South San Joaquin Irrigation District
Water Capacity Fee Study 1
EXHIBIT A
CONSULTANT SCOPE OF SERVICES
Water Capacity Fee Study for New City Entrant
South San Joaquin Irrigation District (henceforth “SSJID” or the “District”), along with the cities of Escalon, Lathrop, Manteca, and Tracy (“Project Participants”), developed the South County Water Supply Program, and constructed a 40 million gallon per day capacity water treatment plant and appurtenant storage and transmission pipeline facilities to serve the Project Participants in 2005. SSJID operates the facilities, and provides wholesale treated drinking water deliveries pursuant to a Water Supply Development and Operating Agreement (“Agreement”) between SSJID and the Participating Cities. The Agreement covers operational and financial responsibilities and coordination, water supply allotments and purchases, capital, fixed, and variable cost allocations, and related matters. The original project construction was funded by the Project Participants, and the Project is owned and operated by SSJID pursuant to the Agreement.
Recently, the City of Ripon, a local city that is not part of the South County Water Supply Program, has expressed interest in receiving water from the plant on an annual basis, subject to availability of surplus plant capacity.
The Project Participants are willing to enter into negotiations with the City of Ripon for delivery of water from the plant. The Project Participants seek to explore the development of an appropriate capital charge to City of Ripon for annual use of surplus capacity. This capital charge would be used to inform negotiations between the Project Participants, SSJID, and the City of Ripon.
The scope of services NBS offers for completing the study is presented in this section. We will also be prepared to make adjustments during the course of the study to reflect the direction of District staff and stakeholders as the study progresses. NBS will provide the leadership necessary to guide you through the various options, key concerns, and explaining the issues involved. These tasks serve as the basis for the proposed budget for this study.
TASK 1. KICKOFF MEETING
NBS will hold a kick-off meeting with District staff at the beginning of the study. The kick-off meeting will be used to review and discuss data requirements in general as well as review study objectives, tasks, and schedule. A preliminary plan for meetings and presentations will be discussed with the District and NBS’ team during this meeting. Items to be discussed at the kickoff meeting, include, but are not limited to:
• Identify all relevant background documents necessary to conduct the study, including the cost allocations analysis for construction of the treatment plant as well as the District’s Water Supply Development and Operating Agreement with all Project Participants • Discuss the structure of the District’s existing water capacity fee program • Identify any key issues of concern to the staff or stakeholders South San Joaquin Irrigation District
Water Capacity Fee Study 2
TASK 2. DATA COLLECTION AND MEMORANDUM
NBS will collect, review, organize and analyze examples of methodology and negotiated rates that other agencies have used for interruptible water agreements and surplus water service agreements.
Data will be obtained from various sources and Agencies in the State of California as well as potentially other examples in the western United States.
NBS will prepare a memorandum for review and comment by the District summarizing the various methodologies and negotiated rates/fees. The results of the data collection phase will inform the system buy-in fee analysis and fee structure analysis described in Tasks 3 and 4.
TASK 3. SYSTEM BUY-IN FEE ANALYSIS
Various methodologies have been and are currently used to calculate water capacity fees. The most common methodologies are based on the following from the American Water Works Association’s Principles of Water Rates, Fees and Charges1
, also referred to as Manual M1:
• The value of existing (historical) system assets, often called a “system buy-in” or “replacement cost” methodology.
• The value of planned future improvements, also called the “incremental” or “system development” methodology.
• A combination of these two approaches.
As provided by the District, the plant already has a defined capacity and capacity allocations for the current plant phase, and for a future expansion phase. Because the City of Ripon wants to use unused existing capacity under the current phase only, with no firm capacity commitment for the existing or future plant phase, the system development methodology is not relevant to this analysis.
NBS proposes to utilize the system buy-in approach for this analysis, which calculates the fair share of the existing system assets by the City of Ripon for the use of the unused existing capacity under the current phase only. The buy-in approach is based on the idea that new customers are entitled to the same rates as existing customers and "buy" a proportionate share of the system's capacity.
TASK 4. FEE STRUCTURE ANALYSIS
Using the information developed in Tasks 2 and 3, NBS will calculate water capacity fees for the City of Ripon.
NBS will calculate and propose three fee structure alternatives for consideration by the District for implementation. The fee structures for consideration will be informed by the results of Task 2. Fee alternatives for consideration and calculation in Task 4 may include:
• a 100% fixed one-time buy-in capacity fee,
1 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, M1, AWWA, seventh edition, 2017.
South San Joaquin Irrigation District
Water Capacity Fee Study 3
• a combination of a fixed one-time buy-in capacity fee with an annual volumetric fee based on usage,
• or a 100% volumetric capacity fee assessed to the City of Ripon based on annual usage of the unused capacity in the plant.
For each of the three alternatives, NBS will also calculate the potential revenue for the District on an annual basis based on the fee structure design.
TASK 5. PREPARE ELECTRONIC FEE MODEL
NBS will develop the Excel-based fee model for use by District staff (users not limited) once the study is complete. The model will be custom-built to the District’s specific needs, will have a dashboard where assumptions can be modified, a documentation tab that explains each tab and the interrelationships of each tab. We will review the model with staff during the development of the study to make sure it meets the District’s requirements and preferences.
A training session can be provided with the District’s Project Manager at the conclusion of the study. The goal of this session will be to review all tabs in the model and to provide sufficient information for the District to accept the model and have the ability to use it going forward.
TASK 6. PREPARE STUDY REPORTS
NBS will prepare a draft study report that will explain the data, methodology and formulas used in the fee calculations and document the nexus between the proposed fees and the impacts of development for the City of Ripon. While it is anticipated that the fees will be agreed upon in a negotiated development agreement, the report will also propose findings that satisfy the requirements of the Mitigation Fee Act regarding the purpose of the fees, the use of the fees, and the reasonable relationship between the fees and development.
An executive summary and introduction will present the purpose of the report and results of the study.
Tables, graphs, and charts will be used as appropriate, but the emphasis will be on providing a clear, concise and understandable report that will provide the District with a thorough administrative record.
Key assumptions, methodologies, and factors affecting the development of fees will be highlighted with charts and graphs when helpful. However, more technical aspects of the study, particularly the tables documenting the calculations and sources of data, will be separately provided in technical appendices.
NBS will provide an electronic file in Microsoft Word format of the draft report for the District’s review and comment. Once we have received the District’s comments2 , we will incorporate those comments
into a final report.
The study report will include the following components:
• An Executive Summary including summary capacity fee tables • A chapter discussing the legal requirements for capacity fees and methods used to calculate the fees
2 We assume District staff’s comments will be in an electronic Microsoft Word file using track-changes mode.
South San Joaquin Irrigation District
Water Capacity Fee Study 4
• Separate chapters presenting the data and methodology used in the analysis, a detailed explanation the proposed capacity fee calculations for the City of Ripon, and documentation of the nexus between the fees and the impact to the plant
TASK 7. MEETINGS AND PRESENTATIONS
NBS plans to provide support to the District in one public meeting to support the development of the proposed water capacity charges for the City of Ripon. We will also plan to meet with District staff to review study results and recommendations throughout the project. The following meetings and presentations are anticipated for this study:
Meetings with District Staff – NBS proposes to hold progress meetings with District staff via conference call or web meeting format. These meetings will be used to review initial work products and gain input from Staff on the direction of the study. Prior to the public meetings, we also expect to have regular phone conversations with District staff to discuss how the study is proceeding, solicit input from Staff, and to review and discuss the study’s initial results and work products. In addition, NBS will work with District Staff to discuss and understand talking points while continuously providing guidance on how to manage questions for community members to ensure a clear and transparent message.
Other Meetings – NBS staff will provide up to two (2) meetings with District staff and representatives with Project Participants and the City of Ripon.
3 The project team will prepare a PowerPoint
presentation for this meeting, which will include visual aids, graphics, charts and additional worksheets or handouts. In this presentation, NBS will present study results, recommendations, receive input and guidance on the direction of the study and answer questions. Our team will work with District Staff to ensure clear and concise messaging, create agendas and develop presentations that allow for insightful presentations.
District’s Responsibilities
The District shall furnish NBS with any pertinent information that is available to District and applicable to the Services. The District shall designate a person to act with authority on its behalf in respect to the Services. The District shall promptly respond to NBS’ requests for reviews and approvals of its work, and to its requests for decisions related to the Services. District understands and agrees that NBS is entitled to rely on all information, data and documents (collectively, “Information”) supplied to NBS by District or any of its agents, contractors or proxies or obtained by NBS from other usual and customary sources including other government sources or proxies as being accurate and correct and NBS will have no obligation to confirm that such Information is correct and that NBS will have no liability to District or any third party if such Information is not correct.
3 The number of meetings/presentations that NBS provides can be adjusted as necessary by District staff. We plan to discuss the number of meetings and plans for presentation at the kick-off meeting and adjust throughout the process as needed.
South San Joaquin Irrigation District
Water Capacity Fee Study 5
EXHIBIT B
COMPENSATION FOR SERVICES
Water Capacity Fee Study for New City Entrant
Consulting Fee.................................................................................................................................... $33,900 Estimated Expenses (1).......................................................................................................................... $2,000 Total Not to Exceed.................................................................................................................... $35,900 (1) See description of expenses below
EXPENSES
Customary out-of-pocket expenses will be billed to the District at actual cost to NBS. These expenses may include, but not be limited to, mailing fulfillment, postage, reproduction, telephone, travel, meals and various third-party charges for data, maps, and recording fees.
ADDITIONAL SERVICES
The following table shows our current hourly rates. Additional services authorized by the District but not included in the scope of services will be billed at this rate or the then applicable hourly rate.
Title Hourly Rate
Director / Senior Review $250
Associate Director / Engineer $225
Senior Consultant $200
Consultant $175
Senior Project Analyst $165
Project Analyst $150
Project Resource Analyst $130
Clerical / Support $110
TERMS
Consulting services will be invoiced on a monthly basis. Expenses will be itemized and included in the next regular invoice. Fees for all other services will be invoiced upon completion of the task. If the project is prematurely terminated by either party, NBS shall receive payment for work completed.
Payment shall be made within 30 days of submittal of an invoice. If payment is not received within 90 days simple interest will begin to accrue at the rate of 1.5% per month. Either party may cancel this contract with 30 days’ written notice.
APPENDIX | RESUMES
This appendix contains full resumes for our proposed project team’s key personnel.
TEAM RESUME
JEREMY TAMARGO | Associate Director
EDUCATION
• Master of Science, Environmental
Engineering, Syracuse University
• Bachelor of Science, Civil
Engineering, University of Notre
Dame
• Certificate, Advanced Study in
Sustainable Enterprise, Syracuse
University
PROFESSIONAL AFFILIATION
• American Society of Civil
Engineers
HIGHLIGHTS
• Experience in both public and
private sectors
• Civil engineering design
• Utility master planning
• Development review
• Mapping and analysis in ArcGIS
• AutoCAD
“Jeremy did a great job
presenting to our
governing Board and
answering tough
questions. We threw lots
of curve balls at NBS, and
Jeremy always kept pace
with our needs and
timeline.” and energy
Rich Stevenson
Director of Finance
Sweetwater Authority
BIOGRAPHY
Jeremy Tamargo has nearly a decade of professional civil engineering experience in both the public and private sectors. He is a licensed professional engineer in the State of Oregon and has an application in technical review with the California Board for Professional Engineers, Land Surveyors, and Geologists for comity licensure in the State of California.
Jeremy’s recent experience as an Assistant City Engineer and Principal Engineer included the following activities:
• Supervising, planning, designing, and inspecting all phases of civil engineering public works construction projects
• Defining the scope of the project; securing adequate funding from Federal and State grant programs and other funding sources • Coordinating with permitting and public utility agencies • Surveying and engineering analysis of alternatives
• Preparing plans, specifications, and cost estimates
• Coordinating construction schedules with other projects and agencies
• Preparing and reviewing cost estimates and inspecting construction of projects to ensure compliance with construction documents
• Reviewing compliance criteria for the design and construction of streets, sidewalks, and public utilities
RELEVANT PROJECT EXPERIENCE
• City of Redding – Water, Sewer, and Solid Waste Rate Studies: Prepared a costof-service study for water, sewer, and solid waste rates. Rate design for utilities included addressing policies objectives and analyzing structure alternatives. • El Dorado Irrigation District, Placerville – Water, Sewer, and Recycled Water Cost-of-Service and Rate Design Study: Worked with the district board and a dedicated committee to review/recommend policy changes; alternative rate designs; and recommended water, sewer, and recycled water rates. • City of Victorville –Sewer and Solid Waste Rate Studies: Prepared a cost-ofservice study of sewer and solid waste utility rates. Sewer and solid waste studies analyzed alternative rate structures as well as alternative recommended reserve targets for consideration by City staff.
• Sweetwater Authority – Water Rate Study: Prepared a cost-of-service study of water utility rates. Water rate study included numerous rate alternatives for residential tiered rates based on source of supply as well as a “phase-in” approach to adjusting the allocation of fixed vs. variable charges over the course of the rate implementation period.
TEAM RESUME
ALLAN HIGHSTREET, PMP | Principal Consultant
EDUCATION
• Master of Science,
Agricultural Economics,
UC Davis
• Bachelor of Science,
Agricultural Business
Management,
California State University,
San Luis Obispo
AFFILIATIONS
• Project Management
Professional (2002,
No. 52367)
• American Water Works
Association (AWWA),
Member
PROJECTS |CONT.
HIGHLIGHTS
After retiring from Jacobs Engineering as a senior vice-president, Allan Highstreet has since joined NBS as a technical consultant with the highest level of expertise in water-related financial analyses.
Allan is a senior economist with 43 years of experience in financial planning for water, wastewater, and stormwater utilities, including rate studies, project funding, and cost allocations. He has performed economic assessments, cost analyses, finance plans, and rate studies, including preparing loan applications and related documents for many municipal clients.
RELEVANT PROJECT EXPERIENCE
• Rowland Water District – Water and
Recycled Water Rate Study. Update water
and recycled water rates. Proposed a minor
increase in order to fund maintenance of
the water system. Update the cost-based
rates and drought rates to coincide with the
District’s Water Shortage Contingency.
Objectives for the recycled water system:
develop a method for allocating costs in the
District’s budget to the potable and recycled
water systems, establish a financial plan to
have recycled water customers bear a
greater percentage of their costs.
• Project Economist, Groundwater Recovery
Enhancement and Treatment Program,
City of Oxnard, CA. Prepared a Title 16
feasibility study to obtain a $20 million
grant from U.S. Bureau of Reclamation.
This project comprised of a recycled water
treatment, conveyance, and injection.
Tasks included providing recycled water for
groundwater injection and irrigation that
would enable the City to build
groundwater credits through injection and
obtain groundwater allocations from
agricultural users who would use recycled
water in lieu of groundwater. Allocations
and credits could then be used to make up
the City’s water supply deficit.
• Project Economist, Finance Planning
Framework, California Water Plan,
California Department of Water
Resources, CA. Assisting in preparing the
Finance Planning Framework for the 2013
and 2018 California Water Plan. The effort
includes describing the current financial
setting, developing approaches to
prioritizing investments, and developing a
menu of available financing strategies.
• Merced Irrigation District, Merced,
CA – Water Cost of Service Study:
Prepared a cost-of-service study that
estimated user charges and fees for
the water deliveries within the
District. Also prepared the
Proposition 218 material for the
vote to enact the rates.
• Byron Bethany Irrigation District,
Byron, CA – Water Cost of Service
Study: Prepared a cost-of-service
study that estimated user charges
for the water deliveries within the
District. Also prepared the
Proposition 218 material for the
vote to enact the rates.
• Westlands Water District, CA –
Evaluating Land Based
Assessments: Led an evaluation of
possible land based assessments in
the District, then prepared an
Engineers Report to implement a
benefit assessment for the District.
• Oakdale Irrigation District, Oakdale,
CA – Water Rate Study: Prepared a
cost-of-service study that estimated
user charges for the water deliveries
within the District. This study moved
the District from a flat rate to tiered
volumetric rates to comply with the
Water Conservation Act of 2009 (SBx
7-7). Also prepared the Proposition
218 material for the vote to enact
rates.
• City of Tracy, Tracy, CA – Sewer
Rate Studies: Has prepared sewer
rate updates for the City of Tracy
since 1979. Originally done to
satisfy SRF requirements, more
recent updates focused on cost of
service studies.
• Senior Consultant, San Mateo
Clean Water Program, San Mateo,
CA. Overseeing the preparation of
the State Revolving Fund loan
applications for the $800M Clean
Water Program. These efforts
include developing a financial
model to evaluate funding
scenarios and preparing the
application packages.
• Project Economist, Wastewater
Master Plan, Laguna County
Sanitation District, Santa Barbara,
CA. Prepared a financial model
that estimated user charges and
demand fees for various capital
improvement scenarios. The
model’s financial dashboard could
vary in growth, timing of projects,
escalation rates, financing terms,
and rate structure alternatives to
develop the appropriate master
plan for the District.
S TEAM RESUME
EVAN HOENIG | Senior Project Analyst
EDUCATION
• Bachelor of Science, Business
Administration - Management,
California State University, San
Marcos
HIGHLIGHTS
• Four years of public budget
development and administration,
professional-level research,
project management, and
financial analysis
• More than 12 years of
compliance management
AFFILIATIONS / AWARDS
• California Parks and Recreation
Society (CPRS) - District 12 “Parks
Make Life Better Spotlight –
Event” Award Recipient, 2022
BIOGRAPHY
Evan Hoenig will perform large-scale data analysis and validation, design and implement cost allocation and rate models, and prepare technical outcomes, as needed on this project. He will support facilitating data collection and reminders to staff to keep efforts moving along the agreed upon timeline for the completion of each task.
Evan is a Senior Project Analyst with NBS. He brings more than a decade of compliance management experience to our project team, as well as public budget development and administration, research, project management and financial analysis experience. He has extensive skills in analytical software, databases, and spreadsheets.
RELEVANT PROJECT EXPERIENCE
Evan has consulted and served on many projects, including the following:
• El Dorado Irrigation District,
Placerville – Water, Sewer, and
Recycled Water Cost-of-Service
and Rate Design Study: Assisted
with the design of alternative rate
designs; and recommended
water, sewer, and recycled water
rates.
• City of Fresno – Impact Fee
Study: Study of the City’s water
and sewer capacity fees to
ensure that the City’s fees are
updated to comply with legal and
industry standards, and to
ensure fees reflect the cost of
capital infrastructure needed to
serve new connections.
• City of Rio Vista – Water, Sewer,
and Storm Water Rate Studies:
Completed comprehensive
financial plans, cost of service
analyses, and rate design for
water and sewer utility studies.
• City of San Jacinto – Cost
Estimation Tool: Provided indepth research and analysis on capital assets and improvements,
interpreted, and organized data,
and assigned and evaluated
costs.
• Sweetwater Authority –
Financial Plan: Performed
detailed analysis of client
operations and maintenance
budgets, capital improvement
and debt forecasting, and
determination of rate revenue
requirements.
• City of Victorville – Sewer and
Solid Waste Rate Studies:
Assisted with cost-of-service
studies of sewer and solid waste
utility rates. These studies
analyzed alternative rate
structures as well as alternative
recommended reserve targets for
consideration by City staff.
Con
EDUCATION
• Bachelor of Arts, with honors,
Economics, Mills College
• Continuing education from UC
Davis, UCLA, CDIAC, etc.
HIGHLIGHTS
• Registered Municipal Advisor
Representative
• 23 years of experience
• Bond Issuance Modeling &
Disclosure
• Expert Special Tax Consultant
• Assessment District Formation
• Reassessment Consulting
• Proposition 218
AFFILIATIONS
• California Society of Municipal
Finance Officers (CSMFO)
• California Special Districts
Association (CSDA)
• Committee on Special
Assessments, Taxes and Other
Financing Facilities (CASTOFF)
• Women in Public Finance (WPF)
SPEAKING / MEDIA
• Maintenance Services Funding: A
Finance/Public Works Convo, 2023
CSMFO Annual Conference
• Leading Your District through
Financing Facilities and Fund
Services with a Tax Measure 2022
CSDA GM Summit and Webinar
• Revenue Recovery: From Riches to
Rags, and Back to Riches? 2022
CSMFO Annual Conference
• Show Me More Money: Optimizing
Revenues in a Post-COVID World.
2022 CSMFO Annual Conference
BIOGRAPHY
Sara Mares is a Director with NBS and a Registered Municipal Advisor Representative. She has extensive experience with modeling and structuring revenue mechanisms that support debt issuance.
Sara forms Special Financing Districts (SFDs), including Community Facilities Districts and 1913 Act Assessment Districts, which provide land secured financing for limited obligation bonds. She has also provided bond issuance disclosure related to revenue bonds, both stand-alone that are secured by utility rate revenue or as part of a pool bond structure. Sara also has more than 23 years of experience preparing and disseminating continuing disclosure annual reporting and listed event filings.
RELEVANT PROJECT EXPERIENCE
TEAM RESUME
SARA MARES | Director
• City of Patterson Water and
Wastewater Revenue Bond
Disclosure. Continuing annual
disclosure report filings for water
revenue bonds, wastewater
revenue bonds, land secured
bonds and lease revenue bonds.
Timely filings made annually,
including notices of listed events
as applicable.
• City of American Canyon CFD
Formation and Bond Issuance.
Analysis and formulation of
special tax rate and method of
apportionment structure. Data
analysis and bond issuance
disclosure data provided for debt
issue.
• City of Rio Vista CFD Formation
and Bond Issuance Disclosure.
Complex Workout including
refinancing existing CFD debt,
formation of a new CFD to
restructure a portion of the
existing CFD debt and funding of
additional services. CFD
Formation and Bond Issuance
completed in 2018.
• United Water Conservation
District Feasibility and Revenue
Options Analysis. Review CIP
project list to determine available
financing options and potential
rate structures, including
modeling of various rates.
“Thank you so much for all of your guidance, advice and support this year. We definitely wouldn't have been able to accomplish this amazing feat without your experience and knowledge!” Nikki Winslow, Library District Director, Altadena Library District