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FD1 4.Detailed Proposal City of Pleasanton I Water and Wastewater Rate Study provide a formal written data request to the City prior to the initial project meeting so that it can be discussed at the meeting and problem areas quickly resolved. The data and information requested for this study should be, for the most part, readily available information (e.g., financial, statistical, customer). Task 3 - Revenue Requirement Analysis Task Objective: Using a "generally-accepted" rate-setting methodology, develop the City's water and wastewater revenue requirements for a projected multi-year time period. For each utility. the revenue requirement analyses will establish the cost-based 'level' of revenue to be collected from rates. and, if necessary, a plan to transition rates to cost-based levels. Key to the analysis will be the development of a capital funding analysis to determine the blend of funding needed to support the capital improvement plans. Task Approach: • Analyze each utility on a stand-alone basis. • Utilize most recent budgeted, or year-end actual data. and a "cash basis" methodology. • Project costs for a multi-year period (typically 5 to 10 years). • Utilize the City's existing financial policies and financial planning criteria. • Develop a capital funding plan. incorporating the City's capital improvement plan and asset management plan. • Review key assumptions on growth, revenues, and expenses. • Review existing and future (planned) debt service. • If needed, develop a rate transition plan for each utility(to adjust overall levels of revenue). • Review and project recycled water revenues and expenses. • Develop a recycled water rate transition plan, as necessary. Expected City • Provide "as needed" assistance to clarify the City's data and Staff Support: information. • Provide "as needed" data refinements or additional data. • Attend a three-to four-hour project meeting to review the draft revenue requirement analysis. Deliverables: • The development of the water and wastewater revenue requirements for a multi-year period that considers the necessary operating and capital needs. • A capital financing plan within the revenue requirement analysis, utilizing the City's water and wastewater Capital Improvement Program, which attempts to maximize capital expenditures while minimizing the rate impacts to customers over time. 4-4 15007