Title
Financial Rate Study (wet utilities)
Recommended Action
Briefing Only
Report
Issue:
Receive briefing on proposed scope of work and timeline for a multi-year financial rate study for the City's Drinking Water, Wastewater, and Storm and Surface Water Utilities
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, Planning and Engineering Manager, Public Works Water Resources, 360.753.8321
Presenter:
Susan Clark, Planning and Engineering Manager, Public Works Water Resources,
Background and Analysis:
Following the release of a Request for Proposals and a selection process, the City contracted with HDR Engineering, Inc. to complete a comprehensive, multi-year Financial and Rate Services Analysis for its wet utilities. This effort is designed to support long-range financial planning, rate setting, and capital funding strategies.
The study will evaluate revenue and General Facility Charge (GFC) requirements and conduct a cost-of-service and rate design analysis to ensure the three utilities remain financially sustainable, equitable, and aligned with growth and regulatory needs. A key outcome will be development of rate and fee models that City staff can use annually for budgeting and rate-setting.
The work is structured as a phased effort from 2025 through 2028 to align with the City's budget cycle and allow for iterative review, policy development, and to build support for long-range financial planning in decision-making.
Key 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...
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