CITY COUNCIL REGUALR MEETING AGENDA PACKET

EXHIBIT A Water and Sewer Rate and Connection Fee Studies SCOPE OF WORK/SCHEDULE OF DELIVERABLES The following is a general scope of work developed by City staff. The final scope of work will be developed with input from the selected Consultant. The City desires a detailed rate study for the City’s water, recycled water, and sewer systems that establishes cost based, fair and equitable rates consistent with legally supported industry standards including Proposition 218. The recommended rates should be stable in both their ability to provide adequate revenues to meet the full financial requirements and the customer’s perception of the rates from year to year. This rate study will also include updating the drought/water shortage rates. The last water rate study was in 2023. The City implemented Consumer Price Index (CPI) increases for sewer for FY24 and FY25. This rate study will cover two years for both water and sewer rates. The City also desires a detailed connection fee study for the City’s water, recycled water, and sewer systems that establishes cost based, fair and equitable fees consistent with legally supported industry standards including Proposition 218. The City is currently underway with a water and sewer connection fee study. The plan is to have the fees adopted by Council in September 2024 and effective by January 1, 2025. The City is looking for a phased approach to the project that will require meetings with City staff including the finance committee, council workshops/meetings, and public presentations. The number of meetings, workshops, and presentations and the consultant’s level of involvement will be determined after the consultant is selected and the scope of work is further defined. Phase 1: Rate/Connection Fee Studies Framework and Community Outreach The objectives of phase 1 are to establish a framework for which the rate and connection fee studies will be conducted while conducting community outreach services. As part of this phase the consultant shall confirm the City’s major drivers and goals for the rate and connection fee studies, provide an overview of the rate study process including legal requirements, understand the City’s O&M, capital, and financial planning practices, and discuss potential modifications to the existing rate structure at a policy level that can help achieve the City’s goals. By the completion of this phase, the consultant shall have established a framework for the rate and connection fee studies with buy-in at a policy level from the City that will serve as the basis for the technical analysis. This phase will include multiple meetings with Council and community members. The consultant shall have a community outreach program. Phase 2: Technical Analysis This phase includes the financial analysis, cost of service analysis, and the rate design. Page 37 of 46