Water and Wastewater Rate Study

1. CITY OF ALAMO HEIGHTS
ADMINISTRATION AND FINANCE DEPARTMENT
CITY COUNCIL AGENDA MEMORANDUM
TO: Mayor and City Council Members
FROM: Phil Laney, Assistant City Manager
SUBJECT: A Resolution to Complete a Water and WasteWater Rate Study and a Meter
Assessment Study
DATE: February 13, 2023
SUMMARY
This is a resolution to have Willdan Financial Services conduct a Water/Wastewater rate study
along with a meter assessment. Willdan Financial will also develop a 10-year financial rate
structure to maintain reliable and efficient water and wastewater service to Alamo Heights.
BACKGROUND
In October 2018, Willdan Financial Services conducted a 10-year water and wastewater rate study.
The study included water and wastewater rate comparisons with other cities in the area. The rate
study recommended rates be increased each year for 10 years in order to make needed capital
improvements to the utility system to maintain efficient operations. On October 22, 2018, Council
approved Ordinance 2113 to adopt rate increases for three years in March 2019, March 2020 and
March 2021.
A comprehensive rate study is needed in order to properly assess current operations, operating
costs, rates by each customer class and evaluate what capital expenditures are needed for the next
10 years. Some of the known capital improvements that need to be brought current are completion
of the 4x2 water & sewer main relocation project by 2030, the replacement of the water and
wastewater lines within the Broadway Improvement Project, water meter replacement, conversion
of water meters from cubic feet to gallons, maintenance of the water towers and capital equipment
replacement.
The following are deliverables to be included in the rate study:
 comparison of city monthly charges for water and wastewater to surrounding cities,
 a determination of revenues needed to maintain operations for the next ten years,
 update the customized ten-year cost of service model including debt service for water and
wastewater, update and forecast operating costs for 10 years,
 presentation to include alternate rate models,
 preliminary recommendations within 90 days after receiving all data from city staff,
including input from staff to update draft,
 workshop with city council to go over findings and rate recommendations, and
 final meeting with council to vote on any changes recommended by the study.

2. The October 2018 rate study did not include a meter assessment. Meter replacement is an
anticipated future obligation as current equipment utilizes different usage data – cubic feet
compared to the more common gallons measurement – and is outdated and increasingly difficult
to replace. For the meter assessment, information will include a survey of current water
infrastructure and clean water delivery system, including meters and related systems and
equipment. Compiled data will be analyzed to:
 identify anomalies and high non-revenue water loss
 current infrastructure to current technology and identify the efficiencies and cost savings
for upgraded systems
 determine opportunity for water conservation and leak detection
 determine eligibility of potential infrastructure improvements for upcoming Infrastructure
Investment and Jobs Act, IIJA funding opportunities.
The Utility Fund is a self-sustaining fund that relies on user rates to pay for its operations,
infrastructure improvements and replacement of equipment.
POLICY ANALYSIS
The City informally solicited and received 2 proposals for a rate study for water and wastewater
rates and for a meter assessment by contacting two historically underutilized businesses (HUBs)
and Willdan Financial Services. One HUB, Blackbridge, submitted a proposal for $16,000. The
other HUB did not respond. Willdan Financial Services has the professional experience and
expertise to conduct and complete the services requested, including a positive experience with the
City in 2018. The City follows sound financial practices and the rate study with the ten-year
forecast is in line with developing a viable financial plan for the Utility Fund to operate efficiently
with competitive rates for water and sewer customers.
FISCAL IMPACT
The rate study for water and wastewater for a ten-year time frame is $24,500.00. The meter
assessment will cost a total of $5,000.00. The total cost will be $29,500.00. Funds are available in
the FY 2023 Utility Fund Budget.
ATTACHMENTS
Attachment A – Willdan Rate Study Contract
Attachment B – Resolution
Phil Laney
Assistant City Manager
Buddy Kuhn
City Manager

3. Engineering and Planning | Energy Efficiency and Sustainability | Financial and Economic Consulting | National Preparedness and Interoperability
972.378.6588 | Fax: 972.378.6988 | 5500 Democracy Drive, Suite 130, Plano, Texas 75024 | www.willdan.com
January 30 2023
Mr. Buddy Kuhn
City Manager
City of Alamo Heights
6116 Broadway
San Antonio TX 78209
Re: Letter Agreement to Provide 2023 Water/Wastewater Rate Study and Metering System
Assessment Study
Dear Mr. Kuhn:
Willdan Financial Services (“Willdan”) is pleased to present the following scope of services and budget to provide
a Water and Wastewater Cost of Service Rate Study and a Metering System Assessment Study for the City of
Alamo Heights (“The City”). We have served as the City’s utility rate consultants since 2018 and appreciate the
opportunity to continue to provide this valuable service to the City. The study is intended to cover the test year FY
2023 and a ten-year forecast period.
It is our understanding that the City seeks to have two separate studies completed. The first is a comprehensive
Water and Wastewater Rate Study and Long-Term Financial Plan. The purpose of this engagement will be for
our project team to analyze the City’s financial, debt and operating obligations for both the current year and ten
years into the future, and to develop multi-year rate plan scenarios designed to recover rate revenues sufficient to
cover the projected costs of service and to meet key financial benchmarks. We will also provide alternative sets
of rate plan recommendations for the City to consider.
The second is a thorough examination and assessment of the City’s water meters and related equipment and
systems. The purpose is to determine the eligibility of potential infrastructure and measures to improve metering.
Water and Wastewater Rate Study -- Proposed Scope of Work / Tasks
In the course of this engagement, we will perform the following specific tasks:
 A comparison of the City’s current monthly charges for each utility to those of surrounding providers.
 A determination of the revenues required for the City to meet its operating and capital obligations in the
current year and future years.
 Update our customized ten-year utility cost of service rate model for the City’s water and wastewater utilities
using current budget, volume, debt service and capital improvement plan (“CIP”) data. The model will identify
Attachment A

4. Mr. Buddy Kuhn, City Manager
Letter Agreement to Provide Utility Rate Study and Metering System Assessment
January 30 2023
Page 2
2
current and forecast operating expenses, capital outlays and debt service for the period FY 2023 – 2032.
The model will adhere to each respective utility’s industry ratemaking standards to ensure that the cost of
service for each customer class is just, reasonable and accurate. The model will be based on our
international rate design model that has been used to develop rates for 200 cities and five sovereign nations,
for use in calculating the City’s rates.
 The project team will prepare several alternative proposed rate plans for the City to consider. Each
alternative will enable the City to recover sufficient revenues to fund operating and capital costs and to meet
key financial objectives.
 The project team will summarize its initial findings and recommendations into a PowerPoint summary
presentation for review with staff.
 The project team will prepare a draft written rate study report which will thoroughly document the project
team’s analysis, findings and recommendations for rates and connection fees. An electronic (PDF) copy of
the preliminary draft report will be submitted for staff review.
 Based on comments received from staff and other participants, the draft report will be revised to incorporate
the agreed upon changes. Upon completion, up to ten copies of the final rate study report will be provided to
the City.
As part of this engagement, the project team will conduct the following meetings:
 an initial meeting with staff to go over information required for the study
 a status/ preliminary recommendations meeting with staff to outline initial findings and answer questions
raised during the course of the analysis;
 a workshop with the City Council to go over findings, recommendations and rate alternatives; and
 a final Council meeting at which the recommendations are voted upon by the Council.
Please note that if more than two Council meetings are required, we will request that the City amend this contract
to reimburse us for additional professional fees and travel expenses.
As Principal in Charge for this engagement, I will have sole responsibility for its successful outcome. I will be
assisted by Mr. Jason Gray, Vice President, and Mr. Dan Lanning, Senior Project Manager.
Proposed Timing
The project team intends to have preliminary recommendations for staff within 90 days of receipt of all required
data from the City staff.
Attachment A

5. Mr. Buddy Kuhn, City Manager
Letter Agreement to Provide Utility Rate Study and Metering System Assessment
January 30 2023
Page 3
3
Proposed Pricing
We propose to complete this study for a fixed fee of $24,500. Please note that this is approximately the same
price that we charged for the previous rate study that we completed in 2018.
Tasks or meetings considered to be outside the scope of this engagement will be discussed with the City Staff
and additional work completed would be subject to staff approval and would be billed at our hourly rates.
Metering System Assessment Study -- Proposed Scope of Work / Tasks
The purpose of this engagement is to conduct a thorough assessment of the City’s water metering system,
including a calculation of water and revenue loss from underperforming meters. As part of this engagement we
will provide the following services:
 Perform a survey of the water infrastructure and clean water delivery system, including but not limited to
meters and related equipment and systems.
 Collect billing flat files, meter profiles, and other relevant data.
 On-site inspection of infrastructure, if needed, to verify or enhance findings and analysis.
 Analyze data to identify anomalies, high non-revenue water loss, and other indicators of potential for cost
savings and revenue recovery through technology upgrades.
 Compare existing infrastructure with current technology and capabilities to identify gaps in operational
capabilities, efficiencies, cost savings, and revenues.
 Calculate operational and monetary benefits of upgrading elements of the system to various forms of
current technologies.
 Analyze findings to determine eligibility of potential infrastructure improvements for upcoming
Infrastructure Investment and Jobs Act (IIJA) funding opportunities.
 Analyze findings to determine opportunities for water conservation, leak detection and reductions in
greenhouse gas (GHG) emissions.
 Provide a PowerPoint presentation for the City detailing key investigative findings, measures to improve
metering and related infrastructure, estimated financial implications for various scenarios, potential
funding opportunities, and other non-quantitative factors for the City to consider in relation to their existing
metering infrastructure and future improvement plans.
Services that will NOT be provided as part of this agreement are:
 Vendor-specific equipment, installer, or service provider recommendations.
 Design services.
 Project or construction management services.
Attachment A

6. Mr. Buddy Kuhn, City Manager
Letter Agreement to Provide Utility Rate Study and Metering System Assessment
January 30 2023
Page 4
4
We will need access to staff to collect actual production logs, share the screen with someone managing the billing
system and review the data available for export. We usually just explain this directly in a kick-off call along with a
short debrief on reading and billing operations. The second bullet above is simply a catch-all.
Mr. Chris Gaddy of Willdan will be the project lead for this engagement.
We propose to complete this project for total professional fees and expenses of $5,000.
Authorization
General terms and conditions for this engagement are included as Attachment 1. If the terms of this
engagement are acceptable, please execute one copy of this letter and return it to our Dallas office. We
appreciate this opportunity to once again serve the City of Alamo Heights.
If you have any questions regarding the proposed services, please contact me directly at 972-378-6588 or
via email at djackson@willdan.com.
Sincerely,
Willdan Financial Services
January 30 2023
Dan V. Jackson, Vice President Date
ACCEPTED BY
City of Alamo Heights:
__________________________________ _____________________________
Signature Date
___________________________________ _____________________________
Buddy Kuhn City Manager
Attachment A

7. Mr. Buddy Kuhn, City Manager
Letter Agreement to Provide Utility Rate Study and Metering System Assessment
January 30 2023
Page 5
5
ATTACHMENT 1 TO LETTER AGREEMENT
TERMS AND CONDITIONS
The Letter Agreement between the City of Alamo Heights (“Client” or “City:) and Willdan Financial Services (“WFS”
or “Consultant”) is subject to these Terms and Conditions (collectively, this “Agreement”).
1. Additional Services. Additional services shall be performed by WFS only upon Client’s request evidenced
by a written addendum executed by both parties.
2. Compensation. WFS shall submit monthly statements for services. Payments shall be due and payable
within 30 days of invoice and if not timely paid shall bear interest at the rate of 1.5% per month.
3. Termination. Client may terminate this Agreement at any time upon 30 days’ written notice. In the event of
early termination, WFS shall be paid for services performed prior to the effective date of termination.
4. Data Provided by Client. WFS shall rely upon data provided by Client without independent verification of
accuracy. WFS shall not be responsible for any errors resulting from its use of inaccurate data provided by Client.
5. Insurance. WFS shall maintain the following insurance:
a. Workers' Compensation and Employer's Liability Insurance as prescribed by applicable law.
b. Commercial General Liability Insurance, with limits not be less than $1,000,000 per occurrence and general
aggregate.
c. Commercial Automobile Liability with limits not less than $1,000,000 per occurrence.
d. Professional Liability with limits not be less than $1,000,000 per claim and annual aggregate.
e. All policies except Professional Liability and Workers Compensation shall include Client as an additional
insured and be primary with respect to any insurance carried by WFS. All policies shall include a waiver of
subrogation in favor of Client.
WFS shall provide Client with certificates of insurance evidencing compliance with the above insurance requirements
prior to commencing it services.
6. Miscellaneous.
a. Titles used in this Agreement are for general reference and are not a part of the Agreement.
b. This Agreement shall be interpreted as though prepared by both parties.
c. Any provision of this Agreement held to violate any law shall be deemed void, and all remaining provisions
shall continue in full force and effect.
d. This Agreement shall be interpreted under the laws of the State of Texas. The venue for any litigation would
be Bexar County, Texas.
e. This Agreement comprises a final and complete repository of the understandings between the parties and
supersedes all prior or contemporary communications, representations or agreements, whether oral or written, relating
to the subject matter of this Agreement.
f. Any notices given pursuant to this agreement shall be effective on the third business day after posting by
first class mail, postage prepaid, to the address appearing immediately after the signatures below.
g. WFS shall not be liable for damages resulting from the actions or inactions of governmental agencies
including, but not limited to, permit processing or environmental impact reports.
h. WFS’s waiver of any term, condition, or covenant, or breach of any term, condition, or covenant, shall not
constitute the waiver of any subsequent breach of any other term, condition or covenant.
i. WFS shall not responsible for the performance of services by third parties not retained by WFS.
7. Statutory.
Consultant hereby agrees that the following terms, conditions, verifications, certifications, and representations apply
Attachment A

8. Mr. Buddy Kuhn, City Manager
Letter Agreement to Provide Utility Rate Study and Metering System Assessment
January 30 2023
Page 6
6
to and are incorporated into this Agreement for all purposes:
a. Pursuant to Texas Local Government Code Chapter 176, Consultant shall submit a signed Texas Ethics
Commission (“TEC”) Conflict of Interest Questionnaire (“CIQ”) at the time Consultant submits this signed
Agreement to City. TEC Form CIQ and information related to same may be obtained from TEC website by
visiting https://www.ethics.state.tx.us/forms/conflict/. If Consultant certifies that there are no Conflicts of
Interest, Consultant shall indicate so by writing name of Consultant’s firm and “No Conflicts” on the TEC
Form CIQ.
b. If Consultant is a privately held entity, then pursuant to Texas Government Code Section 2252.908 and the
rules promulgated thereunder by the TEC, Consultant shall submit a completed and signed TEC Form 1295
with a certificate number assigned by the TEC to CITY at the time Consultant submits this signed Agreement
to CITY. TEC Form 1295 and information related to same may be obtained from TEC website by visiting
https://www.ethics.state.tx.us/filinginfo/1295/. Consultant agrees and acknowledges that this Agreement
shall be of no force and effect unless and until Consultant has submitted said form to CITY, if and to the
extent such form is required under Government Code § 2252.908 and the rules promulgated thereunder by
the TEC.
c. As required by Chapter 2271, Texas Government Code, Consultant hereby verifies that Consultant, including
a wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the same, does not
boycott Israel and will not boycott Israel through the term of this Agreement. The term "boycott Israel" in this
paragraph has the meaning assigned to such term in Section 808.001 of the Texas Government Code, as
amended.
d. Pursuant to Chapter 2252, Texas Government Code, Consultant represents and certifies that, at the time of
execution of this Agreement, neither Consultant, nor any wholly owned subsidiary, majority-owned
subsidiary, parent company or affiliate of the same, is engaged in business with Iran, Sudan, or any terrorist
organization, and is a company listed by the Texas Comptroller of Public Accounts under Sections 2270.0201
or 2252.153 of the Texas Government Code.
e. As required by Chapter 2274, Texas Government Code, Consultant hereby verifies that Consultant, including
a wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the same, does not
boycott energy companies, and will not boycott energy companies during the term of this Agreement. The
term “boycott energy companies” in this paragraph has the meaning assigned to such term in Section
809.001 of the Texas Government Code, as amended.
Attachment A

9. Attachment B
1
5425/2 #290998.1
RESOLUTION NO. 2023R - 161
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALAMO
HEIGHTS, TEXAS AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND EXECUTE A CONTRACT WITH WILLDAN
FINANCIAL SERVICES TO PERFORM A RATE STUDY FOR WATER
AND WASTEWATER RATES AND TO PERFORM A METERING SYSTEM
ASSESSMENT STUDY.
WHEREAS, the City of Alamo Heights (“City”) informally solicited and received proposals for a
rate study for water and wastewater rates and for a metering system assessment study and contacted
two HUBs as required by law for purchases below $50,000.00; and
WHEREAS, the City Council has determined that Willdan Financial Services, submitted the best
value proposal for the city based on cost and prior demonstrated experience with the City.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ALAMO HEIGHTS, TEXAS:
SECTION 1. The proposal of Willdan Financial Services is accepted subject to the execution of an
appropriate contract for such services.
SECTION 2. The City Manager is authorized to negotiate the terms of a contract with Willdan
Financial Services on behalf of the City for the financial rate study for water and wastewater rates
and for a metering system assessment study, and execute the same on behalf of the City.
PASSED AND APPROVED this the 13th
day of February, 2023.
_____________________________________
BOBBY ROSENTHAL
MAYOR
ATTEST:
____________________________________
ELSA T. ROBLES, TRMC
CITY SECRETARY
APPROVED AS TO FORM:
____________________________________
FRANK J. GARZA
CITY ATTORNEY