HomeMy WebLinkAboutContract 44339 (2)CiTY
COWT �1®0 61
STATE OF TEXAS
COUNTIES OF TARRANT
DENTON AND WISE
THIS AGREEMENT is made and executed by and between the City of Fort Worth, Texas,
a municipal corporation situated in Tarrant, Denton and Wise Counties, Texas, hereinafter called the
"City", acting herein by and through Fernando Costa, its duly authorized Assistant City Manager,
and Raftelis Financial Consultants Inc., hereinafter called the "Consultant," acting herein by and
through William G. Stannard, its duly authorized President and CEO.
•
WHEREAS, the City desires to perform a Wholesale Wastewater Cost of Service and Rate
Study; and
WHEREAS, the City desires to hire a professional firm knowledgeable and experienced in
conducting such a study; and
WHEREAS, the Consultant has represented that it is knowledgeable and experienced in
conducting such a study.
NOW, THEREFORE, that for and in consideration of the mutual covenants and
agreements herein contained, the parties hereto do hereby covenant and agree as follows:
SECTION 1.
DEFINITIONS
In this Contract, the following words and phrases shall be defined as follows:
Citv's Representative means the Director of the Water Department or his designee.
Contract Documents means the Consultant's Draft Scope of Services and all its addenda, attached
as exhibit "A", this Contract and all other attachments.
Deliverable Document means a report, photograph, electronic file, or an invoice that shows the
completion of one of the work tasks and/or subtasks. Electronic files shall be in Word, Excel,
AutoCad, or similar software and shall be provided as requested by the City.
Notice to Proceed means the letter issued by the City that authorizes Consultant to begin work. It
also authorizes future invoices to be paid.
The City hereby contracts with the Consultant as an independent consultant, and the Consultant
hereby agrees to perform the professional services set out herein in accordance with standard utility
rate -setting practices and policies.
RECEIVED APR �2 2013
OFFICIAL RECORD
C;2RTY SECRETARY
i'.. WORTH, TX��
SECTION 2.
SCOPE OF SERVICE- S
The Consultant shall perforiu a Wholesale Wastewater System Cost of Service and Rate Study for
fiscal year beginning October 1, 2013 in accordance with Consultant's Response to the RFP as
described in Exhibit A.
SECTION 3.
TIME OF PERFORMANCE
Services of the Consultant shall commence upon execution of this Agreement. Unless otherwise
directed by the City and agreed to by the Consultant, the deliverables shall include the following as
set forth by the City.
1. The Consultant will review all inputs made by Staff into the rate model.
2. The Consultant will review and confirm all calculations by the model related to establishing
revenue requirements:
a) operating expense;
b) depreciation expense; and
c) return on investment.
3. The Consultant will review and confirm all calculations by the model related to allocating
costs of service:
a) allocate cost of service to wastewater service functions; and
b) allocate functionalized costs to the wholesale customer class
4. The Consultant will review and confirm all calculations by the model related to calculating
and recommending rates and charges:
5. May 16, 2013 Preliminary Cost of Service and Rates Report;
6. June 6, 2013 1st Draft Cost of Service and Rates Report and
7. July 18, 2013 Final Cost of Service and Rates Report.
SECTION 4.
COMPENSATION TO THE CONSULTANT AND METHOD OF PAYMENT
As compensation for the services required to complete this Project in accordance with the terms of
this Agreement, the City agrees to pay the Consultant on the basis of the hourly rates set forth in this
section an amount not -to -exceed $44,560. This amount shall constitute full and complete
compensation for the Consultant' s services under this Agreement, including all expenditures made
and expenses incurred by the Consultant in performing such services.
Such compensation shall be paid to the Consultant in monthly installments upon submission of
statements, togetherwith supporting data indicating the progress of the work and services
performed for the month immediately preceding. Invoices will be due upon receipt and payable
within thirty (30) days, subject to certification by the Director of the Water Department, or his
authorized representative, that such work has been performed and the expenses have been incurred.
Such certification shall not be unreasonably withheld or delayed.
Reimbursable expenses are part of the Not -to -Exceed amount and include, but are not necessarily
limited to subcontractors expenses, travel, report production and other out-of-pocket expenses,
which shall be paid based upon actual cost, supported by such documentation as the City may
reasonably request.
SECTION 5
PROFESSIONAL RESPONSIBILITY AND WARRANTY
Consultant shall perform services consistent with skill and care ordinarily exercised by other
professional consultants under similar circumstances at the time services are performed, subject to
any limitations established by City as to degree of care, time or expense to be incurred or other
limitations of this Agreement. Consultant further warrants that it will perform all services under this
Agreement in a safe, efficient and lawful manner using industry accepted practices, and in full
compliance with all applicable state and federal laws governing its activities and is under no
restraint or order which would prohibit performance of services under this Agreement.
SECTION 6.
ESTABLISHMENT AND MAINTENANCE OF RECORDS
Records shall be maintained by the Consultant at its place of business with respect to all matters
covered by this Agreement. Such records shall be maintained for a period of three (3) years after
receipt of final payment under this Agreement.
SECTION 7.
AUDITS AND INSPECTIONS
The Consultant agrees that the City shall, until the expiration of three (3) years after the final
payment under this Agreement have access to and the right to examine any directly pertinent books,
documents papers and records of the Consultant involving transactions relating to this Agreement.
The Consultant agrees that the City shall have access during normal working hours to all necessary
Consultant facilities and shall be provided adequate and appropriate work space in order to conduct
audits in compliance with the provisions of this section. The City shall give Consultant reasonable
advance notice of intended audits.
The Consultant further agrees to include in all its subcontracts hereunder a provisions to the effect
that the subcontractor agrees that the City shall, until the expiration of three (3) years after the final
payment and directly pertinent books, documents, papers and records of such subcontractor,
involving transactions to the subcontract, and further that City shall have access during normal
working hours to all subcontractor facilities, and shall be provided adequate and appropriate work
space, in order to conduct audits in compliance with the provisions of this article and shall give
subcontractor reasonable advance notice of intended audits.
SECTION 8.
INDEMNITY
THE CONSULTANT AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
THE CITY AND ITS OFFICIALS, AGENTS AND EMPLOYEES FROM AND AGAINST
ANY AND ALL THIRD PARTY CLAIMS, ACTIONS, SUITS OR PROCEEDINGS OF
ANY KIND BROUGHT AGAINST SAID PARTIES TO THE EXTENT CAUSED BY THE
NEGLIGENT ACT, ERROR, OR OMISSION OF THE CONSULTANT OR
CONSULTANT'S AGENTS, EMPLOYEE OR OFFICER, IN THE PERFORMANCE OF
SERVICES HEREUNDER. THE CONSULTANT IS NOT REQUIRED HEREUNDER TO
DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY OF FORT WORTH AND
ITS OFFICIALS, AGENTS AND EMPLOYEES FROM LIABILITY RESULTING FROM
THE NEGLIGENCE OR WRONGFUL ACTS OF THE CITY OR ANY THIRD PARTY
THE INDEMNITY REQUIRED HEREUNDER SHALL NOT BE LIMITED BY REASON
OF THE SPECIFICATION OF ANY PARTICULAR INSURANCE COVERAGE IN THIS
AGREEMENT.
SECTION 9.
COMPLIANCE WITH LAWS
In providing the scope of services outlined herein, the Consultant shall comply with all applicable
laws, ordinances, and codes of the Federal, State and local governments.
Consultant certifies that on the day work is to commence under this Agreement and during the
duration of the Agreement, it shall have and maintain current valid and appropriate federal and state
licenses and permits necessary for the provision of services under this Agreement.
Consultant also certifies that if it uses any subcontractor in the performance of this Agreement, that
such subcontractor shall have and maintain current valid and appropriate federal and state licenses
and permits necessary foi the provision of services under this Agreement.
SECTION 10.
NON-DISCRIMINATION
During the performance of this Contract, Consultant agrees not to discriminate against any
employee or applicant for employment because of race, religion, color, sex or national origin,
except where religion, sex or national origin is a bona fide occupational qualification reasonably
necessary to the normal operation of the Consultant. Consultant agrees to post in conspicuous
places, available to employees and applicants for employment, notices setting forth the provisions of
the non-discrimination clause.
Consultant also agrees that in all solicitations or advertisements for employees placed by or on
behalf of this Contract, that Consultant is an equal opportunity employer.
Notices, advertisements, and solicitations placed in accordance with federal law rule or regulation
shall be deemed sufficient for the purpose of meeting the requirements of this section.
SECTION 11.
MODIFICATION
No modification of this Agreement shall be binding on Consultant or the City unless set out in
writing and signed by both parties. Modifications shall be in the same format as the final
specification showing the change or addition of a task, project schedule, deliverable document(s),
and schedule of payments.
SECTION 12.
PERSONNEL
The Consultant represents that it has, or will secure at its own expense all personnel required in
performing all of the services required under this Agreement. Such personnel shall not be
employees of or have any contractual relationships with the City.
All the services required hereunder will be performed by the Consultant or under its supervision and
all personnel engaged in the work shall be qualified and shall be authorized or permitted under state
and local law to perform such services.
The Consultant represents that the Consultant's Project Manager, Thomas Beckley, is available to
ensure completion of the scope of services pursuant to this Agreement.
SECTION 13.
ASSIGNABILITY
Neither party hereto shall assign, sublet or transfer its interest herein without prior written consent of
the other party, and any attempted assignment, sublease or transfer of all or any part hereof without
such prior written consent shall be void.
SECTION 14.
DEFAULT
Consultant shall not be deemed to be in default because of any failure to perform under this
Agreement, if the failure arises from causes beyond the control and without the fault or negligence
of Consultant. Such causes shall include acts of God, acts of the public enemy, acts of Government,
in either its sovereign or contractual capacity, fires, flood, epidemics, quarantine restrictions, strikes,
freight embargoes, and unusually severe weather.
If Consultant fails to begin work herein provided for within the time specified above, or to complete
such work within the time specified above, within the true meaning of this Agreement, City shall
have the right to take charge of and complete the work in such a manner as it may deem appropriate.
If City exceeds the costs detailed in the attached documents, City may deliver to Consultant a
written itemized statement of the total excess costs, and Consultant shall reimburse City for such
excess costs without delay.
If, at any time during the term of this Contract, the work of Consultant fails to meet the
specifications of the Contract Documents, City may notify Consultant of the deficiency in writing.
Failure of Consultant to correct such deficiency and complete the work required under this
Agreement to the satisfaction of City within ten (10) days after written notification shall constitute
default, and shall result in termination of this Agreement. All costs and attorneys fees incurred by
City in the enforcement of any provision of this Agreement shall be paid by Consultant.
The remedies provided for herein are in addition to any other remedies available to City elsewhere
in this Agreement and by law.
SECTION 15.
TERMINATION OF CONVENIENCE OF CITY
The City may terminate this Agreement for its convenience at any time by giving at least ten (10)
days notice in writing to the Consultant. In the event of tennination pursuant to this paragraph,
Consultant shall be entitled to receive payment for all work completed or in progress, and for costs
reasonably incurred to close out its project services. Compensation is to include fees, expenses and
liabilities to subcontractors or other third parties. Consultant will make reasonable attempts to
cancel all such liabilities in order to mitigate the cost to the City. If this Agreement is terminated
due to the fault of the Consultant, Section 14 shall apply.
SECTION 16.
INSURANCE
Consultant shall maintain at its own expense the following insurance:
1. Commercial General Liability (CGL)
$1,000,000 each occurrence
$2,000,000 aggregate limit
2. Workers' Compensation
Statutory limits
Employer s liability
$100,000 each accident/occurrence
$100,000 Disease - each employee
$500,000 Disease - policy limit
3. Automobile Liability
$1 000,000 each accident on a combined single limit basis
Split limits are acceptable if limits are at least
$250,000 Bodily Injury per person /
$500,000 Bodily Injury per accident /
$100,000 Property Damage
4. Errors & Omissions (Professional Liability)
$1,000,000 per claim and aggregate
The certificate of insurance shall document the City of Fort Worth, its' Officers, Employees and
Volunteers as an "Additional Insured" on all liability policies. The additional insured
requirement does not apply to Workers' Compensation policies
The certificate of insurance shall provide thirty days (30) notice of cancellation or non -renewal.
Example: "This insurance shall not be canceled, limited in scope or coverage cancelled
or non -renewed, until after thirty (30) days prior written notice has been given to the City
of Fort Worth.
The certificate shall be signed by a agent authorized to bond coverage on behalf of the insured,
be complete in its entirety, and show complete insurance carrier names as listed in the current
A.M. Best Property & Casualty Guide
All policies shall include a Waiver of Subrogation (Rights of Recovery) in favor of the City of
Fort Worth.
The insurers for all policies must be licensed and/or approved to do business in the State of
Texas. Except for workers' compensation, all insurers must have a minimum rating of A-: VII in
the current A. M. Best Key Rating Guide or have reasonably equivalent financial strength and
solvency to the satisfaction of Risk Management If the rating is below that required, written
approval of Risk Management is required.
If insurance policies are not written for specified coverage limits, an Umbrella or Excess
Liability insurance for any differences is required. Excess Liability shall follow form of the
primary coverage.
"Unless otherwise stated, all required insurance shall be written on the ` occurrence basis' . If
coverage is underwritten on a claims -made basis, the retroactive date shall be coincident with or
prior to the date of the contractual agreement and the certificate of insurance shall state that the
coverage is claims -made and the retroactive date. The insurance coverage shall be maintained
for the duration of the contractual agreement and for five (5) years following completion of the
service provided under the contractual agreement or for the warranty period, whichever is longer.
An annual certificate of insurance submitted to the City shall evidence such insurance coverage.
Policies shall have no exclusions by endorsements, which nullify the required lines of coverage,
nor decrease the limits of said coverages unless such endorsements are approved in writing by
the City In the event a contract has been bid or executed and the exclusions are determined to be
unacceptable or the City desires additional insurance coverage, and the City desires the
Consultant/engineer to obtain such coverage, the contract price shall be adjusted by the cost of
the premium for such additional coverage plus 10%.
Certificates of Insurance shall be furnished to the City upon the request of the City.
SECTION 17.
SEVERABILITY
If any portion of this Contract is held to be void, invalid, or otherwise unenforceable, in whole or
part, the remaining portions of this Contract shall remain in effect.
SECTION 18.
VENUE
Should any action, whether real or asserted, at law or in equity, arise out of the terms of this
Contract, venue for said action shall be in Tarrant County, Texas.
SECTION 19
AGREEMENT AMENDMENT
This Contract and all attachments represents the entire understanding between the City and the
Consultant in respect to the Project, supersedes any and all prior written or oral negotiations of
agreements between the parties, and may only be modified in writing signed by both parties.
SECTION 20.
NOTICES
All written notices to the respective parties shall be sent by registered mail and be addressed as
follows:
CITY OF FORT WORTH CONSULTANT
Frank Crumb William G Stannard
Water Department Director President & CEO
City of Fort Worth Raftelis Financial Consultants, Inc.
1000 Throckmorton 3013 Main Street
Fort Worth, Texas 76102 Kansas City, MO 64108
SECTION 21.
CAPTIONS
The captions of this Contract are for informational purposes only and shall not in any way affect the
substantive terms and conditions of the Contract.
SECTION 22.
CONFLICTS
This Contract is the sole agreement between the City and the Consultant and any and all other prior
agreements, whether oral or written, are merged into this Contract and of no further force or effect.
EXECUTED on this, the -1/3 day of
Raftelis Financial Consultants, Inc.
BY William G. Stannard
ITS President and CEO
3///duS
Date
LA
Witness
, 2013.
City of Fort Worth, Texas:
Fernando Costa
Assistant City Manager
4/1/13
Date
Approval Recommended
Frank Crumb, P.E., Director
Fort Worth Water Department
APPROVED AS TO FORM AND
LEGALITY:
5C*3h?.rYtwyt&J
Christa R. Reynolds
Senior Assistant City Attorney
ATT ST:
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Exhibit A
Consultant's Response to RFP
GITY OF
FORT WORTH
WATER DEPARTMENT
Wholesale Wastewater Cost of Service and Rate Study
January 28, 2013
401 Congress Avenue, Suite 1540 Austin, TX 78701
Phone 512.687.3409 Fax 512.687.3499
www.rattelis.com
RAFTELIS
FINANCIAL CONSULTANTS, INC.
This page intentionally left blank to facilitate two-sided printing.
January 25, 2013
Mr. Skipper Shook
Senior Utility Rate Analyst
Fort Worth Water Department
1000 Throckmorton, Second Floor
Fort Worth, TX 76102
401 Congress Avenue
Suite 1540
Austin, TX 78701
Subject: Proposal for Wholesale Wastewater Cost of Service and Rate Study
Dear Mr. Shook:
hone 512.687.3409
512.687.3499
1s.cmn
Raftelis Financial Consultants, Inc. (RFC) is pleased to submit this proposal to conduct a wholesale wastewater
cost of service and rate (Study) for the City of Fort Worth (City) Water Department (Department). We appreciate
the opportunity to submit this proposal, which details our project approach to meet the Department's objectives
and our qualifications and experience within the water and wastewater utility industry.
The City has a population nearing 750,000, with a rich history dating back to 1873 when it was first incorporated.
'The City purchased the water system in 1884, and began treating wastewater in 1924. In addition to providing
service to City residents and businesses, the City provides service to areas outside the City through wholesale water
and wastewater contracts. The City is seeking a qualified consultant to perform a cost of service and rate study for
its wholesale wastewater service. Specifically, the City recognizes the value in regularly reviewing wholesale rates,
and conducts a wholesale wastewater ate update on a three-year cycle. As part of this study, the City is seeking a
consultant to evaluate the existing methodology and provide recommendations for the updated calculation. Based
on our extensive experience and expertise in utility finance and rate setting, we believe that RFC is the most quali-
fied firm to assist the City with this important project.
RFC was established in 1993 to provide financial, pricing, and management consulting services of the highest qual-
ity to public and private water and wastewater utilities. RFC is one of the largest and most experienced utility rate
and financial consulting firms in the country. Our staff have provided rate and/or financial planning assistance to
more than 500 utilities across the United States and have conducted thousands of studies. No one in the industry
can equal RFC's combination of size, efficiencies, and corporate independence. Our mission has always been fo-
cused on assisting our clients in meeting their goals of financial viability, and we have no "stake" in the scope and
depth of a utility's capital investments, which allows us to avoid the potential for conflicts.
Our staff members are involved in shaping industry standards by chairing and actively participating in various com-
mittees within the American Water Works Association (AWWA) and the Water Environment Federation (WEF).
We have authored or co-authored several industry standard books related to water and wastewater utility rate setting
and finance, and are also responsible for producing the biennial AWWA/RFC rational Writer and Wastewater Rate
Survey, which is the most comprehensive collection of water and wastewater utility data available in the industry.
To assist the Department with this project, we have assembled a team with extensive experience and a reputation
tor quality service. As President and Chief Executive Officer of RFC, I will serve as Project Director, responsible
for overall project accountability and contractual representations with the Department. I have more than 35 years
of experience providing consulting services to utilities covering a variety of economic, financial, and management
matters. Tom Beckley will serve as Project Manager for this project. He will manage the day-to-day aspects of the
project and ensure it is within budget, on schedule, and effectively meets the Department's objectives. Tom has been
with RFC since 2000, serving as manager on a variety of projects to assist water and wastewater utilities in address-
ing economic and financial issues. Rocky Craley will work at Tom's direction in conducting analyses and prep lying
project deliverables. Rocky has provided a variety of financial and rate consulting scrvices for utilities across the
country. In addition to our dedicated Project Team members, we will have the full support of RFC's staff of 38 util-
ity rate, financial, and management consultants.
We are proud of the resources that we can offer and welcome the opportunity to be of assistance to the City on
this engagement. Should you have any questions, please do not hesitate to contact me or our Project Manager, Tom
Beckley, using the following contact information.
William (Bill) Stannard, PE
Office: 816.285.9022
Mobile: 913.710.2575
E-Mail: wstannard@raftelis.com
Tom Beckley
Office: 816.285.9024
Mobile: 816.682.1328
E-Mail: tbeckley@raftelis.com
Very truly yours,
RAFTELIS FINANCIAL CONSULTANTS, INC.
William G. Stannard, PE
President and Chief Executive Officer
IS rI ANCIAL CONSULCAN IS, INC. CITY OF FORT WORTH WATER DEPARTMENT
TABLE OF
ONTENTS
01 Firm Profile
03 Project Team
05 Experience & References
13 Project Understanding
14 Project Approach
19 Fee for Services
21 RFP Affirmations
23 Appendix A: Project Team Resumes
37 Appendix B: Recommendation Letters
45 Appendix C: Board Resolution
This page intentionally left blank to facilitate two-sided printing.
�FT3LIS FIclANCIAL CONSULTANTS, INC.
FIRM PROFILE
In 1993, Raftelis Financial Consultants,
Inc. (RFC) was founded to provide services
that help utilities function as sustainable
organizations while providing the public with
clean water at an affordable price.
With this goal in mind, RFC has grown to become one of the
Largest and most respected utility financial, rate, and management
consulting practices in the nation. RFC has experience providing
rate/financial services, including cost of service analysis, to hun-
dreds of utilities across the country and abroad, allowing us to
provide our clients with innovative and insightful recommenda-
tions that are founded on industry best practices.
Throughout our history, we have maintained a strict focus on the
financial and management aspects of utilities, building a staff with
knowledge and skills that are extremely specialized to the services
that we provide, and thus allowing us to provide our clients with
independent and objective advice. RFC's staff currently consists of
38 consultants in our 6 offices positioned strategically throughout
the country to effectively and efficiently serve our clients. Our full
consulting staff will be available to provide support for this project,
as necessary, giving us ample resources to meet the City's goals
and objectives.
CITY OF FORT WORTH WATER DEPARTMENT 01
OFFICE LOCATIONS
Austin Office
401 Congress Avenue, Suite 1540
Austin, TX 78701
p: 512.687.3409 / f: 512.687.3499
Kansas City Office
3013 Main Street
Kansas City, MO 64108
p: 816.285.9020 / f: 816.285.9021
Charlotte Office
1031 S. Caldwell Street, Suite 100
Charlotte, NC 28203
p: 704.373.1199 / f: 704.373.1113
Pasadena Office
201 S. Lake Avenue, Suite 301
Pasadena, CA 91101
p: 626.583.1894 / f: 626.583.1411
Orlando Office
976 Lake Baldwin Lane, Suite 204
Orlando, Ft 32814
p: 407.271.4775 / f: 407.730.5941
Raleigh Office
121 Edinburgh South Drive, Suite 214
Cary, NC 27511
p: 919.780.9151
C is registered with the U.S. Securities `Exchange Commission (SECI and the f Municipal Securities
emaking Board (MSR3) as a Municipal Advisor. The registration reauurment Is a new rute cov-
:red under the Dodd -Frank 'Watt Street Reform and Consurn
issuance support services, i:actutting financial easibll
nd tiiSRB to tegatly provide official opinions and re
r Protecuon Act. All firms that provide
dies, must be registered with the
vices. ;RFC's registration allows our
clients to be confident that 'iFC is fully qualified and capable of providing financial advice related to
antes in comp tirinr:e','vith the .a apticahle regulations of the SEC and the MSRB.
02 CITY OF FORT WORTH WATER DEPARTMENT .AFTELIS FINANCIAL CONSULTANTS, INC.
UNPARALLELED EXPERIENCE
RFC staff have assisted more than 500 water and/or
w-istewater utilities throughout the country with a
wide variety of financial and rate consulting services.
Benefit:: Our extensive national and local experience will
allow us to provide innovative and insightful
recommendations to the Department
to resolve challenges, and to provide
independent validation for the
proposed methodology ensur-
ing that the best industry
practices are incorporated.
DEPTH OF
RESOURCES
RFC has one of the larg-
est water industry financial
planning, cost of service, and
rate consulting practices in the
nation.
FOCUS
RFC's services are solely focused on providing finan-
cial, pricing, and management consulting services to
water -industry utilities.
Benefit: This focus allows RFC professionals to de-
velop and maintain knowledge and skills
which are extremely specialized to the
services that we provide, and will
allow us to provide the Depart-
ment with independent and
objective advice.
WHAT MAKES RFC
U � QU
Benefit: Our depth of resources will al-
low us to sufficiently staff this project with
the qualified personnel necessary to efficiently and ex-
peditiously meet the objectives of the Department.
INDUSTRY LEADERSHIP
Our senior staff is involved in shaping industry stand-
ards by chairing various committees within American
Water Works Association (AWWA) and Water En-
vironment Federation (WEF). RFC's staff members
have authored and co-authored many industry stand-
ard books regarding utility rate setting.
Benefit: Being so actively involved in the industry
will allow us to keep the Department informed of
emerging trends and issues, and to be confident that
our recommendations are insightful and founded on
sound industry principles.
9
MODELING EXPERTISE
RFC has developed some
of the most sophisticated
yet user-friendly financial/
rate and cost of service mod-
els available. Our models are
custom-built on a client -by -cli-
ent basis and are non-proprietary,
which ensures that our models fit the
specific needs and objectives of each of
our clients.
MINE
Benefit: Our models are tools that allow us to examine
different policy options and cost allocations and their
financiallcustomer impacts in real time. Our models
are non-proprietary and are developed with the expec-
tation that they will be used by the client as financial
planning tools long after the project is complete.
CLIENT COMMITMENT
RFC strives to develop strong relationships with each
of our clients. We work collaboratively with our clients
during the engagement and provide any necessary as-
sistance after the engagement.
Benefit: We recognize that we have a vested interest
in the success of our clients. This engagement would
allow us build a strong and lasting relationship with
Departtent staff.
IELIS FINANCIAL CONSULTANTS, NC.
PROJECT TEAM
CITY OF FORT WORTH WATER DEPARTMENT 03
Our team consists of some of the most knowledgeable and skilled financial and
management consulting professionals in the wa-
ter, wastewater, and stormwater utility industry.
As a result of their many years of experience, our
consultants are able to provide clients with insight-
ful recommendations to address their goals and
objectives. RFC places a high priority on being re-
sponsive to our clients and, therefore, actively manages each consultant's project
schedule to ensure appropriate availability for addressing client needs.
RFC currently has a team of 38 consultants who specialize in financial, rate, and/
or management consulting services for water wastewater, and stormwater utili-
ties. In •addition, many of our consultants are subject matter experts in specific
areas of utility finance and management, from innovative pricing structures to organizational optimization. Our per-
sonnel are able to leverage the depth of their expertise to provide our clients with solutions to the most complex
situations. In addition to our dedicated Project Team, the Department will have the support of RFC's full staff for
this project RFC will not be utilizing any subconsultants for this project. -
In the following pages, we have provided brief profiles of each of our Project Team members and descriptions of
their role for the Department's project. In Appendix A of this proposal, we have included more detailed resumes.
While there are no specific registrations/licenses required to conduct the requested services in the State of Texas, all
of our Project Team members are fully capable and qualified to conduct these services.
itFC persone ship industry st,udar'ds through active p.,rticipation and teartarship 1n indus-
ry nssoctatit7a;s. {7ur st if i:lduc! is a marnber of the rvtanacternenl Division of AVJV/A, 'numbers
of i','{'f':.rA's ita'es ;and u`harges Committee, the recant Ct air of i INWA's Financial Accounting
vier Char ofA'rVW/ s Strategic Management
Practices Committee, .and the former t:ixair of the WE - G s12 Force istaw,a,ter Charges.
and t•fanagernent Controls Cornmitte
eiNW-rr,ftoti5.com/ahontit�adcrs1
ore :about Wirt r eaders.
04 CITY OF FORT WORTH WATER DEPARTMENT TELIS FINANCIAL CONSULTANTS, INC.
FC staff hive
written one of
the leading books
on tvater and
wastewater financial
issues, Water trod
Wastewater Finance
.and Pricing: A
t:urnnrrahensive
+3uide, ill(I co-
authored other
industry standard
hooks, such as:
AWWA's ivanuat
`ill, Principles
ui Water Rates,
_,res and Charges,
AWWA's Water
vies, (-ecs, ;and the
_dal Environment.
t=cllti}xi, and
VFF's Financing
;yid (Thai Les for
JasteNater Svstems.
'd-C also conducts
.;nd publishr s the
natiort:rt'vVater and
i �.7steIle
i u veV
;trill) 1' \V)
unlunctian
nnSt
compnfili nsfve
.oilection of water
and wastewater
l;ty data available
the industry.
ILIUM ,) Nc\0, PE
ect Director (President and CEO
:Kansas City t ri
PROJECT ROLE
Mr. Stannard will be responsible for overall project accountability ensuring
it is completed in a timely manner, and for contractual representations with
the Department.
PROFILE
Mr. Stannard has more than 35 years of experience providing consulting
services to investor and municipally -owned utilities covering management,
operation, economic, and financial matters. His extensive experience en-
compasses formulation of financial systems and ordinances for compliance
with regulations regarding the Clean Water Act rind the Safe Drinking
Water Act; comprehensive revenue requirements and cost of service stud-
ies; consulting engineers and financial feasibility reports related to the sale
of revenue bonds; financial feasibility analyses; organizational and manage-
ment reviews; and utility competitiveness studies. He has served as an expert
witness in rate litigation matters in federal and state courts and before arbi-
tration panels and state public service commissions. Mr. Stannard has also
served as an arbitrator in resolving water and wastewater rate disputes. Mr.
Stannard has been an active member of the WEF and AWWA He served
as Lhair of the WEF task force charged with the development of a Manual
of Practice, Financing aid Charges for Wastewater Systems. Mr. Stannard
was also a contributing author for the book Water and Wastewater Finance
and Pricing: A Comprehensive Guide ("Third Edition). This authoritative
text is used by utility manzgers and consultants throughout the United
States. He 's a past -chair of AWWA's Finance, Accounting and Manage-
ment Controls Committee, and a trustee of AWWA's Management and
Leadership Division.
\FTELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 05
enior Ctent, :Kansas t.:ity liffl.e)
PROJECT ROLE
Mr. Beckley will be managing the day-to-day aspects of the project and ensuring it is within budget, on schedule,
and effectively meets the Department's objectives. He will also conduct analyses and prepare project deliverables.
PROFILE
Mr. Beckley has over ten years of experience with RFC in conducting finance related projects. He has assisted a
wide range of municipal water and wastewater utilities in conducting cost of service, financial feasibility, privatiza-
tion system development fee, and other finance related studies. Some of his past clients include San Francisco
Public Utilities Commission (CA); City of Phoenix (AZ); City of Peoria (AZ); City of Naperville (IL); Northwest
Water Commission (IL); City of Hobbs (NM); Birmingham Water Works Board (AL); City of Orlando (FL) Ar-
lington County (VA); Loudoun County Sanitation Authority (VA); City of Suffolk (VA); City of Saginaw (MI);
City of Wyoming (MI); City of Grosse Pointe (MI); City of Denton (TX); and City of Olathe (KS).
;43CKY ORAL :.Y
Consultant (Senior Consultant, n FC v Austin Office)
PROJECT ROLE
Mr. Craley will work at the direction of Mr. Beckley to conduct analyses and prepare project deliverables.
PROFILE
Mr. Craley joined RFC at the beginning of 2008. He has a highly analytical background, and his expertise lies in
data compilation analysis, and modeling. Since joining RFC, he has served as a consultant on numerous water
and wastewater rate aid cost of service studies. Additionally, he has had the opportunity to work on a wide range
of other projects involving public -private partnerships, rate differentials, risk analysis, and utility policy. Mr. Cra-
ley also manages RFC's many survey efforts, including the biennial national Water and Wastewater Rate Survey
co -produced with AWWA and the Utility Financial Information Survey produced by A?v1WA. Mr Craley is an
active member of WEF, and WEF's Utility Management Committee, and he serves on the WEFTEC Planning
Committee He is also a contributing author for the 4th edition of Water and Wastewater Finance and Pricing: A
Comprehensive Guide to be released in 2013.
06 CITY OF FORT WORTH WATER DEPARTMENT AFTELIS FINANCIAL CONSULTANTS, MC.
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iAFTELIS FINANCIAL CONSUL/AN IS, INC.
CITY OF FORT WORTH WATER DEPARTMENT 07
EXPERI[NCE&R ER NC S
RFC staff have provided financial, rate, and/or management consulting services to more than 500 utilities across the country.
In the past year alone, RFC worked on more than 250 financial and/or rate consulting projects for over 160 water, wastewater,
and/or stormwater utilities in 28 states and the District of Columbia. The matrix below displays a list of some of the utilities
that we have assisted in the past and the services performed for these utilities.
Birmingham (AL) Water Works Board
Mobile (AL) Area Water and Sewer
System
Little Rock Wastewater Utility, AR
City of Peoria, AZ
City of Phoenix, AZ
Pima County, AZ
City of Scottsdale, AZ
City of Anaheim, CA
City of Beverly Hills, CA
City of San Diego, CA
City of Redlands, CA
Metropolitan Water District of Southern
California
San Francisco (CA) Public Utilities
Commission
Groton Utilities, CT
District of Columbia Water and Sewer
Authority
City of Wilmington, DE
City of Pompano Beach, FL
City of Canton, GA
Columbus (GA► Water Works
Gainesville/Hall County, GA
City of Kansas City, KS
City of Olathe, KS
City of Wichita, KS
Paducah -McCracken Joint Sewer
Agency IKY)
Sewerage and Water Board of New
Orteans, LA
City of Baltimore, MD
Macomb County, MI
City of Saginaw, MI
City of Wyoming, MI
City of Lee's Summit, MO
Kansas City, MO
Metropolitan Sewer Distirct 5t. Louis, MO
v ✓
✓
✓
✓
✓ /
✓
✓ ✓
✓
✓
✓ ✓ ✓ ✓
✓
✓ ✓ ✓
✓ ✓
✓
✓
✓ ✓
✓
✓ ✓
✓
✓
✓ ✓ ✓
✓
✓
✓ ✓
✓ ✓
✓
✓
✓ ✓ ✓ ✓ ✓
✓
✓
✓
✓ ✓
✓
✓
✓
✓
✓
✓
✓
City of Billings, MT
City of Raleigh, NC
City of Winston-Salem/Forsyth County
Utilities, NC
City of Durham, NC
Town of Cary, NC
City of Concord, NC
City of Henderson, NV
City of Hobbs, NM
City of Buffalo, NY
New York City Water Board/Municipal
Finance Authority, NY
Northeast Ohio Regional Sewer District,
OH
City of Dayton and Montgomery County, OH
City of Portland, OR
Allegheny County Sanitary Authority, PA
Borough of Carlisle, PA
City of Erie, PA
City of Newport, RI
Providence Water, RI
Mount Pleasant Waterworks, SC
Spartanburg Water, SC
Hallsdale-Powell Utility District, TN
Metro Water Services, Nashville, TN
Sewanee Utility District, TN
City of Johnson City, TN
City of Denton, TX
Tarrant Regional Water District, TX
San Antonio (TX) Water System
Arlington County, VA
Loudoun County Sanitation Authority (VAI
City of Suffolk, VA
City of Burlington, VT
Tacoma Water Department, WA
✓ United States Navy
✓
✓
/
✓ ✓
✓ ✓ ✓ ✓ ✓
✓ ✓ ✓
✓ ✓
✓ ✓ ✓ ✓ ✓
✓ / ✓ ✓
✓
✓
✓
✓
✓
/
✓ ✓
✓ ✓
✓
✓ If
✓
✓
✓ ✓
✓
✓ / ✓
✓
/ ✓
✓
✓
✓
✓
✓ ✓
✓ ✓ ✓ ✓ ✓
✓
✓
✓
✓
✓
✓
08 CITY OF FORT WORTH WATER DEPARTMENT i'ti""C�i_IS INANCIAL CONSULTAN fs, INC.
In the following pages, we have provided detailed descriptions of five past cost of service and rates studies using the utility
basis that RFC has worked on that are similar in scope and/or geography to the Department's project. We also selected these
projects because many of our proposed Project Team members worked in similar roles on them. We have included refer-
ences for each of these clients and urge you to contact them to better understand our capabilities and the quality of service
that we provide. In Appendix B of this proposal, we have also included recommendation letters from some of our clients as
further evidence of RFC's focus on client satisfaction
_J N +xN oNlo
'-12 SYSTEM
Services Provided
> Cost of service study
> Wholesale cost of
service study
> Rate study
> Rate model
> Conservation rates
Client Reference
Dan Crowley, Director -
Financial Planning
PO Box 2449
San Antonio, TX 78298
P: 210.233.3811
E: dan ,crowleyfdsaws.org
RFC has completed two comprehensive cost of service and rate studies for the San
Antonio Water System (SAWS) in the past six years SAWS is responsible for provid-
ing water and wastewater services to approximately 300,000 customers within the City
of San Antonio and portions of the surrounding metropolitan area Water supply is
provided by water pumped from the Edwards Aquifer, which provides potable water
for approximately 1.2 million people. SAWS is focused on developing a comprehensive
tpproach to meeting its long term water demands in one of the fastest growing regions
of the country. A combination of effective conservation programs, acquisition of addi-
tional water rights in the Edwards Aquifer and development of new water supplies are
the foundation of the SAWS capital improvement plan. As such, development of fair
and equitable water and wastewater rates that meet the financial and pricing objectives
of SAWS and effective communication of the basis for those objectives and the rates to
community leaders and customers was an integral part of this effort.
Both studies involved a Rates Advisory Committee (RAC) comprised of San Antonio
residents that represented each of the customer types that SAWS serves. One of the in-
itial tasks in each study for SAWS was a rate -setting workshop that RFC facilitated for
SAWS staff and members of the RAC. The purpose of the workshop was to bring eve-
ryone involved in the process up to speed with respect to some of the technical aspects
of rate -setting. The next critical step in the process was the identification and prioriti-
zation of pricing objectives. To facilitate this process, SAWS staff and RAC members
were provided with a list of pricing objectives that many of RFC's clients identify as
being critical. RFC conducted a meeting with SAWS staff and the RAC in which
the pricing objectives were discussed in detail and then asked the staff and the RAC
to rank these objectives in order of priority. Based on this prioritization of objectives,
RFC was able to focus its effort with respect to identifying potential improvements to
the existing rate structures Ind develop several options for alternative rate structures.
RFC then developed a financial tool that provided a high-level indication of the im-
pacts that each of the rate structure options would have on various customers monthly
utility bills. The RAC and SAWS staff used this information to identify preferred wa-
ter and wastewater rate structures. Finally, RFC developed a cost -of -service and rate
model to calculate rates under the preferred rule structure options. These calculations
served as draft rates that were adjusted to reflect various rate -setting policies.
ri:.
NAN
CIA'_ CUNSULiANTS, lNC. CITY OF FORT WORTH WATER DEPARTMENT 09
S ervices Provided
Rate study
Rate model
Financial policies
Client Reference
N ancy Towle, Budget and
Rates Manager - Water
U tilities
215 E. McKinney Street
Denton, TX 76201
P: 940.349.7183
E: nancy.towlela •
cityofdenton.com
IT ROCK
t"A 1 EWATER
I ]! ITY (AR)
Services Provided
> Cost of service analysis
> System valuation study
> Miscellaneous fee study
Client Reference
Reggie Corbitt, Chief
Executive Officer
11 Clearwater Drive
Little Rock, AR 72204
P: 501.688.1404
E: reggie.corbittfdlrwu.com
The City of Denton engaged RFC to perform a comprehensive water and wastewater
cost of service and rate study. RFC conducted a pricing objectives workshop with
City staff to identify the City's pricing objectives. These pricing objectives were used
to develop proposed conceptual designs, specifically for the water utility, that would
better meet the objectives of the City.
RFC worked with the City to review its existing water and wastewater financial plans
and ensure they met the needs of the City and provided the capital financing and
reserve levels necessary. The City's financial plan was incorporated into a new cost
of service and rate model designed and developed specifically for the City's needs.
Denton also provides wholesale water and wastewater service under contract, and the
City's existing wholesale rate methodologies were incorporated into the new cost of
service and rate model developed for the City.
RFC reviewed the results of the cost of service and rate study with City Staff and
prepared draft and final reports documenting the study process and results. The find-
ings of the study were presented to the City s Utility Commission by RFC. RFC also
provided City Staff with training on the update and use of the model developed.
RFC was retained by the City of Little Rock's Wastewater Utility (LRW) to perform
a comprehensive cost of service analysis and system valuation study. LRW is imple-
menting a significant capital improvement program in compliance with a consent
order with the State of Arkansas and the EPA to eliminate sanitary sewer overflows.
The requirements of this consent order are placing substantial pressure on LRW's
costs and wastewater rates and fees. The major components of the project included:
> Development of a ten-year comprehensive financial plan including LRW's op-
eration maintenance and administration, as well as financing of its major capital
improvement program.
> Determination of LRW's cost of providing wastewater service to its various cus-
tomer classes.
> Development of wastewater user rates to fairly and equitably recover the cost of
providing wastewater collection, treatment, and disposal service from the various
customer classes.
> Review and update of miscellaneous fees.
> Analysis of alternative system growth charges to be assessed new customers.
> Determination of the current value of LRW's collection and treatment assets.
In addition to these project components, RFC also assisted LRW with the creation
ind implementation of a Rate Advisory Committee (RAC) The RAC consisted of
members of the community representing a cross section of stakeholders including
neighborhood groups, home builders, businesses and the League of Women Vot-
ers. The RAC held monthly meetings from Vlarch through August, as well as several
interim workshops to develop a strong understanding of LRW's operations and to
provide input to the project team on pricing objectives, alternative rate structures, ind
LRW s long term financial plan.
10 CITY OF FORT WORTH WATER DEPARTMENT 'AFTiLIS FINANCIAL CONSULTANTS, INC,
mPI
)1a
V1CII I,a (,cs)
Services Provided
Wholesale rate study
Water rate study
Demand analysis
Client Reference
Ben Nelson, Senior Budget
Analyst
P: 316.268.4148
E: bnetsonfawichita.gov
In 2011, RFC completed financial planning, cost of service, and rate design studies for
the City of Wichita's (City) water and sewer utilities. The City, which faces long-term
water supply constraints, was an early adopter of an aggressive conservation water rate
structure ind is in the process of completing an ambitious aquifer storage and recov-
ery program that will eventually result in up to 100 MIGD of recharge in the aquifer
that services as its primary source of supply.
The City's water utility serves approximately 143,000 customers and has annual rate
revenues of more than $66 million. Key issues facing the water utility were ensur-
ing adequate revenues to fund a 10-year capital improvement program in excess of
3400 million and reducing the rate revenue volatility associated with an aggressive
conservation -oriented water rate structure. RFC s 10-year water utility financial plan
featured the use of updated demand forecasting assumptions to project water sales
revenues; detailed debt service coverage ratio projections under a variety of revenue
and expense scenarios; and the development of both cash and utility basis test year
revenue requirement forecasts.
RFC's water cost of service study included the development of a revenue require-
ment and associated unit cost of service for each of the City's twenty-three water
rate classes including inside city retail, outside city retail, wholesale treated water
customers, and a wholesale raw water customer class. To mitigate rate revenue vola-
tility, RFC's water rate design featured the use of a readiness -to -serve adjustment
that shifted revenue recovery from the volumetric to fixed charge component of rates.
In addition, the volumetric rate design shifted a higher proportion of revenue re-
covery to the lower consumption blocks which are associated with non -discretionary
customer water consumption.
The City's sewer utility serves approximately 140,000 customers and has annual rate
revenues of more than $40 million. The primary issue facing the sewer utility was
ensuring adequate funding for a 10-year capital improvement program in excess
of $300 million including exceptionally large forecast expenditures to comply with
expected nutrient removal regulations in the second half of the planning horizon.
RFC's 10-year sewer utility financial plan also featured the use of updated demand
forecasting assumptions, detailed debt service projections, and the development of
both cash and utility basis test year revenue requirement forecasts. he sewer cost
of service and rate design studies featured the development of volumetric rates and
fixed charges for inside city retail, outside city retail, and wholesale sewer customer
classes. In addition, RFC also developed extra strength surcharge rates for both in-
side and outside city customers.
As part of our consulting engagement, the City requested that RFC analyze the key
drivers of billed water consumption. To accomplish this objecth e RFC analyzed the
correlation between historical billed water consumption and driver variables such as
temperature, precipitation, price, population, and regional economic activity. As part
of this process, RFC developed regression equations that, for customer classes, ex-
plained as much as 70% of annual billed water demand (i.e., resulted in coefficients of
determination as high as .70).
i `ELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 11
WICHI 6A CON 1 iNtJ€ D)
In addition to water and sewer utility financial planning, cost of service, and rate design studies, RFC also devel-
o ped a pro forma financial model for the City that allows them to compare budgeted to actual water and sewer rate
revenues on a monthly basis for each of its many water and sewer customer rate classes. 'This model, which not
o nly includes a monthly forecast of rate revenues by customer class but also by each consumption block within a
customer class, is designed to serve as an early warning system that can be used by the City to identify deviations
from budgeted rate revenues is early as possible within a given rate year Further, it allows the City to determine
both the annual cash flow and debt service coverage ratio impact of deviations from budgeted rate revenues should
they continue throughout the year.
If OF
e FOl,it (WWM
Services Provided
> Cost of service study
> Miscellaneous fee
analysis
> Financial planning
Client Reference
Craig Ziesemer, Assistant
Director Department of
Public Utilities
P: 757.923.3684
E: cziesemerfdcity.suffolk.
va.us
RFC began a multi -year engagement with the City of Suffolk (City) to provide finan-
cial services to the City's Department of Public Utilities (DPU) in 2003
RFC's engagement with DPU addresses financial, accounting, and pricing issues
confronting the City that impact its water and wastewater systems. The City pro-
vides retail water and wastewater service to approximately 21,000 accounts, as well
as wholesale water to the Western Tidewater Water Authority (the Authority) in a
region that has experienced unprecedented growth in the past ten years.
The scope of services provided to the City includes an annual update of the ten-year
comprehensive financial plan, determination of water and sewer costs of service, de-
velopment of proposed water and sewer rates for the upcoming fiscal year, and an
assessment of the City s water and sewer system availability fees. In addition RFC
also conducts an annual true up analysis for wholesale water service to the Authority.
The true up analysis recalculates the water rates using actual cost and water usage data
to determine the actual cost of service to the Authority during the prior year.
1 2 CITY OF FORT WORTH WATER DEPARTMENT ?AFTE:US FINANCIAL. CONSUL -AN 1S, INC.
This page intentionally left blank to facilitate two-sided printing.
'AFTELI
CIAL CONSULTANTS, INC.
CITY OF FORT WORTH WATER DEPARTMENT 13
ROJECT UNDERSTANDING
The City of Fort Worth (City), through its Water
Department (Department), owns, manages and op -
crates a water supply, treatment, transmission and
distribution system, and a wastewater collection
treatment and disposal system serving residents
and businesses within and outside the City. Ser-
vice to •areas outside the City is provided through
28 wholesale water agreements and 23 wholesale
wastewater agreements. The Water Department
uses four separate computer models to assist in the
cost of service and rate setting process. Wholesale
water and wastewater rates are determined in ac-
cordance with specific revenue requirements and
cost allocation methodologies contained in the
wholesale water and wastewater contracts.
The City's practice has been to retain the services
of an expert financial and rate consultant to update
the wholesale rates on a three-year cycle. The cur-
rent Request for Proposals (RFP) has been issued
to perform a Wholesale Wastewater Cost of Ser-
vice Study in accordance with the provisions of the
Uniform Wastewater Contract using a utility basis
methodology.
In order to facilitate the review of our proposal
by the Proposal Evaluation Committee, we have
organized our proposal based on the sections set
forth in the City's RFP
14 CITY OF FORT WORTH WATER DEPARTMENT
;AFTELIS FINANCIAL CONSULTANTS, INC,
ROJECT APPROACH
PflO.JECT I I "! >T1tJN AND
IAG€ :I'f
The goal of this task is to Lay the groundwork
Por a successful project and provide the ongo-
ing management that ensuies efficiency and
:_duality throughout the process.
SUBTASK A: PROJECT KICK-OFF MEETING
We believe that successful projects begin with a pro-
ductive kick-off meeting. The objectives for this
meeting include:
> Providing a forum to finalize the work plan and
schedule with City Staff
> Discussing the City's modeling and pricing objectives;
> Ensuring that the Project Team has a full under-
standing of the overall goals of the project
> Providing an opportunity for City Staff to meet and
become comfortable with our Project Team
> Reviewing the data needs for the project
Accomplishing these objectives will help to ensure that
the project progresses as smoothly as possible.
Prior to the kick-off meeting, we will prepare a de-
tailed data request list that will identify the information
needed to complete the various analyses. Informa-
tion that is typically required to perform a water rate
study includes, for example, recent Comprehensive
Annual Financial Reports (CAFR); wholesale con-
tracts; recent and current utility budgets; a description
> f the wastewater service area, current and historical
wastewater treatment and billing data and a long-term
capital improvement plan. Some of this information
will be readily available, whereas other components may
require more detailed analyses of operational data, cus-
tomer billing information and costs.
SUBTASK B INITIATION OF THE QUALITY
ASSURANCE/QUALITY CONTROL PROCESS
During this phase of the project, the Project Team will
initiate its qu'ility assurance/quality control (QA/QC)
process. This process ensures that all work performed
by the Project Team on this project will be accurate and
of the highest quality.
'The QA/QC process begins at the outset of the project
when the Project Manager assigns a member of the
Project Team as the project QA/QC reviewer. This per-
son is present at all internal project meetings and works
closely with both the Project Manager and the lead
consultant during the course of the project. The QA/
QC reviewer's primary responsibility is to review the
work effort for consistency accuracy, and validity and
ensure that the cost of service and rate model that will
be developed for the project is functioning properly and
is based on sound rate -making principles and standard
industry practice and that the report produced is com-
prehensive, consistent with the results, and meets the
high quality standards of RFC. This will be especially
critical given the complexity called for in this model.
The QA/QC responsibility is accomplished through pe-
riodic reviews of the model throughout the course of its
development. For this Study these reviews would occur
during the following stages of model development:
Once the basic model framework is complete
Upon completion of the revenue requirements and
financial planning module
Upon completion of the cost allocation schedules
Upon completion of the wholesale rate calculation
module
Upon completion of the retail rate calculation module
Prior to the delivery of the final model results
We have found that a well defined QA/QC process en-
sures that all of our work products will be of the highest
quality and meet or exceed the standards that our cli-
ents have come to expect from the Project Team.
SUBTASK C: ONGOING PROJECT MANAGEMENT
The proposed project entails several different, yet
interrelated, work efforts that will require effective
coordination between City staff, wholesale representa-
4FTFLIS FINANCIAL CONSULTANTS, INC.
Lives and the Project Team. Our management approach
stresses communication, teamwork, objectivity, and
accountability for meeting project objectives and in-
cludes general administrative duties, including client
correspondence, billing, project documentation, and
administration of the study control plan. This task
provides for consistent and competent project man-
igement to ensure that all deadlines and objectives are
met in a timely and efficient manner. We believe in a
no -surprises approach so that the client is aware of the
status of the project at all times. Our approach includes
the following:
> A strong Project Manager who will be responsible
for facilitating a close working relationship be-
tween the City and the Project Team and who is
accountable to the City for meeting the technical
requirements of the project, schedule and budget
He will lead meetings throughout the course of the
Project and provide meeting notes summarizing the
issues discussed.
> Ample resources to ensure timely completion.
> Client involvement and control by:
• Regular and open communication between the
Project Team members and City staff including
monthly status reports showing the tasks accom-
plished and identification of potential problems
Ind solutions.
• Assurance of budget and schedule control
through the Project Manager's use of RFC's pro-
ject accounting and management system.
• Coordination of project activities among the
Project Team and City staff to meet project ob-
jectives and deadhnes. Review of all study -related
work and overall quality assurance.
10 L : VAS T ENAT ER
!JOY
Tne goal of this task is to provide updated
wholesale wastewater rates using the new
consolidated rate model developed in Task II.
The study objective is to perform a detailed whole-
sale wastewater rate study to s itisfy the requirements
of the City's uniform wholesale wastewater contract.
CITY OF FORT WORTH WATER DEPARTMENT 15
Our Project Team commits to stridently follow the
uniform wholesale contract and precedent established
over the years. We also commit to strong communica-
tion with Water Department staff and the Wholesale
Advisory Committee.
Defensible Methodology
The Project Team proposes to conduct the wholesale
wastewater rate study using the Water Environment
Federation (WEF) policies regarding financing and
rates. 'The basic premise of the approach is that rates
and charges should reflect the costs of providing ser-
vice and the revenue produced will be adequate to
meet revenue requirements. In addition, we will work
with the Wholesale Advisory Committee and Water
Department staff to ensure the proposed rates will be
understood by the customer.
Scope of Services
Our proposed scope of services includes the standard
rate study elements of revenue requirements determi-
nation, cost of service allocations, and rate design. The
proposed scope ensures that the wholesale wastewater
rate study will be performed in accordance with gener-
ally accepted principles for wastewater rate studies, that
the methodology utilized will comply with the terms of
the uniform contract between the City and its whole-
s ile customers, and precedent established throughout
the years.
SUBTASK A: ESTABLISH REVENUE REQUIREMENTS
(COST OF SERVICE)
The revenue requirements, to be shared by the City's
wholesale customers for the "test year," will be estab-
lished utilizing the rate methodology contained in
the uniform wholesale contract between the City and
wholesale customers. Revenue requirements will be
determined on a utility basis and will include operating
and maintenance (O&M) expense, depreciation expense,
return on investment (including recognition of invento-
ries and working capital), and street rental fees. Specific
activities to be accomplished in this task include:
1. Operation & Maintenance Expense Test year
O&M expense to be shared will i iclude audited his-
torical costs for the fiscal year ending September 30,
2012, adjusted for known and measurable changes to
expense categories, such as salary and wages, employee
16 CITY OF FORT WORTH WATER DEPARTMENT 2AFTELIS FINANCIAL CONSULTANTS, INC.
benefits, power and chemical costs, non -recurring costs
recovered over a related benefit period, and new budget
categories (if applicable)
2. Depreciation Expense. Annual depreciation expense
to be shared will be based on available plant investment
data, as of February 28, 2013, net of grants and con-
tributions applied to appropriate annual depreciation
rates as utilized in the most recent wholesale wastewa-
ter cost of service study.
3. Return on Investment and Street Rental Fee. Re-
turn on investment to be shared will be calculated on
investment in facilities providing wastewater service to
the wholesale customers (or rite base). Investment will
include plant investment net of accumulated deprecia-
tion, grants and contributions, plus construction work
in progress at February 28, 2013 Investment also in-
cludes recognition of Fort Worth Water Department
inventories and working capital. Return will be deter-
mined based on contract provisions. The street rental
fee to be shared will be calculated as 4 percent of the
sum of O&M, depreciation, and return on investment
attributable to wholesale wastewater service.
SUBTASK B: ALLOCATE COST OF SERVICE TO
CUSTOMER CLASSES
The wholesale customer share of test year cost of ser-
vice will be determined through a three -step allocation
process. The first step involves allocating the elements
of cost of service (operation and maintenance expenses
(O&Iv1), depreciation, and return on rate base) to waste-
water service functional categories. Fort Worth Water
wastewater O&M expenses are tracked by the catego-
ries of administrltion, engineering customer service,
treatment, field operations, and non -departmental.
Each expense and investment item used to develop total
wastewater system revenue requirements (cost of ser-
vice) will be assigned to one or more of the following
wastewater service functions depending on its nature•
Collection
Treatment
Customer Accounting
> Wholesale Customer Metering
> Administrative and Non -Department
Next, these functionalized expenses will be classified
into one or more of the following cost components:
Volume and Capacity
BOD
TSS
Customer Billing
Customer Metering
Retail Only
Once the components of total wastewater system costs
have been functionalized and classified, the final step
involves allocating the proportionate share of the result-
ing classified costs to the wholesale customers based on
their proportional share of units of service associated
with each functional cost category. The wastewater sys-
tem units of service utilized for the allocation process
will be historical units of service for the fiscal yelr end-
ing September 30, 2012.
SUBTASK C: CALCULATE AND RECOMMEND RATES
AND CHARGES
The revenue requirements and cost allocations devel-
oped in the previous subtasks will be input into the
City's existing rate model and schedule to determine
the City's wholesale rates and charges. Rates and
charges to be determined will include, at a minimum.
> Volume Charge - $ per 1,000 gallons
> BOD Charge - $ per pound of BOD
> TSS Charge - 8 per pound of TSS
> Customer Charge - $ per month
SUBTASK D: PROVIDE RECOMMENDATION FOR
CHANGES IN COST/RATE METHODOLOGY
The City's current cost of service — rate methodology
will be reviewed for: (1) adherence to the terms and
conditions of the uniform wholesale wastewater con-
tract; (2) correct and consistent application of the utility
basis cost of service concepts and principles; and (3)
recognition of special conditions and factors which may
influence the wholesale rate design causing significant
fluctuations from year to year in calculated rates. Af-
ter discussions with Water Department staff and the
Subcommittee of the Wholesale Advisory Commit-
tee, studies may be conducted on flow normalization,
strength billing assignments, and other assumptions
or applications incorporated in the ratemaking meth-
odology if considered necessary. Based on this review
and any recommendations resulting in changes in the
?\FTELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 17
wholesale rate calculation methodology, modifications
will be made, as appropriate, pertaining to each of the
following areas:
Normalization of Wastewater Volumes. The influ-
ence of dry and wet weather years on the annual sales
volumes of customers can cause wide variations in
calculated rates from year to year. Normalization of
wastewater volumes over a period ranging from 3 to
10 years has been investigated in a previous study. It
was noted during the process that a change to flow
normalization would require a contract amendment
and the Water Department would concurrently re-
quire normalization of the wholesale water customer
service units
Application of Measured Strength to Billed Volume.
To normalize the application of measured concentra-
tions of BOD and TSS to billed monthly volume, an
evaluation of the process of recognizing a "pound is a
pound" will be conducted, as required.
Fixed Asset Accounting/Record Keeping. Discussions
will be held with Department staff to reassess fixed as-
set tracking capabilities and methodologies pertaining
to recording and maintain ng fixed rsset investment
data, and make recommendations, if necessary, for im-
provements pertaining to wholesale rate determination.
Engineering Assumptions. Engineering assumptions
incorporated in the current wholesale ratemaking
methodology will be reviewed for applicability and ap-
propriateness.
_,..\ SX di. l r G / " TATIONS
['he goal of this task is to piovide the Rates
Sub -Committee and the Wholesale Customer
_Advisory Committee (the WCAC) with the ap-
propriate documentation and reports for the
woik completed in 'casks I and [I.
The Project Team will provide the Rates Sub-Cotn-
mittee and the WCAC with several presentations and
reports during the course of the study presenting the
findings. These presentations and reports will be in the
format established in the uniform wholesale contract
and consistent with previous presentations and reports.
The following reports and deliverables are included as a
p•irt of the proposed study (note all dates are tentative):
SUBTASK A: RATES SUB -COMMITTEE COST OF
SERVICE PROCESS WORKSHOP AND REVIEW OF
PRELIMINARY DRAFT COST OF SERVICE AND RATE
REPORT
Deliver an overview of the cost of service study process
rnd preliminary cost of service and rates overview to
the Rates Sub -Committee on or about May 23, 2013.
Also, the Preliminary Draft of the Rate Report will be
due on the date of this meeting and the Project Team
Staff will work with the Sub -Committee to review any
questions, comments, or concerns they may have.
SUBTASK B: WCAC MEETING TO RECEIVE AND REVIEW
1ST DRAFT COST OF SERVICE AND RATE REPORT
The lst Draft of the Rate Report will be presented to
the WCAC and Project Term staff will work with the
WCAC to review any questions, comments, or concerns
they may have on or about June 6, 2013.
SUBTASK C: RATES SUB -COMMITTEE MEETING TO
REVIEW FINAL DRAFT RATE REPORT
Depending on the changes necessary to address com-
ments, questions and concerns from the review of the
lst Draft Rate Report, it may be necessary to review the
Final Draft Rate Report to the Rates Sub -Committee
on or about July 11, 2013.
SUBTASK D: WCAC TO RECEIVE FINAL DRAFT RATE
REPORT
The Final Draft Rate Report will be presented to the
WCAC on or about July 18, 2013. The Final Draft
Cost of Service and Rate Report will be due on the date
of this meeting.
1 8 CITY OF FORT WORTH WATER DEPARTMENT 'AFTELIS FINANCIAL CONSULTANTS, INC_
This page intentionally left blank to facilitate two-sided printing.
aFTELIS FINANCIAL CONSLJL-ANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 19
FEE FOR SERVICES
As requested, Raftelis Financial Consultants, Inc. (RFC) has provided a proposed fee, including estimated hours
by task, to complete the Study. The table below details the estimated hours and billing rates for each consultant and
administrative support related to each task of of r Project Approach. We typically bill monthly based on hours and
expenses (with no mark-up).
The proposed fee is based on our understanding of the City's objectives as set forth in the RFP. The Project Team
is willing to modify the Project Scope and cost as outlined in this proposal as necessary to ensure that the City's
objectives will be met by this project.
William Stannard, who signed the cover letter of this proposal, is the President and CEO of RFC and is entitled to
represent our firm, empowered to submit the bid, and authorized to sign a contract with the City of Fort Worth In
Appendix C of this proposal, we have included a copy of the Board Resolution of RFC which certifies this.
Hours Requirements
William Stannard, Thomas Beckley,
Project Director Project Manager
I Project Initiation and Management 8 12
1 11 Wholesale Wastewater Cost of Service Study 8 12 56
III Reports/Presentations/Deliverables 8 48 20
Total estimated hours 24 72 ( 88
Hourly rates $ 325 $ 210 I $
Consultant Fees $ 7,800 $ 15,120 I $
Estimated Fees
Technology and Communication Charges
Travel Expenses
Total Estimated Fees and Expenses
Rocky Craley, Lead Administrative
Consultant Support
12 4
185
16,280
8
12
$ 60
$ 720
$ 39,920
$ 1,840
$ 2,800
$ 44,560
20 CITY OF FORT WORTH WATER DEPARTMENT ' 1FTELIS FINANCIAL CONSULTANTS, INC.
This page intentionally left blank to facilitate two-sided printing.
\FTELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 21
RFP AFFIRMATIONS
NIp INN9DEP FNOENT O1- i HE CITY OF C T `;/ ORTH
Raftelis Financial Consultants, Inc. is independent of the City of Fort Worth as defined by the U.S. General Ac-
Lounting Office's Government Auditing Standards (1988).
.FOAL / DISCIPLINARY ACTIONS
'There have not been any, nor are there any pending, legal or disciplinary actions against Raftelis Financial Consult-
ants, Inc. during the past three years by any regulatory bodies or professional organizations.
OAOEMENTS WITH THE CITY OF FORT WORTH
Raftelis Financial Consultants, Inc. has not had any engagements with the City of Fort Worth during the past
three years
NORKINO PAPER RETENTION ANO .ACCESS TO WORKING PAPERS
If awarded this contract, Raftelis Financial Consultants, Inc will retain, at our expense, all working papers and
reports for a minimum of three years, unless we are notified in writing by the City of Fort Worth of the need to
extend the retention period. We will snake working papers available, upon request, to the following parties or their
designees:
a) City of Fort Worth
b) Proposal Evaluation Committee
c) Wholesale Advisory Committee
In zddition, Raftelis Financial Consultants, Inc will respond to the reasonable inquiries of successor consultants
ind allow successor consultants to review working papers relating to matters on continuing accounting significance.
22 CITY OF FORT WORTH WATER DEPARTMENT bAFTELIS FINANCIAL CONSULTANTS, C.
This page intentionally left blank to facilitate two-sided printing.
?AFT FLIS FINANCIAL CONSULTANTS, INC.
CITY OF FORT WORTH WATER DEPARTMENT 23
APPENDIX A: PROJECTTEAM RESUMES
Technical Specialties
> Cost of service and rate studies
> Financial planning studies
> Valuation and acquisitions
> Bond forecasts and examinations
> Regionalization studies
> Management policy and practice
> Environmental finance & accounting
Professional History
> Raftelis Financial Consultants, Inc.:
Chief Executive Officer (2011-present);
President (2008-present); Vice
President (2002-2008)
> Black & Veatch: Senior Vice President
(1996-20021; Vice President (1992-
1996); Project Manager (1984-1992);
Assistant Project Manager (1980-
19841; Staff Consultant (1975-1980)
Education
> Bachelor of Science in Business
Administration - Kansas State University
(1975)
> Bachelor of Science in Civil
Engineering - Kansas State University
(1975)
Professional Registrations
> Registered Professional Engineer: KS,
OH, MA, MI
Professional Memberships
> American Society of Civil Engineers
> American Water Works Association:
Past -Chair of Finance, Accounting and
Management Controls Committee;
Trustee of Management and
Leadership Division; Texas Section
Rates Committee
> Water Environment Federation: Past -
Chair - Task Force on Wastewater
Charges
> Listed in Best Lawyers in America -
Directory of Expert Witnesses
> Listed in Who's Who in Science and
Engineering
-NILLIAJ 1 STANNARO,
Project Oirector (President and CEO, e)=C)
PROFILE
Mr Stannard has more than 35 years of experience providing con-
sulting services to investor and municipally -owned utilities covering
management, operation, economic, and financial matters. His extensive
experience encompasses formulation of financial systems and ordi-
nances for compliance with regulations regarding the Clean Water Act
and the Safe Drinking Water Act; comprehensive revenue require-
ments and cost of service studies; consulting engineers and financial
feasibility reports related to the sale of revenue bonds; financial fea-
sibility analyses; organizational and management reviews; and utility
competitiveness studies. He has served as an expert witness in rate liti-
gation matters in federal and state courts and before arbitration panels
and state public service commissions. Mr. Stannard has also served
as an arbitrator in resolving water and wastewater rate disputes. Mr
Stannard has been an active member of the WEF and AWWA. He
served as chair of the WEF task force charged with the development
of a Manual of Practice, Financing and Charges for Wastewater Sys-
tems Mr. Stannard was also a contributing author for the book Water
and Wastewater Finance and Pricing: A Comprehensive Guide (Third
Edition). This authoritative text is used by utility managers and con-
sultants throughout the United States. He is a past -chair of AWWA's
Finance, Accounting and Management Controls Committee, and a
trustee of AWWA's Management and Leadership Division.
RELEVANT PROJECT EXPERIENCE
Tarrant Regional Water District (TX)
Mr. Stannard served as Project Director on a project for the Tarrant
Regional Water District (TRWD) to study the financial, economic,
and policy impacts of a proposal that TRWD pay communities for
wastewater effluent discharged into the Trinity River which would
subsequently be used to augment TRWD's raw water supply.
Little Rock Wastewater Utility (AR)
Mr. Stannard is Project Manager for a comprehensive wastewater fi-
nancial planning cost of service and rate study for the City of Little
Rock's Wastewater Utility (LRW). In addition to the cost of service
analysis, this project includes a feasibility study of alternative system
growth charges and a system value determination. LRW is in the
midst of a major capital improvement program to address wet weather
flow management issues. The program includes construction of a new
wastewater treatment plant and, as such, LRW is interested in assess-
ing the feasibility of instituting a system development ch irge to be
24 CITY OF FORT WORTH WATER DEPARTMENT 1,AFTELIS=INANCIAL CONSULTANTS, INC.
applied to new customers. The system valuation ele
ment of the project will be an integral step in LRW's
o ngoing asset management program development.
City of Hobbs (NM)
Mr Stannard has been the Project Manager on the City
o f Hobbs (City) water mind wastewater rate study. The
City was faced with significant capital expenditures to
u pgrade their wastewater treatment plant and wanted to
e nsure that the water and wastewater utilities were op-
erating in a self-sufficient manner. RFC worked with
City Staff as well as the City Council and Water Board
to determine the City's rate setting goals. RFC then
developed water and wastewater rate structures that
addressed these goals, in particular, conservation, while
providing for adequate capital financing.
City of Wichita (KS)
As Project Manager, Mr. Stannard assisted the City of
Wichita (City) in performing an analysis of wholesale
water rates by evaluating billing data for the past three
years for all of the City's wholesale customers and pro-
vided recommendations to improve the recovery of
revenue requirements from these customers. RFC has
also performed a rate study to determine a raw water
rate for a proposed new industrial customer seeking ser-
vice from the City. RFC also analyzed the City's rate
structure to determine its effectiveness for providing sta-
ble revenues during varying weather conditions.
City of Olathe (KS)
Mr. Stannard has been the Project Manager on a series
of engagements for the City of Olathe (City). RFC
first performed an analysis of the City's existing System
Development Fee methodology and provided guid-
•ince on how the fees could be updated and improved.
RFC provided the subsequent revisions and updates
and presented these findings to City Council. RFC has
subsequently been engaged by the City to analyze pro-
posed wastewater impact fees that would supplement
system development charge revenue, to update the
City s cost of service computer model, and to assist with
the determination of wholesale wastewater rates.
City of Saginaw (MI)
vlr. Stannard served as the Project Manager for a wa-
ter cost of service engagement for the City of Saginaw
(City). The engagement included development of a
comprehensive financial plan cost of service analy-
sis and design of water rates. In addition to its retail
customers, the City also provides water service to 19
wholesale customers, which use approximately 60% of
the water produced. A key element of the engagement
involved meetings with each of the wholesale customers
to explain in detail the cost of service allocation meth-
odology and the effect on the customer's water rates.
City of Wyoming (MI)
Mr. Stannard was the Project Manager for RFC's en-
gagement with the City of Wyoming (City) to perform
a water cost of service study and to provide assistance in
the negotiation of new wholesale contracts for water and
wastewater service. The City engaged RFC to perform
a water cost of service study to support the negotiation
of new wholesale water contracts. RFC also provided
expertise in areas including rate of return, cost of service
allocations, industrial surcharges, and rate design.
City of Lee's Summit (MO)
As Project Manager, Mr. Stannard performed compre-
hensive water and wastewater cost of service studies for
the City of Lee's Summit (City) as well as provided an
update of the City's system development charges col-
lected from new customers.
City of Kansas City (MO)
vlr. Stannard served as the Project Director for a
wastewater financial planning and cost of service study
for the City of Kansas City Water Services Department
(Department). The project included development of a
comprehensive financial plan, cost of service analysis
and design of wastewater rates. In addition to its retail
customers, the Department also provides wastewater
service to more than 20 wholesale customers. A key
element of the engagement involved a detailed analysis
of the costs of the system components which serve the
wholesale customers to serve as the basis for a move to
cost of service based rates for the wholesale customers
in place of the historic practice of tying the wholesale
rates to the inside City retail rates.
Fort GratiotTownship (MI)
Mr. Stannard served as the Project Manager on an
engagement for Fort Giatiot Township, Michigan
(Township) to review proposed water rates fiom the
City of Port Huron (City). The City provides wholesale
water service to the Township and the Township was
concerned about the level of proposed rate increases
FTELIS FINANCIAL CONSULIANIIS, INC
they were facing and, hence engaged RFC to review
the proposed rates to ensure they were appropriate.
City of Detro t (MI)
Stannard served as Project Manager/Principal-
in-Charge for various projects for the City of Detroit
(City), including comprehensive water and waste-
water revenue requirements, cost of service and rate
design studies; consulting engineers/feasibility reports
for over 32 billion of water and wastewater system
revenue bonds an automated capital improvement
program management and tracking system; and an
automated work order tracking system. The rate study
engagements included development of user-friendly,
Windows -based, rate models initially using Lotus
123 and, subsequently, Microsoft Excel® for use by the
City's rate and finance staff.
City of Grosse Pointe (MI)
Mr. Stannard served as Project Manager to the City
of Grosse Pointe, Michigan (City) performing a com-
prehensive water and wastewater cost of service study
including benchmarking analysis allowing the City to
compare their performance with respect to key per-
formance criteria to the performance of other similar
utilities. Mr. Stannard has also been responsible for the
development of a ten-year financial plan for the City's
Utilities Department, and creation of a financial plan-
ning and rate model for use by City staff in preparing
annual updates to the water and wastewater rates.
Northeast Ohio Regional Sewer District (OH)
Mr. Stannard served as Project Manager in the devel-
opment of a comprehensive financial plan for the five
year period 2007 through 2011. The financial plan
included projections of customers, water usage and
revenues under the existing rates, projections of operat-
ing and maintenance expense, debt service on existing
bonds and additional bonds necessary to fund the capi-
tal improvement program, and reserve fund deposits.
In addition, RFC recommended a rate adjustment
program over the five year study period to meet the
projected revenue requirements and maintain the Dis-
trict's financial sustainability. A user-friendly computer
model was also developed for use by District staff to
analyze different planning scenarios.
City of Naperville (IL)
Mr. Stannard served as Project Director for a compre-
CITY OF FORT WORTH WATER DEPARTMENT 25
hensive water and wastewater rate study for the City of
Naperville (City). The scope of work included develop-
ment of financial plans for the water and wastewater
utilities, cost of service analyses, and design of proposed
rates to fund the projected revenue requirements for the
two utilities. The findings of the study were presented to
the City Council which approved the proposed changes
in rates including a purchased water component which
will serve as a pass through to reflect the tares for water
purchased from the Du Page County Water Commission.
Northwest Water Commission (IL)
ivir. Stannard has served as principal -in -charge for
several engagements for the Northwest Water Com-
mission (Commission). These engagements have
included review of water rates charged to the Com-
mission proposed by the City of Evanston (City) and
assistance with negotiation of the rates to be charged
under the terms of the Commission's contract with the
City, and a determination of the current value of the
Commission's water system assets. Currently, RFC is
developing proposed water rates for potential service to
new contract customers.
City of Suffolk (VA)
Mr. Stannard serves as Project Director for RFC's
multi -year engagement with the City of Suffolk (City)
to provide financial services to the City's Department
of Public Utilities (DPU). The scope of services include
an annual update of the ten-year comprehensive finan-
cial plan, determination of water and sewer costs of
service, development of proposed water and sewer rates
for the upcoming fiscal year, and an assessment of the
City s water and sewer system availability fees. In addi-
tion, RFC also conducts an annual true -up analysis for
wholesale water service to the Authority. The true -up
analysis recalculates the water rates using actual cost
and water usage data to determine the actual cost -of -
service for the Authority during the prior year
City of Baltimore (MD)
Mr. Stannard serves as the Project Director on this
multi -year engagement with the City of Baltimore's
Bureau of Water and Wastewater (City). The engage-
ment encompasses a variety of cost of service and rate
studies for the City's water and wastewater systems. He
is currently leading our Firm's wastewater cost of service
analysis and development of high strength surcharge
rates in accordance with EPA user charge regulations.
26 CITY OF FORT WORTH WATER DEPARTMENT ;;\FTELIS FINANCIAL CONSULTANTS,
Other components of our engagement with the City
include review and evaluation of cost allocations to the
City's wholesale water Ind wastewater customers in ac-
cordance with the water and sewer service agreements.
Loudoun County Sanitation Authority (VA)
Mr. Stannard served as the Project Director on two
Lngagements for Loudoun County Sanitation Author-
ity (Authority), a cost of service rate study and a bond
feasibility study. The Authority's goal for the rate study
was to maintain the current rate structure and mini-
mize rate increases while still preserving a sufficient
fund balance to meet all internal coverage requirements.
The follow-up bond feasibility study used the newly de-
eloped rate model to ensure the Authority's financial
capability to issue new debt.
City of Portland (OR)
Mr. Stannard was Project Manager for an engagement
for the City of Portland Water Bureau (Bureau) which
provides retail water service to customers within the City
Ind wholesale water service to 19 agencies under agree-
ments that will expire within the next couple of years.
RFC's scope of work was separated into two parts: as-
sistance in developing wholesale rates and development
of a robust modeling tool for onging rate calculation and
financial planning use by the Bureau.
St. Louis Metropolitan Sewer District Rate
Commission (MO)
Mr. Stannard served as Project Manager for RFC's
engagement as rate consultant to the St. Louis MSD
Rate Commission. As the Commission's rate consult-
ant, ?Vlr. Stannard was responsible for performing an
independent review of MSD's proposed wastewater
and stormwater rates covering the period 2008 through
2012. The project included a detailed evaluation of the
cost of service studies supporting the wastewater and
stormwater rates, an evaluation of proposed policies for
implementation of the rates, and examination of the
level and phasing of annual rate adjustments proposed
during the fifce-year study period. Mr. Stannard was
also responsible for submitting testimony and exhibits
for the rate hearings conducted by the Rate Commis-
sion and assisted the Commission's Counsel in cross
examination of MSD witnesses and witnesses of the
various interveners in the case.
City and County of San Francisco (CA)
Mr. Stannard served as Project Manager on an en-
gagement with the San Francisco Public Utilities
Commission (SFPUC) in the development of contract
negotiation strategies regarding the renegotiation of
SFPUC's wholesale water service agreements with it
wholesale water customers. A major component of Mr.
Stannard's work included the analysis of the impact of
SFPUC's $4.5 billion capital improvement program on
the overall financial plan and the allocation of costs to
the wholesale customers under the utility basis of cost
allocation as well as the cash basis to determine the
short, mid, and long term impacts on retail rates and
wholesale rates
City of San Diego (CA)
Mr. Stannard served as the Principal -in -Charge for a
management review of the City's Water Department.
This review was driven by City Council concerns about
the overall management of the Department and several
specific areas within the Department, as identified by
the Council. The City Council directed a very tight
time schedule for the project, which was completed
within two months. In order to accomplish the goals
of the project within this schedule, separate work teams
were formed for each of the assigned areas. The sys-
tematic approach provided an efficient, thorough and
comprehensive review of each functional area while al-
lowing the project team to successfully conform to the
tight schedule.
City of Los Angeles (CA)
Mr. Stannard served as Principal -in -Charge for the
best practices study for the Los Angeles Wastewater
Program. This project built on the City's efforts con-
ducted during the five years prior to the best practices
study during which the City, working through its Labor
Management Committee, had reduced the program's
full-time employment by 28 percent. The best practices
study covered every aspect of the organization including
plants, collection system, engineering, finance, account-
ing, human resources, billing and collection, customer
service, construction management, and many others. As
a result, additional savings of nearly 20 percent were
identified over the ensuing five -}ear period, utilizing
normal attrition in lieu of layoffs. The projected savings
incorporated business process changes that were identi-
fied and evaluated as part of the project with a significant
FTELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 27
portion of the savings to be achieved in the areas of sup-
port services and capital improvement programs.
City of Cincinnati (OH)
Ir. Stannard served as the Partner -in -Charge for
the project team engaged by Cincinnati Water Works
(CWW) to work with CWW's Executive Management
Team in development of their first Strategic Business
Plan. The work on this project included a complete em-
ployee survey, outreach with key external stakeholders,
multiple workshops with the Executive Team and staff
representatives for development of CWW's vision and
mission, as well as goals, objectives and strategies, and
leading multi -disciplined CWW teams in development
of specific action plans. The result of this engagement
was a comprehensive business plan which established a
road map for the utility over the coming decades
City of Philadelphia (PA)
Mr. Stannard is serving as a water rate expert, assisting
the City of Philadelphia in a water rate dispute with
one of the City's major wholesale customers. Dispute
resolution will be accomplished through arbitration
where Mr. Stannard will provide expert testimony in
support of the City's water cost of service analysis and
rate design. He is also assisting the City in developing
the overall strategies for crafting the City's case.
Other Relevant Project Experience
> Arlington County (VA) — Alternative Rate Struc-
ture Analysis, Financial Planning, Availability Fee
Development, and Public Involvement Program
> Allegheny County Sanitary Authority (PA) — Rate
Study, Industrial SC Review
> City of Columbus (OH) — Water and Wastewater
Rate Study
> City of Henderson (NV) — Water and Wastewater
Rate Study
> City of Lexington (KY) — Water System Valuation
> City of Loveland (OH) — Evaluation of Wastewater
Service Alternatives
> City of K'tlamazoo (MI) — Wastewater Rate Review
> City of Kansas City (MO) — Wastewater Cost of
Service Study
> City of Macomb (1JII) — Wastewater Rate Litigation
Assistance and Feasibility Analysis for Acquisition
> Oakland County (MI) — Witter and Wastewater
Rate Review and Master Plan Financial Analysis
> San Antonio Water System (TX) — Water and Sew-
er Rate Study
> City of Warren (MI) — Water Rate Litigation Sup-
port
> United States Navy, Norfolk (VA) — Water Rate
Review
28 CITY OF FORT WORTH WATER DEPARTMENT
Technical Specialties
> Utility cost of service and rate
structure studies
> Conservation rate studies
> Bond forecasts and feasibility
studies
> Economic feasibility studies
> Industrial waste charge
studies
> Capital recovery fee studies
Professional History
> Raftelis Financial
Consultants, Inc. Manager
(2000-present)
Education
> Master of Public
Administration - University of
Kansas (2008)
> Master of Business
Administration (Concentration
in Finance) A.B. Freeman
School of Business, Tulane
University (2000)
> Bachelor of Science, Naval
Architecture and Marine
Engineering - Webb Institute
(1995)
Professional Memberships
> American Water Works
Association
> International Water
Association
> Water Environment
Federation
1 TELIS ;=INANCIAL CONSULTANTS, INC.
LY
anager (Manager, RFC)
PROFILE
Mr Beckley has over ten years of experience with RFC in conducting fi-
nance related projects. He has assisted a wide range of municipal water and
wastewater utilities in conducting cost of service, financial feasibility, privati-
zation, system development fee, and other finance related studies. Some of his
past clients include: San Francisco Public Utilities Commission (CA); City
of Phoenix (AZ); City of Peoria (AZ); City of Naperville (IL); Northwest
Water Commission (IL); City of Hobbs (NM); Birmingham Water Works
Board (AL); City of Orlando (FL); Arlington County (VA); Loudoun Coun-
ty Sanitation Authority (VA); City of Suffolk (VA), City of Saginaw (MI);
City of Wyoming (MI); City of Grosse Pointe (MI); City of Denton (TX);
and City of Olathe (KS).
RELEVANT PROJECT EXPERIENCE
City of Wichita (KS)
Mr. Beckley is serving as Project Manager for a cost of service study for the
City of Wichita's (City) water and wastewater utility. RFC was engaged by
the City to perform a comprehensive cost of service study to address revenue
shortfalls caused by declining usage in the City and to fund a large water
source of supply project. RFC worked with the City to allocate costs between
the water and wastewater utilities and to functions in each utility to determine
cost of service for each of the City's customer classes. RFC then worked with
the City to determine appropriate rates that not only recovered the City's cost
of service, but also addressed their concerns related to revenue stability RFC
is also working with the City to develop a proforma model that will be used
by City staff on an ongoing basis as a management decision tool based on the
City's actual experience during the course of each fiscal year.
In a previous engagement with the City, Mr. Beckley served as Lead Consult-
•int and assisted the City in performing an analysis of wholesale water rates by
evaluating billing data for the past three years for all of the City's wholesale
customers and provided recommendations to improve the recovery of revenue
requirements from these customers. RFC has also performed a rate study to
determine a raw water rate for a proposed new industrial customer seeking ser-
vice from the City. RFC also analyzed the City's rate structure to determine its
effectiveness for providing stable revenues during varying weather conditions.
City of Suffolk (VA)
Mr Beckley serves as Project M'inager for RFC's multi -year engagement
with the City of Suffolk (City) to provide financial services to the City's De-
p'irtment of' Public Utilities (DPU). The scope of services includes an annual
update of the ten-year comprehensive financial plan, determination of water
'Ind sewer costs of service, development of proposed water and sewer rates
for the upcoming fiscal year, •ind an assessment of the City's water and sewer
system availability fees. In addition, RFC also conducts an annual true -up
FTELIS FINANCIAL CONSULTANTS, INC,
analysis for wholesale water service to the Authority.
The true -up analysis recalculates the water rates using
actual cost ind water usage data to determine the actual
cost of service to the Authority during the prior year.
Kansas City Water Services Department (MO)
Mr. Beckley served as Lead Consultant for a wastewater
Lost of service and rate study for the Kansas City Wa-
ter Services Department (Department). RFC prepared
a financial plan for the wastewater utility, forecasted
revenue requirements, and determined the City's cost
of service to its various customer classes and wholesale
customers. A cost of service analysis and review of the
City's wholesale contracts provisions resulted in the de-
elopment of wastewater rates which were approved by
the City Council.
City of Hobbs (NM)
Mr. Beckley has been the Lead Consultant on the City
of Hobbs (City) water and wastewater rate study. The
City was faced with significant capital expenditures to
upgrade their wastewater treatment plant and wanted to
ensure that the water and wastewater utilities were op-
erating in a self-sufficient manner. RFC worked with
City staff' as well as the City Council and Water Board
to determine the City's rate setting goals. RFC then
developed water and wastewater rate structures that
addressed these goals; in particular, conservation, while
providing for adequate capital financing.
City of Saginaw (MI)
Mr. Beckley served as the Lead Consultant for several
water costs of service engagements for the City of Sag-
inaw (City) These engagements include development
of a comprehensive financial plan, cost of service analy-
sis and design of water rates. In addition to its retail
customers, the City also provides water service to 19
wholesale customers, which use approximately 60% of
the water produced. A key element of the engagement
involved presentations to the wholesale customer group
and meetings with individual wholesale customers to
explain in detail the cost of service allocation method-
ology and the effect on the customer's water rates.
City of Wyoming (MI)
Mr. Beckley has served as Lead Consultant and Pro-
ject Manager for several engagements with the City of
Wyoming (City) over the past seven years. RFC's larg-
CITY OF FORT WORTH WATER DEPARTMENT 29
est engagement was to perform a water cost of service
study and to provide assistance in the negotiation of
new wholesale contracts for water and wastewater ser-
vice. The City engaged RFC to perform a water cost of
service study to support the negotiation of new whole-
sale water contracts. RFC has also provided expertise in
areas including rate of return, cost of service allocations,
industrial surcharges, and rate design across several en-
gagements with the City.
City of Grosse Pointe (MI)
Mr. Beckley serves as Project Manager to the City of
Grosse Pointe (City) performing a comprehensive
water and wastewater cost of service study including
benchmarking analysis allowing the City to compare
their performance with respect to key performance cri-
teria to the performance of other similar utilities. Mr.
Beckley has also been responsible for the development
of a ten year financial plan for the City's Utilities De-
partment, and creation of a financial planning and rate
model for use by City staff in preparing annual updates
to the water and wastewater rates
Fort Gratiot Township (MI)
Mr. Beckley served as the Lead Consultant on an en-
gagement for Fort Gratiot Township (Township) to
review proposed water rates from the City of Port Hu-
ron (City) The City provides wholesale water service
to the Township and was concerned about the level of
proposed rate increases they were facing, so they en-
gaged RFC to review the proposed rates to ensure they
were appropriate.
City of Lee's Summit (MO)
As Lead Consultant, Mr. Beckley performed compre-
hensive water and wastewater cost of service studies for
the City of Lee's Summit (City) as well as provided an
update of the City's system development charges col-
lected from new customers.
Northwest Water Commission (IL)
Mr. Beckley is serving as Project Manager for RFC's
engagement with the Northwest Water Commission
(Commission), a wholesale water provider located in
the northwest Chicago suburbs. The Commission
engaged RFC to review its assets and determine a
valuation for use in potentially providing service to
additional customers. RFC is also assisting the Com-
30 CITY OF FORT WORTH WATER DEPARTMENT AFTELIS FINANCIAL CONSULTANTS, Iris.
mission in analyzing potential methodologies for
recovery of costs from potential customers, including
potential rates.
City of Naperville (IL)
Mr. Beckley is serving as Project Manager for RFC's
e ngagement with the City of Naperville (City) 'The
City has engaged RFC to provide a comprehensive cost
of service study for their water and wastewater utility
and propose updated rates to meet the City's pricing
objectives. RFC worked with City staff to determine
their pricing objectives in a workshop setting and then
u sed the results of that exercise to propose cost of
service -based rates that met those objectives. The City
has also engaged RFC to provide assistance in updat-
ing their contract for wholesale wastewater service with
the City of Warren. RFC is working with the City to
e nsure that the contract is recovering the appropriate
costs related to their service to the City of Warren
City of Olathe (KS)
Mr. Beckley has been the Lead Consultant on a series
of engagements for the City of Olathe (City). RFC
first performed an analysis of the City's existing System
Development Fee methodology and provided guid-
ance on how the fees could be updated and improved.
RFC provided the subsequent revisions and updates
'Ind presented these findings to City Council. RFC has
subsequently been engaged by the City to analyze pro-
posed wastewater impact fees that would supplement
system development charge revenue, to update the
City s cost of service computer model, and to assist with
the determination of wholesale wastewater rates.
City of Phoenix (AZ)
Mr. Beckley has assisted the City of Phoenix (City)
by providing bond feasibility analyses ind parity test
certifications for over S1 billion in water and waste-
water revenue bonds over the past 10 years, including
a 3600,000,000 in Junior Lien Water System Revenue
Refunding Bonds issued in 2005. These engagements
included reviews of the City's financial statements and
other financial data to prepare the feasibility analyses
and parity test certifications.
Arlington County (VA)
Mr. Beckley has been the Lead Consultant on a series
of engagements for Arlington County (County). RFC
has conducted cost of service studies for the County
for the past several years, updated the County's Sys-
tem Development Charge methodology, conducted
pricing objective workshops with County staff as well
as a citizen's advisory group that provided input into
the rate setting objectives for the cost of service study.
RFC has also assessed the equity of existing user rates
and charges and evaluated the customer impacts as-
sociated with alternative rate structures. In addition,
the County has also requested assistance in evaluating
financing alternatives related to its capital improvement
program, which may also include the utilization of the
rate model to facilitate the preparation of a written fea-
sibility report to be used by the County in obtaining a
bond rating or credit enhancement for debt obligations.
RFC is also developing new infrastructure •Ivailabil-
ity fees for the County along with a model for use by
County staff in the future
Town of Grand Lake (CO)
Mr. Beckley served as the Project Manager for a water
rate study for the Town of Grand Lake (Town). The
Town's water utility serves approximately 950 custom-
ers in and around the Town. RFC was engaged by the
Town to determine revenue requirements for the utility,
prepare a financial plan that provided for funding of the
utility's operations and maintenance as well as capital
requirements, and propose rates to recover the neces-
sary revenues. RFC worked with Town staff to develop
an appropriate financial plan and presented the results
to the Town's Mayor and Board in a public meeting.
Loudoun County Sanitation Authority (VA)
Mr. Beckley served as the Lead Consultant on two
engagements for Loudoun County Sanitation Author-
ity (Authority), a cost of service rate study and a bond
feasibility study. The Authority's goal for the rate study
was to maintain the current rate structure and mini-
mize rate increases while still preserving a sufficient
fund balance to meet all internal coverage require-
ments The follow-up bond feasibility study used the
newly developed rate model to ensure the Authority's
financial capability to issue new debt.
City of Peoria (AZ)
In February 1998, the City engaged RFC to conduct
I comprehensive water and wastewater rate and finan-
cial planning study, which incorporated a water and
wastewater utility rate study, an update of its water and
wastewater development fees, the development of a wa-
ILIANCIAL CUNSUL(ANTS, INC.
ter resource fee, and the development of an appropriate >
financial plan and bond feasibility forecast Following >
these initial engagements RFC has assisted the City in
updating its water and wastewater rates, utility financial >
plan, and utility development fees on a biennial basis
(2000, 2002, 2004 and 2006). As part of these updates, >
the City implemented a uniform service area approach
to determining its development fees.
In 2003, RFC further assisted the City in determining
utility development fees for a separate service area lo-
cated west of the Aqua Fria River. Although the City
assesses uniform water and wastewater development fees
to customers in all other areas of its water and wastewa-
ter system, proposed development in this independent
service area requires significant investment in capital
iinprovements and certain portions of the required in-
frastructure will be financed through a Community
Facilities District. Since these fees will be separate and
unique from the fees assessed to other customers within
the City's current service area, the City requested that
RFC calculate the fees based upon the specific costs for
the infrastructure they are intended to recover.
Other Relevant Experience
> Allegheny County Sanitary Authority (PA) - Indus-
trial Surcharge Review and Rate Study
> Birmingham Water Works Board (AL) - Bond Fea-
sibility Study (2)
> City of Baltimore (MD) - Cost Model, Wastewater
Rate Study, and Water Rate Arbitration Assistance
> City of Gladstone (MO) - Wholesale Rate Review
> Harlingen Water Works System (TX) - Water and
Wastewater Rate Study
> City of Liberty (MO) - Wholesale Rate Review
> Little Rock Wastewater Utility (AR) - Cost of Ser-
vice Study and Model, Rate Advisory Committee
Assistance, Rate Review System Growth Charge
Study, and Valuation Study
> City of Macomb (MI) - Feasibility Analysis for Ac-
quisition find Wastewater Rate Litigation Assistance
> City of Naperville (IL) - Water and Wastewater
Cost of Service Study
> Metropolitan Government of Nashville and David-
son County Water Services (TN) - Budget Review
> Oakland County (MI) - Water find Wastewater
Master Plan Study
> Peace River lvla aasota Regional Water Authority
(FL) - Feasibility Study
CITY OF FORT WORTH WATER DEPARTMENT 31
City of Providence (RI) - Rate Filings (multiple)
Saginaw -Midland Municipal Water Supply Corpo-
ration (MI) - Feasibility Study
City of San Francisco (CA) - Wholesale Water
Contract Negotiations
St. Louis Metropolitan Sewer District (MO) - Rate
Change Review (multiple)
United States Navy - Rate Review and Negotiations
32
CITY OF FORT WORTH WATER DEPARTMENT
Technical Specialties
> Rate structure studies
> Surveys and benchmarking
analyses
Professional History
> Raftelis Financial
Consultants, Inc. Senior
Consultant (2011-presentl;
Staff Consultant (2008-20111
Education
> Master of Science - Carnegie
Melton University (2006)
> Bachelor of Arts - Princeton
University (2004)
JCXY c aAL Y
tarf Consultant (Senior nsultant,
7Ar T ELIS FINANCIAL CONSULTANTS, INC.
PROFILE
Mr. Cialey joined RFC at the beginning of 2008. He has a highly analytical
background and his expertise lies in data compilation, analysis, and modeling
Since joining RFC, he has served as a consultant on numerous water and
wastewater rate and cost of service studies. Additionally, he has had the op-
portunity to work on a wide range of other projects involving public -private
partnerships, rate differentials, risk analysis, and utility policy. Mr. Craley also
manages RFC's many survey efforts, including the biennial national Wa-
ter and Wastewater Rate Survey co -produced with AWWA and the Utility
Financial Information Survey produced by AMWA. Mr. Craley is an active
member of WEF, and WEF's Utility Management Committee, and he serves
on the WEFTEC Planning Committee. He is also a contributing author for
the 4th edition of Water and Wastewater Finance and Pricing: A Compre-
hensive Guide to be released in 2013.
RELEVANT PROJECT EXPERIENCE
San Antonio Water System (TX)
Mr. Craley served as staff consultant for a comprehensive cost of service and
rate study for the San Antonio Water System (SAWS) During this pro-
ject, RFC prepared and facilitated a rate setting workshop for SAWS staff
and members of a Rates Advisory Committee (RAC); developed a compre-
hensive cost of service/rate model that calculated conservation water rates
for residential, commercial, industrial and wholesale customers. In addition,
RFC developed a wastewater rate model that calculated residential waste-
water rates and high -strength surcharges As part of this project, RFC also
reviewed SAWS' impact fee calculation methodology, developed recycled
water rates; reviewed chilled water and steam rates, in addition to assisting
SAWS with the development of various miscellaneous charges. Mr. Craley
primarily assisted with modeling the rates and financial plan for water and
recycled water service
Central Arkansas Water (AR)
RFC is currently assisting Central Arkansas Water (CAW) with a compre-
hensive cost of service and rate design study. Serving as Lead Consultant for
the project, he is developi ig the rate and financial planning model for CAW.
RFC is also assisting CAW with planning capital spending, including two
upcoming debt issues and significant rate funded capital. RFC's recommen-
dations will be the foundation for the adoption of a three-year rate forecast
for 2012-2014. Mr. Craley will conduct the analysis, evaluate the rate alterna-
tives, ind generate the deliverables for the project.
Mobile Area Water and Sewer System (AL)
?vlr. Craley has served as Associate Consultant for a comprehensive rate
and financial planning study for the Mobile Area Water and Sewer System
(MAWSS). MAWSS hired RFC to explore alternative rate structures, and
reevaluate their existing revenue sources, including capacity fees, miscellane-
�ArTELIS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 33
ous fees, and surcharges. Mr. Craley has completed
extensive financial modeling of the complex billing data
and existing and alternative rate structures while pro-
viding support for the fees and other charges analyses.
Phoenix Water Services Department (AZ)
The City of Phoenix Water Services Department (City)
engaged RFC to conduct a two-phase study analyzing:
1) impact of pricing on demand, and 2) conservation
rate structures ?vlr. Craley has served as the Lead Con-
sultant for this project. Mr. Craley identified potential
utilities, contacted the utilities, and collected data. Mr
Craley has also assisted RFC in the analysis and pres-
e ntation of the results.
The City has recently engaged RFC to update the
wastewater environmental fee. Mr. Craley is serving
as Lead Consultant for RFC and is working on the fi-
n ancial allocation analysis to determine costs related to
e nvironmental regulations. 1VIr. Craley has retooled the
existing model to accommodate and model changes in
the treatment processes.
Jefferson County (AL)
Jefferson County Office of Sewer Service (County) en-
gaged RFC to conduct a wastewater cost of service and
financial planning study. The County is facing difficult
capital repayment issues and engaged RFC to assist in
determining the most advantageous approach for the
County and customers. Mr. Craley served as Lead Con-
sultant for this study and extensively modeled financial
plans for the County based on the implementation of
different capital repayment scenarios. Mr. Craley was
also involved with analysis and presentation of results
District of Columbia Water and Sewer Authority (DC)
RFC is working with the District of Columbia Wa-
ter and Sewer Authority (DC Water) on a multi -year
contract to provide cost of service, rate, and financial
consulting services. Mr. Craley's responsibilities have
included assisting with a survey of rate structures
within the industry and a miscellaneous fee analysis. A
water and wastewater cost of service study is planned
for 2012, and Mr. Craley's chief responsibility will be
the development of the water and wastewater cost of
service and rate model.
Northeast Ohio Regional Sewer District (OH)
Mr. Craley served as Lead Consultant for a cost of
service study for the Northeast Ohio Regional Sewer
District (District). RFC conducted a rate structure
•analysis ind recommended the District incorporate
•i base charge into their rate structure. Additionally,
RFC worked with the District's financial advisor to
forecast debt scenarios for the District's extensive capi-
tal improvement program. Mr. Craley's primary task
was to develop the rate and financial planning model
for the District.
The City and County of Honolulu Department of Envi-
ronmental Services (HI)
The City and County of Honolulu Department of
Environmental Services (ENV) engaged RFC to con-
duct a study of their sewer service charge. This study
included an in-depth examination of ENV's pricing
objectives as well as the advantages and disadvantages
of ENV's rate structure and potential rate structure al-
ternatives. Mr Craley reviewed several similar utilities
and compiled presentation materials of the results
ENV engaged RFC approximately one year later to
continue the analysis on the sewer service charge. Mr.
Craley is currently serving as Lead Consultant to the
ENV. RFC has modeled the selected rate structure
alternative, modifications to the non -monitored high
strength surcharge program, and has recommended
a methodology for calculating an update to the facil-
ity charge. Finally, RFC has designed a cutting edge
affordability analysis to evaluate potential affordability
programs.
Pima County Regional Wastewater Reclamation De-
partment (AZ)
Mr. Craley was part of the four -firm consulting project
team analyzing alternative project delivery models for a
new wastewater treatment facility for Pima County Re-
gional Wastewater Reclamation Department (County).
During this project, Mr. Craley provided technical
expertise. He extensively modeled the inherent and
transferred risks of each alternative method, including
design, construction management, and operation and
maintenance of the proposed facility. Mr. Craley also
provided clear and concise reporting of risk analysis re-
sults tor presentation.
In addition, Mr. Craley served as consultant during
the fiscal year 2010 rate ind financial plan update for
the County. Mr. Craley provided the same service to
34 CITY OF FORT WORTH WATER DEPARTMENT IAFTL'-L15 FINANCIAL CONSULTANTS, INC.
the County in the prior year's update. Specifically, he
worked with the budget and capital improvement plan
and overall modeling of future rate increases and finan-
cial plan.
San Francisco Public Utilities Commission (CA)
Mr. Craley served as Consultant during the water and
wastewater rate and financial pla fining study for the
San Francisco Public Utilities Commission. Mr. Cra-
ley's primary role was to administer a rate survey to
similarly sized and geographically located utilities for
benchmarking purposes. Mr. Craley assisted in the
development of the survey questionnaire, served as
primary contact for participating utilities, and created
applicable analyses.
City of Loveland (OH)
The City of Loveland (Loveland) appealed to the Met-
ropolitan Sewer District (MSD) of Greater Cincinnati
to resume control of a wastewater treatment facility
and infrastructure previously operated and maintained
by Loveland until 1985, at which point in operating
agreement was established with MSD RFC provided
Loveland with economic feasibility studies of various
transfer scenarios. Mr. Craley in particular, has con-
ducted extensive research regarding local and state
policy, EPA standards and requirements, and has as-
sisted in the financial modeling of the scenarios.
Santa Clara Valley Water District (CA)
RFC was engaged to provide expert testimony in on-
going litigation on the appropriateness of wholesale
rates charged by Santa Clara Valley Water District Mr.
Craley served as staff consultant and assisted this pro-
ject by surveying large western wholesale utilities about
their rates and rate setting practices. Additionally Mr.
Craley conducted a high level analysis of the utilities
build-up of expenses.
City of Gainesville and Hall County (GA)
Mr Craley assisted the City of Gainesville (City) and
Hall County (County) as staff consultant for a rate dif-
ferential study. RFC conducted a cost of service study
to calculate the rate differential between water and
wastewater customers within the City and customers
outside of the City within the County. Mr. Craley re-
viewed the fixed assets of each system and determined a
rate differential based on cost of service.
Town of Sullivan's Island Water and Sewer Depart-
ment (SC)
Mr. Craley has served as staff consultant for a cost of
service study for the Town of Sullivan's Island (Town).
The Town was under recovering revenue and had in-
stituted a multifaceted rate structure that included a
minimum charge, a varying basic facility charge and
multi -tiered rates for the water, wastewater and irriga-
tion service Mr. Craley and RFC assisted the Town by
constructing a new rate model and rate structure that
reduced the complexity of the existing rate structure,
set rates at appropriate levels, and forecasted future rate
increases to maintain revenue neutrality.
James Island Public Service District (SC)
Mr. Craley served as a Consultant for a rate and cost
of service study for the James Island Public Service
District (PSD). The PSD is involved in an intricate
charge -charge back relationship with Charleston Water
System (CPW) regarding several classes of customer
groups from each utility. RFC has assisted the PSD in
determining the cost of service for each customer class,
setting appropriate rates, and working with CPW for a
smooth implementation of the new rate structure. 1VIr.
Craley has performed research on the local policy as
well as extensive modeling of the updated rate model.
Other Project Experience
> Confidential Client (AL) — Litigation Support and
Research
> Town of Bethel (CT) — Rate and Financial Plan
update
> Nova Scotia Utility and Review Board, Halifax (NS,
Canada) - Review of Return on Rate Base
> Pima County Regional Wastewater Reclamation
Department (AZ) — Procurement Support
> Spartanburg Water and Sanitary Sewer District
(SC) — FY2008 Rate Update
> United States Navy - Northwest Utility Privatiza-
tion Procurement
SURVEYS
2012 Water and Wastewater Rate Survey
Mr. Craley had evolved into the role of RFC's project
manager for the 2010 Water and Wastewater Rate
Survey, and is now overseeing the 2012 Rate Survey
project. The biennial national survey is completed by
RFC in conjunction with the American Water Works
'TLIS FINANCIAL CUNSULiANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 35
Association. Mr. Craley manages the day-to-day as-
pects of the survey, including the support staff, and
provides critical support in reviewing data and per-
forming analyses. A record 341 utilities responded and
were included in the 2010 survey.
Association of Metropolitan Water Agencies - Utility
Financial Information Survey
Mr. Craley has served as Project Manager for RFC's
work with the Association of Metropolitan Water
Agencies (A IWA). AIMWAs membership, which
includes utilities that have a service population of at
least 100,000, has expressed interest in understanding
the rates and rate structures of its members and the
drivers of rate increases. In 2010, RFC was engaged
to conduct another comprehensive Utility Financial
Information Survey of its membership, as it had done
in 2008. Mr. Craley managed the survey development,
data collection, and processing of results. The results
have been compiled in database format with the 2008
results, and provided to AIVIWA and participants. Mr.
Craley has also led a webinar demonstrating use of the
database.
Water Infrastructure Finance Authority (AZ) — Water
and Wastewater Residential Rate Survey
Mr Craley served as Project Manager for the 2011
Water and Wastewater System Survey for the Water
Infrastructure Finance Authority of Arizona (WIFA).
This was the third year RFC conducted the survey
for WIFA. Over 400 utilities were solicited for par-
ticipation. Mr. Craley served as primary contact for
participating utilities and oversaw the data collection
process. Upon completion of the survey, Mr. Craley
compiled the data, reviewed the results for accuracy, and
performed analyses used for presentation.
36 CITY OF FORT WORTH WATER DEPARTMENT 'AFTELIS i=INANCIAL CONSUL-IANTS, INC.
This page intentionally left blank to facilitate two-sided printing.
11=LiS FINANCIAL CONSULTANTS, INC. CITY OF FORT WORTH WATER DEPARTMENT 37
APPENDIX B: RECOMMENDATION LETTERS
As further evidence of RFC's focus on client satisfaction, in the following pages we have included recommendation letters
from several of our clients.
San
Antonio
Water
System
•
June 22, 2010
Mr. Harold J. Smith
Vice President
Raftelis Financial Consultants, Inc.
1031 S Caldwell Street, Suite 100
Charlotte, NC 28203
Dear Mr. Smith:
On behalf of the San Antonio Water System, I would like to express appreciation for the
efforts of your company in the conduct of the Comprehensive Cost of Service and Rate
Design Study As you are aware, on June 17, 2010, the San Antonio City Council voted
to accept the recommendations of the Rate Design Study with minor revisions Without
the professionalism and responsiveness of you and your staff, the successful completion
of the Rate Study would not have been possible.
Please extend our appreciation to your management and staff for their efforts.
Sincerely,
Douglas P. 'anson
Sr. Vice President/Chief Financial Officer
2800 U.S. Hwy. 281 North • P.O. Box 2449 • San Antonio, TX • 78298-2449 • www.saws.org
I Y Y + O F
IUICNITB
Department of Public Works & Utilities
March 1, 2012
The City of Wichita contracted with Raftelis Financial Consultants last year to complete a Cost
of Service Analysis of our water and sewer system. We had a number of challenges facing the
u tility, including the equitability of our customer charges and a insufficient funding for necessary
capital improvements. The Raftelis team had the staff resources and capabilities to lead our
u tility toward long term sustainability.
The consultant team was very responsive to our needs and ensured the timely completion of the
project. They dedicated all resources needed to develop the best possible solutions for our
u tility. We greatly appreciated how flexible they were in adjusting to new issues that arose
during the project and their detailed analysis exceeded the expectations we established at the
o utset of the initiative.
Working with Raftelis proved very beneficial for our utilities — it was incredibly important that we
hired the best possible team for our project. Raftelis delivered with a very helpful product that
positioned us for the future. The data analysis identified a disparity in customer rates that we're
n ow on the path to addressing. Their work ensures that our rates will support needed
infrastructure improvements over the next decade, and we now also have sophisticated financial
planning tools to allow us to adjust to changing conditions in the future.
We are very pleased with the work product delivered by Raftelis and are grateful for their efforts
in assisting our utilities They have tremendous staff capabilities and are very dedicated to
ensuring the satisfaction of their clients
Sincerely,
Ben Nelson
Strategic Services Manager
Office of the Director
City Hall • Eighth Floor • 455 North Main • Wichita, Kansas 67202-1606
T 316.268.4422 W www.wichitagov.org
n IF I31 tnnNc;I IAM
\V,vri:It \l)ItK' I3oARD
Directors/Officers
A, Jackie Robinson, III
Chairman/President
Sherry W. Lewis
First Vice Chairman/
First Vice President
Anthony L. Barnes
Second Vice Chairman/
Second Vice President
David S. Herring
Secretary -Treasurer
Ann D. rlorle
Assistant Secretary -Treasurer
Mac Underwood, CPA
General Manager
Assistant
General Managers
Darryl R. Jones, P. E.
Operations and Technical
Services
T. M. Jones, P.E.
Engineering and Maintenance
Michael Johnson, CPA
Finance and Administratwn
February 28, 2012
Subject: RFC Letter of Reference
To whom it may concern:
The Birmingham Water Works Board (Board) has relied on Raftelis
Financial Consultants Inc. (RFC) to pi ovide various financial and rate
consulting services for the last 10+ years. We have appieciated RFC's
professionalism, responsiveness, and attention to our needs on a variety
of projects.
The Board, which provides water service to a population of
approximately 600,000 in a five -county region around Birmingham, had
acquired two small sewer systems to protect its source waters in the
i980s. 1-Laving stabilized the systems, the Board was interested in
focusing on its core business, providing water service. At the sane
time, the Board was approached by two groups interested in
purchasing the systems. As a result, the Board decided to investigate a
potential sale of the systems. RFC prepaied a valuation of the systems,
assisted the Boaid in developing a negotiation strategy, and evaluated
the impact of lost revenue stream on the Board's five-year financial
plan. With this assistance, the. Board was able to successfully negotiate
to sell the systems.
We do not hesitate to recommend RFC in providing valuation services
as well as other financial and rate services for water and wastewater
utilities.
Sincerely,
Mac Underwood
General Manager
.1600 First Avenue North, i' 0 Box 830I 10, Birmingham, Alabama 352K3-01 10 Phone 203.244 4000 \Vebsitc: www.hwwsh.com
0
4'
e
eo`�
vnt�g
•
August 24, 2011
Mr George Raftelis
Raftelis Financial Consultants, Inc.
201 S. Lake Boulevard, Suite 803
Pasadena, CA 91101
CITY OF HENDERSON
.H050
As the City of Henderson prepares a utility revenue enhancement package for our elected City
Council consideration, I am reminded of the excellent work your firm provided us in the 2006 to
2010 timeframe. We continue to use the principles and rate model tool you provided during that
effort
The efforts led by Sudhir Pardiwala and Steve Vuoso were responsive, professional, and timely.
They guided us through the preparation of a 10-year financial plan, a cost of service rate study,
and a comprehensive rate model for our water, wastewater, and reclaimed water services. These
documents continue to form the foundation for our ongoing financial plan. We rely on these
elements heavily to manage our finances and justify changes to our rate structure.
Both Mr Pardiwala and Mr.Vuoso have remained engaged and available to us to assist our use
and understanding of the financial models which were delivered. I have been extremely pleased
with the follow-on support.
The partnership between Raftelis Financial Consultants (RFC) and the City of Henderson
Department of Utility Services has proven to be extremely productive and valuable to the City of
Henderson. RFC has been responsive, reliable, professional, and creditable. With their guidance
and advice, the City of Henderson is well positioned to address the long term financial
challenges we face in operating our utility I appreciate their assistance and will gladly consider
RFC for all our future financial projects.
Sincerely,
Barney L. Rabold, P.E.
Acting Director of Utility Services
BLR: jdv
Department of Utility Services • 702-267-2500 • fax 702-267-2501 • www.atyofhenderson.com
Fir If r
r,
etA)
PIMA COUNTY
REGIONAL WASTEWATER RECLAMATION DEPARTMENT
201 NORTH STONE AVENUE
TUCSON, ARIZONA 85701-1207
MICHAEL GRITZUK, P.E. PH: (520) 740-6500
DIRECTOR 2 AX: (520) 620-0135
August 19, 2010
Mr. George A. Raftelis
Raftelis Financial Consultants, Inc.
1031 South Caldwell Street Suite 100
Charlotte, North Carolina 28203
Dear George,
I am writing to thank you for the excellent service that Raftelis Financial Consultants,
Inc. (RFC) has provided to the Pima County Regional Wastewater Reclamation
Department over the past several years. During that period, professionals from RFC
have assisted us on a number of projects including the development of our Regional
Optimization Master Plan; the preparation of three annual financial plans; and are
currently assisting us with the procurement of a design/build/operate contractor for a
new wastewater reclamation facility. Additionally your firm also helped secure the
approval from the Pima County Board of Supervisors for the rate increases needed to
begin the implementation of a capital program approaching $1 billion. Your staff has
always been well prepared to address our needs.
I would also like to take this opportunity to also thank you for the financial services you
performed in the past for the City of Phoenix Water Services Department during the
years that I was the Department Director
We have enjoyed working with you and your staff and look forward to continuing
working with you as we continue into the future
Sincercly,
4(t ' G
± �a�r
hael ritzu{Y, P.E.
Director
MG. mo
City of Peoria
Finance Department
3401 West Monroe Street, Peoria, Arizona 85345
Ph:623-773-7134
February 27, 2012
Mr. George Raftelis
Raftelis Financial Consultants, Inc.
511 East Boulevard
Charlotte, North Carolina 28203
Dear Mr. Raftelis:
Raftelis Financial Consultants (RFC) has provided a range of financial analysis, rate and fee analysis and
planning valuation and economic feasibility studies to the City of Peoria since 1997. RFC s industry expertise
and analytical support have been invaluable to Peoria as our utility systems have grown and matured over the
past 15 years.
In the area of valuation and economic feasibility studies, RFC staff have provided Peoria with assistance related
to two of the three private water systems within Peoria's municipal service area. The City considered the
purchase of one or more of the three utilities through friendly negotiations if it was determined to be
economically feasible. RFC developed a decision -support tool to allow Peoria staff to assess the economic
feasibility of acquiring the private utility using several acquisition scenarios. In addition, RFC assessed the fair
market value and investment value of the systems and was engaged to update the analysis in subsequent years.
While the acquisitions were not completed, RFC's analysis and support enabled the City to fully consider the
feasibility of these acquisitions
RFC has provided the City with continual support in the review and development of its water and wastewater
rates and development impact fees over the last 15 years. Peoria has grown rapidly and RFC's staff have been
attentive to the City's financial needs and objectives while mindful to suggest approaches that best fit Peoria's
circumstances. Peoria has made a point to review its rate structures every two years with RFC support. As part
of this effort RFC has developed forecasting models that City staff could update annually RFC has been very
flexible in adapting these tools to meet changing City demands and to improve their functionality.
Peoria has been very satisfied with the project support and planning assistance provided to the City by Raftelis
Financial Consultants and would recommend their services to your organization.
Sincerely,
Brent D. Mattingly
Finance Director / CFO
:i
DIVERSITY
.nail. t I. CI Pi
THE CITY OF SAN DIEGO
March 5, 2007
Mr. George Raftelis
Raftelis Financial Consultants, Inc.
511 East Boulevard
Charlotte NC 28203
Dear Mr. Raftelis:
Subject: City of San Diego Water Cost of Service Study
1 am writing to thank Raftelis Financial Consultants (RFC), and particularly Sudhir
Pardiwala and Steve Vuoso, for the work involved in preparing the Water Cost of Service
Study, and assisting with presentations to the City s elected officials and community
members on the study. The work they accomplished on the study was completed in an
unusually short amount of time and received significant amounts of scrutiny from various
sources. Sudhir and Steve, in addition to providing great technical expertise, were
unswervingly patient and responsive. I know they called on numerous resources within
RFC to meet our many requests, and I am grateful to all who contributed to the success of
this project.
The Cost of Service Study prepared by RFC provided the foundation on which the Mayor
was able to recommend modifying our rates and on which the City Council could rely in
approving those recommendations. We appreciate the work performed, and assistance
RFC provided to the City.
Sincerely,
M. Barrett
Water Department Director
•
Water Department Director
600 8 Street, Suite 1300 (MS 913) • San Diego, California 92101.1588
Tel (619) 533.7555 • Fax (619) 533 7593
AE rELIS S=INAr1CIAL CONSULiANIS, NC. CITY OF FORT WORTH WATER DEPARTMENT 45
APPENDIX C: BOARD RESOLUTION
On the following pages we have included a copy of the Board Resolution of RFC which certifies that William Stannard, who
signed the cover letter of this proposal, is the President and CEO of RFC and is entitled to represent our firm, empowered to
submit the bid, and authorized to sign a contract with the City of Fort Worth.
BOARD RESOLUTION
OF
RAFTELIS FINANCIAL CONSULTANTS, INC.
At the meeting of the Board of Directors on October 16, 2009, the following
resolution was proposed and approved by the Board:
WHEREAS the Amended RFC Bylaws state 'The Board of Directors may authorize
any officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.'
RESOLVED, that the Board authorizes any Officer or Vice President of the
Corporation to execute on behalf of the Corporation any contractual documentation
related to entering into an obligation to perform professional services for an entity.
FURTHER RESOLVED that the Officers referred to in the foregoing resolutions are
as follows:
George A. Raftelis Chief Executive Officer
William G. Stannard President
Peiffer A. Brandt Chief Operating Officer
Diane R. Adams Chief Financial Officer & Secretary
Alexis F. Warmath Vice President
Harold J. Smith Vice President
Sudhir D. Pardiwala Vice President
CERTIFICATION
I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution
presented to and adopted by the Board of Directors of Raftelis Financial Consultants,
Inc. at a meeting duly called and held at on the 16`h day of October 2009, at which a
quorum was present and voted, and that such resolution is duly recorded in the
minute book of this corporation; that the officers named in said resolution have been
duly elected or appointed to, and are the present incumbents of the respective offices
set after their respective names, and that the signatures set opposite their respective
names are their true and genuine signatures.
Secretary)14