TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:September 10, 2024
SUBJECT: Water and Wastewater Rate Consultant Agreement RECOMMENDATION:
1. Award six-year agreement with two optional, two-year extensions to Water Resources Economics (Culver City, CA), beginning September 10, 2024, through December 31, 2030, with two two-year options to extend the agreement through December 31, 2034, for a not-to-exceed amount of $415,000.
2. Authorize expense in the amount of $104,320 in FY 2024-25 as follows: $38,720 from A/C #611-5010-682-5299 (Water Fund, Financial) and $65,600 from A/C #621-5010-682-5299 (Wastewater Fund, Financial).
3. Approve budget appropriation in FY 2024-25 in the amount of $89,320 as follows: $33,720 from A/C #611-0000-341-9900 (Water Fund, Net Position) to A/C #611-5010-682-5299 (Water Fund, Financial) and $55,600 from A/C #621-0000- 341-9900 (Wastewater Fund, Net Position) to A/C #621-5010-682-5299 (Wastewater Fund, Financial) for consultant contract costs.
4. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: Yes
FINANCIAL IMPACT:
$33,720 Increase to FY 2024-25 Water Fund Budget and $55,600 Increase to FY 2024-25 Wastewater Fund Budget. $33,720 increase to the Adopted FY 2024-25 Water Fund Budget and $55,600 increase to the Adopted FY 2024-25 Wastewater Fund Budget is requested for preparation of the 2025 Water and Wastewater Financial Plans and Rate Updates, Water Drought Study, Connection Fee Study, and Wastewater Cost of Services Study. The remaining funds for the agreement term will be requested during the upcoming and future biennial budget processes.
Water and Wastewater Rate Consultant Agreement
September 10, 2024
BACKGROUND:
The City of Thousand Oaks is one of four water purveyors and one of two wastewater purveyors serving residences and businesses in the Conejo Valley.
The City-operated utilities are public enterprises administered by the Public Works and Finance Departments. The City serves approximately 17,200 potable water customers and 38,000 wastewater customers. The City maintains integrated, long- term Financial Plans and asset management that provide the basis for operating and maintaining reliable water and wastewater systems for City customers. As a public utility, the City must comply with Proposition 218 for rate setting, requiring thorough cost-of-service analysis and strict adherence to public notification and protest procedures.
The City’s water and wastewater enterprises are crucial components of its municipal infrastructure, providing safe and reliable services to residents. To maintain high service standards and financial sustainability, the City develops biennial Financial Plans and conducts Cost of Service (COS) Studies every six years, exceeding the state requirement of every 10 years. These proactive efforts ensure that rate structures accurately reflect the true cost of services, remain adaptable to evolving financial conditions, and support fair and equitable rates.
Additionally, with a five-year planning horizon, the City’s Financial Plans allow for effective anticipation of future expenses, enabling the City to stay ahead of economic cycles and adjust strategies to better serve its customers.
On October 8, 2019, City Council approved the Wastewater COS Study. Then, on October 13, 2020, City Council approved the last Connection Fees Study for both water and wastewater services. Following that, on October 12, 2021, City Council approved the Water COS Study. Most recently, on September 12, 2023, City Council approved the latest Financial Plans for both water and wastewater services, which proposed water rates through 2025 and wastewater rates through June 30, 2026, and included a planning horizon through 2028.
DISCUSSION/ANALYSIS:
To maintain the City’s high standards and navigate the complexities of utility management, it is imperative that the City engage a consultant with industry expertise. An experienced consultant brings valuable insights and technical knowledge, ensuring that the City’s Financial Plans are robust, rates are justifiable, and the City’s utilities remain financially sustainable. An experienced consultant’s guidance will help the City make informed decisions, adapt to changing circumstances, and continue providing reliable services to the community. The consultant will be responsible for developing biennial Financial Plans, conducting COS Study for water, wastewater, and connection fees, and performing a drought rate study to address water scarcity and conservation needs.
Water and Wastewater Rate Consultant Agreement
September 10, 2024
On April 12, 2024, the City published a formal Request for Proposals/Qualifications (RFP/Q) in the Thousand Oaks Acorn newspaper and on the City’s e-procurement website for water and wastewater COS Study, Financial Plan updates, and rate studies. The City received four proposals from the following companies:
Company City, State
1. Bartle Wells Associates Berkeley, CA
2. Black and Veatch Corporation Overland Park, KS
3. Raftelis Financial Consultants, Inc. Charlotte, NC
4. Water Resources Economics, LLC Culver City, CA
Public Works and Finance Department staff evaluated the proposals based on the following criteria:
1. Project understanding and approach.
2. Quality, clarity, responsiveness, conformance with the terms of this RFP/Q, and overall impression of the proposal.
3. Qualifications and availability of key persons to be assigned to the contract resulting from this solicitation.
4. Sub-consultant qualifications (if applicable).
5. Past experiences with the City.
6. Relevant experience (past similar scope and size projects).
7. Creativity and innovation.
8. Reasonableness of completion schedule and hours dedicated to completion of each task.
9. Price.
Two proposers were invited for interviews, and Water Resources Economics, LLC was selected based on the firm’s expertise, experience with similar projects, qualifications, and evaluation criteria, as set forth in the RFP/Q package.
The total cost for the six-year agreement with two optional, two-year extensions (Attachment #1) is not to exceed $415,000. Staff recommends approval of the agreement with Water Resources Economics.
LEVINE ACT (California Government Code § 84308):
This item is subject to the Levine Act. City Councilmembers who have received a campaign contribution of more than $250 (aggregated) within the preceding 12 months from a party or their agent/representative, or a financially-interested participant involved in this proceeding may do either of the following: (1) disclose the contribution on the record and recuse themselves from this proceeding; or if applicable (2) return the portion of the contribution that exceeds $250 within 30 days from the time the official knew or should have known about the contribution, and participate in the proceeding.
Water and Wastewater Rate Consultant Agreement
September 10, 2024
All parties and their agents/representatives must disclose on the record of this proceeding any aggregated contribution of more than $ 250 made to any Councilmember within the preceding 12 months. Councilmembers are prohibited from accepting, soliciting, or directing a campaign contribution of more than $250 aggregated) from a party, their agent/representative, or a financially-interested participant during a proceeding and for 12 months following the date a final decision is made. In addition, a party, their agent/representative, or a financially interested participant is prohibited from contributing more than $250 (aggregated) to a Councilmember during a proceeding and for 12 months following the date a final decision is made.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Tara Tosatto, Revenue Operations Manager
Attachments:
Attachment #1 – Water and Wastewater Rate Consultant Agreement FIN:1000-20\tt\H:\COMMON\Council\2024\Public Services\09102024 Water and Wastewater Rate Consultant Agreement.docx