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REV: 08-25-2022 RL EXHIBIT “A” I. SCOPE OF SERVICES For all services, Consultant shall comply with the requirements of Proposition 218 and meet or exceed best practices for any relevant industry standards. Task 1 – Sewer Rate Study Any new sewer rates shall be adopted by mid-April 2023 and effective beginning July 1, 2023. Task 1a. Kickoff Meeting Consultant shall facilitate an in-person kickoff meeting with City staff to introduce participants and identify their project roles and expectations. Meeting topics shall include discussions evaluating relevant fiscal policies and community interests, identifying current issues and concerns (financial and operational), discussing project scope, timing, and deliverables, and requesting and compiling all relevant and required data. Deliverables: Consultant shall provide: •A data request list ahead of the meeting for the purposes of discussion •Meeting notes Task 1b. Develop Revenue Requirement Consultant shall prepare a 10-year financial planning model projecting the operations and maintenance and capital expenses, operating and non-operating revenue, and reserve fund balances. Expenses will be based on the City’s budget and capital improvement program. Consultant shall prepare the financial plan as an Excel spreadsheet model to provide the City with a means to edit the model when annual budgets and capital expenditures change each year. Consultant shall develop the models to be as simple as possible and with input from City staff to ensure that they meet the City’s needs. Models shall have no licensing restrictions. For specific elements: •Expenses: Consultant shall tailor expense calculations to reflect variations in staffing levels, salaries, operating expenses and other City requested inputs. Consultant shall incorporate Silicon Valley Clean Water (SVCW) expenses into the model and consider how future development impacts the SVCW costs as well as the City’s. Expenses shall also include debt service and software. •Revenue: Consultant shall calculate and project rate revenue based on the current rate structure and projected growth in units of service (e.g., service connection size, number of dwelling units, commercial water use by class). Consultant analysis shall consider that City has transitioned to billing all residential sewer rate customers with one-dwelling unit to the County of San Mateo property tax roll beginning FY2022-23. •Reserves: Consultant shall integrate current reserve funds into the model and evaluate existing policies, as well as the need for adding, deleting, or redefining the funds. Consultant shall confirm the reserve level rules for modeling the rate increases, which will either reflect current policies or recommended policies. ATTY/AGR.2022.318/HF&H Consultants, LLC (Page 11 of 27)