That the City Council and Utility Authority;
A.  Waive formal bidding requirements per the La Habra Municipal Code, Section 4.20.080(B) when a service firm has established such a successful past history of work that it is clearly in the public interest not to negotiate with any other sources; and,

B.  Authorize the Executive Director to execute a professional services agreement with Raftelis Financial Consultants, Inc. for an amount not to exceed $69,630 to update the Utility Authority's five-year water and sewer fund financial plans and rate structures.

The City of La Habra's current water and sewer rates structures, as analyzed and proposed by Raftelis, were adopted by City Council and the Utility Authority in December 2023.  New water and sewer rates based on that analysis were implemented in January 2024 and January 2025.

The proposed FY 2025-2026 Utility Authority Budget includes increases to imported water costs, power, fees associated with regulatory compliance, and the materials used in the repair and maintenance of the City's water and sewer systems.  Staff recommends executing a professional services agreement with Raftelis to evaluate the impact of these increases in conjunction with proposed capital improvement projects, bond obligations, staffing costs, and reserve requirements, and to formulate suitable rate structures for staff and Council review.

Raftelis has provided financial services to more than 500 public utilities across the nation, including more than 138 utilities in California.  Raftelis has assisted the City and Utility Authority in the development of previously adopted rate structures in compliance with Proposition 218 regulations and, as a result, has a thorough understanding of the complex imported water rates unique to the City of La Habra. Furthermore, Raftelis's staff developed a rate model specific to the fiscal parameters of the Authority in the course of previous studies which will avoid the need to construct a new rate model, and represents an efficiency and cost savings compared to using a different consultant to create a brand new rate model.

There is no impact to the General Fund.  The fee proposal submitted by Raftelis to conduct the proposed water and sewer rate study is $69,630.  There is sufficient funding in the Utility Authority's Proposed FY 2025-2026 Water and Sewer Operations Budgets to pay for the cost of this rate study proposal.