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

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9.H.a City of Prescott, Arizona Water and Wastewater Rate Study Project Approach Raftelis has not included a stand-alone task for project management -related activities and has integrated and distributed this critical component key to a successful project within the nine tasks proposed to be completed. Project management activities include working with City staff to establish the project objectives, develop and execute the project schedule, obtain necessary data, understand constraints, and execute the project efficiently and within the proposed schedule. TASK 1 Data Acquisition and Project Initiation This task will include the collection and review of all relevant data and documents and an initial project initiation meeting. The project initiation meeting will be held to clarify project milestones, roles, and responsibilities and to identify future utility financial challenges and any concerns with the existing rate structure and/or during our project initiation meeting. A data request will be provided in advance of the project initiation meeting and is anticipated to include items such as customer growth projections, capital project forecast for the 10-year planning period, multi -year capital improvement project cost and timing, customer billing data and summary level use and revenue information, annual budgets and financial statements, debt service schedules, and utility and City financial policies and practices. Historical billing data is a critical component to this study as it is used through our analyses. We will meet with the City's Staff to evaluate the billing system and the data we will need to conduct the study. Together, we will define what data is available for download as well as the number of historical fiscal years that are necessary and available. Raftelis will validate information from the extracted dataset by comparing various field totals to the City's financial and operating records. For example, total revenue from bills in the dataset for a specific fiscal year should be in a reasonable range of revenues recorded in financial documents. Our level of effort assumes that the necessary fields, years of data, and verified results will be obtained from the initial download. Finally, our level of efforts assumes that the extracted data will be compatible with Microsoft Excel and Microsoft Access and that the exported fields will be in the appropriate formats (i.e. date fields are formatted as dates; number fields are formatted as numbers, data with no leading or trailing spaces, etc.). TASK 2 Water and Wastewater Utility Financial Plan and Revenue Requirements Analysis The financial planning task evaluates the projections of rate and other revenues and their ability to meet annual expenditures (revenue requirements) while meeting debt service coverage and reserve targets. For this task, we will: • Review and project customer billing data • Develop rate revenue projections including the APF, alternative water fee, effluent, and other user charge revenues • Identify the timing and level of debt issuances to fund capital improvements • Project budgeted O&M and capital expenses • Calculate necessary rate revenue increases 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 2 Packet Pg. 251