Indirect Cost Allocation Plan and Analysis

The City of Pasadena’s Water and Power Department ( “ PWP ” ) is inviting proposals f rom experienced technical and financial consulting firms specializing in cost recovery . The goal is to conduct a thorough overhead cost allocation study, plan, and model for use within the Department and in external funding or financing applications, including but not limited to grants. The study aims to create and implement methodologies for precisely allocating overhead costs associated with various PWP services to other business units, ensuring adherence to regulatory standards and industry best practices.

PWP plans to select one firm that showcases the capability and expertise to execute the tas k s detailed in the “S cope of Work” section of this Request for Proposal ( “ RFP ” ).

PWP

Founded in 1912, PWP is a municipally owned utility that is committed to providing safe and reliable water and power with superior customer service at reasonable rates . PWP is g overned by the City ’s elected Mayor and seven-member City Council and operate s under the management and control of the City Manager . The utility is overseen by General Manager, who is responsible for the planning, design, construction, maintenance , and operation of both systems . PWP has a fiscal year 2026 operating budget of $366 million with 442 full-time equivalent employees.

Within the Electric System and the Water System, PWP is organized into s even separate divisions. This structure allows for a higher level of accountability as well as the creation of individual cost centers and profit centers. These business units are briefly described as follows:

General Manager
This uni t oversees department-wide administration, strategic planning , and labor relations to support the overall direction and effectiveness of the organization.

External Affairs
This unit is responsible for public relations, marketing, special events and educational partnerships, public benefits , key accounts customers , legislation and government affairs.

Finance and Administration
This unit is responsible for developing and executing PWP’s overall financial strategy and ensuring the department’s financial integrity. It manages PWP’s financial resources and provides relevant information to support decision-making across operating units. Key responsibilities include financial planning, budgeting, procurement, safety, and other administrative support functions .

Customer Service and Technology
This unit develops a range of solutions and tools aimed at enhancing customer support and satisfaction through the integration of technology. The responsibilities of this unit include call center, utility billing and support , credit , collection, payment, meter reading , turn on/off services , business systems, information and operational technolog y .

Power Supply
Responsible for managing PWP’s energy portfolio, including strategic resource power generation, power contracts, electric energy and ancillary services and natural gas procurement. This unit is also responsible for energy scheduling to ensure reliable delivery of electricity and the operation of generating units located within the City .

Power Delivery
This unit is responsible for the design, construction, operation and maintenance of the local power distribution system to provide the safe and reliable delivery of electricity, load dispatch operations and is responsible for implementing the Power Distribution System Master Plan.

Water Delivery
This unit is responsible for the procurement, production and delivery of water as well as the planning, design and construction of the local water distribution system. This unit also operates and maintains the local water supply resources and distribution system.