a thorough understanding of specific City policies and objectives, the structure and organization of the City and the relationships between the central and operating departments, as well as internal service funds, or other programs or projects to which overhead can be defensibly allocated.

We will review the City’s existing plans and structure, to ensure that general government costs are fairly and equitably allocated to the appropriate programs and funds. This effort will ensure that each enterprise and program bears its fair share of general governmental expenses.

Willdan possesses the resources, practical experience, creative thinking, and collaborative consulting skills necessary to complete this important project.

Public Engagement
Our models and project approach are geared toward delivering our work on schedule and presenting our analysis results at public meetings and City Council workshops. The Willdan Team is experienced at communicating complex analytical results in a manner that is easy to understand by non-finance-oriented individuals and facilitates discussion.

Rather than a costly and inflexible
proprietary software, which can require
expensive licensing fees, Willdan builds
models utilizing Excel, from the ground up,
employing the City ’s budget as the gauge.

This model, which is then the City’s to retain,
gives City Staff the control to make on-thefly adjustments and updates.

Cost Allocation Plan and Utility Rate Studies 26
City of McFarland
Our proposed project team for this engagement have coordinated or participated in numerous public and staff workshops regarding fees and cost of service-based charges. As previously mentioned, our objective is to provide useful, detailed information to the City Council and City Staff, necessary to make important decisions. Our experience ensures that we can meet this objective.

User Friendly Models and Reports
Willdan prides itself on creating user-friendly Excel-based models that the City can retain and conducting our analysis and developing the model collaboratively with City Staff. With City staff’s immediate input and collaboration, Willdan will design an extremely flexible, intuitive Excel-based model. In the future, as the City assumes new responsibilities, modifies existing processes, and/or eliminates unnecessary services or programs, the model will be capable of adding or deleting funds, objects, departments, programs, staff positions, and activities. Willdan understands that issues facing the City are unique; consequently, we will design our model to match your immediate and desired needs to ensure that end-results exceed staff expectations.

This model is then the City’s to retain, after our services are completed, and allows for the creation of revenue projections, highlighting potential new revenues, and levels of subsidy.

A key element of these types of studies are presenting results and recommendations in a straightforward manner, which allows the City Council and City Staff to confidently make policy decisions and understand the impacts of those decisions. Rather than using an inflexible proprietary software program, we construct our model from the ground up, as previously discussed, mirroring the City’s budget format wherever possible.

As a result, the information contained in our model is easy for City Staff to interpret, and the familiar software ensures ease of navigation. As the model is being designed and constructed, we will work together with City Staff to determine the best and most effective features to include. After the project is completed, we will provide training, so that your staff can independently and efficiently evaluate the effects of changes in certain factors as the City moves forward.

Utility Rate Study Project Understanding
The following project approach and scope of services is based on Willdan’s current understanding of the City of McFarland’s (“City”) needs and objectives for a water, sewer, solid waste, and optional street sweeping utility rate, and the services outlined within the Request for Proposals (“RFP”). A final scope and schedule will be determined following further discussions with City staff.

Current water rates consist of a fixed charge based on the size of the customer’s meter, three tiers of successively increasing volumetric rates for single-family customers, and a volumetric rate for non-residential customers. Sewer rates consist of rates for single and multi-family customers, different rates based on strength for non-residential and commercial customers, and a rate for correction facilities. Solid waste rates are based primarily on the size and number of receptacles utilized by customers.

Our objective is to provide Staff and the Council with the information it needs to fully understand the water, sewer, solid waste, and street sweeping (if undertaken) utilities current and projected financial condition, including planned capital projects and potential funding options, 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, determine whether sufficient revenue is being collected for utility activities, and as appropriate, develop an updated schedule of rates for each utility that is simple, equitable, and most importantly, structured to meet the future financial needs of the City’s utilities. The proposed rate structures must adequately fund the ongoing operating, maintenance and capital improvement needs of the water and sewer utilities.

The City of McFarland provides water and sewer service to a population of approximately 14,459, through roughly 3,000 service connections. The City also provides refuse service to its residents through a third-party vendor. A brief review of the most recent financial statements available on the City’s website provides insight into the financial condition of the utilities. The Water, Sewer and Solid Waste Utilities all appear to be in good standing currently, based on recent historical operating results, but all are facing challenges moving forward, as discussed in the City’s Fiscal Year 2022/23 Operating Budget (Budget).

As discussed in the Budget statement, two of the City’s three major enterprise funds – sewer and water – are facing significant fiscal challenges in the coming years. The issues primarily surround the need to fund capital improvements.

While the funds have adequate working capital balances to fund services and improvements in 2022/2023 and fund basic operations and maintenance, the working capital balances are below levels necessary to fund long-term capital needs for Sewer and Water.

The model will be developed
to allow the City to run “whatif” scenarios to address possible changes in staffing
levels, working hours, etc.

Cost Allocation Plan and Utility Rate Studies 27
City of McFarland
The City is pursuing grant funding through the State Water Resources Control Board (SWRCB) to assist with current and long- term capital needs for Sewer ($20 million) and Water ($24.8 million), and may also utilize debt, impact fees and rate revenue. Willdan has worked recently with several cities, including Lakeport, Blythe, Lomita, and Dinuba, all of which face the exact challenge that McFarland is facing: funding significant capital plans while trying to limit the impact on ratepayers. For these projects we developed dynamic financial models that successfully facilitated the creation and evaluation of funding and financial scenarios, with the ability to make on-the-fly changes to compare alternative approaches.

For the sewer utility, the most recent available Audited Financial Report, for the Fiscal Year Ending (FYE) June 30, 2021, shows that operating revenue was $1.47M, compared to operating expenses of $1.43M, for a positive operating result of $533K. In addition, the cash position was sound, with unrestricted cash of $911K at the end of Fiscal 2021.

This balance exceeded the objective of 35% of operating expenses and debt service (or 120 days), as called for in the City’s financial policies. Looking forward to the Fiscal Year 2022/23 Adopted Annual Operating Budget, revenues are projected to increase to $2.09M, and expenses are projected to increase to $2.41M, resulting in projected negative operating results for the year. As mentioned earlier, the capital plan included in the Budget shows significant projects for the sewer utility in the upcoming five-year period, totaling more than $20.6MM over the five years. Among others, the projects consist of line replacements and wastewater expansion.

For the water utility, the most recent financial report also showed positive results. For FYE June 30, 2021, operating revenues for the water utility were $1.84M, compared to operating expenses of $1.58M, for a positive operating result of $253K. Unrestricted cash at the end of Fiscal 2021 was strong at $1.48M, equivalent to just under a full year’s operating expenses, exceeding the reserve policy goal. Looking forward, the FY 22/23 Budget projects revenues increasing to $2.06M, but also anticipates expenses increasing at a higher rate, to $3.51M, resulting in projected negative operating results in the coming year, and a reduction in working capital. The capital plan shown in the Budget includes more than $29M in projects over the five years, including multiple well replacements and a 1 MG tank replacement, and booster project.

Funding for water and sewer utility capital projects is anticipated to come from a combination of SWRCB grants (as available), impact fees, debt, and operating funds. The model we develop for the City will be capable of adjusting the timing of capital projects and selecting different funding sources to demonstrate and evaluate the impacts of these options on the overall plan and ultimately, the rate impacts on customers.

For refuse, the financial picture is similar to the water and sewer utilities. Per information presented in the 2020/21 Financial Report, operating revenues were $1.39M, while operating expenses were $1.29M, with a positive operating result of $98K. Unrestricted cash for FYE June 30, 2021, was less favorable than the other utilities, at $135K, or just over 10% of annual operating expenses for the year. The 2022/23 Adopted Budget projects revenues to increase to $1.43M, and expenses to increase to $1.599M, flipping the projected operating results to negative for the year.

The proposed option of creating a charge for street sweeping will entail a different approach, and discussion regarding the approach prior to starting. Under Proposition 218, only water, sewer and solid waste charges are exempt as this type of charge will require a balloting of affected properties, or voters, depending on the approach selected under Proposition 218. We have experience with other types of fees and assessments under Prop 218, that require property owner or voter approval, however, this brings in an expansion of planning and community engagement activities not typically necessary for other utility rates, and also extends the timeline.

The level of rate increases will be largely dependent on how successful the City is obtaining grant funding for planned capital projects. We will model options as necessary to evaluate the effects on the overall plan and recommended rate adjustments, depending on whether capital projects are funded with grants, debt, rate revenue, or some combination of all three. We will develop a comprehensive financial model and evaluate the projected operations for the next five years to confirm preliminary assumptions, and to be sure everything is accounted for, and appropriate recommendations are made. We also will ensure that the appropriate level of operating reserve (35% of annual operating expenses) is maintained as outlined in the City’s financial policies.

The project will entail three primary phases. The first is the review and evaluation of the previous rate study and development of objectives, development of a comprehensive financial plan for each utility, with projections for the next five years for the purposes of recommending rate adjustments extended out to ten (10) 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 each 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-ofservice analysis and development of rates, and preparation of a report.

Cost Allocation Plan and Utility Rate Studies 28
City of McFarland
Clearly all of the above-mentioned factors require a comprehensive and detailed look at the utilities.

Our approach and model incorporate a robust Capital Plan Analysis to ensure the utilities will be best equipped to address upcoming projects and their funding over the next five years, while maintaining required debt service coverage and appropriate reserve fund balances.

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 and their funding sources (including SWRCB grants) over the next five to ten years. We will produce financial analyses 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 sales, 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; ▪ Consideration of drought impacts on the rate structure; ▪ 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 a 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 comply with the requirements of Proposition 218 and recent legal decisions.

Our recommendations and proposed structure(s) will be developed in compliance with Proposition 218 requirements and recent court decisions, including the San Juan Capistrano case. We have worked recently with leading Proposition 218 legal experts to develop tiered rates and supporting analysis to address these factors, allowing us to bring this insight to the City of McFarland’s study.

Cost Allocation Plan and Utility Rate Studies 29
City of McFarland
Cost Allocation Plan Methodology
Study Approach
The purpose of this cost allocation plan engagement is to ensure that the City is maximizing the allowable recovery of indirect overhead costs from identified operating departments, as well as enterprise and other chargeable funds.

A sound cost allocation plan is also a foundational element in the development of internal hourly rates, including position billing rates. We will work closely with staff in identifying the proper balance of allocation factors appropriate for the City so that the City has a method of identifying and distributing administrative costs that is fair, comprehensive, well documented, and fully defensible.

We will work collaboratively with City Staff in the development of this model to verify that our assumptions are sound and accurate, given specific City characteristics. Further, we will ensure that appropriate allocation factors are selected for various City functions and enterprises to ensure that the overall allocation strategy is tailored for City of McFarland.

Cost allocation studies should be simple in concept and form. Our plans are not over-complicated, can be easily understood by non-finance-oriented individuals, and are readily presentable to elected officials, appointed finance committees and the public.

We deliberately design our cost allocation models to quickly and easily transition from a simple model to a progressively more inclusive plan. The logical step-by-step presentation of our plans fosters confidence in their results and facilitates adoption and implementation.

The allocation models utilize an iterative method which is the most accurate allocation methodology. Unlike a direct or “step-down” methodology, an iterative method uses the chosen distribution bases and allocates central service costs iteratively until all allocable costs have been distributed. Using this method, the model can detail the allocation for each central function individually for complete transparency and accountability, while removing bias that might result from the order in which allocations occur in a step-down approach. A direct methodology is essentially a one-iteration methodology, while a step-down method is typically only two iterations and is less precise and unable to accurately track the allocations from start to finish.

Approach for Managing the Project
Willdan’s “hands-on” supervision of Cost Allocation Plan studies, include the following methods:

Effective Project Management
Principal-in-Charge, Chris Fisher will manage the entire project with an eye toward high responsiveness, while ensuring that all stakeholders are “on board” with the direction of the project, as well as with the final results. Mr. Fisher will ensure that regular status updates are provided to City Staff, conference calls are scheduled, and that in-person meetings are conducted (as necessary). By taking these steps, he will be responsible for ensuring that Willdan will be accessible and fully engaged with your management and staff; and that communication remains, in effect, open throughout the project’s lifecycle — another essential step towards avoiding errors and irregularities.

Adherence to Time Schedule
Willdan recognizes that the use of “timelines” is highly effective in meeting all required deadlines. To keep the project on schedule, there are several tasks that must be completed in a timely manner. Therefore, we will present a project timeline at the kick-off meeting that should be closely followed.

Although the establishment of an experienced project team and a detailed project timeline work extremely well in general, Willdan understands that outside influences can create uncontainable situations for everyone involved in the project. In rare circumstances like these, our team quickly adapts to changes, and communicates our recommended schedule adjustments to the City. In so doing, we are able to produce a corrected timeline that will bring the project back on course to a successful completion by a mutually agreed upon deadline.

Approach in Communicating with the City
As the work on the project progresses, we understand that it will be necessary for our staff to work closely with you and City personnel. To accomplish this, we employ a variety of tools, including monitoring project status and budget costs; and ensuring effective communication through several options that are based on the City’s preferences. Regular updates can be provided by:
▪ E-mail (creation of a dedicated distribution list)
▪ Phone calls
▪ Project status memos
▪ Meetings
▪ Zoom or WebEx Conference Calls
▪ Using “timelines” as a highly effective tool to meet all required deadlines in a timely manner to keep the project on schedule
Cost Allocation Plan and Utility Rate Studies 30
City of McFarland
Utility Rate Study Project Methodology
As described herein, and detailed within the scope of services that follows, our approach to this utility rate study is built around three primary objectives:

Primary Objectives
Working collaboratively with the
City of McFarland to develop the
comprehensive financial plan and
model for the utilities
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 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.

As part of this analyses, Willdan will develop a comprehensive financial analysis — which incorporates the following:
▪ Revenue requirements such as operating expenses, transfers, and reserve requirements; ▪ Major and minor capital expenses;
▪ Cash and debt-funded major capital expenditures, along with existing annual debt service expenses; ▪ Adequate funding of designated reserves including operating and existing debt service, and other reserves as outlined in the City’s financial policies; and
▪ Functional cost breakdown consistent with Proposition 218 requirements and American Water Works Association (AWWA) rate-making standards.

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 each system, while recovering costs from customers in a manner which is fair, equitable, and within reasonable customer impact parameters.

During this project, we will utilize our Microsoft Excel-based model, with its interactive dashboard, as a comprehensive financial tool to allow for planning and reviewing 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. These analyses are 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.

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.

Cost Allocation Plan and Utility Rate Studies 31
City of McFarland
Real-Time Financial Modeling
The goal of financial forecasting is to provide clear vision regarding the potential financial outcomes of current management decisions. Our goal is to help you mold the existing knowledge base of the City into a viable financial management and rate plan. At Willdan, the development and use of real-time financial models in an interactive, collaborative process is an integral part of the model development.

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.

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 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 existing debt service coverage on revenue bonds.
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%

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
Rate Revenue
Requirements
Financial Planning
Model
Rate Design Model
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%

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
Cost Allocation Plan and Utility Rate Studies 32
City of McFarland
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.
▪ 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.

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 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 of McFarland upon completion of the project.

Cost Allocation Plan and Utility Rate Studies 33
City of McFarland
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.

Cost Allocation Plan and Utility Rate Studies 34
City of McFarland
Cost Allocation Plan Work Plan
Our proposed work plan, described in detail by task, is provided below. We explain how each task will be accomplished and identify associated meetings and deliverables. We want to ensure our scope provides quality and clarity and is responsive to the City’s needs and specific local circumstances. We will work in concert with the City to adjust the scope as needed during the course of the study.

This proposed scope addresses the completion of both the full and OMB compliant versions of the Cost Allocation Plan (CAP). We have noted where activities specific to the OMB compliant plan occur.

Task 1: Initial Document Request
Objective: Initial due diligence.

Description: Prior to project kick-off, relevant documentation will be obtained and reviewed in order to enhance our understanding of the City’s current cost allocation plan and internal structure of the agency. A written request for specific data will be sent to the City. The data provided in this task will provide the building blocks for later model development.

Our request may include (but is not limited to):
▪ Detailed budget and accounting data;
▪ Prior year’s financial data, salary, position, and staffing data; ▪ Organizational structure; and
▪ Data related to various allocation bases that may be incorporated as part of the methodology, i.e., Council agenda frequencies by department, AP/AR transactions by department, IT equipment distribution by department, etc.

Deliverables: Willdan: Submit information request to City.

City: Provide requested data to Willdan (prior to Task 2, Kick-off/Refine Scope). We will follow up with the City to confirm in writing the data that we have received, or which is still outstanding.

Task 2: Kick-off / Refine Scope
Objective: Confirm project goals and objectives. Identify and discuss policy issues related to the study.

Description: Willdan will identify and discuss policy issues typically raised by these studies, discuss any operational changes, and address data gaps in order to gain a full understanding of the City’s goals for the cost allocation plan. We will establish effective lines of communication and processes for information gathering and review.

We will ask that the City assign a project manager to serve as its primary contact. The selected City project manager will ensure that available data is provided to Willdan in a timely manner, thereby maintaining adherence to the project’s schedule.

We will obtain and review the current cost allocation methodology and discuss with City staff. The objective of this review is to determine specific areas of focus as they relate to the City’s objectives, and to discuss and evaluate current and potential allocation factors.

Meetings: One (1) project kick-off conference call to initiate the project, discuss data needs and methodologies and to address policy issues.

Deliverables: Willdan: If needed, a revised project scope and schedule.

City: Provide further data requirements and select / introduce City’s project manager.

Task 3: Gather Staffing Information and Develop Cost Allocation Plan Model Objective: Gather information related to indirect staffing and functions. Prepare draft both full and OMB compliant cost allocation plan and model.

Description: This task involves the gathering of specific information, directly from City staff, through interviews and discussion, related to the functions served by indirect staff and the departments served by their activities.

This task also focuses on the development of, and/or adjustment of existing, allocation bases, and the development and testing of a model that will ultimately be used to calculate the proper cost allocations derived from data gathered in prior tasks.

Cost Allocation Plan and Utility Rate Studies 35
City of McFarland
The model will be developed to incorporate any recent changes in the provision of City services, and fully allocate central service costs.

The model will also be developed to allocate only those costs eligible under 2 CFR Part 200. This is accomplished by loading relevant data into the model, identifying which costs are not allocable under the OMB guidelines. The OMB Super Circular compliant model is valuable as the City may receive Federal or State grant funding that mandates compliance with Federal OMB regulations.

We will utilize budget and organizational information, and other required information gathered from City staff to complete the work in this task. Specific discussions will be held to discuss bases, how central overhead services are provided to and utilized by other departments, cost categories and allocation criteria, and how these will factor into the overall cost allocation methodology.

The model and methodology will also produce indirect cost rates. These rates will be suitable for a variety of uses, billing to CIP projects, and in the OMB Super Circular compliant CAP, to Federal grants.

Meetings: Online meetings with staff to understand structure and operations as model and allocation bases are developed. Key staff will be interviewed to best understand central overhead staffing and functions and the departments served.

Deliverables: Willdan: One (1) user-friendly model in Microsoft Excel format that provides both a full cost allocation plan and an OMB Super Circular compliant cost allocation plan.

Task 4: Test and Review Cost Allocation Methodology
Objective: Test and review model and results with City.

Description: The draft cost allocation plan model will be reviewed with City staff, and adjusted as necessary, to ensure that preliminary allocations provide an accurate depiction of how the central overhead costs should be borne by the operating programs and funds. Over the past several years, we have successfully integrated online meetings by using WebEx™ as an element to our approach. This allows us to remotely guide staff through the model review and allows you the opportunity to interactively change inputs and test approaches.

Meetings: One (1) online meeting and demonstration with City Staff to review the model.

Deliverables: Willdan and City: Draft cost allocation plan model review.

Task 5: Prepare and Present Draft Report
Objective: Prepare the draft cost allocation report.

Description: This task involves the draft report preparation. The report will include an executive summary, cost allocation plan’s background, data and information sources utilized, model methodologies and calculation approaches, and results; calculations and supporting data will be presented textually and in easily understood tables and provided to the City.

The draft report will provide a breakdown of allocations, showing both the allocating and receiving organizations, as well as a comparison between allocations calculated for this new CAP (full and OMB) and prior year allocations.

Meetings: One (1) online meeting to present the draft report to City Staff.

Deliverables: Willdan: Draft report for City review and input.

City: Review of draft report, with comments, and edits.

Task 6: Discuss and Revise Report
Objective: Review of draft report, cost distribution methods, and model.

Description: An in-depth review of the draft report and model will be conducted to arrive at an optimum allocation method for each expenditure type.

Often, through the course of an engagement, comments usually revolve around issues of understandability; appropriate levels of enterprise funds’ cost recovery, etc.; ease of calculation; differences in allocations from previous years; and overhead costs’ distribution methods.

Our reports are structured to include both the full and OMB compliant plan, but in the course of review if a separate report is desired for each or just one of the plans, they will be split.

Following a round of comments from City staff concerning the draft report, the final report will be prepared for presentation to the City Council.

Cost Allocation Plan and Utility Rate Studies 36
City of McFarland
Meetings: One (1) web meeting or conference call with City staff to review the report with changes and revisions.

Deliverables: Draft report, and revised draft/final report.

Task 7: Prepare and Present Final Report and Model
Objective: Prepare and present the final report to City Council. Educate City staff on the operation and use of the model for future modifications.

Description: This task is the culmination of the cost allocation plan project. Based on staff comments on the draft report, Willdan will prepare the final report for presentation to City Council.

Meetings: One (1) meeting with the City Council to present the final plan.

We will also provide staff training on the operation and use of the model so it can be used in future years to prepare updates. We will also be available for questions following this training.

Deliverables: Willdan: Provide one (1) electronic PDF file copy of the final report and model (full and OMB Super Circular compliant); and two (2) bound copies to the City. Using Microsoft Word and Excel, an updateable electronic copy of the study and models, as well as related schedules, will also be provided on CD/ROM.

Water, Sewer, and Solid Waste Utility Rate Study Work Plan The following proposed scope of services is intended to capture the goals and objectives of the City. Willdan is confident the following will effectively meet the stated 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 water and sewer projections and rates for five years, an extended 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;
▪ Service contracts, residential and commercial,
for refuse collection, recycling, and disposal
services;
▪ 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 kick-off meeting to allow for a more meaningful discussion to occur. 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 – Kick-off Meeting and Planning Discussion
Task 1.2.1 – Project Kick-off. 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 service contracts;
▪ Review of recent financial performance for the utilities; Cost Allocation Plan and Utility Rate Studies 37
City of McFarland
▪ 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, cost of imported water, 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 utilities to be studied.

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

Water and Sewer Rate Study
Task 2.1 –Financial Plan, 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 water and sewer system accounts and billable flows by customer class for a recent historical period for which audited revenues exist. The customers and flows 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.

Task 2.1.2 – Customer and Flow Projections. The water and sewer system accounts and billable flows will be forecasted for a five-year planning period. Such projections will be developed by considering historical growth trends, peak demands, climatological patterns, 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 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 planning period will be developed for water and sewer, recognizing projected accounts, flow volumes, and usage patterns by customer class (as determined in the billing analysis under the previous tasks).

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 cover FY 22/23 through FY 26/27 (consistent with recommended rate adjustments), with an extended project period first through June 30, 2032, and will include, but not be limited to, the following:
▪ Operation and maintenance expenses;
▪ Direct and indirect costs utilizing the City’s existing overhead cost allocation model;
▪ Outlay for annual capital additions and
replacements;
▪ Debt service and reserve requirements on existing and anticipated debt instruments;
▪ Funding for long-term capital projects; and
▪ Other expenditures and transfers.

Cost Allocation Plan and Utility Rate Studies 38
City of McFarland
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 water and sewer systems 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 existing 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.

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) and Asset Replacement Schedules. The City’s existing utility system five-year CIP and asset replacement schedules 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. Examining the impacts on the financial objectives of the water and sewer utilities, as well as capital projects associated with rehabilitation and replacement of existing facilities, will be a key objective of not only this task but the entire 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.
$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
Cost Allocation Plan and Utility Rate Studies 39
City of McFarland
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 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.

Provide a system performance report and meter evaluation to determine Non-Revenue Water Loss and Recovery and how this will impact costs and rates. Provide cost scenarios for new equipment, system requirements, energy, and water savings.

Since we are not serving 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.

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. The evaluation of allocation factors associated with applicable costs will be based on existing rate structures applied by the City, meter size, rate structures applied by other comparable utility systems in the region, common industry practice and standard rate-making principals.

Task 2.3.2 – Determination of Revenue Adequacy. Comparisons of revenues under the existing water and 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 Structures. The existing rate structures will be further evaluated for their 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.

As part of the rate design process, Willdan will discuss with departmental staff the current trends and philosophies in utility ratemaking. 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:
▪ Full Cost Recovery – rate revenue should provide sufficient income so that, when combined with other sources of funds, funding requirements for the system are covered 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. ▪ Resource Conservation – under conditions of scarcity, the pricing of water as a commodity should promote voluntary conservation, discourage unnecessary service use and extend the availability of supply. ▪ 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 the Willdan Team 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 systems and consider annual inflationary indexed adjustments to rates as needed to maintain each utility. We will coordinate with City Staff to ensure suggested rate structures are compatible with the City’s utility billing software.

Cost Allocation Plan and Utility Rate Studies 40
City of McFarland
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. The projected revenues will consider possible elasticity effects associated with changes in usage characteristics that may occur from revising the rate structure. In addition, similar to the process described in Task 2.1, the five-year forecast will identify annual adjustments in utility system revenues necessary to meet existing 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 analysis to better demonstrate rate impacts on typical customer accounts in each class.

Task 2.4.5 – Neighboring Utility Comparison.

A comparison will be prepared to assess the difference between existing and proposed rates of the City with those of other comparable municipal utility systems.

Solid Waste Rate Study
The following section outlines the work tasks exclusive to the solid waste rate study.

Task 3.1 – Development of the Revenue Requirements
The first task in conducting the solid waste cost of service analysis will be the development of the annual revenue requirements. This represents the total revenue that the Solid Waste Enterprise Fund will need to recover during the year in order to fund expenses associated with the provision of services. Willdan will work with City staff to select a oneyear period that reflects typical operations.

We will then review all financial data and work with City staff to make any adjustments to costs in order to be representative of a typical year. Willdan will work with staff to project changes in costs due to inflation, salary increases, new equipment, new customers, etc. The result will be a ten-year revenue requirement forecast.

Task 3.2 – Allocation of Costs to Service Categories
Following the development of the revenue requirements, Willdan will assign and allocate costs to various service categories. The service categories represent the primary services provided by the Solid Waste Enterprise Fund.

Task 3.3 – Allocation of Costs to Customer Classes
Once the allocation of costs has been identified by overall service categories, Willdan will group the service categories based upon the customer classes that will recover each category's costs.

Task 3.4 – Determination of Billing Units
Willdan will identify the appropriate billing units for each customer class, incorporating existing policies and formulas as appropriate, to ensure the updated rates provide sufficient cost recovery and follow the cost-of-service principles of Proposition 218.

Task 3.5 – Rate Design
Willdan will identify adjustments to the current rates for the recovery of solid waste system revenue requirements that reflect the goals and objectives of the City. Rate design alternatives may be generated on cost‐based rates as developed in the previous task, as well as on the City’s existing rate structure or other methodologies that meet the specific requirements of the City.

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
Cost Allocation Plan and Utility Rate Studies 41
City of McFarland
Preparation of Reports and Proposition 218 Notices
Task 4.1 – Reports and Deliverables
Task 4.1.1 – Preliminary Draft Report. A draft report will be developed to address study findings and 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 copies of the draft report will be provided to staff for review. The report and presentations will also include a comparison of the City’s current and proposed water and sewer rates with five other public agencies.

Task 4.1.2 – 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 two (2) copies of the Final Rate Study Report, as well as the dashboard model spreadsheet will be provided to the City.

Task 4.2 – Proposition 218 Notice Preparation and Mailing Task 4.2.1 – Proposition 218 Notices. Based on our over 25-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 4.2.2 – Proposition 218 Notice Processing. We will develop 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. The additional cost for these services is estimated at $.75 per parcel and includes direct costs associated with the mailing. Our cost proposal does not include these direct costs. They will be billed directly to the City at the time of the mailing once the actual costs are known.

Optional Street Sweeping Cost-of-Service Study Work Plan Phase I: Street Sweeping Fee Analysis
The following section outlines the tasks exclusive to the optional street sweeping fee study. As mentioned in the project understanding, this type of fee is defined and treated differently under Proposition 218 than sewer, water, and solid waste. A street sweeping fee would not be exempt from the voting/balloting provisions applicable to property-based fees as sewer, water and solid waste are, and would require either a balloting of property owners or a vote of registered voters, depending which approach is adopted – either is allowed under Prop 218. As such, this scope is included here to fully represent the tasks required for the development and implementation of an optional street sweeping fee.

Task 5.1 - Project Kick-off Meeting, Data Gathering, and Study Preparation Willdan will conduct a kick-off meeting or conference call with stakeholder considerations and project objectives outlined. We will review and identify the following:
1) Review of the objectives for a proposed fee structure; 2) Gather and review necessary documents and data from the City including budgets, financial reports, property owner data, capital plans, bond, and loan documents (if applicable), and other data as available and necessary; 3) Components to incorporate into the revenue requirements, such as, operating and maintenance budgets, deferred maintenance projects, capital projects, debt repayment (if applicable), reserves, annual repair and replacement, etc.;
4) Strategy and level of effort for outreach and education; 5) Conduct a detailed review of the data used in the baseline financial forecast; 6) The timeline for the study and ballot/election process; and 7) 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 street sweeping utility.

Cost Allocation Plan and Utility Rate Studies 42
City of McFarland
Topics of discussion may include:
▪ Fee design alternatives;
▪ City financial policies;
▪ Capital Improvement Plan (CIP) financing
options;
▪ Reserve options and target levels (operating, rate
stabilization, repair and replacement);
▪ Cost of service factors; and
▪ Proposition 218.

In addition, we will request and begin acquiring data necessary to conduct the analyses. We will provide the City with a detailed list of data requirements pertaining to the subsequent financial analysis. As this type of study is data intensive, and in order to remain on schedule, it is imperative that all data be provided in a timely manner and be delivered in an electronic format.

Task 5.2 - Establish a Parcel Database
Willdan will create a parcel database of the properties that will be subject to the proposed fee and analyze the data collected to complete analysis and develop the street sweeping fee. ▪ Parcel Database. The established parcel database will be utilized to categorize properties based on type, and demand placed on the City’s street sweeping system. We will classify properties based on the service or maintenance being funded to optimally capture and charge properties in relation to their impact. Through this process, we will keep in mind the current property classifications for the existing rate structure to minimize reclassification, wherever appropriate.
▪ GIS Data incorporation. We will obtain appropriate GIS layer data to incorporate into the comprehensive property database. This data will be used to analyze impervious surface or other factors as necessary and assist in developing the fee methodology. Perform a cross reference of the final parcel database with the County’s parcel database, in order to develop a technically defensible and equitable methodology for the street sweeping fee. ▪ Evaluate CIP. Review capital improvement documents as necessary, to determine improvement projects, as well as maintenance, operations and regulatory activities that will be incorporated and funded through the street sweeping fee. In addition, through discussions with the City we will incorporate an appropriate replacement schedule that will include factors such as age of improvements, condition of infrastructure, and asset management priorities.

Task 5.3 - Financial Planning and Revenue Requirements Analysis Willdan will develop a 10-year financial analysis of projected street sweeping operations. This analysis will include the development of annual revenue requirements taking into consideration the following factors:
▪ Historical and audited financial data and current budgets; ▪ Operating, maintenance, central service, and administrative expenses; ▪ Routine repair and replacement capital expenditures;
▪ Major and minor capital expenditures);
▪ Current and anticipated funding of appropriate reserves; ▪ Expected operational needs and/or inflation; and
▪ Existing or proposed debt service.

Develop future cash flow scenarios for operations showing application of revenue under existing and proposed fee schedules.

Task 5.4 - Cost of Service Analysis
Allocate costs in a proportionate manner based upon demand placed on the street sweeping utility. Based on the preceding tasks, we will allocate costs and develop unit costs for each defined customer class/property type. ▪ Method of Apportionment. Describe the proportionate demand placed by each property category and the amount that should be charged for the activities being funded. Correlate these findings to establish a benchmark, such as an Equivalent Residential Unit (ERU) and assign ERUs to different property categories. Apportion costs within each land use category that fairly and equitable charges properties. ▪ Exemptions/Special Cases. Determine property types that may require special considerations due to unique characteristics, such as, golf courses or parks that typically build in their own retention basins through swales and basins.

Cost Allocation Plan and Utility Rate Studies 43
City of McFarland
Task 5.5 - Fee Design and Comparative Analyses
Develop fee schedules based on strict cost-of-service and proportionality principles, as outlined within Proposition 218, to ensure equitable and understandable street sweeping fees, as well as revenue sufficiency for the street sweeping utility.

The revenue requirement will be recovered through a fee structure designed to stand alone as a separate revenue source. The methodology will be equitable and only utilize data that can be supported and easily obtained and updated.

This type of analysis will address the following criteria:
▪ Financial Sustainability. The proposed rate structure needs to generate adequate revenues to fully recover current and future costs of operating and maintaining the street sweeping system, including capital replacement. ▪ Equity. The fee structure needs to be fair and equitable and must comply with the requirements of Proposition 218.
▪ Administrative Ease. In updating the model, we will ensure — through discussion with City staff — that essential features and components are incorporated into the new model to facilitate a seamless transition.

Phase II: Ballot/Election Proceedings
Task 5.6 - Coordinate the Ballot Process
We will discuss the options for gaining approval of the new fee with City staff and the City’s legal counsel. Proposition 218 provides some flexibility in this process. A ballot proceeding can be conducted based on weighted ballots, similar to an assessment, or a majority vote of the property owners subject to the fee (i.e. one-property, one-vote). We will discuss the pros and cons of each approach, then work with staff to develop a timeline and task outline for the selected approach.

Since a Public Hearing will be required in either approach, Willdan will prepare the required notice for the Public Hearing.

Depending on whether a ballot of election process is undertaken, we will coordinate the preparation of assessment ballot or election documents in compliance with Proposition 218, and if applicable, the Elections Code. Draft copies will be sent to City staff and the City Attorney for review and comment prior to finalization of the documents. The notice and ballot materials will be tailored so as to specifically address the fees per individual proposed parcel.

Upon adoption of the resolutions during the Intent Meeting, assuming a mailed ballot proceeding, Willdan will coordinate the printing and assembling of the notice and ballot for mailing. The notice and ballot will be double sided, to save on printing and postage costs. A return #9 envelope will be included for the property owner to mail back the assessment ballot to the City Clerk. Return postage will not be included.

The notice and ballot will be delivered via first class mail. The ballot will contain instructions to return directly to the City Clerk and to not be opened until the close of the Public Hearing. Mailing of the notice and ballot will be done a minimum of 45 days prior to the Public Hearing date as set in the resolution.

If it is decided to undertake an election, Willdan will discuss options with the City for conducting the election in a mailin process, or through the County Registrar, develop a timeline, and coordinate the development of election materials.

Task 5.7 - Public Hearing and Ballot Tabulation (assuming mailed ballot proceeding) Willdan team members will attend the Public Hearing to be available to answer questions and to assist the City Clerk with an independent tabulation of the returned ballots.

Upon the close of the Public Hearing, the City Clerk will be directed to open the ballots received, and upon completion of the tally, announce the results either at the same Council session or the next regularly scheduled session (depending on the number of ballots to be tabulated).

The ballots may be opened and tallied by the City Clerk with the assistance of an outside consultant but must be opened and tabulated in a public venue. Ballot results will be tallied in a database that identifies the “yes” votes, “no” votes, and any ballots deemed invalid. These results will be provided to the City in a hard copy format.

Task 5.8 - Communicating the Results – Presentation & Meetings Willdan believes in proactive stakeholder outreach, feedback, and understanding during the entire process, not only at the time the results are proposed. Throughout the course of the study, in addition to the project kick-off, Willdan will conduct discussions with key City staff, and City Council to walk-through the model, discuss the preliminary findings, and to discuss the draft results and study findings.

Cost Allocation Plan and Utility Rate Studies 44
City of McFarland
In addition to the project kick-off, we anticipate up to two (2) in-person working meetings with City staff during the course of this project. Additionally, we have increasingly been utilizing WebEx to conduct online meetings and discussions.

This allows for the project to move forward in full compliance with whatever public health guidelines may be in place due to the COVID-19 outbreak. This often proves more beneficial than conference calls, and does not count as a formal meeting, which can add unnecessary additional costs to the project.

Beyond working project meetings, we will also conduct presentations of the combined findings and reports to the City Council and Stakeholders and attend necessary City Council Meetings and Public Hearings. The final presentation will include easy-to-follow handouts/graphics as needed to illustrate study assumptions, methodologies, findings and conclusions, and will include a discussion period for questions and answers.

We may utilize the model during the presentation of study results, including demonstration of scenarios, evaluation of policy assumptions, and effects of different fee alternatives.

In total, we will attend up to six (6) public meetings, including City Council meetings.

Task 5.9 - Prepare and Document Fee Recommendations
Willdan will document the results of the study in a report consistent with the tasks identified throughout this work plan, and consistent with the requirements of Proposition 218. The documentation will include an executive summary, methodology, background assumptions, findings, recommendations, and conclusions, along with the required diagrams.

We will provide City staff with a digital copy, and ten (10) hard copies of the preliminary draft report for review and comment. Based upon the comments received, prepare the same number of final printed and digital copies of the report.

The City will also retain a copy of the fee/assessment model for future reference.

Phase III: Public Outreach
Community outreach and education efforts can involve a variety of mechanisms and tools. Depending on the extent of the proposed street sweeping fees the City may wish to implement, a more concentrated outreach effort that could include social media, newspaper releases or enhanced graphic designs for property owner mailings. Depending on the level of effort, it may be advisable for the City to retain the services of a public relations firm. If the City chooses not to retain additional public relations assistance, Willdan can, at the City’s request, assist with coordinating and scheduling of basic public outreach efforts that do not require a public relations firm.

This phase of the project will be initiated with a conference call to discuss the various public outreach elements necessary to garner support for the proposed new/increased street sweeping fees. This discussion will also include the development of an overall outreach strategy and course of action. Outlined below are services that Willdan can provide for this particular engagement.

Task A - Property Owner Outreach Workshops
As needed, attend public/property owner outreach meeting/workshops, acting as technical support to City staff to answer questions and prepare and provide information related to the calculation of the proposed fee and the improvements and activities it would fund; as well as to describe the notice and balloting process. The purpose of the workshops is to provide property owners with background information to assist them in making informed decisions about the proposed fee.

Communicating Results - Presentations & Meetings
Task 6.1 – Meetings and Presentations
Task 6.1.1 – Project Kick-Off. As detailed in Task 1.2, 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 utility rates, fees, charges, issues, and deficiencies with staff.

Task 6.1.2 – 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 systems and guide the development of the draft report.

Task 6.1.3 – Rate Workshops/Community Outreach. As requested in the RFP, Willdan will conduct a minimum of three (3) rate workshops with the City Council and City Staff, and three (3) to five (5) community outreach meetings.

Cost Allocation Plan and Utility Rate Studies 45
City of McFarland
Task 6.1.4 – Public Meetings. As necessary, we will work with City Staff to develop a public outreach strategy, should communications beyond the Proposition 218 notice be required. If requested, we will attend two (2) public meetings to educate the public about proposed rate changes prior to the Prop 218 Public Hearing.

Task 6.1.5 – Draft Financial Plan Meeting. The results of the Preliminary Financial Plan and Revenue Requirements will be presented to staff for comment, feedback, and direction.

Task 6.1.6 – Draft Study/Final Report Meetings/Public Hearing. The draft report will be reviewed with City Staff to discuss findings and recommendations, gather feedback and address questions, then presented to the City Council.

The results of the Final Report will be presented to the City Council during one (1) public City Council meeting, and then again at one (1) Public Hearing required by Proposition 218. Willdan’s project manager will be present to address any questions or concerns raised during the public hearings. Please note, meetings may need to be conducted remotely using video collaboration software and/or conference calls depending on the public health mandates in effect due to COVID-19.

City Staff Support / Responsibilities
Willdan recommends that the City of McFarland 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 as necessary with the City Attorney’s office; ▪ Coordinate review of work products; and
▪ Identify appropriate staff members for participation in meetings and facilitate 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 McFarland further represents, acknowledges, and agrees that:
(i) The City uses 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.

Cost Allocation Plan and Utility Rate Studies 46
City of McFarland
Project Management and Quality Assurance/Control Approach Project Management Approach
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.

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.

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.

Cost Allocation Plan and Utility Rate Studies 47
City of McFarland
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,
Jeff McGarvey&
Robert Quaid
▪ Contract deliverables;
▪ Specific quality control procedures;
▪ Special quality control emphasis;
▪ Budget and manpower requirements;
▪ Overall project schedule and budget; and
▪ Project documentation requirements;
Cost Allocation Plan and Utility Rate Studies 48
City of McFarland
Fee Proposal
Cost Allocation Plan
Willdan Financial Services (“Willdan”) proposes a not-to-exceed fixed fee of $10,905 for the Cost Allocation Plan phase. The table below provide a breakdown of the fee to complete each study by task and project team member.

Water, Sewer, and Solid Waste Utility Rate Study
Based on our work plan provided in the scope of services, we propose a not-to-exceed fixed fee of $71,690.

The table below provides a breakdown of this fee by task and project team member.

C. Fisher
Principal-inCharge
T. Thrasher
Project
Manager
P. Patel
Analytical
Support
R. Quaid
QA/Tech
Advisor Total
$ 250 $ 210 $ 135 $ 210 Hours Cost
Cost Allocation Plan
Task 1: Initial Document Request - 1.0 1.0 - 2.0 $ 345
Task 2: Kick-off /Refine Scope - 1.0 1.0 - 2.0 345
Task 3: Gather Staffing Information & Develop CAP Model 1.0 6.0 16.0 1.0 24.0 3,880 Task 4: Test and Review Cost Allocation Methodology - 3.0 8.0 1.0 12.0 1,920 Task 5: Prepare and Present Draft Report 1.0 2.0 8.0 1.0 12.0 1,960 Task 6: Discuss and Revise Report 1.0 2.0 5.0 - 8.0 1,345 Task 7: Prepare and Present Final Report/Instruct Staff on Model - 4.0 2.0 - 6.0 1,110 Total – Cost Allocation Plan 3.0 19.0 41.0 3.0 66.0 10,905$ City of McFarland
Cost Allocation Plan
Fee Proposal
C. Fisher
Principal-inCharge
J. McGarvey
Tech Advisor
& QA/QC
K. Burnett
Technical
Advisor
M. Cronan
Analytical
Support
$250 $240 $185 $125 Hours Cost
Task 1.1 - Data Collection & Review 1.0 3.0 2.0 16.0 22.0 $ 3,340 Task 1.2 - Kick-off Meeting & Planning Discussion 1.0 1.0 - 1.0 3.0 615 Task 2.1 - Financial Plan, Requirements & Determinants 16.0 3.0 16.0 60.0 95.0 15,180 Task 2.2 - Capital Plan Analysis 5.0 3.0 2.0 16.0 26.0 4,340 Task 2.3 - Cost-of-Service Allocations 4.0 1.0 4.0 12.0 21.0 3,480 Task 2.4 - Rate Analysis & Design 6.0 1.0 10.0 24.0 41.0 6,590 Task 3.1 Development of the Revenue Requirements 2.0 6.0 - 18.0 26.0 4,190 Task 3.2 Allocation of Costs to Service Categories 2.0 4.0 - 8.0 14.0 2,460 Task 3.3 Allocation of Costs to Customer Classes 2.0 4.0 - 12.0 18.0 2,960 Task 3.4 Determination of Billing Units 1.0 3.0 - 8.0 12.0 1,970 Task 3.5 Rate Design 1.0 3.0 - 10.0 14.0 2,220
Task 4.1 - Reports & Deliverables 8.0 4.0 6.0 36.0 54.0 8,570 Task 4.2 - Proposition 218 Notice Preparation & Mailing 12.0 1.0 1.0 12.0 26.0 4,925 Task 6.1 Meetings & Presentations 26.0 2.0 2.0 28.0 58.0 10,850 Total - Utility Rate Study 87.0 39.0 43.0 261.0 430.0 $ 71,690 Preparation of Reports and Proposition 218 Notices
Communicating Results - Presentations & Meetings
Solid Waste Study Rate Study
City of McFarland
Water, Sewer, and Solid Waste Utility Rate Study
Fee Proposal
Total
Scope of Work
Project Initiation
Water and Wastewater Rate Study
Cost Allocation Plan and Utility Rate Studies 49
City of McFarland
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.

Optional Street Sweeping Cost of Service Study
Based on our work plan provided in the scope of services, we propose a not-to-exceed fixed fee of $46,925.

The table below provides a breakdown of this fee by task and project team member.

C. Fisher
Principal-inCharge
J. McGarvey
Tech Advisor
& QA/QC
M. Cronan
Analytical
Support
$250 $240 $125 Hours Cost
Task 5.1: Kick-off Meeting, Data Gathering & Study Prep 3.0 1.0 6.0 10.0 $ 1,740 Task 5.2: Establish a Parcel Database/GIS Analysis 12.0 2.0 36.0 50.0 $ 7,980 Task 5.3: Financial Planning & Revenue Requirements 10.0 2.0 24.0 36.0 $ 5,980 Task 5.4: Cost of Service Analysis 8.0 3.0 16.0 27.0 $ 4,720 Task 5.5: Fee Design & Comparative Analysis 8.0 4.0 24.0 36.0 $ 5,960 Stormwater and Drainage Fee Analysis Sub-total 41.0 12.0 106.0 159.0 26,380 Task 5.6: Coordinate the Ballot Process 20.0 2.0 12.0 34.0 6,980$ Task 5.7: Public Hearing & Ballot Tabulation 6.0 - 6.0 12.0 2,250$ Task 5.8: Communicating the Results - Presentations & Meetings 6.0 2.0 4.0 12.0 2,480$ Task 5.9: Prepare & Document Fee Recommendations 12.0 2.0 24.0 38.0 $ 6,480 Ballot/Election Proceedings Sub-total 44.0 6.0 46.0 96.0 18,190$ Task A: Property Owner Workshops 5.0 2.0 5.0 12.0 $ 2,355

5.0 2.0 5.0 12.0 2,355$
Total Street Cleaning Cost-of-Service Study 90.0 20.0 157.0 267.0 46,925$ City of McFarland
Optional Street Sweeping Cost of Service Study
Fee Proposal
Street Sweeping Fee Analysis
Ballot/Election Proceedings
Public Outreach
Public Outreach Services
Scope of Work
Totals
Cost Allocation Plan and Utility Rate Studies 50
City of McFarland
Notes
▪ Our fee includes all direct expenses associated with the project. ▪ We will invoice the City monthly based on percentage of project completed. ▪ Additional services or meetings may be authorized by the City and will be billed at our then-current hourly overhead consulting rates.
▪ 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 City or relating to the project. Reimbursement shall be at Willdan's rates in effect at the time of such response.
▪ Willdan will rely on the validity and accuracy of the City’s data and documentation to complete the analyses. Willdan will rely on the data as being accurate without performing an independent verification of accuracy and will not be responsible for any errors that result from inaccurate data provided by the client or a third party.

Hourly Fee Schedule
Our current hourly rates are listed below.

Willdan Hourly Rate Schedule
Position Team Member Hourly Rate
Vice President Chris Fisher $250
Managing Principal Jeffrey McGarvey $240
Principal Consultant Tony Thrasher
Bob Quaid $210
Senior Project Manager Kevin Burnett $185
Project Manager $165
Senior Project Analyst Priti Patel $135
Senior Analyst Michael Cronan $125
Analyst II $110
Analyst I $100
Cost Allocation Plan and Utility Rate Studies 51
City of McFarland
Project Timelines
Willdan understands that time is of the essence for the City to begin this engagement. The proposed schedules can only be met with the cooperation of City staff. Delays in responding to our requests for data and review will result in corresponding delays to the project schedules. If that is the case, we will notify the City immediately of the possible impact on this schedule.

Cost Allocation Plan
6 13 20 27 6 13 20 27 3 10 17 24
Task 1: Initial Document Request z1
Task 2: Kick-off /Refine Scope z2
Task 3: Gather Staffing Information & Develop CAP Model z3 Task 4: Test and Review Cost Allocation Methodology z4
Task 5: Prepare and Present Draft Report z5
Task 6: Discuss and Revise Report z6
Task 7: Prepare and Present Final Report/Instruct Staff on Model z7 Deliverables:
z1: Information Request z5: Draft Report
z2: Revised Project Scope and Schedule (if needed) z6: Revised Draft Report/Final Report z3: User-friendly Model in Microsoft Excel z7: Final Report z4: Draft Cost Allocation Plan Model Review
City of McFarland
Cost Allocation Plan
Project Timeline
Scope of Services February March April
Cost Allocation Plan and Utility Rate Studies 52
City of McFarland
Water, Sewer, and Solid Waste Utility Rate Study
2 9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 Task 1.1 - Data Collection & Review
Task 1.2 - Kick-off Meeting & Planning Discussion
Task 2.1 - Financial Plan, Revenue Requirements & Rate Determinants Task 2.2 - Capital Plan Analysis
Task 2.3 - Cost-of-Service Allocations
Task 2.4 - Rate Analysis & Design
Task 3.1 Development of the Revenue Requirements
Task 3.2 Allocation of Costs to Service Categories
Task 3.3 Allocation of Costs to Customer Classes
Task 3.4 Determination of Billing Units
Task 3.5 Rate Design
Task 4.1 - Reports & Deliverables
Task 4.2 - Proposition 218 Notice Preparation & Mailing Task 6.1 Meetings & Presentations Public Hearing (Aug/Sep 2023) Final Report for PH
City of McFarland
Water, Sewer, and Solid Waste Utility Rate Study
Project Timeline
Project Initiation
Water and Wastewater Rate Study
April May Scope of Work January February March
Preparation of Reports and Proposition 218 Notices
Communicating Results - Presentations & Meetings
Solid Waste Rate Study
June July August
Cost Allocation Plan and Utility Rate Studies 53
City of McFarland
Optional Street Sweeping Cost of Service Study
6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17 24 31 October November Task 5.1: Kick-off Meeting, Data Gathering & Study Prep Task 5.2: Establish a Parcel Database
Task 5.3: Financial Planning & Revenue Requirements
Task 5.4: Cost of Service Analysis
Task 5.5: Fee Design & Comparative Analysis
Task 5.6: Coordinate the Ballot Process
Task 5.7: Public Hearing & Ballot Tabulation
Task 5.8: Communicating the Results - Presentations & Meetings Task 5.9: Prepare & Document Fee Recommendations
Task A: Property Owner Workshops
City of McFarland
Optional Street Sweeping Cost of Service Study
Project Timeline
Scope of Work February March April May June July Autum 2023 September
(Autumn 2023)
(Autumn 2023)
(Autumn 2023)
(Autumn 2023)
(Autumn 2023)
Cost Allocation Plan and Utility Rate Studies 54
City of McFarland
Required Form
27368 Via Industria, Suite 200
Temecula, CA 92590-4856
951.587.3500 | 800.755.6864 | Fax: 951.587.3510
www.willdan.com