HomeMy WebLinkAboutRaftelis ProposalCity of Bozeman
Utility Rate Consulting and Financial Analysis
PROPOSAL / AUGUST 24, 2023
Table of
Contents
A) Letter of Transmittal ........................... 1
B) Project Description and Approach ... 3
C) Project Team ..................................... 17
D) Related Experience .......................... 20
E) Cost Proposal ................................... 25
F) Affirmation of Nondiscrimination ... 26
G) Firm Overview ................................... 27
H) Exceptions ........................................ 29
Appendix: Resumes .............................. 30
Photo on cover courtesy of Glora Cabada Leman (Flickr)
Diversity and inclusion
are an integral part of
Raftelis’ core values.
We are committed to doing our part to fight
prejudice, racism, and discrimination by
becoming more informed, disengaging with
business partners that do not share this
commitment, and encouraging our
employees to use their skills to work toward
a more just society that has no barriers to
opportunity.
Raftelis is registered
with the U.S. Securities
and 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
financial planning in compliance with the
applicable regulations of the SEC and the
MSRB.
RAFTELIS 1
383 N. Corona Street, Denver, CO 80218
www.raftelis.com
A) LETTER OF TRANSMITTAL
August 24, 2023
Mr. Mike Maas
City Clerk
City of Bozeman
121 North Rouse Avenue
Bozeman, MT 59715
Subject: Proposal for Utility Rate Consulting and Financial Analysis
Dear Members of the Review Committee:
A successful water, wastewater, and stormwater study could be the difference between a City’s reliable water future
and stressful financial decisions involving rates that impact your customers greatly down the line. We appreciate the
opportunity to be considered for this project as the City of Bozeman (City) navigates significant infrastructure
investment and your community’s demand for water, wastewater, and stormwater services, and all the situations in
between. We understand that rates are critical to ensuring the City can serve its community, even as climate
conditions deviate from the norm and populations increase substantially. We are prepared to work with you to
achieve the rate structures that best meet your needs today and will position you well for the years to come.
We’ve tailored our approach based on your identified needs and our experience assisting other communities like
yours. Like many utilities, the City is challenged to maintain infrastructure and navigate an uncertain future water
supply. These externalities will directly affect the utility’s financial health and put upward pressure on rates and
charges.
Raftelis is one of the most experienced financial consultants to utilities in the country, and with offices in Colorado,
we have expertise serving utilities across the Rocky Mountains, where our recommendations are readily adopted
and implemented. Our team has considerable experience in utility financial management, rate and fee studies, and
infrastructure funding.
We believe our team would provide significant value to the City of Bozeman for several reasons:
• Breadth of experience – We have conducted thousands of financial projects for more than 1,000 utilities
across the country, many similar to this study.
• Knowledge of Rocky Mountain utility systems – Our team has worked with many utilities in the Rocky
Mountain region and is knowledgeable of the challenges facing utilities in Montana, New Mexico,
Colorado, Wyoming, and Montana.
• Depth of resources – No firm that specializes in financial consulting for the water and wastewater industry
has the staff resources we have.
• Drive to succeed – Our project team will be focused on exceeding the City’s expectations.
RAFTELIS 2
383 N. Corona Street, Denver, CO 80218
www.raftelis.com
Melissa Elliott, APR, will serve as Project Director and be responsible for the project’s success to your satisfaction.
Melissa specializes in communicating rate change to customers. She is a past president of the American Water
Works Association, and the former public affairs director for Denver Water.
I will serve as the Project Manager, responsible for the project’s day-to-day operations and overseeing the technical
analysis needed for this study. I have over 20 years of national utility financial experience, including serving clients
in the Rocky Mountain region. I am also a co-instructor of AWWA’s Financial Management Cost of Service
seminar and lead the update to the AWWA Rates Manual of Practice – Principles of Rates, Fees, and Charges. I am proud
of the resources we can offer and ask for the opportunity to assist the City on this engagement. Thank you very
much for your consideration.
Should you have any questions, I can be reached at tcristiano@raftelis.com or 303-305-1138.
Sincerely,
Todd Cristiano
Senior Manager
RAFTELIS 3
B) PROJECT DESCRIPTION AND APPROACH
Project Description
The City has issued this RFP to secure a long-term consultant for five years. The core of this study is a
comprehensive rate study which includes the following for the water, wastewater, and stormwater utilities:
Financial plan: Development of a 20-year financial plan that will forecast the ability of rate revenues, other operating
income to meet annual revenue requirements, target reserves, debt service coverage and other financial metrics.
Cost-of-service analysis: The development of a cost-of-service analysis that proportionately allocates the cost to
provide service to each customer class based on their unique demand
parameters and customer characteristics.
Rate design: Development of rates under the existing and alternative
schedules, which meet the City’s rate structure pricing objectives. Sample
pricing objectives are shown in the figure to the right.
The City also requests other services as part of the 5-year contract,
specifically rate study analysis, advice on rate modeling and model
maintenance, additional financial plans, or other cost-of-service analyses
associated with the water, wastewater, and stormwater utilities. The scope
included in our proposal focuses on year 1. However, we understand that
these tasks or a combination of these tasks will be required in future years.
The City has also identified several focus areas to be examined and incorporated into the final results. These focus
areas are included in this scope of work and summarized in the listing below.
Customer Demand Analysis
• Evaluation of historical consumption patterns for existing customer classes on a customer-level basis
• Evaluation of specific groups of customers that may warrant a new classification
• Development of peaking factors for each customer class and adjusting those peaking factors based on
different demand scenarios
• Analysis of various demand scenarios over the study period based on different levels of conservation and
drought restrictions
• Evaluation of wastewater-contributed flows under various water demand scenarios
Financial
• Evaluation of fund reserve targets to ensure the level is sufficient to meet the City’s financial performance
metrics and align with industry best practices and AAA-rated utilities
• Funding of repair and replacement projects over the study period
• Optimize the balance of debt and cash financing of capital projects, which will minimize rate increases and
minimize financial risk to the utility
• Evaluation of different sources of debt financing
Cost of Service
• Identification of conservation costs and the appropriate cost recovery component
• Design of class cost of service, which is designed to ensure interclass equity
Pricing Objectives
• Revenue stability
• Wise use of water
• Essential water use pricing
• Demand management
• Ease of implementation
• Ease of administration
• Equity between classes
• Equity within a class
• Intergenerational equity
• Defensibility
• Revenue sufficiency
• Others as identified by the City
RAFTELIS 4
Rate Design
• Rate structure alternatives that meet the objectives of each utility
• Price elasticity analysis to examine the effects of reduced consumption because of price increases
• Evaluation of low-income rates and programs
Project Approach
RAFTELIS PROJECT BEST PRACTICES
We learn a lot working with our clients and what we have learned we incorporate into our project delivery. Raftelis
has developed project best practices to ensure we provide reliable, timely, and accurate results to our projects. Below
is some insight to our best practices.
Project Goals
Starting with the End in Mind:
Achieving project goals is a function of maintaining effective two-way communication paired with detailed project
management. Members of our proposed team are experts in both.
Starting at the project kickoff workshop, Raftelis will facilitate an in-depth discussion with participants to find
consensus on specific project goals. These goals will serve as our touchstones and guide our work through the
project. Codifying these goals up-front will help all parties work towards a common end, avoid gold plating or costly
scope creep (and accompanying change orders), and give City staff confidence that the work we are doing on your
behalf is a good use of finite resources.
Deep Bench:
Another area that sets Raftelis apart is the volume and depth of resources we can tap from across the country to step
up when additional horsepower is needed. We understand the criticality of maintaining the project schedule. Our
deep and talented bench of professionals in offices across the country are scalable; standing ready to jump in at any
point in the project to deliver quality products on time and within budget. Our clients appreciate this value add,
which helps to maintain schedules even when schedules change through no fault of the team.
Setting Foundation on Reliable Data:
One additional Raftelis differentiator relates to the City’s need for rate and fee structures that are fair, equitable, and
legally defensible. The best way to reach that result is to ensure up-front that the data provided – and on which the
entire study sits – is accurate and complete. Our Data Analytics Team is eager to take data from a variety of sources
and conduct a deep dive using tools to clean, scrub, organize, and analyze your key data. Their work ensures that
proper cross-references are completed, and that all numbers and assumptions are reasonable.
The time investment made in shaping the data pays off in two ways – it gives the team confidence in its accuracy
and reduces the time necessary later in the study by technical rates specialists. In summary, this approach saves
time, money, and delivers reliable data and insights on which the entire study can solidly be built.
RAFTELIS 5
Approach to Problem Solving
Few Things are New:
With literally hundreds of rate studies completed on behalf of clients across the country, we long ago stopped
encountering truly novel challenges or problems; those we encounter now tend to be the same as earlier challenges
we were able to overcome, or at the very least they rhyme.
In the rare circumstance where a new problem emerges, one strength Raftelis brings is our vast and deep bench of
experts in offices around the country. With a single email sent to our colleagues company-wide, we tap a vast
resource with hundreds of years of experience and identify potential innovative solutions or workarounds, often in
just minutes.
People Support what They Help Build:
“It was everyone’s idea.” Ideally, problem solving should tap the minds and experience of not just your consultants,
but built-in expertise within the City. Policies we help develop during this project are likely to have ripples through
the organization, so it is important that those who will be impacted by these policies be consulted. That consultation
– and inviting partners to contribute – gives a much greater chance for the final policies to be supported and
implemented effectively, with fewer pains than would have been experienced otherwise.
Approach in Developing Creative Solutions that Adhere to Public Policy, Regulatory
and/or Statutory Constraints
Our project manager has experience working in the public sector, and therefore understands the constraints you
must operate under. Pair that with the experience we bring having served many similar communities in Colorado,
and you can imagine we have a deep understanding of state-specific statutory requirements, nuances, and
constraints. Creative solutions will come from applying these experiences, and confidence will come from our
ability to share how solutions we propose helped nearby communities achieve similar policy objectives as those
being pursued in Bozeman.
PROJECT METHODOLOGY
We conducted a cursory review of data about your water and wastewater, utilities based on publicly available
information from your website. This is not a complete picture of the utilities’ current standing, but it provides
information to develop a tailored scope of work for this project.
Environmental
Like many cities in the Rocky Mountain region, the City is growing at approximately 2.2% annually. This growth
and increased tourism are straining the City’s water supplies. Through conservation and water portfolio
management, the City has been able to maximize the use of its supply. However, climate change will affect the
availability and quality of water in the future. Bozeman’s water supply is primarily served by Hyalite Creek,
Sourdough Creek, and Lyman Spring. These sources depend completely on snowpack. The City owns
approximately 5,400 acre-feet in the Hyalite Reservoir.
Financial
The City’s utilities are financially self-sufficient, with ample reserves to fund operations and capital improvement
projects. In addition, the water utility maintains a drought reserve to be available during drought to mitigate large
increases to maintain revenues. The water and wastewater utilities’ days cash-on-hand is strong. Days cash-on-hand is
the ratio of unrestricted and restricted cash divided by O&M expense, excluding depreciation, divided by 365. This
ratio is an indication of each utility’s ability to meet near-term obligations. The water utility’s FY22 days cash-on-
hand was estimated at more than 600 days. This far exceeds the 2022 medians published by Fitch Ratings. The
RAFTELIS 6
wastewater utility’s days cash-on-hand was lower at approximately 350. However, wastewater revenues tend not to
fluctuate at the same level as water revenues, so a higher value may not be necessary. Each utility’s debt to net
assets or leverage is low as well. This represents great financial flexibility in funding large future capital projects. By
strategically issuing debt, the utilities can minimize the risk of default and maintain lower, more consistent rate
increases.
The City’s water and wastewater capital improvement programs contain annual amounts for repair and replacement
(R&R). In fact, the annual repair and replacement capital spending exceeds each utility’s annual depreciation
expense (often used as a basic barometer for adequate capital R&R spending). However, both the water and
wastewater utilities have identified significant projects in FY27, including upgrades to the water treatment plant,
and construction of the Lyman Tanks and Transmission lines as part of the 5-year contract the use of the City’s
water supply and provide redundancy and resiliency to the water system. Similar to the water capital improvement
program, the wastewater CIP contains sufficient funding for annual R&R and includes several large projects
associated with the water reclamation facility and lift stations. The low debt profile for each utility provides for
flexibility in funding these large projects.
We have tailored our approach to focus on areas specific to the City’s future financial viability of its utilities. Our
approach for the water and wastewater utilities is summarized in the graphic below followed by a narrative on the
following pages describing our process.
Time (Timing of Tasks Overlap)
1-2 weeks 4-8 weeks 4-8 weeks 4-8 weeks Varies / TBD
Major Objectives Water and Wastewater Utilities
Validate the cursory
research we’ve
already conducted
and collect other
pertinent data.
Spend time listening
and understanding
your needs and
constraints.
Understand from a
staff perspective
“What defines a
successful
project?”
Hold a kick-off
meeting with City
staff to finalize
study, develop
Project Charter and
rate structure pricing
objectives
requirements.
Develop demand
forecast by class.
Calculate rate
revenues and other
operating and project
revenues over the
study period for each
utility.
Project O&M costs,
existing and proposed
debt, and grants.
Develop financial
planning models to
evaluate different
approaches to
funding the CIP
varying the level of
debt, cash, and
project timing.
Allocate costs from
the financial plan to
develop the equitable
distribution of costs
between classes.
Develop cost of
service and rate
design options based
on pricing objectives
identified in the kick-
off meeting.
Staff and Raftelis
consultations to
evaluate the analyses
and develop viable
options for further
consideration and
testing with
stakeholders.
Develop rates that
recover the cost of
service and meet
pricing objectives.
Create various bill
impacts to
demonstrate how
individual customers
will be affected.
Present options to
staff and/or
stakeholders to
gauge their
preferences and
feedback.
Finalize rate
structure
alternatives.
Prepare presentation
materials and
documentation
necessary for Board
consideration.
Make Council
presentations and
follow-up presentations
as needed to obtain
approval.
Prepare preliminary,
draft, and final reports.
Up to two meetings
with City Commission
or advisory groups.
Cost of
Service
Rate
Design
Approval
Process
Project Kick
Off/Data
Gathering
Development
Fee/Financial
Forecast
RAFTELIS 7
Project Management
This task provides a solid foundation for the project. During the kick-off meeting, all aspects of the project will be
discussed, including the primary objectives of the City, final deliverables, and ongoing project management. In
addition, Raftelis will lead a workshop on pricing objectives and rate setting to better understand what the City
would like to achieve through its rate structure. We will prepare separate financial forecasts, cost of service, and rate
design for each utility.
Financial Analysis, Cost of Service, and Rate Design
Customer Billing Data
We will analyze billing information to classify customers and project user demand and revenues over the planning
period. Using this historical data and growth projections from the master plan, we will forecast demands and
corresponding rate revenue for the study period. Raftelis will develop various scenarios, each varying the changes in
use per account and different growth projections, resulting in an optimistic, pessimistic, and most likely projection.
Raftelis will also examine the City’s current customer classifications and identify any changes that may be necessary
to make them more consistent with current industry practices and standards. We will then calculate the revenues
under current rates at projected consumption levels (optimistic, pessimistic, and most likely) to understand what
potential revenues are realizable. We will then compare these revenues to the revenue requirements forecast in the
financial plan to understand the magnitude of the potential shortfall under the current rates.
Financial Planning
A primary consideration in developing an “optimal” financial plan is minimizing annual revenue increases through
balancing the use of reserves, existing rate revenue, and state loans. This balance is subject to the constraints of
meeting the City’s target reserve policies and debt service coverage requirements on any proposed debt.
This approach is an iterative process. For example, issuing debt to fund a capital project may keep revenue increases
low; however, new debt payments may decrease coverage below the target level. As a result, a revenue increase may
be needed to meet to maintain compliance with the target. The revenue generated from the increase now may meet
debt service coverage and produce an ending balance more than the target reserve. This excess can be used to
partially fund the capital project, which, in turn, could reduce the proposed state loan amount.
Time (Timing of Tasks Overlap)
1-2 weeks 4-8 weeks 4-8 weeks 4-8 weeks Varies / TBD
Key Outcomes
Documented goals
and objectives for
the study, including
a listing of key
performance metrics
and a range of
acceptable results
for each.
Project meetings.
Baseline financial
planning model with
easily updated links
to cost-of-service and
rate design modules.
Interactive sessions
to evaluate financial
plan scenarios and
rate design
alternatives.
Cost-of-service
analysis, which
shows the cost to
provide service to
customer classes.
A documented
indication of
stakeholder
preferences.
Narrow the
alternatives to the
best two to three
based on feedback
received.
Commission meetings
presenting results.
Commission selection
of the preferred option
for implementation.
Final report
documenting all
findings and
recommendations.
Cost of
Service
Rate
Design
Approval
Process
Project Kick
Off/Data
Gathering
Development
Fee/Financial
Forecast
RAFTELIS 8
The financial planning task will include the development of forecasted revenues, O&M, debt service, and capital
expenditures, along with project bond or loan issues with any rate increases required to meet these requirements and
financial metrics through the study period. We will create separate financial plans for each utility. The graphic
below illustrates the requirements needed to build a sound financial plan.
Figure 1: Financial Planning Process
Cost of Service
Raftelis will start with industry-accepted cost-of-service principles and customize our analysis to account for the
specific requirements of this study. The cost-of-service analysis will provide the City with a defensible justification
explaining why the costs are assigned as they are. Raftelis needs this information to evaluate the level of the current
and proposed rates.
The cost-of-service analysis is a multi-step process. For water, it includes determining the revenue requirement,
assigning it to various facilities (functional areas), and further allocating those costs to system parameters based on
their design criteria or function in the system (e.g., water utility: average and peak demands, customers, and billing).
Those costs are then distributed to customer classes based on their water demands and accounts or equivalent
meters. Raftelis will use the cost allocation process based on the industry standard methodologies published in the
AWWA’s Manual M1, Principles of Water Rates, Fees, and Charges, and the Water Environment Federation’s Manual of
Practice M27, Financing and Charges for Wastewater Systems.
The figure on the following page illustrates the four primary steps we will use to complete the cost-of-service
analysis for the water utility. The wastewater utility will follow a similar approach. The stormwater utiliy will also
have a similar cost allocation approach.
RAFTELIS 9
Rate Design
As noted previously, developing rate structure alternatives will be based on pricing objectives identified by City staff.
A critical element of the rate design process is the analysis of customer bill impacts under each alternative rate
structure. We will calculate bill impacts across a range of customer demands (low, medium, and high) and the
average monthly change for each customer. This will ensure that City staff and the City Council are fully informed
regarding which customers will experience high bill impacts. The third figure below illustrates the rate design
process. Like the financial planning and cost-of-service process, the rate design process is iterative, and through the
iterations, rates are refined to best meet the City’s pricing objectives. The graphic below summarizes the rate
structure development process for water, wastewater, and stormwater.
Figure 3: Rate Design Process
Meetings and Presentations
On-Site Project Meetings
This study will require several touchpoints along the way, and the proposed on-site project meetings will be key to
ensuring successful and timely project delivery. We will prepare materials in advance of each meeting and, to the
extent possible, provide key information ahead of the meeting for staff to review. We will follow up with project
meeting notes and share them with staff ensuring we captured the salient points of the conversations.
Commission Meetings
We have included two Commission presentations in our scope of work. The first meeting is typically an
informational session about the rate study. The second meeting will be the presentation of preliminary results. These
presentations and presentations to other stakeholders are of critical importance to the study. A maligned
presentation could put the entire project in jeopardy. Our project manager has several years of experience presenting
complex material to Councils and Boards across the Rocky Mountain region. Our approach to presentations is to
Figure 2: Water Cost of Service Framework
RAFTELIS 10
develop a narrative that provides the Council with the key information needed to make an informed decision. Too
much information and detail and the messaging will get lost in translation; too little information and the Council
will lack context and the inability to make a sound decision.
Reports
Raftelis views the development of a detailed and fully transparent study report as a critical objective of the cost-of-
service study and rate design process. The study report serves as a “legacy” document that will serve as a reference
for guiding the utility’s future financial sufficiency.
We will memorialize the study's assumptions, calculations, findings, and conclusions into a draft rate report for the
City’s review and comment. We will incorporate feedback and changes into a final report for the City’s records.
Rate Model Development
At the heart of any successful cost-of-service and rate study is the computer model used to develop revenue
requirements; perform cost functionalization, classification, and allocation; and calculate rates. The model must be
sophisticated enough to perform the complex calculations involved in a comprehensive cost-of-service and rate
analysis and yet still be simple enough to allow for future updates by City staff.
The model will incorporate the rate structures and rate calculation methodologies that are identified during the kick-
off meeting. During the course of the project, City staff will be provided with working copies of rate model drafts in
Microsoft Excel so that they will be able to provide input into the development of the model. Once the project is
complete, the City will be provided with fully functioning copies of the model, and Raftelis personnel will train City
staff in its use.
Raftelis will develop a
customized financial model
that incorporates a
dashboard to allow you to
easily run scenarios and see
the impacts in real time.
Shown here is a sample
dashboard that we developed
for another project.
RAFTELIS 11
Scope of Work
We have developed the following scope of services based on our extensive experience in completing similar studies
in Rocky Mountain region. The scope has been tailored to address the specific objectives and concerns identified in
the RFP while maintaining those elements that we believe are essential for a successful project. Our scope considers
the clarifications stated in City’s Response to Questions dated August 24, 2023 as outlined below.
• The Q&A mentions the stormwater will not be included in the near-term cost of service analysis. We have
included stormwater tasks in this scope of work for reference and comparison.
• Task 6, Rate Model Development, will occur concurrently with the other tasks.
Task 1: Project Initiation and Project Management
Work Plan Activities
This task sets the stage for efficient and effective project execution through understanding the City’s perspective and
what they value in a successful project.
• Project Management
• Provide timely invoices, regular calls with the City’s project manager, and identify milestones and
deliverables.
• Project Initiation Meeting
• Provide data requests in advance of the project initiation meeting.
• Review prior City rate models before the meeting.
• Schedule conference call to review and clarify data request items.
• Discuss other policy objectives that may affect the study (e.g., reserve policies, debt coverage
requirements, etc.).
• Review rate model functional requirements with staff. The rate model will be developed over the
course of each task in this scope of work.
• Pricing Objectives Workshop (held during project initiation meeting)
• Conduct a pricing objectives workshop with City staff to better understand the objectives of current
rate structures and critical issues that should be considered in the development of alternative rate
designs.
• Establish criteria for each objective in which to measure the ability of each structure to meet the
objectives.
• Prepare rate structure alternatives that align with the selected objectives. Rate structure alternatives
will be evaluated in Task 4.
DELIVERABLES:
• On-site kick-off meeting with City Staff.
• Technical Memorandum summarizing results and action items from Kick-off meeting.
• Pricing objectives workshop.
• Technical memorandum summarizing results of pricing objectives workshop.
RAFTELIS 12
Task 2: Water, Wastewater, and Stormwater Customer Billing Data
Analysis
Work Plan Activities
This task is the basis for developing accurate revenue projections and cost allocation between the various customer
classes.
• Analyze historical billed water consumption by meter size and by customer class. Tally the number of
bills by customer class and calculate the average use per bill.
• Complete a water bill frequency for the residential class showing the percentage of bills and volume
included in each tier for the residential class from the past 3 years of billing data. This will be used in the
revenue projections developed in Task 3.
• Complete a wastewater bill frequency for the commercial class showing the percentage of bills and
volume included in the minimum charge and in excess of the minimum charge. This will be used in the
revenue projections developed in Task 3.
• Conduct water and volume sensitivity analysis to develop optimum sales projections scenarios.
• Calculate the water demand factors using the most recent three years’ worth of billing data. Identify any
anomalies and normalize for test year cost of service.
• Identify the largest users on the system and calculate their demand factors for inclusion in the cost of
service analysis.
• Analyze the City’s impervious area data for residential and commercial customers for the purpose of
projecting stormwater revenues and evaluating storm drainage rate structure alternatives. The level of
effort assumes that all GIS data will include the necessary layers that identify and link parcel type, size,
and impervious area together.
DELIVERABLES:
• Customer water class demand characteristics and wastewater flow characteristics used to develop
revenue projections and rate design alternatives.
• Technical memorandum summarizing results the billing data analysis.
Task 3: Water, Wastewater, and Stormwater 20-Year Financial Plan
Work Plan Activities
This task lays the groundwork for creating a long-term financial roadmap to meet financial goals. This will assist the
City with proactive planning of large capital projects, evaluating various funding options, and balancing those to
minimize future revenue adjustments.
• Create separate water and wastewater financial plans for the 20-year study period from FY24 to FY43.
Operating Fund
• Forecast revenue under existing (FY24) rates using the demands projections developed in Task 2, the
plant investment fees, and other miscellaneous revenues.
• Forecast operations and maintenance (O&M), repair and replacement (R&R) capital, and existing and
proposed debt service, and projected cost changes in operations.
• Identify the projects eligible for bond or state loans based on timing, duration, and the project amount.
Raftelis can present financial plan alternatives considering specific projects financed through state loans
or grants the City has secured.
• Forecast existing and proposed debt service based on identified capital projects available for bond
funding.
• It is assumed the impact fee fund is self-supporting however, the cash flow will allow for transfers to the
impact fee fund should fees be insufficient to meet annual expenditures in a given year.
RAFTELIS 13
Financial Plan Optimization
• Evaluate conservation and supply expansion funding costs for the study period and examine various
sources of funding for these initiatives.
• Develop an “optimal” revenue requirement financial plan balancing a mix of cash funding and debt
financing capital projects (if applicable) while meeting reserve targets and debt service coverage
requirements while maintaining conservative debt capacity levels and minimizing revenue increases.
Calculate annual rate revenue adjustments needed through the study period.
• Review existing reserve and debt capacity levels and recommend changes based on specific financial
risks or upcoming large capital expenditures.
• Conduct an on-site meeting to review preliminary results with City staff.
• Update financial plan scenarios based on feedback from City staff.
DELIVERABLES:
• Financial plan alternative cash flows.
• On-site meeting with Staff to review and finalize cash flows for use in the cost of service and rate design
analysis.
• Technical memorandum summarizing results of financial plan analysis.
Task 4: Water, Wastewater, Stormwater Cost of Service
Work Plan Activities
The cost-of-service analysis will determine each customer class’s fair share of cost to provide service. We will use
industry standard methodologies and our expertise to develop an equitable distribution of costs.
Water Utility
• Determine the test year revenue requirement.
• Assign the net book value or replacement cost of existing utility infrastructure to the correct functional
categories for the allocation of annual capital costs. Functional categories include: treatment,
transmission and distribution, pumping, storage, and fire protection.
• Assign test-year capital costs (PAYGO financing and projected debt service), O&M expenses, and non-
rate revenue offsets to the correct functional categories.
• Allocate test-year capital cost, O&M expenses, and non-rate revenue offsets to the correct demand
parameters. Demand parameters include average day demands, peak demands, and customer-related
activities such as billing, meters and services, and customer field services.
• Determine customer class units of service. Units of service include class average day demands, peak
demands, number of bills, and number of ¾” meter equivalents.
• Distribute the allocated test-year capital costs, O&M expenses and non-rate revenue offsets to customer
classes based on each of their proportionate share of demands, bills and equivalent meters.
• Compare the class cost of service to the revenue projected under existing rates for the test-year. This
comparison will show the percentage change in the classes based on the cost of service process.
Wastewater Utility
• Determine the test-year revenue requirement.
RAFTELIS 14
• Assign the net book value or replacement cost of existing utility infrastructure to the correct functional
categories for the allocation of annual capital costs. Functional categories may include: primary
treatment, secondary treatment, UV disinfection, headworks, collection system lift stations, etc.
• Assign test-year capital costs (PAYGO financing and projected debt service), O&M expenses, and non-
rate revenue offsets to the correct functional categories.
• Allocate test-year capital cost, O&M expenses, and non-rate revenue offsets to the correct demand
parameters. Demand parameters include contributed flow, infiltration and inflow, strength, and
customer-related activities such as billing, meters and services, and customer field services.
• Determine customer class units of service. Units of service include class billable flows, infiltration and
inflow contributions, strength, and customer.
• Distribute the allocated test-year capital costs, O&M expenses and non-rate revenue offsets to customer
classes based on each of their proportionate share of demands, bills and equivalent meters.
• Compare the class cost of service to the revenue projected under existing rates for the test-year. This
comparison will show the percentage change in the classes based on the cost of service process.
Stormwater Utility
• Determine the test year revenue requirement.
• Assign the net book value or replacement cost of existing utility infrastructure to the correct functional
categories for the allocation of annual capital costs.
• Assign test-year capital costs (PAYGO financing and projected debt service), O&M expenses, and non-
rate revenue offsets to the correct functional categories.
• Allocate test-year capital cost, O&M expenses, and non-rate revenue offsets to the correct demand
parameters. Demand parameters may include number of accounts, parcel size, equivalent units or
impervious area.
DELIVERABLES:
• Draft technical memorandum summarizing assumptions, data sources, and preliminary results of the
water and wastewater cost of service analysis.
• Conference call with Staff to review water, wastewater, and stormwater cost of service results.
• Technical memorandum summarizing the finalized cost of service results based on feedback from Staff.
These results will be used in the rate design analysis.
Task 5: Water, Wastewater, and Stormwater Rate Design
Work Plan Activities
This task develops the rate structure and rates required to meet the pricing objectives of the utility and generate
sufficient revenue recovery from each customer class.
• Using the selected pricing objectives and evaluation metric identified in Task 1, determine the alignment
the existing rate structure has with the objectives. Assess the ability of proposed rate structures to align
with the evaluation metrics for each utility. Rank the existing structure against the alternatives and
select two or three structures to determine test year rates.
• Update the current water, wastewater, and stormwater rates with the test-year revenue requirement
increase. This serves as the baseline for comparison against other rate structures.
• Based on the rate structure ranking results, develop test-year rates for each alternative. Compare results
from proposed rates under each structure against the ability to meet ranked pricing objectives.
• Incorporate price elasticity into the design of rate alternatives and compare the change in revenues from
financial plan. Adjust rate increases as necessary
RAFTELIS 15
Task 5: Water, Wastewater, and Stormwater Rate Design
Work Plan Activities
• Develop a bill impact table for each customer class which compares typical monthly bills under existing
and proposed rate structures, annual bills for typical customers, and an annual bill comparison under
the rate alternative and existing rates for each customer in a class summarized to show the number of
customers that will annual bill increase or decrease.
• Develop a water, wastewater, stormwater utility bill comparison under the City’s existing and proposed
rate alternatives compared against up to eight peer utilities.
DELIVERABLES:
• Technical memorandum summarizing results of rate design analysis of the existing and proposed rate
structure alternatives.
• On-site meeting with City staff and other stakeholders to review rate design alternatives, update based
on discussions with Staff and finalize the preferred rate alternative.
Task 6: Rate Model Development
Work Plan Activities
This task develops the rate model which will be used for the financial plan, cost of service, and rate design analysis.
Raftelis does not use “one-size-fits-all” financial models. Our rate models will be tailored to the needs and
requirements of the City. City staff will see the model and approve of the model layout and functionality through the
Study.
• Develop outline of model function requirements. Functional requirements include determining:
o Who are the users, number of users
o Desired outputs and format of outputs
o List of assumptions (ie: inflation factors, growth factors, conservation reduction, price elasticity,
etc.)
o Data sourcing: manual inputs vs. links to existing databases (e.g. budget systems)
o The content and layout of each worksheet. For example, separate worksheets for operation and
maintenance expenses, capital improvement program, water sales revenue projections, etc.
o Level of detail of inputs
o Data visualization requirements (i.e. dashboard components and functionality associated with
developing multiple scenarios of financial plans and rate designs)
• Provide regular updates of the model development during the course of the study.
• Provide draft versions of the model to staff at key milestones (i.e. during the draft-final versions of the
financial plan, cost of service, and rate design).
• Provide half-day training on model functionality.
DELIVERABLES:
• Functional water and wastewater models.
• Half-day training session with Staff.
RAFTELIS 16
Task 7: Study Reports and Council Presentations
Work Plan Activities
• Attend two meetings to present findings to the City Council.
• Prepare a draft summary report of findings and conclusions of the study for staff to review and
comment. Incorporate comments from the draft report into a final report.
Summary of Deliverables
• Project kick off on-site meeting
• Project kick-off technical memorandum
• Customer billing data technical memorandum
• Financial plan technical memorandum
• Financial plan: on-site meeting
• Cost of service technical memorandum
• Rate design technical memorandum
• Rate design: on-site meeting
• Peer utility survey
• Two Council meetings
• Draft report
• Final report
• Excel-based rate models for water and wastewater
• Half-day model training
RAFTELIS 17
C) PROJECT TEAM
Project Team
OUR TEAM OF CONSULTANTS SPECIALIZES IN THE SPECIFIC ELEMENTS THAT ARE CRITICAL TO THE SUCCESS OF THE CITY’S
PROJECT.
Our team includes senior-level professionals to provide experienced project leadership with support from talented
consultant staff. This close-knit group has frequently collaborated on similar successful projects, providing the City
with confidence in our capabilities.
Here, we have included an organizational chart showing the structure of our project team. On the following pages,
we have included resumes for each of our team members as well as a description of their role on the project.
Although stormwater is not part of the initial cost of service analysis, we have identified a lead consultant for those
tasks with future analysis.
City of Bozeman
PROJECT DIRECTOR
Melissa Elliott, APR
Availability: 25%
TECHNICAL ADVISOR
Andrew Rheem
Availability: 60%
ASSISTANT PROJECT MANAGER
Justin Rasor
Availability: 75%
PROJECT MANAGER
Todd Cristiano
Availability: 65%
LEAD ANALYSTS
Lundyn Harrelson
(Water/Wastewater)
Hannah Palmer Dwore
(Wastewater/Stormwater)
Availability: 80%
RAFTELIS 18
TEAM QUALIFICATIONS & EXPERIENCE
Melissa Elliott, APR
Project Director | Raftelis Title: Executive Vice President
Melissa’s 25+ year career is focused on helping utilities and municipalities tell their stories. As an
executive and leader for Raftelis’ western offices, she has responsibility for service delivery to clients across the
Western US.
Role: Melissa will be responsible for overall project accountability and will be available to provide quality assurance
and control, industry perspective, and insights into the project.
Key Projects: Santa Cruz, CA; Boulder, CO; Craig, CO; Golden, CO; Denver Water, CO; Aurora Water, CO;
Golden, CO; Charlotte Water, NC; American Water Works Association, CO
Todd Cristiano
Project Manager | Raftelis Title: Senior Manager
Todd has more than 20 years of utility finance experience—14 years as a consultant to utilities and 6
years as the Manager of Rates at Denver Water. He has managed several studies across the U.S. for water,
wastewater, stormwater, and electric utilities. In particular, as the Past Chair and current member 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. Todd is also a co-instructor for the AWWA’s biennial Financial Management: Cost-of-
Service Rate-Making Seminar.
Role: Todd will manage the day-to-day aspects of the project ensuring it is within budget, on schedule, and
effectively meets the City’s objectives. He will also lead the consulting staff in conducting analyses and preparing
deliverables for the project. Todd will serve as the City’s main point of contact for the project.
Key Projects: Aspen, OK; Durango, CO; Breckenridge, CO; Denver Water, CO; Oklahoma City, OK; Scottsdale,
AZ, Salt Lake City, UT; City of Laramie, WY; City of Sheridan, WY
Justin Rasor
Assistant Project Manager | Raftelis Title: Manager
Justin has assisted in conducting a variety of engagements for water, wastewater, and electric utilities.
He oversees the technical aspects of the study and the work cost-of-service and rate design studies, financial
planning, financial valuations and analyses, feasibility studies, and depreciation analyses for public and private
sector utility clients.
Role: Justin will assist the Project Manager with managing the day-to-day aspects of the project and leading the
consulting staff in conducting analyses and preparing deliverables for the project.
Key Projects: Oklahoma City, OK; Round Rock, TX; Corinth, TX; Robinson, TX; City of Arlington, TX, Manor,
TX.
RAFTELIS 19
Andrew Rheem
Technical Advisor | Senior Manager
Andrew has been providing financial planning, impact fee and rate consulting services to water,
wastewater, reclaimed water, and stormwater utilities and local government for nearly 20 years, including studies
for numerous Colorado, Arizona, Montana, Utah, New Mexico, California, and Texas local governments.
Role: Andrew will serve as a technical resource for cost of service and rate design analysis including conservation-
based rate structures. He will also provide a quality review of work products throughout the study.
Key Projects: Prescott, AZ; Jackson, WY; Lockwood Water, MT; County Water District of Billing Heights, MT;
Steamboat Springs, CO; Mt. Crested Butte Water & Sanitation District, CO; El Paso Water, TX; Salt Lake City,
UT; City and County of Denver, CO; City of Boulder, CO
Lundyn Harrelson
Water and Wastewater Lead Analyst | Raftelis Title: Consultant
Lundyn has assisted in conducting a variety of engagements for water, wastewater, and electric
utilities. She supports cost-of-service and rate design studies, financial planning, financial valuations and analyses,
feasibility studies, and billing data statistical analysis.
Role: Lundyn will work at the direction of Justin and Todd in conducting analyses and preparing deliverables for
the water portions of the project.
Key Projects: Oklahoma City, OK; Aspen, CO; Scottsdale, AZ; Seattle, WA; Robinson, TX; New Orleans, LA;
Fraser, CO; Pueblo, CO; Addison, TX; Huntsville, TX, Manor, TX
Hannah Palmer-Dwore
Lead Stormwater Analyst and Assistant Wastewater Analyst | Raftelis Title: Senior
Consultant
Hannah has a diverse background including natural science, natural resource management, and quantitative
analysis. Her expertise includes geospatial analysis and modeling, technical report writing, and data management.
She has gained a breadth of experience with a variety of water, wastewater, and stormwater projects.
Role: Hannah will work at the direction of Justin and Todd in conducting analyses and preparing deliverables for
the wastewater and stormwater portions of the project.
Key Projects: Boulder County, CO; Eagle, CO; Reno, NV; Jackson, WY; Golden, CO
RAFTELIS 20
D) RELATED EXPERIENCE
Experience
RAFTELIS HAS THE MOST EXPERIENCED UTILITY FINANCIAL AND MANAGEMENT CONSULTING PRACTICE IN THE NATION.
Our staff has assisted more than 1,500 local government agencies and utilities across the U.S., including some of the
largest and most complex agencies in the nation. In the past year alone, Raftelis worked on more than 1,200
financial, organizational, and/or technology consulting projects for more than 600 agencies in 46 states, the District
of Columbia, and Canada. Below, we have provided descriptions of projects that we have worked on that are
similar in scope to the City’s project. We have included references for each of these clients and urge you to contact
them to better understand our capabilities and the quality of service that we provide.
Town of Jackson WY
Reference: Johnny Ziem, Wastewater Manager/Assistant Public Works Director
150 E Pearl Avenue, Jackson, WY 83001 / P: 307.733.4203 / E: jziem@jacksonwy.gov
Key Staff: Andrew Rheem (Project Manager)
“Overall, I thought the process was professionally handled, well thought out, and came to a conclusion that helped
our community achieve their goal of re-evaluating water rates. I enjoyed the process from many aspects, but
primarily from the learning angle. The detail and volume of information seems to be overwhelming, however TOJ
staff and Raftelis handled it well. Also, the meeting agendas were well thought out and the meetings were facilitated
professionally, and the data was presented in a thoughtful manner for the committee members to digest.” –Bill
Wotkyns, Citizen Review Committee Member, Town of Jackson, WY
In 2020, Raftelis presented study findings and recommendations to the Town of Jackson (Town) Council regarding
a comprehensive rate and plant investment fee study. The Town also completed an update of the utility facility plan
RAFTELIS HAS PROVIDED FINANCIAL/
ORGANIZATIONAL/TECHNOLOGY ASSISTANCE
TO UTILITIES SERVING MORE THAN
25% OF THE U.S. POPULATION.
RAFTELIS 21
identifying expansionary, rehabilitation, and replacement improvements for the water and wastewater utility.
Raftelis financial and communication staff facilitated seven meetings with a Citizen Rate Committee (CRC)
composed of a diverse group of citizens and business leaders assisting Raftelis and Town staff to assess the
compatibility of rate and fee recovery strategies. Raftelis recommended equitable adjustments to the Town’s plant
investment fees aligned with community goals and objectives. Water rate recommendations included tiered water
rates to communicate conservation pricing signals, increasing the amount of revenue through the fixed charges, and
sustaining affordable access to essential utility services while increasing overall revenue recovery.
Raftelis assisted the Town in addressing the cost of providing wastewater services to the original Town as well as
residents within Teton County. Raftelis facilitated meetings with representatives of 3 Creek Ranch following the
cost-of-service study to review recommended rates and fees modifying the rate structure. As part of this study,
Raftelis assisted in the development of a long-range financial plan completing multiple capital funding scenarios in
support of anticipated debt issuances to fund capital expansions and improvements.
Following the adoption of recommended rates and fees, Raftelis provided additional assistance to the Town in
support of effectively communicating the necessity of increased revenues supporting the economic and
environmental vitality of the region. The Town retained Raftelis in 2022 and 2023 to update the financial plans and
provide annual rate and plant investment fee recommendations.
Town of Breckenridge CO
Reference: Kristin Brownson, Assistant Public Works Director
1095 Airport Road, Breckenridge, CO 80424 / P: 970.547.3179 / E: kristinb@townofbreckenridge.com
Key Staff: Todd Cristiano (Project Manager)
Todd served as the project manager on this engagement. The Town of Breckenridge had not completed a
comprehensive rate study in recent years. The Town retained Raftelis to develop a 10-year financial plan, cost of
service, plant investment fees and rate design alternatives. The Town had just completed the construction of a new
water treatment facility as well as repairs to the Tarn Dam. The Tarn Dam repairs were unexpected and required
the issuance of state loans. The Town also used state loans to fund a portion of the new WTP. These loans and
additional O&M expense from the new WTP caused coverage to fall below the SRF targets of 1.1x debt service.
Raftelis developed a 10-year financial plan using uniform annual revenue adjustments to avoid rate shock. Raftelis
also completed a comprehensive cost of service analysis. The analysis showed nominal changes in each class’s
responsibility. During this process, the project team met regularly with the Rate Advisory Committee to discuss rate
design alternatives to address the objectives set forth by the committee – conservation, affordability, and equity.
Raftelis presented more than 20 rate structure alternatives. The Town’s existing rate structure is a base fee based on
the number SFEs, includes a 10,000 gallons volume allowance and a volumetric rate for usage above the 10,000
gallons. The 10,000-gallon minimum scales with the number of SFEs for each customer. The existing commercial
rate structure includes a base fee that varies by meter size, includes a minimum that varies by meter size, and a
volumetric rate for usage over the minimum. The selected residential rate structure retained the existing components
but reduced the minimum threshold to 6,000 gallons and added a second tier for the usage over the minimum The
selected commercial rate structure eliminated the base fee and assessed a volumetric rate for all usage. The new rate
structures were adopted to be implemented in June 2023 and the rate adjustment was adopted for January 2024.
RAFTELIS 22
City of Aspen CO
Reference: Cole Langford, Business Services Manager
130 South Galena Street, Aspen, CO 81611 / P: 970.920.5002 / E: cole.langford@cityofaspen.com
Key Staff: Todd Cristiano (Project Manager)
Raftelis has provided financial consulting services to the City of Aspen since 2010. The City completes
comprehensive water and electric cost of service and rate studies approximately every five years. Financial planning
reviews and true-ups are completed annually. The cost of service studies include developing a long-range financial
plan, cost of service analysis, and rate design for each utility. Both utilities' cost of service analysis follows generally
accepted industry rate-setting standards. Rates are designed based on the cost of service results. When there are
significant changes to a class’s cost of service or the fixed or variable component of the rate, the City will transition
that change over a five-year period. The City’s water rate structure is based on Equivalent Capacity Units (ECUs).
The fixed charge scales based on each customer’s number of ECUs and the tiered rate structure also scales with the
number of ECUs. The electric rate structure follows the traditional residential small and large commercial customer
classes. The residential customer class is a four-tiered increasing block structure.
City of Prescott AZ
Reference: Mark Woodfill, Finance Manager
201 S. Cortez Street, Prescott, AZ 86303 / P: 928.777.1408 ext. 4900 / E: mark.woodfill@prescott-az.gov
Key Staff: Andrew Rheem (Project Manager)
The City retained Raftelis for a separate water and wastewater rate study and solid waste rate studies completed in
2019 updating a similar water and wastewater rate study completed in 2014. Rate study recommendations were
adopted with multi-year rate adjustments in place starting April 1, 2019 and subsequent annual adjustments in place
January of each year through 2023. Raftelis also completed separate utility development impact fee and non-utility
impact fee studies in 2019 with proposed impact fees implemented effective August 1, 2019 also updating similar
studies completed in 2014. As part of the 2019 studies, Raftelis presented at multiple City Council meetings and
public hearings and helped to facilitate four meetings with a developer stakeholder group assembled to provide
advice to City Council regarding the impact fee analyses.
Lockwood Water and Sewer District MT
Reference: Mike Ariztia, District Manager
1644 Old Hardin Road, Billings, MT 59101 / P: 406.259.4120 / E: mikea@lockwoodwater.com
Key Staff: Andrew Rheem (Project Manager)
The District retained Raftelis for a comprehensive water and wastewater financial plan, plant investment fee, cost of
service, rate study in 2020 updating a similar study completed in 2017. The District is installing a sewer collection
system over multiple phases and Raftelis worked with the District to develop and implement rates and separate
plant investment fees for sewer customers within and outside of assessment areas and as part of different phases.
Sewer rates and plant investment fees for a large contract industrial customer were also developed as part of the
initial study. Water rates and plant investment fees were reviewed and modified in both studies. Study
recommendations were adopted with multi-year rate and plant investment fee adjustments in place starting July 1,
2021 and subsequent annual adjustments through 2025. As part of both studies, Raftelis presented at multiple
District Board meetings and public hearings and helped to facilitate meetings with a plant investment fee
stakeholder group assembled to provide advice to the District Board regarding the plant investment fee analyses.
RAFTELIS 23
State Client Connection Charges Benchmarking Cost of Service Analysis Debt Issuance Support Financial & Capital Improvements Planning Public Education & Outreach Rate Case Support Rate Structure Development Rate Study Stakeholder Process Development & Facilitation AZ Prescott, City of
MT Jackson, Town of
CO Arapahoe County Water and Wastewater Authority
CO Aspen, City of
CO Aurora, City of
CO Berthoud, Town of
CO Boxelder Sanitation District
CO Boulder, City of
CO Brighton, City of
CO Broomfield, City & County of
CO Buena Vista, Town of
CO Castle Rock, Town of
CO Crestview Water & Sanitation District
CO Denver, City And County of
CO Denver Water
CO Dillon, Town of
CO Eagle River Water & Sanitation District
CO East Cherry Creek Valley Water & Sanitation District
CO East Larimer County Water District
CO Eaton, Town of
CO Englewood, City of
CO Fairplay Sanitation District
CO Fort Collins, City of
CO Fort Collins - Loveland Water District
CO Fruita, City of
CO Grand Junction, City of
CO Greeley, City of
CO Gunnison, Town of
CO Idaho Springs, City of
CO Lakewood, City of
CO Left Hand Water District
CO Littleton, City of
CO Lochbuie, Town of
CO Longmont, City of
CO Louisville, City of
CO Morrison Creek Metropolitan Water & Sanitation District
CO Mount Werner Water & Sanitation District
CO Nederland, Town of
CO Northern Colorado Water Conservancy District
ROCKY MOUNTAIN AND WESTERN
UNITED STATES EXPERIENCE
This matrix shows a sample of some of the
utilities that Raftelis staff have assisted and
the services performed for these utilities.
ROCKY MOUNTAIN AND WESTERN
UNITED STATES EXPERIENCE
This matrix shows a sample of some of the
utilities that Raftelis staff have assisted and
the services performed for these utilities.
RAFTELIS 24
State Client Connection Charges Benchmarking Cost of Service Analysis Debt Issuance Support Financial & Capital Improvements Planning Public Education & Outreach Rate Case Support Rate Structure Development Rate Study Stakeholder Process Development & Facilitation CO Northglenn, City of
CO Parker Water & Sanitation District
CO Pueblo, City of
CO Pueblo West Metropolitan District
CO Rifle, City of
CO Salida, City of
CO Security Water & Sanitation District
CO Snowmass Water & Sanitation District
CO South Adams County Water & Sanitation District
CO South Metro Water Supply Authority
CO Steamboat Springs, City of
CO Superior, Town of
CO Thornton, City of
CO Upper Thompson Sanitation District
CO Widefield Water & Sanitation District
CO Willows Water District
MT County Water District of Billing Heights
MT Lockwood Water & Sewer District
CO Woodmoor Water & Sanitation District No. 1
UT Cedar City, City of
UT Granger Hunter Improvement District
UT Salt Lake City
UT West Jordan, City of
WY Casper, City of
WY Laramie, City of
WY Pinedale, City of
WY Sheridan, City of
RAFTELIS 25
E) COST PROPOSAL
Cost Proposal
The following table provides a breakdown of our proposed fee for this project. This table includes the estimated
level of effort required to complete each task and the hourly billing rates for our project team members. Expenses
include costs associated with travel and a $10 per hour technology charge covering computers, networks,
telephones, postage, etc.
We have priced this study including and excluding the level of effort for the stormwater utility rate study (See Lines 13
and 15). In addition, the fees shown below is for completion of the initial near-term financial plan, cost of service,
and rate design study. Fees for subsequent study will be priced based on tasks required and the anticipated level of
effort. We anticipate lower fees in future years for a similar scope of work due to efficiencies from our familiarity
with the City.
Line
No ME TC AR JR LH HP Admin Total
1 1. Project Orientation/Project
Management 1 2 12 8 6 6 2 36 $1,960 $8,910 $10,870
2
2. Water, Wastewater, and
Stormwater Customer Billing
Data Analysis
2 10 20 30 0 62 $0 $13,190 $13,190
3
3. Water, Wastewater, and
Stormwater 20-Year Financial
Plan
1 8 2 12 24 32 0 78 $1,960 $17,270 $19,230
4 4. Water, Wastewater, and
Stormwater Cost of Service 8 2 12 24 32 0 78 $0 $17,270 $17,270
5 5. Water, Wastewater, and
Stormwater Rate Design 16 2 12 16 24 0 70 $0 $16,430 $16,430
6 6.Rate Model Development 2 6 12 24 44 $0 $9,350 $9,350
7 7.Study Reports and Council
Presentations 2 28 2 8 10 16 64 $2,220 $16,130 $18,350
8 4 2 76 8 68 112 164 2 432
9 $350 $295 $295 $260 $200 $200 $95
10 $700 $22,420 $2,360 $17,680 $22,400 $32,800 $190 $98,550
11 Total Fees $98,550
12 Total Expenses $6,140
13 Total Fees & Expenses Including Stormwater $104,690
14 12 0 8 0 50 0 70 $0 $15,620 $15,620
15 Total Fees & Expenses Excluding Stormwater $89,070
Excluding Stormwater Level of Effort
Tasks
In-person
Meetings
Hours
Total
Expenses
Total
Labor
Total
Labor &
Expenses
Total Meetings / Hours
Hourly Billing Rate
Total Professional Fees
ME - Melissa Elliott
TC - Todd Cristiano
AR - Andrew Rheem
JR - Justin Rasor
LH - Lundyn Harrelson
HP - Hannah Palmer-Dwore
Admin - Administration
Fees include regular project conference calls and web meetings.
RAFTELIS 26
F) AFFIRMATION OF NONDISCRIMINATION
RAFTELIS 27
G) FIRM OVERVIEW
Who is Raftelis
HELPING LOCAL GOVERNMENTS AND UTILITIES THRIVE
Local government and utility leaders partner with Raftelis to transform their organizations by enhancing performance,
planning for the future, identifying top talent, improving their financial condition, and telling their story. We’ve helped
more than 600 organizations in the last year alone.
We believe that Raftelis is the right fit for this project. We provide several key factors
that will benefit the City and help to make this project a success.
RESOURCES & EXPERTISE: This project will require the resources necessary to effectively staff the project
and the skillsets to complete all of the required components. With more than 160 consultants, Raftelis has the
largest water-industry financial and management consulting practice in the nation, including many of the industry’s
leading rate consultants and experts in key related areas, like stakeholder engagement and data analytics. Our depth
of resources will allow us to provide the City with the technical expertise necessary to meet your objectives.
DEFENSIBLE RECOMMENDATIONS: When your elected officials and customers are considering the validity
of recommended changes, they want to be confident that they were developed by experts using the latest
industry standard methodology. Our staff are shaping industry standards by chairing committees within the
American Water Works Association (AWWA) and the Water Environment Federation (WEF) and co-authoring
many industry-standard books regarding utility finance and rate setting. 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. In addition, with Raftelis’ registration as a Municipal
Advisor, you can be confident that we are fully qualified and capable of providing financial advice related to all
aspects of utility financial planning in compliance with federal regulations.
HISTORY OF SIMILAR SUCCESSES: An extensive track record of past similar work will help to avoid
potential pitfalls on this project and provide the know-how to bring it across the finish line. Raftelis staff has
assisted 1,300+ utilities throughout the U.S. with financial and rate consulting services with wide-ranging needs and
objectives. 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.
USER-FRIENDLY MODELING: A modeling tool that your staff can use for scenario analysis and financial
planning now and into the future will be key for the City going forward. Raftelis has developed some of the most
sophisticated yet user-friendly financial/rate models available in the industry. Our models are tools that allow us to
examine different policy options and cost allocations and their financial/customer impacts in real time. We offer
model options including Microsoft Excel-based and web-based tools that are developed with the expectation that
they will be used by the client as a financial planning tool long after the project is complete.
RATES THAT ARE ADOPTED: For the study to succeed, rates must be approved and implemented. Even the
most comprehensive rate study is of little use if the recommendations are not approved and implemented.
Raftelis has assisted numerous agencies with getting proposed rates successfully adopted. We focus on effectively
communicating with elected officials about the financial consequences and rationale behind recommendations to
ensure stakeholder buy-in and successful rate adoption.
RAFTELIS 28
OUR TEAM INCLUDES 160+ consultants focused on
finance/management/communication/
technology for the public sector
2 members of
AWWA and WEF utility finance and management committees and subcommittees
chairs & 16
& a Past President of AWWA
RAFTELIS HAS PROVIDED ASSISTANCE FOR 1,500+ public agencies
and utilities
25% of the U.S. population
that serve more than 38 of the nation’s 50 largest cities
including the agencies serving
1,000+ projects
for
in the past year alone, we worked on 600+ agencies
in 46 states
How we stack up
RAFTELIS 29
H) EXCEPTIONS
Exceptions
We request that the City consider making the following modifications, shown in red below, to the Professional
Services Agreement. Please contact us if you have any questions or concerns about these modifications.
7. Indemnity/Waiver of Claims/Insurance: For other than professional services rendered, to the
fullest extent permitted by law, Contractor agrees to release, defend, indemnify, and hold harmless the City, its
agents, representatives, employees, and officers (collectively referred to for purposes of this Section as the City) from
and against any and all claims, demands, actions, fees and costs (including attorney’s fees and the costs and fees of
expert witness and consultants),, losses, expenses, liabilities (including liability where activity is inherently or
intrinsically dangerous) or damages of whatever kind or nature connected therewith and without limit and without
regard to the cause or causes thereof or the negligence of any party or parties that may be asserted against, recovered
from or suffered extent caused by the City occasioned by, growing or arising out of or resulting from or in any way
related to: (i) the negligent, reckless, or intentional misconduct of the Contractor; or (ii) any negligent, reckless, or
intentional misconduct of any of the Contractor’s agents.
For the professional services rendered, to the fullest extent permitted by law, Contractor agrees to
indemnify and hold the City harmless against claims, demands, suits, damages, losses, and expenses, including
reasonable defense attorney fees, to the extent caused by the negligence or intentional misconduct of the Contractor
or Contractor’s agents or employees.
Such obligations shall not be construed to negate, abridge, or reduce other rights or obligations of
indemnity that would otherwise exist. The indemnification obligations of this Section must not be construed to
negate, abridge, or reduce any common-law or statutory rights of the City as indemnitee(s) which would otherwise
exist as to such indemnitee(s).
Should the City be required to bring an action against the Contractor to assert its right to defense or
indemnification under this Agreement or under the Contractor’s applicable insurance policies required below, the
City shall be entitled to recover reasonable costs and attorney fees incurred in asserting its right to indemnification
or defense but only if a court of competent jurisdiction determines the Contractor was obligated to defend the
claim(s) or was obligated to indemnify the City pursuant to this Section 7 for a claim(s) or any portion(s) thereof.
Contractor also waives any and all claims and recourse against the City, including the right of contribution
for loss or damage to person or property arising from, growing out of, or in any way connected with or incident to
the performance of this Agreement except “responsibility for [City’s] own fraud, for willful injury to the person or
property of another, or for violation of law, whether willful or negligent” as per 28-2-702, MCA.
These obligations shall survive termination of this Agreement and the services performed hereunder for 36
months thereafter. In no event will Contractor be liable for consequential, special, punitive, lost business
opportunity, lost productivity, field office overhead, general conditions costs, or lost profits damages of any nature
or kind.
RAFTELIS 30
APPENDIX: RESUMES
Appendix: Resumes
RAFTELIS 31
Melissa Elliott APR
PROJECT DIRECTOR
Executive Vice President (Raftelis)
ROLE
Melissa will oversee the project to ensure we exceed client expectations.
PROFILE
Melissa’s 25+ year career is focused on helping utilities and municipalities tell
their stories. As an executive and leader for Raftelis’ western offices, she has
responsibility for service delivery to clients across the Western U.S. She also
consults with local government and utility leaders as part of Raftelis’
nationwide Strategic Communication Services practice, providing strategic
counsel on communications and outreach planning, stakeholder engagement,
and risk communication strategies. Melissa has extensive experience working
with elected officials, stakeholders, and the public on issues as diverse as rate
structure change, drought, water quality, potable reuse, affordability,
impactful construction projects, rate increases, customer assistance programs,
and demand management. Highly active in the water industry, Melissa is a
Past President of the American Water Works Association, former chair of
AWWA’s Public Affairs Council, and a regular volunteer for The Water
Research Foundation. She has an M.S. in technical communication and a
B.A. in journalism and is Accredited in Public Relations (APR) from the
Public Relations Society of America. Before joining Raftelis, Melissa directed
the public affairs efforts at Denver Water, which included creating public
engagement strategies for massive infrastructure projects, developing a
nationally recognized lead service line replacement program, and leading
conservation outreach efforts through the innovative “Use Only What You
Need” campaign.
KEY PROJECT EXPERIENCE
• American Water Works Association (CO) – Risk Communications Guide,
Affordability Guide
• Birmingham Water Works Board (AL) – Cost of Service Rate Study
• Boston Water and Sewer Commission (MA) – Stormwater Program
Development and Communication
• Bullhead City (NV) – Communications to Support Private Utility
Acquisition
• Central Brown County Water Authority (WI) – Utility Collaboration
Services
• City of Abilene (TX) – Comprehensive Rate Study
• City of Aurora (CO) – Strategic Plan
• City of Boulder (CO) – Carbon Taxes Policy Engagement
• City of Calgary (AB) – Cost of Service and Rate Design
• City of Charleston (SC) – Citywide Communication Optimization
• City of Corona (CA) – Facilitation
Specialties
•Utility rate change communication
•Strategic communication planning
•Stakeholder engagement
•Public involvement
•Community outreach
•Crisis & risk communication
•Reputation management
•Coalition building & campaigns
Professional History
•Raftelis: Executive Vice President
(2023 – present) Vice President of
Communications and Marketing
(2021-2022); Director of Strategic
Communication Services (2018-
2020)
•Denver Water: Director of Public
Affairs (2012-2018); Manager of
Water Conservation (2008-2012)
•Aurora Water: Manager of Public
Relations (2000-2008)
Education
•Graduate, Water & Wastewater
Leadership Center - University of
North Carolina, Kenan-Flagler
Business School (2016)
•Master of Science in Technical
Communication (Public Relations) -
Colorado State University (2005)
•Bachelor of Arts in Technical
Journalism (Public Relations) -
Colorado State University (1991)
Professional Memberships
•AWWA: Past President; Former
Public Affairs Council Chair; Former
Strategic Planning Committee Chair
•AWWA/WEF Transformative Issues
Symposium on Affordability: Former
Chair
•WEF
•NACWA
•US Water Alliance One Water
Council
•Public Relations Society of America:
Accredited in Public Relations (APR)
RAFTELIS 32
• City of Eagan (MN) – Strategic Plan
• City of Golden (CO) – 5-year Rate Study and Strategic Plan
• City of Lakewood (OH) – Stormwater Program Development and Communication
• City of Newport (OR) – Capital Project Construction Stakeholder Engagement and Communication
• City of Newport Beach (CA) – Comprehensive Rate Study
• City of Oxnard (CA) – Comprehensive Cost of Service Rate Study
• City of Port Hueneme (CA) – Cost of Service Rate Study
• City of Santa Cruz (CA) – Rate Structure Change Communication and Stakeholder Engagement
• Charlotte Water (NC) – Strategic Communications
• Cucamonga Valley Water District (CA) – Water Rate Study Communications and Outreach
• Daphne Utilities (AL) – Strategic Communication Planning and Risk Communications
• Eastgate Council of Governments (OH) – Regional Utility Collaboration
• Encina Wastewater Authority (CA) – Facilitation Services
• Green Bay Water (WI) – Strategic Communications Services
• Fort Collins/Loveland Water District (CO) – Communications to Support Cost of Service Rate Study
• Jersey Water Works (NJ) – Strategic Communications Services
• Johnson City (TN) – Risk Communications
• Lehigh County Authority (PA) – Comprehensive Strategic Plan
• Louisville Water (KY) – Internal Communication Plan
• Marin Municipal Water District (CA) – Facilitation for 10-year Capital Plan
• Mojave Water Authority (CA) – Stakeholder Committee Facilitation and Communication Services
• Montecito Water District (CA) – Rate Change Communications and Engagement
• Mount Pleasant Water Works (SC) – Strategic Communication Services
• Municipal Water District of Orange County (CA) – Facilitation Services
• National Association of Clean Water Agencies (DC) – 50th Anniversary Communications
• Nevada Irrigation District (CA) – Public Outreach Services and Planning
• New York AWWA (NY) – Public Communication Training
• Northern Water (CO) – Capital Project Construction Stakeholder Engagement and Communication
• Region of Peel (ON) – Rate Structure Change Stakeholder Engagement
• Richmond Public Utilities (VA) – Affordability Program Customer Engagement
• Sacramento Suburban Water District (CA) – Regional Utility Collaboration
• Santa Clara Valley Water District (CA) – Water Rate Implementation Planning
• Sewerage and Water Board of New Orleans (LA) – Settlement Billing Communications
• Sweetwater Authority (CA) – Strategic Communications Planning
• Tucson Water (AZ) – Communication Services
• Tuolumne Utilities District (CA) – Rate Study and Communications Planning
• Water Environment Federation (DC) – Biosolids PR Toolkit
• WSSC Water (MD) – Utility Rate Change Communication and Outreach
RAFTELIS 33
Todd Cristiano
PROJECT MANAGER
Senior Manager
ROLE
Todd will be responsible for overall project accountability and will be
available to provide quality assurance and control, industry perspective, and
insights into the project.
PROFILE
Todd has nearly 20 years of utility finance experience—14 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 particular, as the Past Chair
and current member 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. Todd is also co-instructor for the AWWA’s
biennial Financial Management: Cost-of-Service Rate-Making Seminar.
KEY PROJECT EXPERIENCE
City of Aspen (CO)
Water and Electric Financial Plan, Cost of Service,
and Rate Design
Todd served as the project manager on this engagement. Todd has provided financial consulting service to the City
of Aspen since 2002. The City completes comprehensive water and electric cost of service and rate studies
approximately every 5 years. Financial planning review and true-ups are completed annually, The cost of service
studies include a the development of a long-range financial plan, cost of service analysis, and rate design for each
utility. The cost of service analysis for both utilities follows generally accepted industry rate-setting standards. Rates
are designed based on the cost of service results. When there are significant changes to a class’ cost of service or the
fixed or variable component of the rate, the City will transition that change over a 5-year period. The City’s water
rate structure is based on Equivalent Capacity Units (ECUs). The fixed charge scales based each customers number
of ECUs and the tiered rate structure also scales with the number of ECUs. The electric rate structure follows the
traditional residential, small and large commercial customer classes. The residential customer class is a 4-tiered
increasing block structure.
Raftelis also completes special projects. These include developing low income rates for the electric utility. Currently,
we are examining the cost to the utility that solar customer place on their electric system. Energy from solar panels
Specialties
•Financial planning
•Cost-of-service & rate structure
studies
•Litigation support
•Economic feasibility analyses
•Impact fee studies - utility & non-
utility
•Reviews of policies, procedures, &
operating practices
•Budget processes
Professional History
•Raftelis: Senior Manager (2019-
present); Manager
•(2017-2018)
•Stantec (2016-2017)
•Denver Water: Manager of Rates
(2010-2016)
•Malcolm Pirnie-Arcadis-US
•(2005-2010)
•Black & Veatch (1998-2005)
Education
•Master of Business Administration
• - University of Colorado (2003)
•Bachelor of Science in Chemical
Engineering - University of Tulsa
(1995)
Professional Memberships
•AWWA: Past Chair and current
member of Rates & Charges
Committee
•WEF
RAFTELIS 34
is distributed back into the distribution grid but does not offset peak demands. The current credit to solar customers
includes the cost of transmission and generation. We are also examining the cost of supply EV charging stations.
Town of Eagle (CO)
Wastewater Financial Planning and Plant Investment Fee Study
Todd served as the project manager on this engagement. Todd has worked on two engagement with the Town since
2018. The most current study was a wastewater financial plan and tap fee study. The Town was in the process of
developing a 10-year capital program with significant expenditures to meet regulatory requirements. Todd
developed a 10-year cash flow analysis with proposed revenue adjustments. Todd prepared multiple scenarios based
on a variety of growth scenarios from new development. The timing of the new development was not exactly
known. Couple that with soaring construction pricing and the covid-19 pandemic, Todd worked closely with the
planning department to determine the most likely scenarios. In addition, Todd evaluated the Town’s wastewater tap
fee. The fee was last updated in 2017. Todd conducted a detailed analysis of establishing flow data for 1.0 SFE as
there was not historical data available. Todd also discovered inconsistencies between the water tap fee schedule and
wastewater fee schedule. The Town decided to pause on the study and start a comprehensive review of both tap fees
in 2022.
Todd served as the project manager on the 2018 engagement. The Town had retained a consultant in 2016 to
develop a financial plan and rate design for their water utility. Following iterations of the report and feedback from
stakeholders, the Town requested Raftelis to conduct a peer review of the Excel model, results, and provide any
recommendations on the study. Raftelis worked with the Town’s consultant, reviewed detailed billing data,
financials, rate design options and the Excel model’s structure. Overall, Raftelis found the assumptions and results
of the model sound, accurately documented, and the financial plan projections were reasonable based on the
assumptions provided by the Town. We provided comments on the Consultant’s rate design options as they related
to meeting conservation goals, equity, and impact to customers. We provided a technical memorandum
summarizing our results. This memorandum was presented to the Town’s Board of Trustees for review and
comment.
City of Durango (CO)
Water and Wastewater Financial Plan, Cost of Service, Rate and Fee Study
Todd served as the project manager on this engagement. The City of Durango (City) retained Raftelis to conduct a
comprehensive, independent assessment of its water and wastewater utilities and provide recommendations on
revenue adjustments, cost of service and rate design. The City’s broad objective of the study was to adequately fund
water and wastewater utility operations, foreseeable capital costs, and any future bonded debt, which will be
supported by the proposed rates. The study included a comprehensive review of the City’s water and wastewater
funds and budgets, an inventory of the water and wastewater capital assets, customer classes, current usage data,
future planned service area growth, and any other information deemed necessary. This analysis included a review
and update of the City’s water and wastewater plant investment fees. The City also requested a review of the rate
differential between inside City and outside City customers.
The City’s last comprehensive study was completed in 2014 which recommended large rate adjustments to fund an
upcoming wastewater treatment construction project and a water treatment plant. The City has continued to focus
efforts on ongoing repair and replacement for the wastewater treatment plant. The new water plant’s primary
purpose is to provide redundancy and provide for some growth in the system. The water capital program also
included ongoing repair and replacement projects. Raftelis prepared several water financial plan alternatives for
staff’s review and review by the City’s Public Utility Commission’s stakeholder group. Raftelis also developed cost-
of-service-based rates for inside and outside City water and wastewater customers. As an alternative, Raftelis also
developed outside City rates based on a rate differential (i.e. higher rates for outside City). This rate was developed
RAFTELIS 35
based on the premise that the density of customers outside the City was lower than inside City. This lower density
required more distribution infrastructure to serve outside City customers. Raftelis calculated a density ratio for
inside and outside City customers based on the number of accounts per length of main. This ratio was applied to
distribution-related costs in the cost-of-service analysis to arrive at a rate differential for inside and outside City
customers.
Raftelis also updated the City’s plant investment fees considering the replacement costs of current assets. Because
there is sufficient capacity in the current system, no future expansion costs were included in the fee. The ¾-inch
meter equivalency used to develop the ¾-inch meter fee was based on peak demand for all ¾-inch meter water users
and ¾-inch meter average winter flows for wastewater.
City of RIfle (CO)
Water and Wastewater Financial Plan, Rate and Fee Study
Todd served as the project manager on this engagement. The City of Rifle retained Raftelis and an engineering
consultant to update the City’s water and wastewater master plan and to develop a financial plan and rate structures
to support the future financial viability of the water and wastewater utilities. Raftelis developed multiple financial
plans based on various capital improvement scenarios and funding options. In addition, to help support paying for
the cost of growth, Raftelis updated the City’s system development fees which had not been updated in some time.
The analysis showed an increase was required for both the water and wastewater utilities. Rate adjustments and the
proposed system development fees were adopted in 2021
Town of Breckenridge (CO)
Water Financial Plan, Cost of Service, and Rate and Fee Study with Stakeholder Participation
Todd served as the project manager on this engagement. The Town of Breckenridge had not completed a
comprehensive rate study in recent years. The Town retained Raftelis to develop a 10-year financial plan, cost of
service, plant investment fees and rate design alternatives. The Town had just completed the construction of a new
water treatment facility as well as repairs to the Tarn Dam. The Tarn Dam repairs were unexpected and required
the issuance of state loans. The Town also used state loans to fund a portion of the new WTP. These loans and
additional O&M expense from the new WTP caused coverage to fall below the SRF targets of 1.1x debt service.
Raftelis developed a 10-year financial plan using unform annual revenue adjustments to avoid rate shock. Raftelis
also completed a comprehensive cost of service analysis. The analysis showed nominal changes in each class’
responsibility. During this process, the project team met regularly with the Rate Advisory Committee to discuss rate
design alternatives to address the objectives set forth by the committee – conservation, affordability, and equity.
Raftelis presented over 20 rate structure alternatives. The Town’s existing rate structure is a base fee based on the
number SFEs, includes a 10,000 gallons volume allowance and a volumetric rate for usage above the 10,000
gallons. The 10,000 gallon minimum scales with the number of SFEs for each customer. The existing commercial
rate structure includes a base fee which varies by meter size, includes a minimum which varies by meter size, and a
volumetric rate for usage over the minimum. The selected residential rate structure retained the existing components
but reduced the minimum threshold to 6,000 gallons and added a second tier for the usage over the minimum The
selected commercial rate structure eliminated the base fee and assessed a volumetric rate for all usage. The new rate
structures were adopted to be implemented in June 2023 and the rate adjustment was adopted for January 2024.
Project 7 Water Authority (CO)
SRF and WIFIA Water Financial Planning Study
Todd was the project manager on this engagement. Project 7 Water Authority (Authority) is the only wholesale
water provider to the Cities of Montrose, Delta, the Town of Olathe, Tri-County Water Conservancy District,
Menoken Water District, Chipeta Water District, and the Uncompahgre Valley Water Users Association The
Authority’s was source is primarily from the Gunnison River delivered from the Cystal Resevoir through the
RAFTELIS 36
Gunnison Tunnel to the Authorities Ridgeway Water Treatment Plant. The remainder of water is provided by the
Cimarron Ditch. Due to recent fires and the aging infrastructure, the Authority was looking to improve the
reliability of the system under emergency conditions. The Authority retained Raftelis to develop ong-range cash
flows to show the impacts to rates in building this redundancy project. The redundancy pipeline project totals $120
million which will require significant rate increases. Raftelis is evaluating different funding strategies to minimize
the impact to rates and the financial risk to the Authority. The Authority is anticipating the use of WIFIA loans and
SRF loans to fund the project. Raftelis is assisting the Authority in securing a credit rating from Fitch through a
comprehensive financial plan and using that financial plan to justify the WIFIA and SRF funding needs. The
WIFIA loan process is complex and requires meeting several financial metrics. However, the terms of these loans is
very flexible. As a result, Raftelis has developed a number of funding options for the Authority’s consideration.
City of Golden (CO)
Water, Wastewater, and Stormwater Financial Plan, Cost of Service, and Rate Design Study
The City of Golden (City) provided water, sewer, and drainage services to approximately 5,400 customers through
separate self-supporting enterprise funds. Rates charged for services must be adequate to support maintenance and
operations, debt service, capital improvements, asset reinvestment, and transfers for general administration.
This City requested a comprehensive financial and rate analysis on their water, wastewater, and stormwater
utilities. They wished to focus on the rate structures, updates to the cost-of-service with recommendations on the
best alternatives for equitable and sustainable revenue recovery by each customer class. The last cost-of-service study
was completed over 10 years ago.
Also part of this study was convening a Utility Rate Citizens Committee (URCC) to review and provide
recommendations on rate alternatives based on identified pricing objectives. Raftelis developed rate alternatives for
each utility.
Raftelis prepared financial plans, cost-of-service analysis, and rate design for each utility. Using the pricing
objectives from the URCC, we developed three alternatives for water, two for wastewater, and two for stormwater.
For stormwater, of particular interest was improving the equity between residential and commercial customer
classes. The existing residential fee is on a per dwelling unit basis and commercial is based on individual impervious
area. Raftelis developed a impervious area fee for both residential and commercial. This increased the residential fee
and reduced the commercial fee. The City adopted the new rates and rate structures for 2020.
City of San Diego (CA)
Water and Wastewater Rate Study
The City of San Diego provides service water and wastewater to approximately 300,000 customers. The City
retained Raftelis to conduct a comprehensive water and wastewater cost of service and rate analysis. Also included
in this study was development of wastewater industrial pretreatment fees and capacity fees for both utilities. Raftelis
will deliver a customized financial planning, cost of service, and rate model for the City’s use at the end of the
project. Mr. Cristiano is leading the efforts on this project.
Of particular concern to the City was ensuring that rates are equitable and follow Proposition 218 requirements. In
addition, the previous droughts have caused variability in revenues. As a result, they’ve requested an analysis of
their recovery of fixed charges and variable charges. Any increases to fixed charges may negatively affect low
volume and low income users. Raftelis is completing scenario analysis on financial planning alternatives that will
minimize rate impacts and optimize funding for their large capital improvement program. The rate design module
will allow the City to evaluate different rate structures with varying fixed charge recovery as well as showing the
impacts to customers. Raftelis will be presenting these results to the City’s Independent Rate Advisory Committee
RAFTELIS 37
(IROC) for feedback and recommendations. The study will conclude with a presentation to City Council for vote on
the proposed rates. Any rate approval would be effective in FY21.
Mr. Cristiano is also updating their industrial pretreatment fees to comply with an internal audit. This evaluation
considers all activities the industrial pretreatment department completes to manage permits, issue violations, sample
customers, and monitor truck waste. The outcome will be cost-based fees for each of these areas which will comply
with the internal audit and Proposition 218.
Finally, Mr. Cristiano updated the City’s water and wastewater capacity fees to ensure that fees recovered the cost
to serve growth. The fees include in-service assets plus future growth-related projects. Fees are assessed on a per
EDU basis. This process follows the Proposition 218 requirements.
Salt Lake City Department of Public Utilities (UT)
Todd served as the project manager on this engagement. The Salt Lake City Department of Public Utilities (City)
engaged Raftelis in 2017 conduct comprehensive water, sewer, stormwater and streetlight cost-of-service rate
studies. These studies included developing revenue requirements, cost-of-service allocations, rate design, and impact
fees. Impact fees includes a review of the methodology for each utility - water, sewer, and stormwater. A hybrid or
combined methodology was selected for the water and sewer utilities. This methodology included an evaluation of
the existing assets as well as determining the growth-related portion of future capital, and estimating the capacity to
be served in the 10-year time horizon. The stormwater impact fee was assessed using the buy-in methodology. The
valuation of assets for each utility was based on replacement cost less accumulated depreciation.
In conjunction with the rate studies, the City formed a Rate Advisory Committee (RAC) to solicit feedback and
recommend changes to the City’s existing water and sewer rate structures. Todd co-facilitated six RAC meetings
which included an overview of the water and sewer systems, the long-term challenges faced by the City as well as
detailed discussion of rate-setting 101 and analysis of various rate structures. The RAC committee members reached
consensus on two water rate structure alternatives and two sewer rate structure alternatives to present to the City’s
Public Utilities Advisory Board (PUAC). The City anticipated the PUAC made their final recommendation to City
Council in January 2018. Todd oversaw the development of the cost-of-service and rate design analysis for the
utilities. He developed the rate alternatives for review by the RAC based on the selected pricing objectives. He also
led the development of the water, sewer, and stormwater impact fee analysis. The fees were developed based on an
Impact Fee Facilities Plan completed by their engineering or record. The impact results had to comply with state
statutes.
Denver Water (CO)
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, Todd
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. Todd served as the project manager on this engagement, which included assistance from
Denver Water’s Public Affairs Division as well as an outside facilitator. Todd oversaw and managed a ‘lessons-
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. Todd led in-house development of all rate structure
modeling with staff.
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 accordance with
RAFTELIS 38
Denver’s Charter provisions, “outside-city rate recover the full 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 methodology became less suitable, more complex, and more opaque. The Board determined that the
utility-basis was no longer workable under current conditions.
Todd led this project and developed cost allocation alternatives that both met current circumstances of a growing
Denver, satisfied the Charter provisions, and equitably allocated costs between inside and outside city customers.
Over a 14 month process, Todd 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 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. Todd led an internal team to
address inconsistencies in the calculations of capacity costs. The SDCs were developed 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. Todd developed ‘SDC guidelines’ to assist Water Sales staff in assessing
SDCs based on the changes adopted by the Board. Todd met with Distributor representatives, members of the
developer community as well as the Citizen’s Advisory Council to review alternatives and present findings.
City of Pocatello (ID)
This City of Pocatello (City) conducts comprehensive rate studies for its water, wastewater, and sanitation utilities
approximately every 5 years. Todd was the lead analyst on the 2002 and 2005 engagements and served as the
project manager on the 2010 and 2019 studies. The study included the development of 5-year financial plans, cost-
of-service analyses, and rate design for each utility. In addition, the City requested an update of their water and
wastewater system capacity charges.
Revenue and expenditure projections for each utility were based on their City’s FY19 with significant input from
Staff. Raftelis reviewed and developed the inflation factors with Staff’s input. Additional staff positions were
included in the operating budget for each utility as well. Raftelis reviewed several iterations of the utilities’ capital
plans including costs and timing options to help minimize rate increases. Raftelis developed revenue projections
using detailed billing data by individual customer, adjusted for growth and anticipated changes in use (flows) per
account. For the water utility financial plan, infrastructure upgrades to treated water storage and new wells were the
key drivers for revenue increases – the City prefers to cash finance most capital projects. Revenue increases for the
wastewater utility were driven by the new debt service payments for a recent upgrade and expansion to their
wastewater treatment plant. Projected revenue adjustments were needed to fund a new administration building and
significant investment in the collection system as well. The sanitation utility incurred additional unexpected costs
because of the changes in the market demand for recycling material which required nominal revenue adjustments
over the study period.
Raftelis updated the cost of service for each utility by reviewing previous cost allocations and system data. Raftelis
held individual meetings with water, wastewater, and sanitation staff to ensure that costs were allocated correctly to
maintain customer equity. Raftelis adjusted certain customer class rates to comply with the City’s rate policies and
customer contracts. Unrecovered costs from the policy adjustments were reallocated to other customer classes based
on their proportionate share of water demand and/or contributed flow. The sanitation cost of service included
adjusting residential and commercial cart charges to recover the increased recycling costs. Rates were developed for
RAFTELIS 39
each utility over a 5-year period from current rates to FY24 cost of service rates. Of importance to the City were a
smooth transition of rates to minimize rate shock for all three utilities.
Raftelis also updated its system capacity fees. The City has sufficient capacity to serve new growth. Using the buy-in
method, Raftelis calculated the replacement cost of existing facilities. The ¾” equivalent demands for water were
calculated by evaluating multiple years of data and developing an average demand per day for a ¾” meter. Using
historical production data and master plan data, Raftelis calculated a theoretical peak day demand to calculate the
capacity charge. Wastewater capacity charges were calculated in a similar manner.
City Council expressed interest in reviewing the basis of the current outside City water and wastewater rate
differentials. These rate differentials had been in place for well over a decade however, documentation on the
calculations were not readily available. Raftelis applied a common approach to verify the differential for water and
wastewater– a revenue requirement rate of return approach (similar to an approach for a regulated utility). Raftelis
evaluated an additional approach for water based on a density factor. This approach assumes that that the
distribution of outside City customers is less dense than inside City. As a result, outside City customers should incur
a greater proportionate share of annual small distribution mains costs. This approach indicated that the City could
support a rate differential of 1.1 to 1.3 times inside City rates.
PRESENTATIONS
• “A Guide to Designing Conservation-Oriented Water System Development Charges,” AWWA and
Western Resources Advocates , 2018, https://westernresourceadvocates.org/projects/water-system-
development-charges/
• Co-Instructor for American Water Works “Financial Management - Cost-of-Service Rate Making Seminar,”
2010-present
• “The Grass is Always Greener…Building Consensus of Reclaimed Water Project Pricing for Jointly
Operated Systems,” Water Environment Federation Technical Exhibition and Conference, 2008
• “Honestly, What’s the Reuse,” WateReuse Symposium, 2008
• “Showers to Flowers - Objectives and Approaches for Reclaimed Water Pricing," Utility Management
Conference, 2010
• “Which Conservation Rate Structure is Best for Your Utility,” Utility Management Conference, 2013
• “Financial Management and Ratemaking Challenges for Reuse Water,” Utility Management Conference,
2015
• “Rate Perception Surveys: Leveraging Customer Knowledge to Create the Right Rate Structure,” Annual
Conference Exhibition (ACE), 2015
• “Assessing Household Affordability in the Denver Water Service Area,” ACE, 2015
• “Rate Perception Surveys: Leveraging Customer Knowledge to Create the Right Rate Structure,” Utility
Management Conference (ACE), 2016
RAFTELIS 40
Andrew Rheem
TECHNICAL ADVISOR
Senior Manager
ROLE
Andrew will serve as a technical resource for cost of service and rate design
analysis including conservation-based rate structures. He will also provide the
quality review of work products throughout the study.
PROFILE
Andrew has been providing financial planning, impact fee and rate consulting
services to water, wastewater, reclaimed water, and stormwater utilities and
local government for nearly 20 years, including studies for numerous
Colorado, Arizona, Montana, Utah, New Mexico, California, and Texas
local governments. Andrew has assisted large municipalities to small towns or
special districts serving a few hundred customers. He has served as project
director, project manager and/or lead analyst for multiple long-standing
clients providing a range of municipal financial planning, rate, and impact fee
assistance through multiple engagements.
SELECT PROJECT LIST
• Town of Jackson (WY) – Comprehensive 2021 water and wastewater
financial plan, rate and capacity fee study and annual 2022 and 2023
financial plan and rate updates.
• Lockwood Water District (MT) – 2017 and 2021 water and
wastewater financial plan, PIF, and rate study.
• County Water District of Billing Heights (MT) – 2022 water financial
plan, PIF, and rate study and on-going contract water rate review and
dispute resolution.
• City of Prescott (AZ) – 2014 and 2019 water and wastewater financial
plan, development impact fee, and rate studies and 2014 and 2019
non-utility development impact fee studies.
• Village of Ruidoso (NM) – Comprehensive 2022 water, wastewater,
and solid waste financial plan and rate update.
• Lake Havasu City (AZ) – 2015 Wastewater bond feasibility study and
multiple wastewater financial plan, rate and loan feasibility studies
completed from 2004 through 2012. 2008 and 2014 water financial
plan and rate studies.
• El Paso Water Utility (TX) – Annual 2004 through 2023 water and sewer financial plan and wholesale rate
updates and multiple individual studies since 2004.
• Salt Lake City Department of Public Utilities (UT) – 2012 Street light utility feasibility and implementation
study and 2016 Street light utility enhanced service level surcharge study.
• City of Boulder (CO) – 2017 Water, wastewater, and stormwater financial plan, water budget structure
review, rate, and fee study and 2019 Carbon tax feasibility study.
Specialties
•Utility rate, and municipal financial
plan, cost-of-service, impact fee,
activity-based fee, rate consulting
services and for local governments.
•Impact fee studies including those
under different legislative guidance
in Colorado, Arizona, Utah, &
Montana
•Financial and bond feasibility
consulting services for water, sewer,
reclaimed, & stormwater utilities
Professional History
•Raftelis: Senior Manager (2019-
present); Manager (2014-2018);
Senior Consultant (2013)
•Red Oak Consulting: Principal
Management & Utility Rate
Consultant (2003-2013)
•Ajilon Finance: Telecommunications
Analyst (2002-2003)
•ISPhone Inc. & Appia
Communications: Finance &
Accounting Administrator (1999-
2001)
•McLagan Partners: Compensation
Analyst Intern (1998, 1999)
Education
•Bachelors in Business
Administration, Finance &
Accounting - University of Michigan
at Ann Arbor (1999)
Certifications
•Series 50 Municipal Advisor
Representative
Professional Memberships
•Growth & Infrastructure Consortium
Board of Directors
RAFTELIS 41
• City of Grand Junction (CO) – 2021 Wastewater financial plan, PIF, and rate study and 2018 Internal
service fee study.
• City and County of Denver (CO) – 2016 Sanitary sewer and stormwater financial plan and rate study and
2017 Bond feasibility study.
• City of Phoenix (AZ) – 2017, 2019, and 2021 LUA, IIP, and development impact fee audits and 2018
stormwater utility impact fee study.
• Town of Berthoud (CO) - 2017 Water, wastewater, and stormwater financial plan, rate, and fee study and
2019 Small house development fee study.
• Boxelder Sanitation District (CO) – 2020 Financial plan, PIF, and rate update.
• Canon City (CO) – 2017 Water and stormwater financial plan, rate, and PIF study.
• City of Fort Morgan (CO) – 2017 and 2021 Water and wastewater financial plan, PIF, and rate study.
• City of Greeley (CO) – Annual 2018 through 2023 stormwater financial plan and rate model updates, 2020
stormwater development fee study, and 2015 comprehensive stormwater financial plan and rate study.
• City of Idaho Springs (CO) – 2016, 2017, 2019, and 2020 Water and wastewater financial plan and rate updates.
• City of Lafayette (CO) – 2019 Water rate study and a Comprehensive 2022 water, wastewater, and
stormwater financial plan, capital funding, tap fee, and rate study that is in process.
• City of Longmont (CO) – 2014 water financial plan, SDF, and rate study, 2012 wastewater financial plan,
SDF, and rate study, and 2008 water and wastewater financial plan, SDF, and rate study.
• Town of Mead (CO) – 2019 and 2021 wastewater financial plan, SDF, and rate study.
• Mount Crested Butte Water & Sanitation District (CO) – 2016 and 2019 water and wastewater financial
plan, rate and fee studies and 2019 Meridian Lake Park sub-fund interfund deficit review and reconciliation
study.
• Mount Werner Water District (CO)_ – 2016 and 2019 Comprehensive water and wastewater financial plan,
PIF, and rate study. 2019 Availability of service fee update.
• Town of Nederland (CO) – 2020 Comprehensive water and wastewater financial plan, PIF, and rate study.
• Town of Platteville (CO) – 2019 Water and wastewater financial plan and rate study.
• South Adams County W&SD (CO) – 2020 Water and wastewater financial plan, PIF, and rate study.
• St. Vrain Sanitation District (CO) – 2018 and 2020 Wastewater financial plan, PIF, and rate study.
• City of Thornton (CO) – 2021 Water and wastewater financial plan, connection fee, and rate studies and
2018 stormwater utility feasibility and implementation studies.
• City of Steamboat Springs (CO) – 2008, 2013, 2016, and 2019 water and sewer financial plan, rate, and fee
studies.
• Triview Metropolitan District (CO) – 2018 and 2021 water and wastewater financial plan, PIF, and rate study.
• Woodmoor Water District No. 1 – Annual 2018 through 2022 water and wastewater financial plan, PIF,
and rate study updates.
• City of Avondale (AZ) – 2021 water and wastewater financial plan and rate study.
PRESENTATIONS
• “Conducting Audit of Infrastructure Improvements Under Arizona Revised Statutes 9-463.05 - Scottsdale
Arizona Case study,” Growth Infrastructure Consortium Conference, 2016
• “How Lake Havasu City’s Pro-Active Wastewater Asset Management Program Makes Every Dollar
Count,” AZ Water Conference, 2016
• “Expense, Project and Budget Management Tactics to Provide Wastewater Service Delivery Without
Increasing Rates,” AZ Water Conference, 2016
• “Comparing Utility Rates, Fees and Financial Results,” Colorado Special Districts Association Conference,
2016
• “Utility Financial Planning in Advance of Issuing Debt,” 2015 Water Bond Workshop, 2015
RAFTELIS 42
Justin Rasor
ASSISTANT PROJECT MANAGER
Manager
ROLE
Justin will assist the Project Manager with managing the day-to-day aspects
of the project and leading the consulting staff in conducting analyses and
preparing deliverables for the project.
PROFILE
Justin has assisted in conducting a variety of engagements for water,
wastewater, electric, and gas utilities. He supports cost-of-service and rate
design studies, financial planning, financial valuations and analyses,
feasibility studies, and depreciation analyses for public and private sector
utility clients. Before joining Raftelis in 2019, he served as a Senior Analyst
for Austin Water’s rates and charges division. In this role, Justin developed
the Financial Planning and Forecasting Model for the water, wastewater, and
reclaimed utilities. He also maintained the cost-of-service models and assisted
in the submission to the Public Utility Commission involving a wholesale rate
case. Prior to joining Austin Water, Justin worked as a consultant at NewGen
Strategies and Solutions, LLC, where he conducted numerous costs of service
and rate design studies, financial valuations, and provided litigation support.
Before joining the firm, he began his career as a Project Engineer responsible
for managing and estimating schedules and construction costs for healthcare
projects. After leaving the construction industry, he managed short-term
investments using equities and options.
KEY PROJECT EXPERIENCE
Austin Water (TX)
While at Austin Water, Justin developed the financial planning and
forecasting model used by the executive team to monitor key performance
indicators, affordability, and other assumptions for effective utility
management. The model combined the water, wastewater, and reclaimed utilities and allowed for multiple what-if
scenarios (using VBA and visual dashboards) providing insight into the timing and types of financing, capital
improvement projects, rate increases, and defeasance. He incorporated Austin Water’s strategic water resource plan
(Water Forward) balancing reductions in consumption and revenue with long term sustainability of the utility.
Justin continues to assist the City by update their financial planning model adding features to help the utility plan
for the future.
City of Oklahoma City (OKC)
In November 2020, Justin was the lead analyst working with Oklahoma City Water Utilities Trust (OCWUT) to
complete a Water, Wastewater, Reuse, and Solid Waste Study. OCWUT' provides service to approximately 1.4
million people, which includes water and wastewater service which extends well beyond the jurisdictional boundary
of the City of Oklahoma City to include inside and outside retail services, raw and potable wholesale service, reuse,
and other miscellaneous services.
Specialties
•Financial Planning & Feasibility
Studies
•Budgeting & Forecasting
•Cost-of-service & Rate Design
•Utility Appraisals & Valuations
•Litigation & Regulatory Support
Professional History
•Raftelis: Manager (2022-present)
Senior Consultant (2019-2021)
•Austin Water Utility: Senior Financial
Analyst (2017-2019)
•NewGen Strategies & Solutions:
Consultant (2012-2017)
•Kershner Trading Group: Trader
/Analyst (2010-2012)
•Edward Jones: Financial Advisor
(2010-2012)
•Bulley & Andrews: Project Engineer
(2008-2009)
Education
•Bachelor of Science in Industrial
Technology, Minor Business
Administration - Illinois State
University (2008)
Professional Registrations
•WEF: Water Environment
Association of Texas
•Leadership in Energy &
Environmental Design, LEED AP
RAFTELIS 43
The comprehensive cost-of-service and rate model considers multiple rate design alternatives and provides OCWUT
with a 5-year rate plan for all its customers. This complex model includes a financial plan, cost of service analysis,
and a rate design module. Justin assisted OCWUT by evaluating several rate design alternatives to address
affordability while continuing to promote conservation.
OCWUT updates its rate studies on a regular cycle, but since the last Cost of Service and Rate Design study, there
have been significant capital additions and rehabilitations to the water and wastewater infrastructure, and service to
customers has also been enhanced. The extension of service results in many different types of customers whose
relationship with OCWUT can vary based on location and type of service. In this study, Justin conducted a
standard cost of service for all the services that OCWUT provides while considering the possibility of unbundling
raw water rates. The City of Oklahoma's council passed a 5-year rate plan in April 2022.
City of Round Rock (TX)
Justin served as lead analyst for the City of Round Rock on the 2022 rate study. The City has been increasing retail
rates at a nominal level to achieve revenue sufficiency for water and wastewater service, but wholesale service rates
had not been updated in some time. In 2019, 4 of the 10 wholesale customers of Round Rock appealed the rates of
the City. The case has been filed through the Public Utilities Commission of Texas. To date, the appeal has
progressed to Discovery. Justin drafted testimony covering the revenue requirement, costs of service, and the model
development. Justin updated the City’s rate study and providing rate calculations for two new wholesale customers
of the City, as well as updating the City's FY 2022 Water and Wastewater Rate Study. The latest rate study
calculated rates for retail and wholesale customers. No changes to the retails rates were required in this study.
Wholesale customers saw a decrease in wastewater rates and an increase to the water rates.
City of Arlington (TX)
Raftelis was engaged by the City of Arlington (City) to complete a cost-of-service study that will consider water and
wastewater rates. The study will include cost of service allocations to the City’s customer classes. With the diversity
of the City’s commercial class, Raftelis will consider the usage patterns of the classes and make recommendations
for the class. This study is ongoing with expected completion in 2021.
City of Denton (TX)
Raftelis was engaged by the City of Denton (City) to complete a cost-of-service study that considers retail and
wholesale rates. The study included cost of service allocations to the City’s customer classes. The City provides
water and wastewater wholesale service to several entities. The City desired a wastewater cost of service that looks
at the strength charges but lacks some of the data. Raftelis worked with the City to identify the data required so that
the City can gather the data. Once the data is available, Raftelis will complete the wastewater cost of service. Rate
recommendations were made to City Management in March 2021, after being delayed by Covid-19.
San Antonio Water System (TX)
Raftelis has been engaged by the San Antonio Water System (SAWS) to complete a cost-of-service study. Justin is
serving as the lead consultant and subject matter expert for the model development and water and wastewater cost
allocations. SAWS has added significant capital costs to increase and diversify its water supply protecting the City
from drought and reliance on the Edwards Aquifer. Raftelis is currently working with SAWS staff and the Rate
Advisory Committee (RAC) to design rate structures that align with cost-of-service principals while meeting the
pricing objective of the RAC.
RAFTELIS 44
City of Midland (TX)
Raftelis was engaged by the City of Midland (City) to complete a rate study and financial planning model. The City
has been undergoing significant capital improvements to keep up with the growth in the area. Raftelis analyzed
water user characteristics to design a rate structure that would help the City recover costs without significant rate
increases to the average user. The study considers a five-year time period and looked at the City’s revenue
requirement challenges and rate increases need to recover costs. Rate recommendations will be made to the Council
in the March 2020 timeframe.
City of Lubbock (TX)
In 2016, the City of Lubbock (City) conducted a water and wastewater cost-of-service and rate structure study. The
project included three primary objectives; a five-year financial plan and revenue requirement, a cost-of-service
analysis, and rate structure evaluation and design. The City’s current rate design consisted of a tiered, inclining rate
structure with dynamic rate blocks based on a customer’s average winter consumption. This rate design was found
to be overly complicated and difficult to administer and challenging for customers to understand. Therefore, the
major challenges were to identify and evaluate the appropriateness of any subsidies in customer classes based on the
cost-of-service results and smoothly transition to a preferred rate design. The City then moved to a class-level, static
inclining block-rate structure to create a more consistent revenue stream, while also employing a phase-in approach
to reduce rate shock.
Lubbock has three major supply sources and three water treatment plants. Therefore, all six were listed as different
functional cost categories for the water utility to ensure customers were only assigned costs based on their use of
these resources and to reflect specific wholesale customer contractual allocations. Discussions with City staff, water
supply contracts, and customer data all helped to identify the associated revenue requirement with providing supply
and treatment service.
LITIGATION EXPERIENCE
Justin has provided litigation and regulatory support for cost-of-service, rate design, and ratemaking issues before
state and local regulatory bodies and courts. He has assisted with rate filings with the Public Utility Commission
(PUC) related to the establishment of or changes to water and sewer rates, or the decertification of water and sewer
CCNs. Justin’s experience includes:
• Austin Water Utility, PUC Docket No 49189
• Double Diamond Utilities Company, Texas; SOAH Docket Nos. 582-08-0698; 582-09-4288, 582-09- 6112,
473-15-037
• Trophy Club Municipal Utility District No. 1; PUC Docket No. 45231; SOAH Docket No. 473-16-
1836.WS
PUBLICATIONS
• “Financing and Charges for Wastewater Systems, Chapter 8: Development and Design of a Schedule of
Rates and Charges,” WEF Manual of Practice No. 27, Fourth Edition, 2018
ADDITIONAL PROJECT LIST
Justin has performed cost-of-service and rate design studies for wholesale and retail water, reclaimed water,
wastewater, and drainage utilities to assist clients in understanding the financial and operational impacts of their
service offerings. Rates developed as a result of these studies are intended to fully recover operational costs. Below is
a list of those clients:
• City of Addison (TX)
• City of Arlington (TX)
RAFTELIS 45
• City of Aspen (CO)
• City of Athens (TX)
• City of Aubrey (TX)
• City of Austin (TX)
• City of Brenham (TX)
• Buena Vista-Bethel SUD (TX)
• Canyon Regional Water Authority (TX)
• City of College Station (TX)
• City of Denton (TX)
• Double Diamond Utilities (TX)
• City of Garland (TX)
• City of Greeley (CO)
• City of Hutto (TX)
• City of Huntsville (TX)
• City of Killeen (TX)
• Lake Cities Municipal Utility Authority (TX)
• Lake Fork Water Supply, Yantis (TX)
• City of Liberty Hill (TX)
• City of Lubbock (TX)
• City of Lubbock (TX)
• Manville Water Supply Corporation (TX)
• City of Midland (TX)
• City of Oklahoma City (OK)
• City of Paris (TX)
• Porter SUD (TX)
• City of Pueblo (CO)
• City of Pharr (TX)
• City of Roscoe (TX)
• City of Round Rock (TX)
• San Antonio Water System (TX)
• City of San Diego (CA)
• City of Seagoville (TX)
• Sharyland Water Supply, Alton (TX)
• City of Terrell (TX)
• Trinity River Authority (TX)
• Triunfo Water Sanitation District (CA)
• Trophy Club Municipal Utility District No. 1 (TX)
• City of Waco (TX)
• City of Wichita Falls (TX)
• City of Vallecitos (CA)
• Walker SUD (TX)
RAFTELIS 46
Lundyn Harrelson
LEAD WATER/WASTEWATER ANALYST
Consultant
ROLE
Lundyn will lead the water financial plan, cost of service, and rate design
modeling with an emphasis on the statistical modeling of water usage data
and wastewater billed volume data.
PROFILE
Lundyn has completed various water, wastewater, electric, data, and
technology projects in her time at the firm. Prior to her role at Raftelis,
Lundyn was a consultant through her master’s program at Louisiana State
University and gained experience working with clients, data, and deadlines.
With a bachelor’s degree in actuarial science and a master’s degree in
Analytics, she uses her analytical and statistical expertise to be a trusted
advisor and deliver lasting solutions.
KEY PROJECT EXPERIENCE
City of Whittier (CA)
Lundyn is the staff consultant for a financial plan and cost of service study for
Whittier Utility Authority. The Authority provides water to over 50% of the
City of Whittier, and can provide water to outside Cities. The sewer system is
collection only and the wastewater is conveyed to Los Angeles County Sanitation District for treatment. The study
will ensure financial stability of the Authority, and evaluate the current rates charged to customer classes and
outside city customers.
City of Fraser (CO)
Lundyn is the staff consultant for a financial plan and cost of service study for the city of Fraser water and
wastewater utility. The study emphasizes on financial sufficiency to fund large capital projects, level of growth
incurred throughout the utility systems, and sufficient recovery from customer classes.
City of Scottsdale (AZ)
Lundyn is the staff consultant for a financial plan and cost of service study for the city of Scottsdale water utility.
The study includes an in depth evaluation of their current rate structure. This evaluation includes but is not limited
to level of recovery between customer classes and level of variations within classes, out of city surcharge rates, and
cost impacts of source water costs due to drought, wholesale increases, etc.
City of New Orleans (LA)
Lundyn performed as the staff consultant for a Drainage and Feasibility study for the City of New Orleans. This
study focuses on the scenarios of tax revenue generated by the City and the implementation of a drainage fee to help
support additional operational and capital needs. The feasibility study helps the City better understand the
operational and financial impacts of implementing such a program.
Specialties
•Data Analysis
•Forecasting
•Time Series Analysis
Professional History
•Raftelis: Consultant (2023-present);
Associate Consultant (2020-2022)
•National Insurance Company-
Consultant (2020)
•Statewide Community College
Association- Consultant (2020)
Education
•Bachelor of Science in Actuarial
Science- Louisiana State University
(2020)
•Master of Science in Analytics-
Louisiana State University (2021)
Professional Memberships
•AWWA: Texas Section
RAFTELIS 47
Additionally, Lundyn is currently lead consultant in projecting the water, wastewater, and drainage revenue forecast
to allow city to properly budget and account for future revenues. The study includes benchmarking the City’s
revenues and rates against nearby entities.
City of Oklahoma City (OK)
Lundyn is acting as the staff consultant to update the City’s financial plan and cost of service study for water and
wastewater. The study focuses on a general update and capital infrastructure projects' priority, timing, and funding.
The city has various customer classes, inside and outside of the city. Additionally, the city provides wholesale and
raw water to various entities. The city requested an in-depth evaluation of their residential rate structure,
considering individual residential account usage fluctuations and applying a surcharge during peak usage months.
City of Boulder City (NV)
Lundyn completed the update of the water, wastewater, electrical, and solid waste model for Boulder City. The
study focused on updating the existing financial planning model and presenting various rate design alternatives.
These rate design alternatives aim to provide equity across the various classes and recover appropriate revenues for
the utilities.
City of Aspen (CO)
To assist the utility in tracking revenues and usage, Lundyn created an excel based data model that automates
billing data analysis with the appropriate outputs from discussion with staff. The City of Aspen staff can readily
drop data into Excel, click a button, and the data model automatically analyzes consumption and revenue patterns.
Additionally, Lundyn acted as staff consultant on a water and electric financial planning and cost of service study.
The cost of service analysis designed rates based on cost of service results, and transitioned the city into those rates
to mitigate the rate shock to classes. The City’s water rate structure is based on Equivalent Capacity Units (ECU’s)
and scales charges to customers based on their ECU’s. The electric rate structure follows the traditional structure.
Both rate structures were analyzed and adjusted to better represent the behavior of the City’s customers. In addition
to the financial plan and cost of service study, Lundyn has also completed various special projects for the City. The
projects include but are not limited to, examining the cost to the utility that solar customers place on the system and
developing an equitable rate for solar customers and the cost of supply for EV charging stations.
City of Pueblo (CO)
Lundyn updated the City of Pueblo’s 10-year financial planning model and billing data analysis. Additionally,
Lundyn completed an EPA financial capacity assessment to identify the impact of base and additional capital and
operating requirements on residential customer bills to median income and related community-wide metrics of
financial capacity.
Perry Park Metropolitan District (CO)
As lead consultant, Lundyn completed the billing data analysis and created a financial planning model with various
scenarios to ensure the utility could meet the forecasted operating and capital expenditures.
Arapahoe County Water and Wastewater Authority (CO)
As a staff consultant, Lundyn analyzed their billing and financial data to create a financial plan and completed a
cost of service and rate design study for the authority. The rate design focused on irrigation customers and creating a
structure that coincides with the water allotment per acre foot provided through water rights purchased by the
authority.
RAFTELIS 48
Alexandria Renew Enterprises (VA)
Lundyn aids in project management and system testing for a billing and customer service transition coordination
project with Alexandria Renew Enterprises (AlexRenew). She collaborates with AlexRenew’s staff and an
outsourced CSS provider to implement the replacement of their existing system.
City of Robinson (TX)
Raftelis performed a water and wastewater rate study for the City of Robinson. Lundyn was the lead analyst, and
completed a financial plan for the city and designed rates at the cost of service to ensure rates were equitable and
recovered the appropriate revenue.
City of Huntsville (TX)
Raftelis was engaged by Huntsville to conduct a water and wastewater cost-of-service and financial planning study.
As staff consultant, Lundyn compiled the model financial plan of the model and led the billing data analysis.
City of Seattle (WA)
Raftelis was engaged by Seattle, WA to create a long-term water demand forecast that considers demographic, weather,
conservation, and economic scenarios to help plan for the future. Lundyn acts as staff consultant and provides data
analysis expertise to the city. A variety of time series and regression forecasts will be designed to forecast future water
demand levels for Seattle. Seattle provides water to the City itself and has over 20 wholesale customers, so it is essential
for water supply and infrastructure planning to be able to plan for the future appropriately.
City of Manor (TX)
The City of Manor engaged Raftelis to conduct a water and wastewater cost-of-service study that considered water rates,
wastewater rates, capital infrastructure needs, and water supply. As staff consultant, Lundyn completed the fiscal year
2022 update.
City of Addison (TX)
Raftelis was engaged by Addison, TX to conduct a financial planning study to provide the Town with proposed
water and sewer rate based on the forecasted 7-year period (FY 2022-2028). The analysis evaluates the validity of
the previous forecast and adds various scenarios for the Town to consider timing and funding of projects.
City of Fair Oaks Ranch (TX)
Raftelis was engaged by City of Fair Oaks Ranch to conduct a water and wastewater cost-of-service. Lundyn
supported financial planning, cost-of-service, and rate design for the project.
PROJECT LIST
• Oklahoma City (OK) - Financial Plan and Rate Design Study
• Round Rock, TX – Financial Plan and Rate Design Study
• Arlington, TX – Financial Plan and Rate Design Study
RAFTELIS 49
Hannah Palmer-Dwore
LEAD ANALYST – STORMWATER
ASSISTANT ANALYST – WASTEWATER
Senior Consultant
ROLE
Hannah will be the lead analysis for the stormwater utility study. She will also
assist with the development of the wastewater financial plan, cost of service,
and rate design alongside Lundyn.
PROFILE
Hannah has a diverse background including natural science, natural resource
management, and quantitative analysis. Her expertise includes geospatial
analysis and modeling, technical report writing, and data management.
KEY PROJECT EXPERIENCE
Boulder County (CO)
Boulder County (County) engaged Raftelis to evaluate the feasibility of
establishing a stormwater utility and fee. Hannah worked with a team to
document the current stormwater management program and gap analysis,
develop data, and build a financial plan for the County.
City of Reno (NV)
Raftelis was engaged by the City of Reno (City) to study the feasibility of
developing stormwater management utility and fee to meet revenue needs and
consistently fund their stormwater program. As part of the project, Raftelis
built a 20-year financial model, developed data to determine units of service,
completed a rate base and rate structure analysis, and assessed stormwater fee
impacts on key customer segments. The City is currently working towards the
implementation of a stormwater utility. Hannah has assisted in developing
data as part of the feasibility study and led efforts to develop the financial
model.
Durham County (NC)
Durham County engaged Raftelis and WK Dickson to complete a Stormwater Funding Fee Plan and Utility Design
and Rate Structure Analysis. Raftelis was responsible for completing the cost-of-service analysis and rate structure
analysis. Hannah assisted in the development of a 10-year financial planning model and rate base estimate.
City of West Palm Beach (FL)
The City of West Palm Beach (City) engaged Raftelis to study the feasibility of developing a stormwater
management fee. Hannah assisted in and conducted quality control of data development to determine the proper
unit of charge.
Specialties
•Geospatial analysis
•Rate modeling & forecasting
•Water utility financial management &
planning
•Statistical analysis & data
management
•Technical report writing
Professional History
•Raftelis: Senior Consultant (2021-
present); Consultant (2019-2020);
Associate Consultant (2017-2018)
•Colorado Parks & Wildlife: Policy &
Planning Assistant (2017)
•National Geographic’s Big Cats
Initiative: Consulting Intern
•(2015-2017)
•American Rivers: River Restoration
Intern (2016)
Education
•Master of Environmental
Management, Ecosystem Science &
Conservation - Duke University
Nicholas School of the Environment
(2017)
•Geospatial Analysis Certificate
(2017)
•Bachelor of Arts in Organic
Chemistry & Theater - Sarah
Lawrence College (2009)
Professional Membership
•AWWA
•WEF
•American Planning Association
(APA)
RAFTELIS 50
City of Corpus Christi (TX)
The Raftelis team assisted the City of Corpus Christi (City) with the development of a stormwater utility fee to fund
the City’s stormwater management, operations, maintenance, and MS4 compliance. Hannah worked with the team
to ensure successful implementation by conducting quality control on parcel and account data. A successful go-live
for the new billing system occurred on January 1, 2022.
City of Marietta (OH)
Raftelis was retained by the law firm of O’Toole, McLaughlin, Dooley, & Pecora, Co., LPA to calculate the
financial impact caused by the failure of Washington County, OH (County) to connect to the City of Marietta’s
(City) sanitary sewer system. In 2011, The County and City entered into an intergovernmental agreement
stipulating that the City, which owned and operated a wastewater treatment plant (WWTP), would receive and
treat effluent from several areas of the County. The City expanded and improved their WWTP to accommodate the
additional flow. In return, the agreement stated that the County would pay for a portion of operating,
administrative, and capital costs associated with the expansion. Contrary to the agreement, the County did not
connect to the City sewer system, resulting in City customers bearing the entire cost of expansion in the form of
higher sewer rates. Hannah analyzed the financial impact to the City, defined as the difference between the sewer
rates that City customers have paid and the rates they would have paid given the additional volume that County
customers should have added to the system. The outcome of the analysis and negotiations for settlement are
currently under discussion by the relevant parties.
Town of Eagle (CO)
The Raftelis team began working on a wastewater rate and tap fee study in August 2020. This study was heavily
impacted by uncertainty stemming from the ongoing COVID pandemic. The Town was concerned about a
downturn in growth and rising costs of construction, in particular. As part of the financial model, Hannah
conducted sensitivity analyses to model different growth scenarios and cost estimates. In addition to developing a
12-year financial planning model and tap fees, Hannah evaluated the current equivalent residential unit (EQR) that
serves as the basis for assessing wastewater fees. She used historical data to provide recommendations to the Town
on establishing an EQR to be in the future.
Town of Nederland (CO)
Hannah served as lead consultant on the Town of Nederland’s (Town) water and wastewater financial plan, plant
investment fee (PIF), and rate study. During this study, JVA worked as a subconsultant to Raftelis and was tasked
with creating a Master Infrastructure Plan (MIP). The results of the MIP were incorporated into the financial plan,
PIF, and rate study. As the Town highly values sustainability and equity, these were used as key objectives in
creating new rate structures. Hannah worked closely with Town staff and the Board of Trustees to craft rates that
reflected these values while funding utility operations. She developed rates in tandem with 10-year financial plans
and financial planning models to be used by the Town in the future.
City of Jackson (WY)
Raftelis was engaged by the City of Jackson (City) to conduct a comprehensive rate and plant investment fee study.
As lead analyst, Hannah conducted a cost-of-service analysis and assisted in developing a long-range financial plan.
This plan provided several rate and fee recovery strategies, including tiered water rates, increasing revenue
recovered through fixed charges, and tailoring plant investment fees to ensure equitable charges are assessed.
Hannah assisted in stakeholder engagement by providing materials for Citizen Rate Committee (CRC) meetings.
City of Evans (CO)
The City of Evans (City) is focused on long-term sustainability in both financial and strategic planning. Anticipating
large capital expenditures in the next ten years, the City engaged Raftelis to develop a long-range financial plan that
RAFTELIS 51
sustains the financial health of the storm drainage fund. Hannah worked with City staff to develop a financial plan
and planning model to be used by utility staff in future planning. She also performed a cost-of-service study and
designed several rate alternatives to ensure equity between customers and adequate rate revenues.
Town of Erie (CO)
Hannah is served as lead consultant on the Town of Erie’s (Town) water, wastewater, and drainage rate and
connection fee study. The Town engaged Raftelis to conduct this comprehensive study to ensure that rates and
connection fees are set according to industry best standards, provide adequate funding for anticipated capital, and
remain comparable to utilities along the Front Range in order to encourage growth. Hannah is developing financial
plans for each utility and providing support in calculating connection fees. She is also conducting a spatial analysis
to determine parcel characteristics for each customer class to inform development of storm drainage rates and fees.
Crestview Water and Sanitation District (CO)
Hannah served as the lead consultant on a water and sewer rate study for the Crestview Water and Sanitation
District (District). The District sought to update its comprehensive financial plans as well as analyze the
performance of existing rate structures. Hannah prepared financial plans for each utility with a focus on funding
capital projects while minimizing revenue increases. She also analyzed historical consumption data to recommend
an update to water rates.
City of Golden (CO)
Hannah is currently serving as lead consultant on the City of Golden’s (City) water, wastewater, and stormwater
comprehensive financial analysis and rate study. The City wished to focus on the rate structures and updates to cost-
of-service. To identify rate alternatives, the City convened a Utility Rate Citizens Committee (URCC) to review and
provide recommendations on pricing objectives. Hannah prepared financial plans, cost-of-service analysis, and
created rate alternatives based on URCC recommendations for each utility. Hannah obtained and analyzed
impervious area data for residential and non-residential customers to ensure equitable revenue recovery between
classes. This study is ongoing and will be completed in Spring 2020.
City of Thornton (CO)
Raftelis was engaged by the City of Thornton (City) to conduct a stormwater utility feasibility study. Using available
aerial imagery, Hannah digitized a statistically significant sample of City parcels and conducted a spatial analysis to
determine impervious area and parcel statistics for each class of development. This data was used to calculate unit
costs of service and rates for each customer class. Hannah also conducted extensive research on stormwater policies
along Colorado’s Front Range, determining commonly-used rate structures, regulations and ordinances, as well as
exploring policies related to credits and refunds.
City of West Jordan (UT)
Hannah developed financial plans, performed cost-of-service studies, and designed rates for the wastewater and
stormwater utilities of West Jordan. As the City of West Jordan required a quick turnaround on this project,
Hannah efficiently conducted an accurate analysis and effectively conveyed the rate changes required for each
utility.
City of Phoenix (AZ)
Hannah worked with the City of Phoenix (City) to complete research, analysis, and calculation of a storm drainage
impact fee. This impact fee will be applicable to an area benefiting from proposed capital improvements whose
construction is being led by the Maricopa County Flood Control District (MCFCD).
RAFTELIS 52
City of Reno (NV)
The City of Reno (City) engaged Raftelis to study the feasibility of developing a stormwater management fee.
Hannah developing data by creating a sample of representative parcels from the Citywide database, digitizing the
impervious area for these parcels, and calculating the impervious area to determine the proper unit of charge.
City of Pocatello (ID)
Hannah developed a financial plan, performed a cost-of-service study, and designed rates for the sanitation utility of
Pocatello. Concurrently, she performed impact fee studies for the City of Pocatello’s water and wastewater utilities.
City of Buckeye (AZ)
The City of Buckeye (City) engaged Raftelis to update the Water and Wastewater IIP and DIF. Hannah was
responsible for conducting overlay analyses to aggregate areas for public safety, parks, streets, water, and
wastewater impact fees. She incorporated state and local policies in her work and used geospatial tools to complete
the analysis. Hannah worked with the engineering and planning staff to maintain and update geodatabases of utility
and non-utility data. At the City’s request, Hannah provided additional GIS support to the City’s engineering staff
on a per diem basis during a staffing shortage.
City of Thornton (CO)
The City of Thornton (City) sought to tailor single family residential system development charges to lot size in an
effort to better reflect the capacity of each user. Hannah conducted an analysis of SFR gross lot sizes and worked
closely with City officials to create an equitable fee structure and water allotment schedule for existing and future
users.
City of Sheridan (WY)
The City of Sheridan (City) requested a comprehensive water and wastewater rate and plant investment fee analysis.
Hannah conducted a comprehensive analysis of the billing data to project revenue as part of the financial planning
process. Hannah assisted with developing plant investment fees for water and sewer, as well as drafting the technical
report.
Three Lakes Water and Sanitation District (CO)
Three Lakes Water and Sanitation District (District) engaged Raftelis to conduct a cost-of-services analysis in
anticipation of large capital expenditures. The District has several unique features, including its local terrain and
large service area, which offer unique challenges to providing coverage to customers. Additionally, the District has
several inactive taps of record purchased at various costs over the years which have not been subject to a capital
improvement fee. Hannah has begun preliminary analysis to provide a rate analysis and financial forecast to meet
the goals of the utility.
Eagle River Water and Sanitation District (CO)
The Eagle River Water Sanitation District’s (District) current policy provides static monthly allocations for single
family equivalents. To improve water use efficiency, the District requested a rate study for coverage-based irrigation-
only water allocations by tier. Hannah conducted an analysis of billing data to determine historical use by customer
class and drafted a water budget based on evapotranspiration values for the study area.