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Meetings: Two webinars with City staff Deliverables: Water, Recycled Water, Sewer Cost of Service Analysis in Microsoft Excel Task 4: Rate Design Raftelis will develop appropriate rates using Microsoft-Excel-rate models for all three enterprises. These rates will be informed by current revenues, operating expenditures, and projected CIP requirements. Raftelis will review the City's current rate structures for Proposition 218 compliance. Raftelis is familiar with Proposition 218 requirements for tiered rate structures and has continued to successfully propose tiered structures in the post San Juan Capistrano Ruling period. Raftelis will suggest alternative rate structures if necessary, or if the developed framework suggests rate structure alternatives. For tiered water rates it is imperative to show the nexus between the cost to serve water and the corresponding rate in each tier. Raftelis' rate design methodology demonstrates the nexus between costs and tiered rates by showing the cost of each updated unit cost component in each tier. Raftelis' rate models will be able to conduct various rate scenario analyses to show varying levels of fixed (meter-based charge) and variable (consumption charge) revenues. In addition, Raftelis will also update the water drought/shortage charges based on the City's current water shortage stage. Water drought/shortages charges are typically calculated to recover the net revenue loss due to reduction in water usage. For sewer rates,the distinction between the different customer classes is in the flow and strength characteristics for each class. Raftelis will use available City or industry data to calculate the charges for residential, commercial, and industry rates based on cost of service principles. If schedule permits, Raftelis will also evaluate the following: • Multi-family HOA discount process • Low-income/senior discount and program criteria • Implementation of lien on homes for non-payment Raftelis will incorporate the City's policy considerations as well as current federal, state, and local rules and regulations such as Proposition 218. Raftelis has extensive experience with Proposition 218 and has assisted numerous agencies throughout the state in proposing rates that meet Proposition 218 requirements. Raftelis will also work with the City to ensure that its various pass- throughs (for both water and sewer) are implemented in a fashion that meet City goals while recovering the proper amount of pass-through revenue. After completing this rate design step, Raftelis will provide an analysis of customer impacts resulting from the proposed rates. Proposed water rates will be effective January 1, 2021 and proposed sewer rates will be effective July 1, 2021. Meetings: Two webinars with City staff Deliverables:Rate models showing proposed rates and customer impacts Task 5: Miscellaneous Fees Update 81Patue