1. Cost of Service Analysis & Rate Design
Charles Turner
July 20, 2016

2. Agenda Cost of Service Study Background Proposed Scope of Work
Proposed Schedule
Requested Action
Standard of Excellence: Efficiency and fiscal responsibility

3. Cost of Service Study Background
Board approved $150,000 Professional Services Agreement with Carollo Engineers on June 17, 2015 to conduct Cost of Service and Rate Design Study
Carollo and Staff conducted several Board workshops between September 2015 and February 2016
Carollo prepared draft report with various analysis of water, sewer, and recycled water rates in February 2016
On February 3, 2016, Board members requested further study and research in various aspects of the rates, including
Water budgets allocations sensitivity analysis
Meter sizes and factors
Phasing of improvement area rates
Recycled water rate
Non-residential water allocation budgets
Staff requested Carollo Engineers to propose additional Scope of Work to conduct this analysis and facilitate workshops with the Board

4. Cost of Service Scope of Work
Carollo will perform four additional tasks to complete the study, and one additional optional task to provide greater capabilities for rate analysis at the more detailed customer segment or geography
Task
Description
Task 1
Update Cost of Service Analysis
- Revise with FY Budget, debt restructuring
Task 2
Customer Data and Budget Allocation
Update customer data through June 2016
Prepare drought impact analysis
Task 3
Update Rate Analysis & Report
Update scenarios and revenue analysis
Update and finalize report
Task 4
Facilitate 4 Board Workshops
Optional
Demand Planning Support and Analytics

5. Proposed Schedule Board Meeting Date:
Proposed Action or Workshop Topics:
July 20, 2016
Approve Carollo Engineers to facilitate workshops and complete study
August 17, 2016
Board Workshop: Review meter sizes, non-residential water budgets
September 21, 2016
Board Workshop: Review water budget allocations, recycled water
October 19, 2016
Board Workshop: Review rate recommendations and phase-in
November 16, 2016
Present Proposed Rate Recommendation and Cost of Service Study
TBD
Demand Planning Support and Analysis Tools

6. Requested Action
Approve and authorize the General Manager to execute a change order to the professional services agreement with Carollo Engineers in the amount not to exceed $99,815 to complete the Cost of Service and Rate Design Study and facilitate the Board Workshops

7. Contact Information
Charles Turner Director of Finance (951) Ext. 4363