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Brentwood City Commission Agenda

Meeting Date:	09/14/2020
Resolution 2020-85 - Approval of Agreement with Willdan Financial Services for Rate Analysis and Financial Planning Services
Submitted by:	Chris Milton, Water & Sewer
Department:	Water & Sewer

Information

Subject

Resolution 2020-85 - Approval of agreement with Willdan Financial Services for Rate Analysis and Financial Planning Services.

Background

The Water Services Department’s FY 2021 Non-Routine Work Plan approved by the Board of Commissioners includes working with the Finance Department to update the enterprise fund’s long-range financial model and rate structure with assistance from a qualified rate consultant.   It is important that the City periodically update the fund's financial model to assure its continued financial sustainability and the proper allocation of costs across the various customer classes.

As you will recall, in FY 2016, the Board approved a financial plan with recommendations for rate adjustments through FY 2021 and established financial policies related to minimum reserves and debt service coverage levels.   It is obviously important that the City continue to meet all the enterprise fund’s financial and regulatory obligations and maintain rates and charges sufficient to recover the revenue required to balance both operation and maintenance expenses and cost of growth.

The financial model completed in 2016 was prepared by Willdan Financial Services group after an extensive solicitation process by City staff.  Willdan has provided utility financial planning services to numerous cities across the country and Willdan staff members have played lead roles in the development of utility rate making methodologies established by the American Water Works Association (AWWA). In light of their past extensive work to develop a detailed financial model of the City’s enterprise fund and extensive experience with the City and firm’s qualifications, staff requested Willdan prepare a scope and proposal for updating the enterprise fund’s financial model for the Board’s consideration. The final negotiated scope of work for this agreement includes the following five tasks which are discussed in detail in the attached agreement:

Review of Historical Financial and Customer Data
Develop a Financial Management Plan (including Revenue Sufficiency Analysis)
Cost of Service Analysis
Rate Design Analysis
Preparation and Documentation of Rate Recommendations

The scope of work also includes up to two on-site meetings including a workshop to present methodologies and rate findings results. Willdan has submitted a proposed fee in an amount not to exceed $56,100 for this service. Attached is a copy of the Willdan proposed agreement form including exhibits for scope of services and service fees for the Board’s consideration.

Please contact Chris Milton should you have any questions.

Staff Recommendation

Staff recommends approval of the agreement.

Fiscal Impact

Amount :	$56,100
Source of Funds:	Water & Sewer Fund
Account Number:	412-52310-82599

Fiscal Impact:

Attachments
Resolution 2020-85
Contract No. 2020-114
Signed Resolution & Contract