2013/01/30 Council Agenda Packet

3 2. E-mailed Word and PDF files of the draft and final addendum Chapter 9. Task 9 — Financial Plan (CWP Chapter 10) Objective Develop the financial program for the Comprehensive Water System Plan Addendum. The objective of the financial program, as defined in the Water System Planning Handbook published by the Washington State Department of Health, "is to identify the total cost of providing water service, assure that the utility improvement schedule will be implemented, and assist in establishing adequate fees for service." Accordingly, a financial plan will be developed for the City that will: • Identify the total cost of providing water service, both operational and capital. • Develop a funding strategy that will assure financial strength and viability for the City in both a short-term (6 years) and long-term (20 years) planning period and thus assures the City's ability to implement the schedule of capital improvements. • Estimate connection charges and water service rates to reflect the impacts of the defined capital needs and related increases in operational costs. HDR Services The financial program will be included in the Comprehensive Plan document as follows: 1. Past and Present Financial Condition—document a summary of water utility financial performance for the past six years and document outstanding long-term debt. 2. Available Revenue Sources - Document available sources of revenue and funding for capital and operational costs and describe historical approaches and or policies that establish the City's funding methods. 3. Capital Financing Alternatives and Approaches— Identify capital financing. Develop a . financing strategy incorporating rates, connection charges, and debt financing. Identify and document Capital Funding Assistance Programs—Available State and Federal grant and loan programs. • 4. Connection Charges— Update Connection Charges potentially applicable to new development consistent with statute (RCW 35.92.025). Evaluate the financial impacts of imposing these charges. The CIP will designate projects as`replacement"or "expansion", or provide an allocation between those categories, for use in the connection charge update. 5. Rate Forecast and Rate Impacts—Develop a rate forecast which incorporates the capital and operating requirements identified in the plan. A six-year forecast will estimate annual rate increases required. For each year, estimate revenues and expenses. 6. Rate Structure and Conservation—Summarize the City's water rate structure and document a qualitative review. The review will focus on potential equity concerns or water conservation opportunities that might be addressed through rate structure revisions. 7. Recommended Financial Strategy—Document a recommended financial strategy addressing funding sources, basic financial policies, rates and charges. Client Responsibilities 1. Provide financial, budgeting, rate and customer reports. Addendum to the 2007 Comprehensive Water Plan January 9,2013 Exhibit A—Scope of Services Page 9 28