Wastewater Utility Rate Study
| Agency: | Scotts Valley city |
|---|---|
| State: | California |
| Type of Government: | State & Local |
| NAICS Category: |
|
| Posted Date: | Oct 21, 2025 |
| Due Date: | Nov 25, 2025 |
| Original Source: | Please Login to View Page |
| Contact information: | Please Login to View Page |
| Bid Documents: | Please Login to View Page |
| Bid Title: |
Wastewater Utility Rate Study
|
| Category: | Public Works |
| Status: | Open |
|
Attachment Preview
REQUEST FOR PROPOSALS
CITY OF SCOTTS VALLEY
Wastewater Utility Rate Study
City of Scotts Valley
1 Civic Center Drive
Scotts Valley, CA 95066
ISSUE DATE:
October 21, 2025
DEADLINE FOR SUBMISSION:
November 25, 2025, by 5:00PM
CONTACT:
Jeremy Long, Wastewater Division Manager
jlong@scottsvalley.gov
I. NOTICE OF INVITATION
The City of Scotts Valley (“City”) is requesting proposals for the development of a Comprehensive
Wastewater Utility Rate Study. The purpose of the study is to assess the City’s existing wastewater rates,
develop long-term financial projections, and calculate wastewater rates that equitably recover the costs
of providing service over the next several years. Recommended rates should meet the City’s operational
and capital funding needs, comply with legal requirements (including Proposition 218), and be fair and
reasonable for all customers.
Interested firms shall submit one electronic copy in PDF format.
Submissions will be accepted via email only.
Please email your submission to: jlong@scottsvalley.gov
No submission will be accepted by oral communication, telephone, or facsimile transmission. Proposals
may be withdrawn prior to the time set for closing. Postmarks will not be accepted. Any proposal
received after the time set for closing will be rejected.
II. INTRODUCTION
The City of Scotts Valley (herein referred to as “City”) is requesting proposals from qualified consultants
(“Consultant”) to prepare a Comprehensive Wastewater Rate Study, provide technical support during
the Proposition 218 process, and assist City staff and the City Council with the adoption of new
wastewater rates. The study will update the City's cost-of-service analysis, recommend a fair and
equitable rate structure, and ensure financial sustainability of the wastewater utility over the next 20
years.
The intent of this RFP is to evaluate each interested consultant's specific qualifications, experience, and
approach, and to select the best-qualified consultant. The City expects the consultant to provide
sufficient, readily available resources in the form of trained personnel, support services, specialized
consultants, and financial capacity to carry out the work without delay or shortcomings. The consultant
shall also provide model documentation and staff training at project completion to allow City staff to
update the model in future years.
The work will be performed according to the attached Agreement for Services. All contracts are subject
to approval by the Scotts Valley City Council. The City reserves the right not to award a contract at its
sole discretion.
III. BACKGROUND
The City of Scotts Valley is in northern Santa Cruz County, located in the redwoods of the Santa Cruz
Mountains. Situated approximately 6 miles north of Santa Cruz, 30 miles southwest of San Jose, and 68
miles south of San Francisco, the City is known for its natural beauty, proximity to Silicon Valley, and
small-town character.
The City provides wastewater service to approximately 3,400 customers. The wastewater system
includes a treatment and reclamation facility, approximately 60 miles of sewer line, eight pump stations,
and a jointly operated ocean outfall with the City of Santa Cruz. Average dry-weather flow is
approximately 0.85 million gallons per day.
The City’s wastewater utility operates as an enterprise fund supported primarily by rate revenues. Rates
were last adjusted in July 2020, and the overall structure has not been comprehensively updated since
the mid-1990s. The utility is currently experiencing an annual operating deficit of approximately
$262,556 and must also fund an adopted five-year $2.2 million Capital Improvement Program (CIP).
Additional funding will be required for pipeline rehabilitation, equipment replacement, and reserve
stabilization. The study shall align with the City’s adopted financial and reserve policies to ensure long-
term stability of the wastewater enterprise fund.
IV. SCOPE OF SERVICES
The selected Consultant shall provide all labor, materials, and expertise necessary to complete a
comprehensive wastewater rate study. The scope of services shall include, but is not limited to, the
following tasks:
1. Project Initiation
• Conduct a kickoff meeting with City staff.
• Prepare a detailed project schedule identifying key milestones, draft/final deliverable dates, and
review meetings.
• Review financial records, budgets, and historical rate studies.
2. Utility Financial Review and Baseline Assessment
• Review and analyze the City’s Wastewater Enterprise Fund, including historical and current
revenues, expenditures, debt obligations, and reserve policies.
• Review existing rate structures, customer classifications, billing data, and revenue performance.
• Identify structural or accounting adjustments necessary to ensure compliance with cost-of-
service principles.
• Evaluate historical rate performance compared with peer agencies and document key
differences in rate structure and cost allocation.
3. Cost-of-Service Analysis
• Identify and allocate all utility costs (operations, maintenance, administration, overhead, debt
service, capital, and regulatory) among customer classes.
• Ensure the allocation methodology complies with Proposition 218 and California case law.
• Develop a transparent cost-of-service model, provided to the City in Excel format.
• Document all cost allocation assumptions within the Excel model and provide internal model
notes describing calculation logic for future City updates.
4. Financial Forecasting and Revenue Requirement Analysis
• Prepare a 20-year financial forecast including projected operating costs, CIP expenditures,
regulatory requirements, reserve funding, and inflation assumptions.
• Calculate revenue requirements needed to meet current and future financial obligations.
• Assess revenue sufficiency and identify potential funding gaps.
5. Capital Improvement Program (CIP) Integration and Funding Strategy
• Integrate the City’s current and planned CIP into the financial model.
• Evaluate alternative funding strategies including pay-as-you-go, debt issuance, State Revolving
Fund (SRF) loans, and grants.
• Recommend an approach that balances affordability, risk, and financial stability.
• Recommend reserve funding strategies consistent with City financial policies and identify target
reserve levels (e.g., operations, capital replacement, and rate stabilization).
6. Rate Structure Development and Alternatives
• Evaluate the performance and equity of the existing rate structure.
• Develop and recommend a new 5-year rate schedule that meets financial needs, promotes
equity, and is legally defensible.
• Consider multiple design alternatives (e.g., uniform, tiered, fixed/variable recovery).
• Provide rate impact analysis for typical customers.
• Provide visual comparison charts showing rate impacts for typical residential and non-residential
customers, and comparison to neighboring agencies.
7. Scenario and Sensitivity Analysis
• Model alternative scenarios such as changes in water use, growth, project costs, or regulations.
• Provide recommendations for maintaining financial resilience.
8. Proposition 218 Process Support
• Prepare draft and final Proposition 218 notices for mailing to property owners.
• Coordinate the mailing of notices on behalf of the City.
• Assist in preparing summary materials (e.g., FAQs, presentation slides, rate comparison charts)
for public and Council communication
• Provide staff support and attend one public hearing and one City Council meeting.
9. Deliverables and Presentations
• Draft and final wastewater rate study reports.
• Electronic Excel-based model with update instructions.
• Provide City staff training session (virtual or in-person) summarizing model structure, data
inputs, and update process.
• Draft and final Proposition 218 notices.
• Presentation materials and attendance at up to two Council meetings.
Proposed Report Outline
1. Introduction & Objectives
2. Background and System Overview
3. Current Rates and Revenue Structure
4. Customer Accounts and Usage Characteristics
5. Financial Review: Revenues, Expenses, and Reserves
6. Legal Framework (Proposition 218)
7. Financial Projections and Revenue Requirements
8. Cost of Service Analysis
9. Rate Structure Alternatives
10. Recommended Rates & Customer Impacts
11. Implementation Plan & Proposition 218 Compliance
12. Appendices (data tables, CIP, financial assumptions, etc.)
13. Rate Affordability and Benchmarking Summary
Model Documentation Guide (for City internal use)
V. SUBMITTAL REQUIREMENTS
Each proposal must be concise yet complete, demonstrating the consultant’s qualifications and ability to
perform the required services. Proposals shall include:
1. Cover Letter – Summarize the firm’s interest, understanding, and key qualifications.
2. Statement of Qualifications – Firm overview, resumes of key personnel, and examples of at
least two similar wastewater rate studies completed in the last five years.
3. Technical Approach and Scope of Work – A detailed description of the consultant’s approach,
enhancements to scope, and proposed project schedule.
4. Sample Work Products – At least one sample shall demonstrate compliance with Proposition
218 for a California agency.
5. Cost Proposal – Provide detailed labor categories, hourly rates, estimated hours, and total not-
to-exceed amount. Identify optional tasks and costs.
6. Exceptions to City Agreement – Identify any exceptions or modifications requested to the City’s
standard agreement or state “no exceptions.”
VI. SELECTION PROCESS
Selection Criteria:
• Responsiveness and completeness of proposal (10%)
• Qualifications and performance with similar municipalities (25%)
• Understanding of project and technical approach (25%)
• Quality and usability of proposed deliverables, including model and presentation materials
(20%)
• References and staff qualifications (10%)
• Fee structure (not sole basis for selection) (10%)
Selection Process: The City will establish a selection committee to review and rank all complete
submissions. Any firm(s) selected for further review may be invited for an interview or may be asked for
further information for internal review. The final selection will result in a contract award to be approved
by the Scotts Valley City Council on or after December 17.
The schedule for the selection process is:
This page summarizes the opportunity, including an overview and a preview of the attached documents.
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