CC - Agendas - City Council - REGULAR - 8/14/2018

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9.H.a City of Prescott, Arizona Water and Wastewater Rate Study Water and Wastewater Rate Study Statement of Understanding Raftelis proposes to complete a comprehensive review and update of the City of Prescott (City) water and wastewater utility financial plans, rates and fees. The proposed study will update a similar study completed by Raftelis in 2014. The proposed study will include the following major elements: • Update of the separate water and wastewater financial plans over a 10-year study period of fiscal year (FY) 2018-19 through FY 2027-28, • Update the customer class cost -of -service for a single test -year, • Evaluate of up to two (2) rate alternatives for each utility, and • Issue study report and complete presentations of study findings and recommendations. As part of the financial plan update, Raftelis will work with City staff to project recurring operating costs, multi- year capital requirements and capital funding, existing and project debt service requirements, one-time development impact fee (DIF) revenues, recurring user charges, effluent rates, and rates miscellaneous revenues. Raftelis will complete an update of the previously developed cost -of -service analysis for a future test -year and evaluate rate alternatives for each utility, including reviewing the adequacy of the aquifer protection fee (APF), alternative water fee and reviewing the rates assessed to customers outside the City within the County and those outside the City located within the Town Chino Valley. Study findings and recommendations will be documented within a draft and final study reports and presented to City Council during up to two meetings and/or public hearings. The following details the proposed scope of services to complete a comprehensive water and wastewater financial plan, cost -of -service and rate study. Proposed rates for service are anticipated to be effective January 1" of each year, but the initial rate adjustment in anticipated for 2019 may be effective in February due to the timing of the study and Arizona Revised Statute (ARS) adoption and implementation requirements. Raftelis will take reasonable efforts in study staffing and execution to maintain a January 1, 2019 effective date. Attachment: Raftelis Scope of Work -Prescott DIF and Rate Study (2124 : Rate & Fee Study Contract with Raftelis) RAFTELIS Water and Wastewater Utility Rate Study - Attachment Page 1 Packet Pg. 250