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Dates of Service: 2017 <br />Project Team: Mark Hildebrand, Matt <br />Freiberg, Ben Stewart <br />Client Contact: Mr. Nelson Smith, <br />Finance Director; <br />nsmith@bakersfieldcity.us; (661) 326- <br />3740; 1600 Truxtun Ave. Bakersfield, <br />CA 93301 <br />City of Bakersfield, CA <br />Water Rate Study <br />The City of Bakersfield (City) engaged Stantec Consulting to study the finances of the City's Domestic <br />Water Fund and develop recommendations for updating the Domestic Water Rates. The study was <br />primarily a long-range financial plan with recommended rate revenue adjustments in response to <br />changes in drinking water regulations (see below), and also included recommendations regarding cost <br />of service, rate design, and financial policies for the Domestic Water Fund. <br />In early March 2017, the State Water Resources Control Board Division of Drinking Water (DDW) <br />issued a Notice of Proposed Rulemaking for a new maximum contaminant level for the synthetic <br />organic chemical 1,2,3-trichloropropane (TCP). The City was expected to begin treatment of TCP at 41 <br />wells for a capital cost of approximately $55 million (the majority of which would be financed with two <br />Water Revenue Bonds) and an estimated additional $5 million in annual operating costs. <br />In order to evaluate the long-term financial sustainability of the Domestic Water Fund, Stantec <br />evaluated the utility's revenues and expenses in a five-year financial plan. In addition to accounting for <br />operating costs, capital spending, and projected debt service, the financial plan also accounts for non - <br />rate revenue, reserve targets, and financial performance metrics (specifically, the debt service <br />coverage ratio). <br />Notably, this project was completed in 3 weeks. This means that Stantec created a financial model that <br />mirrored the entire Domestic Water Fund, met with city staff on several occasions, developed <br />recommendations, and wrote a report in 15 business days. This project is a testament to the efficiency <br />of our finance team, the effectiveness of our tools, and our willingness to be responsive to our clients' <br />needs. <br />City of Santa Ana, California I water and Sewer Enterprise Cost of Service Study Stark 15 <br />