HomeMy WebLinkAbout17- RFP Submission - Raftelis Financial Consultants, Inc. - Water and Wastewater Cost of Service and Rate Design StudyWATER AND WASTEWATER UTILITY SYSTEM
COST OF SERVICE AND RATE DESIGN STUDY
PROPOSAL / AUGUST 15, 2017
CITY OFBOZEMAN
August 15, 2017
Ms. Kristin Donald
Finance Director
City of Bozeman
P.O. Box 1230
Bozeman, MT 59771
Subject: Proposal for Water and Wastewater Utility System Cost of Service and Rate Design Study
Dear Ms. Donald:
Raftelis Financial Consultants, Inc. (Raftelis) is pleased to submit this proposal to conduct a water and waste-
water cost of service and rate design study for the City of Bozeman (City). We appreciate the opportunity to
submit this proposal, which details our project approach to meet the City’s objectives and our qualifications
and experience for this study.
Raftelis was established in 1993 to provide financial, rate, and management consulting services of the highest
quality to water and wastewater utilities. Raftelis now has the largest and most experienced local government
utility rate and financial consulting practice in the country. Raftelis' mission has always been focused on assist-
ing our clients in meeting their goals of financial viability, and we have no “stake” in the scope and depth of a
utility’s capital investments, which allows us maintain a completely independent and impartial perspective.
Our staff members help shape industry standards by chairing and actively participating in various commit-
tees within the American Water Works Association (AWWA) and the Water Environment Federation (WEF).
I am the former Chair of the AWWA Rates and Charges Committee, and our Project Manager, Todd Cristiano,
is the current chair. We have authored or co-authored several industry standard books related to water and
wastewater utility rate setting and finance, including AWWA’s Manual M1, Principles of Water Rates, Fees and
Charges and WEF's Manual of Practice No. 27 - Financing and Charges for Wastewater Systems.
As an Executive Vice President at Raftelis, I will serve as Project Director, responsible for overall project
accountability and ensuring the study is completed in a timely manner and meets both Raftelis and indus-
try standards. I have over 39 years of national financial experience in the utility industry, serving clients
nationally and many in the Rocky Mountain region.
Todd Cristiano will serve as Project Manager. He will manage the day-to-day aspects of the project. This
includes management of the budget, schedule, and meeting milestones and deliverable. He will lead the
consulting staff in conducting analyses and preparing project deliverables.
5619 DTC Parkway, Suite 175
Greenwood Village, CO 80111
www.raftelis.comPhone
Fax
303 . 305 . 1135
702 . 475 . 1103
Mr. Cristiano has almost 20 years of professional experience in the utility finance sector both as a consultant
and as the Manager of Rates at Denver Water. In addition to being the Chair of the Rates and Charges Com-
mittee, Mr. Cristiano is also a co-instructor for AWWA’s Financial Management Cost of Service Rate-Making
Seminar. His consulting experience coupled with his utility experience at Denver Water and technical exper-
tise make him an ideal fit for this project.
He will bring a balanced approach to creating options and the experience that will provide the best service
to the City. Elaine Conti will serve as Technical Advisor. With her nearly two decades of utility rate-setting
experience, she will provide her national perspective on the technical aspects of this study. Mr. Cristiano will
also have the full support of Raftelis’s staff of more than 70 utility rate, financial, and management consultants.
We are proud of the resources that we can offer and welcome the opportunity to be of assistance to the City
on this engagement. Should you have any questions, please do not hesitate to contact me or our Project
Manager, Todd Cristiano, using the following contact information:
Rick Giardina, CPA Todd Cristiano
Project Director Project Manager
5619 DTC Parkway, Suite 175 5619 DTC Parkway, Suite 175
Greenwood Village, CO 80111 Greenwood Village, CO 80111
P: 303.305.1136 P: 303.305.1138
E: rgiardina@raftelis.com E: tcristiano@raftelis.com
Very truly yours,RAFTELIS FINANCIAL CONSULTANTS, INC.
Richard Giardina, CPA Todd Cristiano
Executive Vice President Manager
TABLE OF
CONTENTS
01 1. Basic Information
02 2. Firm Experience
10 3. Proposed Team
47 4. References
55 5. Work Summary
56 6. Work Plan & Poject Schedule
69 7. City-Furnished Documentation
71 Appendix A: Exception to the Agreement
72 Appendix B: Statement of Non-Discrimination
73 Appendix C: Recently Completed Rate Study
Cover Photo courtesy of Devin
Stein (Flickr)
Photo on page 56 courtesy of
Glora Cabada - Leman (Flickr)
1. BASIC INFORMATION
BASIC INFORMATION
CONTACT PERSON
Todd Cristiano, Project Manager
Raftelis Financial Consultants, Inc.
5619 DTC Parkway, Suite 175, Greenwood Village, CO 80111
Phone: 303.305.1138 / Fax: 720.475.1103 / Email: tcristiano@raftelis.com
OFFICE LOCATIONS WHERE SERVICES AND WORK WILL BE PERFORMED
Greenwood Village, CO Office (main office to provide services - 90%)
Charlotte, NC Office (10%)
Los Angeles, CA Office (will be available to provide support on an as-needed basis)
CITY OF BOZEMAN / 01 /
1993, Raftelis Financial Consultants, Inc. (Raftelis) was founded to provide services that help utilities function as
sustainable organizations while providing the public with clean water at an affordable price. With this goal in mind,
Raftelis has grown to have the largest and most experienced practice in the nation that is focused on financial
and management consulting for the water, wastewater, and stormwater utility industry. Raftelis has experience
providing these services to hundreds of utilities across the country and abroad, allowing us to provide our clients
with innovative and insightful recommendations that are founded on industry best practices. Throughout our
history, we have maintained a strict focus on the financial and management aspects of utilities, building a staff
with knowledge and skills that are extremely specialized to the services that we provide, and thus allowing us to
provide our clients with independent and objective advice.
Visit www.raftelis.com to learn more about Raftelis' story.
Raftelis has the largest consulting practice in the nation focusing on
the financial and rate aspects of water-industry utilities.
WHO IS RAFTELIS
COMPANY OVERVIEW
SPECIALTIES
FINANCIAL SOLUTIONS: Affordability analysis and program development; capital improvements planning/
prioritization; debt issuance support; economic and financial evaluations; financial planning and modeling;
rate, charge, and fee studies; stormwater utility development and support
PERFORMANCE SOLUTIONS: Asset management; customer service enhancement; governance; organiza-
tional and operations optimization; performance measurement and benchmarking; stakeholder engagement
and communications; strategic planning
TECHNOLOGY SOLUTIONS: Analytics and decision support; business process development; data manage-
ment; software solutions; training and support; visualization and dashboarding
2. FIRM EXPERIENCE
WHY RAFTELIS IS
BEST QUALIFIED
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 02 \
WHY RAFTELIS IS
BEST QUALIFIED
DEPTH OF RESOURCES
With more than 70
consultants, Raftelis has the
largest and most experienced
practice in the nation that
is focused on financial and
management consulting for
the water, wastewater, and
stormwater utility industry.
BENEFIT TO THE CITY
Our depth of resources will
allow us to sufficiently staff
this project with the qualified
personnel necessary to
efficiently and expeditiously
meet the City's objectives.
FOCUS
Raftelis' services are solely
focused on providing financial,
rate, and management
consulting services to water-
industry utilities.
BENEFIT TO THE CITY
This focus allows Raftelis
professionals to develop and
maintain knowledge and
skills that are extremely
specialized to the services
that we provide, and will
allow us to provide the
City with independent and
objective advice.
UNPARALLELED
EXPERIENCE
Raftelis staff have assisted
hundreds of utilities
throughout the Rocky
Mountain Region and across
and the U.S. with financial,
rate, and management
consulting services.
BENEFIT TO THE CITY
Our extensive experience
will allow us to provide
innovative and insightful
recommendations to the City,
and will provide validation
for our proposed methodology
ensuring that industry best
practices are incorporated.
CITY OF BOZEMAN / 03 /
INDUSTRY LEADERSHIP
Our senior staff is involved in
shaping industry standards by
chairing various committees
within the American Water
Works Association (AWWA)
and Water Environment
Federation (WEF). Raftelis'
staff members have also
contributed to many industry
standard books regarding
utility rate setting.
BENEFIT TO THE CITY
Being so actively involved
in the industry will allow us
to keep the City informed of
emerging trends and issues,
and to be confident that
our recommendations are
insightful and founded on
sound industry principles.
MODELING EXPERTISE
Raftelis has developed some
of the most sophisticated
yet user-friendly financial/
rate models available in the
industry.
BENEFIT TO THE CITY
Our models are tools that
allow us to examine different
policy options and cost
allocations and their financial/
customer impacts in real
time. Our models are non-
proprietary and are developed
with the expectation that they
will be used by the client as
financial planning tools long
after the project is complete.
RATE ADOPTION EXPERTISE
Raftelis has assisted numerous
agencies with getting proposed
rates successfully adopted.
BENEFIT TO THE CITY
Our experience has allowed
us to develop an approach
that effectively communicates
with elected officials about
the financial consequences
and rationale behind
recommended rates to
ensure stakeholder buy-in
and successful rate adoption.
This includes developing
a “message” regarding the
changes in the proposed
utility rates that is politically
acceptable, and conveying
that message in an easy-to–
understand manner.
Raftelis is registered with the U.S. Securities Exchange Commission
(SEC) and the Municipal Securities Rulemaking Board (MSRB) as a
Municipal Advisor. Registration as a Municipal Advisor is a requirement
under the Dodd-Frank Wall Street Reform and Consumer Protection
Act. All firms that provide financial forecasts that include assumptions
about the size, timing, and terms for possible future debt issues, as
well as debt issuance support services for specific proposed bond
issues, including bond feasibility studies and coverage forecasts,
must be registered with the SEC and MSRB to legally provide financial
opinions and advice. Raftelis’ registration as a Municipal Advisor
means our clients can be confident that Raftelis is fully qualified and
capable of providing financial advice related to all aspects of utility
financial planning in compliance with the applicable regulations of the
SEC and the MSRB.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 04 \
Leading the industry
Raftelis staff shape industry standards for water and wastewater utility finance
and rate setting through our active leadership in AWWA, WEF, and EPA. Raftelis’
staff includes:
AWWA
• Chair and three members of Rates and
Charges Committee
• Trustee of Management and Leadership
Division
• Chair of Management and Leadership
Division
• Member of Strategic Management Practices
Committee
• Vice Chair and member of Finance,
Accounting, and Management Controls
Committee
• Division Liaison to Workforce Strategies
Committee
• Trustee of Technical and Education Council
WEF
• Three members of Utility
Management Committee
• Subcommittee Chair of Finance
and Administration
• Member of Technical Practices
Committee
• Two members of WEFTEC
Conference Planning Committee
• Member of Utility Management
Conference Planning Committee
EPA
• Member of Environemental
Financial Advisory Board
we wrote the book
Raftelis staff have co-authored many of the industry’s leading guidebooks
regarding water and wastewater financial issues and rate setting, including:
• AWWA’s Manual M1, Principles of Water Rates, Fees and Charges
• AWWA’s Water Rates, Fees, and the Legal Environment, 2nd Edition
• AWWA’s Manual M29, Water Utility Capital Financing
• AWWA’s Financial Management for Water Utilities: Principles of Finance,
Accounting, and Management Controls
• AWWA’s Manual M5, Water Utility Management, 2nd Edition
• WEF’s Manual of Practice No. 27 - Financing and Charges for Wastewater
Systems
• WEF's The Effective Water Professional: Leadership, Communication,
Management, Finance, and Governance
• Water and Wastewater Finance and Pricing: The Changing Landscape
Raftelis also conducts and publishes the national Water and Wastewater Rate
Survey in conjunction with AWWA. This survey is the most comprehensive collection
of water and wastewater utility financial and rate data available in the industry.
/ 05 /CITY OF PINERY
Raftelis has focused on financial consulting for water, wastewater, and stormwater utilities since the firm’s
founding in 1993, and our staff consists of some of the most experienced consultants in the industry. Raftelis
has provided financial, rate, management, and operational assistance to hundreds of water, wastewater,
and stormwater utilities across the U.S. In the past year alone, Raftelis worked on more than 400 financial,
rate, management, and operational consulting projects for over 300 water, wastewater, and/or stormwater
utilities in 36 states, the District of Columbia, Canada, and Puerto Rico.
GENERAL EXPERIENCE
Raftelis has provided financial
and/or management assistance to
utilities serving more than 25% of the U.S.
population. This map shows some of the water,
wastewater, and/or stormwater utility clients
where Raftelis staff have provided financial/
management consulting.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 06 \
FINANCIAL AND RATE CONSULTING MANAGEMENT CONSULTING
STATECLIENTAFFORDABILITY ANALYSIS AND PROGRAM DEVELOPMENTDEBT ISSUANCE SUPPORTDISPUTE RESOLUTIONFINANCIAL AND CAPITAL IMPROVEMENTS PLANNINGIMPACT FEESMASTER PLANRATE CASE SUPPORTRATE STUDYRISK ANALYSISSTORMWATER UTILITY DEVELOMENTCUSTOMER RELATIONSHIP MANAGEMENTCUSTOM SOFTWARE AND TOOL DEVELOPMENTDATA SERVICESORGANIZATIONAL OPTIMIZATIONPERFORMANCE MANAGEMENT AND BENCHMARKINGPROJECT/PROGRAM PROCUREMENT ASSISTANCEPUBLIC/STAKEHOLDER EDUCATION, OUTREACH, AND FACILITATIONSTORMWATER PROGRAM DEVELOPMENT SUPPORTSTRATEGIC BUSINESS PLANNINGWATER/WASTEWATER UTILITY VALUATIONAL Birmingham Water Works Board
AL Mobile Area Water & Sewer System
AR Central Arkansas Water
AR Little Rock Wastewater Utility
AZ Peoria, City of
AZ Phoenix, City of
AZ Pima County
AZ Tucson Water
CA Anaheim, City of
CA Beverly Hills, City of
CA MWD of Southern California
CA San Diego, City of
CA San Francisco PUC
CA Santa Clara Valley Water District
CA Western Municipal Water District
CO Denver Water
CO Denver Wastewater, City of
CO Pueblo, City of
DC DC Water
DE Wilmington, City of
FL Clearwater, City of
FL Pompano Beach, City of
FL Port St. Lucie, City of
FL St. Johns County
GA Columbus Water Works
HI Honolulu ENV, City and County of
IL Naperville, City of
KS Wichita, City of
KY Hardin County Water District #1
LA New Orleans, Sewerage & Water Board of
MD Baltimore, City of
MO Metropolitan St. Louis Sewer District
NATIONAL EXPERIENCE
This matrix shows a brief
sample of some of the
utilities throughout the U.S.
and Canada that Raftelis
staff have assisted and
the services performed for
these utilities.
CITY OF BOZEMAN / 07 /
FINANCIAL AND RATE CONSULTING MANAGEMENT CONSULTING
STATECLIENTAFFORDABILITY ANALYSIS AND PROGRAM DEVELOPMENTDEBT ISSUANCE SUPPORTDISPUTE RESOLUTIONFINANCIAL AND CAPITAL IMPROVEMENTS PLANNINGIMPACT FEESMASTER PLANRATE CASE SUPPORTRATE STUDYRISK ANALYSISSTORMWATER UTILITY DEVELOMENTCUSTOMER RELATIONSHIP MANAGEMENTCUSTOM SOFTWARE AND TOOL DEVELOPMENTDATA SERVICESORGANIZATIONAL OPTIMIZATIONPERFORMANCE MANAGEMENT AND BENCHMARKINGPROJECT/PROGRAM PROCUREMENT ASSISTANCEPUBLIC/STAKEHOLDER EDUC., OUTREACH, AND FACILITATIONSTORMWATER PROGRAM DEVELOPMENT SUPPORTSTRATEGIC BUSINESS PLANNINGWATER/WASTEWATER UTILITY VALUATIONMS Jackson, City of
MT Lockwood, City of
NC Asheville, City of
NC Cary, Town of
NC Charlotte-Mecklenburg Utilities
NC Durham, City of
NC Raleigh, City of
NM Aztec, City of
NV Henderson, City of
NY New York City Water Board
OH Northeast Ohio Regional Sewer District
OR Portland Water Bureau, City of
PA Philadelphia Water Department
RI Newport, City of
RI Providence Water Supply Board
SC Greenville Water/ReWa
SC Spartanburg Water System
TN Johnson City, City of
TN Nashville and Davidson County MWS
TX Dallas, City of
TX El Paso Water Utilities PSB
TX San Antonio Water System
UT Cedar City, City of
UT Granger Hunter Improvement District
UT Kearns Improvement District
UT Park City, City of
UT Salt Lake City, City of
UT Snyderville Water Reclamation District
VA Richmond DPU, City of
VA Suffolk, City of
WA Tacoma, City of
WI Milwaukee Water Works
Can Ottawa, City of
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 08 \
EXPERIENCE WITH CAPITAL PLAN
PREPARATION, RATE STUDIES, &
ON-CALL PROFESSIONAL SERVICES
Our project team will pull from their many years of
experience in financial planning, rate-setting, and
modeling expertise to bring the best viable options
to meeting the goals of each utility.
Our project team is supported by 70 utility financial
consultants to serve as additional technical resources
on this project. With their experience, they have
been exposed to and addressed many of the unique
challenges every utility encounters. In reality, those
challenges are more common than some may think.
Bringing in that experience can provide a great per-
spective on solving those difficult challenges.
Our Project Manager, Todd Cristiano, is the Chair
of the AWWA’s Rates and Charges Committee and
is a co-instructor for AWWA’s Financial Manage-
ment and Cost of service Seminar. This industry
leadership, coupled with his consulting and utility
experience as the Rates Manager at Denver Water,
ensures the City is getting a balanced perspective
on this study.
Our project team has developed models for numer-
ous clients nationwide. The common theme on each
of these models is a model customized to meet the
client’s needs that is also easy to use. We believe
using a standardized model coupled with the specific
needs of the City provides the best value. Further,
we also believe that building on a utility’s existing
model preserves the institutional knowledge of the
rate-setting process, and maintains the familiarity
of use by utility staff.
EXPERIENCE WITH WATER
CONSERVATION PROGRAMS
AND RATE DESIGN
Our project team has worked with a number of
utilities to develop or enhance a utilities’ conser-
vation-based rate structures. Sanjay Gaur, our
Technical Advisor for conservation rate structures,
has developed many conservation rate structures in
California in response to the record years of drought.
Many of his clients looked to individualized rate
structures, or water budgets, to comply with the
mandated State reductions.
While at Denver Water, Mr. Cristiano managed an
18-month rate structure study to evaluate changes to
the utility’s conservation rate structures. This evalu-
ation included a 15-member stakeholder committee.
They were charged with reviewing rate structure
alternatives and recommending a structure that best
met the needs of Denver Water and its customers.
From a technical standpoint, this included evaluat-
ing multiple structures and examining the customer
impacts, reduction in water use due to a change in
price, and the resulting changes in revenue.
Almost all of our studies for clients in the Rocky
Mountain region use some basis of a conservation
rate structure. These studies often involve a review
and update of the structures to ensure compliance
with their conservation goals and objectives.
CITY OF BOZEMAN / 09 /
For this project, we have included senior-level personnel to provide experienced leadership for the project,
with support from talented consultant staff. Raftelis places a high priority on being responsive to our clients
and, therefore, actively manages each consultant’s project schedule to ensure appropriate availability for
addressing client needs. Raftelis currently has a team of more than 70 consultants specializing in financial
and management consulting services for water, wastewater, and stormwater utilities. In addition to our
dedicated Project Team, the City will have the support of Raftelis' full staff for this project.
STAFF CONSULTANTS
BRIAN KIRSCH, PhD & LAURA SLAVIN will work
at the direction of Mr. Cristiano to conduct analyses
and prepare deliverables for the project.
CITY OF BOZEMAN
TECHNICAL ADVISORS
ELAINE CONTI (COST OF SERVICE & RATE
DESIGN) & SANJAY GAUR (CONSERVATIVE RATE
STRUCTURES) will provide knowledge and expertise.
PROJECT MANAGER
TODD CRISTIANO will ensure that
the project stays on schedule, is
within budget, and effectively meets
the City's objectives. He will also lead
the consulting staff in conducting
analyses and preparing deliverables
for the project. Mr. Cristiano will serve
as the City's main point of contact for
the project.
PROPOSED TEAM
3. PROPOSED TEAM
PROJECT DIRECTOR
RICK GIARDINA, CPA will be
responsible for overall project
accountability and will be available to
provide insights into various cost of
service and rate-setting matters.
Percentage of Time:
Rick Giardina, CPA: 2%
Todd Christiano: 31%
Elaine Conti: 4%
Brian Kirsh, PhD & Laura Slavin: 63%
Sanjay Guar can provide services on an
as-needed basis
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 10 \
Below, we have included brief descriptions of our Project Team members’
qualifications and experience in the industry followed by detailed resumes.
RICK
GIARDINA, CPA
PROJECT DIRECTOR
(Executive Vice President)
EXPERIENCE: 39 years
CAREER HIGHLIGHTS >Member of EPA Environmental Financial
Advisory Board >Co-author of WEF's MOP No. 27,
Financing and Charges for Wastewater
Systems >Chair of AWWA Rates and Charges
Committee >Chaired AWWA's committe for re-write
of M1 Manual & Water Utility Capital
Financing Manual >Financial/rate consulting experience
with Laramie, Pocatello, Sheridan,
Jackson, Denver, Salt Lake City, Santa
Fe, Phoenix, Tucson, Albuquerque,
Reno, Austin, San Diego, Seattle,
Honolulu, St. Louis MSD, & MWD of
Southern California
EDUCATION >BA – Western State College of
Colorado
Mr. Giardina is an Executive Vice President with Raftelis
and, while serving in a national role, he also leads the Rocky
Mountain regional practice of Raftelis. His over 39 years of
managerial and financial experience includes more than 300
financial studies serving both the private and public sector.
His experience covers technical areas and industries such as
municipal fee development, utility cost of service and rate
structure studies, litigation support, economic feasibility
analyses, privatization and regionalization feasibility and
implementation studies, impact fee studies, management and
operational audits, reviews of policies and procedures and oper-
ating practices, mergers and acquisitions, valuation services,
and rate filing and reporting. He has also served as an arbitrator
for several wholesale rate disputes.
As a member of several industry associations, he has developed
industry guidelines regarding financial and rate-making prac-
tices. Mr. Giardina is currently a Trustee and Vice Chair of the
AWWA Management and Leadership Division. In addition, as
the former Chair of the AWWA Rates and Charges Committee,
he chaired one group that prepared the first edition of the M54
– Small System Rate Manual and another that re-wrote the Water
Utility Capital Financing Manual. He also chaired the re-write of
Manual M1, Principles of Water Rates, Fees, and Charges (the Sixth
Edition was published in June of 2012 and oversaw the publi-
cation of the Seventh Edition in January 2017). In addition, he
was a contributing author to the WEF’s Financing and Charges
for Wastewater Systems manual. Mr. Giardina organized and led
WEF-sponsored seminars in 2010 and 2011 titled “Weathering
the Storm: Is This the Right Time for You to Form a Stormwater
Utility?”; seminars on the opportunities and challenges sur-
rounding the creation of a stormwater utility. In 2011, he was
appointed to a two-year term to the EPA Environmental Finan-
cial Advisory Board and he is still serving on the Board.
CITY OF BOZEMAN / 11 /
TODD
CRISTIANO
PROJECT MANAGER
(Manager)
EXPERIENCE: 20 years
AREAS OF EXPERTISE & TRAINING:
Cost of service and rate structure studies;
Litigation support; Economic feasibility
analyses; Impact fee studies; Reviews
of policies, procedures, and operating
practices; Budget processes
CAREER HIGHLIGHTS: >Current chair of AWWA Rates and
Charges Committee >Co-instructor for an AWWA biennial
Financial Management: Cost of Service
Rate-Making Seminar >Former Manager of Rates at Denver
Water >Financial/rate consulting experience
with Las Vegas Valley Water District,
El Paso Water Utilities Public Service
Board, Salt Lake City, & Boulder
EDUCATION >MBA – University of Colorado (2003) >BS – University of Tulsa (1995)
Mr. Cristiano has over 20 years of utility finance experience
– 12 years as a consultant to utilities and 6 years as the Man-
ager of Rates at Denver Water. He has completed studies across
the U.S. for water, wastewater, stormwater, electric, and gas
utilities. His experience covers technical areas and industries
such as municipal fee development, utility cost of service and
rate structure studies, economic feasibility analyses, impact
fee studies, and budget processes. While at Denver Water,
he oversaw four significant rate- and fee-related studies, all
unanimously approved by the Board of Water Commissioners,
and also served as interim budget manager at Denver Water.
As a member of the AWWA, he has helped to develop industry
guidelines regarding financial and rate-making practices. In
particular, as the current Chair of the AWWA Rates and Charges
Committee, he co-authored the water reuse chapter in the latest
edition of Manual M1, Principles of Water Rates, Fees and Charges.
Mr. Cristiano is also co-instructor for an AWWA biennial Finan-
cial Management: Cost of Service Rate-Making Seminar.
ELAINE CONTI
TECHINICAL ADVISOR -
COST OF SERVICE &
RATE DESIGN
(Senior Manager)
EXPERIENCE: 16 years
CAREER HIGHLIGHTS >Former Chair of NC AWWA-WEA
Finance & Management Committee >Co-author of Water and Wastewater
Finance and Pricing >Financial/rate consulting experience with
Metropolitan Government of Nashville
and Davidson County, San Antonio
Water System, Santa Clara Valley Water
District, & Beverly Hills
EDUCATION >MBA – Wake Forest University >BS – University of North Carolina at
Chapel Hill
Ms. Conti joined Raftelis in 2000 and has served as project man-
ager on numerous water and wastewater cost of service and rate
and financial planning studies. She has performed rate studies
for numerous clients across the country and has assisted in
providing utilities with benchmarking data and industry stan-
dards from which they can assess their utility’s performance and
efficiency. Ms. Conti has also assisted several utilities in their
efforts to implement management practices consistent with the
Effective Utility Management (EUM) framework. In addition,
Ms. Conti co-authored a chapter entitled, “Outside-City Rates for
Retail and Wholesale Customers, and Wheeling Rates,” for the
Fourth Edition of the industry guidebook, Water and Wastewater
Finance and Pricing: The Changing Landscape.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 12 \
SANJAY GAUR
TECHNICAL ADVISOR -
CONSERVATION RATE
STRUCTURES
(Vice President)
EXPERIENCE: 20 years
CAREER HIGHLIGHTS >Regarded as a leader in innovative rate
structures >Co-author of: AWWA's M1 Manual;
AWWA's Water, Rates, Fees, and
the Legal Envronment; & Water and
Wastewater Finance and Pricing >Financial/rate consulting experience
with East Bay Municipal Water District,
Metropolitan Water District of Southern
California, La Habra Heights County
Water District, Yorba Linda Water
District, & Huntington Beach
EDUCATION >MPA – Harvard University >MS – University of California, Santa Cruz >BA – University of California, Santa
Cruz
Mr. Gaur has 20 years of public-sector consulting experience,
primarily focusing on providing financial and rate consult-
ing services to water and wastewater utilities. His experience
includes providing rate structure design, cost of service stud-
ies, financial analysis, cost benefit analysis, connection/
development fee studies, conservation studies, and demand
forecasting for utilities spanning the west coast. Mr. Gaur is
considered one of the leading experts in the development of
conservation rate structures. He has often provided his insight
into utility rate and conservation-related matters for various
publications and industry forums, including: authoring articles
in Journal AWWA; being quoted in various newspaper articles
including the Los Angeles Times and the New York Times; par-
ticipating in a forum regarding the future of water in Southern
California sponsored by the Milken Institute; being quoted on
National Public Radio; speaking at various industry confer-
ences including American Water Works Association (AWWA),
the Utility Management Conference, Association of California
Water Agencies, and California Society of Municipal Finance
Officers; and, co-authoring several industry guide books
including AWWA’s Manual M1 Principles of Water Rates, Fees and
Charges, 6th Edition as well as AWWA’s Water Rates, Fees, and
the Legal Environment, Second Edition. Mr. Gaur co-authored a
chapter entitled, “Understanding Conservation and Efficiency
Rate Structures,” for the Fourth Edition of the industry guide-
book, Water and Wastewater Finance and Pricing: The Changing
Landscape. Mr. Gaur is also active in a number of utility-related
associations, including serving as a member of AWWA’s Rates
and Charges Committee.
CITY OF BOZEMAN / 13 /
BRIAN KIRSCH,
PhD
STAFF CONSULTANT
(Consultant)
EXPERIENCE: 3 years
CAREER HIGHLIGHTS: Financial/rate
consulting experience with North Texas
Municipal Water District, Salida, & Denver
Wastewater Management Division
EDUCATION >PhD – University of North Carolina at
Chapel Hill >MS – University of North Carolina at
Chapel Hill >BS / BA – Rice University
Dr. Kirsch has conducted a number of rate studies in which he
has provided financial plans, cost of service analysis, and rate
designs to Colorado utilities. In addition to rate consulting, he
has consulted on several operational assessments for some of
the largest utilities in the country, providing expertise in utility
operations ranging from asset management to capital project
delivery to general operations & maintenance practices. Dr.
Kirsch a background in water resources management and pos-
sesses extensive analytical skills. His expertise lies in the areas
of systems analysis and economic modeling. He has performed
significant research in the field of water resources in which he
has utilized aspects of engineering, policy analysis, risk man-
agement, economics and market analysis.
LAURA SLAVIN
STAFF CONSULTANT
(Consultant)
EXPERIENCE: 7 years
CAREER HIGHLIGHTS: Financial/rate
consulting experience with Lake Havasu
City, Trinidad, Grand Junction, Santa Rosa,
New York City, Central Basin Municipal
Water District, & San Luis Valley
EDUCATION >MBA – Yale School of Management >BA – Wellesley College
Ms. Slavin has extensive experience in economic analysis and
consulting and an understanding of the challenges and oppor-
tunities facing water utilities. Ms. Slavin earned her Master of
Business Administration (MBA) from the Yale School of Man-
agement where she focused on corporate strategy and water
management and authored a white paper on the U.S. water
industry. She joined Raftelis in April 2015 as a consultant in the
Denver Office. Since then, she has worked on a bond feasibility
study, financial planning studies, and cost of service and rate
analyses. For her MBA internship, she traveled to Budapest,
Hungary to assist Organica Water, an innovative wastewater
treatment company, in developing their U.S. market entry strat-
egy. Prior to business school, she spent several years working
for Analysis Group, Inc., an economic, financial and strategy
consulting firm, in their Denver office. At Analysis Group, she
worked on numerous projects in which she applied economic
analysis to support expert witness testimony. Laura earned her
B.A. in Economics from Wellesley College and has also worked
as a Research Assistant at the Federal Reserve Board in Washing-
ton, D.C. as well as a Research Associate at Accenture.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 14 \
RICK GIARDINA, CPA
PROJECT DIRECTOR
Executive Vice President
PROFILE
Mr. Giardina is an Executive Vice President with Raftelis and, while serv-
ing in a national role, he also leads the Rocky Mountain regional practice
of Raftelis. His over 39 years of managerial and financial experience
includes more than 300 financial studies serving both the private and
public sector. His experience covers technical areas and industries such
as municipal fee development, utility cost of service and rate structure
studies, litigation support, economic feasibility analyses, privatization
and regionalization feasibility and implementation studies, impact fee
studies, management and operational audits, reviews of policies and
procedures and operating practices, mergers and acquisitions, valuation
services, and rate filing and reporting. He has also served as an arbitrator
for several wholesale rate disputes.
As a member of several industry associations, he has developed industry
guidelines regarding financial and rate-making practices. Mr. Giardina
is currently a Trustee and Vice Chair of the AWWA Management and
Leadership Division. In addition, as the former Chair of the AWWA Rates
and Charges Committee, he chaired one group that prepared the first
edition of the M54 – Small System Rate Manual and another that re-wrote
the Water Utility Capital Financing Manual. He also chaired the re-write of
Manual M1, Principles of Water Rates, Fees, and Charges (the Sixth Edition
was published in June of 2012 and oversaw the publication of the Sev-
enth Edition in January 2017). In addition, he was a contributing author
to the WEF’s Financing and Charges for Wastewater Systems manual. Mr.
Giardina organized and led WEF-sponsored seminars in 2010 and 2011
titled “Weathering the Storm: Is This the Right Time for You to Form a
Stormwater Utility?”; seminars on the opportunities and challenges sur-
rounding the creation of a stormwater utility. In 2011, he was appointed
to a two-year term to the EPA Environmental Financial Advisory Board
and he is still serving on the Board.
RELEVANT PROJECT EXPERIENCE
CITY COUNCIL OF SALT LAKE CITY, UT (2016 - PRESENT)
Mr. Giardina led the council through a process of identifying and rank-
ing water rate or pricing objectives. This effort resulted in the adoption
of a seasonal rate approach (the existing method was a uniform rate). On
the basis of the most recent rate study, the city has adopted a combina-
tion fixed-block rate for its residential accounts and a customer-specific
block approach for nonresidential accounts. This approach was the result
TECHNICAL SPECIALTIES
»Cost of service and rate
structure studies
»Litigation support
»Economic feasibility analyses
»Impact fee studies
»Management and
operational audits
»Reviews of policies,
procedures, and operating
practices
»Public-Private Partnerships
»Mergers and acquisitions -
regionalization
»Valuation services
»Rate filing and reporting
PROFESSIONAL HISTORY
»Raftelis Financial
Consultants, Inc.: Executive
Vice President (2013–
present, 1993-1995)
»Malcolm Pirnie-Arcadis-US
(2004-2013)
»Rick Giardina & Associates,
Inc. (1995-2004)
»Ernst & Young (1984-1993)
»Stone & Webster
Management Consultants,
Inc. (1981-1984)
»State of Colorado Public
Utilities Commission (1978-
1981)
EDUCATION
»Bachelor of Arts in Business
Administration - Western
State College of Colorado
(1978)
CERTIFICATIONS
»Certified Public Accountant,
Colorado
PROFESSIONAL MEMBERSHIPS
»American Institute of
Certified Public Accountants
»American Water Works
Association
»Government Financial
Officers Association
»Water Environment
Federation
CITY OF BOZEMAN / 15 /
of a comprehensive evaluation of rate options using
a 20-member citizen committee. He also assisted
the City Council in developing financial policies and
leading a discussion regarding pay-as-you-go versus
debt financing for capital projects, and in providing
a detailed analysis of a bonding proposal. The work
included general fund activities as well as water,
sewer, and storm drainage operations. Mr. Giardina
analyzed such issues as alternative financing vehi-
cles (including impact fees) and customer/taxpayer
impact analyses. He completed a rate alternative
workshop with th sewer rate methodology and
assisted the Utility in implementation of both user
rates and impact fees.
Additionally, Mr. Giardina was the Project Manager
in assisting the City to develop and implement non-
utility impact fees for the first time under state
legislation.
DENVER WATER, CO (2013 - PRESENT)
Mr. Giardina is currently working with Denver
Water in a facilitation and technical assistance
capacity as the utility considers changes to its rate
structure. It has been over 20 years since Denver
Water last made significant changes to its rate struc-
ture. Working with Denver Water staff, Mr. Giardina
is facilitating/leading a series of meetings with a cit-
izen-stakeholder Rate Structure Review Committee.
His role includes the development of the agenda for
each meeting, preparation of meeting materials,
facilitation and presentation, post-meeting staff
de-briefs, and assistance in the formulation and
development of rate structure alternatives.
CITY OF THORNTON, CO (2010 - 2017)
Mr. Giardina served as the Project Director for a
financial planning and cost of service study con-
sulting engagement with the City of Thornton, CO
(City). The City, located in the fast growing northern
suburbs of the Denver metropolitan area, currently
provides water utility service for a population of
125,000. With an estimated service territory pop-
ulation of up to 250,000 at full system build-out,
the City’s ten-year capital improvement program
includes expenditures of approximately $560 million
for water resources, treatment facilities and storage
projects to meet long-term demand growth. As part
of the consulting engagement, Mr. Giardina assisted
the City in several key areas including: 1) the devel-
opment of multiple long-range financial planning
scenarios to determine the optimal capital financing
strategy, 2) the preparation of a comprehensive cost
of service study to identify misalignments between
customer class revenue recovery and the actual cost
of service; 3) the analysis of alternative water rate
structures; and, 4) and an update of the City’s system
development charges. Throughout the consulting
engagement, Mr. Giardina made numerous pres-
entations at City Council workshops. Ultimately, the
City Council approved a long-term financial planning
strategy that includes the forecast issuance of $280
million in revenue bond financing. In addition, the
City Council adopted three straight years of annual
13% increases and new system development charges
featuring a $4,255 increase in single family residen-
tial connection fees.
ADAMS COUNTY, CO (2014)
Raftelis completed a Stormwater Utility Credit Study
for Adams County (County), of which the outcome
was to develop guidelines, policies, and procedures
for offering utility fee credits to customers in the
Adams County Stormwater Utility. The team com-
pleted a preliminary review of the stormwater
program and utility documentation, financial mate-
rials, billing data, and the Stormwater Management
Task Force meeting materials and minutes. Raftelis
visited sites around the utility service area that were
representative of existing stormwater management
or special drainage conditions. The team’s summary
of these site visits and an overview of available
credit types were presented to utility staff and the
County board along with the preliminary Raftelis
recommended program structure. We used program
costs and other data to determine maximum avail-
able credits and estimate the revenue impacts of
implementing the program. Raftelis recommended
that the utility implement a limited credit program,
focused primarily on incentivizing treatment
practices that result in improved water quality or
reduced peak flow or runoff volume. Recommen-
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 16 \
dations were based on analyses of the utility’s costs
and a determination of which costs have the poten-
tial to be reduced through customers’ stormwater
treatment or activities, and which costs could not
be further reduced through these means. Finally,
Raftelis estimated the potential revenue impact of
implementing the recommended credit program.
CITY OF BOULDER, CO (2006 - PRESENT)
Mr. Giardina is serving as Project Director for an
ongoing water, wastewater, and storm drainage rate
study initiated in 2016. The study includes a detailed
review of policies and practices incorporated in sep-
arate utility rate models maintained and updated by
the City for validation and/or modification as well as a
comprehensive review of improvements to the utility
rate structures. The City implemented an individu-
alized customer water budget based rate structure
in 2007 and this study will include a review of how
well the rate structure accomplished the intended
goals. The City’s wastewater utility faces increased
capital costs associated with increased regulatory
requirements combined with repair and replacement
requirements. The City’s stormwater collection and
drainage systems are faced with equitably recover-
ing increased operating and capital requirements
associated with increasing storm drainage service
levels following the flooding experienced by the City
in the fall of 2013. Alternative water, wastewater and
storm drainage rate structures will be developed that
incorporate adjustments that better align the rate
structures with the City’s financial and rate setting
goals and objectives. The alternative rate structures
will be completed to the existing rate structure
updated for increased utility revenue needs and a
January 1, 2017 effective date. Raftelis also reviewed
the City’s revenue requirement and provided recom-
mendations to the Utility debt service coverage and
cash reserve policies.
Throughout the project, Raftelis worked extensively
with City staff to review and refine study findings
and recommendations. Raftelis and City staff will
present interim and final study recommendations
to the standing Water Resource Advisory Board
(WRAB) to provide direction regarding policies,
practices and adjustments to the utility rate struc-
ture for review and approval by City Council.
Mr. Giardina also served as Project Director on an
engagement to conduct a management study of
the City’s development review process. This study
evaluated the organization and operating processes
in place and also included a review of the degree to
which various functions could be and/or should be
automated. A third area of study included a com-
prehensive review and revision of the city’s design
standards manual.
CITY OF AURORA, CO (2007)
Mr. Giardina examined user charges and impact
fees as part of a water, wastewater, and stormwater
rate and financial study. He developed automated
financial plans and cash flow statements for each
utility, further segregated into operation and system
development. He also examined several alternatives
for determining appropriate transfers from the
city’s utility operations to the General Fund. Subse-
quently, Mr. Giardina worked with the city to update
impact fees and rates and develop a rate structure in
response to a drought. He also developed a financial
plan to provide the city with reasonable assurance
that its costs would be funded with a combination
of rate revenue and existing unrestricted cash. Con-
ducted an update for the city utility’s financial plans
evaluating alternative user fee and impact fee meth-
odologies, and developed a reclaimed water pricing
policy/structure.
CITY OF BROOMFIELD, CO (2005)
Mr. Giardina served as Project Director for compre-
hensive financial planning and system development
or an impact fee study for the city’s utility. The
financial plan covered a five-year horizon and pro-
vided the city with revenue and expense projections
for its water, sewer, and reclaimed water funds,
including debt service coverage, cash position, and
fund balance information. The plan encompassed
the results of a CIP review, miscellaneous or specific
service charge analyses, and system development
fees. Mr. Giardina designed system development
charges for water and sewer operations to approx-
CITY OF BOZEMAN / 17 /
imate the capital cost of serving a new customer.
He evaluated alternative calculation and assess-
ment methodologies. The project also included an
evaluation of issues associated with funding storm
drainage capital and O&M requirements, as well
as potential organizational alternatives. Mr. Giar-
dina evaluated water pricing structures designed to
achieve the city’s goals and objectives and completed
a rate analysis for the city’s high-strength discharges
and entire industrial pretreatment program. Most
recent work included updates to financial planning
models for the utility, as well as the preparation of
recommended financial policies and development
of “drought rates.”
CITY AND COUNTY OF DENVER, CO (2015)
This project was the first ever bond issue ($30.7
million) for the City of Denver’s (City) Wastewater
Management Division and, as such, required the
development of a number of “bond-related” docu-
ments in addition to the financial feasibility plan.
The engagement was completed in several phases: 1)
Reviewed the City’s ordinances and regulatory mate-
rials concerning the storm drainage utility, including
the Denver revised municipal code, wastewater pol-
icies and procedures related to the assessment and
collection of storm drainage fees within the City.
The storm drainage capital projects 6-year and long-
term needs were reviewed and the costs of services
for maintaining and operating the storm drainage
utility, including assessing the current and projected
financial requirements of operating the utility and
the planned capital projects was assessed. 2) Prepared
a plan of finance, including projections of storm
drainage fees which supported completion of the
planned capital projects.
Mr. Giardina also conducted a financial planning
study for storm drainage in several phases:
>Reviewed the City’s ordinances and regulatory
materials concerning the storm drainage utility
and the storm drainage capital project’s six-year
and long-term needs. Assessed the cost of services
for maintaining and operating the storm drain-
age utility, including the current and projected
financial requirements of operating the utility
and the planned capital projects.
>Prepared a plan of finance, including projections
of storm drainage fees, which supported comple-
tion of the planned capital projects.
CITY OF PHOENIX, AZ (2016)
Mr. Giardina was retained by the City of Phoenix
(City) Water Services Department to develop a long-
range financial planning model of the City’s water
and wastewater utilities. The models, to be used by
Department Management and the Natural Resources
subcommittee of the City Council, had the capability
to examine alternative funding sources for the capital
improvement program and project results of opera-
tions in overall cash flows. The financial parameters
of the City were incorporated into the model so that
such indicators could be readily reviewed to ensure
that debt service coverage requirements were met or
that the use of debt to fund capital projects did not
exceed target levels.
As part of an ongoing contract with the Department,
he converted this model for use with the wastewater
utility. The wastewater financial planning model
was enhanced so that the revenue requirement can
be projected by customer class. The primary reason
for this enhancement was to provide the Department
with the ability to analyze the impact that anticipated
upgrades to the City’s two wastewater treatment
plants would have on various customer classes. These
upgrades were necessary in order to comply with
anticipated NPDES permit requirements.
He is currently working with the City/Department
to complete a comprehensive water and wastewater
rate study that includes a review of and as appropri-
ate modifications to the cost of service methodology,
rates and an update to the water and wastewater envi-
ronmental rates or user charges.
CITY OF AUSTIN WATER UTILITY, TX (2016)
Mr. Giardina served as Project Director under the
Water and Wastewater Cost of Service Rate Study con-
tract for the City of Austin Water Utility (AWU) The
project included cost of service and rate studies for the
water and wastewater utilities and development of cost
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 18 \
of service and rate models. He prepared several issue
papers to educate Public Involvement Committee (PIC)
about issues relating to cost of service methodologies
and rate design and presented issue paper topics to PIC
and the utility’s Executive Committee.
Mr. Giardina also served as Project Director for a
Revenue Stability Fee Study. He provided expertise
relating to revenue stability efforts among water
and wastewater utilities throughout the country. In
addition, he researched and presented information
regarding options for improving utility revenue
stability to AWU staff and appointed Joint Subcom-
mittee on AWU’s Financial Plan. Recommendations
were made to AWU staff regarding revenue stability
fee structure.
CITY OF SAN DIEGO, CA (2014)
Mr. Giardina served as Project Director for a Bond
Feasibility Study for the City of San Diego, Mr. Giar-
dina conducted a financial analysis to determine
if current rates and proposed future rates could
reasonably be expected to provide the revenues
necessary to support all costs of the MWWD and
city systems, including capital expenditures, O&M
expenses, debt payments, debt coverage require-
ments, and financial reserve requirements.
Additionally, Mr. Giardina served as Project Director
for a project for the City’s ongoing training initiative.
Specifically, he led managers and staff of the Utility
Department through a comprehensive financial plan-
ning and rate study program. He conducted sessions
with the groups during which the fundamental con-
cepts and approaches to financial planning, cost of
service and rate design were presented.
ST. LOUIS METROPOLITAN
SEWER DISTRICT, MO (2012)
Mr. Giardina was part of a team performing a
management audit for St. Luis Metropolitan Sewer
District that included: review of policies, proce-
dures, and management techniques; use of focus
groups to gauge perceptions of employees, specific
customer groups, etc.; assessment of district use
of industry best practices; assessment of budget
process, accounting procedures, and information
systems; and work force utilization, technology
application, and standard operating and mainte-
nance procedures.
CITY OF TUCSON, AZ (2005)
Mr. Giardina served as Project Manager in providing
rate and financial services for Tucson Water under a
multi-year contract for services, including cost allo-
cation and alternative rate design considerations.
Specifically, he assisted the city in analyzing the
rate blocks for its inclining block water rate struc-
ture and customer class designations. He developed
new impact fees and provided recommendations on
revenue projections and financial modeling.
REGIONAL WATER COOPERATION
COMMISSION, FORT COLLINS, CO (2015)
The purpose of this project (completed in 2014) for the
Regional Water Cooperation Commission (the RWCC)
evaluated the merits of alternative regional water
treatment solutions to providing drinking water to
customers in Northern Colorado. More specifically,
we determined if there is an opportunity to achieve
operational and economic benefits for the region
at-large through regionalization. Mr. Giardina is
serving as Project Manager for the project.
The Tri-Districts (East Larimer County Water Dis-
trict, the North Weld County Water District, and the
Fort Collins Loveland Water District) and the City of
Fort Collins were looking at the merits of crafting a
regional water treatment solution through possible
creation of a regional water treatment cooperative
involving the Tri-Districts and the City (the stake-
holders) versus the continued operation of the two
completely autonomous facilities. As was identified
in the request for proposals issued by the RWCC, “…
the evaluation of each entity will need to include, but
not be limited to, equitable financial representation
of assets and debt, cost of service equity, equitable
treatment of staff and equal representation relative
to governance.”
During Phase 1 of the project, Mr. Giardina met
with key senior representatives, (e.g., managers,
CITY OF BOZEMAN / 19 /
directors, elected officials) from each RWCC stake-
holder, over a 2-3 day period to identify key issues
and opportunities related to the potential regional-
ization. Mr. Giardina then led all of the economic/
financial analysis and worked extensively with the
RWCC “working group” to define Status Quo require-
ments, identify regionalization options, determine
data needs, create the analysis frame-work, etc. A
key initial activity included the identification of
any technical or institutional factors that would
be considered as “non-starters” in terms of moving
forward with a collaborative arrangement. This was
accomplished early in Phase 1 via the interview with
key management from the four entities – the conclu-
sion being that there were not any major technical
issues that should be considered “non-starters.”
Based on this finding, the financial analysis was
undertaken to demonstrate how the region and the
entities would be impacted under the current versus
regionalization or collaboration scenario.
The balance of the Phase 1 and 2 efforts centered on
the development of demand projections, cost esti-
mates, and the financial plan. Key to this included
assumptions regarding historic use and cost respon-
sibility for the Tri-District’s Soldier Canyon Plant,
a determination of the plant “value” each of the
Tri-District’s members would bring to the table, and
an appropriate means of acknowledging these differ-
ences. With input from the client and team, Raftelis’
Mr. Giardina developed a series of options for this
valuation that quantified the value “shortfall” or
“excess” for each entity and included in the financial
analysis how this would be recognized along with
future capacity additions, financing needs, and
plant investment fee or impact fee revenues.
The detailed financial analysis was used to esti-
mate preliminary net present value costs for the
region in total, as well as for each entity, over a
30-year study period under both the Status Quo
and an alternative Regionalization option. The
entities were presented with the preliminary find-
ings and recommendations through a series of
two separate validation workshops facilitated by
Mr. Giardina that included an impact/sensitivity
analysis around the major assumptions, including
future demand projections, capacity sharing, and
potential savings in operation and maintenance
expenses due to regional efficiencies. Stakeholders
were also presented with a proposed governance
structure (developed and presented by another
team member – a local legal firm). Based on the
financial analysis, the stakeholders elected to not
move forward with the regionalization alternative.
CITY OF RENO, NV (2004)
Mr. Giardina served as project officer on this com-
prehensive wastewater rate study. He directed the
team in developing a financial model that was used
to evaluate revenue sufficiency, determine the cost
of providing wastewater service including charges
for excess-strength discharges, and determine equi-
table connection fees based on the cost of expansion.
Our interactive approach facilitated the develop-
ment of a rate structure that was legally defensible,
and met the City’s goals related to rate defensibility
and equitably paying for growth. Unanimous con-
sensus was reached in all forums and the project
ended with a unanimous vote by the City Council to
adopt all recommendations.
CITY OF LAS VEGAS, NV (2015)
Mr. Giardina served as Technical Advisor for the
analysis of the solid waste utility’s financial status,
including a review of current rate schedules to rec-
ommend adjustments as necessary to assure the
utility’s continuing financial viability. The study
includes: development of financial plan scenarios
for the study period, fiscal years (FY) 2010-11 through
2014-15; analysis of FY 2010-11 customer class cost of
service; and design of FY 2010-11 rates. To make this
study feasible, the team conducted a series of work-
shops with City staff to confirm study objectives,
review data received from City, identify relevant
City policies and objectives, and present findings.
The team provided technical memos following each
workshop. Additionally, the team attended a City
Council retreat and meeting to evaluate rate alter-
natives and discuss the implementation process.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 20 \
EL PASO WATER UTILITIES
PUBLIC SERVICE BOARD, TX (2016)
Mr. Giardina served as Project Officer to assist the
City of El Paso in identifying and assessing potential
organizational and institutional arrangements for
the management and funding of stormwater-related
activities; and recommend the preferred structure
for providing stormwater management and prepare
an implementation plan. Subsequently, Mr. Giardina
assisted the utility in the creation of the stormwater
utility, development of staffing plan and organiza-
tion structure, preparation of financial plan, rate
design and customer billing data base all culminat-
ing with the issuance of stormwater bills 18 months
after beginning the initial feasibility effort.
Mr. Giardina also served as Project Director for a water
and sewer rate and financial planning study for the
City of El Paso Water Utilities Public Service Board.
He evaluated a number of pricing alternatives includ-
ing the board’s inverted residential block structure
and excess use approach for nonresidential custom-
ers. Mr. Giardina projected demand reductions based
on price elasticity estimates so that, when considered
within the spectrum of a comprehensive water con-
servation program, per capita usage would decrease
from 200 to 160 gallons per day by the year 2000. He
also developed excess strength sewer surcharges as
well as permit fees for significant industrial users and
other permitted accounts.
OKLAHOMA CITY WATER UTILITIES TRUST, OK
(2015 - PRESENT)
Mr. Rick Giardina, as a sub-consultant to another
firm, served as Project Director for the most recent
comprehensive water and wastewater rate study
completed for the Oklahoma City Water Utilities
Trust (OCWUT). In this capacity he was responsible
for the overall project direction, technical analysis
and presentations to the Trust, City Council and
Wholesale Customers. This study included devel-
opment of a multi-year financial plan (2015-2024),
cost of service study, rate design and the determi-
nation of system development charges (also known
as impact fees). A key driver in all elements of this
study is the planned 2nd Atoka raw water supply
line – part of a 10-year, $2 billion capital improve-
ment program. The resulting approved financial
plan includes annual revenue increases, a transition
plan for increasing the water system development
charge as well as moving towards user charges
based on the indicated class cost of service. Retail
water user charges will include an incremental fixed
charge to assist in funding the Atoka Pipeline and
volume rates will be restructured from the current
uniform rates to an inverted 2-block approach with
plans to re-evaluate results and in 2-3 years consider
adjusting the block thresholds and adding a third
block. Additionally, wholesale rates will transition
from forms of demand and take-or-pay charges/
rates to time of day rates. This change will result
in enhanced equity among the retail and wholesale
class; better reflecting the investment made by
OCWUT to serve the wholesale customer class.
Mr. Giardina again is serving as the Project Director
for an ongoing project to update the financial plan,
cost of service, and rate design. Additionally, this
current effort will begin assessing the effectiveness
of the conservation-oriented rate structure adopted
as part of the last study.
CITY OF LARAMIE, WY (2016)
Mr. Giardina served as Technical Advisor for a water
and sewer cost of service rate study for the City of
Laramie with the support of citizen committee meet-
ings. On the basis of this study we updated the City’s
water and wastewater financial plan and rates and
presented the findings to Laramie’s City Council.
Mr. Giardina also served as Project Manager to
assist the City in soliciting and evaluating propos-
als to privatize (design/build with possible contract
operations) a new wastewater treatment facility. Mr.
Giardina was responsible for drafting the request
for proposals, a design/build contract and other
related documents. Efforts also included assisting
City Council in understanding the privatization
process and evaluating contract operation for the
completed facility. Wyoming state law relating to
municipal procurement requirements added to the
complexity of this project. Council workshops and
CITY OF BOZEMAN / 21 /
a close working relationship with the City’s outside
legal counsel were necessary to address these and
other issues.
CITY OF POCATELLO, ID (2014)
Mr. Giardina served as Technical Advisor for san-
itation, water, and wastewater utilities rate study
and cost of service analysis. The study included a
detailed customer billing and revenue analysis, cash
flow, cost of service, and revenue sufficiency analysis
for the water, wastewater, and sanitation utilities.
Long range plans for each utility were developed and
revenue increases proposed.
CITY OF CHANDLER, AZ (2005)
Mr. Giardina provided financial consultation to City
of Chandler’s utilities since 1993. He managed com-
prehensive rate studies that included development
of long-range financial plan, analysis of outside
City rate differentials, detailed study reports, and
meetings with City Council. Mr. Giardina managed
a study to examine feasibility of alternative solid
waste disposal options. He recently completed a
study of water and wastewater development fees
that included meeting with the Homebuilders Asso-
ciation of Central Arizona to address their questions.
Mr. Giardina also served as Project Director in
reviewing and updating System Development
Charges for solid waste, water, and wastewater oper-
ations and analyzed the cost associated with water
and wastewater extensions. The overall objective of
this project included: recommending development
fees and charges which more equitably recover
water, wastewater, and solid waste capital costs;
designing a schedule of Utility System Development
Charges for the five-year study period; and evaluat-
ing developer paid extension or “buy-in” charges for
water and wastewater service and recommending
new charges and/or procedures for the assessment,
collection and refunding of such charges. Subse-
quently, Mr. Giardina was retained by the City to
update impact fees based on newly modified utility
master plans.
TOWN OF GILBERT, AZ (2006)
Rick Giardina served as Project Director for a com-
prehensive solid waste, water, and wastewater utility
financial planning study for the Town of Gilbert. The
plan, covering a five-year study horizon, provided
the town with a cash flow and financing plan for the
town’s utilities, an evaluation of alternative water
rate structures, and recommendations for the full
recovery of costs associated with other utility ser-
vices such as hydrant changes, customer account
services, etc. Additionally, he developed a process
for identifying the cost of services provided by gen-
eral fund departments to the utilities. Mr. Giardina
led meetings throughout the project with the town’s
Citizens’ Utility Rate Advisory Committee. During
these sessions we briefed the committee on relevant
issues and used feedback to assist in the formulation
of recommendations regarding the financial plans
and rate structures. He also completed an update to
determine utility and non-utility system develop-
ment or impact fees.
CITY OF SHERIDAN, WY (PRE - 2000)
As Project Director, Rick Giardina developed financial
plans for the City’s three utility operations – water,
sewer and sanitation (collection and disposal). The
financial plans contained cashflow projections and
identified revenue deficiencies on a year-to-year basis
and were designed to achieve goals and objectives
relating to cash recovery, debt coverage, and renewal
and replacement funding. For the water utility a cost
of service and rate design model was also developed.
Impact fees were evaluated and recommended for use
as a capital recovery mechanism.
TOWN OF JACKSON, WY (PRE - 2000)
As Project Manager, Rick Giardina completed a
review of the Town’s water and sewer rate pricing
approaches and procedures. A plan was developed
for assigning or allocating each component of rev-
enue requirements to specific utility functions. The
plan consisted of a specification of utility functions
based on the assessment of information available for
the cost of service analysis, as well as a delineation
of the procedures to be employed to accomplish a
comprehensive assignment or allocation of revenue
requirement components. A plan for classifying
revenue requirements among the different types
of customers was developed. Impact fees were also
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 22 \
developed as part of this project and presented to a
20-member Rate Committee comprised of private
citizens, business owners, Town employees and
Council members.
JOINT POWERS WATER BOARD, WY (PRE - 2000)
Mr. Giardina assisted in a forecast and feasibility
study for Joint Powers Water Board. The Board’s
existing bond indenture required that a parity-lien
test be completed prior to the Board committing
to a loan from the State of Wyoming. In order to
assist the Board with this financing a five-year rate
and financial plan was developed. Financial analy-
sis assistance was also provided associated with a
second borrowing from the State.
SEATTLE WATER DEPARTMENT, WA (PRE-2000)
Mr. Giardina served as Project Manager on an
engagement to assist the Seattle Water Depart-
ment in conducting a comprehensive water cost
of service and rate study and another rate study a
couple of years later. The base-extra capacity cost
allocation approach was used for this study. The
department provides retail service to in-city resi-
dents and wholesale service to twenty-nine purveyor
customers. Issues examined in this study included
marginal cost pricing; seasonal rate development;
rate of return; and inside/outside rate differentials.
He provided consulting services and direction to the
department on each of these issues.
CITY OF NOGALES, AZ (PRE - 2000)
Mr. Giardina served as Project Director of a manage-
ment study and organizational assessment of the
city’s water and wastewater systems. The analysis
was requested by the North American Development
Bank to provide recommendations to the City of
Nogales to allow it to increase and improve man-
agement capacity of its water and wastewater utility
operations to operate and maintain the proposed
infrastructure systems effectively and efficiently
and provide a superior level of service to end user.
GRAND RIVER DAM AUTHORITY, TX (PRE - 2000)
Mr. Giardina served as lead consultant in the rates
and regulation area of management audits of the
Grand River Dam Authority and saws Lighting and
Power. Included in these projects were rate surveys
and comparisons as well as effectiveness and effi-
ciency reviews of the utility’s rate analysis functions.
LITTLE ROCK WATER WORKS, AR (PRE - 2000)
As Project Manager, Mr. Giardina reviewed capital
improvement program planning, rates and finance,
and customer service for a management study.
EASTERN MUNICIPAL WATER DISTRICT, CA
(PRE - 2000)
Mr. Giardina served as Project Director for the
Potable Water System Access Policy and Rate Devel-
opment for the Eastern Municipal Water District.
The District contracted for development of a pota-
ble water system access policy to require that water
introduced into District facilities meet all current
District regulatory guidelines for potable drinking
water, including water quality. Additionally, the
District requested cost recovery methodology that
is most applicable to the District’s transmission and
distribution system.
CITY OF NEWPORT BEACH (CA)
Mr. Giardina performed QA/QC for a water cost
of service study and assisted in development of a
long-range financial plan, evaluation and imple-
mentation of a conservation rate structure that
adheres to cost of service principles and provisions
of California Proposition 218.
In addition, he worked with Newport Beach staff to
identify policy objectives for prospective rate design
alternatives.
METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA (CA)
While he was with a previous employer, Mr. Giardina
facilitated a series of workshops with management,
member agencies and stakeholders to assess the
economic, political and technical feasibility of a
growth-related infrastructure charge (approx-
imately 2006-2007). He led seminars to inform
participants of the prevailing industry standards for
adhering to cost of service principles and navigating
CITY OF BOZEMAN / 23 /
California’s complex legal environment. Again, in
2011, he led the long-range financial planning pro-
cess with a focus on better aligning fixed costs with
fixed revenue sources as well as a variety of related
issues. He facilitated and provided technical input
as a variety of rate and financial planning alterna-
tives were considered.
From 2015 to 2016, Mr. Giardina developed alter-
natives to the current MWD 100% variable rate
methodology for treated water service. He lead
Raftelis’ efforts to frame and develop a number
of fixed charge alternatives considering the basis
or rationale for historic investments in treatment
capacity and the demand characteristics of the
MWD Member Agencies, i.e., average, peaking and
standby demands.
CITY OF OXNARD, CA (PRE - 2000)
As Project Manager, Mr. Giardina prepared a pro-
jection of water user charge revenues. The project
approach included the compilation and review of
historic data regarding water production, customer
usage and account information, and reported
revenues. He reviewed usage and revenue data in
aggregate and by customer class. He also calculated
revenues by class based on the City’s current rates,
and reviewed the procedures used by the City for
determining individual customer bills.
Mr. Giardina also assisted the city in developing a
master plan for its wastewater system, including
storm water, and defining improvements required to
address future capacity and replacement/rehabilita-
tion needs. A component of this plan and associated
activities related to the evaluation and potential
establishment of funding sources for storm water
capital and operational requirements.
CITY OF ROHNERT PARK, CA (PRE - 2000)
Mr. Giardina served as Project Manager in develop-
ment of connection or impact fees and an automated
rate model. The use of the model, which was left
with the city at the conclusion of the study, will
allow for future updates based on revised forecasts
or budget data. Both user charges and impact fees
were designed to comply with local, state and EPA
requirements, and reflected the City’s participation
in a regional wastewater treatment facility.
HONOLULU BOARD OF WATER SUPPLY, HI
(PRE - 2000)
Mr. Giardina served as Project Director on an
engagement to conduct a comprehensive rate and
financial planning study for the Honolulu Board
of Water Supply. He developed several alternative
rate methodologies that addressed the pricing
objectives of the community. These included the
development of impact fees by functional area (e.g.,
supply, treatment). A major interest to the client was
the consideration of a conservation pricing struc-
ture which included an increasing unit charge for
increasing amounts of water consumed.
In addition, we completed a study for the Board
to examine the relationship between impact fees,
user charges and conservation pricing and develop
a recommended rate and financial plan. This was
completed with the development and use of an
automated rate, financial planning, and customer
impact model.
PUERTO RICO AQUEDUCT &
SEWER AUTHORITY, PUERTO RICO (2017)
Mr. Giardina served as Technical Advisor for the
review of financial forecasts in support of planned
capital financing for the Puerto Rico Aqueduct &
Sewer Authority (Authority)-multi-year capital
needs in support of new money and refunding
bond issues, and for completing a comprehensive
rate study. Mr. Giardina represented the Authority
in meetings and presentations with rating agen-
cies and insurance companies for their first public
issue in over a decade. The financial forecast and
additional work completed included a comprehen-
sive assessment of efficiency initiatives, resulting
increases in revenues and/or decreases in expendi-
tures. This effort proved to be critical in building
credibility with the rating agencies.
In 2016, Mr. Giardina was Project Director on a pro-
ject to provide an independent 3rd Party Professional
Opinion regarding PRASA’s operations and financial
position. This was done in light of the current and
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 24 \
on-going financial challenges facing the Common-
wealth of Puerto Rico and was specifically intended
to identify opportunities for cost reductions and
revenue increases to ultimately position PRASA to
access capital markets. Mr. Giardina lead all efforts
regarding the operations assessment and financial
planning and facilitated meetings and presentation
with the Government Development Bank, PRASA’s
Fiscal Agent, and both Commonwealth Senators and
Representatives as they considered PRASA-specific
legislation intended to assist PRASA in raising cap-
ital while mitigating rate increases.
CITY OF WINNIPEG, CANADA (PRE - 2000)
Mr. Giardina served as Project Director for an organi-
zational and financial management study for the City
of Winnipeg Waterworks, Waste & Disposal Depart-
ment to evaluate the potential for creating a storm
water utility and establishing a means of financing
both capital and operations and maintenance costs.
OTHER RELEVANT
PROJECT EXPERIENCE
>City of Albuquerque (NM) - Various Rate Studies
since the early 1990’s
>City of Hobbs (NM) - Rate Study
>Rio Rancho (NM) - Rate and Impact Fee Studies
>Santa Fe Metropolitan Water District (NM) - Rate
Study
SPECIAL RECOGNITION
>Water Rates Summit, Invited Expert, Alliance for
Water Efficiency (AWE), The Johnson Foundation,
August 2012 and April 2014
>US EPA – Appointee to the Environmental Finan-
cial Advisory Board, 2011 to present
>Rates and Charges Committee, American Water
Works Association, 1999 to present
>Utility Management Committee, Water Environ-
ment Federation, 2005 to 2011
>Water For People, Annual Fund Raising Event,
Organizing Committee, 2006 to 2012
>Utility Management Conference, AWWA-WEF,
past co-chair and organizing committee, 2005 to
2010
>Conference President, the Growth and Infrastruc-
ture Consortium (formerly known as the National
Impact Fee Roundtable), Annual Conference,
Denver, CO, October 2005
>Board Member, East Cherry Creek Valley Water &
Sanitation District, CO 2001 to 2002
RECENT PUBLICATIONS/
PRESENTATIONS
>Giardina, R.D., Cramer, C., “How Much Does It
Cost To Build Here,” presented at the Growth and
Infrastructure Consortium Annual Conference,
Denver, CO, October 13, 2016.
>Giardina, R.D., Gaur, S., Kiger, M.H., Zieburtz, W.,
“Committee Report: Ripples From the San Juan
Capistrano Decision,” Journal – American Water
Works Association, September 2016, Volume 108,
Number 9.
>Giardina, R. D., “What’s In Your Rates?”, presented
at the Colorado Water Congress, 2016 Summer
Conference, Steamboat Springs, CO, August 24,
2016.
>Giardina, R.D., Ash, T., “Constructing Successful
Rates: The Art and Science of Revenue and Effi-
ciency,” presented at the 5th Annual WaterWise
Pre-Conference Workshop, Denver, CO, October
24, 2013.
>Giardina, R.D., Ash, T., Mayer, P., “Constructing
Successful Rates,” presented at the WaterSmart
Innovations Annual Conference, Las Vegas, NV,
October 4, 2013.
>Giardina, R.D., Burr-Rosenthal, Kyrsten, “Consid-
ering Water Budget Rates? One City’s Approach,”
presented at the 2013 CA-NV AWWA Spring Con-
ference, Las Vegas, NV, March 27, 2013.
>Corssmit, C.W., Editor, and contributing editors,
reviewers, and technical editors: Hildebrand,
M., Giardina, R.D., Malesky, C.F., Matthews, P.L.,
Mastracchio, J.M., “Water Rates, Fees, and the
Legal Environment,” American Water Works
Association (AWWA), 2nd Edition, 2010. ISBN
978-1-58321-796-2.
>Giardina, R.D., “Is This the Right Time for You
to Form a Stormwater Utility?,” presented at a
Seminar on Weathering the Storm: Is This the
Right Time for You to Form a Stormwater Utility?
sponsored by the Water Environment Federation
CITY OF BOZEMAN / 25 /
(WEF), Alexandria VA, May 18, 2010. This seminar
was also presented in 2011. See also http://www.
wef.org/blogs/blog.aspx?id=7312&blogid=17296
>Giardina, R.D., “Financial Viability - Can Budget
or Individualized Water Rates Work for You?,”
presented at the Utility Management Conference
sponsored jointly by the American Water Works
Association and Water Environment Federation
(AWWA/WEF), San Francisco CA, February 21-24,
2010.
>Giardina, R.D., “Attaining Sustainable Business
Performance Finance - Water Budget Based
Rates,” presented at a Meeting of the Association
of Metropolitan Water Agencies (AMWA), New
Orleans LA, October 20, 2008.
>Jackson, D.E., Giardina, R.D., “Financing Options
for Drinking Water CIP Projects,” presented at
a Seminar sponsored by the Arizona Water and
Pollution Control Association (AWPCA) on Treat-
ment Technologies for Compliance with the Stage
2 Disinfection Byproducts Rule, Phoenix AZ, Feb-
ruary 16, 2006.
>Giardina, R.D., “Impact Fee with a Defined
Short-Term Build-Out Horizon,” presented at the
National Impact Fee Roundtable, Naples FL, Octo-
ber 22, 2004.
>Giardina, R.D., “Calculating Impact Fees: Meth-
ods,” presented at the American Planning
Association State Conference, Vail CO, September
24, 2004.
>Giardina, R.D., “Funding Local Government Ser-
vices,” presented at the 97th Annual Convention
of the Utah League of Cities and Towns, Salt Lake
City UT, September 15, 2004.
>Giardina, R.D., “Understanding Water Issues in
Arizona,” presented at the Government Finance
Officers Association Summer Training Program,
Tucson AZ, August 20, 2004.
>Giardina, R.D., “Impact Fees: A Vote of Confidence
for Economic Growth?,” published in Colorado
Government Finance Officers Association (GFOA)
Footnotes, December 2003, the Arizona GFOA
Newsletter, January 2004, and the Illinois Gov-
ernment Finance Leader, Spring 2004.
>Giardina, R.D., “Impact Fee Basics / Impact Fees
with a Defined Short-Term Build-Out Horizon,”
presented at the National Impact Fee Roundtable,
San Diego CA, October 16, 2003.
>Giardina, R.D., “Local Government Utilities
Establishing Rates for Service,” presented at Ari-
zona State University, Phoenix AZ, September 23,
2003.
>Giardina, R.D., “Selecting a Water Rate Structure
through Public Involvement,” presented at the
Annual Conference of the American Water Works
Association, Intermountain Section, Jackson
Hole WY, September 17, 2003.
>Giardina, R.D., “Ratemaking 101,” presented at
the Government Finance Officers Association of
Arizona, Summer Training, Flagstaff AZ, August
22, 2003.
>Giardina, R.D., “Impact Fees,” presented at the
Colorado Government Finance Officers Associ-
ation, Metro Coalition, Golden CO, May 9, 2003.
>Giardina, R.D., “Impact Fees – A Primer,” pre-
sented at a Conference of the Colorado River
Finance Officers Association, Parker AZ, Febru-
ary 4, 2003.
>Giardina, R.D., “Impact Fees and Economic Devel-
opment,” presented at the Annual Conference of
the Colorado Government Finance Officers Asso-
ciation, Vail CO, November 20, 2002.
>Giardina, R.D., “Case Study: City of Chandler,
Arizona, Utility System Development Charges,”
presented at the National Impact Fee Roundtable,
Phoenix AZ, October 24, 2002.
>Giardina, R.D., “Using Impact Fees to Fund Streets
and Roads,” presented at the Utah League of Cities
and Towns 2001 City Streets and County Road
School Convention, St. George UT, April 25, 2001.
>Giardina, R.D., “Addressing Capital Needs,” pre-
sented at the Utah League of Cities and Towns
Mid-Year Conference 2001, St. George UT, April
5, 2001.
>Giardina, R.D., “Fine Tuning Your Rate Structure
Using a Citizen Committee,” presented at the
Annual Conference and Exposition of the Amer-
ican Water Works Association, Denver CO, June
14, 2000.
>Giardina, R.D., “Impact Fees without Getting in
Trouble,” presented at the Annual Convention of
the Utah League of Cities and Towns, St. George
UT, April 13, 2000.
>Giardina, R.D., “Impact Fees for Small Communi-
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 26 \
ties,” presented at the Annual Convention of the
Utah League of Cities and Towns, Salt Lake City
UT, September 16, 1999.
>Giardina, R.D., “Trends in Privatization,” pre-
sented at a Conference of the Water Environment
Association of Utah, St. George UT, April 24, 1998.
>Giardina, R.D., “Isn’t Competition Wonderful?,”
presented at the Joint Technical Advisory Com-
mittee (JTAC) of the American Water Works
Association, Rocky Mountain Section and the
Rocky Mountain Water Environment Associa-
tion, Denver CO, February 26, 1998.
>Giardina, R.D., “Strategies and Approaches for the
Development of Utility Impact Fees,” presented at
the Annual Conference of the Rural Water Asso-
ciation of Utah, Park City UT, August 25, 1998;
and the Joint Annual Winter Conference of the
Water Environment Association of Utah/Amer-
ican Water Works Association, Intermountain
Section, Salt Lake City UT, January 21, 1998.
CITY OF BOZEMAN / 27 /
TECHNICAL SPECIALTIES
»Cost of service and rate
structure studies
»Litigation support
»Economic feasibility
analyses
»Impact fee studies
»Reviews of policies,
procedures, and operating
practices
»Budget processes
PROFESSIONAL HISTORY
»Raftelis Financial
Consultants, Inc.: Manager
(2017 – Present)
»Stantec (2016 – 2017)
»Denver Water: Manager of
Rates (2010 – 2016)
»Malcolm Pirnie-Arcadis-US
(2005 – 2010)
»Black & Veatch (1998 –
2005)
»Fluor (1996 – 1998)
»Advanced Composites
Group (1996 – 1998)
EDUCATION
»Master of Business
Administration – University
of Colorado (2003)
»Bachelor of Science in
Chemical Engineering –
University of Tulsa (1995)
PROFESSIONAL MEMBERSHIPS
»American Water Works
Association: Chair of Rates
and Charges Committee
»Water Environment
Federation
TODD CRISTIANO
PROJECT MANAGER
Manager
PROFILE
Mr. Cristiano has over 20 years of utility finance experience – 12 years
as a consultant to utilities and 6 years as the Manager of Rates at Denver
Water. He has completed studies across the U.S. for water, wastewater,
stormwater, electric, and gas utilities. His experience covers technical
areas and industries such as municipal fee development, utility cost of
service and rate structure studies, economic feasibility analyses, impact
fee studies, and budget processes. While at Denver Water, he oversaw four
significant rate- and fee-related studies, all unanimously approved by the
Board of Water Commissioners, and also served as interim budget manager
at Denver Water. As a member of the AWWA, he has helped to develop
industry guidelines regarding financial and rate-making practices. In par-
ticular, as the current Chair of the AWWA Rates and Charges Committee,
he co-authored the water reuse chapter in the latest edition of Manual M1,
Principles of Water Rates, Fees and Charges. Mr. Cristiano is also co-instructor
for an AWWA biennial Financial Management: Cost of Service Rate-Mak-
ing Seminar.
RELEVANT PROFESSIONAL EXPERIENCE
DENVER WATER - NEW RATE STRUCTURE (2014-2016)
Originally developed to provide for Denver Water’s revenue needs while
encouraging conservation, the organization’s current rate structure had
not undergone a full-scale rate structure study in 20 years. Much has
changed since that time—water use habits, average demand and peak day
needs, available technology, revenue stability, and an increased emphasis
on the customer experience—for a start. To gain support for this initiative,
Mr. Cristiano presented key drivers to the CEO and Board. Coming off of
the 2013 drought and floods raised the issue of revenue instability to the
forefront. Mr. Cristiano served as the project manager on this engagement,
which included assistance from Denver Water’s Public Affairs Division as
well as an outside facilitator. Mr. Cristiano oversaw and managed a ‘les-
sons-learned’ workshop co-sponsored with the Water Research Foundation,
an external affordability study, a customer rate perception survey, as well
as a 20-person stakeholder group. Mr. Cristiano led in-house development
of all rate structure modeling with staff.
DENVER WATER - COST ALLOCATION MODEL (2012-2013)
Denver Water outside-city customers make up 50% of revenues and usage
for the utility. Denver Water serves these customers through contracts with
special districts called “distributors”. Distributors are charged in accord-
ance with Denver’s Charter provisions, “outside-city rate recover the full
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 28 \
cost of providing service plus an additional amount”.
In 1990, the Board developed a cost of service model
using the utility-basis of rate setting. This was
used to address the significant population growth
outside the city with a decline of population in the
city of Denver. As time progressed, the methodol-
ogy became less suitable, more complex, and more
opaque. The Board determined that the utility-basis
was no longer workable under current conditions.
Mr. Cristiano led this project and developed cost
allocation alternatives that both met current cir-
cumstances of a growing Denver, satisfied the
Charter provisions, and equitably allocated costs
between inside and outside city customers. Over a
14 month process, Mr. Cristiano evaluated several
alternatives, worked with a Distributor Task Force,
and met with Board members individually to review
model alternatives. The Board adopted the new cash
basis methodology in May 2013.
DENVER WATER - SYSTEM DEVELOPMENT
CHARGE STUDY (2012-2013)
Denver Water assesses system development charges
(SDCs) for new connections to the system. SDCs were
updated annually however, the last analysis of the
structure was completed in 1999. Mr. Cristiano led
an internal team to address inconsistencies in the
calculations of capacity costs. The SDCs were devel-
oped using the ‘hybrid’ method which considers
available capacity with future capacity projects.
The unit cost of capacity using the hybrid method
was used to develop the fee schedule for each type
of development. This uniform unit cost ensured
equitable recovery from all classes of customers.
Mr. Cristiano met with Distributor representatives,
members of the developer community as well as the
Citizen’s Advisory Council to review alternatives
and present findings.
RELEVANT PROJECT EXPERIENCE
CITY OF SALT LAKE CITY, UT (2008-2009)
Salt Lake City conducts a comprehensive update of
their water rates and impact fees every five years.
The City commissioned a study to ensure that rates
and fees were sufficiently recovering revenues and
adequately addressed conservation goals. Mr. Cris-
tiano facilitated five Water Rate Subcommittee
(WRS) stakeholder meetings with over 20 members
of the community representing a variety of industries
and community groups. The facilitation included
responding to technical questions, providing back-
ground on the concepts of rate making, and building
consensus among the group. Mr. Cristiano managed
three analysts for the development of the financial
plan, cost of service, and rate design alternatives.
CITY OF BOULDER, CO (2006-2010)
The City commissioned a study to review and update
utility plant investment fees. The primary concern
for the City was linking a customer’s share of system
and water rights capacity to water budget rates. Mr.
Cristiano served as project manager and participated
in 7 stakeholder meetings with the assistance of City
Staff to educate stakeholders on the PIF process. Mr.
Cristiano developed and reviewed progressive alter-
natives to arrive at fees that link the water budget
rate structure to water plant investment fees. Waste-
water and storm water PIF were developed with
traditional methodologies to ensure equity between
new and existing customers was maintained.
The City of Boulder adopted a new water budget
rate structure to be implemented in 2007. The City
commissioned a study to assist in developing the
volumetric rate required to meet revenue require-
ments. This water budget rate structure includes a
5-tier increasing block incorporating an allowance
for indoor and outdoor usage. Each tier’s threshold
is based on a percentage of the total indoor and out-
door monthly water allowance which could vary by
month. Based on the number of variables, number
of customers, and scenario analysis required, Excel
was not robust enough to handle the analysis.
As a result, Mr. Cristiano developed a customized
Access Database to model each of the scenarios
allowing users to change all of the variable con-
sidered in the structure. Mr. Cristiano attended
and presented at several Water Resources Advisory
Board (WRAB) meetings to review rate alternatives
and the revenue impacts of each. WRAB recommen-
CITY OF BOZEMAN / 29 /
dations are presented to Council for consideration.
Technical analysis included bill impacts to demon-
strate the percentage change in each bill from the
existing rate structure to the proposed rate structure.
CITY OF FORT COLLINS, CO (2006-2010)
The City requested a review and update of its plant
investment fees (PIF) to ensure growth would pay its
own way. Mr. Cristiano conducted analysis of each
utility’s asset base and growth-related projects to
determine the future value of the backbone system.
Reviewed several PIF methodologies including:
system buy-in, incremental, and the hybrid method.
Based on the available capacity in each system,
selected the buy-in method for water and storm
water and the hybrid method for the wastewater
utility. Due to changes in water usage and peak
demands, the fee schedule for water was updated to
include current customer class peak day demands to
improve the equitability of the fees. The wastewater
PIF schedule was updated to include an allowance
for peak flows as a result of infiltration and inflow.
The existing storm water utility basin-by-basin fee
structure was simplified to a uniform fee structure
for all basins. Also included in this study was a
financial plan review. Mr. Cristiano performed a
detailed billing analysis, revenue projections, and
revenue requirement projections for a five-year
study period. Revenue projections for the water and
wastewater utilities involved an extensive analysis
of historical water use. Mr. Cristiano delivered a
20-year financial plan model to the City that allows
annual updates to the financial plan and PIFs.
The City requested a comprehensive cost of service
analysis for their water and wastewater utilities. The
City has a number of wholesale customers as well as
one large contract customer. Costs specific to these
customers were identified and isolated to ensure
that retail customers did not subsidize the whole-
sale and contract customers. Delivered detailed cost
of service model to the City that allows for annual
updates and scenario analysis with different cost
allocations and rate designs. Mr. Cristiano served
as project manager on this engagement.
CITY OF PRESCOTT, AZ (2005)
The City requested a comprehensive water rate study
including development of system impact fees, and
water resource development fees. The utility faced a
number of infrastructure-related challenges as well
as an unfunded federal mandate to reduce arsenic
in the water supply. In addition, the state of Arizona
required the City to reduce water consumption by
2025 to meet assured water supply requirements. Mr.
Cristiano developed financial plan scenarios based
on different growth level assumptions and capital
improvement programs. Mr. Cristiano also worked
with the City’s conservation committee to review
pricing objectives and develop a rate structure that
was commensurate with the needs of the City and
its citizens. Mr. Cristiano presented results to City
Council on several occasions during the project.
CITY OF GREELEY, CO (2000 – 2010)
Provided cost of service rate consulting and mode-
ling services to the City from 2002 through 2010. Mr.
Cristiano assisted the City with annual updates to
their cost of service models and rate design. Included
in these updates were a review and development
of plant investment fees (PIFs). Annual updates
included a review and update of the financial plan,
cost of service analysis, rate design, and PIF analysis
for its water and wastewater utilities. The water cost
of service analysis incorporated capital improve-
ment changes, debt service adjustments, demand
projections, and a recalculation of the utility’s rate of
return. The cost of service analysis and rate design
for wastewater included a review of the utility’s debt
structure and changes in strength concentrations
for industrial customers. Separate rate models are
used for each utility which allow staff City Staff to
perform “what-if” scenarios on a variety of financial
conditions.
CITY OF PEORIA, AZ (2007)
The City retained consulting services to review and
update their general government impact fees. The
study included library, fire, police, general govern-
ment, and zone-based transportation fees. Served as
deputy project manager for the project and oversaw
all technical aspects of the study. Of primary interest
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 30 \
to the City was equitable recovery of fees to ensure
sufficient impact fee revenues funded growth-related
projects of the 10-year period. Developed customized
model and methodology for library and transporta-
tion fees. The rates were adopted for 2009.
LAS VEGAS VALLEY WATER DISTRICT, NV (2005)
The Las Vegas Valley Water District (LVVWD)
retained consulting services to perform a compre-
hensive analysis of their reclaimed water system and
develop a reclaimed water rate. The reclaimed system
is jointly operated by the LVVWD, the City of Las
Vegas, and Clark County Water Reclamation District.
Mr. Cristiano reviewed operating costs for the
reclaimed treatment facilities operated by the City
and the County as well as operating costs for the dis-
tribution system operated by LVVWD. Also included
in the analysis were developing the cost of capital for
the various facilities, the cost of providing potable
water to supplement periods of high re-claimed water
demand, and projecting total reclaimed water sales.
EL PASO WATER UTILITIES PUBLIC
SERVICE BOARD, TX (2005)
Mr. Cristiano developed a full cost recovery rate for
the two reclaimed rate classifications. This included
determining net book value of existing assets,
incorporating annual operating expenditures and
calculating the full cost recovery rate based on sales
projections. The full cost recovery rate was calcu-
lated each year for the 10-year study period FY06
through FY16. Also developed an alternative rates
considering the market constraints of reclaimed
water pricing. This reduced rate including credits
from previous grants received for the construction
of reclaimed facilities as well grants anticipated on
future expansion projects.
WATER REUSE FOUNDATION: EVALUATING
PRICING LEVELS AND STRUCTURES TO
SUPPORT RECLAIMED WATER SYSTEMS (2007)
The WateReuse Foundation (WRF) retained con-
sultant services to research and develop a process
of evaluating the financial and economic aspects
of developing a reclaimed water system. The study
incorporated the financial aspects to reclaimed
water pricing as well as a theoretical discussion on
the economic factors of reclaimed water use. Mr.
Cristiano served as project manager on this study.
The study included:
>Pricing issues review and discussion considering
the economic (Triple-Bottom-Line) perspectives
and a financial perspective (cash flow) perspec-
tive.
>Mr. Cristiano developed an interactive model
using a Microsoft Excel modeling program. This
model allows users to analyze the cost-bene-
fit relationship associated with developing a
reclaimed water system. The model looks beyond
the financial aspects and incorporates the tri-
ple-bottom-line economic analysis. This allows
users to evaluate the potential reclaimed water
system from a financial, social, and environmen-
tal perspective.
INDUSTRY ENGAGEMENT
>Co-Instructor for American Water Works “Finan-
cial Management – Cost of service Rate Making
Seminar (2010 – Present)
>“Evaluating Pricing Levels and Structures to Sup-
port Reclaimed Water Systems”, Research Report,
Water Reuse Foundation, 2009; co-author
>“The Grass is Always Greener…Building Con-
sensus of Reclaimed Water Project Pricing for
Jointly Operated Systems”, Presentation at the
2008 Water Environment Federation Technical
Exhibition and Conference, Co-Presenter
>“Honestly, What’s the Reuse”, Presentation at the
2008 WaterReuse Symposium
>“Showers to Flowers - Objectives and Approaches
for Reclaimed Water Pricing”, Presentation at
2010 Utility Management Conference
>“Which Conservation Rate Structure is Best for
Your Utility”, Presentation at 2013 Utility Man-
agement Conference, Co-presenter
>“Financial Management and Ratemaking Chal-
lenges for Reuse Water”, Presentation at 2015
Utility Management Conference, Co-presenter
>“Rate Perception Surveys: Leveraging Customer
Knowledge to Create the Right Rate Structure”,
Presentation of 2015 Annual Conference Exhibi-
CITY OF BOZEMAN / 31 /
tion (ACE)
>“Assessing Household Affordability in the Denver
Water Service Area”, Presentation at 2015 Annual
Conference Exhibition (ACE), Co-presenter
>“Rate Perception Surveys: Leveraging Customer
Knowledge to Create the Right Rate Structure”,
Presentation at 2016 Utility Management Confer-
ence (ACE)CLIENTROLE1UTILITY2FINANCIAL PLANNINGCOS/RATE DESIGNIMPACT FEES/SDCBOND FEASIBILITYDavenport, IA PM W
Town of Dillon, CO PM W, WW
Town of Erie, CO PM W, WW
City of Greeley, CO PM W, WW
Water Research Foun-
dation PM Reuse
Breckenridge Sanita-
tion District, CO PM WW
Pueblo West Metropoli-
tan District, CO PM W, WW
Pueblo Wastewater, CO PM WW
City of Pocatello, ID PM W, WW,
San
City of Aspen, CO PM W, Elec
City of Craig, CO PM W, WW
City of Boulder, CO PM W
City of Farmington, NM PM W, WW
City of Great Falls, MT PM W, WW
Snyderville Water Rec-
lamation District, UT PM WW
Mammoth Community
Water District, CA PM W, WW
Salt Lake City, UT DPM W
City of Surprise, AZ DPM W, WW
City of Peoria, AZ DPM Gen Gov’t 3
City of Prescott, AZ DPM W
City of Grand Junction,
CO DPM WW
PRASA, Puerto Rico Analyst W, WW
1. PM=Project Manager; DPM=Deputy Project Manager
2. W=Water; WW=Wastewater; Elec=Electric; San=Sanitation
3. General government impact feesCLIENTROLE1 UTILITY2FINANCIAL PLANNINGCOS/RATE DESIGNIMPACT FEES/SDCBOND FEASIBILITYLas Vegas Valley Water
District, NV Analyst Reuse
El Paso Water Utility, TX Analyst Reuse
Moapa Valley, NV Analyst W
Town of Berthoud, CO Analyst W, WW
City of Fort Collins, CO DPM, PM W, WW
Sacramento Sanitation
District, CA Lead Analyst WW
City of Glendale, AZ Tech
Resource W, WW
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 32 \
ELAINE CONTI
TECHNICAL ADVISOR −
COST OF SERVICE & RATE DESIGN
Senior Manager
PROFILE
Ms. Conti joined Raftelis in 2000 and has served as project manager on
numerous water and wastewater cost of service and rate and financial
planning studies. She has performed rate studies for numerous clients
across the country and has assisted in providing utilities with bench-
marking data and industry standards from which they can assess their
utility’s performance and efficiency. Ms. Conti has also assisted several
utilities in their efforts to implement management practices consistent
with the Effective Utility Management (EUM) framework. In addition,
Ms. Conti co-authored a chapter entitled, “Outside-City Rates for Retail
and Wholesale Customers, and Wheeling Rates,” for the Fourth Edition
of the industry guidebook, Water and Wastewater Finance and Pricing: The
Changing Landscape.
RELEVANT PROJECT EXPERIENCE
CITY OF POMPANO BEACH, FL (2005 - PRESENT)
Ms. Conti served on the team for this project in which Raftelis partnered
with the City of Pompano Beach Utilities Department (CPUD) to introduce
the EUM framework to senior leadership, departmental management, and
operational staff with the intent to help link the organization across depart-
mental boundaries. CPUD leadership was interested in an inde¬pendent
evaluation to assess if CPUD was implementing and performing all five
keys to success, and if CPUD was addressing the ten attributes of EUM
effectively. The results of the workshops and interview sessions identified
that employee leadership and employee development could be enhanced.
In the end, a list of key measures for each of the ten attributes as well as a
prioritized list of initiatives for CPUD to more effectively address the ten
attributes and five keys to success was developed.
Ms. Conti is also serving as the Lead Consultant for a multi-year contract
for the City of Pompano Beach (City). Raftelis was engaged to conduct a
rate and financial planning study for the City’s water, sewer, reuse and
stormwater utilities. As part of the study, Ms. Conti developed a rate and
financial planning model to calculate revenue requirements for each util-
ity using the City’s budget and capital improvement plan. Raftelis has
utilized the model to determine the self-sufficiency of each utility and the
level of water, sewer and stormwater rate adjustments necessary over the
next five-year period to ensure sufficient revenues and adequate debt ser-
vice coverage. In addition, Ms. Vasits completed a review of miscellaneous
TECHNICAL SPECIALTIES
»Cost of service and rate
structure studies
»Bond forecasts and
feasibility studies
»Litigation support
»Economic feasibility studies
»Financial valuation and
appraisal
»Effective utility management
studies
»Customer service
assessments
»Performance benchmarking
studies
»Privatization feasibility
studies and implementation
analysis
PROFESSIONAL HISTORY
»Raftelis Financial
Consultants, Inc.: Senior
Manager (2017-present);
Manager (2009-2016); Senior
Consultant (2000-2009)
»Wachovia Bank, NA:
Assistant Vice President
(1995-2000)
EDUCATION
»Masters in Business
Administration - Wake Forest
University (2004)
»Bachelor of Science in
Business Administration -
University of North Carolina
at Chapel Hill (1995)
PROFESSIONAL MEMBERSHIPS
»Former Chair - NC AWWA-
WEA Finance & Management
Committee
CITY OF BOZEMAN / 33 /
fees, which included a comparison of fees with peer
utilities, a work flow analysis, and the calculation of
costs to perform each miscellaneous service fee.
SPARTANBURG WATER
SYSTEM, SC (2000 - PRESENT)
Ms. Conti has served as Lead Consultant and Project
Manager on a number of projects for Spartanburg
Water, formerly Spartanburg Water System and
Spartanburg Sanitary Sewer District SWS and SSSD).
Raftelis built the original rate models for SWS and
SSSD in the early 1990s. Ms. Conti has participated
in annual rate and model updates for both utilities
for the last eight years. She has also assisted in
the preparation of six Bond Feasibility studies and
provided other consulting services including a mis-
cellaneous fee study which calculated updated costs
for new accounts, tap fees, etc.
NEW YORK CITY WATER BOARD (2014)
The Bureau of Environmental Planning and Anal-
ysis (BEPA), of New York City’s Department of
Environmental Protection (DEP), was identifying
and evaluating appropriate pricing structures to
ensure efficient use of resources, promote demand
reductions, and generate sufficient revenues in the
event of a water supply shortage. As a result, DEP
engaged Raftelis to conduct a water shortage rate
study to identify the appropriate rate structure to be
implemented during a water supply shortage event.
Raftelis and DEP staff identified a set of criteria to be
used in identifying viable water shortage rate struc-
tures. Raftelis and DEP staff then identified several
possible water shortage rate structures that would
apply during a water shortage emergency. Raftelis
applied a range of elasticity factors to water demand
for various customer groups to calculate the water
shortage rate under each water shortage rate struc-
ture. Raftelis also calculated the resulting revenues
under each water shortage rate structure.
SAN ANTONIO WATER SYSTEM, TX
(2003 & 2008)
Ms. Conti served as Lead Consultant for the water
and sewer rate study conducted for the San Antonio
Water System (SAWS), which is responsible for provid-
ing water and wastewater services to approximately
300,000 customers within the City of San Antonio and
the portions of the surrounding metropolitan area. In
2003, the San Antonio Water System engaged Raftelis
to conduct a detailed cost of service study, including
the development of a model that would analyze the
rates and customer impacts under various alternative
rate structures. Raftelis assisted SAWS in identifying
viable rate structures that would meet the majority
of SAWS’ objectives which included conservation
and financial sufficiency. Raftelis was subsequently
engaged by SAWS in 2008 to conduct a water and
sewer rate study. Similar to the study conducted in
2003, Raftelis developed a rate model to assist SAWS
in analyzing various rate structures, and developed
a model that can be used by staff in future years to
determine rate adjustments. Ms. Conti served as Lead
Consultant on both engagements with SAWS and
participated in several presentations with SAWS staff.
CENTRAL ARKANSAS WATER, AR (2011)
Central Arkansas Water (CAW) was challenged with
increasing capital costs associated with addressing
aging infrastructure and regulatory requirements.
While CAW was able to cash fund capital projects in
the past, the capital projects identified through the
asset management program required the issuance of
several bonds over the next five years. As a result,
CAW was interested in developing a rate and finan-
cial planning model to forecast revenue requirements
over the next several years to ensure bonds could be
issued and to determine the impact on water rates
under various levels of bond funded and cash funded
capital projects. CAW was also interested in review-
ing its rate structure and making modifications to
address several pricing objectives. CAW engaged
Raftelis to conduct a comprehensive water rate study.
As part of the study, Raftelis developed a rate and
financial planning model to forecast rate adjustments
for both retail and wholesale customers, and used the
rate model to identify alternative rate structures for
the Commission to consider. Raftelis also conducted
several workshops with the Commission on rate set-
ting principals and to review various rate structure
alternatives. Ms. Conti served as the Project Manager
for this engagement.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 34 \
STOCKTON EAST WATER DISTRICT, CA (2011)
Raftelis was engaged in 2011 by the Stockton East
Water District (District) to conduct a wheeling rate
study. The District owns and operates the New Mel-
ones Conveyance System (NMCS) which is used to
convey water to the District and to one of the District’s
wheeling customers, Central San Joaquin Water Con-
servation District (Central). The District and Central
are involved in litigation regarding the wheeling rate
that was assessed to Central. Raftelis was engaged
to conduct a wheeling rate study to determine the
wheeling rate under California water codes and water
industry standards. Ms. Conti served as the Project
Manager for the wheeling rate study and provided
litigation support.
CITY OF JACKSONVILLE, NC (2009)
In 2009, Raftelis developed a five-year water and
wastewater financial planning and rate model
(Model) for the City of Jacksonville (City). Ms. Conti
served as the Project Manager for this study. The
City was interested in making modifications to its
existing rate structures. As Project Manager, Ms.
Conti lead two workshops with the City Council: 1) a
conceptual design workshop to discuss rate structure
alternatives, the pros and cons of each alternative,
and to identify which alternatives should be used to
develop rates 2) a workshop to discuss the resulting
rates and customer impacts under the alternatives
chosen in the conceptual design workshop. The
Model is currently being used by the City to forecast
annual rate adjustments that will recover both O&M
costs and projected future capital costs, and ensure
adequate bond coverage requirements.
MOBILE AREA WATER AND
SEWER SYSTEM, AL (2008)
Ms. Conti was the Project Manager for Raftelis’s 2008
engagement with Mobile Area Water and Sewer
System (MAWSS) to conduct a comprehensive water
and sewer rate study. She created a rate and financial
planning model which was used to analyze MAWSS’
existing rate structure by allocating costs to each
utility, and more importantly, between the fixed
monthly component and the volumetric component.
She also led Raftelis’s efforts with the wholesale rate
study, impact fee study, and miscellaneous fee study.
The rate study and miscellaneous fee study involved
gathering benchmarking and key metric data to
compare MAWSS’ miscellaneous fees, reserve fund
policies and debt service coverage ratios and identify
areas of improvement.
SANTA CLARA VALLEY
WATER DISTRICT, CA (2009)
Raftelis was engaged by the Santa Clara Valley Water
District (District) in the summer of 2009 to provide
litigation services. Specifically, Raftelis provided
expert witness testimony in a trial involving the Dis-
trict and one of the District's wholesale customers
who was claiming to have been overcharged for water
purchased in fiscal year (FY) 2006. Ms. Conti served
as the Project Manager for this project and performed
a cost of service analysis using FY 2006 data, and
incorporating relevant state laws, legal rulings, and
best practices to determine the rates that should have
been charged by the District. Ms. Conti also assisted
the District in reviewing the plaintiff’s expert wit-
ness testimony and calculations. Other Raftelis staff
provided expert witness testimony during the trial
by utilizing the results of the cost of service analysis
to demonstrate that the District had not overcharged
the wholesale customer. Raftelis also conducted a
water rate validation study for the FY 2011 rates.
CITY OF BEVERLY HILLS, CA (2005)
The City of Beverly Hills (City) wished to conduct
a comprehensive water rate study that included a
review of revenue requirements, user classifica-
tions, costs of service, and the design of a system of
user charges for the City’s water service that would
promote water conservation. Ms. Conti served as
the lead consultant on this engagement. The City
engaged Raftelis to develop a rate and financial
planning model that would be used to evaluate alter-
native rate structures and to provide more detailed
forecasts to assist in the preparation of updating
rates in future years.
The City’s current rate structure consisted of a three-
tiered increasing block water rate structure with
no differentiation among customer types. Raftelis
modeled numerous alternative rate structures and
reviewed customer and revenue impacts before rec-
CITY OF BOZEMAN / 35 /
ommending that the City modify its current three
tiered rate structure to include a fourth tier that
targets large irrigation usage. In addition, Raftelis
recommended that separate tiers be established
for multi-family customers to reflect their usage
characteristics. For commercial, industrial, and
municipal customers, Raftelis recommended that
the City implement a uniform commodity rate, since
these customers have lower peaking factors than
residential customers. Raftelis continues to provide
updates to the model so that rates may be projected
in future years.
BRUNSWICK COUNTY, NC (2007)
In 2007, Brunswick County (County) was experienc-
ing rapid growth and, therefore, faced a significant
capital improvement plan in order to address infra-
structure needs. The County was interested in the
development of a rate and financial planning model
to determine the impact of growth and debt service
costs resulting from the capital improvement plan.
Raftelis designed a rate model for the County that
included a review of cost allocations between water
and wastewater to ensure that neither utility was
subsidizing the other. The model was used to deter-
mine the costs to be recovered from the fixed versus
the volumetric component. The model was also used
to evaluate alternate financing plans concerning the
City’s capital improvement plan. The model subse-
quently was used to produce a bond feasibility study
for inclusion in an Official Statement issued in Janu-
ary 2008 for a revenue bond issue of approximately
$56 million. Ms. Conti served as Project Manager for
this study.
CITY OF CONCORD, NC (2003 AND 2013)
Ms. Conti has served as project consultant for the rate
study conducted for the City of Concord (City), North
Carolina. The City was experiencing rapid growth
but also a persistent drought that limited the City’s
raw water supply. The City was also faced with a sig-
nificant capital improvement plan in order to address
water supply needs. Raftelis developed a rate model
for the City that included a review of cost allocations
between water and wastewater to ensure that neither
utility was subsidizing the other. The model was also
used to evaluate alternate financing plans concerning
the City’s capital improvement plan. A new water rate
structure was recommended based on a two-tiered
residential rate to encourage water conservation.
Rates for commercial and industrial users were also
determined based on the cost of service study. The
rate model has been rebuilt since the original study
to assist the City in calculating cost of service rates.
Ms. Conti served as Project Manager for the studies.
OTHER RELEVANT
PROJECT EXPERIENCE
>City of Baltimore (MD) – Cost of Service Model
and Water Rate Study
>City of Corona (CA) – Cost of Service Model
>Davie County (NC) – Water and Sewer Financial
Planning Study
>Highland County (FL) - Capacity Fee Study
>Lexington-Fayette Urban County Government
(KY) - Financial Valuation and Economic Impact
Analysis
>Madison Utilities (AL) – Water and Sewer Cost of
Service Analysis
>Mecklenburg County (NC) – Analysis of Funding
of Capital Plan for Stormwater
>Metropolitan Water District of Southern Califor-
nia (CA) – Litigation Support
>City of Peoria (IL) - Financial Valuation and Eco-
nomic Impact Analysis
>City of Scottsdale (AZ) - Water and Wastewater
Rate Study
>United States Navy - Privatization Procurement
PROFESSIONAL PRESENTATIONS
>“EUM Concepts and a Case Study: The Central
Arkansas Water Experience”, May 2010
> “Six Sigma and EUM”, North Carolina AWWA-
WEA – November 2009
>“Drought Surcharges”, North Carolina AWWA
Workshop - February 2009
>“Miscellaneous Fees”, Alabama-Mississippi
AWWA Conference - October 2006
>“Cost Effective Regional Planning”, Joint Manage-
ment Conference - (Dallas, TX); February 2003
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 36 \
SANJAY GAUR
TECHNICAL ADVISOR -
CONSERVATION RATE STRUCTURES
Vice President
PROFILE
Mr. Gaur has 18 years of public-sector consulting experience, pri-
marily focusing on providing financial and rate consulting services
to water and wastewater utilities. His experience includes provid-
ing rate structure design, cost of service studies, financial analysis,
cost benefit analysis, connection/development fee studies, con-
servation studies, and demand forecasting for utilities spanning
the west coast. His project experience includes engagements
with the Metropolitan Water District of Southern California, San
Diego County Water Authority, Eastern Municipal Water District,
Alameda County Water District, and East Bay Municipal Water
District, among many others. Mr. Gaur is considered one of the
leading experts in the development of conservation rate structures.
He has often provided his insight into utility rate and conserva-
tion-related matters for various publications and industry forums,
including: authoring articles in Journal AWWA; being quoted in
various newspaper articles including the Los Angeles Times and
the New York Times; participating in a forum regarding the future
of water in Southern California sponsored by the Milken Insti-
tute; being quoted on National Public Radio; speaking at various
industry conferences including American Water Works Associa-
tion (AWWA), the Utility Management Conference, Association
of California Water Agencies, and California Society of Municipal
Finance Officers; and, co-authoring several industry guide books
including AWWA’s Manual M1 Principles of Water Rates, Fees and
Charges, 6th Edition as well as AWWA’s Water Rates, Fees, and the
Legal Environment, Second Edition. Mr. Gaur co-authored a chapter
entitled, “Understanding Conservation and Efficiency Rate Struc-
tures,” for the Fourth Edition of the industry guidebook, Water and
Wastewater Finance and Pricing: The Changing Landscape. Mr. Gaur
is also active in a number of utility-related associations, including
serving as a member of AWWA’s Rates and Charges Committee.
RELEVANT PROJECT EXPERIENCE
ALAMEDA COUNTY WATER DISTRICT, CA (2010 - PRESENT)
Alameda County Water District (District) currently has a uniform
rate structure and is interested in developing a conservation rate
structure that will assist them in promoting water efficiency,
comply with regulatory requirements of SBx7-7, achieve revenue
stability and is equitable. Mr. Gaur served as the Project Manager
TECHNICAL SPECIALTIES
»Model development
»Financial analysis
»Cost of service studies
»Conservation rate structure design
»Connection/development fee
studies
»Economic analysis
»Cost benefit analysis
»Demand forecasting
»Econometric analysis
PROFESSIONAL HISTORY
»Raftelis Financial Consultants, Inc.:
Vice President (2015-present);
Senior Manager (2012-2014);
Manager (2009-2012)
»Red Oak Consulting, Division of
Malcolm Pirnie (2007-2009)
»MuniFinancial (2005-2006)
»A & N Technical Services (1999–
2003)
»United States Peace Corps, Bulgaria
(1995-1997)
EDUCATION
»Master of Public Administration,
Public Administration/International
Development, Kennedy School of
Government - Harvard University
(2003)
»Master of Science, Applied
Economics - University of California,
Santa Cruz (1994)
»Bachelor of Arts, Economics and
Environmental Studies - University
of California, Santa Cruz (1992)
PROFESSIONAL REGISTRATIONS
»Who’s Who in America, 63rd Edition
(2009)
»Finalist, National Venture
Competition (2003); Goldman Sachs
Foundation
»Roy Environmental Fellowship
(2002), Kennedy School of
Government, Harvard University
»Academic Scholarship (2001-2003),
Kennedy School of Government,
Harvard University
»Certificate of Outstanding Service
(1997), United States Peace Corps
PROFESSIONAL MEMBERSHIPS
»American Water Works Association -
Rates and Charges Committee
»California Society of Municipal
Finance Officers
CITY OF BOZEMAN / 37 /
and led a series of workshop with the Executive
Management and the Board of Directors in eval-
uating and identifying the proper rate structure
that meets their objectives. Based on this outcome,
Raftelis developed a conservation rate structure that
can compare different types of inclining and water
budget rate structure and evaluate the customer
impacts associated with these rate structures.
CITY OF CORONA, CA (2013 - PRESENT)
Mr. Gaur served as the Project Manager for a water
budget rate study the City of Corona (City). This
study first created a Financial Plan Model to analyze
the Enterprise’s cash flow needs, and to determine
necessary revenue adjustments. With this Model,
Raftelis developed a financial plan that took into
account the financial impact of the ongoing drought
and developed drought surcharges to maintain
financial stability.
Raftelis also used the model to develop a financial
plan for the recycled water enterprise. After devel-
oping both the potable water and recycled water
financial plans, Raftelis conducted Cost of Service
analyses for both enterprises and developed Cost
of Service based rates. These rates were created in
compliance with California Proposition 218 and
other relevant government codes.
Mr. Gaur facilitated a workshop on the policy options
associated with the development of a water budget
rate structure. Mr. Gaur met with City staff and the
City Manager for a rate workshop to get input on the
rates that Raftelis had developed. Raftelis is cur-
rently developing a report that details the process
that went into developing these rates.
EAST BAY MUNICIPAL
UTILITY DISTRICT, CA (2014 - PRESENT)
Mr. Gaur is currently serving as Project Manager for
a comprehensive wastewater cost of service study
for East Bay Municipal Utility District (District). The
last comprehensive cost of service study was done
in 2000 for the wastewater treatment charges. As
part of the study, Raftelis thoroughly examined the
District’s cost structure, analyzed wastewater flow
and customers data, and evaluated alternative rate
structures to develop an equitable rate structure
that meets Proposition 218 requirements and the
District’s goals and objectives. While the proposed
treatment rates retain the current rate structure,
which includes a fixed monthly service and strength
charge and a variable flow charge with a cap at 10
hundred cubic feet (hcf) per dwelling unit per month
for residential customers, and a fixed monthly ser-
vice charge and a variable flow charge per hcf based
on customer classification for apartment buildings
and non-residential customers, the individual rates
are realigned to reflect the cost of service. The Dis-
trict’s current rate structure also includes a fixed
annual charge per dwelling units (up to five dwell-
ing units) for single- and multi-family customers
and per parcel for non-residential customers for wet
weather facilities. This rate structure was developed
in late 1980s. Raftelis and District staff evaluated
various alternatives for the wet weather facilities
charge to ensure equity amongst customer classes.
The proposed wet weather facilities charge will be
based on the average parcel size for each customer
class, which has a stronger cost of service basis than
the current rate structure.
EAST ORANGE COUNTY WATER
DISTRICT, CA (2010 - 2017)
Mr. Gaur served as the Project Manager in assisting
East Orange County Water District in evaluating a
water budget rate structure. Mr. Gaur educated the
Board of Directors on the benefits of water budget rate
structure; developed a water budget model to deter-
mine the associated rates and customer impacts.
CITY OF HOLLISTER, CA (2015 - PRESENT)
Mr. Gaur developed a sewer rate and impact model
to examine the rate and impact fee implication of
$120 million treatment project. He also conducted a
workshop and presented final results to City Coun-
cil. The Council adopted the recommended sewer
rates, which will finance the $120 million treatment
plant project.
City of Huntington Beach (CA) 2010 to current
Mr. Gaur served as Project Manager for a sewer cost
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 38 \
of service and rate design study. The engagement
called for the redesign of rates to achieve City’s
policy goals associated with improving inter-class
equity, reducing administrative burden, and main-
taining revenue stability, while adhering to cost of
service principles.
Mr. Gaur also served as the Project Manager in eval-
uating a water budget rate structure for the City.
This included workshop with staff on developing a
water budget framework that is consistent with City
policy and the development of a water budget model
that can calculate the associated rates and estimate
customer impacts.
LA HABRA HEIGHTS COUNTY
WATER DISTRICT, CA (2010 - PRESENT)
Mr. Gaur assisted the District in calculating a
wheeling rate for a neighboring District. Mr. Gaur
presented his finding to the Board of Director.
MUNICIPAL WATER DISTRICT OF ORANGE
COUNTY, CA (2014 - 2015)
Mr. Gaur developed an optimization model for con-
servation programs. The results guided the District in
developing a master plan for conservation programs.
RANCHO CALIFORNIA WATER
DISTRICT, CA (2010 - PRESENT)
Mr. Gaur assisted Rancho California Water District
(District) in the development of a water budget rate
structure. The project required the consultant to
develop a flexible water budget model that could
do multiply block with allocation and determine
the appropriate revenue within a month. The team
was successfully able to accomplish this task and
assisted the District in implementing the new water
budget rate structure. The rates where successfully
adopted in November 2009.
Mr. Gaur also assisted the District in the develop-
ment of a New Water Demand Offset Fee. The New
Water Demand Offset Program is a form of funding
of conservation measures that will help to create
sustainable, zero water footprint development. New
developments will pay fees called New Water Demand
Offset Fees to create potable water savings in the
existing system to support water demand generated
by new developments. Water savings can be achieved
by converting irrigation accounts to recycled water
or installing high efficiency retrofits to replace inef-
ficient fixtures for existing accounts in RCWD. This
fee is expected to be adopted in February 2010.
CITY OF VISTA, CA (2012 - CURRENT)
As Project Manager for a sewer rate and connection
fee study, Mr. Gaur developed a long-range financial
plan for City of Vista Sanitation and Buena Sanita-
tion District, including financing of a $300 million
capital improvement program. The project required
a cost of service analysis and redesign of the sewer
rate structure and connection fee schedule to adhere
to cost of service principles while meeting escalating
revenue requirements. Mr. Gaur fine-tuned rates to
meet the City’s policy goals of equity, defensibility,
and minimal customer impact.
WALNUT VALLEY WATER
DISTRICT, CA (2014 TO CURRENT)
Mr. Gaur developed a water rate model for the Dis-
trict as well as examined indexing practices and
determined appropriate rates for meter and vari-
able charges.
WESTERN MUNICIPAL WATER
DISTRICT, CA (2010 - PRESENT)
Mr. Gaur served as Project Manager for the imple-
mentation of a water budget rate study, which
included facilitating and leading a discussion on
the policy options associated with the development
of a water budget rate study. Based on these policy
options, a water budget model was developed that
can evaluate different allocation factors for indoor
and outdoor water use, determine price ratios for the
corresponding tiers, and develop the corresponding
rates and customer impacts.
Mr. Gaur served as the Project Manager for the
development of a financial model for the District.
The model has the ability to examine the 14 different
fund centers of the District, develop and save differ-
ent Capital Improvement Plan scenarios, examine
CITY OF BOZEMAN / 39 /
the financial consequences of these scenarios and
compare the results. In addition the model has
the ability aggregate the fund centers by water,
wastewater or by the whole District. The model is
currently being utilized by the District to examine
long term health of the District.
YORBA LINDA WATER
DISTRICT, CA (2010 - PRESENT)
Mr. Gaur served as the Project Manager for conduct-
ing a water rate study for Yorba Linda Water District.
This study included the development of a financial
plan that examined different CIP scenarios, cost of
service study and development of a conservation
rate structure. Raftelis developed a conservation
rate model that evaluated an inclining tiered rate
and a water budget rate structure, that can deter-
mine the associated rate structure and estimate
customer impacts. Mr. Gaur will present the finding
of the study to the Board and make the associated
recommendation.
PUBLICATIONS AND PRESENTATIONS
>Gaur, S., Giardina, R.D., Kiger, M.H., Zieburtz, W.,
“Committee Report: Ripples From the San Juan
Capistrano Decision,” Journal – American Water
Works Association, September 2016, Volume 108,
Number 9.
>Gaur, S., “Adelman and Morris Factor Analysis
of Developing Countries,” The Journal of Policy
Modeling, Vol. 19, Issue 4, pp. 407-415, August
1997.
>Gaur, S., “Water Rate Setting,” presented at the
Annual 2006 Conference of the California Soci-
ety of Municipal Finance Officers, Palm Springs,
California.
>Gaur, S., “Water Rate Setting,” presented at
the following: California Society of Municipal
Finance Officers Chapters: Central Los Angeles,
Channel Counties, Imperial County, San Gabriel
Valley, South Bay and Twenty – Nine Palms 2006.
>Gaur, S., “Designing Water Rate Structures,” pre-
sented at a workshop for Urban Water Institute,
San Jose, California. February 17, 2006.
>Gaur, S. “How Much Should Water Cost? Theoret-
ical and Practical Approach in Developing Water
Rates.” Guest lecturer at University of California,
Santa Barbara, Course: Water Policy, Bren School
of Environmental Science and Management.
November, 7, 2006.
>Gaur, S. “Designing Water Rates,” All day seminar
at the Center for Water Education. Hemet, Califor-
nia. January 12, 2007.
>Gaur, S. “Policy Objectives in Designing Water
Rates”, Journal of American Water Works, 99:5
May 2007 p.112- 116.
>Gaur, S. Corssmit, K. and Hotchkiss, D. “Water
Rates Defining Cost of Service – Proposition 218
Implications,” presented at the Association of
California Water Agencies, May 7 , 2008 Spring
Conference, Monterey, California.
>Gaur, S. “Moving Beyond the Public Workshop,”
presented at the Municipal Management Associ-
ation of Southern California, July 1, 2008 Summer
Conference, La Jolla, California.
>Gaur, S. “Evolution of Water Rates,” presented
at the Association of California Water Agencies,
December 3, 2008 Fall Conference, Long Beach,
California.
>Gaur, S. “Managing Drought Scenarios,” pre-
sented at the Association of California Water
Agencies, December 4, 2008 Fall Conference,
Long Beach, California.
>Gaur, S. “Rates 101,” 4 hour training course con-
ducted at the Annual 2009 California Society of
Municipal Finance Officers, San Francisco, Cali-
fornia.
>Gaur, S. Corssmit, K., Hildebrand, M. and
Hotchkiss, D. “Defining Latest Trends in Con-
servation Rate Design,” presented at the Utility
Management Conference, February 18, 2009, New
Orleans, Louisiana.
>Gaur, S. “Conservation Rate Structures,” pre-
sented at the International Water Efficiency
Conference, April 1, 2009 Newport Beach, CA
>Gaur, S. “Developing a Water Budget Rate Struc-
ture: Eastern MWD Experience,” presented at
the CA/NV AWWA Section, April 9, 2009, Santa
Clara, CA
>Gaur, S. “Rates and Equity Issue” presented at
Managing the Crisis: Essential Tools for Urban
Water Managers, sponsored by Water Education
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 40 \
Foundation and Association of California Water
Agencies, April 16, 2009 (San Francisco) and April
23, 2009 (Irvine)
>Hildebrand, M. Gaur, S. and Salt, K. “Water
Conservation Made Legal: Water Budgets and
California Law” Journal of American Water
Works, 101:4 April 2009 p.85-89.
>Gaur, S. “Whiskey’s for Drinking, Water is for
Fighting: Allocating Water During a Shortage”
presented at the Association of California Water
Agencies, May 21, 2009 Spring Conference, Sac-
ramento, CA.
>Gaur, S. “Policy Issues and Challenges with Water
Budgets: Eastern MWD Experience” presented
at American Water Works Association, Annual
Conference and Exposition 09, June 15, 2009, San
Diego, CA
>Gaur, S. “Economics of Desalination” presented
at the Association of California Water Agencies,
December 2, 2009 Fall Conference, San Diego, CA.
>Gaur, S. “Achieving Water Conservation, Revenue
Stability and Equitable Rates” presented at the
Annual 2010 (February 17, 2010) Conference of the
California Society of Municipal Finance Officers,
Los Angeles, California.
>Gaur, S. and Summers, L. “New M1 Chapter:
Water Budget Rates” presented at American
Water Works Association, Annual Conference
and Exposition 10, June 23, 2010, Chicago, IL
>Contributing Author to “Water Rates, Fees and
the Legal Environment” 2nd Edition American
Water Works Association 2010 Editor: C.(Kees)
W. Corssmit
>Gaur, S. “Developing a Rate Structure that
Addresses the Financial Consequences of SBx7-7”
presented at the Association of California Water
Agencies, December 1, 2010 Fall Conference,
Indian Wells, CA
>Gaur, S “The Verdict is out on Water Budget” pre-
sented at the Utility Management Conference,
February 9, 2011, Denver, CO
>Gaur, S “What in the world can we learn from Cal-
ifornia? Water budget rates successfully achieve
water efficiency and revenue stability” presented
at AWWA Water Conservation Symposium March
15, 2011, Orlando FL
>Gaur, S “You Can Have the Best of Both Worlds:
Promoting Water Use Efficiency While Enhanc-
ing Revenue Stability” presented at Council of
Water Utilities April 19, 2011 Poway, CA
>Gaur, S. “Water Budget Alternatives: How Do We
Define Efficiency?” presented at the Association
of California Water Agencies, May 12, 2011 Spring
Conference, Sacramento, CA
>Gaur, S. “Inclining Block Rates versus Water
Budget Rates: How do You Define Equity?” pre-
sented at American Water Works Association
Annual Conference, June 15, 2011 Washington
D.C.
>Gaur, S. “Innovative Rate Designs: Balancing
Conservation Objectives with Revenue Stability”
presented at the Association of California Water
Agencies 2011 Regulatory Summit, August 17,
2011 Pasadena, CA
>Gaur, S. “Cutting-Edge Financial Planning Tool
to Facilitate Communications” presented at the
Water Environment Federation Annual Confer-
ence October 19, 2011 Los Angeles, CA
>Gaur, S., Lim, B., Phan, K., “California Water Rate
Trends,” Journal – American Water Works Asso-
ciation, March 2013, Volume 105, Number 3
>Gaur, S., Atwater, D., Lee, J., “Conservation Rates
Offer Options,” CA/NV Section of American
Water Works Association, April 2014
>Gaur, S., Cavanaugh, P., Kightlinger, J., Mantle,
L., McDaniel, J., Poole, K., “The Future of Water
in Southern California” presented at the Milken
Institute Forum, August 21, 2014, Santa Monica,
CA
>Gaur, S., Leal, S., Lipkis, A., Smith, R., Spivey
WeberMas Masumoto, F., “The Water Challenge:
Doing More with Less” presented at the Milken
Institute California Summit, November 21, 2014,
Santa Monica, CA
>Gaur, S., Atwater, D., Cruz, J., “Why do Water
Agencies need Reserves?,” Journal – American
Water Works Association, November 2014,
Volume 106, Number 11
>Gaur, S., Atwater, D., “California Water Rate
Trends,” Journal – American Water Works Asso-
ciation, January 2015, Volume 107, Number 1
>Gaur, S. “California Water Rate Trends,” Journal
– American Water Works Association, September
2016, Volume 108, Number 9
CITY OF BOZEMAN / 41 /
BRIAN KIRSCH, PhD
STAFF CONSULTANT
Consultant
PROFILE
Dr. Kirsch has conducted a number of rate studies in which he has pro-
vided financial plans, cost of service analysis, and rate designs to Colorado
utilities. In addition to rate consulting, he has consulted on several
operational assessments for some of the largest utilities in the country,
providing expertise in utility operations ranging from asset management
to capital project delivery to general operations & maintenance practices.
Dr. Kirsch a background in water resources management and possesses
extensive analytical skills. His expertise lies in the areas of systems analy-
sis and economic modeling. He has performed significant research in the
field of water resources in which he has utilized aspects of engineering,
policy analysis, risk management, economics and market analysis.
RELEVANT PROJECT EXPERIENCE
ST. VRAIN SANITATION DISTRICT, CO (2017 - PRESENT)
Dr. Kirsch is conducting a cost of service study that includes updating
impact fees for a rapidly growing sanitation district. Included in the
study is a policy evaluation of how residential and non-residential cus-
tomers are treated relative to each other. A key outcome of the study will
be guidance on the financial impacts of several financing options for
construction of the next wastewater treatment plant expansion.
TOWN OF BERTHOUD, CO (2017 - PRESENT)
Dr. Kirsch is conducting a financial plan for the Town’s water, wastewater,
and stormwater enterprise funds. The study is also updating impact fees
for the water and wastewater funds, while establishing a new stormwater
impact fee. The Town is seeing rapid development, and the financial plan
is aiding the Town in weighing their future growth options.
MT. CRESTED BUTTE WATER AND SANITATION DISTRICT, CO
(2017 - PRESENT)
Mt. Crested Butte is a resort community that has several significant cap-
ital projects planned in the coming years, and wants to adequately plan
for them financially. Dr. Kirsch is developing a financial plan for their
water and wastewater enterprise funds.
CITY OF CASPER, WY (2017 - PRESENT)
Contact: Bruce Martin, Public Utilities Manager, (307)235-7543
Dr. Kirsch is developing financial plans and cost of service models for
the City’s water and wastewater enterprise funds. This project presents
significant levels of complexity due to current operation of the water
TECHNICAL SPECIALTIES
»Risk management
»Economic analysis
»Water resources management
»Data analysis
PROFESSIONAL HISTORY
»Raftelis Financial
Consultants, Inc.: Consultant
(2014-present)
»Colorado School of Mines:
Postdoctoral Research Fellow
(2011-2014)
»University of North Carolina
– Chapel Hill: Research
Assistant (2001-2010)
EDUCATION
»Masters of Science and
Doctorate – University of
North Carolina – Chapel Hill
(2004 and 2010, respectively)
»Bachelor of Science in
Chemical Engineering
and Bachelor of Arts in
Environmental Engineering –
Rice University (2001)
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 42 \
treatment plant as a regional treatment facility, and
the past operation of the wastewater treatment plant
as a regional facility. This project includes updat-
ing the City’s water treatment, water distribution,
wastewater treatment, and wastewater collection
impact fees.
PUERTO RICO AQUEDUCT AND SEWER
AUTHORITY, PUERTO RICO (2015)
PRASA has made considerable progress becom-
ing more efficient in the last 10 years; reducing its
workforces from over 7,000 to now roughly 5,000
employees, eliminating over a dozen treatment facil-
ities, and increasing productivity by over 10 percent.
Despite these positive changes, PRASA still deals
with a relatively poor service population, high energy
costs, and restrictive Commonwealth rules and reg-
ulations. Dr. Kirsch and the Raftelis team performed
an assessment of PRASA’s organization, operations
and finances to find additional opportunities for effi-
ciency. The project is also providing an independent
assessment of the organization for perspective buyers
of PRASA bonds and commercial debt.
NORTH TEXAS MUNICIPAL WATER DISTRICT, TX
(2015 - PRESENT)
The North Texas Municipal Water District is a
regional water and wastewater district serving
communities in the northern Metroplex of Texas,
including Plano and Richardson. As part of a Dis-
trict-wide improvement program, Dr. Kirsch is
assisting in an assessment of current conditions and
a benchmarking study to examine how NTMWD
compares to peer utilities and how it might expand
upon its successes. Dr. Kirsch is also assisting
NTMWD in establishing their training program
and developing software tools to help manage this
training program.
DENVER WASTEWATER MANAGEMENT
DEPARTMENT, CO (2015)
Dr. Kirsch served as the Lead Analyst for the assess-
ment of the City and County of Denver Wastewater
Management Department (WMD) and the Wastewa-
ter Capital Project Management Division within the
City Engineering Department. This project included
a complete assessment of the operations and capital
projects delivery organization, processes, staffing
and technologies. Opportunities for enhancing
both operations delivery and capital project develop-
ment and management were identified. This study
was conducted in conjunction with a cost of service
study for the City.
CITY OF SALIDA, CO (2015)
Dr. Kirsch conducted a financial plan and rate study
for the City of Salida’s water and wastewater utili-
ties. While Salida serves a fairly small population,
its utilities have taken on significant debt in recent
years in order to expand and improve treatment
capacity. Its recent rate studies have also been
affected by large rapid changes in growth rates due
to the recent housing crisis. Through his efforts, Dr.
Kirsch helped to design rates that will be financially
sustainable and will reflect the pricing objectives
that have been prioritized by the City.
SECURITY WATER AND SANITATION
DISTRICTS,CO (2014)
Dr. Kirsch developed a financial plan and cost of ser-
vice rate study for Security. The District found itself
with a choice of whether to cash-fund or issue debt
to complete a major capital project, and Dr. Kirsch
developed alternative financial plans that showed
the timing and size of rate increases required for
each of the options. In performing the cost of service
study and rate design, Raftelis developed an alter-
native rate structure that more equitably recovered
costs from their customers than their current rate
structure. Dr. Kirsch delivered a written report and
presented the findings to the Board, which lead to
the adoption of the proposed rate structure.
TOWN OF EATON, CO (2014)
Dr. Kirsch developed a 10-year financial plan for the
Town of Eaton’s water enterprise fund and performed
a cost of service rate study. As a shareholder in the
Northern Integrated Supply Project (NISP), Eaton
is faced with significant rate increases in the near
future as they fund their portion of NISP construction
costs. In addition to insuring that the new rates will
provide adequate revenues to meet these new obliga-
CITY OF BOZEMAN / 43 /
tions, Dr. Kirsch advised Eaton on how consumption
patterns may change under the increased rates. Dr.
Kirsch produced a report outlining Raftelis’ findings
and guided the Town Council through the selection
of an alternative rate structure.
CITY OF FORT COLLINS, CO (2014)
Dr. Kirsch aided in the execution of a survey of
development fees among Front Range municipali-
ties. Development fees for a number of standardized
development projects were researched and calcu-
lated before findings were described in a report. This
report gave Fort Collins comprehensive knowledge
of how their development fees rank in type and mag-
nitude in comparison to comparable communities.
CITY OF LARAMIE, WY (2014)
Dr. Kirsch helped create a 10-year financial plan
for Laramie’s water and sewer utilities. Using the
financial plan, he performed a cost of service rate
study for both utilities. He then designed rates that
transition Laramie’s current water and sewer rates
to cost of service rates over a 10-year period while
insuring that the transitional rates will provide ade-
quate revenue in each year.
CITY OF CHICKASHA, OK (2015)
Raftelis is conducting a survey of general fund fees
for the City of Chickasha. Based on recommen-
dations from another Raftelis client, the City of
Chickasha engaged Raftelis to survey general fund
fees from a collection of cities identified as peer
communities by Chickasha. In particular, the City is
interested in building permit fees, code enforcement
fees, business permit fees, and animal control fees.
Through its research, Raftelis has compiled prelimi-
nary results from the peer communities. The project
is currently in a validation phase as the peer com-
munities are being contacted to confirm the initial
findings. Once the peer communities have responded,
Raftelis will compile the information in a manner
that allows Chickasha to easily compare their fees
to their selected peer communities. Raftelis will also
highlight those fees that peer communities charge
which the City of Chickasha do not currently charge.
BAY AREA WATER SUPPLY AND CONSERVATION
AGENCY, CA (2013)
Dr. Kirsch conducted a modeling effort to investigate
how drought conditions might best be managed by
the Bay Area Water Supply and Conservation Agency
(BAWSCA). Using available data, he simulated a
water market to determine the efficient allocation
of water within the region, and demonstrated how
a market-based allocation can significantly reduce
economic losses due to drought.
ORANGE WATER AND SEWER AUTHORITY, CITY
OF DURHAM, AND TOWN OF CARY, NC
(2009 - 2010)
Dr. Kirsch led an analysis of a proposed interruptible
contract in which Cary would sell treated water to
Durham and the Orange Water and Sewer Authority
(OWASA) during times of drought. As part of the
study, Dr. Kirsch analyzed the risk-based triggers
which would spur Durham and OWASA to request
water, and the efficacy of the interruptible contracts
in preventing water supply failures. He further devel-
oped advanced statistical techniques that allowed
the performance of the interruptible contracts to be
tested under potential future climate scenarios.
CENTRAL COASTAL PLAIN CAPACITY
USE AREA, NC (2002 - 2004)
A region of North Carolina was found to be unsus-
tainably pumping groundwater, and as a result the
state created the Central Coastal Plain Capacity
Use Area (CCPCUA). The two dozen or so affected
communities within the CCPCUA were mandated
to reduce groundwater pumping by up to 75%. Dr.
Kirsch developed a model to determine how these
communities might best meet these restrictions,
whether through joining regional surface water
treatment systems, purchasing groundwater per-
mits in a market, or pursuing other alternatives.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 44 \
LAURA SLAVIN
STAFF CONSULTANT
Consultant
PROFILE
Ms. Slavin has extensive experience in economic analysis and consulting
and an understanding of the challenges and opportunities facing water
utilities. Ms. Slavin earned her Master of Business Administration (MBA)
from the Yale School of Management where she focused on corporate strat-
egy and water management and authored a white paper on the U.S. water
industry. She joined Raftelis in April 2015 as a consultant in the Denver
Office. Since then, she has worked on a bond feasibility study, financial
planning studies, and cost of service and rate analyses. For her MBA
internship, she traveled to Budapest, Hungary to assist Organica Water, an
innovative wastewater treatment company, in developing their U.S. market
entry strategy. Prior to business school, she spent several years working
for Analysis Group, Inc., an economic, financial and strategy consulting
firm, in their Denver office. At Analysis Group, she worked on numerous
projects in which she applied economic analysis to support expert witness
testimony. Laura earned her B.A. in Economics from Wellesley College and
has also worked as a Research Assistant at the Federal Reserve Board in
Washington, D.C. as well as a Research Associate at Accenture.
RELEVANT PROJECT EXPERIENCE
CITY OF WESTMINSTER, CO (2017 - PRESENT)
Ms. Slavin is currently assisting the City with a complex, long-tern water
and wastewater financial planning, cost of service, rate, and tap fee study.
The project includes developing financial models that will help the City to
eliminate a projected water supply shortfall. This project also includes a
rate affordability assessment and an evaluation of the City’s asset inventory
tracking tool.
FORT COLLINS LOVELAND WATER DISTRICT (2017 - PRESENT)
Ms. Slavin is currently serving as a consultant on a water financial plan-
ning, cost of service, rate design and plant investment fee analysis for the
District. The District is particularly interested in ensuring that the rate and
fee structures developed are equitable to all ratepayers. In pursuit of this
objective, her work thus far has included extensive consumption analyses,
which have helped to identify water use patterns and prompted discussion
with the District about specific rate and fee structure alternatives.
CITY OF PEARLAND, TX (2017)
Ms. Slavin served as a consultant on a financial modeling and rate design
project for the City. The City was dissatisfied with its previous model, as it
TECHNICAL SPECIALTIES
»Bond feasibility and forecast
studies
»Financial planning studies
»Utility cost of service and
rate studies
»Strategic market analysis
»Econometrics
»Cost-Benefit analysis
»Affordability studies
»Litigation support, including
preparation of expert
witness testimony and
deposition materials
PROFESSIONAL HISTORY
»Raftelis Financial
Consultants, Inc.: Consultant
(2015-present)
»Caliper Corporation: Product
Management Consultant
(2014-2015)
»Analysis Group, Inc.: Senior
Analyst (2010-2012); Analyst
(2007-2010)
»Board of Governors of the
Federal Reserve System:
Research Assistant (2006-
2007)
»Accenture: Research
Associate (2005)
EDUCATION
»Master of Business
Administration – Yale School
of Management (2014)
»Bachelor of Arts in
Economics – Wellesley
College (2006)
PROFESSIONAL MEMBERSHIPS
»American Water Works
Association – Rocky
Mountain Section
»American Marketing
Association
CITY OF BOZEMAN / 45 /
was clunky and counterintuitive. Ms. Slavin and her
colleague were tasked with building a user-friendly
financial planning model for the City. Frequent
communication between her team and the client
enabled Raftelis to create a model that satisfied the
City’s finance team. She also modeled various rate
scenarios proposed by the client and assisted in
preparation of a presentation to Council.
MT. WERNER WATER &
SANITATION DISTRICT, CO (2016)
Ms. Slavin served as a consultant on a comprehen-
sive water and wastewater rate study for the District.
She developed water and wastewater financial plans
and determined rate revenue increase needs over
the study’s 10-year period. In addition, she assessed
class cost of service and developed rate alternatives
to present to Council. The study also entailed assess-
ing water and sewer development fees.
CITY OF STEAMBOAT SPRINGS, CO (2016)
Ms. Slavin served as a consultant on a comprehen-
sive water and wastewater rate study for the City.
The project entailed updating water and waste-
water financial plans, conducting a cost of service
analysis, and developing multiple rate structure
alternatives to meet the City’s financial goals. She
also analyzed tap fees for the City. She is currently
finalizing a report that summarizes study findings
and rate structure alternatives.
LAKE HAVASU CITY, AZ (2015)
Ms. Slavin served as the lead analyst on the financial
feasibility evaluation for the City’s proposed refi-
nancing and restructuring of more than $275 million
in outstanding sewer debt. The project involved
evaluating multiple scenarios regarding refinancing
existing loans and includes the development of mul-
ti-year financial plan and rate adjustments to exceed
debt service coverage and reserve requirements. She
assisted the City and the City’s finance team during
rating agency presentations, the preparation of the
Official Statement and presentations to City Council.
A feasibility report was issued upon completion of
the study.
Ms. Slavin also updated the City’s water financial
plan and determined the timing and extent to
which rate increases will be necessary to meet rev-
enue requirements.
TRINIDAD, CO (2015)
Ms. Slavin serves as a consultant on the financial
plan and revenue sufficiency evaluation for the
City’s water and sewer funds. The project involved
developing comprehensive five-year financial plan-
ning models to calculate revenue requirements for
both the water and sewer funds and determining the
rate adjustments necessary to exceed debt service
coverage and reserve requirements. She assisted the
City with presentations to City Council.
Currently, she is refining the wastewater financial
plan given various capital improvement planning
scenarios as well as analyzing water and wastewater
tap fees.
GRAND JUNCTION, CO (2014)
Ms. Slavin served as an analyst on a project with the
City of Grand Junction in which she has reviewed
and updated the City’s wastewater financial plan and
conducted a cost of service analysis. She assessed
and proposed updates to the City’s wastewater plant
investment fee and wastewater rates.
SANTA ROSA, NM (2014)
Ms. Slavin served as an analyst on a project which
required updating the City’s water and wastewater
financial plans, facilitating a financial planning
workshop, and developing water cost of service and
rate alternatives.
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 46 \
Below, we have included descriptions of five projects that our team has worked on similar to the
City's project. We urge you to contact these clients to better understand the quality of services
that we provide. In Appendix C, we have included a sample of our recently completed rate study.
4. REFERENCES
REFERENCES
CITY OF LARAMIE
The City of Laramie (City or Laramie) has a population of approximately
30,000 and is home to the University of Wyoming. In addition to retail cus-
tomers located within its jurisdictional boundaries, Laramie also provides
service to both retail and wholesale customers located outside the City.
Raftelis has served Laramie since 2014 when it prepared an update of the
City’s water and wastewater user charges. In 2016, Raftelis completed com-
prehensive rate studies for the water and wastewater enterprise funds. The
financial planning components of these rate studies included an update of
forecast billed consumption and a review/verification of the assumptions and
output produced by the City’s 10-year water and wastewater enterprise fund
financial planning models.
After establishing the test-year revenue requirement from rates for the water
and wastewater enterprise funds, Raftelis conducted comprehensive water
and wastewater cost of service studies to determine the revenue requirement
for each customer class served by the City. These cost of service studies were
conducted using AWWA and WEF cost of service principles and included the
development of forecast rates for the period 2017 - 2026. On December 23,
2016, the Laramie City Council adopted water and wastewater rates for 2017
and 2018 as recommended by Raftelis.
CLIENT REFERENCE
Malea Brown,
Administrative Services
Director
406 Ivinson Ave.
Laramie, WY 82070
P: 307.721.5223
E: mbrown@
cityoflaramie.org
WY
CITY OF BOZEMAN / 47 /
CITY OF
SALT LAKE CITY
Raftelis professionals have provided financial consulting services to Salt Lake
City since 1993. Salt Lake City conducts a comprehensive update of their water,
sewer and stormwater rates and impact fees every five years and retrained Raft-
elis professionals 2008 to complete this study. The study included water and
sewer financial planning, cost of service and rate design, public outreach, water
rate modeling software and water, sewer and stormwater impact fee updated.
As part of this effort, Raftelis professionals facilitated Water Rate Subcommit-
tee (WRS) stakeholder meetings with over twenty members of the community
representing a variety of industries and community groups. The facilitation
included responding to technical questions, providing background on the
concepts of rate making and building consensus among the group. Raftelis
professionals also worked with the City Council and Utilities Department in
the evaluation and selection of water pricing methodologies, the analysis of
utility rates, completion of a management and organizational review and
the development of utility impact fees. Raftelis professionals also assisted
the City with a public outreach program to explain the City’s rates and the
rationale for rate adjustments.
Technical analysis included a utility-basis cost of service analysis to develop
a rate of return for outside-City customers. Rate design included a price
elasticity of demand analysis for resulting from the increase in rates and the
change from a 3-tiered inclining block structure to a 4-tiered inclining block
structure for residential and nonresidential customers.
Raftelis professionals also updated the City’s water, sewer and stormwater
fees so that the fees adequately recovered the cost to serve new development.
The fees were developed using the buy-in method since the City has existing
capacity in all utility facilities.
In 2011, Raftelis professionals assisted Salt Lake City evaluate establishing a
separate street light utility and associated annual charge. We worked with
City staff to evaluate annual street lighting costs funded through the general
fund and incorporate the current and projected costs for the street light Util-
ity, including a phased replacement of current street lights with more energy
efficient light fixtures. The City had established separate street light districts
and assessments for alternative street light infrastructure above the base City
standard included within the separate Districts. Raftelis professionals also
worked with City staff to consolidate the separate street light improvement
CLIENT REFERENCE
Laura Briefer, Director
of Department of Public
Utilities
Salt Lake City
Corporation
P: 801.483.6741
E: Laura.Briefer@
SLCgov.com
Kurt Spjute, Public
Utilities Finance
Manager
Salt Lake City
Department of Public
Utilities
P: 801.483.6755
E: Kurt.Spjute@
SLCgov.com
UT
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 48 \
CITY OF SALT LAKE CITY (CONTINUED)
Districts throughout the City into three groupings and develop a surcharge to replace the annual assessments
in funding infrastructure replacements as part of the street light utility. Recommendations and findings
were summarized and presented to City Council in February 2012. The City adopted the street light Utility
for implementation in 2013.
*Services prior to 2013 were provided by Project Team members while with a previous employer.
CITY OF BOZEMAN / 49 /
CITY OF LOUISVILLE
Raftelis is completing a comprehensive water, wastewater, and stormwater
rate and fee study the City of Louisville, CO. Louisville has a population of
approximately 18,500 and is a member of the Northern Colorado Water Con-
servancy District with access to Colorado Big Thompson and Windy Gap water
resources. Raftelis is assisting the City to develop financial plans and com-
plete cost of service studies for the City’s water, wastewater and stormwater
utilities; the design of alternative water and wastewater rate structures; and
water and wastewater system development charges. Louisville has sought
extensive public participation throughout the consulting engagement from
a stakeholder group known as Utility Rates Task Force. Raftelis has facilitated
several meetings with Utility Rates Task Force to discuss key financial plan-
ning, cost of service and rate design issues. The study issues include:
>Determining the optimal mix of rate revenue and debt financing to fund
forecast CIP expenditures while ensuring adequate reserve balances and
full compliance with bond covenants. As part of this process, Raftelis
developed three separate comprehensive financial planning scenarios for
consideration by the Utility Rates Task Force.
>Consideration of multiple water rate structure alternatives to replace Lou-
isville’s existing rate design which features consumption block thresholds
that vary by meter size. Among the alternatives developed by Raftelis
include traditional inclining block rate structures for residential and
multi-family customers and a uniform rate structure for non-residential
customers. In addition, Raftelis also developed a water rate structure alter-
native applicable to all customers in which the first consumption block is
based on each customer’s individualized winter average consumption.
>Determining the appropriate structure for the water and wastewater
system development charges and whether a new stormwater system devel-
opment charge should be implemented by the City.
>Estimating how customer’s utility bill would be impacted by each financial
planning scenario and proposed rate structure alternative. As part of its
customer bill impact analysis, Raftelis estimated bill impacts for all of the
City’s approximately 7,000 utility customer accounts.
Study findings and recommendations will be summarized in draft report and
presented to City Council at the completion of the study.
CLIENT REFERENCE
Kurt Kowar
Director of Public Works
749 Main Street
Louisville, CO 80027
P: 303.335.4601
E: kurtk@louisvilleco.gov
CO
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 50 \
DENVER WATER
CLIENT REFERENCE
Angela Bricmont
Director of Finance
1600 W. 12th Avenue
Denver, CO 80204
P: 303.628.6411
E: angela.bricmont@
denverwater.org
CO
From 2015 to 2016, Mr. Giardina assisted Denver Water in a facilitation and
technical assistance capacity as the utility considered changes to its rate
structure. It had been over 20 years since Denver Water last made significant
changes to its rate structure. Working with Denver Water staff, Mr. Giardina
facilitated/lead a series of meetings with a citizen-stakeholder Rate Structure
Review Committee. His role included the development of the agenda for each
meeting, preparation of meeting materials, facilitation and presentation,
post-meeting staff de-briefs, and assistance in the formulation and develop-
ment of rate structure alternatives. He also assisted staff in modifications
to the cost of service process/model reflective of the alternative rate designs
considered and ultimately adopted, in presentations to the Denver Water
Board and in the implementation of the new rate structure which occurred
in April of 2016.
CITY OF BOZEMAN / 51 /
CITY OF BOULDER
Raftelis was retained by the City of Boulder (City) to evaluate and complete
a comprehensive water, wastewater and stormwater rate assessment and to
develop rate alternatives for each utility. The study includes a detailed review
of policies and practices incorporated in separate utility rate models main-
tained by the City and of potential improvements to the utility rate structures.
The City implemented an individualized customer water budget based rate
structure in 2007. Raftelis assessed the effectiveness of the rate structure
by looking at customer water use behaviors and revenue generated, and
comparing against other utilities in Colorado and California with similar
structures. The City’s wastewater utility faces rising capital costs associated
with increased regulatory requirements combined with repair and replace-
ment needs.
The City’s stormwater collection and drainage systems are faced with equi-
tably recovering increased operating and capital requirements following
the flooding experienced there in the fall of 2013. The City’s rate structure
is perceived as being overly complex, and Raftelis worked with the City to
articulate issues to be resolved with rate structure revisions or the addition
of a credits program. Raftelis also developed potential options, analyzed bill-
ing processes and assessed customer impacts, and in the process identified
properties that were potentially not being billed in line with current policy
for staff to review as needed.
Raftelis developed alternative water, wastewater and storm drainage rate
structures that align the rate structures with the City’s goals and objectives,
and updated the existing rate structure for increased utility revenue needs
effective January 1, 2018. As part of the update, Raftelis reviewed the City’s
revenue requirement and provided recommendations on utility debt service
coverage and cash reserve policies.
Throughout the project, Raftelis has worked extensively with City staff to
refine interim study findings and recommendations. Raftelis and City staff
will present final recommendations to the standing Water Resource Advisory
Board (WRAB) to provide direction on policies, practices and adjustments to
the utility rate structure for review and approval by City Council.
CLIENT REFERENCE
Ken Baird
Utilities Finance
Manager
1739 Broadway
Boulder, CO 80306
P: 303.441.3252
E: bairdk@
bouldercolorado.gov
CO
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 52 \
Below, we have provided a list of the current clients that each of our team members is working
with on projects that are similar to the City's project. A full firm-wide client list along with the
references can be provided upon request.
CURRENT CLIENT LIST
TEAM MEMBER JURISDICTION NAME CONTACT NAME PHONE NUMBER LENTGH OF
ENGAGEMENT
Rick Giardina, CPA
Dallas Water Utilities, TX
Terry Lowery, Assistant
Director of Business
Operations
214.670.3146 2016 - current
City of Oklahoma City, OK Billy Little, Utilities
Finance Section Manager 405.297.2800 2015 - current
City of Phoenix, Water
Services Department, AZ
Darren Sversvold,
Principal Planner 602.534.8194 2016 - current
Salt Lake City, UT Laura Briefer, Director 801.483.6864 2016 - current
Austin Water, TX
Joseph Gonzales, CPA
Utility Budget and Finance
Manager
512.972.0131 2016 - current
City of Glendale, AZ Dan H. Hatch CPA, Water
Services Administrator 602.316.6071 2016 - current
Todd Cristiano
Salt Lake City Department
of Public Utilities, UT Laura Briefer, Director 801.541.0214 2017 - current
City of Greeley, CO Erik Dial, Budget Manager 970.350.9893 2017 - current
City of Tolleson, AZ Mark Berrelez, Utilities
Superintendent 623.478.8721 2017 - current
Bancroft-Clover Water and
Sanitation District, CO
Tim Lowe, General
Manager 303.922.1113 2017 - current
Elaine Conti City of Phoenix, AZ Darren Sversvold,
Principal Planner 602.534.8194 2016 - current
Sanjay Gaur
City of Malibu, CA
Rob Duboux, Asstistant
Public Works Director /
Asstistant City Engineer
310.456.2489 2016 - current
City of Chino Hills, CA Cheryl Yeamans,
Management Analyst II 909.364.2807 2015 - current
City of Camarillo, CA
Lucia M. McGovern,
Deputy Director of Public
Works/Envirnoment
805.388.5334 2007 - current
Fallbrook Public
Utility District, CA
Jack Bebee, Assistant
General Manager and
Chief Engineer
760.728.1125 2015 - current
City of Huntington
Beach, CA
Kenneth J. Dills, Project
Manager - Public Works
Department
714.375.5055 2007 - current
City of Long Beach, CA Anatole Falagan, Assistant
General Manager 562.570.2317 2014 - current
City of Thousand Oaks, CA Jay Spurgin, Public
Works Director 805.449.2444 2010 - current
CITY OF BOZEMAN / 53 /
TEAM MEMBER JURISDICTION NAME CONTACT NAME PHONE NUMBER LENTGH OF
ENGAGEMENT
Brian Kirsch
St. Vrain Sanitation
District, CO
Rob Fleck,
District Manager 303.776.9570 2017 - current
Town of Berthoud, CO Stephanie Brothers,
Director of Engineering 970.532.2643 2017 - current
Mt. Crested Butte Water
and Sanitation District, CO
Nettie Gruber,
Finance Manager 970.349.7575 2017 - current
City of Casper, WY Bruce Martin, Public
Utilities Manager 307.235.7543 2017 - current
North Texas Municipal
Water District, TX
Brian Brooks, Process
Improvement Advisor 469.626.4337 2015 - current
Laura Slavin
City of Westminster, CO Stu Feinglas, Water
Resources Analyst 303.658.2386 2017 - current
Fort Collins Loveland
Water District, CO Terry Farrill 970.226.3104
ext. 104 2017 - current
CURRENT CLIENT LIST (CONTINUED)
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 54 \
5. WORK SUMMARY
WORKSUMMARY
THE ROLE OF
CONSULTANT
Raftelis has found that building
trust and credibility with our
clients is key to successful pro-
ject outcomes. These attributes,
coupled with our depth of expe-
rience, is demonstrated through
the large number of our repeat
client engagements. We are com-
mitted as a firm and a Project
Team to spend the time necessary
to cultivate this relationship and
exceed your expectations on this
project. While some consultants
would dread a call on the week-
end to discuss an issue, we relish
such calls because they indicate
the confidence and trust our
clients have in us. We hope to
develop such a relationship with
City staff.
Raftelis uses a tailored approach
for each study communicating
the timely flow of information
and documents between our
team, the City, and other relevant
parties. This tailored approach
is identified at beginning of the
project during the project initi-
ation meeting. Communication
strategies may include regularly
scheduled project meeting calls
with key team members, group
email lists to share information,
or web-conferences. Although
face-to-face meetings are very
productive, we have found our
clients are using web-based meet-
ings more frequently because of
the low cost and convenience.
TRACKING/MANAGING
THE CONTRACT AND
CONTROLLING COSTS
Raftelis employs several man-
agement strategies to heighten
the effectiveness of the services
we provide to our clients. During
the project initiation meeting, we
will thoroughly review the scope,
deliverables, milestones, and the
client’s main point of contact.
The purpose of this is to ensure
a common understanding among
the team and set expectations.
Raftelis’ executive and manage-
ment team will participate in
weekly conference calls to review
the staff workload and capacity
for each upcoming week. Those
weekly meetings allow Raftelis’
Project Managers to align our con-
sulting staff in a flexible manner
that ensures suitable resources
will be devoted to each client.
Project managers also receive
weekly billing reports showing
time charged by project staff. The
weekly report allows the project
manager to manage the budget
by task and identify any poten-
tial issues and bring them to the
attention of the client.
In the following pages, we have included our understanding of the project along with a work
plan to accomplish the scope of work.
CITY OF BOZEMAN / 55 /
We took it upon ourselves to learn as much as possible about
the City’s water and wastewater utilities in preparing this
proposal. We conducted a cursory review of the City’s publicly
available financial and planning information. We want to
better understand where you are today and where we may help
you with meeting future goals and objectives. On the following
page, we have included a few items that may be important
considerations during this study.
PROJECTUNDERSTANDING
6. WORK PLAN & SCHEDULE
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 56 \
FINANCIAL
SUFFICIENCY
The City reviews its rates annu-
ally. Since 2012, the City has
increased rates on a consistent
basis (no water increases in 2014
and 2015). This ‘smooth and
predictable’ approach ensures
that the utilities are sufficiently
meeting annual revenue require-
ments, reserve targets and debt
service coverage. Future rate
increases are projected for both
utilities, all under 5% per year
(Source: Annual Reports).
CAPITAL REPAIR
AND REPLACEMENT
Depreciation expense is a
common industry benchmark
used to evaluate a utility’s ability
to keep pace with renewal and
replacement of infrastructure.
The City anticipates spending
on average $5.8 million to main-
tain water utility infrastructure
from FY19-FY23. This is nearly
double the utility’s depreciation
expense. The wastewater utility’s
average capital expenditures is
approximately $1.6 million per
year. This is below the utility’s
current depreciation expense.
However, this lower value may
be due in part to a recent major
upgrade to the City’s water recla-
mation facility.
WATER SUPPLY GAP
According to the 2013 Integrated
Water Resources Plan (IWRP),
the City may experience a water
supply gap within the next 20
years. The Plan outlines several
strategies to close that gap, one of
which is continued conservation
efforts. Properly designed con-
servation rate structures that are
consistent with the conservation
program’s philosophy can be an
effective tool for reaching long-
term goals. The City implemented
a residential tiered rate structure
in 2008 (source: 2008 HDR Water
Rate Study). As discussed in the
IWRP report, the City has expe-
rienced a water use per account
reduction. Based on our experi-
ence, we would expect to see a
decline the in volume billed in
tier 3 as shown in the example
below. As the volume decreases
in tier 4, revenue will decrease
as well however, at a greater rate
than in the lower priced tiers.
This could have an impact on
overall residential water volume
revenue. With the change in
consumption patterns, the tiered
pricing signal may loss some of
its effectiveness in encouraging
the wise use of water.
We realize that this public infor-
mation will require context and
further explanation from City
staff. Some of this information
may not be relevant to the study
while other items will be critical.
One of the goals of the kick-off
meeting is to evaluate this data
and determine which information
may affect the outcome the study.
Based on this information and
our experience working with
similar clients, we believe that
to ensure a successful study, we
need to accomplish the following:
>Provide viable options for
funding the water and waste-
water utilities operations,
maintenance, debt, capi-
tal programs, and reserves
through careful analysis and
using best-in-breed strategies
>Develop equitable distri-
butions of cost to customer
classes based on their unique
characteristics
>Align rate structure alter-
natives with utility and
community goals, specifically
conservation, equity, and
affordability. Bold "Aligh rate
structure alternatives
>Assist you in every way
possible to get to a solution
that both works and can be
approved by elected officials
and accepted by the commu-
nity at-large
CITY OF BOZEMAN / 57 /
WORK PLAN
TASK 1: PROJECT INITIATION/KICK-OFF MEETING
Prior to the project initiation
meeting, we will submit a data
request list detailing the infor-
mation needed to conduct the
study. We will facilitate an
on-site project initiation with
staff. At this meeting, we will
review data received from the
data request list, and clarify and
gather any outstanding items
or questions. We will also use
this meeting to discuss study
objectives and other project
management items. We antici-
pate covering the following:
>Project Management: We
will finalize scope, milestones,
and deliverables, schedule reg-
ular project conference calls,
and determine primary points
of contact.
>Finalize project goals and objectives: These will be used
as the guiding principles for the
study and we will measure our
results against these criteria.
>Rate structure pricing objec-tives: The City has asked for a
review of its existing water
and sewer rate structures. We
will evaluate the structures
through a of pricing objectives
that best meet the goals of the
utilities. We will prioritize the
selected objectives and use
those to evaluate the existing
structure and develop rate
alternatives. Once the objec-
tives have been selected and
ranked, we will work with
staff to establish metrics or
parameters for each one of the
objectives. These metrics will
be used to measure the effec-
tiveness of the alternatives
against the objectives. The
figure to the below lists some
of the most common pricing
objectives used to evaluate a
rate structure and develop rate
structure alternatives.
Task 1 Deliverables
>Meeting #1: Kick-off meeting
with staff
>Formalized lines of communication
>Finalized schedule with meeting
dates and other deliverables
>Memo summarizing overall
study objectives and pricing
objectives
Classification Rank Total Objective
Most Important
1 Conservation/Demand Management
2 Financial Sufficiency
3 Rate Stability
Very Important
4 Revenue Stability
5 Equitable Contributions from New Customers
5 Affordability to Disadvantaged Customers
Important
7 Cost of Service Based Allocations
8 Minimization of Customer Impacts
9 Simple to Understand and Update
Least Important
10 Defensibility
11 Ease of Implementation
12 Economic Development
Pricing objectives drive the entire rate-setting process
Below is a sample pricing objectives scorecard
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 58 \
TASK 2:
FINANCIAL PLANS
The financial planning task will
evaluate the projections of rate
and other revenues and their abil-
ity to meet annual expenditures
(revenue requirements) while
meeting debt service coverage
and reserve targets. For this task,
we will review and project cus-
tomer billing data, develop rate
revenue projections, identify the
timing and level of bond issues,
project budgeted operating and
capital, and calculate revenue
increases over the study period.
For this task, we will exam-
ine utility’s financial activity
through an operations subfund
and an impact fee subfund. The
operations subfund tracks those
activities associated with annual
operating revenue and revenue
requirements. The impact fee
subfund tracks growth-related
activities. This includes impact
fee revenue, bond issues, contri-
butions or in-lieu of payments to
offset the need for certain capi-
tal projects.
Building on the City’s water and
sewer financial planning models,
we will develop a five-year plan-
ning horizon for each utility. The
structure of our financial plan
model (See Task 5) will allow
users to conduct what-if scenarios
using an easy to manage dash-
board interface. The development
of the water and sewer financial
plans involve several steps which
are discussed in the following.
REVENUE NEEDS:
PROJECTION OF ACCOUNTS,
USAGE AND RATE REVENUE.
Raftelis will examine usage
patterns from historical water
and wastewater billing records.
Using this data billing data and
other planning documents, we
will project consumption and
rate revenue for the study period
under the current rate schedule.
We will adjust projections for
customer growth and changes in
usage per account. These include
changes in residential use per
account, which can be attributed
to more efficient fixtures, change
in development code, and/or
infill vs. green field development.
A bill distribution or bill fre-
quency provides valuable
information on projecting
customers’ water use habits,
as shown in the graphic below.
These are instrumental in devel-
oping revenue for the City’s tiered
structure as well as evaluating
rate structure alternatives. The
water demands used to develop
the projected revenue will also
be used in determining the
customer classes demand char-
acteristics in the cost of service
service analysis.
BONDS
The City has current outstand-
ing bonds for the water and
wastewater utility. As part of the
capital plan review, we will iden-
tify which projects are eligible for
bond funding.
DEBT SERVICE COVERAGE
AND RESERVE POLICIES
Raftelis will incorporate exist-
ing bond covenants and reserve
policies into the financial plan.
We will evaluate these policies
against the industry standards
and other goals identified by the
City. We will review our findings
and proposed recommendations
with staff. Our financial plan sce-
narios will be based on meeting
these two requirements.
CITY OF BOZEMAN / 59 /
OPERATING EXPENSES
Raftelis will use historical budget
and actuals as well as the current
budget to forecast operating
expenses. We will adjust line
item expenses for inflation, and
changes in operational costs due
to new or replaced facilities or
staffing changes.
CAPITAL EXPENDITURES
Raftelis will examine the City’s
practice of funding capital
improvements through rate-rev-
enue, reserves, and debt. We will
make recommendations related
to debt issue and its uses and lim-
itations relative to maintaining a
proper balance for debt coverage
reserve levels. To do this, we will
evaluate various financing sce-
narios using the five-year capital
plan, such as varying the timing
of proceeds, the level of proceeds
and adjusting timing of projects
if necessary.
FINANCIAL
PLANNING SCENARIOS
We will aassess revenue needs
for the five-year planning period
beginning 7/1/2018 (FY2019 –
2023) and show the level of rate
revenue adjustments needed to
meet annual revenue require-
ment over the study period and
satisfy debt service coverage
and reserve requirements. The
financial planning scenarios
will show the level of rate reve-
nue adjustments needed to meet
annual revenue requirement
over the study period and satisfy
debt service coverage and reserve
requirements. More specifically,
we will incorporate the City’s
funding capital funding policies,
and how those policies will affect
revenue adjustments.
Our efforts on this task will
provide viable scenarios to test
the long-term revenue suffi-
ciency of proposed rate revenue
adjustments to annual revenue
requirements. From the selected
financial plan, we will select the
test-year revenue requirement or
the year in which new rates will
be effective. The test-year reve-
nue requirement will be used in
the cost of service analysis.
Task 2 Deliverables
>Meeting #2: On-site financial
plan review meeting with staff
>Communication protocol – reg-
ularly schedule conference calls
>Financial plan and rate revenue
projections for the five-year study
period
>Projections of operation and
maintenance expense and capital
improvement program
>Capital identified as cash, bond,
or grant funded; timing and level
of bond proceeds
>Projections of reserve balances
and debt service coverage
>Memo summarizing findings and
recommendations
TASK 3: COST OF
SERVICE ANALYSIS
We will start with the industry-ac-
cepted cost of service principles
and customize our analysis to
account for the specific require-
ments of this study. The cost of
service analysis will provide the
City with a defensible justification
explaining the reason why the
costs are assigned in the manner
they are. Whereas the financial
planning will answer the ques-
tion of “how much?”, the cost of
service analysis will answer the
question of “from who?”. The cost
allocation information will be
needed for the rate alternative
and design task.
We will develop a test-year rev-
enue requirement as the basis
for our cost of service analysis.
The revenue requirement is the
amount of revenue required from
rates to meet annual expendi-
tures such as operating, capital,
debt service, changes in reserves
and is net of other operating and
non-operating revenue. The figure
on the following page illustrates
the revenue requirement calcula-
tion. We will calculate a revenue
requirement and develop a sepa-
rate cost of service analysis for the
water and wastewater utilities.
The cost of service analysis is a
multi-step process. It includes
the assignment of costs to the
various facilities (functional
areas) and further allocating
those costs based on their design
criteria or the function in the
system. Those costs are distrib-
uted to customer classes based
on their water demands or sewer
flow characteristics as well as the
number of accounts or equivalent
meters. Raftelis will use the cost
allocation process based on the
industry standard methodologies
published by the AWWA’s Manual
M1, Principles of Water Rates, Fees,
and Charges and the WEF’s Manual
of Practice No. 27, Financing and
Charges for Wastewater Systems
(both of which were co-authored
by Raftelis staff).
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 60 \
TASK 3.1: WATER UTILITY
COST OF SERVICE
3.1.1: Cost Functionalization
As a first step in the water
cost of service process, we will
allocate the detailed revenue
requirement to the appropriate
functional cost categories. As
an example, O&M expenses are
often listed functionally in the
budget and capital expenditures
are typically organized based on
the type of facility. Debt service
can be functionalized based on
the project the proceeds intended
to fund. Capital expenditures
can be functionalized based on
asset categories. During the ini-
tial phases of the study, we will
work with City staff to determine
the appropriate functional cate-
gories and factors to use in the
analysis. Functional cost cate-
gories may include:
>Source of supply
>Pumping plant
>Transmission plant
>Distribution costs
>Public and private fire protec-
tion costs
>Meter, billing and collection,
utility locates, and other cus-
tomer service costs
Other operating and non-op-
erating income such as water
material sales, hydrant fees,
interest income, etc. will be func-
tionalized as well. These revenue
sources are an offset to the reve-
nue required from rates.
3.1.2: Cost Allocation
After assigning the detailed
water utility revenue require-
ment to functional categories, we
will allocate those costs per the
type of service they are designed
to provide. Under the base-extra
capacity method of cost alloca-
tion described in AWWA’s Manual
M1, these cost classification
parameters generally include:
>Base or average day demand
(also referred to as commodity)
>Maximum day demand
>Maximum hour demand
>Fire Protection
>Meters and services
>Billing and collection
For example, distribution mains
are typically designed to meet
maximum hour demands. Under
the base extra-capacity meth-
odology, those costs would be
allocated to the base, maximum
day, and maximum hour. This
and other allocations are based
on water production ratios of
maximum day and maximum
hour demands to average day
demands. Conversely, source of
supply costs are associated with
annual water supply require-
ments. Those costs would be
allocated to the base or average
day component. Some costs can
be directly assigned such as bill-
ing or meter costs.
Other operating and non-oper-
ating revenues such as sales of
water materials, hydrant fees,
interest income, etc. not directly
related to a cost component, will
be allocated on the basis of all
other allocations.
3.1.3: Customer Class Demand
Characteristics (Units of Service)
We will develop the test-year
demand characteristics for each
customer class. Referred to as
units of service, the demand char-
acteristics include are the same as
the cost classification parameters
use in the cost allocation process
in task 3.1.2. Based on the bill-
ing data and test year revenue
requirement developed in Task
2, we will determine average day
demands, maximum day, and
maximum hour demands as well
DEVELOPMENT OF TEST-YEAR
REVENUE REQUIREMENT
Operation and maintenance expense
+ Capital funded from rates
+ Annual debt service
+ Transfers out
= Revenue requirement
Less revenue requirement adjustments
Miscellaneous revenue
+ Transfers in
+ Changes in fund balance
= Adjustments to revenue requirements
= Net test-year revenue requirement
Capital expenditures
- Bond funding
- Grant funding
- Plant investment fees
= Capital funded from rates
CITY OF BOZEMAN / 61 /
as the number of bills and meters
stated on an equivalent meter
basis for each customer class.
3.1.4: Distribute Costs to
Customer Classes
We will distribute costs from step
3.1.2 to each customer class based
on their proportionate share of
demand characteristics or units
of service. For example, if the
residential class’ maximum day
demands represent 50% of the
total demand, we would allocate
50% of the maximum day costs to
the residential class. In a similar
manner, if the commercial class
represents 10% of total bill, we
would allocate 10% of the billing
costs to the commercial class.
3.1.5: Comparison of Class Cost
of Service to Revenue Under
Existing Rates
We will compare the class cost of
service developed above to the
revenue projected under existing
rates for the test-year. This com-
parison will show the percentage
change in the classes based on
the cost of service analysis.
Task 3.1 Deliverables
>Web meeting: Water cost of
service review (to be combined
with wastewater cost of service
review) with staff
>Test-year revenue requirement for
the water utility
>Functionalized and allocated
revenue requirement
>Customer class cost of service
>Comparison of cost of service to
revenue under existing rates
3.2: WASTEWATER COST
OF SERVICE
The sewer cost of service anal-
ysis will be conducted in a
similar manner to the water
cost of service. We will follow
the principles and guidelines set
forth in the WEF’s MOP27, Prin-
ciples of Financing and Charges for
Wastewater Systems.
3.2.1: Cost Functionalization
As a first step in the sewer cost of
service process, we will allocate
the detailed revenue requirement
to the appropriate functional
cost categories. As an example,
O&M expenses are often listed
functionally in the budget and
capital expenditures are typ-
ically organized based on the
type of facility. Debt service can
be functionalized based on the
project the proceeds intended to
fund. During the initial phases of
the study, we will work with City
staff to determine the appropriate
functional categories and factors
to use in the analysis. Functional
categories may include:
>Collection mains
>Interceptor/conveyance
systems
>Lift stations
>Water reclamation facility
>Sludge processing/ biosolids
handing
>Account, billing and collec-
tion, and customer service
costs
3.2.2: Cost Allocation
We will allocate the functional-
ized costs based on the type of
service they provide. Some costs
the utility incurs are a function
of the water quantity discharged
by a customer, other costs are
associated with addressing sewer
strengths or conveying sewer.
Customer service, billing, and
metering costs are generally a
function of the number of custom-
ers served, and the size and type of
meter or service. As with the func-
tionalization process, Raftelis will
work with City staff to determine
the specific allocation factors
that best represent sewer utility
system cost drivers. These cost
allocation factors may include:
>Contributed Flow
>Biochemical Oxygen Demand
(BOD)
>Total Dissolved Solids (TSS)
>Meters and Services
>Billing and Collection
3.2.3: Customer Class Demand
Characteristics (Units of Service)
We will develop the demand char-
acteristics for each customer class.
Also referred to as units of ser-
vice, the demand characteristics
include are the same as the cost
classification parameters used in
the cost allocation process in task
3.2.2. Based on the billing data
and test-year revenue requirement
developed in Task 2, we will deter-
mine billable flow volume, BOD,
TSS, equivalent meter, and bills
by customer class.
3.2.4: Distribute Costs to
Customer Classes
We will allocate costs in task 3.2.2
to each customer class based on
their proportionate share of ser-
vice characteristics or units of
service calculated in task 3.2.3.
For example, if the residential
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 62 \
class’ billable flow represents
50% of the total contributed flow,
we would allocate 50% of the flow
costs to the residential class. In a
similar manner, if the commer-
cial class represents 10% of total
BOD costs, we would allocate 10%
of the BOD costs to the commer-
cial class. Total volume-related
and customer-related costs by
class will be used to calculate the
class cost of service rates. Vol-
ume-related costs include flow
and strength costs. Customer-re-
lated costs include billing and
collection and other customer
costs usually stated in an equiv-
alent water meter basis. Using
the BOD and TSS cost allocations
developed in step 3.2.2, we will
calculate the unit cost of BOD and
TSS on a dollar per pound basis
for extra strength customers.
3.2.5: Comparison of Class Cost
of Service to Revenue Under
Existing Rates
We will compare the class cost of
service developed in task 3.2.4 to
the revenue projected under exist-
ing rates for the test-year. This
comparison will show the percent-
age change in the classes based on
the cost of service process.
Task 3.2 Deliverables
>Web meeting: Wastewater cost
of service review (to be combined
with water cost of service review)
>Additional web meetings/confer-
ence calls as necessary
>Test-year sewer revenue require-
ment for the water utility
>Functionalized and allocated
revenue requirement
>Customer class cost of service
>Comparison of cost of service to
revenue under existing rates
TASK 4: RATE
DESIGN ALTERNATIVES
AND DESIGN
With the questions of “how
much?” and “from whom?” from
the financial plan and cost of
service analysis, the rate design
task answers the question “from
where?” The rate design task
will identify the volume (varia-
ble) and customer-related (fixed)
costs to be recovered through
rates. For both utilities, we will
develop a typical bill survey for
the City’s existing and proposed
alternatives compared to up to 10
peer utilities.
TASK 4.1: EXISTING RATE
STRUCTURE EVALUATION
Using the ranked pricing
objectives from Task 1 and the
evaluation metrics, we will eval-
uate the existing rate structures
EXAMPLES OF RATE
STRUCTURE ALTERNATIVE
SCENARIOS
Adjusting the level of revenue
recovered from the minimum
charge and volume charges
Adjusting the residential
minimum allowance
Adding tiers to the residential
structure or changing the
structures for multifamily and
other customers
Adjusting the pricing ratios and/
or tiers of the existing structure
Creating a tier that captures
essential use to address bill
affordability
against the pricing objective
metrics. For example, if revenue
stability was a highly-ranked
objective, we would evaluate
historical revenues to determine
if the existing rate structure pro-
duced a trend of stable revenues
over the years. That type of metric,
along with the other ranked pric-
ing objective metrics, will provide
the information needed to create
viable alternatives.
TASK 4.2: WATER AND
WASTEWATER RATE
ALTERNATIVES
We will calculate the test-year
water rates under the current
structure – the service charge by
meter size and a tiered volume
rate for single-family and uni-
form for all other customers. We
will also develop test-year rates
for rate structure alternatives.
Rate structure alternatives will
be based on the results of the pric-
ing objectives identified in Task
1. We will use the bill frequency
information from Task 2 to assist
with the rate structure analysis.
Examples of alternatives are
shown below.
These are just four examples and
there could certainly be more.
There is no ‘perfect’ rate struc-
ture, however, using the pricing
objectives and creating options
around those objectives is a
proven method of developing the
right structure for the City.
We will calculate the test-year
wastewater rates under the
current structure – the service
charge by meter size and a uni-
CITY OF BOZEMAN / 63 /
form volume rate for all customers
which varies by class. We will also
develop test-year rates for any rate
structure alternatives. Rate struc-
ture alternatives will be based on
the results of the pricing objec-
tives identified in Task 1.
TASK 4.2: RATE
IMPACT MODEL
Increases to customers’ bill
influence their usage patterns.
As bills increase, water use will
decline overtime. The decline in
consumption results in further
revenue loss. For example, a 5%
overall revenue increase may
only generate 3% in additional
revenue. Our rate impact model
will calculate the change in
customers’ bills under existing
rates and proposed rates. Based
on the change in bill, we will use
elasticity factors to estimate the
reduction in demand because
of the rate increase. From that,
we will calculate total revenue
adjusted for the reduction in
demand and compare to the orig-
inal revenue requirement.
TASK 4.3: CUSTOMER
IMPACT ANALYSIS
Changes to customer class rates
stem from changes in the overall
revenue requirement, class cost of
service, and changes to the struc-
ture. The combination of these
changes can have significant
impact on customer’s bills. In our
bill impact analysis, we will gen-
erate monthly bills at each level
of usage comparing the cumula-
tive impact from the change in
revenue requirement, class cost
of service and any changes in the
rate structure to the bills under
existing rates. The customer
impact model will include a series
of tables and figures that show
the projected overall impacts by
customer class at various levels
of consumption. As an example,
the customer impact illustration
shown below indicates that a typi-
cal customer with a 3/4-inch meter
using 12 ccf will see an increase of
$2.24 or 6% in their monthly bill.
Task 4 Deliverables
>Meeting #3: On-site rate design
alternatives review meeting with
staff
>Web meetings/conference calls
as necessary
>Test-year rates under existing
structure
>Test year rates for each water and
wastewater alternative based on
pricing objectives developed in
Task 1
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 64 \
>Customer bill impacts to showing
the distribution of bill changes
for all customers for every month
>Typical monthly bills for typical
levels of consumption (e.g. winter
and summer usage)
>Monthly and annual bill from a
sampling of at least three cus-
tomers per class
>Typical bill survey for the water
and sewer rate utility of up 10
peer utilities
TASK 5: RATE MODEL
DEVELOPMENT
This task will be completed in
parallel with tasks 2 through 4.
Raftelis has developed numerous
of financial planning and cost of
service models customized for cli-
ents from the ground up. Because
the City uses an existing set of
models, we propose building
upon the City’s existing platform.
We’ll identify the strengths and
weaknesses and make recom-
mendations for updates. Most, if
not all, of our financial planning
models include a summary dash-
board like the figure above. We
will create a custom dashboard
or modify the City’s existing
dashboards to include cash flow
charts, capital spending, annual
revenue adjustments, or other
parameters required by the City.
A sample of our dashboard is
shown below.
Task 5 Deliverables
>Updated water and wastewater
financial planning models for the
10-year period
>Module for developing revenues
at existing rates and revenues at
projected or adopted rates
>Operating expense module allow-
ing for the projection of expenses
for the 10-year study period
>Capital plan module that allows
for conducting scenario analysis
on the timing and amount of cap-
ital costs
>Graphical dashboard that will
shows the affects the water and
sewer utility financials
No of Years Display in Charts 5 Select year to show Financial Structure
Under Current Rate Structure
2010
Zero Selected Variables
Variables Increments 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Rev Adjmts 1%10%10%9%9%9%9%0%0%0%0%
New Debt 1,000,000$ 13,000,000$ -$ -$ 8,000,000$ -$ -$ -$ -$ -$ -$
Shows the projected operating costs and
revenue streams
Shows the revenue
adjustment required
for the next five years
in order to meet debt
coverage and target reserve balance
Spin buttons for scenario analysis
Indicates the reserves
balance and target level according to
utility’s policies Indicates the
different funding sources of the CIP
SAMPLE MODEL DASHBOARD
The Dashboard allows quick decision-making by visually
displaying impacts of changes to selected variables.
CITY OF BOZEMAN / 65 /
TASK 6: STUDY
REPORTS AND
CITY COMMISSION
PRESENTATIONS
Raftelis will attend three project
meetings with City staff and two
City Commission meetings to
present draft findings and final
recommendations.
Throughout this project, techni-
cal memoranda, presentations,
City staff input, and other related
documentation will be developed
to memorialize outcomes of the
analysis and public process. It
will contain the proposed rates,
rate structure, a narrative for
the financial plan, cost of service
analysis, the rate structure alter-
natives, and a summary of the
project revenue under adopted
rates. A hard copy and electronic
copy of the draft report will be
provided to the City for review.
Based on comments from staff
and City Council, Raftelis will
prepare a final report for the
City’s records. We will submit
three hard copies and an elec-
tronic copy to the City. The final
report will contain the sum-
marized action of the elected
officials, final rates, the final rate
structure, updated discussion
on the financial plan, cost of ser-
vice, and rate design as well as a
summary of the revenue under
adopted rates.
Raftelis will develop separate
Microsoft Excel-based models
for the water and sewer utilities
as part of tasks 3 through 5. The
models will contain the financial
plan, cost of service analysis,
and rate design assumptions,
calculations, and tables. The
models will be used throughout
the project to develop and refine
preliminary and final study rec-
ommendations. Throughout the
study, there will be opportunities
for City's staff to become familiar
with the tools, inputs, and out-
puts throughout the project.
Task 6 Deliverables
>Meeting #4: First presentation of
rate study recommendations to
City Commission
>Meeting #5: Second presentation
rate study recommendations to
City Commission
>Draft report
>Final report with final recom-
mendations, rates, rate structure
and rate study narrative
>Excel rate models for the water
and wastewater utilities
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 66 \
Raftelis proposes to complete the scope of work outlined in our proposal on a time-and-materials basis with
a not-to-exceed cost of $74,785 including related expenses. The following table provides a breakdown of
the estimated level of effort required for completing each task described and the hourly billing rates for the
personnel scheduled to complete the project. Expenses include costs associated with travel, and a $10 per
hour technology charge covering computers, networks, telephones, postage, etc.
PROJECT PRICE
RG TC EVC SC Admin Total
$310 $230 $255 $175 $75
1 1 2 2 16 12 3 33 $6,625
2 1 2 2 16 2 48 68 $13,210
3 0 0 16 4 48 68 $13,100
4 1 2 2 24 4 64 94 $18,360
5 0 0 8 16 24 $4,640
6 2 1 2 24 2 24 52 $10,850
TOTAL MEETINGS / HOURS 5 7 8 104 12 212 3 339
PROFESSIONAL FEES $2,480 $23,920 $3,060 $37,100 $225 $66,785 $66,785
$8,000
$74,785
Project Initiation and
Management
Financial Plan
Cost-of-Service Analysis
Rate Design Alternatives and
Design
Total Expenses
Total Labor and Expenses
Rate Model Development
HOURLY RATES
Task Task Descriptions No of
Meetings
Hours Requirements
Total
No of
Attendees
RG - Rick Giardina (Project Director)
TC - Todd Cristiano (Project Manager)
EVC - Elaine Vastis Conti (Technical Advisor)
SC - Staff Consultants
Admin - Administrative Staff
Rate Study Reports and
Council Presentations
CITY OF BOZEMAN / 67 /
Begin End 4-Sep 18-Sep 2-Oct 16-Oct 30-Oct 13-Nov 11-Dec 25-Dec 8-Jan 22-Jan 5-Feb 19-Feb 5-Mar 19-Mar 2-Apr 16-Apr
Kick-off Meeting Delivery of Final Report
On-site meeting Council Presentations
Web meeting Technical memorandums
Delivery of Draft Report
3/19/2018 4/6/20185Rate Study Reports and
Council Presentations
TASKS
2 Financial Plan
1 Project Initiation and
Management
9/4/2017 2/16/20185Rate Model
Development
2017 (week beginning)2018 (week beginning)
9/18/2017 2/16/2018
9/5/2017 9/5/2017
9/4/2017 9/29/2017
9/4/2017 9/29/2017
4 Rate Design Alternatives
and Design
3 Cost-of-Service Analysis
27-Nov
Raftelis will complete the scope of services within the timeframe shown in the schedule below. The proposed
schedule assumes a notice-to-proceed by the beginning of September 2017, and that Raftelis will receive
the needed data in a timely manner and be able to schedule meetings as necessary. Project completion is
estimated for April 2018. The number of hours indicated for each team member is shown previously in the
project cost.
PROJECT SCHEDULE
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 68 \
The list below itemizes the basic data requirements for a water and wastewater rate study. We have included
our best estimate on the time required by City staff to compile the information. These estimates are based on
our experience with other utilities of similar size. There are often instances where a data request item yields
additional questions and requires additional research from City staff. That additional time is not included
in these estimates. Billing data is often one of the more challenges data requests. We have included 10 hours
for this task should there be special programming required to query the data. Raftelis has consultants with
billing system expertise to assist the City if needed. This time excludes on-site meetings, conference calls,
or other forms of communication with Raftelis.
CITY-FURNISHED DOCUMENTATION
7. CITY-FURNISHED DOCUMENTATION
DATA REQUEST ITEMS
ESTIMATED CITY
TIME REQUIREMENT
(HOURS)
1. City rate ordinance for current water and wastewater user charges 1 hour
2. FY15, FY16, and FY17 audited financial statements 1 hour
3. FY17, and FY18 water and wastewater enterprise fund budgets at object code and cost code
detail.4 hours
4. Inventory of water meters by meter size and meter type for each major type of customer as of
FY17 2 hours
5. FY16, FY17, and FY18 monthly billed water and wastewater volume for each major type of
customer. Fields to include:
• Account number/Premise number
• Address
• Customer classification
• Number of units
• Bill date
• Read date
• Meter size
• Monthly billed consumption
10 hours
6. FY15, FY16, and FY17 monthly billed water and wastewater user charge revenue for each \
customer class. Revenues should be delineated as minimum charge revenue and volumetric
revenue
1 hour
7. Annual service territory population growth projections over for the 10-year period FY17 through
FY26 (or recent master planning documents with population project information)1 hour
8. Detailed Capital Improvement Program expenditure forecast for the 5-year period FY18 -FY23.
CIP expenditures should be segregated between growth and non-growth components 1 hour
9. Existing debt service schedules for water and wastewater showing the timing of future annual
principal and interest payments. Provide loan agreements for all outstanding debt issues 1 hour
10. Cash reserve policies for the water and wastewater enterprise funds 1 hour
CITY OF BOZEMAN / 69 /
DATA REQUEST ITEMS
ESTIMATED CITY
TIME REQUIREMENT
(HOURS)
11. Water and wastewater fixed asset data. Including the separate identification of all contributed
(e.g., developer constructed/funded assets) and grant funded assets (if available). To the
extent possible, assets should be grouped by functional category (e.g., treatment, storage,
transmission, distribution) Provide the following (as of FY17):
• asset identifier
• asset description
• original cost
• est. useful life
• in-service date
• accumulated and annual depreciation
8 hours
12. Permitted capacity for both water and wastewater treatment facilities 1 hour
13. Monthly FY15, FY16, and FY17 influent, effluent and pounds of BOD and TSS at the water
reclamation facility 2 hours
14. Annual, maximum day and maximum hour water production for FY15, FY16, and FY17 2 hours
15. Inventory of water (e.g., feet) transmission and distribution lines by diameter size 2 hours
16. Inventory of wastewater (e.g., feet) collection and interceptor lines by diameter size 2 hours
17. Copies of most recent water and wastewater master plans 1 hour
18. Copies of most recent water and wastewater rate study reports 1 hour
19. Copies of any IGAs involving the City’s water and wastewater utilities 1 hour
20. Meter replacement cost by meter size 1 hour
21. Most recent private fireline and public hydrant inventory by line size 3 hours
TOTAL HOURS 53 HOURS
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 70 \
We carefully reviewed the agreement and would like to note one exception:
Section 7. Idemnity/Waiver of Claims/Insurance: "The insurance and required endorsements must be in a
form suitable to the City and shall include no less than a sixty (60) forty-five (45) day notice of cancellation
or non-renewel."
We ask that the City replace 60 days to 45 days , as that is the state’s regulation. Please contact us if you have
any questions.
EXCEPTION
TO THE AGREEMENT
APPENDIX A: EXCEPTION TO THE AGREEMENT
CITY OF BOZEMAN / 71 /
APPENDIX B: STATEMENT OF NON-DISCRIMINATION
RFP: WATER AND WASTEWATER UTILTIY RATE STUDY 11
Statement of Non-discrimination – Attachment 1
____________________________________(name of entity submitting) hereby affirms it will not discriminate on the basis of race, color, religion, creed, sex, age, marital status, national origin, or because of actual or perceived sexual orientation, gender identity or disability and acknowledges and understands the eventual contract will contain a provision prohibiting
discrimination as described above and this prohibition on discrimination shall apply to the hiring
and treatments or proposer’s employees and to all subcontracts.
______________________________________
Name and title of person authorized to sign on behalf of submitter
Raftelis Financial Consultants, Inc.
Rick Giardina, Executive Vice President
RAFTELIS FINANCIAL CONSULTANTS, INC.\ 72 \
On the following pages, we have included a recently completed report for the Stonegate Metropolitan Dis-
trict’s Water and Wastewater Cost of service study. This report highlights our approach to conducting a cost
of service study, regardless of the size of utility.
RECENTLY COMPLETED
RATE STUDY
APPENDIX B: RECENTLY COMPLETED RATE STUDY
CITY OF BOZEMAN / 73 /
Water and Wastewater Financial Plan Study ReportDistrict of Thousand Oaks
Final Water Rate and Cost of Service Study
Report
March 31,2017
STONEGATE VILLAGEMETROPOLITANDISTRICT
5619 DTC ParkwaySuite 175Greenwood Village, CO 80111
Phone 303.305.1135Fax720.475.1103 www.raftelis.com
March 31, 2017Board of DirectorsStonegate Village Metropolitan District10252 Stonegate ParkwayParker, CO 80134
Subject:Water Rate and Cost of Service Study ReportDearBoard of Directors,Raftelis Financial Consultants, Inc. (RFC)is pleased to provide this Water Rate and Cost of Service(COS)Study (Study)report to the Stonegate Village Metropolitan District (District).The main goal ofthe Study was to determine the amount of revenue that is required to be recovered from all customerclasses,any rate revenue increases required during the study period, develop an appropriate ratestructure,and define a Single Family Equivalent (SFE) customer.This report summarizes RFC's key findings and discusses the methodologies that were utilized todevelopour recommendations.It has been a pleasure working with you and other members of theDistrict’s Staff,Board,and Consultants.Thank you for the support you provided during the course ofthis study.Sincerely,
RAFTELIS FINANCIAL CONSULTANTS, INC.
Richard D.Giardina, CPA John J.Wright, CPAExecutive Vice President Senior Consultant
Water Cost of Service Study
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY ......................................................................1
1.1 OBJECTIVE OF THE WATER RATE AND COST OF SERVICE STUDY .....................1
1.2 DISTRICT WATER FINANCIAL PLAN..........................................................................1
1.3 WISE RENEWABLE WATER FEE................................................................................2
1.4 WATER COST OF SERVICE RESULTS .......................................................................3
1.5 EXISTING WATER RATE STRUCTURE.......................................................................5
1.6 COS RATES AND ALTERNATIVE WATER RATE STRUCTURES..............................6
1.7 RECOMMENDATION REGARDING WATER RATE STRUCTURE ..............................8
1.8 MUNICIPAL SECRUITES RULEMAKING BOARD (MSRB) DISCLOSURE .................9
2 BACKGROUND AND INTRODUCTION .............................................10
2.1 BACKGROUND OF THE STUDY................................................................................10
2.2 STUDY PLANNING HORIZON....................................................................................10
2.3 DISTRICT WATER UTILITY SYSTEMS ......................................................................10
Forecast Population Growth ....................................................................................................11
Water Treatment System ..........................................................................................................11
Water, Infrastructure, and Supply Efficiency (WISE) Project................................................11
3 WATER FINANCIAL PLAN AND CAPITAL FUNDING ......................13
3.1 OVERVIEW OF CAPITAL FINANCING PROCESS.....................................................13
3.2 WATER FINANCIAL PLAN ASSUMPTIONS ..............................................................14
3.3 WATER FINANCAL PLAN RESULTS ........................................................................15
4 WATER COST OF SERVICE..............................................................16
4.1 OVERVIEW OF THE WATER COST OF SERVICE PROCESS ..................................16
4.2 FORECAST WATER UTILITY REVENUE REQUIREMENT........................................17
4.3 FORECAST BILLED WATER CONSUMPTION ..........................................................18
4.4 CUSTOMER CLASS PEAKING FACTORS ................................................................19
4.5 RESULTS OF THE COST OF SERVICE STUDY ........................................................19
4.6 NON-POTABLE CUSTOMERS ...................................................................................20
5 RATE STRUCTURE ...........................................................................22
5.1 EXISTING RATE STRUCTURE...................................................................................22
5.2 PROPOSED RATE STRUCTURE ...............................................................................22
5.3 RECOMMENDED 2017 RATE STRUCTURE..............................................................25
Stonegate Village Metropolitan District
6 CUSTOMER BILL IMPACTS ..............................................................27
6.1 RESIDENTIAL CUSTOMERS .....................................................................................27
6.2 MULTI-FAMILY CUSTOMERS....................................................................................28
6.3 COMMERCIAL CUSTOMERS.....................................................................................28
6.4 IRRIGATION CUSTOMERS ........................................................................................29
APPENDIX A:WATER FINANCIAL PLAN
APPENDIX B:WATER COST OF SERVICE STUDY
APPENDIX C:WATER PEAKING FACTORS
LIST OF TABLES
Table 1: Financial Plan Revenue Increases..............................................................................................2
Table 2: WISE Renewable Water Fee ($/Month).......................................................................................2
Table 3: Water COS Results –2017 With 18% Revenue Increase..........................................................4
Table 4: Water COS Results –2017 With 0%Revenue Increase............................................................4
Table 5: Existing Water Usage Blocks Per Tier by Meter Size ...............................................................5
Table 6: Water Base Charges ($/Month)...................................................................................................6
Table 7: Forecast Water Volumetric Rates ($/kgal)–Existing Rate Structure .....................................7
Table 8: Alternative Uniform Volumetric Rates for Non-Residential Customers .................................7
Table 9: Residential Volumetric Rate Using AWC ...................................................................................8
Table 10: Tier 5 Usage for Non-Residential Customers..........................................................................9
Table 11: Results of Financial Plan.........................................................................................................15
Table 12: Forecast Revenue Requirements ...........................................................................................17
Table 13: Historical Monthly and Annual Consumption by Class per Account .................................18
Table 14: Forecasted Number of Water Customer Accounts...............................................................18
Table 15: Forecasted Billed Water Consumption (kgal/yr.)..................................................................18
Table 16: Historical System Wide Peaking Factors (kgal)....................................................................19
Table 17: Historical Peaking Factors by Class ......................................................................................19
Table 18: Water COS Results –2017 With 18% Revenue Increase......................................................20
Table 19: Existing Rate Structure............................................................................................................22
Table 20: Proposed Rate Comparison –Residential.............................................................................23
Table 21: Proposed Rate Comparison –Multi-Family...........................................................................23
Table 22: Proposed Rate Comparison –Commercial ...........................................................................24
Table 23: Proposed Rate Comparison –Irrigation ................................................................................24
Table 24: AWC Based Rate Structure for Residential Customers in 2017..........................................24
Table 25: Tier 5 Usage for Non-Residential Customers........................................................................26
Table 26: Forecast Water Volumetric Rates ($/kgal)–Existing Rate Structure .................................26
Table 27: Bill Impacts for Residential Customers in 2017 ....................................................................27
Table 28: Bill Impacts for a 1” Multi-Family Customer in 2017 ............................................................28
Table 29: Bill Impacts for a 1.5” Commercial Customer in 2017..........................................................29
Table 30: Bill Impacts for a 2” Irrigation Customer in 2017 ..................................................................30
Water Cost of Service Study
LIST OF FIGURES
Figure 1: Development of the Water Capital Financing Plan................................................................13
Figure 2: Determination of Water Customer Class Revenue Requirements ......................................17
Water Cost of Service Study |1
1 EXECUTIVE SUMMARY
1.1 OBJECTIVE OF THE WATER RATE AND COST OF SERVICE STUDYOnAugust 17,2016, the Stonegate Village Metropolitan District (District)engaged Raftelis FinancialConsultants, Inc. (RFC)to conduct a Water Rate and Cost of Service (COS)Study (Study).The Districthas significant operations and maintenance (O&M), and capital expenses in the near future.It isimportant that the water utility remains financially healthy during this period of rising costs, and todo it in a way that recovers the utilities revenue requirements in an equitable fashion amongst allcustomer classes. In order to address these issues, this Study intends to:
Review the District’s financial plan, and incorporate the results of the COS study.
Determine the water demand from a single family residential equivalent (SFE) customer,based on historical usage data.
Determine the amount of revenue that should be recovered from each of the District’scustomer classes (residential, multi-family, commercial, and irrigation).
Develop water rates that reflect the cost of service for each of the District’s customer classes,based on the water consumption characteristics of each customer class.The ultimate decisionregardingrevenue increases, and rate structure will be determined by the District.
Develop up to two alternative rate structures for each of the Districts customer class.The calendar year of 2017 was considered the “test year” for purposes of the COS Study, while thecomplete “study period” extends through 2026.This report summarizes the key findings andrecommendationsfor each of these main objectives.
1.2 DISTRICT WATER FINANCIAL PLANTheDistrict’s accounting firm,Simmons and Wheeler, P.C.,provided RFC with the District’s 5-yearfinancial plan for the water utility. RFC has reviewed this plan for O&M requirements,existing debtservice, and revenue sources.This plan excluded growth projections, which RFC has incorporated.Another key part of District financial plan is the capital improvement plan (CIP).The District’sengineering firm,TST Infrastructure,has provided RFC with a water utility master plan,whichcontains a 10-year CIP (Appendix A, pg.A-5).After analysis of the financial plan, the percentage of revenue increases and bond issues listed inTable1demonstrate the overall rate revenue necessary to maintain the financial integrity of thewater utility. This plan will fully fund all of the projected operations and maintenance (O&M)expenses, existing and future debt service, capital expenditures, debt service coverage requirementsandotherreserve requirements. These increases are indicative of the overall revenues needed tosustain the utility regardless of the COS analysis or any changes in user charge/rate structure.
2 |Stonegate Village Metropolitan District
Table 1:Financial Plan Revenue Increases
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Overall Rate Revenue
Increase 18%22%22%22%0%0%0%0%0%0%
Cumulative Revenue
Increase 18%44%76%114%114%114%114%114%114%114%
Bond Issue ($ Million)$2.5 $16.0It is also important to note that O&M costs are projected to increase by 77.8% over the 10-yearplanning period.This increase is mainly due to the operating and reserve costs for the Water,Infrastructure and Supply Efficiency (WISE) project. A breakdown of the District’s operatingexpensesisshownin (Appendix A, pg.A-7).
1.3 WISE RENEWABLE WATER FEEThe District will be incurring significant capital costs over the 10-year planning period, with forecastCIP expenditure of $37 million. Approximately $34 million of these expenditures are related to theWISE project. In addition to the rate revenue increases shown in Table 1 above, RFC proposes thatthe $15/month WISE Renewable Water Fee be increased at a rate of 3% annually.This 3% increasewill offset future construction cost inflation, and provide a revenue stream for WISE projectexpenditures.The WISE Renewable Water Fee schedule that RFC proposes is shown below in Table2.
Table 2: WISE Renewable Water Fee ($/Month)
MeterSize SFE Existing2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
3/4"1 $15.00 $15.45 $15.91 $16.39 $16.88 $17.39 $17.91 $18.45 $19.00 $19.57 $20.16
1"2 $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 $35.82 $36.90 $38.00 $39.14 $40.32
1 1/2"4 $60.00 $61.80 $63.65 $65.56 $67.53 $69.56 $71.64 $73.79 $76.01 $78.29 $80.63
2"8 $120.00 $123.60 $127.31 $131.13 $135.06 $139.11 $143.29 $147.58 $152.01 $156.57 $161.27
3"18 $270.00 $278.10 $286.44 $295.04 $303.89 $313.00 $322.39 $332.07 $342.03 $352.29 $362.86Currently, the District returns some of the revenue it receives from this fee, back to Compark andLincoln Park. If allowable under current agreements, RFC recommends that District recover the fullamount of WISE Renewable Water Fee revenue from Compark and Lincoln Park, in order for theseDistricts to contribute evenly to future WISE expenses.The revenues from the WISE Sustainability Fee are directed toward the water utility’s capital fund.The capital fund is projected to have surplus funding in 2024 and beyond. At this time the Districtcould revisit this charge and consider revising its rate.
Water Cost of Service Study |3
1.4 WATER COST OF SERVICE RESULTSOne of the objectives in this Study is to perform an analysis of customer consumption characteristics,and define how much water is used by a SFE. RFC analyzed historical water consumption data forcalendar years 2013, 2014 and 2015. The data was broken down by customer class (residential,multi-family, commercial, irrigation and non-potable). The data was also separated by which districtthe customer is located, as Stonegate Village Metropolitan District provides water for two additionalmetro districts, Compark and Lincoln Park.The historical usage data indicated that a single family residential customer within the StonegateVillage Metropolitan District boundary consumes approximately 100.8 kgal/year, or 8.4 kgal/monthon average.This rate of consumption is equal to 276 gallons per day. When RFC’s calculated systemwide peaking factor of 3.13 is used, an SFE has a peak usage of 864.33 gpd.All of the single familyresidential accounts have a ¾” meter.The main objective of a COS study is to determine how to recover the appropriate revenue from eachclass. The COS study process is generally composed of 3-steps:
Step 1:Determine the amount or level of revenues
Step 2: Determine customer class responsibility; complete a COS analysis
Step 3: Design user charges to recover the indicated COS from each customer classStep 1, as previously noted, is a product of the District-prepared financial plan, with RFC’sincorporation of growth and CIP. Steps 2 and 3 will be discussed in the balance of the ExecutiveSummary and in greater detail in the body of this report.RFC’s COS analysis indicates there is a differential between the estimated 2017 revenuerequirement for each water service customer class versus forecast 2017 revenue recovery underexisting water user charges by customer class. The residential customer class are under recoveringthe cost it places on the system.The other customer classes (multi-family, commercial andirrigation) have been over recovering the cost they place on the system.Table 3 shows the imbalance between 2017 revenue recovery versus the estimated 2017 COS. Notethatthisassumes an overall 18%increase in rate revenue in 2017, but this increase would only beeffective for 9 months during the period of April through December.This translates into a 13.5%increase in overall rate revenue during calendar year 2017.
4 |Stonegate Village Metropolitan District
Table 3: Water COS Results –2017 With 18% Revenue Increase
Customer Class
Cost of
Service
Revenue Under
Existing Rates
Required Change in
Revenue
Residential $1,914,385 $1,597,491 $316,894 19.84%
Multi-Family 205,191 205,443 (252)-0.12%
Commercial 373,493 350,450 23,043 6.58%
Irrigation 394,033 399,606 (5,573)-1.39%
Non-Potable 10,541 0 10,541 N/A
Total System $2,897,643 $2,552,989 $344,654 13.5%Table 3 above shows the imbalance between customer class revenue recovery and customer classCOS, assuming an overall 18% increase in rate revenues.Any change in revenue greater than the13.5% increase, indicates that this customer class has been paying less than its COS.Any change inrevenue less than the 13.5% increase, indicates that this class has been paying more than its COS.In order to better illustrate the imbalance between COS and revenue recovery,Table 4 shows theoutcome for each customer class assuming no overall rate revenue increase in 2017.Note, that evenwith no overall increase in rate revenues, residential customers are required to pay 5.6% more thancurrent revenue recovery, in order to match their true COS.
Table 4: Water COS Results –2017 With 0% Revenue Increase
Customer Class
Cost of
Service
Revenue Under
Existing Rates
Required Change in
Revenue
Residential $1,686,887 $1,597,491 89,396 5.60%
Multi-Family 181,518 205,443 (23,925)-11.65%
Commercial 329,243 350,450 (21,207)-6.05%
Irrigation 344,801 399,606 (54,805)-13.71%
Non-Potable 10,541 0 10,541 N/A
Total System $2,552,989 $2,552,989 $0 0.00%There are several reasons a misalignment between revenue recovery and COS can occur.TheDistrict’s current rate structure charges the same volumetric rates per tier for each customer class.This approach to revenue recovery does not account for the differences in class cost of service asdetermined the unique consumption characteristics of each class.Another reason may be that awater utility has not implemented the results of a cost of service study for a significant period of time.As a result, a misalignment may occur between revenue recovery and the actual cost of providingservicedueto changes in customer class water consumption characteristics or changes in thecomposition of the overall utility-wide revenue requirement.
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1.5 EXISTING WATER RATE STRUCTURETheDistrictis able to maintain and expand its water infrastructure through multiple funding sources.These sources can be generalized into four main categories: user charge revenues earned from theprovision of water service to customers;development fee receipts earned when new customersconnect to the water system; external debt financing, and various miscellaneous revenue sources.The District's water utility earns user charge revenue from the following rates and charges:
$21.44 per SFE monthly base charge for water service;
$15.00 per SFE monthly WISE Renewable Water Fee, which is also known as a SustainabilityFee;
Volumetric rates for monthly billed water consumption, which include:
o Residential water customers with a ¾” meter pay:
Tier 1:$1.61 per thousand gallons for the first 6,000 gallons,
Tier 2: $2.95 per thousand gallons for 6,001 to 12,000 gallons,
Tier 3: $4.29 per thousand gallons for 12,001 to 18,000 gallons,
Tier 4: $5.36 per thousand gallons for 18,001 to 24,000 gallons,
Tier 5: $7.50 per thousand gallons for 24,001 gallons.
o Multi-family, commercial, irrigation water customers currently pay the samerate as residential customers on a per 1,000-gallon basis, within the same tier.However, the usage blocks are based on the water meter size that is installed.The following consumption block thresholds are used in the District’s inclining tiered ratestructure (Table 5):
Table 5: Existing Water Usage Blocks Per Tier by Meter Size
Tier 3/4”1”1 –1/2”2”3”
Gallons Gallons Gallons Gallons Gallons
Tier 1 0 –6,000 0 –12,000 0 –24,000 0 –48,000 0 –108,000
Tier 2 6,001 –12,000 12,001 –24,000 24,001 –48,000 48,001 –96,000 108,001 –216,000
Tier 3 12,001 –18,000 24,001 –36,000 48,001 –72,000 96,001 –144,000 216,001 –324,000
Tier 4 18,001 –24,000 36,001 –48,000 72,001 –96,000 144,001 –192,000 324,001 –432,000
Tier 5 Over 24,000 Over 48,000 Over 96,000 Over 192,000 Over 432,000
SFE 1 2 4 8 18It is also important to note that the single family equivalents (SFE) listed on the bottom row Table 5,are also used to determine the monthly base charge, WISE Renewable Water Fee, and developmentfees based on meter size.
6 |Stonegate Village Metropolitan District
1.6 COS RATES AND ALTERNATIVE WATER RATE STRUCTURESRFC has performed a COS analysis that results in rates that will recover the appropriate amount ofrevenue from each customer class.User charge revenue comes from two sources: monthly basechargesand volumetric user charges.In order to maintain a level of consistency and affordability forlow usage customers,RFC proposes that the monthly base charge remain constant in 2017.Theprojected water base charges are shown below in Table 6.
Table 6: Water Base Charges ($/Month)
Meter
Size
SFE Existing
2016
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
3/4"1 $21.44 $21.44 $24.89 $28.38 $32.55 $32.55 $32.55 $32.55 $32.55 $32.55 $32.55
1"2 $42.88 42.88 49.77 56.76 65.10 65.10 65.10 65.10 65.10 65.10 65.10
1 1/2"4 $85.76 85.76 99.54 113.51 130.20 130.20 130.20 130.20 130.20 130.20 130.20
2"8 $171.52 171.52 199.09 227.03 260.40 260.40 260.40 260.40 260.40 260.40 260.40
3"18 $385.92 385.92 447.95 510.81 585.91 585.91 585.91 585.91 585.91 585.91 585.91NotethatinTable6,the maximum required monthly base charges occurs in 2020. After 2020, theCOS study indicates that monthly base charges can decline. RFC recommends maintaining monthlybase charges at the 2020 levels during the period of 2021 to 2026.RFC recommends recovering the overall revenue increase in 2017 from volumetric rates.The Districtcurrently uses an inclining tiered rate structure for all customer classes.Table 7 reflects RFC’sproposed volumetric rates for the period 2017 through 2026 under this existing rate structure.Thevolumetric rates shown in Table 7 differ by customer class in order to reflect the unique 2017customer class COS.This is a significant change from the District’s current approach of having allcustomer classes pay the same volumetric rates in each tier.
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Table 7:Forecast Water Volumetric Rates ($/kgal)–Existing Rate Structure
Customer Class Existing2016
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Residential
First 6,000 gals $1.61 $2.24 $3.03 $3.86 $4.90 $4.97 $5.06 $5.14 $5.22 $5.30 $5.38
6,001 to 12,000 gals 2.95 4.11 5.56 7.08 8.98 9.11 9.28 9.42 9.57 9.72 9.86
12,001 to 18,000 gals 4.29 5.97 8.08 10.29 13.06 13.25 13.49 13.70 13.91 14.13 14.34
18,001 to 24,000 gals 5.36 7.46 10.09 12.86 16.32 16.55 16.85 17.12 17.38 17.65 17.92
Over 24,000 gals 7.50 10.44 14.12 17.99 22.83 23.16 23.58 23.95 24.32 24.69 25.07
Multi-Family
First 6,000 gals $1.61 $1.81 $2.60 $3.26 $4.16 $4.28 $4.35 $4.36 $4.38 $4.39 $4.41
6,001 to 12,000 gals 2.95 3.32 4.77 5.98 7.63 7.85 7.98 7.99 8.03 8.05 8.09
12,001 to 18,000 gals 4.29 4.83 6.93 8.69 11.09 11.41 11.60 11.62 11.68 11.70 11.76
18,001 to 24,000 gals 5.36 6.03 8.66 10.86 13.85 14.25 14.49 14.52 14.59 14.62 14.69
Over 24,000 gals 7.50 8.44 12.12 15.19 19.38 19.94 20.27 20.32 20.41 20.46 20.55
Commercial
First 6,000 gals $1.61 $1.61 $2.12 $2.63 $3.26 $3.29 $3.31 $3.32 $3.33 $3.33 $3.34
6,001 to 12,000 gals 2.95 2.95 3.89 4.82 5.98 6.03 6.07 6.09 6.11 6.11 6.12
12,001 to 18,000 gals 4.29 4.29 5.65 7.01 8.69 8.77 8.82 8.85 8.88 8.88 8.90
18,001 to 24,000 gals 5.36 5.36 7.06 8.76 10.86 10.96 11.02 11.06 11.09 11.09 11.12
Over 24,000 gals 7.50 7.50 9.88 12.26 15.19 15.33 15.42 15.47 15.52 15.52 15.56
Irrigation
First 6,000 gals $1.61 $1.61 $1.97 $2.48 $3.06 $3.00 $2.97 $2.99 $3.00 $3.02 $3.04
6,001 to 12,000 gals 2.95 2.95 3.61 4.55 5.61 5.50 5.45 5.48 5.50 5.54 5.58
12,001 to 18,000 gals 4.29 4.29 5.25 6.61 8.16 8.00 7.92 7.97 8.00 8.05 8.11
18,001 to 24,000 gals 5.36 5.36 6.56 8.26 10.19 9.99 9.89 9.96 9.99 10.06 10.13
Over 24,000 gals 7.50 7.50 9.18 11.56 14.26 13.98 13.84 13.93 13.98 14.07 14.17In addition to volumetric rates reflecting the unique customer class COS under the District’s existingrate structure,RFC also researched two alternative rate structures.The first alternative structure isa uniform volumetric rate for non-residential customers.The District’s existing tiered rate structure,as applied to non-residential customers, forces customers with highly divergent water consumptioncharacteristicsinto consumption tiers that are often not closely correlated to their actual usage.Thisproblem would be eliminated under a uniform non-residential rate structure, because all non-residential customers would pay a uniform rate for all water consumption.These proposed non-residential uniform volumetric rates are shown in Table 8.
Table 8:Alternative Uniform Volumetric Rates for Non-Residential Customers
Customer
Class
Uniform Rate
($/kgal)
Multi-Family $2.93
Commercial $4.64
Irrigation $6.29
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The second alternative rate structure analyzed by RFC would apply to residential customers. Thisalternative rate structure is based on an individualized average winter consumption (AWC),calculated for the months of December,January,and February.Residential customers would becharged a Tier 1 volumetric rate for their actual AWC.The Tier 1 minimum threshold for this ratestructure is set at a minimum of 5,000 gallons.Tier 2 would be based on a customer’s AWC plus a15,000-gallon allowance for outdoor water usage. Tier 3 would be for any consumption above thesecond-tier threshold.This alternative volumetric rate structure for residential customers is shown in Table 9.This ratestructure has the advantage of closely correlating Tier 1 consumption threshold under each customeris billed to their actual non-discretionary indoor water consumption. It also establishes a baselineoutdoor irrigation allowance of 15,000 gallons that is applicable to all residential customers.It isimportant to note that the alternative AWC based residential volumetric rate structure shown inTable9isconceptual in nature. As a result, RFC has not developed forecast rates beyond 2017, ordeveloped AWC-based rates for non-residential customers.If the District Board has an interest in thistype of alternative rate structure, the rates for these customer classes can be developed in the future.
Table 9: Residential Volumetric Rate Using AWC
Usage Block Volumetric Rate($/kgal)
AWC (Minimum of 5,000 gallons)$2.67
AWC + 15,000 gallons $4.90
Usage above AWC + 15,000 gallons $7.12
1.7 RECOMMENDATION REGARDING WATER RATE STRUCTUREAs discussed in Section 1.1 of this report, RFC has forecasted the need for an 18% rate revenueincrease in 2017 followed by 3 years of 22% rate revenue increases. It is extremely difficult gaincustomer acceptance for any rate design change during periods of such large rate increases.Therefore, RFC recommends no rate structure changes for 2017, other than the move to customerclass COS volumetric rates as shown in Table 7.RFC has two observations regarding the District’sexisting water rate structure that should guide the consideration of alternative rate structures in thefuture:
Observation #1:The consumption block thresholds used in the current inclining tiered ratestructure for non-residential customers do not correlate to actual customer usage. Asdiscussed later on in this report, the vast majority of consumption takes place in consumptionTiers 4 and 5. Given the highly diversified nature of non-residential consumption,RFC’sexperience is that it is extremely difficult to design consumption tiers that vary with metersize. Therefore, our natural tendency is to recommend a uniform rate structure for non-residential customers.Unfortunately, a move to a uniform volumetric rate structure wouldcause significant bill impacts for low consumption non-residential customers.As a result, RFC
Water Cost of Service Study |9
is not recommending the implementation of a uniform rate structure for non-residentialcustomers in 2017.
Observation #2:Because the vast majority of non-residential consumption takes place inTiers 4 and 5,an initial conclusion might be to increase the steepness of the volumetric ratesinthese two tiers.This would enhance the conservation price signal sent to high volume users.However, it would also dramatically lower the volumetric rates charged in Tiers 1, 2 and 3. Atpresent, RFC is unsure of the price elasticity response created by increasing the volumetricrates in Tiers 4 and 5 (i.e.; how much consumption would decline in Tiers 4 and 5). Further,RFC is unsure how much additional consumption would take place in Tiers 1, 2 and 3 if thevolumetric rates in Tiers 4 and 5 were significantly increased.If the District believes it prudentto increase the volumetric rates in Tiers 4 and 5, it should be recognized that the rates in Tiers1 through 3 must decline in order to generate the same level of water sales revenue. Given theopenquestion regarding customer price elasticity response, RFC recommends that anymodification of rate structure steepness be phased in over time.Table 10 shows theconcentration of consumption in Tier 5 for non-residential customers.
Table 10: Tier 5 Usage for Non-Residential Customers
Customer Class % of Total BilledConsumption in Tier 5
Multi-Family 3.81%
Commercial 36.62%
Irrigation 73.57%Given the complexities of modifying the steepness of the volumetric rates in the District’s existingnon-residential water rate structure, RFC recommends that the District maintain the existing ratestructurefor 2017. The sole modification that RFC suggests, is moving to customer class COS rates,similar to those shown in Table 7. We also recommend the District consider the implementation ofan AWC-based rate structure for all customer classes.
1.8 MUNICIPAL SECRUITES RULEMAKING BOARD (MSRB) DISCLOSURERFC is registered with the U.S. Securities Exchange Commission (SEC) and the Municipal SecuritiesRulemaking Board (MSRB) as a Municipal Advisor.Registration as a Municipal Advisor is arequirement under the Dodd-Frank Wall Street Reform and Consumer Protection Act. All firms thatprovide financial forecasts that include assumptions about the size, timing, and terms for possiblefuture debt issues, as well as debt issuance support services for specific proposed bond issues,including bond feasibility studies and coverage forecasts, must be registered with the SEC and MSRBto legally provide financial opinions and advice.RFC's registration as a Municipal Advisor means ourclients can be confident that RFC is fully qualified and capable of providing financial advice related toall aspects of utility financial planning in compliance with the applicable regulations of the SEC andthe MSRB.
10 |Stonegate Village Metropolitan District
2 BACKGROUND AND INTRODUCTION
2.1 BACKGROUND OF THE STUDYOnAugust 17,2016, the Stonegate Village Metropolitan District (District) engaged Raftelis FinancialConsultants, Inc. (RFC) to conduct a Water Rate and Cost of Service (COS) Study (Study).The Districthas significant operations and maintenance (O&M), and capital expenses in the near future.It isimportant that the water utility remains financially healthy during this period of rising costs, and todo it in a way that recovers cost in an equitable fashion amongst customer classes. In order to addressthese issues, this Study intends to:
Review the District’s financial plan, and incorporate the results of the cost of service study.The ultimate decision regarding revenue increases, and rate structure will be determined bythe District.
Determine the water demand from a single family residential equivalent (SFE) customer,based on historical usage data.
Determine the amount of revenue that should be recovered from each of the District’scustomer classes (residential, multi-family, commercial, and irrigation).
Develop water rates that reflect the cost of service for each of the District’s customer classes,based on the water consumption characteristics of each customer class.
Determine the appropriate water rate structure for each of the Districts customer class.The calendar year of 2017 was considered the “test year” for purposes of the COS Study, while thecomplete “study period” extends through 2026.This report summarizes the key findings andrecommendations for each of these main objectives.
2.2 STUDY PLANNING HORIZONThemodifiedwaterfinancial plan and cost of service rates discussed in this report are based on aDistrict-developed CIP plan for the calendar years 2016 -2027.The use of a 10-year planning horizonfor these purposes is normative as compared to longer 15-or 20-year planning horizons.Asdescribed in the Sixth Edition of the AWWA publication Manual of Water Supply Practices M1:
Principles of Water Rates, Fees, and Charges,“From a strategic financial planning or revenue-adequacystandpoint, projections beyond 10 years tend to be quite speculative and are of questionable value”(pg. 10).
2.3 DISTRICT WATER UTILITY SYSTEMSStonegate Village Metropolitan District is located in Parker, Colorado, which is south of Denver.TheDistrictformed in 1982 in order to serve the Stonegate residential development.In October of 2016,the District completed a water utility master plan. This plan indicated that there are currently 2,500SFEs within the District boundaries, consisting of mostly single family residential detached homes.The District is mostly built out, with the exception of approximately 300 SFEs in an undeveloped
Water Cost of Service Study |11
parcel called Newlin Crossing.Two additional metropolitan districts, Compark and Lincoln Park,thatarelocated nearby rely on the District to provide them with water service.Compark has room forapproximately682SFEs.Lincoln Park has room to add 345 SFEs before buildout.In total, 1,327 SFEsare planned to be added to reach ultimate buildout.
Forecast Population GrowthGrowth in the Newlin Crossing development is expected to occur in the next few years.There are alsoa few developments in the late planning stages within Compark and Lincoln Park.The followingsingle family residential growth assumptions have been incorporated into the financial plan:
Stonegate: 6 accounts in 2018, 10 accounts in 2019, 20 accounts in 2020, 30 accounts in 2021,and 35 accounts per year in 2022 and beyond.
Compark:6 accounts in 2018, 10 accounts in 2019, 20 accounts in 2020, 30 accounts in 2021,and 35 accounts per year in 2022 and beyond.
Lincoln Park:6 accounts in 2017, 8 accounts in 2018, 10 accounts in 2019, 20 accounts in 2020and beyond.A small amount of growth in commercial accounts within the Compark District were also assumed;
Compark: 2 accounts in 2017, and 3 accounts in 2018 and beyond. All were assumed to be ¾”meters.
Water Treatment SystemTheDistrict’s water is currently supplied by non-renewable groundwater from Denver Basinaquifers. Water is pumped from these non-tributary wells, treated for iron and manganese, filteredwith packaged gravity filters,and chlorinated using sodium hypochlorite. With all 6 filters running,the treatment plant can produce, at most, 5.76 million gallons per day (MGD).Due to its non-renewable nature, the groundwater supply that the District relies upon is estimatedto drop 14 to 36% over the next 50 years.In the future, the District may only be able to obtain 400 to700acre-feet per year from this aquifer.The ultimate supply required for buildout is approximately2,874 acre-feet per year.This results in a deficit in future years,which will require the District toimport water from other areas of the Denver metropolitan area.
Water,Infrastructure,and Supply Efficiency (WISE)ProjectWithin the 10-year planning horizon used in this study, the District plans to add 1,000 ac.-ft./yr. ofsupply through the WISE project.This project delivers surplus South Platte River water supply, thatis owned by Denver and Aurora,to participating communities in the south metro area (South MetroWater Supply Authority)when they have a surplus of water.Before the water is pumped to thecommunities it is treated at Aurora Water’s Binney water treatment plant.
12 |Stonegate Village Metropolitan District
The participating communities contribute money for O&M of the treatment process at Aurora’sBinney water treatment plant, the pumping and pipeline delivery costs.Over the next few years ofthe planning period these costs will be increasing significantly as the District starts to receive WISEwater. This is a significant driver for rate revenue increases, as O&M for this project is recoveredthrough rates.The District has multiple options to receive this water.It can be delivered directly to the District’streatment plant and distributed directly to customers, or can be piped to the Reuter-Hess Reservoirfor temporary storage.This reservoir is also able to receive treated wastewater from the District, inorder for it to be reused in the future. However, any water from take from the Reuter-Hess Reservoirmust go through advanced water treatment prior to being distributed to any customers. Thetreatment capability does not exist at the District’s treatment plant, and is only possible at the ParkerWater treatment plant.In the future when the District would like to utilize water in the Reservoir, itwill pay Parker Water for treatment.The District’s CIP indicates that in 2022, the District will needto provide Parker Water with funds to expand this advanced treatment plant (approximately $15million).
Water Cost of Service Study |13
3 WATER FINANCIAL PLAN AND CAPITAL
FUNDINGAmajor objective of this study was to incorporate the existing water connection charge receipts andraterevenuesinto a hypothetical long-term water financing plan that also includes user chargerevenues and external debt financing.The purpose of this financing plan is to inform the District ofthe potential rate revenue increases and external debt financing required to fund the District'sforecast water CIP expenditures.O&M expenses are generally recovered through rate revenue and will be discussed more in Section4 of this report.The following section will be how the District’s capital projects are funded.
3.1 OVERVIEW OF CAPITAL FINANCING PROCESSTheDistrict's water utility finances its CIP expenditures using cash flows generated from fourprimaryfundingsources:1)user charge revenues from the provision of water service; 2)connectioncharge receipts from new customers connecting to the water system;3)external debt financing, and;4)various miscellaneous revenue sources.RFC prepared a hypothetical long-term water utilitycapital financing strategy featuring a proposed mixed of these funding sources in order to illustratethe magnitude of potential user charge revenue increases and external debt financing required tosuccessfully pay for the District's planned water utility capital expenditures.Figure 1 presents a graphical illustration of the process used by RFC to fund capital projects duringthe planning period.
Figure 1:Development of the Water Capital Financing Plan
Operating Sub-FundRevenues:Revenues from User Charges
Reimbursements & Charge Backs
Interest IncomeCosts:Operating Expenditures
Transfers to Non-Growth Sub-Fund
Existing Debt Service
Growth CIP Sub-FundRevenue:Development Fee Receipts
Sustainability Fees
Interest Income
Growth-Related Revenue BondProceedsCosts:GrowthCIP Projects
Growth Debt Service
Non-Growth CIP Sub-FundRevenue:Development FeeReceiptsSustainability Fees
Transfer from Operating Fund
Interest Income
Non-Growth Revenue Bond ProceedsRevenue Requirements:
Non-Growth CIP Projects
Non-Growth DebtService
ConsolidatedCapital Financing Plan
Consolidated Revenues
Consolidated Costs
Debt Service Coverage
o Existing Debt Service
o Proposed Growth & Non-GrowthDebt Service
Cash Reserve Balances
14 |Stonegate Village Metropolitan District
3.2 WATER FINANCIAL PLAN ASSUMPTIONSThe key assumptions used in the development of RFC's hypothetical capital financing plan includedthe following:
Customer Account Growth:
Single Family:
o Stonegate:6 accounts in 2018, 10 accounts in 2019,20 accounts in 2020, 30 accountsin 2021, and 35 accounts per year in 2022 and beyond.
o Compark:6 accounts in 2018, 10 accounts in 2019, 20 accounts in 2020, 30 accountsin 2021, and 35 accounts per year in 2022 and beyond.
o Lincoln Park:6 accounts in 2017, 8 accounts in 2018, 10 accounts in 2019, 20accounts in 2020 and beyond.
Commercial:
o Compark: 2 accounts in 2017, and 3 accounts in 2018 and beyond. All were assumedto be ¾” meters.Growth in other customer classes (multi-family and irrigation)was not included at this time.Anygrowth in addition to what was assumed in the modeling process will improve both the capitalfinancing and rate revenue increases.
Annual Cost Escalation Inflation Rates:
Operating Expenses:2%
Chemicals/Utilities:-10%.It is anticipated that less water will be pumped and treated in thewater treatment plant when WISE water is utilized.
Well Maintenance: 2%
Maintenance,Repairs,and Replacement: 0%
Capital Costs: 3%
Debt Financing Assumptions:
Month of Debt Issue: January
Debt Service Repayment Delay: Repayment Begins Immediately After Issue
Debt Coupon Rate: 4.5%
Debt Term: 20 Years
Debt Issuance Expense: 1%
Debt Service Reserve:1 year
Cash Reserve Assumptions:
Operating Reserve: 90 Days (25%)of Annual O&M Expenses
Capital Reserve:$500,000
Interest Earnings on Reserve Balances:0.5%
Water Cost of Service Study |15
The District’s CIP is located in Appendix A, pg.A-5, and reflects $37.1 million in total expenditures.Approximately, $34.4 million of those costs are related to the WISE project.In order to fund theseimportant projects, the district will utilize two main sources of revenue:Development Fees and WISERenewable Water Fees.Development Fees are charged when a new home or business is built, and anew meter is required.The Fee consists of three separate charges: a tap fee,supplemental waterresourcesfee, and an administrative cost. It was assumed for this study, that those charges remainconstant. However, RFC does recommend modifying the name of the Administrative Cost toInstallationCost, as it is the cost for the District to provide and install the meter.
3.3 WATER FINANCAL PLAN RESULTSThehypotheticalwater utility financing plan developed by RFC is summarized in Table 11 andincludes estimated connection charge revenues based on the existing development fee schedule.It isimportantto note that the purpose of this hypothetical capital financing plan is to informstakeholders of the potential level of rate revenue increases and external debt financing required tofund the District's forecast water CIP expenditures.The ultimate decision regarding the specificcapital financing strategy utilized by the District will be made by the Board of Directors.The fulldetails of the water utility capital financing plan are shown in pages A-1 and A-6 to A-10 of AppendixA.
Table 11: Results of Financial Plan
Metric 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Proposed Rate Increase 18.0%22.0%22.0%22.0%0.0%0.0%0.0%0.0%0.0%0.0%
Cumulative Rate Increase 18%44%76%114%114%114%114%114%114%114%
Months Effective 9 12 12 12 12 12 12 12 12 12
WISE Fee Increases 3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%
Proposed Bond Issue($ Millions)2.5 16
Ending Cash: Combined($ Millions)4.6 2.0 1.9 1.3 15.9 1.3 2.3 3.4 4.4 5.9
Debt Service CoverageRatio (DSCR)
DSCR with Tap Fee
Revenue (1)1.15 1.20 2.09 3.23 1.49 1.50 1.54 1.59 1.65 1.70
DSCR Without Tap FeeRevenue(1)1.03 0.89 1.64 2.34 0.94 0.88 0.92 0.98 1.03 1.09
Target DSCR for Financial
Planning Purposes 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25(1)Per the District’s bond counsel, the minimum legally required debt service coverage theDistrict must maintain is 1.10, including tap fee revenues.
16 |Stonegate Village Metropolitan District
4 WATER COST OF SERVICE
4.1 OVERVIEW OF THE WATER COST OF SERVICE PROCESSThe purpose of a cost of service study is to allocate the water utility revenue requirement to eachcustomer class in direct proportion to the demands they impose on the utility system.To accomplishthis objective, RFC conducted a detailed analysis of customer water consumption characteristics andengaged in a multi-step cost allocation process.The procedures followed by RFC were based on theindustry standard "base-extra capacity method" of cost allocations as published by the AmericanWater Works Association in the Sixth Edition of the Manual of Water Supply Practices M1, Principles
of Water Rates, Fees, and Charges.The primary steps in the water cost of service study process include:
Costs and Demand:Determining and the test year revenue requirement andforecast billed water consumption.
Cost Functionalization:Assigning the O&M, capital, and non-rate revenuecomponentsof the revenue requirement to functional service categories. Thisprocess results in the assignment of costs to the specific water utility functionalactivities they are incurred to perform.
Cost Allocation: Allocating the functionalized O&M, capital,and non-raterevenue components of the revenue requirement to specific cost parameters suchas base demand, maximum day demand, and maximum hour demand.Thisprocess results in the assignment of costs to the specific types of water servicethey are incurred to serve.
Units of Service:Determining the customer class units of service for each costparameter based on metrics such as annual average day billed usage, maximumday and maximum hour extra capacity demand, the number of equivalent meters,and annual number of water bills.
Unit Cost of Service:Determining the utility-wide unit cost of service for eachcost parameter.The unit cost of service is determined by dividing the revenuerequirement assigned to each cost parameter by its associated utility-wide unitsof service.
Customer Class Revenue Requirements:Calculating the customer classrevenue requirement by multiplying the customer class specific units of servicefor each cost parameter by the associated utility-wide unit cost of service.Figure 2 provides a visual overview of key steps in the water cost of service study process.
Water Cost of Service Study |17
Figure 2:Determination of Water Customer Class Revenue Requirements
4.2 FORECAST WATER UTILITY REVENUE REQUIREMENTThe water utility revenue requirement used by RFC in the COS study was based on the District'sadopted2017Water Fund budget.Table 12 summarizes the water utility revenue requirement forthe10-year period 2017 through 2026.A detail of this revenue requirement as well as the District’swater financial plan can be found in Appendix A to this report.
Table 12: Forecast Revenue Requirements
RevenueRequirement 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Total
OperatingExpenses $2,906,030 $3,531,930 $3,579,883 $3,879,823 $4,244,513 $4,502,826 $4,488,660 $4,478,770 $4,472,832 $4,470,550
CIP 2,771,009 5,062,772 1,236,240 2,968,813 1,080,181 15,737,019 168,569 287,019 437,750 118,450
Change inCash Reserves (2,647,339)(4,855,726)(98,346)(651,392)22,797 (14,613,857)1,048,221 1,052,825 1,028,381 1,473,433
Debt Service 844,456 1,039,146 1,041,346 1,038,246 2,270,015 2,268,615 2,266,815 2,271,565 2,270,315 2,268,315
Total CapitalCosts 968,126 1,246,192 2,179,241 3,355,668 3,372,993 3,391,776 3,483,604 3,611,409 3,736,446 3,860,197
GrossRevenueRequirement 3,874,156 4,778,122 5,759,124 7,235,490 7,617,505 7,894,602 7,972,264 8,090,179 8,209,278 8,330,747
MiscellaneousRevenues 976,513 1,119,308 1,302,601 1,796,636 2,144,918 2,367,732 2,381,223 2,435,541 2,491,608 2,550,600
Net RevenueRequirement
from Rates
$2,897,643 $3,658,814 $4,456,523 $5,438,855 $5,472,587 $5,526,870 $5,591,041 $5,654,638 $5,717,670 $5,780,148
DeterminetheTotal SystemRevenue Requirement+ O&MRevenueRequirement+ Capital CostRevenueRequirement-Non-Rate Revenues= Net RevenueRequirement fromRates
Assign the RevenueRequirementto FunctionalCategories-Raw Water-Source of Supply-Treatment-Pumping-Storage-Transmission-Distribution-Meters-Customer Service-Fire Protection
Allocate theFunctionalizedRevenueRequirement to SpecificDemandParameters$Base Demand$Max Day Demand$Max Hour Demand$Customer Service$Meters$ Billing and Collection$ Fire Flow Demand
Allocate theRevenueRequirementto Customer ClassesCustomer ClassUnits of ServiceX$Unit Cost of Servicefor Each CostParameter=TotalCustomer ClassRevenue Requirementthat Must BeRecovered from Rates
Determine theUnits of Service andUnit Cost of Servicefor Each DemandParameterBase Demand $/UnitMax Day Demand $/UnitMax Hour Demand $/UnitEquivalent Meter $/UnitCustomer Bill $/UnitFire Flow Demand $/Unit
18 |Stonegate Village Metropolitan District
4.3 FORECAST BILLED WATER CONSUMPTIONDistrict raw water consumption data for the calendar years of 2013, 2014 and 2015 were analyzed,in order to properly predict future customer water consumption.Table 13 shows the averagemonthly consumption and annual consumption by class.
Table 13: Historical Monthly and Annual Consumption by Class per Account
Customer Type
Average Monthly
Consumption (kgal/mo.)
Average Annual
Consumption (kgal/yr.)
Residential 7.9 94.6
Multi-Family 32.4 388.8
Commercial 119.2 1,430.7
Irrigation 122.4 1,468.2RFC has accounted for the growth in customer accounts in the calculation of total billed consumption,over the financial planning period.Table 14 demonstrates the total number of accounts by class, andtheoverall number of accounts added each year.
Table 14: Forecasted Number of Water Customer Accounts
Customer Class 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Residential 3,106 3,112 3,132 3,162 3,222 3,302 3,392 3,482 3,572 3,662
Multi-Family 92 92 92 92 92 92 92 92 92 92
Commercial 62 64 67 70 73 76 79 82 85 88
Irrigation 37 37 37 37 37 37 37 37 37 37
Total System 3,297 3,305 3,328 3,361 3,424 3,507 3,600 3,693 3,786 3,879
Accts. Added 8 23 33 63 83 93 93 93 93Table15displays the forecasted billed consumption per year by class. It is important to note that themodel has assumed a 1% decline in water usage per account, due to projected increased conservationmeasuresand never improved water fixtures.
Table 15: Forecasted Billed Water Consumption (kgal/yr.)
Customer Class 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Residential 306,486 303,998 302,817 302,542 304,969 309,090 313,977 318,736 323,368 327,875
Multi-Family 39,060 38,669 38,283 37,900 37,521 37,146 36,774 36,406 36,042 35,682
Commercial 64,409 63,765 63,127 62,496 61,871 61,252 60,640 60,033 59,433 58,839
Irrigation 49,359 48,865 48,377 47,893 47,414 46,940 46,471 46,006 45,546 45,090
Total System 459,314 455,298 452,604 450,831 451,775 454,428 457,862 461,182 464,389 467,486
% Change -0.87%-0.59%-0.39%0.21%0.59%0.76%0.73%0.70%0.67%
Water Cost of Service Study |19
RFC has also analyzed the water discharge characteristics of the District's customers to determinethe number of Single Family Equivalent connections that the 5.76 MGD treatment plant can serve.The average residential water demand for Stonegate Village residential customers was calculated tobe100.8 gallons per year (276 gallons per day)on average and 864.33 gpd peak usage, using a 3.13system wide peaking factor.The plant has approximately 6,664 total SFE capacity. Considering thereare currently 4,557 SFEs currently on the system, the plant can add approximately 2,554 additionalSFEs.
4.4 CUSTOMER CLASS PEAKING FACTORSA critical element in the cost allocation process is the determination of the maximum day andmaximum hour peak demands imposed on the utility system by individual customer classes. Theutility system must be designed, constructed, and operated to meet these peak demands. Thosecustomer classes that impose the highest peak demands on the utility system are generally allocatedthe largest proportion of costs.Table 16 shows the historic plant production for 2014 and 2015.
Table 16: Historical System Wide Peaking Factors (kgal)
Calendar
Year
Annual Average
Day (AAD)
Maximum
Day (MD)
Ratio of MD to
AAD
Estimated System
Maximum Hour
2014 1,533 3,868 2.52 5,827
2015 1,518 5,684 3.74 5,770Table17shows the peaking factors for each customer class, based on average of 2013, 2014 and2015 data.These are the peaking factors used in RFC’s COS analysis.Note that irrigation has thehighest max day and max hour peaking factors.Residential has the second highest peaking factorsdue to outdoor irrigation usage.
Table 17: Historical Peaking Factors by Class
Customer Class Maximum Day Maximum Hour
Residential 3.64 4.37
Multi-Family 2.72 3.30
Commercial 3.29 4.00
Irrigation 4.80 8.18
4.5 RESULTS OF THE COST OF SERVICE STUDYThe goal of a cost of service study is to implement rates that equitably recover the cost of providingservice to each customer class. Thus, the critical question the cost of service study process attemptsto answer is: do the rate revenues collected from each customer class correspond to the cost ofproviding service?If the answer to this question is no, it indicates that one or more customer classesare not making a fair and equitable contribution to the utility's overall revenue recovery.
20 |Stonegate Village Metropolitan District
In order to answer this question for the District's water utility, RFC prepared a detailed cost ofservice for a 2017 test year. The results of the COS study are summarized in Table 18.Note that theresults shown in Table 18 reflect the implementation of an 18% rate revenue increase with is onlyeffective for 9 months in 2017.
Table 18:Water COS Results –2017 With 18% Revenue Increase
Customer Class
Cost of
Service
Revenue Under
Existing Rates
Required Change in
Revenue
Single Family $1,914,385 $1,597,491 $316,894 19.98%
Multi-Family 205,191 205,443 (252)-0.12%
Commercial 373,493 350,450 23,043 6.58%
Irrigation 394,033 399,606 (5,573)-1.39%
Non-Potable 10,541 0 10,541 N/A
Total System $2,897,643 $2,552,989 $344,654 13.5%As shown in Table 18, the projected 2017 user charge revenue recovery for each water customerclassdoes not match the calculated 2017 cost of service. Specifically,residential ($316,894 or19.84%)and commercial customers ($23,043 or 6.58%)are paying too little,while multi-family (-$252 or -0.12%)and irrigation (-$5,573 or -1.39%)customers are paying too much. There areseveral reasons such an outcome can occur:1.The existing rate structure utilizes the same volumetric rate for each tier, regardless ofcustomer class. This type of structure does not account for the unique usage characteristicsof each type of customer.2.A water utility has not implemented cost of service rates for a significant period of time, amisalignment between revenue recovery and the actual cost of providing service can occurdue to changes in customer class water consumption characteristics or changes in thecomposition of the overall utility-wide revenue requirement.The last COS study that theDistrict performed was in 2007.As a result, the 2017 rates under the existing rate structure will be adjusted to account for thesechanges, in addition to the 18% revenue increase. These revised rates are shown in Tables 6 and 7.
4.6 NON-POTABLE CUSTOMERSThe raw billing data indicates that there are four non-potable meters on the system.This non-potable water is treated wastewater from the effluent of the wastewater treatment plant.Since thissystem does not utilize potable water, the demand was removed from the data analysis. It was alsoassumed that the non-potable lines do not contribute revenue to the District.Two of these lines did not show any usage in 2013, 2014 and 2015 and are operated by the District.No future usage is projected for either of these lines.Of the other two lines, one is a 4” line operated
Water Cost of Service Study |21
by the District and one is a 6” line operated by Lincoln Park.These two lines used 29,770,000 peryearand 1,894,000 per year,respectively.Currently,the District does not differentiate these lines from potable customers.Further, theDistrict does not charge itself for non-potable usage.RFC currently assumes, that any non-Districtlinesarepaying potable rates.There is a cost associated with providing this service, everythingfromline maintenance, pump maintenance, electricity, chemicals, etc.RFC has allocated $10,541per year of cost to provide this service, based on associated line item expenditures in the District’sgeneral fund.The calculated rate for non-potable water is $0.33/kgal, if no monthly base charge revenue isreceived from these meters.RFC acknowledges that this rate is very low, and that all of the coststhat may be attributable to non-potable water service have not been comprehensively studied.Thisleaves the District with three options for pricing non-potable water service.
Option 1:Charge $0.33/kgal for non-potable water
Option 2:Establish a policy based volumetric rate for non-potable water service. Forexample, the non-potable volumetric rate could be set at some percentage of the Tier 1potable irrigation rate.
Option 3:Charge the potable volumetric rate for all non-potable usage for the foreseeablefuture until non-potable demand becomes a more significant usage.
22 |Stonegate Village Metropolitan District
5 RATE STRUCTURE
5.1 EXISTING RATE STRUCTUREAs previously discussed, the District charges customers a monthly service fee,a monthly WISERenewable Water Fee,and a five-tiered volumetric rate structure (Table 19).The important thing tonote regarding the current rate structure, is that volumetric rates do not reflect the cost of providingservices to individual customer classes. As a result, all customers regardless of type pay the samevolumetric rate in each consumption tier, with the tiers being different for each meter size.
Table 19:Existing Rate Structure
Customer
Class
Monthly
Service Fee
WISE
Renewable
Water Fee
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
Residential $21.44 $15.00 $1.61 $2.95 $4.29 $5.36 $7.50
Multi-Family Commercial, Irrigation¾”$21.44 $15.00 $1.61 $2.95 $4.29 $5.36 $7.501”$42.88 $30.00 $1.61 $2.95 $4.29 $5.36 $7.501.5”$85.76 $60.00 $1.61 $2.95 $4.29 $5.36 $7.502”$171.52 $120.00 $1.61 $2.95 $4.29 $5.36 $7.503”$385.92 $270.00 $1.61 $2.95 $4.29 $5.36 $7.50A tiered rate structure is designed to encourage conservation, by charging users much more perthousandgallonsinhigher tiers. RFC has analyzed the consumption data to observe how well thisconservation signal has been working for the District, and has proposed a few alternatives to thisstructure.
5.2 PROPOSED RATE STRUCTUREThere are multiple options that the District could implement in lieu of the existing rate structure.RFCanalyzed a uniform rate structure for non-residential customers and an AWC based rate structure forresidential customers.Unlike single family residential customers, who share similar water consumption characteristics, thewater consumption characteristics of non-residential customers (multi-family, commercial andirrigation)are highly diverse. For instance, a commercial user could be a small office building withlow water usage or a car wash with significant demands.As a result,volumetric rates may lose theirability to send a conservation price signal.Specifically, non-residential water usage can becomeconcentration in the upper tiers.
Water Cost of Service Study |23
As shown in Table 10, the historical consumption data indicates that 36.6% of commercial usage isin Tier 5, and 73.57% of irrigation usage is in Tier 5.Typically,the last tier is used to discourage largewater usage, and should only reflect a small percentage of the total customer class usage.It doesn’tappear that some of the users in these classes are swayed by the volumetric rate in the last tier.Since there is heterogeneity of customer usage characteristics within the non-residential customerclasses, the District could implement a uniform rate structure, essentially leveling the playing fieldfor all water consumption.Each user would be charged a uniform volumetric rate no matter howmuch they use.Indeed, RFC frequently recommends the use of uniform volumetric rates for non-residential customers due to the highly diverse nature of consumption characteristics.Tables 20 to 23 demonstrate existing, 2017 COS volumetric rates and uniform rates for each of thecustomer classes.As shown in these tables, the move to a uniform volumetric rate structure, wouldcause significant negative bill impacts for some non-residential customers.For example, the uniformrate structure will result in some low usage users paying significantly more per thousand gallons,and large water users would end up paying a lower volumetric rate than the existing Tier 5 rate.Dueto these potentially inordinate customer bill impacts, RFC does not recommend a move to uniformvolumetric rates for non-residential customers in 2017.RFC supports the Districts existing inclining tier rate structure as applied to residential customers.Therefore, we do not recommend a uniform rate structure for residential customers.The uniformrates for residential customers are strictly for illustration purposes only.
Table 20:Proposed Rate Comparison –Residential
Tier ExistingRates
Calculated 2017COSRates CalculatedUniform Rates
Tier 1 $1.61 $2.24 $3.64
Tier 2 $2.95 $4.11 $3.64
Tier 3 $4.29 $5.97 $3.64
Tier 4 $5.36 $7.46 $3.64
Tier 5 $7.50 $10.44 $3.64
Table 21: Proposed Rate Comparison –Multi-Family
Tier ExistingRates
Calculated 2017
COS Rates
Calculated
Uniform Rates
Tier 1 $1.61 $1.81 $2.93
Tier 2 $2.95 $3.32 $2.93
Tier 3 $4.29 $4.83 $2.93
Tier 4 $5.36 $6.03 $2.93
Tier 5 $7.50 $8.44 $2.93
24 |Stonegate Village Metropolitan District
Table 22: Proposed Rate Comparison –Commercial
Tier ExistingRates
Calculated 2017COS Rates Calculated UniformRates
Tier 1 $1.61 $1.61 $4.64
Tier 2 $2.95 $2.95 $4.64
Tier 3 $4.29 $4.29 $4.64
Tier 4 $5.36 $5.36 $4.64
Tier 5 $7.50 $7.50 $4.64
Table 23: Proposed Rate Comparison –Irrigation
Tier ExistingRates
Calculated 2017
COS Rates
Calculated
Uniform Rates
Tier 1 $1.61 $1.61 $6.29
Tier 2 $2.95 $2.95 $6.29
Tier 3 $4.29 $4.29 $6.29
Tier 4 $5.36 $5.36 $6.29
Tier 5 $7.50 $7.50 $6.29A second alternative rate structure considered by RFC would be to charge customers based on theamount they are using relative to their average winter consumption.This rate structure has theadvantage of closely correlating Tier 1 consumption threshold under each customer is billed to theiractual non-discretionary indoor water consumption. It also establishes a baseline outdoor irrigationallowance of 15,000 gallons that is applicable to all residential customers.RFC modeled an AWC based rate structure for residential customers. Under this hypothetical ratestructure,AWC would be defined as usage in the months of December, January,and February.Duringeach month of the year, residential customers would be charged a uniform rate in Tier 1 reflective oftheir AWC.Tier 1 would have a minimum threshold of 5,000 gallons (i.e.; if a customer has an AWCof 3,000 gallons,any use between 3,000 gallons and 5,000 gallons would be charge at the Tier 1 rate).Tier 2 would include a 15,000-gallon outdoor irrigation allowance above each customer’s AWC.Tier3would be any usage above Tier 2.Table 24 illustrates 2017 residential COS rates under an AWCbased rate structure.
Table 24: AWC Based Rate Structure for Residential Customers in 2017
Usage Block
% of BilledConsumption Volumetric Rate($/kgal)
AWC (Minimum of 5,000 gallons)58.4%$2.67
AWC + 15,000 gallons 38.4%$4.90
Usage above AWC + 15,000 gallons 3.0%$7.12Based on historical usage for residential customers, 58.4% of residential usage would be within theAWCblock.Approximately 38.4% of usage would fall into the middle tier (AWC + 15,000 gallons),and lastly only 3% of usage would fall into the last tier.The proposed 2017 COS increases under the
Water Cost of Service Study |25
existing rate structure would bring the lowest tier to $2.24 per thousand gallons. This type ofstructure would add an additional $0.43 per thousand gallons to the lowest usage tier, potentiallygenerating affordability concerns.Additionally, the proposed Tier 5 rate for 2017 would be $10.44per thousand gallons, much higher than the $7.12 suggested here.With the proposed significant rate revenue increases, RFC is concerned that too many changes atonce will confuse customers, and be too much to change the rate structure at the same time.RFCrecommends that the District consider these two alternatives within the 2017 calendar year andconsider making changes in 2018, if desired.
5.3 RECOMMENDED 2017 RATE STRUCTUREAs discussed in the executive summary of this report, RFC has forecasted the need for an 18% raterevenue increase in 2017 followed by 3 years of 22% rate revenue increases. It is extremely difficultgain customer acceptance for any rate design change during periods of such large rate increases.Therefore, RFC recommends no rate structure changes for 2017, other than the move to customerclass COS volumetric rates as shown in Table 7. RFC has two observations regarding the District’sexisting water rate structure that should guide the consideration of alternative rate structures in thefuture:
Observation #1:The consumption block thresholds used in the current inclining tiered ratestructure for non-residential customers do not correlate to actual customer usage. Asdiscussed later on in this report, the vast majority of consumption takes place in consumptionTiers 4 and 5. Given the highly diversified nature of non-residential consumption, RFC’sexperience is that it is extremely difficult to design consumption tiers that vary with metersize. Therefore, our natural tendency is to recommend a uniform rate structure for non-residential customers. Unfortunately, a move to a uniform volumetric rate structure wouldcause significant bill impacts for low consumption non-residential customers. As a result, RFCis not recommending the implementation of a uniform rate structure for non-residentialcustomers in 2017.
Observation #2:Because the vast majority of non-residential consumption takes place inTiers 4 and 5, an initial conclusion might be to increase the steepness of the volumetric ratesin these two tiers. This would enhance the conservation price signal sent to high volume users.However, it would also dramatically lower the volumetric rates charged in Tiers 1, 2 and 3. Atpresent, RFC is unsure of the price elasticity response created by increasing the volumetricrates in Tiers 4 and 5 (i.e.; how much consumption would decline in Tiers 4 and 5). Further,RFC is unsure how much additional consumption would take place in Tiers 1, 2 and 3 if thevolumetric rates in Tiers 4 and 5 were significantly increased.If the District believes it prudentto increase the volumetric rates in Tiers 4 and 5, it should be recognized that the rates in Tiers1 through 3 must decline in order to generate the same level of water sales revenue. Given theopen question regarding customer price elasticity response, RFC recommends that anymodification of rate structure steepness be phased in over time.Table 25 shows theconcentration of consumption in Tier 5 for non-residential customers.
26 |Stonegate Village Metropolitan District
Table 25: Tier 5 Usage for Non-Residential Customers
Customer Class % of Total BilledConsumption in Tier 5
Multi-Family 3.81%
Commercial 36.62%
Irrigation 73.57%Given the complexities of modifying the steepness of the volumetric rates in the District’s existingnon-residential water rate structure, RFC recommends that the District maintain the existing ratestructure for 2017. The sole modification that RFC suggests, is moving to customer class COS rates,similar to those shown in. We also recommend the District consider the implementation of an AWC-based rate structure for all customer classes.
Table 26: Forecast Water Volumetric Rates ($/kgal)–Existing Rate Structure
Customer Class Existing2016
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Residential
First 6,000 gals $1.61 $2.24 $3.03 $3.86 $4.90 $4.97 $5.06 $5.14 $5.22 $5.30 $5.38
6,001 to 12,000 gals 2.95 4.11 5.56 7.08 8.98 9.11 9.28 9.42 9.57 9.72 9.86
12,001 to 18,000 gals 4.29 5.97 8.08 10.29 13.06 13.25 13.49 13.70 13.91 14.13 14.34
18,001 to 24,000 gals 5.36 7.46 10.09 12.86 16.32 16.55 16.85 17.12 17.38 17.65 17.92
Over 24,000 gals 7.50 10.44 14.12 17.99 22.83 23.16 23.58 23.95 24.32 24.69 25.07
Multi-Family
First 6,000 gals $1.61 $1.81 $2.60 $3.26 $4.16 $4.28 $4.35 $4.36 $4.38 $4.39 $4.41
6,001 to 12,000 gals 2.95 3.32 4.77 5.98 7.63 7.85 7.98 7.99 8.03 8.05 8.09
12,001 to 18,000 gals 4.29 4.83 6.93 8.69 11.09 11.41 11.60 11.62 11.68 11.70 11.76
18,001 to 24,000 gals 5.36 6.03 8.66 10.86 13.85 14.25 14.49 14.52 14.59 14.62 14.69
Over 24,000 gals 7.50 8.44 12.12 15.19 19.38 19.94 20.27 20.32 20.41 20.46 20.55
Commercial
First 6,000 gals $1.61 $1.61 $2.12 $2.63 $3.26 $3.29 $3.31 $3.32 $3.33 $3.33 $3.34
6,001 to 12,000 gals 2.95 2.95 3.89 4.82 5.98 6.03 6.07 6.09 6.11 6.11 6.12
12,001 to 18,000 gals 4.29 4.29 5.65 7.01 8.69 8.77 8.82 8.85 8.88 8.88 8.90
18,001 to 24,000 gals 5.36 5.36 7.06 8.76 10.86 10.96 11.02 11.06 11.09 11.09 11.12
Over 24,000 gals 7.50 7.50 9.88 12.26 15.19 15.33 15.42 15.47 15.52 15.52 15.56
Irrigation
First 6,000 gals $1.61 $1.61 $1.97 $2.48 $3.06 $3.00 $2.97 $2.99 $3.00 $3.02 $3.04
6,001 to 12,000 gals 2.95 2.95 3.61 4.55 5.61 5.50 5.45 5.48 5.50 5.54 5.58
12,001 to 18,000 gals 4.29 4.29 5.25 6.61 8.16 8.00 7.92 7.97 8.00 8.05 8.11
18,001 to 24,000 gals 5.36 5.36 6.56 8.26 10.19 9.99 9.89 9.96 9.99 10.06 10.13
Over 24,000 gals 7.50 7.50 9.18 11.56 14.26 13.98 13.84 13.93 13.98 14.07 14.17
Water Cost of Service Study |27
6 CUSTOMER BILL IMPACTSThe change in cost of service rates are may be substantial for some users.The financial plan indicatedthat the District needs to increase rate revenue by 18% starting in April.As previously mentioned,RFC would like to prevent confusion to customers and is recommending that the existing ratestructure remain in place for at least the 2017 calendar year.
6.1 RESIDENTIAL CUSTOMERSAs indicated previously, the base charge for 2017 will remain constant, and the revenue increaseswill be reflected in the volumetric rate.Thus, low water users will see a smaller percentage increase,than higher users.This will help keep water service affordable, and also discourage excessive usage.Table 27 provides an example of how residential users will be impacted when the new rates areimplemented.It is important to note that around 71% of bills had less than 10,000 gallons of usage,which translates to less than a $8.87 increase per bill, or $106.44 per year.
Table 27: Bill Impacts for Residential Customers in 2017
Usage
(kgal)
Existing 2016
Rates
2017 COS Rate
Structure Difference
($)
Difference
(%)0 $36.44 $36.89 $0.45 1%1 38.05 39.13 1.08 3%2 39.66 41.37 1.71 4%3 41.27 43.61 2.34 6%4 42.88 45.85 2.97 7%5 44.49 48.09 3.60 8%6 46.10 50.33 4.23 9%7 49.05 54.44 5.39 11%8 52.00 58.55 6.55 13%9 54.95 62.66 7.71 14%10 57.90 66.77 8.87 15%15 76.67 87.86 11.19 15%20 100.26 115.65 15.39 15%25 129.20 155.93 26.73 21%30 166.70 208.13 41.43 25%The COS study determined that residential customer class has not been recovering enough raterevenue,as compared to the cost they are placing on the water system. In other words,the increasesfor residential customers may reflect higher rate increases than for other classes.
28 |Stonegate Village Metropolitan District
6.2 MULTI-FAMILY CUSTOMERSSince multi-family customers have been contributing more rate revenue than the amount of costthat they are placing on the system, the volumetric rate increases will not be as steep as theresidential users.Table 28 demonstrates the level of impact that most multi-family customers willencounter.Historical data indicates that around 92% of bills for multi-family customers with a 1”meter had less than 30,000 gallons of usage.
Table 28: Bill Impacts for a 1”Multi-Family Customer in 2017
Usage
(kgal)
Existing 2016
Rates
2017 COS Rate
Structure
Difference
($)
Difference
(%)0 $72.88 $73.78 $0.90 1%1 $74.49 75.59 1.10 1%2 $76.10 77.40 1.30 2%3 $77.71 79.21 1.50 2%4 $79.32 81.02 1.70 2%5 $80.93 82.83 1.90 2%6 $82.54 84.64 2.10 3%7 $84.15 86.45 2.30 3%8 $85.76 88.26 2.50 3%9 $87.37 90.07 2.70 3%10 $88.98 91.88 2.90 3%15 $101.05 104.56 3.51 3%20 $115.80 121.16 5.36 5%25 $131.89 139.27 7.38 6%30 $153.34 163.42 10.08 7%Under a uniform rate structure of $2.93/kgal, a 1” multi-family customer using 5,000 gallons permonth would see an 9% increase. A customer using 10,000 gallons per month would see a 16%increase, and a customer using 30,000 gallons per month would see a 4% decrease.
6.3 COMMERCIAL CUSTOMERSCommercial customers have been contributing slightly less rate revenue than the amount of cost thatthey are placing on the system. For 2017, volumetric rates would not increase. In the subsequentyears,the increases will not be as steep as the residential users.Since 37% of use is in the last tier, amajority of the revenue for this class is coming from high users. Therefore, the required revenueincreases from this class will be made up from mostly high demand customers.Approximately 70%bills of commercial customers with a 1.5” meter (within Stonegate) used less than 100,000 gallons.
Water Cost of Service Study |29
Table 29: Bill Impacts for a 1.5”Commercial Customer in 2017
Usage
(kgal)
Existing 2016
Rates
2017 COS Rate
Structure
Difference
($)
Difference
(%)0 $145.76 $147.56 $1.80 1%5 153.81 155.61 1.80 1%10 161.86 163.66 1.80 1%15 169.91 171.71 1.80 1%20 177.96 179.76 1.80 1%25 187.35 189.15 1.80 1%30 202.10 203.90 1.80 1%35 216.85 218.65 1.80 1%40 231.60 233.40 1.80 1%50 263.78 265.58 1.80 1%60 306.68 308.48 1.80 1%70 349.58 351.38 1.80 1%80 401.04 402.84 1.80 0%90 454.64 456.44 1.80 0%100 516.80 518.60 1.80 0%Under a uniform rate of $4.64/kgal, a 1.5”commercial customer using 20,000 gallons per monthwould see a 35% bill increase. A customer using 40,000 gallons per month would see a 44% increase,and a customer using 100,000 gallons per month would see a 18% increase.
6.4 IRRIGATION CUSTOMERSIrrigation customers have been contributing more rate revenue than the amount of cost they havebeen placing on the system. This is mainly due to the fact that 73.6%of usage occurs in Tier 5 andbeing charged at the highest volume rate.Therefore, these customers will not be seeing a significantincrease in their future bills (Table 30).Under a uniform rate increase of $6.29/kgal, a 2” irrigation customer using 5,000 gallons would seea9% increase. A customer using 10,000 gallons would see a 16%increase, and a customer using100,000 gallons would see a 75% increase.
30 |Stonegate Village Metropolitan District
Table 30: Bill Impacts for a 2”Irrigation Customer in 2017
Usage
(kgal)
Existing 2016
Rates
2017 COS Rate
Structure
Difference
($)
Difference
(%)0 $291.52 $295.12 $3.60 1%5 299.57 303.17 3.60 1%10 307.62 311.22 3.60 1%15 315.67 319.27 3.60 1%20 323.72 327.32 3.60 1%25 331.77 335.37 3.60 1%50 374.70 378.30 3.60 1%75 448.45 452.05 3.60 1%100 527.56 531.16 3.60 1%125 634.81 638.41 3.60 1%150 748.48 752.08 3.60 0%
Water Cost of Service Study |31
APPENDIX A:
WATER FINANCIAL PLAN
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Master Control
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Proposed Rate Increase 18.0%22.0%22.0%22.0%0.0%0.0%0.0%0.0%0.0%0.0%
Cumulative Rate Increase 18%44%76%114%114%114%114%114%114%114%
Months Effective 9 12 12 12 12 12 12 12 12 12
Sustainability Fee Increases 3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%
Proposed Bond Issue 2,500,000 16,000,000
% of Debt to Non-Growth 50%100%50%50%22%50%50%50%50%50%
% of Debt to Growth 50%0%50%50%78%50%50%50%50%50%
Amount Non-Growth 0 2,500,000 0 0 3,520,000 0 0 0 0 0
Amount Growth 0 0 0 0 12,480,000 0 0 0 0 0
Ending Cash: Operating 1,649,835 857,777 148,640 188,912 916,398 1,310,422 1,501,435 1,772,936 2,113,494 2,524,596 3,002,771
Target Ending Balance 628,460 726,508 882,982 894,971 969,956 1,061,128 1,125,706 1,122,165 1,119,693 1,118,208 1,117,637
Variance from Target 1,021,375 131,269 (734,343)(706,059)(53,558)249,294 375,729 650,771 993,801 1,406,388 1,885,134
Ending Cash: Non-Growth Capital 2,785,674 1,410,232 437,946 (173,668)(1,820,251)740,138 97,148 184,896 226,347 200,608 431,097
Ending Cash: Growth Capital 2,787,642 2,307,803 1,416,309 1,889,306 2,157,010 13,835,377 (326,504)362,469 1,033,285 1,676,303 2,441,072
Combined Capital Ending Cash 5,573,316 3,718,035 1,854,255 1,715,638 336,760 14,575,515 (229,356)547,365 1,259,632 1,876,912 2,872,169
Target Ending Balance 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
Variance from Target 5,073,316 3,218,035 1,354,255 1,215,638 (163,240)14,075,515 (729,356)47,365 759,632 1,376,912 2,372,169
Ending Cash: Combined 7,223,151 4,575,812 2,002,895 1,904,550 1,253,158 15,885,937 1,272,080 2,320,301 3,373,126 4,401,508 5,874,940
Debt Service Coverage Ratio (DSCR)
DSCR With Tap Fee Revenue 1.30 1.15 1.20 2.09 3.23 1.49 1.50 1.54 1.59 1.65 1.70
DSCR Without Tap Fee Revenue 1.21 1.03 0.89 1.64 2.34 0.94 0.88 0.92 0.98 1.03 1.09
Target DSCR 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25
Variance From Target 0.05 -0.10 -0.05 0.84 1.98 0.24 0.25 0.29 0.34 0.40 0.45
Prepared By RFC 3/31/2017
A-1
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Model Assumptions
Legend
Manual Input X
COS Assumptions Reserve Assumptions
Base Year 2016 Minimum O&M Reserve (% O&M)25%
Test Year 2017 Minimum Capital Reserve (2016 Dollars)500,000
Interest Earnings 0.50%Required Debt Service Coverage 1.25
Debt Issuance Assumptions
Interest Rate 4.5%
Payment Period (Years)20
Issuance Expense 1%
Debt Service Reserve (Years)1
Inflation Assumptions 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Operating Expenses 0%2%2%2%2%2%2%2%2%2%2%
Chemicals/Utilities 0%2%2%2%2%2%2%2%2%2%2%
Well Maintenance 0%2%2%2%2%2%2%2%2%2%2%
Other Repairs and Maintenance 0%2%2%2%2%2%2%2%2%2%2%
Operating and Delivery Expenses WISE 0%0%0%0%0%0%0%0%0%0%0%
Capital Costs 0%3%3%3%3%3%3%3%3%3%3%
Growth Rate Assumptions 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Total Accts
Added
Total SFEs
Added
Residential - SVMD - # of Accounts 2,309 2,309 2,309 2,315 2,325 2,345 2,375 2,410 2,445 2,480 2,515
Residential - SVMD - # Accounts Added 0 0 6 10 20 30 35 35 35 35 35 241 241
Residential - Compark - # of Accounts 324 324 324 330 340 360 390 425 460 495 530
Residential - Compark - # Accounts Added 0 0 6 10 20 30 35 35 35 35 35 241 241
Residential - Lincoln Park - # of Accounts 473 473 479 487 497 517 537 557 577 597 617
Residential - Lincoln Park - # Accounts Added 0 6 8 10 20 20 20 20 20 20 20 164 164
Multi-Family - SVMD - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Multi-Family - SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Multi-Family - Compark - 1" - # of Accounts 5 5 5 5 5 5 5 5 5 5 5
Multi-Family - Compark - 1" - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Multi-Family - Compark - 1.5" - # of Accounts 7 7 7 7 7 7 7 7 7 7 7
Multi-Family - Compark - 1.5" - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Multi-Family - Lincoln Park - 0.75" - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Multi-Family - Lincoln Park - 0.75" - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Multi-Family - Lincoln Park - 1.5" - # of Accounts 78 78 78 78 78 78 78 78 78 78 78
Multi-Family - Lincoln Park - 1.5" - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 0.75" SVMD - # of Accounts 6 6 6 6 6 6 6 6 6 6 6
Commercial - 0.75" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 0.75" Compark - # of Accounts 0 0 2 5 8 11 14 17 20 23 26
Commercial - 0.75" Compark - # Accounts Added 0 2 3 3 3 3 3 3 3 3 3 29 29
Commercial - 0.75" Lincoln Park - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
A-2
Commercial - 0.75" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 1" SVMD - # of Accounts 10 10 10 10 10 10 10 10 10 10 10
Commercial - 1" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 1" Compark - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Commercial - 1" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 1" Lincoln Park - # of Accounts 4 4 4 4 4 4 4 4 4 4 4
Commercial - 1" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 1.5" SVMD - # of Accounts 10 10 10 10 10 10 10 10 10 10 10
Commercial - 1.5" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0Commercial - 1.5" Compark - # of Accounts 8 8 8 8 8 8 8 8 8 8 8
Commercial - 1.5" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 1.5" Lincoln Park - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Commercial - 1.5" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 2" SVMD - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Commercial - 2" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 2" Compark - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Commercial - 2" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 2" Lincoln Park - # of Accounts 6 6 6 6 6 6 6 6 6 6 6
Commercial - 2" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 3" SVMD - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Commercial - 3" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 3" Compark - # of Accounts 1 1 1 1 1 1 1 1 1 1 1
Commercial - 3" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Commercial - 3" Lincoln Park - # of Accounts 1 1 1 1 1 1 1 1 1 1 1
Commercial - 3" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 0.75" SVMD - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Irrigation - 0.75" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 0.75" Compark - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Irrigation - 0.75" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 0.75" Lincoln Park - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Irrigation - 0.75" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1" SVMD - # of Accounts 4 4 4 4 4 4 4 4 4 4 4
Irrigation - 1" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1" Compark - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Irrigation - 1" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1" Lincoln Park - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Irrigation - 1" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1.5" SVMD - # of Accounts 6 6 6 6 6 6 6 6 6 6 6
Irrigation - 1.5" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1.5" Compark - # of Accounts 1 1 1 1 1 1 1 1 1 1 1
Irrigation - 1.5" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 1.5" Lincoln Park - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Irrigation - 1.5" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 2" SVMD - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Irrigation - 2" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 2" Compark - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 2" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 2" Lincoln Park - # of Accounts 3 3 3 3 3 3 3 3 3 3 3
Irrigation - 2" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 3" SVMD - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
A-3
Irrigation - 3" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 3" Compark - # of Accounts 1 1 1 1 1 1 1 1 1 1 1
Irrigation - 3" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 3" Lincoln Park - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 3" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 4" SVMD - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 4" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 4" Compark - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 4" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 4" Lincoln Park - # of Accounts 2 2 2 2 2 2 2 2 2 2 2
Irrigation - 4" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 6" SVMD - # of Accounts 1 1 1 1 1 1 1 1 1 1 1
Irrigation - 6" SVMD - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 6" Compark - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 6" Compark - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 6" Lincoln Park - # of Accounts 0 0 0 0 0 0 0 0 0 0 0
Irrigation - 6" Lincoln Park - # Accounts Added 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 3,297 3,297 3,305 3,328 3,361 3,424 3,507 3,600 3,693 3,786 3,879
Total SFEs Added 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total Check
SVMD 0 0 6 10 20 30 35 35 35 35 35 241 241
Compark 0 2 9 13 23 33 38 38 38 38 38 270 270
Lincoln Park 0 6 8 10 20 20 20 20 20 20 20 164 164
Total Accounts Added 0 8 23 33 63 83 93 93 93 93 93 675 675
Growth Rate 1%1%2%2%3%3%3%2%2%
A-4
Stonegate Village Metropolitan District, CO 3/31/2017
2016 Cost of Service and Tap Fee Model
Capital Improvement Plan
Capital Improvement Program - Total (Uninflated)Growth %2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total
Distribution System
Distribution PS Air Conditioning 0%145,000 145,000
Distribution PS VFDs 0%100,000 100,000Install Distribution System Sampling Points 0%165,000 165,000
Replace 12" Pipeline Stonegate & Crest Rock 0%495,000 495,000
Replace Pipeline in Kennemere Lane 0%220,000 220,000
Replace 8" Pipeline in Jordan Road 0%1,045,000 1,045,000
WTP Electrical Upgrades 0%500,000 500,000Water Supply
WTP Chloramine Disinfection System 31.6%1,411,518 1,411,518
WISE Delivery Pipeline to SVMD Treatment Plant 31.6%3,109,000 3,109,000
Delivery Pipeline to Reuter Hess 31.6%2,489,567 2,489,567
Interconnect PWSD to SVMD near Storage Tanks 31.6%450,000 450,000Equip Wells for ASR 31.6%115,000 115,000 115,000 115,000 460,000
ASR Interconnect Piping 31.6%150,000 150,000
Alluvial Well 31.6%425,000 425,000
Purchase PWSD Pipeline to RHR 31.6%2,500,000 2,500,000
Regional FacilitiesWestern Pipeline Purchase/DIA Connection Fee 31.6%55,641 55,733 55,233 117,343 163,719 163,659 163,659 163,659 938,646
Modifications Agreement Costs 31.6%639,000 639,000
Ridgegate Pipeline 31.6%3,520,000 3,520,000
Binney Plant Construction 31.6%3,331,313 3,331,313
Capacity in the PWSD WTP 100%15,000,000 15,000,000Total$8,096,159 $2,690,300 $4,915,313 $1,200,233 $2,882,343 $1,048,719 $15,278,659 $163,659 $278,659 $425,000 $115,000 $37,094,044
Growth %
Total Peak Day Capacity (MGD)5.76
Est. SFE Peak Day Water Use (gpd)864.33Total SFEs in WTP Capacity 6,664
Total Consumption in Test Yr. (kgal)459,314
Single Family Usage in 2017 (kgal/yr.)100.79
SFEs on System in 2017 4,557Available SFEs for Growth 2,107
Percent Available for Growth 31.6%
Prepared by RFC 3/31/2017
A-5
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee ModelCapital Fund
Combined Capital Fund (Growth & Non-Growth)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Sources of Funds
Beginning Balance 12,746,176 5,573,316 3,718,035 1,854,255 1,715,638 336,760 14,575,515 (229,356)547,365 1,259,632 1,876,912
Tap Fees 75,000 100,000 317,056 470,972 931,186 1,240,551 1,395,234 1,395,234 1,395,234 1,395,234 1,395,234Sustainability Fees 800,000 790,000 779,507 807,416 838,324 876,620 920,758 968,968 1,019,243 1,071,662 1,126,309
Administrative Fee 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Net Proposed Bond Proceeds - Non-Growth 0 0 2,282,810 0 0 3,214,196 0 0 0 0 0
Net Proposed Bond Proceeds - Growth 0 0 0 0 0 11,395,786 0 0 0 0 0
Transfer From Operating Fund to Non-Growth Fund 0 0 0 0 0 0 0 0 0 0 0Transfer From Operating Fund to Growth Fund 0 0 0 0 0 0 0 0 0 0 0
Transfer From Non-Growth to Growth 0 0 0 0 0 0 0 0 0 0 0
Transfer From Growth to Non-Growth 0 0 0 0 0 0 0 0 0 0 0
Interest Income 45,799 23,228 9,310 8,925 10,116 11,492 35,865 795 4,517 7,841 11,873
Total Sources of Funds 13,669,475 6,489,044 7,109,218 3,144,068 3,497,763 17,077,904 16,929,872 2,138,142 2,968,860 3,736,870 4,412,828
Uses of Funds
Capital Projects
Capital Projects - Non-Growth 5,536,396 1,942,119 3,623,275 1,218,253 2,030,163 1,026,865 196,272 115,272 196,272 299,347 81,000Capital Projects - Growth 2,559,763 828,890 1,439,498 17,987 938,650 53,316 15,540,747 53,296 90,747 138,403 37,450
Total Capital Projects 8,096,159 2,771,009 5,062,772 1,236,240 2,968,813 1,080,181 15,737,019 168,569 287,019 437,750 118,450
Debt Service
Existing Debt Service - Non-Growth 0 0 0 0 0 0 0 0 0 0 0Existing Debt Service - Growth 0 0 0 0 0 0 0 0 0 0 0
Proposed Debt Service - Non-Growth 0 0 192,190 192,190 192,190 462,794 462,794 462,794 462,794 462,794 462,794
Proposed Debt Service - Growth 0 0 0 0 0 959,414 959,414 959,414 959,414 959,414 959,414Total Debt Service 0 0 192,190 192,190 192,190 1,422,209 1,422,209 1,422,209 1,422,209 1,422,209 1,422,209
Transfers
Transfer to Operating Fund 0 0 0 0 0 0 0 0 0 0 0
Transfer from Non-Growth to Growth 0 0 0 0 0 0 0 0 0 0 0
Transfer from Growth to Non-Growth 0 0 0 0 0 0 0 0 0 0 0
Total Transfers 0 0 0 0 0 0 0 0 0 0 0
Miscellaneous
Accounting/Audit 0 0 0 0 0 0 0 0 0 0 0
District Management 0 0 0 0 0 0 0 0 0 0 0
Utility Billing 0 0 0 0 0 0 0 0 0 0 0Engineering00000000000
Legal 0 0 0 0 0 0 0 0 0 0 0
Miscellaneous/Office Expenses 0 0 0 0 0 0 0 0 0 0 0
Compark Metro Payment 0 0 0 0 0 0 0 0 0 0 0
Total Miscellaneous 0 0 0 0 0 0 0 0 0 0 0
Total Uses of Funds 8,096,159 2,771,009 5,254,963 1,428,430 3,161,004 2,502,389 17,159,227 1,590,777 1,709,227 1,859,959 1,540,659
Ending Fund Balance 5,573,316 3,718,035 1,854,255 1,715,638 336,760 14,575,515 (229,356)547,365 1,259,632 1,876,912 2,872,169
Required Minimum Capital Reserve 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
Variance 5,073,316 3,218,035 1,354,255 1,215,638 (163,240)14,075,515 (729,356)47,365 759,632 1,376,912 2,372,169
Prepared by RFC 3/31/2017
A-6
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee ModelOperating Fund
Operating Fund 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026RevenueRate Revenues from Existing Rates 2,661,000 2,552,989 2,541,549 2,537,433 2,538,318 2,554,061 2,579,395 2,609,343 2,639,024 2,668,441 2,697,599
Revenue From Increased Rates % Increase Mo. Effective
2017 18%9 344,654 457,479 456,738 456,897 459,731 464,291 469,682 475,024 480,319 485,568
2018 22%12 659,786 658,718 658,947 663,034 669,611 677,385 685,091 692,727 700,297201922%12 803,635 803,916 808,902 816,925 826,410 835,810 845,127 854,362202022%12 980,777 986,860 996,649 1,008,221 1,019,689 1,031,055 1,042,322
2021 0%12 0 0 0 0 0 0
2022 0%12 0 0 0 0 0
2023 0%12 0 0 0 020240%12 0 0 020250%12 0 0
2026 0%12 0
Total Revenue From Increased Rates 0 344,654 1,117,265 1,919,091 2,900,537 2,918,527 2,947,476 2,981,698 3,015,614 3,049,229 3,082,548
Total Rate Revenues 2,661,000 2,897,643 3,658,814 4,456,523 5,438,855 5,472,587 5,526,870 5,591,041 5,654,638 5,717,670 5,780,148
Transfer from Capital Fund 0 0 0 0 0 0 0 0 0 0 0
Miscellaneous RevenueReimbursements/Charge Backs 16,000 50,000 0 0 0 0 0 0 0 0 0Other Revenues 0 0 0 0 0 0 0 0 0 0 0
Interest Income 11,631 10,785 10,935 12,788 14,510 13,755 13,375 13,725 14,047 14,370 14,683
Total Miscellaneous Revenues 27,631 60,785 10,935 12,788 14,510 13,755 13,375 13,725 14,047 14,370 14,683
Total Revenue 2,688,631 2,958,428 3,669,749 4,469,311 5,453,365 5,486,343 5,540,245 5,604,767 5,668,684 5,732,040 5,794,831
Operating Expenses
Operating Expenses from the Operating Fund
Accounting/Audit 29,260 29,260 29,845 30,442 31,051 31,672 32,305 32,952 33,611 34,283 34,968
District Management 114,000 114,000 116,280 118,606 120,978 123,397 125,865 128,383 130,950 133,569 136,241
Utility Billing 50,000 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755Engineering125,000 125,000 127,500 130,050 132,651 135,304 138,010 140,770 143,586 146,457 149,387
Insurance 28,672 29,600 30,192 30,796 31,412 32,040 32,681 33,334 34,001 34,681 35,375
Legal 80,750 81,463 83,092 84,754 86,449 88,178 89,942 91,741 93,575 95,447 97,356
Miscellaneous / Office Expenses 11,000 28,750 29,325 29,912 30,510 31,120 31,742 32,377 33,025 33,685 34,359
Communications/PR Expense 15,000 14,400 14,688 14,982 15,281 15,587 15,899 16,217 16,541 16,872 17,209Director's Fees 3,375 3,375 3,443 3,511 3,582 3,653 3,726 3,801 3,877 3,954 4,033
Payroll Tax Expense 10,000 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Dues and Subscriptions 6,000 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755
Meter Set Costs 5,000 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Meter Read Costs 15,000 16,500 16,830 17,167 17,510 17,860 18,217 18,582 18,953 19,332 19,719Lab Analysis 10,000 25,000 25,500 26,010 26,530 27,061 27,602 28,154 28,717 29,291 29,877
Tools and Supplies 3,500 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975
Meter Replacement 0 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Leak Detection 0 0 0 0 0 0 0 0 0 0 0
Water Regulations 10,000 15,000 15,300 15,606 15,918 16,236 16,561 16,892 17,230 17,575 17,926Water Studies 20,000 25,000 25,500 26,010 26,530 27,061 27,602 28,154 28,717 29,291 29,877
Capital Improvements 0 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755
Reimbursed Expenses 32,000 20,000 20,400 20,808 21,224 21,649 22,082 22,523 22,974 23,433 23,902
Water Operations 294,230 305,182 311,286 317,511 323,862 330,339 336,946 343,684 350,558 357,569 364,721
Maintenance, Repairs and Replacement 300,000 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500Chemicals38,000 38,000 34,580 31,468 28,636 26,058 23,713 21,579 19,637 17,870 16,261
Utilities and Telephone 860,000 700,000 637,000 579,670 527,500 480,025 436,823 397,508 361,733 329,177 299,551
Well Maintenance 100,000 218,000 222,360 226,807 231,343 235,970 240,690 245,503 250,413 255,422 260,530
Operating Costs WISE (Operations and Reserve)353,054 440,000 1,107,609 1,190,800 1,520,033 1,908,552 2,185,665 2,185,665 2,185,665 2,185,665 2,185,665
Total Operating Expenses 2,513,841 2,906,030 3,531,930 3,579,883 3,879,823 4,244,513 4,502,826 4,488,660 4,478,770 4,472,832 4,470,550
Prepared by RFC 3/31/2017
A-7
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee ModelOperating Fund
Operating Fund 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Net Revenues Available for Debt Service 174,790 52,398 137,819 889,428 1,573,542 1,241,830 1,037,419 1,116,107 1,189,914 1,259,208 1,324,281
Existing Debt Service
Water Enterprise Revenue Bond (Series 2015)844,356 844,456 846,956 849,156 846,056 847,806 846,406 844,606 849,356 848,106 846,106
Total Debt Service 844,356 844,456 846,956 849,156 846,056 847,806 846,406 844,606 849,356 848,106 846,106
Net Revenues Available for Other Capital Costs 1,669,485 2,061,574 2,684,974 2,730,727 3,033,767 3,396,707 3,656,420 3,644,054 3,629,414 3,624,726 3,624,444
Pay-Go Capital TransfersTransfer to Non-Growth Capital Fund for Pay-Go CIP 0 0 0 0 0 0 0 0 0 0 0Transfer to Growth Capital Fund for Pay-Go CIP 0 0 0 0 0 0 0 0 0 0 0
Total Pay-Go Capital Transfers 0 0 0 0 0 0 0 0 0 0 0
Total Expenditures 3,358,197 3,750,486 4,378,886 4,429,039 4,725,879 5,092,319 5,349,232 5,333,266 5,328,126 5,320,938 5,316,656
Annual Surplus (Deficit)(669,566)(792,058)(709,137)40,272 727,486 394,024 191,013 271,501 340,558 411,102 478,175
Beginning Balance 2,319,401 1,649,835 857,777 148,640 188,912 916,398 1,310,422 1,501,435 1,772,936 2,113,494 2,524,596
Add: Annual Surplus / (Deficit)(669,566)(792,058)(709,137)40,272 727,486 394,024 191,013 271,501 340,558 411,102 478,175Ending Fund Balance 1,649,835 857,777 148,640 188,912 916,398 1,310,422 1,501,435 1,772,936 2,113,494 2,524,596 3,002,771
Required Minimum Operating Reserve 628,460 726,508 882,982 894,971 969,956 1,061,128 1,125,706 1,122,165 1,119,693 1,118,208 1,117,637
Variance 1,021,375 131,269 (734,343)(706,059)(53,558)249,294 375,729 650,771 993,801 1,406,388 1,885,134
Prepared by RFC 3/31/2017
A-8
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Consolidated Financial Plan
Consolidated Financial Plan 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Revenue
Rate Revenues from Existing Rates 2,661,000 2,552,989 2,541,549 2,537,433 2,538,318 2,554,061 2,579,395 2,609,343 2,639,024 2,668,441 2,697,599
Revenue From Increased Rates 0 344,654 1,117,265 1,919,091 2,900,537 2,918,527 2,947,476 2,981,698 3,015,614 3,049,229 3,082,548Total Rate Revenue 2,661,000 2,897,643 3,658,814 4,456,523 5,438,855 5,472,587 5,526,870 5,591,041 5,654,638 5,717,670 5,780,148
Miscellaneous Revenues
Sustainability Fees 800,000 790,000 779,507 807,416 838,324 876,620 920,758 968,968 1,019,243 1,071,662 1,126,309
Tap Fees 75,000 100,000 317,056 470,972 931,186 1,240,551 1,395,234 1,395,234 1,395,234 1,395,234 1,395,234Reimbursements/Charge Backs 16,000 50,000 0 0 0 0 0 0 0 0 0
Other Revenues 0 0 0 0 0 0 0 0 0 0 0
Administrative Fee 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Interest Income 57,430 34,013 20,245 21,713 24,626 25,247 49,240 14,520 18,564 22,211 26,556
Total Miscellaneous Income 950,930 976,513 1,119,308 1,302,601 1,796,636 2,144,918 2,367,732 2,381,223 2,435,541 2,491,608 2,550,600
Total Revenues 3,611,930 3,874,156 4,778,122 5,759,124 7,235,490 7,617,505 7,894,602 7,972,264 8,090,179 8,209,278 8,330,747
Operating Expenses
Operating Expenses From the Operating Fund
Accounting/Audit 29,260 29,260 29,845 30,442 31,051 31,672 32,305 32,952 33,611 34,283 34,968
District Management 114,000 114,000 116,280 118,606 120,978 123,397 125,865 128,383 130,950 133,569 136,241
Utility Billing 50,000 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755
Engineering 125,000 125,000 127,500 130,050 132,651 135,304 138,010 140,770 143,586 146,457 149,387Insurance28,672 29,600 30,192 30,796 31,412 32,040 32,681 33,334 34,001 34,681 35,375
Legal 80,750 81,463 83,092 84,754 86,449 88,178 89,942 91,741 93,575 95,447 97,356
Miscellaneous / Office Expenses 11,000 28,750 29,325 29,912 30,510 31,120 31,742 32,377 33,025 33,685 34,359
Communications/PR Expense 15,000 14,400 14,688 14,982 15,281 15,587 15,899 16,217 16,541 16,872 17,209
Director's Fees 3,375 3,375 3,443 3,511 3,582 3,653 3,726 3,801 3,877 3,954 4,033Payroll Tax Expense 10,000 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Dues and Subscriptions 6,000 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755
Meter Set Costs 5,000 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Meter Read Costs 15,000 16,500 16,830 17,167 17,510 17,860 18,217 18,582 18,953 19,332 19,719
Lab Analysis 10,000 25,000 25,500 26,010 26,530 27,061 27,602 28,154 28,717 29,291 29,877Tools and Supplies 3,500 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975
Meter Replacement 0 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951
Leak Detection 0 0 0 0 0 0 0 0 0 0 0
Water Regulations 10,000 15,000 15,300 15,606 15,918 16,236 16,561 16,892 17,230 17,575 17,926
Water Studies 20,000 25,000 25,500 26,010 26,530 27,061 27,602 28,154 28,717 29,291 29,877Capital Improvements 0 50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755
Reimbursed Expenses 32,000 20,000 20,400 20,808 21,224 21,649 22,082 22,523 22,974 23,433 23,902
Water Operations 294,230 305,182 311,286 317,511 323,862 330,339 336,946 343,684 350,558 357,569 364,721
Maintenance, Repairs and Replacement 300,000 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500 492,500
Chemicals 38,000 38,000 34,580 31,468 28,636 26,058 23,713 21,579 19,637 17,870 16,261Utilities and Telephone 860,000 700,000 637,000 579,670 527,500 480,025 436,823 397,508 361,733 329,177 299,551
Well Maintenance 100,000 218,000 222,360 226,807 231,343 235,970 240,690 245,503 250,413 255,422 260,530
Operating Costs WISE (Operations and Reserve)353,054 440,000 1,107,609 1,190,800 1,520,033 1,908,552 2,185,665 2,185,665 2,185,665 2,185,665 2,185,665Total Operating Expenses From Operating Fund 2,513,841 2,906,030 3,531,930 3,579,883 3,879,823 4,244,513 4,502,826 4,488,660 4,478,770 4,472,832 4,470,550
Net Revenues Available for Debt Service 1,098,089 968,126 1,246,192 2,179,241 3,355,668 3,372,993 3,391,776 3,483,604 3,611,409 3,736,446 3,860,197
Prepared by RFC 3/31/2017
A-9
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Consolidated Financial Plan
Consolidated Financial Plan 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Debt Service
Existing Debt Service 844,356 844,456 846,956 849,156 846,056 847,806 846,406 844,606 849,356 848,106 846,106
Proposed Debt Service - Non-Growth 0 0 192,190 192,190 192,190 462,794 462,794 462,794 462,794 462,794 462,794Proposed Debt Service - Growth 0 0 0 0 0 959,414 959,414 959,414 959,414 959,414 959,414
Total Debt Service 844,356 844,456 1,039,146 1,041,346 1,038,246 2,270,015 2,268,615 2,266,815 2,271,565 2,270,315 2,268,315
Debt Service Coverage
Debt Service Coverage Ratio 1.30 1.15 1.20 2.09 3.23 1.49 1.50 1.54 1.59 1.65 1.70
Net Revenues Available for Other Capital Costs
Capital Projects - Non-Growth Related
Capital Projects - Non-Growth Related 5,536,396 1,942,119 3,623,275 1,218,253 2,030,163 1,026,865 196,272 115,272 196,272 299,347 81,000Capital Costs - Non-Growth Related 5,536,396 1,942,119 3,623,275 1,218,253 2,030,163 1,026,865 196,272 115,272 196,272 299,347 81,000
Capital Projects - Growth Related
Capital Projects - Growth Related 2,559,763 828,890 1,439,498 17,987 938,650 53,316 15,540,747 53,296 90,747 138,403 37,450
Capital Projects - Growth Related 2,559,763 828,890 1,439,498 17,987 938,650 53,316 15,540,747 53,296 90,747 138,403 37,450
Total Capital Projects 8,096,159 2,771,009 5,062,772 1,236,240 2,968,813 1,080,181 15,737,019 168,569 287,019 437,750 118,450
Total Expenditures 11,454,356 6,521,495 9,633,848 5,857,470 7,886,882 7,594,708 22,508,459 6,924,043 7,037,354 7,180,896 6,857,315
Net Operating Surplus (Deficit)(7,842,426)(2,647,339)(4,855,726)(98,346)(651,392)22,797 (14,613,857)1,048,221 1,052,825 1,028,381 1,473,433
Cash Reserves
Beginning Balance 15,065,577 7,223,151 4,575,812 2,002,895 1,904,550 1,253,158 15,885,937 1,272,080 2,320,301 3,373,126 4,401,508
Add: Net Operating Surplus/Deficit (7,842,426)(2,647,339)(4,855,726)(98,346)(651,392)22,797 (14,613,857)1,048,221 1,052,825 1,028,381 1,473,433Net Proposed Bond Proceeds - Non-Growth 0 0 2,282,810 0 0 3,214,196 0 0 0 0 0
Net Proposed Bond Proceeds - Growth 0 0 0 0 0 11,395,786 0 0 0 0 0
Ending Fund Balance 7,223,151 4,575,812 2,002,895 1,904,550 1,253,158 15,885,937 1,272,080 2,320,301 3,373,126 4,401,508 5,874,940
Required ReservesRequired Operating Reserve 628,460 726,508 882,982 894,971 969,956 1,061,128 1,125,706 1,122,165 1,119,693 1,118,208 1,117,637
Required Capital Reserve 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
Total Required Minimum Fund Balance 1,128,460 1,226,508 1,382,982 1,394,971 1,469,956 1,561,128 1,625,706 1,622,165 1,619,693 1,618,208 1,617,637
Variance From Minimum Fund Balance 6,094,691 3,349,304 619,913 509,579 (216,798)14,324,809 (353,627)698,136 1,753,434 2,783,300 4,257,303
Prepared by RFC 3/31/2017
A-10
32 |Stonegate Village Metropolitan District
APPENDIX B:
WATER COST OF
SERVICE RATES
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Capital Cost Allocation
Allocation of Water System Assets And Annual Capital Costs - Percentage Allocations
Customer Related
Assets Revenue Requirement Total
Non-Potable
Irrigation Base Max Day Max Hour Meters Billing Public Fire
Wells 77,788 100.00%31.95%68.05%
Raw/SOS 185,662 100.00%100.00%
Storage 65,820 100.00%26.32%73.68%
Treatment 80,250 100.00%31.95%68.05%
Pumping 44,877 100.00%31.95%68.05%
Transmission 466,678 100.00%31.95%68.05%
Distribution 47,051 100.00%26.32%56.05%17.63%
Meters 0 100.00%100.00%
Billing 0 100.00%100.00%
Total Capital Cost Revenue Requirement 968,126
Check 968,126
Allocation of Water System Assets And Annual Capital Costs - Dollar Allocations
Volume Customer Related
Assets Revenue Requirement Total
Non-Potable
Irrigation Base
Maximum Day
Demand
Maximum Hour
Demand Meters Billing Public Fire
Wells 77,788 77,788 0 24,852 52,935 0 0 0
Raw/SOS 185,662 185,662 0 185,662 0 0 0 0
Storage 65,820 65,820 0 17,321 0 48,499 0 0
Treatment 80,250 80,250 0 25,639 54,611 0 0 0
Pumping 44,877 44,877 0 14,338 30,540 0 0 0
Transmission 466,678 466,678 0 149,097 317,581 0 0 0
Distribution 47,051 47,051 0 12,382 26,373 8,296 0 0
Meters 0 0 0 0 0 0 0 0
Billing 0 0 0 0 0 0 0 0
Total Capital Cost Revenue Requirement 968,126 968,126 0 429,291 482,040 56,795 0 0 0
Percent of Total 100.0%0.0%44.3%49.8%5.9%0.0%0.0%0.0%
Demand
Prepared by RFC 3/31/2017
B-1
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
O&M Cost Allocation
Allocation of Water System Assets And Annual O&M Costs - Percentage Allocations
Customer Related
Description Revenue Requirement Total
Non-Potable
Irrigation Base Max Day Max Hour Meters Billing Public FireWells177,693 100.00%31.95%68.05%
Raw/SOS 424,115 100.00%1.00%99.00%
Storage 150,356 100.00%26.32%73.68%
Treatment 183,318 100.00%31.95%68.05%
Pumping 102,515 100.00%3.00%28.95%68.05%Transmission 1,066,052 100.00%31.95%68.05%
Distribution 107,480 100.00%3.00%23.32%56.05%17.63%
Meters 0 100.00%100.00%
Billing 0 100.00%100.00%
Meter Set Costs 10,000 100.00%100.00%Meter Read Costs 16,500 100.00%100.00%
Meter Replacement 10,000 100.00%100.00%
Well Maintenance 218,000 100.00%31.95%68.05%
Operating Costs WISE (Operations and Reserve)440,000 100.00%100.00%
Total O&M Cost Revenue Requirement 2,906,030
Check 2,906,030
Allocation of Water System Assets And Annual O&M Costs - Dollar Allocations
Customer Related
Description Revenue Requirement Total
Non-Potable
Irrigation Base Max Day Max Hour Meters Billing Public Fire
Wells 177,693 177,693 0 56,771 120,923 0 0 0 0
Raw/SOS 424,115 424,115 4,241 419,874 0 0 0 0 0
Storage 150,356 150,356 0 39,567 0 110,789 0 0 0Treatment183,318 183,318 0 58,568 124,750 0 0 0 0
Pumping 102,515 102,515 3,075 29,677 69,763 0 0 0 0
Transmission 1,066,052 1,066,052 0 340,589 725,463 0 0 0 0
Distribution 107,480 107,480 3,224 25,060 60,246 18,950 0 0 0
Meters 0 0 0 0 0 0 0 0 0Billing000000000
Meter Set Costs 10,000 10,000 0 0 0 0 10,000 0 0
Meter Read Costs 16,500 16,500 0 0 0 0 16,500 0 0
Meter Replacement 10,000 10,000 0 0 0 0 10,000 0 0
Well Maintenance 218,000 218,000 0 69,648 148,352 0 0 0 0Operating Costs WISE (Operations and Reserve)440,000 440,000 0 440,000 0 0 0 0 0
Total O&M Cost Revenue Requirement 2,906,030 2,906,030 10,541 1,479,754 1,249,497 129,738 36,500 0 0
Percent of Total 100.0%0.4%50.9%43.0%4.5%1.3%0.0%0.0%
Demand
Demand
Prepared by RFC 3/31/2017
B-2
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Non-Rate Revenue Cost Allocation
Allocation of Water System Assets And Annual Non-Rate Revenue - Percentage Allocations
Customer Related
Description
Revenue
Requirement Total
Non-Potable
Irrigation Base Max Day Max Hour Meters Billing Public Fire
Wells 78,461 100.00%31.95%68.05%
Raw/SOS 187,270 100.00%100.00%
Storage 66,390 100.00%26.32%73.68%
Treatment 80,945 100.00%31.95%68.05%
Pumping 45,266 100.00%31.95%68.05%
Transmission 470,721 100.00%31.95%68.05%
Distribution 47,458 100.00%26.32%56.05%17.63%
Meters 0 100.00%100.00%
Billing 0 100.00%100.00%
Total Non-Rate Revenue 976,513
Check 976,513
Allocation of Water System Assets And Annual Non-Rate Revenue - Percentage Allocations
Customer Related
Description
Revenue
Requirement Total
Non-Potable
Irrigation Base Max Day Max Hour Meters Billing Public Fire
Wells 78,461 78,461 0 25,067 53,394 0 0 0 0
Raw/SOS 187,270 187,270 0 187,270 0 0 0 0 0
Storage 66,390 66,390 0 17,471 0 48,919 0 0 0
Treatment 80,945 80,945 0 25,861 55,084 0 0 0 0
Pumping 45,266 45,266 0 14,462 30,804 0 0 0 0
Transmission 470,721 470,721 0 150,389 320,332 0 0 0 0
Distribution 47,458 47,458 0 12,489 26,602 8,367 0 0 0
Meters 0 0 0 0 0 0 0 0 0
Billing 0 0 0 0 0 0 0 0 0
Total Non-Rate Revenue 976,513 976,513 0 433,010 486,216 57,287 0 0 0
Percent of Total 100.0%0.0%44.3%49.8%5.9%0.0%0.0%0.0%
Demand
Demand
Prepared by RFC 3/31/2017
B-3
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Units of Service (1,000 gal)
Estimated Units of Service - Test Year 2017
Non-Base Demand Maximum Day Demand Maximum Hour Demand
Potable Annual Daily Peaking Total Extra Capacity Peaking Total Extra Capacity
Customer Class 1,000 gal 1,000 gal 1,000 gpd Factor 1,000 gpd 1,000 gpd Factor 1,000 gpd 1,000 gpd # of Bills SFE Public Fire
Residential 306,486.00 839.69 3.64 3,057.82 2,218.13 4.37 3,665.76 607.93 37,272 3,106 310.60
Multi-Family 39,060.00 107.01 2.72 291.03 184.02 3.30 353.33 62.30 1,104 352 35.20
Commercial 64,409.00 176.46 3.29 581.32 404.85 4.00 705.75 124.43 744 291 29.10
Irrigation 49,359.00 135.23 4.80 648.94 513.71 8.18 1,106.26 457.32 444 325
Irrigation - Non-Potable 31,664
Residential Fire Flow 0.52 0.52 6.25 5.73
Commercial Fire Flow 24.74 24.74 197.94 173.20
Total System 31,664 459,314.00 1,258.39 4,604.38 3,345.98 6,035.27 1,430.90 39,564 4,074 374.90
Public Fire Flow Estimate
Customer Class
Maximum
Fire Flow Duration
Minutes Per
Hour Max Day Fire Flow Minutes Per Day Max Hour Fire Flow Hydrants
Max Day Per
Hydrant
Max Hour Per
Hydrant
Residential 1,500 2.0 60 180,000 1,440 2,160,000 345.8 520.53 6,246.39
Multi-Family 2,700 2.5 60 405,000 1,440 3,888,000
Commercial 4,000 3.0 60 720,000 1,440 5,760,000 29.1 24,742.27 197,938.14
Irrigation 0 0
Non-Potable Irrigation 0 0
374.9
Customer
Prepared by RFC 3/31/2017
B-4
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Unit Cost of Service
Volumetric Customer Related Direct
Non-Base Max Day Max Hour Meters Billing Public Fire
Description Total Potable 1,000 gpd 1,000 gpd 1,000 gpd SFE # of Bills Hydrants
Units of Service
Residential 0.00 839.69 2,218.13 607.93 3,106.00 37,272.00 310.60
Multi-Family 0.00 107.01 184.02 62.30 352.00 1,104.00 35.20
Commercial 0.00 176.46 404.85 124.43 291.00 744.00 29.10
Irrigation 0.00 135.23 513.71 457.32 325.00 444.00 0.00
Irrigation - Non-Potable 31,664.33 0.00 0.00 0.00 0.00 0.00 0.00
Residential Fire Flow 0.00 0.00 0.52 5.73 0.00 0.00
Commercial Fire Flow 0.00 0.00 24.74 173.20 0.00 0.00
Total Units of Service 31,664.33 1,258.39 3,345.98 1,430.90 4,074.00 39,564.00 374.90
Total System Revenue Requirement
Capital Cost Revenue Requirement $968,126 $0 $429,291 $482,040 $56,795 $0 $0 $0
Capital Cost Unit Cost of Service $0.00 $341.14 $144.07 $39.69 $0.00 $0.00 $0.00
O&M Revenue Requirement $2,895,489 $10,541 $1,479,754 $1,249,497 $129,738 $36,500 $0 $0
O&M Unit Cost of Service $0.33 $1,175.91 $373.43 $90.67 $8.96 $0.00 $0.00
Non-Rate Revenue ($976,513)$0.0 ($433,010)($486,216)($57,287)$0 $0 $0
Non-Rate Revenue Unit Cost of Service $0.00 ($344.10)($145.31)($40.04)$0.00 $0.00 $0.00
Net Revenue Requirement From Rates $2,887,102 $10,541 $1,476,035 $1,245,321 $129,246 $36,500 $0 $0
Net Unit Cost of Service $0.33 $1,172.95 $372.18 $90.33 $8.96 $0.00 $0.00
Customer Class Revenue Requirement
Residential Units of Service 0.00 839.69 2,218.13 607.93 3,106.00 37,272.00 310.60
Residential Revenue Requirement $1,893,206 $0 $984,912 $825,554 $54,912 $27,827 $0 $0
Multi-Family Units of Service 0.00 107.01 184.02 62.30 352.00 1,104.00 35.20
Multi-Family Revenue Requirement $202,791 $0 $125,522 $68,489 $5,627 $3,154 $0 $0
Commercial Units of Service 0.00 176.46 404.85 124.43 291.00 744.00 29.10
Commercial Revenue Requirement $371,508 $0 $206,982 $150,679 $11,239 $2,607 $0 $0
Prepared by RFC 3/31/2017
B-5
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Unit Cost of Service
Irrigation Units of Service 0.00 135.23 513.71 457.32 325.00 444.00 0.00
Irrigation Revenue Requirement $394,033 $0 $158,618 $191,196 $41,307 $2,912 $0 $0
Non-Potable Units of Service 31,664.33 0.00 0.00 0.00 0.00 0.00 0.00
Non-Potable Revenue Requirement $10,541 $10,541 $0 $0 $0 $0 $0 $0
Residential Public Fire Units of Service 0.00 0.00 0.52 5.73 0.00 0.00 0.00
Residential Public Fire Revenue Requirement $711 $0 $0 $194 $517 $0 $0 $0
Commercial Public Fire Units of Service 0.00 0.00 24.74 173.20 0.00 0.00 0.00
Commercial Public Fire Revenue Requirement $24,853 $0 $0 $9,209 $15,644 $0 $0 $0
Total System Revenue Requirement $2,897,643 $10,541 $1,476,035 $1,245,321 $129,246 $36,500 $0 $0
Volumetric Revenue Requirement $2,861,143
Fixed Revenue Requirement $36,500
Prepared by RFC 3/31/2017
B-6
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Revenue Requirement By Class
Before Allocation of Public Fire Protection Costs
Class Non Potable Base Max Day Max Hour Total Volumetric Meters Bills
Direct Public
Fire Total Fixed Cost of Service
Test Year
Rev@Existing
Rates $ Change % Change
Residential 0 984,912 825,554 54,912 1,865,378 27,827 0 0 27,827 1,893,206 1,597,491 295,715 18.51%
Multi-Family 0 125,522 68,489 5,627 199,637 3,154 0 0 3,154 202,791 205,443 (2,652)-1.29%
Commercial 0 206,982 150,679 11,239 368,901 2,607 0 0 2,607 371,508 350,450 21,059 6.01%
Irrigation 0 158,618 191,196 41,307 391,122 2,912 0 0 2,912 394,033 399,606 (5,573)-1.39%
Non-Potable 10,541 0 0 0 10,541 0 0 0 0 10,541 0 10,541
Residential Public Fire Protection 0 0 194 517 711 0 0 0 0 711
Commercial Public Fire Protection 0 0 9,209 15,644 24,853 0 0 0 0 24,853
Total $10,541 $1,476,035 $1,245,321 $129,246 $2,861,143 $36,500 $0 $0 $36,500 $2,897,643 $2,552,989 $319,090 13.50%
Public Fire Allocation
Class % Allocation Amount Alloc to
Residential 82.8%21,179 MD
Multi-Family 9.4%2,400 MD
Commercial 7.8%1,984 MD
Total 25,564
After Allocation of Public Fire Protection Costs
Class Non Potable Base Max Day Max Hour Total Volumetric Meters Bills
Direct Public
Fire Total Fixed Cost of Service
Test Year
Rev@Existing
Rates $ Change % Change
Residential $0 $984,912 $846,733 $54,912 1,886,558 $27,827 $0 $0 $27,827 1,914,385 $1,597,491 316,894 19.84%
Multi-Family $0 $125,522 $70,889 $5,627 202,037 $3,154 $0 $0 $3,154 205,191 205,443 (252)-0.12%
Commercial $0 $206,982 $152,664 $11,239 370,885 $2,607 $0 $0 $2,607 373,493 350,450 23,043 6.58%
Irrigation $0 $158,618 $191,196 $41,307 391,122 $2,912 $0 $0 $2,912 394,033 399,606 (5,573)-1.39%
Non-Potable $10,541 $0 $0 $0 10,541 $0 $0 $0 $0 10,541 0 10,541
Total $10,541 $1,476,035 $1,261,482 $113,085 $2,861,143 $36,500 $0 $0 $36,500 $2,897,643 $2,552,989 $344,654 13.50%
18.00%
Prepared by RFC 3/31/2017
B-7
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Fixed Charge Rate Design
Unit Cost for 3/4-inch meter, $ per kgals
Readiness to Serve Adjustment
Total Volumetric Revenue Requirement $2,861,143
% to Be Recovered via Fixed Charge 1.8%
Amount to Be Recovered Via Fixed Charge $50,843
Equivalent Meters 4,074
Readiness to Serve Cost per Equivalent Meter 12.48
Meter-Related Costs
Meter-Related Costs 36,500
Equivalent Meters 4,074
Cost per Equivalent Meter 8.96
Billing Costs
Billing Costs 0
Number of Bills 39,564
Cost per Bill 0
Direct Fire Protection Costs
Direct Fire Protection Costs 0
Number of Hydrants 375
Cost per Hydrant 0
Monthly Service Charge Calculation
Meter Direct Calculated Existing Dollar Percentage
Capacity RTS Fire Service Service Difference Difference
Meter Size Ratio Recovery Billing Meters Protection Charge Charge $$
3/4 1.00 12.48 0.00 8.96 0.00 21.44 21.44 (0.00)0.0%
1 2.00 24.96 0.00 17.92 0.00 42.88 42.88 (0.00)0.0%
1-1/2 4.00 49.92 0.00 35.84 0.00 85.76 85.76 (0.00)0.0%
2 8.00 99.84 0.00 71.67 0.00 171.51 171.52 (0.01)0.0%
3 18.00 224.64 0.00 161.27 0.00 385.90 385.92 (0.02)0.0%
4 36.00 449.27 0.00 322.53 0.00 771.80 771.84 (0.04)0.0%
6 94.00 1,173.10 0.00 842.17 0.00 2,015.27 2,015.36 (0.09)0.0%
2016 2017
Volumetric Revenue $1,504,831 $1,832,176
Fixed Revenue $1,048,159 $1,048,159
% Volumetric 59%64%
% Fixed 41%36%
Prepared by RFC 3/31/2017
B-8
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Volumetric Rate Design
Residential
Forecast Meters Eq. Meters
Proposed Monthly Fixed
Charge Forecast Fixed Revenue Recovery
Forecast Total
Revenue Req.
Net Volumetric
Revenue Req.
0.75 3,106 21.44 799,075
1 42.88 0
1.5 85.76 0
2 171.51 0
3 385.90 0
4 771.80 0
6 2,015.27 0
Total 3,106 799,075 1,914,385 1,115,310ConsumptionDistributionProposedForecast Calculated Revenue Existing Change Change
Block Proposed Blocks Billed Usage of Usage (All 3 Districts)Steepness Revenue Rates Distribution Rates $%
Block 1 0 – 6,000 171,880 56.08%1.00 $385,010 $2.24 34.52%$1.61 $0.63 39.13%
Block 2 6,001 – 12,000 77,151 25.17%1.83 $317,092 $4.11 28.43%$2.95 $1.16 39.32%
Block 3 12.001 – 18,000 32,622 10.64%2.66 $194,753 $5.97 17.46%$4.29 $1.68 39.16%Block 4 18,001 – 24,000 13,167 4.30%3.33 $98,226 $7.46 8.81%$5.36 $2.10 39.18%
Block 5 Over 24,000 11,666 3.81%4.66 $121,796 $10.44 10.92%$7.50 $2.94 39.20%
306,486 100.00%$1,115,310 100.14%
Check 0 $1,116,876
Check $1,566
Average Rate Per kgal $3.64
Multi-Family
Forecast Meters Accounts
Proposed Monthly Fixed
Charge Forecast Fixed Revenue Recovery
Forecast Total
Revenue Req.
Net Volumetric
Revenue Req.
0.75 2 21.44 515
1 5 42.88 2,573
1.5 85 85.76 87,471
2 171.51 0
3 385.90 0
4 771.80 0
6 2,015.27 0
Total 92 90,558 205,191 114,633
Consumption Distribution Proposed Forecast Calculated Revenue Existing Change Change
Block Proposed Blocks Billed Usage of Usage (Single Family)Steepness Revenue Rates Distribution Rates $%Block 1 0-6,000 21,905 56.08%1.00 $39,648 $1.81 34.59%$1.61 $0.20 12.42%
Block 2 6,001-12,000 9,833 25.17%1.83 $32,644 $3.32 28.48%$2.95 $0.37 12.54%Block 3 12,001-18,000 4,157 10.64%2.66 $20,081 $4.83 17.52%$4.29 $0.54 12.59%
Block 4 18,001-24,000 1,678 4.30%3.33 $10,119 $6.03 8.83%$5.36 $0.67 12.50%
Block 5 over 24,000 1,487 3.81%4.66 $12,549 $8.44 10.95%$7.50 $0.94 12.53%
39,060 100.00%$114,633 100.36%
Check 0 $115,040Check$408
Average Rate Per kgal $2.93
Prepared by RFC
B-9
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Volumetric Rate Design
Commercial
Forecast Meters # of Accounts
Proposed Monthly Fixed
Charge Forecast Fixed Revenue Recovery
Forecast Total
Revenue Req.
Net Volumetric
Revenue Req.
0.75 9 21.44 2,315
1 17 42.88 8,747
1.5 20 85.76 20,581
2 12 171.51 24,698
3 4 385.90 18,523
4 771.80 0
6 2,015.27 0
Total 62 74,865 373,493 298,628
Consumption Distribution Proposed Forecast Calculated Revenue Existing Change Change
Block Proposed Blocks Billed Usage of Usage Steepness Revenue Rates Distribution Rates $%
Block 1 0-6,000 16,195 25.14%1.00 $26,074 $1.61 8.73%$1.61 $0.00 0.00%
Block 2 6,001-12,000 10,970 17.03%1.83 $32,360 $2.95 10.84%$2.95 $0.00 0.00%
Block 3 12,001-18,000 7,912 12.28%2.66 $33,943 $4.29 11.37%$4.29 $0.00 0.00%Block 4 18,001-24,000 5,747 8.92%3.33 $30,803 $5.36 10.31%$5.36 $0.00 0.00%
Block 5 over 24,000 23,585 36.62%4.66 $176,888 $7.50 59.23%$7.50 $0.00 0.00%
64,409 100.00%$298,628 100.48%
Check 0 $300,069
Check $1,441
Average Rate Per kgal $4.64
Irrigation
Forecast Meters # of Accounts
Proposed Monthly Fixed
Charge Forecast Fixed Revenue Recovery
Forecast Total
Revenue Req.
Net Volumetric
Revenue Req.
0.75 7 21.44 1,801
1 9 42.88 4,631
1.5 10 85.76 10,291
2 5 171.51 10,291
3 3 385.90 13,892
4 2 771.80 18,523
6 1 2,015.27 24,183
Total 37 83,612 394,033 310,421
Consumption Distribution Proposed Forecast Calculated Revenue Existing Change Change
Block Proposed Blocks Billed Usage of Usage Steepness Revenue Rates Distribution Rates $%
Block 1 0-6,000 4,152 8.41%1.00 $6,602 $1.59 2.13%$1.61 ($0.02)-1.24%
Block 2 6,001-12,000 3,323 6.73%1.83 $9,704 $2.92 3.13%$2.95 ($0.03)-1.02%Block 3 12,001-18,000 2,922 5.92%2.66 $12,390 $4.24 3.99%$4.29 ($0.05)-1.17%
Block 4 18,001-24,000 2,650 5.37%3.33 $14,042 $5.30 4.52%$5.36 ($0.06)-1.12%Block 5 over 24,000 36,312 73.57%4.66 $269,073 $7.41 86.68%$7.50 ($0.09)-1.20%
49,359 100.00%$310,421 100.45%
Check 0 $311,810Check$1,389
Average Rate Per kgal $6.29
Prepared by RFC
B-10
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Cost of Service Rates
Base Charge
Meter Size Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
3/4"$21.44 $21.44 $24.89 $28.38 $32.55 $32.39 $32.17 $31.92 $31.69 $31.47 $31.26
1"42.88 42.88 49.77 56.76 65.10 64.77 64.33 63.85 63.38 62.94 62.53
1-1/2"85.76 85.76 99.54 113.51 130.20 129.54 128.66 127.69 126.77 125.89 125.05
2"171.52 171.52 199.09 227.03 260.40 259.09 257.32 255.38 253.54 251.78 250.10
3"385.92 385.92 447.95 510.81 585.91 582.95 578.97 574.62 570.46 566.50 562.73
4"771.84 771.84 895.90 1,021.61 1,171.82 1,165.90 1,157.94 1,149.23 1,140.93 1,133.01 1,125.46
6"2,015.36 2,015.36 2,339.30 2,667.54 3,059.75 3,044.31 3,023.52 3,000.77 2,979.08 2,958.41 2,938.69
WISE Renewable Water Fee
Meter Size Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
3/4"$15.00 $15.45 $15.91 $16.39 $16.88 $17.39 $17.91 $18.45 $19.00 $19.57 $20.16
1"30.00 30.90 31.83 32.78 33.77 34.78 35.82 36.90 38.00 39.14 40.32
1-1/2"60.00 61.80 63.65 65.56 67.53 69.56 71.64 73.79 76.01 78.29 80.63
2"120.00 123.60 127.31 131.13 135.06 139.11 143.29 147.58 152.01 156.57 161.27
3"270.00 278.10 286.44 295.04 303.89 313.00 322.39 332.07 342.03 352.29 362.86
4"540.00 556.20 572.89 590.07 607.77 626.01 644.79 664.13 684.06 704.58 725.71
6"1,410.00 1,452.30 1,495.87 1,540.75 1,586.97 1,634.58 1,683.61 1,734.12 1,786.15 1,839.73 1,894.92
Prepared by RFC 3/31/2017
B-11
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Cost of Service Rates
Volumetric Rate ($/kgal)
Residential Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Block 1 $1.61 $2.24 $3.03 $3.86 $4.90 $4.97 $5.06 $5.14 $5.22 $5.30 $5.38
Block 2 2.95 4.11 5.56 7.08 8.98 9.11 9.28 9.42 9.57 9.72 9.86
Block 3 4.29 5.97 8.08 10.29 13.06 13.25 13.49 13.70 13.91 14.13 14.34
Block 4 5.36 7.46 10.09 12.86 16.32 16.55 16.85 17.12 17.38 17.65 17.92
Block 5 7.50 10.44 14.12 17.99 22.83 23.16 23.58 23.95 24.32 24.69 25.07
Multi-Family Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Block 1 $1.61 $1.81 $2.60 $3.26 $4.16 $4.28 $4.35 $4.36 $4.38 $4.39 $4.41
Block 2 2.95 3.32 4.77 5.98 7.63 7.85 7.98 7.99 8.03 8.05 8.09
Block 3 4.29 4.83 6.93 8.69 11.09 11.41 11.60 11.62 11.68 11.70 11.76
Block 4 5.36 6.03 8.66 10.86 13.85 14.25 14.49 14.52 14.59 14.62 14.69
Block 5 7.50 8.44 12.12 15.19 19.38 19.94 20.27 20.32 20.41 20.46 20.55
Commercial Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Block 1 $1.61 $1.61 $2.12 $2.63 $3.26 $3.29 $3.31 $3.32 $3.33 $3.33 $3.34
Block 2 2.95 2.95 3.89 4.82 5.98 6.03 6.07 6.09 6.11 6.11 6.12
Block 3 4.29 4.29 5.65 7.01 8.69 8.77 8.82 8.85 8.88 8.88 8.90
Block 4 5.36 5.36 7.06 8.76 10.86 10.96 11.02 11.06 11.09 11.09 11.12
Block 5 7.50 7.50 9.88 12.26 15.19 15.33 15.42 15.47 15.52 15.52 15.56
Irrigation Existing 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Block 1 $1.61 $1.61 $1.97 $2.48 $3.06 $3.00 $2.97 $2.99 $3.00 $3.02 $3.04
Block 2 2.95 2.95 3.61 4.55 5.61 5.50 5.45 5.48 5.50 5.54 5.58
Block 3 4.29 4.29 5.25 6.61 8.16 8.00 7.92 7.97 8.00 8.05 8.11
Block 4 5.36 5.36 6.56 8.26 10.19 9.99 9.89 9.96 9.99 10.06 10.13
Block 5 7.50 7.50 9.18 11.56 14.26 13.98 13.84 13.93 13.98 14.07 14.17
Prepared by RFC 3/31/2017
B-12
Water Cost of Service Study |33
APPENDIX C:
WATER PEAKING
FACTORS
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
System Production Metrics
System Annual Production
(Thousands of Gallons)
Actual Total System Annual
Treated Consumption
Estimated Water Loss
(Thousands of Gallons)
Annual Retail Estimated Estimated
Year Annual Annual Average Day Treated Consumption Water Loss Water Loss %
2014 559,699 1,533 474,971 84,728 15.14%
2015 554,185 1,518 457,460 96,725 17.45%
Average 556,942 1,526 471,675 90,727 16.29%
System Coincident Max Month Production (Thousands of Gallons)
Actual Month Actual Average Day
Year of Occurrence Max Month Production in Max Month
2014 July 85,635 2,855
2015 August 91,069 2,938
Average 88,352 2,896
System Coincident Max Day Production (Thousands of Gallons)
Actual Day Actual Ratio of Max Day Production Ratio of Max Day Production
Year of Occurrence Max Day Production to Annual Avg. Day to Avg. Day in Max Month
2014 July 11,2014 3,868 2.52 1.36
2015 August 16,2015 5,684 3.74 1.93
Average 4,776 3.13 1.65
Estimated System Coincident Max Hour Production (Thousands of Gallons)
3.80
Actual Date and Time Estimated Ratio of Max Hour Production Ratio of Max Hour Production
Year of Max Hour Max Hour Production to Annual Avg. Day to Avg. Day in Max Month
2014 Unknown 5,827 3.80 2.04
2015 Unknown 5,770 3.80 1.96
Average 5,798 3.80 2.00
Prepared by RFC 3/31/2017
C-1
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
System Demand Ratios
Calculated Base / Max Day Allocations Check on Base / Max Day Allocations
System Max Day / Average Day Ratio 3.13 System Average Day 1,526
Base Allocation %31.95%System Max Day 4,776
Max Day Allocation %68.05%Base Allocation %31.95%
Total Allocation %100.00%Max Day Allocation %68.05%
Total Allocation %100.00%
Base / Max Hour Allocations Check on Base / Max Hour Allocations
System Max Hour to Average Day Ratio 3.80 System Average Day 1,526
Base Allocation %26.32%System Max Hour 5,798
Max Hour Allocation %73.68%Base Allocation %26.32%
Total Allocation %100.00%Max Hour Allocation %73.68%
Total Allocation %100.00%
Base / Max Day / Max Hour Allocation Check on Base / Max Day / Max Hour Allocation
System Max Hour X System Max Day 11.89 System Average Day 1,526
Base Allocation %26.32%System Max Day Less Average Day 3,250
Max Day Allocation %56.05%System Max Hour Less Max Day 1,022
Max Hour Allocation %17.63%Base Allocation %26.32%
Total Allocation %100.00%Max Day Allocation %56.05%
Max Hour Allocation %17.63%
Total Allocation %100.00%
Prepared by RFC 3/31/2017
C-2
Stonegate Village Metropolitan District, CO
2016 Cost of Service and Tap Fee Model
Peaking Factor Summary
Peaking Factor Summary
Max Day Max Hour
Class 2013 2014 2015
3-year
Avg.Use This 2013 2014 2015
3-year
Avg.Use This
Residential 4.24 3.27 3.42 3.64 3.64 5.14 3.97 3.98 4.37 4.37
Multi-Family 3.01 2.77 2.38 2.72 2.72 3.66 3.36 2.89 3.30 3.30
Commercial 3.83 2.92 3.13 3.29 3.29 4.65 3.55 3.80 4.00 4.00
Irrigation 6.13 3.32 4.94 4.80 4.80 7.44 11.10 6.00 8.18 8.18
Prepared by RFC 3/31/2017
C-3