FROM:
Engineering
SUBJECT:
Title
Sewer Rate Study and Proposition 218
End
RECOMMENDATION:
Recommendation
1. Award a contract and authorize the City Manager to execute the Professional Services Agreement for the Sewer Rate Study and Proposition 218 Process (DE-26-77-SP) with Raftelis Financial Consultants, Inc in the amount of $104,640.
2. Approve and authorize the City Manager to execute any future amendments for the Sewer Rate Study and Proposition 218 Process agreement (DE-26-77-SP).
End
COUNCIL GOALS:
• To practice sound fiscal management by producing timely and accurate financial information.
• To practice sound fiscal management by living within our means while investing in the future.
• To practice sound fiscal management by fully funding liabilities and reserves.
• To practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
The City operates and maintains the sewer system that transports all sewage collection through the Inland Empire Utilities Agency (IEUA) or the City of Rialto for treatment, depending upon the location of the property service. IEUA and Rialto impose charges for providing sewage treatment services, and the City in turn passes those costs onto the property owners served by IEUA or Rialto. On May 2021, the City Council approved the passthrough of any increases in IEUA charges or Rialto charges, and it expires on June 30, 2026.
Staff solicited a consultant to study the current sewer rate and perform the Proposition 218 process. The purpose of the study is to ensure that the City’s sewer rates are legally compliant, financially sustainable, and equitably allocated among customers. Proposition 218 requires the City to demonstrate that sewer rates do not exceed the cost of providing service and that charges are proportional to the benefits received by each customer class. The rate study evaluates operating and maintenance costs, capital improvement needs, debt obligations, and reserve requirements to establish a clear and defensible cost-of-service basis for proposed rates. Completing this analysis and the associated Proposition 218 process is necessary for the City to lawfully adjust sewer rates and maintain sufficient funding to operate, maintain, and reinvest in the wastewater collection system.
On November 5, 2025, the City issued a Request for Proposal (RFP) for the study. On December 4, 2025, proposals were received from three (3) firms interested in providing services for the project. The proposals were evaluated based on the firm and staff qualifications, project approach, scope of work, and proposed schedule, in accordance with City policies and procedures. The proposals ranged from $38,820 to $104,640.
Based on the evaluations, staff recommends approval of the Professional Services Agreement with Raftelis Financial Consultants, Inc due to their experience, available project staffing, schedule, and detailed approach to the project.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item is $104,640 for the full term of the Professional Services Agreement. Budget for the project is included in the Fiscal Year 2025-2026 budget in account 70130112.8115 under the Public Works & Engineering Department, Utilities and Streets Division.
MOTION:
Approve staff recommendation.