SEWER COMMITTEE
AGENDA
JUNE 28, 2022
4:00 P.M.
COMMUNITY CENTER
35 CHURCH ST.
Sutter Creek, California
1. Call to Order - 4:00 P.M.
2. Public Matters not on the Agenda
This is an opportunity for the public to comment on items that are not on the Committee agenda.
3. Update regarding smoke testing
Recommendation: For information and staff direction.
4. Review Capital Components of Wastewater Plant
Recommendation: For discussion and staff direction.
5. Review Scope of 2022 Wastewater Financial Plan
Recommendation: For discussion and staff direction.
6. Sewer Capacity
Recommendation: For discussion and staff direction.
Adjournment
* Attachment
In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disability-related modification or accommodation to participate in this meeting, please contact City Hall staff at (209) 267-5647 or (209) 267-0639 (fax).
3378 Guido St. • Oakland, CA 94602 • Tel. (510) 316-0621 • www.HildebrandConsulting.com May 6, 2022
Amy Gedney
City of Sutter Creek
18 Main Street
Sutter Creek, CA 95685
Subject: Proposal for 2022 Sewer Financial Plan and Rate Update Dear Ms. Gedney,
In response to your request, Hildebrand Consulting is pleased to submit this proposal to conduct a Sewer Enterprise Financial Plan and Rate Update study for the City of Sutter Creek (City).
Background
In 2019 Hildebrand Consulting (along with The Reed Group) completed a comprehensive sewer rate study for the City. At the time the City was facing significant capital costs in both its collection system as well as anticipated costs to upgrade or replace its existing wastewater treatment plant with a tertiary plant (WWTP Project). At the time, however, the timing and the magnitude of the wastewater treatment costs were still under development. Ultimately the City decided to implement a 5-year rate schedule that would address the financial needs of operations and repairs to the collection system while deferring rate increases for the WWTP Project until the needs were better defined. The 2019 Sewer Rate Study Report referred to these initial rate increases as “Phase 1” and concluded that the City should conduct a “Phase 2” rate study to address the treatment costs. This proposal describes the scope of work and cost to conduct the so called Phase 2, which will supersede the adopted rates for the latter portion of the Phase 1 5-year rate schedule.
In speaking to the City, we understand that the WWTP Project will not involve a new WWTP. The costs will more likely include modifications to the existing WWTP as well as solutions for disposal of treated wastewater.
Scope of Services
The scope of services includes preparing a financial plan model a 10-year planning period and calculating updated rates and fee plans for a 5-year period. To the extent possible, we will use information from the 2019 rate study in order to streamline the effort, expedite the process and minimize the budget. Specific tasks to be performed include the following:
AMY GEDNEY
MAY 6, 2022
PAGE 2
• Study Initiation and Data Collection – This task involves obtaining and reviewing the documents and information needed to update the City’s financial plan. A list of required information is attached to this letter proposal. Once under contract, we will conduct a video conference kickoff meeting with appropriate staff. We will review any data and information provided in advance prior to the kick-off meeting so the meeting is as productive as possible. During this meeting we will confirm the project scope, timeline, responsibilities, and key milestones. Our goal is to develop a clear and common understanding of the scenarios to be evaluated and what is to be accomplished during the study.
• Multi-Year Financial Plan– A 10-year financial plan model will be developed based on FY 2021/22 actual revenue and expense information, as well as the FY 2022/23 budget. The financial plan will forecast future operating and maintenance costs, debt service obligations, and capital improvement needs, and will be used to determine annual sewer rate revenue requirements.
The financial plan model will also reflect non-rate revenues as well as comply with existing financial reserve policies. If warranted, the financial plan model can also be used to evaluate the potential for future debt issuance and the impact additional debt service costs might have on the sewer rates.
We will prepare a complete sewer rate and fee schedule for the 5-year planning period based on estimated revenue needs. To place proposed new rates into context, we will compare the typical residential sewer bills with bills under current sewer rate schedules, as well as with neighboring communities.
• Draft and Final Report and Proposition 218 Notice – Once the financial plan has been prepared and proposed rates have been calculated, an administrative draft study report will be prepared and submitted to staff for review. The report will document all information, assumption, analyses, findings, and recommendations from the study and provide the technical basis for proposed rates. We will review the administrative draft with staff, make any required refinements, and then prepare a draft report that can be presented to City Council. Following receipt of comments on rate recommendations from staff, the study report will be revised, as necessary, and submitted in final form. This task will also include preparing a draft Notice of Public Hearing regarding proposed sewer rates, in accordance with the requirements of Proposition 218. Our proposal assumes that the City will be responsible for finalizing, printing, and mailing the Notice of Public Hearing.
• City Council Presentations –This scope assumes that the study recommendations will be presented to the City Council three times: the first presentation will be a draft recommendation, the second will be the final recommendation and will ask the City Council to direct staff to mail the Proposition 218 notices, and the third will be the public hearing to adopt the new sewer rates. Mr. Hildebrand can conduct these meetings remotely or in person (for an additional fee as described in the proposed budget below).
AMY GEDNEY
MAY 6, 2022
PAGE 3
Project Schedule
The following project schedule assumes that work will commence in July 2022. We will work closely with the City to maintain the schedule, or to modify it as conditions warrant. • Project approval and notice to proceed July
• Obtain requested information and conduct kick-off meeting Mid-July • Prepare financial plan and calculate rates (including CIP iterations) August • Present initial findings to the City Council / Finance Sub Committee Early September • Prepare draft report and draft public hearing notice Late September • Present recommendations to the City Council Early October • Mail notice of public hearing and prepare final report Late October • Conduct sewer rate public hearing December
• Adopt new sewer rates January 1, 2023
Project Team
This study will be delivered in its entirety by Hildebrand Consulting. Mark Hildebrand is a finance and rate consultant with over 21 years of experience who bridges the disciplines of financial analysis, business strategy, and organizational optimization. He has performed scores of water, wastewater, and recycled water rate studies for both large and small utilities, including for the City of Sutter Creek. Mark is an expert in Proposition 218 and California’s legal requirements regarding utility rate-setting. He has been published by the AWWA Journal for articles addressing the specific challenges of utility rate setting in California. Other expertise includes utility privatization, strategic business planning, business case evaluations, alternative project delivery, organizational assessments, and change management.
Price Proposal
The proposed cost to complete the sewer rate study is summarized in the table below. Given the recently enhanced ability to conduct meetings remotely, the basic budget assumes no on-site travel.
Meetings can be attended in-person for a fee (as indicated in the table below). It is our practice to bill monthly for the actual time and expenses incurred.
Hildebrand
Consulting Hours
Hourly Rate: $230
Task 1 Study Kickoff 7 $1,610
Task 2 Financial Plan 51 $11,730
Task 3 Adminstrative Record 42 $9,660
Task 4 Council and Subcommittee Meetings (3) 18 $4,140
Totals: 118 $27,140
Additional cost for in-person meetings: $920
Cost by
Task
AMY GEDNEY
MAY 6, 2022
PAGE 4
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Please let me know if you have any questions or comments regarding this proposal. We appreciate the opportunity to be of service to the City. For your convenience a data request is attached to this letter.
Additional information may be requested as the study progresses.
Sincerely,
Mark Hildebrand
Hildebrand Consulting, LLC
Enclosure: Data and Information Request
City of Sutter Creek
2022 Financial Plan and Rate Update
Data and Information Request
The following information will be needed to complete the sewer financial plan and rate study:
1. Current sewer rate schedule
2. Actual revenues & expenditures from FY 2020/21 and FY 2021/22 (when available)
3. Budgeted revenues and expenditures for FY 2022/23
4. Year-end fund/reserve balances as of June 30, 2021 (and June 30, 2022 when available)
5. Existing debt service schedules
6. Multi-year capital improvement plan
7. Actual capital spending from past 3 years
8. Any other information deemed relevant to the study
Additional information may be requested as the study proceeds.