25B - AGMT WATER AND SEWER COSTS STUDY

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explanation required from rate reports. For example, in reviewing the Citys 2014 water rate study report (1) there doesn't appear to be a justification for the per-unit charge for multifamily residences, (2) the OCWD "pass-through" formula isn't explained, and (3) the recycled water rates (which are lower than potable water rates) are not fully explained. While it is possible that all of these elements have an equitable basis, there is insufficient documentation. And Insufficient documentation is the root cause of most successful Proposition 218 lawsuits. At Stantec, we are proud to say that we have been providing thorough and defensible deliverables (ultimately the "administrative record" in court) since before the San Juan Capistrano case made it the "new standard". Finally, because we recognized that this engagement includes a mid-term review (Task VII), we will be particularly attentive to developing financial models that can be efficiently populated with updated O&M and capital spending data (as is part of the standard added value that we provide to our clients). Scope Based on our understanding of the City and the requested services, we propose to complete the following tasks. The schedule in Section F and the Fee in Section H correspond with these tasks. Task I. Water, Recycled Water and Sanitary Sewer System Evaluation To initialize the study we will submit a data request to the City. Shortly thereafter, we will conduct a Project Kickoff Meeting with staff to: ✓ Discuss key issues, roles and responsibilities ✓ Confirm study objectives and further explore project drivers such as revenue stability ✓ Confirm data requirements and discuss the data already received ✓ Finalize the project schedule, including key milestone dates and deliverables Once all data has been received, we will review it in detail. This will include a review of master plan documents, historical performance, financial data, prior studies, capital plans, budgets and service agreements. Follow-up calls with staff will be made to ensure full understanding of all data received. We will perform a detailed review of the data pertaining to the water, recycled water and sewer enterprises. Based on our review of all applicable data, Stantec shall Identify any cost of service gaps or discrepancies between the existing rate structures, the projected maintenance, operations and capital spending plans and the effects of drought and associated reduced water consumption demands. This summary will also identify the strategy that Stantec proposes to use to address any cost of service gaps identified. Meetings Kickoff Meeting Deliverables Existing Cost of Service Summary Technical Memo (print and electronic) City of Santa Ma, Califomia I Water and Sewer Enterprise Coll of Service Study 25B-26 Stantec 7