M EM ORAN DLJ M City of Poway
ADDITIONAL MATERIALS
(Agenda Related Writings/Documents provided to City Council or Staff after distribution of the Agenda Packet for the November 19, 2024 Council Meeting) DATE:
TO:
FROM:
CONTACT:
November 19, 2024
Honorable Mayor and Members of the City Council
Carrie Gallagher, City Clerk
(858) 668-4535 or [email protected]
SUBJECT: Item 6 -Award of Contract to Raftelis Financial Consultants, Inc. to Conduct a Comprehensive Cost-of-Service and Water and Sewer Rate Study Attached please find correspondence received after the agenda posting deadline.
Reviewed/Approved By:
Wen;J~mfn -
Assistant City Manager
1 of 3
Reviewed By:
Alan Fenstermacher
City Attorney City Manager
November 19, 2024, Item #6
November 13, 2024
Honorable Mayor Vaus and Councilmember Edmonson
City of Poway
Via email to: [email protected] and [email protected]
RE: Support for Item 6 -Award of Contract to Raftelis Financial Consultants, Inc. to Conduct a Comprehensive Cost-of-Service and Water and Sewer Rate Study Dear Mayor Vaus and Councilmember Edmonson,
As a resident of Poway District 2 and a recent retiree from a 30+ year career in the public water and wastewater sector in Southern California, I am writing in support of Item 6 to award a contract to Raftelis Financial Consultants to perform a Cost-of-Service (COSS) study to determine an appropriate and legally defensible rate structure for Poway's future water, recycled water and sewer services. It's important that Poway updates its COSS every five years or so to assure that the design of its water and sewer rates comply with current laws (such as Propositions 218 and 26) and regulations. The COSS also provides an important process by which public input is invited and considered. Finally, the COSS will provide the documentation for the rationale behind the design that is ultimately supported. While $120k is a large budget cost, it is well worth the investment as ever-increasing water and sewer rates are likely to be challenged.
With regard to the proposed consultant to undertake this work, I can attest that Raftelis is considered to be the "gold standard" of rate design consultants and I have every confidence that they will ably walk the City Council and public participants through Poway's unique conditions, provide smart rate design options based on input received and keep to the desired schedule outlined in the Council Report.
I do have one suggestion for an addition to Raftelis' scope of work, however. I would ask that consideration be given to amending the "Project Understanding" on page 5 of the Council Report, to specify that Raftelis provide analysis looking at the 2019 COSS cost and revenue assumptions for future rate increases (through Fiscal Year (FY) 2025) and compare those estimates to actual cost increases for trend analysis purposes. Ideally, Raftelis would break out the cost and revenue estimates between those incurred by the San Diego County Water Authority for water supply rel iability, the city of San Diego Metro JPA for wastewater and recycled water management, and, lastly, the city of Poway. Ideally, assumptions for energy costs could be broken out within those three categories. I believe that this baseline information will be helpful in explaining variances in past performance (rates have risen much higher than anticipated) and informing future assumptions.
Poway's rates for water, recycled water and wastewater service are uniquely dependent on decisions made at regional water and wastewater agencies. Investments by these other governing bodies over the past 30 years have absolutely reversed our region's vulnerability to drought first seen in 1991, when homes and businesses faced potential 50% water delivery cutbacks. That vast improvement in water supply security is probably not fully appreciated by ratepayers and I hope will be part ofthe educational opportunity that this COSS provides.
2 of3 November 19, 2024, Item #6
Letter to Poway's Honorable Mayor and Councilmember
November 13, 2024
Thank you for your consideration of my request and I urge your support of Item 6 at the November 19, 2024 Council meeting.
Sincerely,
Cathy Pieroni
13631 Sagewood Drive, Poway
3 of3 November 19, 2024, Item #6