Title
Financial and Rate Study (wet utilities)
Recommended Action
Briefing Only
Report
Issue:
Receive a financial and rate project update and a rate setting 101 briefing
Staff Contact:
Gary Franks, Public Works Water Resources Director, 360.753.8780
Mike Vessey, Public Works Drinking Water Utility Director, 360.753.8318
Susan Clark, Engineering and Planning Manager, Public Works Water Resources, 360.753.8321
Presenters:
Susan Clark, Engineering and Planning Manager
Shawn Koorn, Associate Vice President / Senior Professional Associate, HDR Consulting Inc.
Background and Analysis:
Project Background
On April 2, 2026, the UAC received a briefing on the scope of work for a comprehensive, multi-year Financial and Rate Project for the Drinking Water, the Wastewater and the Storm and Surface Water utilities. The project is designed to support long-range financial planning, rate setting and capital funding strategies.
Key project phases include:
* 2025 - June 2026 (Foundational Analysis):
Data collection, financial policy review, and development of baseline revenue requirements and GFC methodologies. Additional white papers will address affordability, customer assistance, and funding strategies for climate-related infrastructure (e.g., sea level rise).
* June - December 2026 (Alternatives & Draft Rates):
Development of revenue requirement scenarios, cost-of-service analysis, and draft rate designs. Updated GFCs and initial presentations to the Utility Advisory Committee (UAC), Finance Committee, and City Council.
* 2027 (Final Recommendations):
Refinement and adoption of final revenue requirements, cost-of-service analysis, rate designs, and GFCs. Final reports, decision-maker presentations, and delivery of rate and fee models with staff training.
During the April 2, 2026 meeting, staff heard support voiced from the UAC for continued involvement in the project, including for a June 2026 project briefing and a rate setting 101 session led by HDR Engineer...
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