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The council on Monday, March 10, approved an amended agreement with Raftelis Financial Consultants to provide Seal Beach with water and sewer financial planning services. (Details of the water and sewer financial study session will be in next week’s Sun.)
The amendment also extended the date of the contract to Dec. 31, 2025. According to the staff report, the original agreement was dated June 12, 2023. The contract amendment included $51,527 more pay for additional work on the project up to a maximum of $187,294.
The vote was unanimous.
This was a Consent Calendar item. Consent items are voted on collectively, without discussion, unless a council member pulls one or more items for further discussion. This item was not pulled.
The extended contract was originally scheduled on the Feb. 24 agenda, but was postponed by staff.
The city last considered water and sewer rates, without a decision in February 2024. (See “Water, sewer rates on hold,” at sunnews.org.)
Background
“The City’s water and sewer utilities are funded by fees collected through adopted water and sewer service charges (Enterprise Funds),” according to the staff report prepared by Management Analyst Sean Sabo.
“The rates that customers pay on their utility bills must fund the operating costs, capital improvements, and reserves,” Sabo wrote.
“Water and sewer rates must be periodically reviewed to ensure rates are set to provide adequate revenue. These studies are performed in accordance with Proposition 218 requirements,” Sabo wrote.
“On February 22, 2021, City Council adopted Resolutions 7114 and 7115 adjusting the water and sewer rates, respectively. These resolutions led to the implementation of five incremental annual rate adjustments, beginning in July 2021, with the final adjustment having occurred in January 2025,” Sabo wrote.
“In early 2023 an assessment of the current five-year financial plan was conducted, revealing the need for water and sewer rate adjustments,” Sabo wrote.
Seal Beach hired Raftelis in 2023 to do the water and sewer rate study.
“The water and wastewater financial plan and proposed rate adjustment findings were presented to City Council on December 11, 2023,” Sabo wrote.
The Seal Beach council held a public hearing on the proposed rate changes on Feb. 12 and 26, 2024.
“At the close of the public hearing, the City Council concluded the pending majority protest proceedings and took no further action to adopt the rate adjustments. City Council directed staff to further examine the rates and re-notice the public pursuant to Proposition 218 at a later date,” Sabo wrote.
On March 25, 2024, the council approved an amendment to the Raftelis contract that increased the pay to Raftelis by $48,352, according to the report.
“As work resumed, it became apparent that a substantial reevaluation was needed to accurately account for updated expenditures and revenue losses, integrate utility account updates, incorporate potential external funding sources to mitigate rate impacts, develop various rate scenarios, and comply with relevant legislation (e.g., AB 755 and AB 2577),” Sabo wrote.
According to the report, the process requires a new financial program and “enhanced” outreach.
“Accordingly, Raftelis submitted a proposal dated January 29, 2025, for the additional support work in the amount of $51,527. Additionally, staff recommends authorizing the Interim City Manager to approve additional work requests in a not-to-exceed amount of $10,000,” Sabo wrote.
