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<br />Consulting Services Agreement between City of San Leandro and Last revised August 15, 2024 <br />Bartle Wells Associates for Sewer Fee Rate Study Page 6 of 6 <br />Task B. 10-Year Financial Plans <br />1. Develop Forecasts and Projections <br />Based on evaluation of the data assembled and input provided by the City, prepare forecasts and <br />projections to be used in the development of financial models for the City’s wastewater utilities. Develop <br />projections in the following areas (and others as appropriate). Review projections and alternatives with City <br />staff for agreements on assumptions, interpretation of data, and completeness of approach. <br /> Capital Improvements Including Long-Term Repairs & Replacements: Based on input from <br />City staff, identify future capital improvement program costs or alternatives to include in the financial <br />analysis and determine a reasonable amount to include for future, ongoing capital repairs and <br />replacements. BWA often recommends that agenc ies phase in funding for long-term system <br />rehabilitation. <br /> Projected Demand: With City input, forecast wastewater demand. Identify future demand scenarios <br />for evaluation. <br /> Growth & New Development: Work with the City to identify levels of growth to incorporate in the <br />financial projections. Evaluate financial impacts under different levels of growth. <br /> Projected Water Supply Costs: Review historical and projected costs of water supply. Work with <br />City to develop projections or a range of projections for inclusion in the water rate study. <br /> Cost Escalation Factors: Review historical cost trends and work with project team to develop <br />reasonable cost escalation factors for both operating and capital expenditures. Work with City staff <br />to identify any anticipated changes in future staffing, benefits, and/or other operating costs. <br />2. Evaluate Financing Alternatives for Capital Improvements <br />Evaluate options for financing capital improvement projects. Our evaluation will: <br /> Allocate capital improvement costs to existing customers and new development based on the share <br />of each project benefiting current vs. future customers. <br /> Estimate the amount and timing of any debt, if needed, to finance capital projects. <br /> Evaluate the alternative borrowing methods available including bonds, COPs, state, and federal <br />loan programs (including the State Revolving Fund Financing Program), bank loans and lines of <br />credit, and other options. <br /> Recommend the appropriate type of debt, its term and structure. <br /> As needed, develop debt service estimates to incorpo rate in the financial projections. <br />3. Establish Prudent Minimum Fund Reserve Targets <br />Evaluate the adequacy of the City’s current utility fund reserves. Establish prudent minimum fund <br />reserve targets based on the City’s operating and capital funding projections. Develop an <br />implementation plan for achieving and maintaining the recommended reserve fund levels. <br />Docusign Envelope ID: 1C386315-7640-416F-B286-F4A8443FDDE6