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HomeMy WebLinkAbout03-19-25 F&A Committee Packet 1 OTAY WATER DISTRICT FINANCE AND ADMINISTRATION COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM WEDNESDAY MARCH 19, 2025 12:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURISDICTION INCLUDING AN ITEM ON TODAY’S AGENDA DISCUSSION ITEMS 3. DEMONSTRATION OF THE DISTRICT’S INTERACTIVE VOICE RESPONSE PHONE SYSTEM (ANDREA CAREY) [5 MINUTES] 4. PRESENT THE RESULTS OF THE CURRENT SEWER COST OF SERVICE STUDY, PREPARED BY RAFTELIS FINANCIAL CONSULTANTS, INC., AND OB-TAIN DIRECTION FROM THE BOARD TO INCORPORATE THE COST-OF-SERVICE STUDY’S RESULTS INTO THE FY 2026 BUDGET (KEVIN KOEPPEN) [5 MINUTES] 5. AWARD A PROFESSIONAL SERVICES CONTRACT TO AXIM GEOSPATIAL FOR THE ARCGIS GEOMETRIC NETWORK TO UTILITY NETWORK MIGRATION IN AN AMOUNT NOT-TO-EXCEED $450,000 (MING ZHAO) [5 MINUTES] 6. FISCAL YEAR 2025 MID-YEAR UPDATE FOR THE DISTRICT’S FISCAL YEAR 2023-2026 STRATEGIC PLAN (MICHAEL KERR) [15 MINUTES] 7. ADJOURNMENT 2 BOARD MEMBERS ATTENDING: Gary Croucher, Chair Jose Lopez All items appearing on this agenda, whether or not expressly listed for action, may be de- liberated and may be subject to action by the Board. The agenda, and any attachments containing written information, are available at the Dis-trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the agenda and attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodations to enable you to participate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on March 14, 2025, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on March 14, 2025. /s/ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Finance and Administration Committee MEETING DATE: March 19, 2025 SUBMITTED BY: Andrea Carey Customer Service Manager PROJECT: DIV. NO.All APPROVED BY: Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Demonstration of District’s Interactive Voice Response (IVR) Phone System GENERAL MANAGER’S RECOMMENDATION: This is an informational item. COMMITTEE ACTION: See Attachment A. PURPOSE: As requested by the committee during the February 19 Finance and Administration Committee meeting, this presentation provides a demonstration of the District’s IVR phone system. BACKGROUND: In July 2017, the District contracted with 8x8, Inc. to implement a cloud-based phone solution that included an IVR phone system. This system was designed to offer self-service options for callers. District staff from multiple departments worked together to develop the IVR options and workflow, incorporating staff feedback and data gathered from the previous phone system. When customers call the District, they are greeted by an automated message offering the option to hear the prompts in Spanish (Press 2) or remain on the line for English. In either language, customers are presented with the following options for automated information (Attachment A): AGENDA ITEM 3 - Customer Service: Press 1 - Water Emergencies: Press 3 - Human Resources: Press 4 - Water Conservation: Press 5 - Engineering: Press 6 - Address and Directions: Press 7 - Names Directory: Press 8 At any time during this prompt, callers can dial 0 to speak with a District representative for assistance. In January 2025, the District received 8,798 calls, of which 748 callers selected Spanish as their preferred language. Approximately 65% of the calls received in January 2025 selected Option 1 for Customer Service, which will be the focus of this demonstration. Once Option 1 is selected, customers are taken to the IVR developed specifically for Customer Service (Attachment B). Based on the preference selected at the beginning of their call, the customer service options are available in either English or Spanish. The following options are available: - If your service has been disconnected or for assistance with your account or questions about your bill: Press 1 - To make a payment on your Otay bill: Press 2 - For water-related emergencies or meter problems: Press 3 - To report water waste activities: Press 4 - For information related to land development and requirements for meter fees and services: Press 5 - To speak with a Customer Service Representative: Press 0 At any time during this prompt, callers can dial 0 to speak with a Customer Service Representative. In January 2025, over 4,500 calls were answered by a Customer Service Representative. The following descriptions outline the functions of the Customer Service IVR options: • Option 1: Allows customers to enter their account information and receive an update on their account balance, due date, and their last payment amount and date. For customers who are past due and may have been disconnected, additional information is provided on what is needed to restore service, with options to be transferred to make a payment or speak to a representative. • Option 2: Transfers customers to our IVR payment processor, Paymentus, to make a payment on their Otay bill. Approximately 2,700 customers use this system to pay their bill monthly. • Option 3: Also available on the main phone tree, this option allows customers to report any water-related emergencies, such as a main break or a hit fire hydrant, and immediately transfers the customer to a Customer Service Representative who can dispatch the call to one of our field technicians as needed. • Option 4: Allows customers to report water waste. After selecting this option, a message directs customers to either our website to report a water waste incident or to stay on the line to leave a message. Messages are checked by Customer Service throughout the day. • Option 5: Forwards calls to our Public Services department for assistance. When the District office is closed, an alternative IVR script is activated, enabling customers to access many of the same self-service options listed above as well as reach the District’s answering service, which will dispatch staff to respond to potential emergencies. District staff routinely reviews the phone system and makes changes as needed to update information or workflow based on employee or customer feedback. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: To continuously evaluate and enhance the District’s systems and customer service processes to improve efficiency, accessibility, and the overall customer experience. LEGAL IMPACT: None. Attachments: A) OWD Auto Attendant Call Flow B) Customer Service Call Flow C) Committee Action 670-2222 670-2777 670-2207 Names Directory Press 8 HR Press 4 Customer Service Press 1 Auto Attendant Main Menu 10000 Thank you for calling the Otay Water District. 10001 Para espanol, oprima el dos. To continue in English, please remain on the line. OWD ONE NUMBER AUTO ATTENDANT CALL FLOW (Revised February 2024) Engineering Press 6 Auto Attendant – Recorded Message Operator (Front Desk) Press 0 Salutation and Language Selection (3 Seconds) Notes: -9 Key Returns to Previous Menu at all Levels -# Key Prompts for User Login to Mailbox at Main Menu Level - * Key Repeats Current Menu at all Levels - Emergency calls are routed externally to 619-692-6041 10020 For the Customer Service Department or questions regarding your water bill, to make a payment, to start or stop service on an account, Press 1 If you re calling about water related emergencies such as a water main break, Press 3 For the Human Resources Dept., Press 4 For the Water Conservation Dept., Press 5 For the Engineering Dept. including contract bids and pricing for meter purchases, Press 6. For our Address and Directions to our office, Press 7. For a dial by name Directory, please Press 8. To Repeat this menu, Press *. To speak with an Operator at any time, Press 0. Repeat Press * Afterhours Attendant replaces Operator with a General Voicemail Option with the message being sent to C.S. 12000 To Engineering 13000 To HR 11021 To Customer Service IVR Water Emergencies Press 3 CS Ops Queue Water Conservation Press 5 14010 To Wtr Cons +Spanish Translation Address and Directions Press 7 Auto Attendant – Recorded Message +Spanish Translation Attachment A 11021 You have reached the Customer Service Department. If your service has been disconnected or for assistance with your water account or questions regarding your Otay bill, please press 1. To make a payment on your Otay bill, please press 2. For water related emergencies or meter problems, please press 3. To report water waste activities, please press 4. For information related to land development and requirements for meter fees and services, please press 5. To speak with a Customer Service Representative, press 0. To Repeat this menu, Press *. Enter Contact Phone Number (last 4 digits) Valid? Valid? SQL Lookup Customer Service Queue Lookup another acct 2 Pay Bill 1 Repeat Info * CUSTOMER SERVICE CALL FLOW Customer Service Rep 0 NO YES Invalid 2X Enter 9 Digit Account Number Paymentus 855-329-5688 Disconnect/Water Account Info 1 Make Payment Now 2 Business Hours? YES NO Customer Service Voicemail Water Main Breaks/ Emergencies 3 Invalid Entry message SQL Lookup Paymentus 855-329-5688 From Auto Attendant Default or 0Meter Fees & Services (PS) 5 Public Services / Message Ext. 2241 Ext. 2207 Transfers to CS Ops Water Waste 4 Water Waste Voicemail Box +Spanish Translation Attachment B ATTACHMENT C SUBJECT/PROJECT: Demonstration of District’s Interactive Voice Response (IVR) Phone System COMMITTEE ACTION: STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: April 2, 2025 SUBMITTED BY: Kevin Koeppen, Assistant Chief of Finance PROJECT: DIV. NO.All APPROVED BY: Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Communicate to the Board the Results of the Current Sewer Cost of Service Study Prepared by Raftelis Financial Consultants, Inc., and Obtain Direction from the Board to Prepare the FY 2026 Budget Using the Cost-of-Service Study Results GENERAL MANAGER’S RECOMMENDATION: Present to the Board the results of the current Sewer Cost of Service Study, prepared by Raftelis Financial Consultants, Inc., and obtain direction from the Board to incorporate the cost-of-service study’s results into the FY 2026 Budget. COMMITTEE ACTION: Please see Attachment A. PURPOSE: Communicate to the Board the results of the current Sewer Cost of Service Study, prepared by Raftelis Financial Consultants, Inc. (Raftelis), and request that the Board direct staff to prepare the FY 2026 budget using the cost-of-service study’s results. BACKGROUND: The District performs cost-of-service studies every three to five years, depending on changes in economic factors, price increases, usage patterns, regulations, infrastructure, and other cost drivers. The cost-of-service study is an important guide when setting rates. It has been five years since the District last conducted a sewer cost-of-service study. This study was prepared using the FY 2025 budget and six-year rate model. Similar to water rate setting, sewer rates must comply with the legal constraints regarding utility ratemaking, specifically California AGENDA ITEM 4AGNED Constitution Article XIII D, Section 6 (commonly known as “Proposition 218”). Proposition 218 requires that sewer and water utilities establish cost-based rates for the services provided. The District’s last comprehensive sewer rate study, conducted in 2020, was structured and developed to comply with these requirements. The findings of the current study recommend that the District update the current sewer rates to reflect current usage characteristics and costs. This rebalancing is expected to have a neutral overall impact on rates, with the impact on individual customers and customer classes discussed further in the Rate Analysis section of this staff report. Process Timeline Proposition 218 mandates specific public hearing and protest procedures. The most recent Proposition 218 hearing for sewer rates occurred in October 2020. The actions taken by the Board at the hearing are effective for a maximum of five years, expiring at the end of the calendar year 2025. To implement new rates beyond 2025, a new Proposition 218 notice and hearing will be required. Today, we are presenting rate modifications for the Board’s consideration. The next step will be to incorporate the changes outlined in this report into the FY 2026 rate model and budget. In June of 2025, staff will request the Board approve the FY 2026 budget and direct staff to proceed with the Proposition 218 hearing process for sewer rates, using the updated rates and rate structure proposed in this study. The Board can approve the rates and changes only after the Proposition 218 hearing. Notices are projected to be mailed between July and August of 2025. Past hearings have been held during October Board meetings, and staff recommends scheduling this year’s hearing for the October Board meeting as well. Rate Methodology This cost-of-service study includes one recommended change to the sewer rate structure. Additionally, Raftelis recommends adjusting the return-to-sewer factor, also known as the usage factor, based on recent customer usage data. Rate Structure Change Currently, the fixed system charge for residential customers is uniform, regardless of meter size. Raftelis recommends adjusting this charge based on meter size, aligning it with the District’s other sewer customer classes. This change will affect approximately 140 residential customers with 1-inch meters and reinstates the methodology used by the District until the end of 2013. These customers will experience a monthly fixed fee that is $11.25 greater than the fee for those with a ¾-inch meter. Meter size is based on the parcel’s fixture count. Although the residential rate table later in this report includes this increase, its impact on overall averages is minimal, as only 3% of our residential customers have a 1-inch meter. Return-to-Sewer Factor Change The return-to-sewer factor is applied based on the premise that not all water usage is returned to the sewer system. This proposed modification is not a structural change but rather an adjustment to the existing methodology. Its application and adjustment are rate neutral actions in that any adjustment in the return-to-sewer factor has an equal indirect implication on the recommended rates. The proposed adjustments are as follows: • Residential and multi-residential customers: Adjusted from 85% to 79% and 88%, respectively. • Commercial customers: Adjusted from 85% to 100%. The higher return-to-sewer factors for multi-residential and commercial customers reflect the fact that many of these customers have separate irrigation meters or relatively minor irrigable areas. Therefore, most of the non-irrigation water usage is primarily for indoor use and is returned to the sewer system. Consistent with prior studies, the sewer rate structure includes a maximum usage limit of 30 HCF per month. A maximum component is used because water usage above a certain threshold is assumed to be used in a manner that it does not return to the sewer system. Staff recommends maintaining the same maximum usage limit. Additionally, a minimum usage limit of 1 HCF is recommended to remain in place to reflect that at least 1 HCF per month is returned to the sewer system. Rate Analysis Sewer fees are comprised of both a fixed monthly system fee and a usage fee. A key aspect of the cost-of-service study is the allocation of operating and capital costs between the fixed system fee and usage fee, based on generally accepted cost-of-service principles. Usage fees are set by customer class (i.e., residential, multi- residential, and commercial) and reflect the allocation of costs related to sewer flow volume and strength. Due to varying levels of strength, commercial customer usage fees are classified according to State Water Resources Control Board subclasses (i.e., schools, churches, low-strength, medium-strength, and high-strength). Changes in these charges result from adjustments to each customer class’s average winter flow (for residential and multi-residential customers) or annual flow (for commercial customers), as well as the strength of the wastewater flow. The revisions to fixed and consumption charges, designed to meet the intent of Proposition 218 through the cost-of-service analysis, will impact customers differently depending on the customers’ meter size, usage, and wastewater strength level. While the rates are structured to collect the same revenue as the existing rates, individual customer classes will see variations due to shifts in usage patterns. The primary driver of the changes in monthly billings in this cost- of-service study is the rising cost of treatment, with the most significant increase being in Metro treatment costs. The following tables provide an analysis of the impact of the cost- of-service study results on different customer classes, compared to their current 2025 billings. Overall, the study reflects rising costs associated with biochemical oxygen demand (BOD) and total suspended solids (TSS). Customers with high- and medium-strength wastewater, who contribute higher concentrations of BOD and TSS, will see increases in their monthly bills. Conversely, low- and medium-strength customers will experience decreases in their monthly bills. Residential customers' monthly bills will remain relatively flat. Residential Customers The table below summarizes the impact on individual residential bills based on a three-year customer winter average. Winter Average Range (HCF) # of Customers Winter Average (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 0 - 10 2,961 6.1 $38.35 $39.18 $0.83 2.2% 11 - 20 1,380 13.5 $60.61 $61.41 $0.80 1.3% 21 and up 272 25.0 $95.16 $96.05 $0.89 0.9% Total 4,613 9.4 $48.36 $49.18 $0.82 1.7% Residential Multi-Residential Customers The table below summarizes the impact per dwelling unit for multi- residential bills based on each multi-residential complex. Schools The table below summarizes the impact on the individual school’s monthly charges based on the customer’s meter size. Churches The table below summarizes the impact on individual church monthly charges based on the customer’s meter size. Winter Average (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) Hilton Head 2.0 676 37 5.4 $25.09 $23.11 ($1.97)-7.9% Calle Verde 3.5 282 9 6.4 $32.45 $30.45 ($2.00)-6.2% Dehesas Rd 3.0 96 1 4.5 $16.76 $17.07 $0.31 1.8% Avocado Village 3.0 204 2 4.6 $16.97 $17.38 $0.40 2.4% Hillsdale 2.0 102 1 5.0 $16.55 $17.36 $0.81 4.9% Per Dwelling Unit Averages Multi-Residential # of Dwelling Units Multi- Residential Complex Average Meter Size # of Meters Average Consumption (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 2.0 3 43.9 $291.60 $235.63 ($55.97)-19.2% 3.0 1 281.7 $1,150.10 $1,110.56 ($39.54)-3.4% 10.0 1 2,241.8 $9,066.45 $9,382.48 $316.04 3.5% Schools Meter Size Number of Customers Monthly Per Customer Averages Average Consumption (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 0.75 1 24.8 $95.01 $100.95 $5.95 6.3% 1.00 1 115.9 $400.41 $406.42 $6.01 1.5% 2.00 2 75.8 $388.14 $338.68 ($49.46)-12.7% Churches Monthly Per Customer Averages Meter Size Number of Customers Commercial – Low-Strength The table below summarizes the impact on individual commercial low- strength monthly charges based on the actual customer’s meter size. Commercial – Medium-Strength The table below summarizes the impact on individual commercial medium-strength monthly charges based on the actual customer’s average water usage. Commercial – High-Strength The table below summarizes the impact on individual commercial high- strength bills based on the actual customer’s average water usage. Average Consumption (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 0.75 19 9.4 $48.22 $51.01 $2.79 5.8% 1.00 4 103.9 $363.96 $367.51 $3.55 1.0% 1.50 12 52.4 $257.67 $229.23 ($28.44)-11.0% 2.00 11 57.0 $331.14 $277.84 ($53.30)-16.1% 6.00 1 17.8 $1,046.51 $849.05 ($197.46)-18.9% Meter Size Number of Customers Monthly Per Customer Averages Commercial - Low-Strength Average Consumption (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 0.75 3 2.6 $28.67 $32.38 $3.71 12.9% 1.50 5 147.7 $607.71 $732.17 $124.46 20.5% 2.00 5 78.8 $430.12 $452.49 $22.37 5.2% Meter Size Monthly Per Customer Averages Commercial - Medium-Strength Number of Customers Average Consumption (HCF) Monthly Bill per Current Rates Monthly Bill per Proposed Rates $ Inc/(Dec) % Inc/(Dec) 0.75 1 5.0 $44.10 $56.50 $12.41 28.1% 1.50 4 32.2 $255.39 $290.56 $35.16 13.8% 2.00 2 99.5 $641.07 $805.59 $164.52 25.7% Monthly Per Customer Averages Meter Size Number of Customers Commercial - High-Strength Conclusion The sewer rates presented in the attached report have been calculated using acceptable rate-setting standards and meet the requirements of Proposition 218. If directed, staff will incorporate these rates into the FY 2026 budget, which will be presented to the Board in June. As part of the FY 2026 budget process and the Proposition 218 hearing process, staff will recommend a five-year Proposition 218 notice. In mid-2025, staff will prepare the Proposition 218 notices. In October 2025, a Proposition 218 hearing will be held to adopt the rates. Upon approval of the rates at the hearing, the new rates and rate structures are proposed to take effect on January 1, 2026. The District has a history of implementing a five-year Proposition 218 notice, a practice that has yielded positive results for both the District and other agencies. To ensure the effectiveness of these notices for five years, the Board has previously approved a pass- through component for future rate increases from sewer service providers, along with a separate maximum rate increase for internal cost increases. Pass-through costs, which apply to rates, fees, and charges from sewer service providers, are defined as costs charged by the County of San Diego and the City of San Diego. Staff will again propose a five-year process with the same stipulations for pass-through cost increases. For internal cost increases, staff historically proposed maximum increases equal to the consumer price index (CPI), consistent with the practice applied to water rate increases. Staff anticipates a change to the Proposition 218 hearing rate proposal compared to prior Proposition 218 hearings. The most recent CPI index maximum associated with internal increases is 3.8%. While the budget is not complete, projected increases in CIP and debt service requirements are resulting in rate projections greater than the CPI internal limit of 3.8%. As a result, the past practice of applying the CPI limit for internal increases would result in additional Proposition 218 hearings, limiting the effectiveness of the five-year Proposition 218 notice. To ensure an efficient and effective Proposition 218 hearing process, staff will propose that the Board replace the prior process and adopt a five-year schedule of sewer rates, which will establish the maximum allowable rates for future years. The adoption of a five-year schedule of rates is a change from prior Proposition 218 hearings, in which only one year of rates was adopted and future year rates were limited to pass-through costs and CPI provisions. Adopting a five-year rate schedule will provide the District with the flexibility needed to manage financial needs in future years. The District will continue to evaluate rates annually and will recommend lower rates in future years if future expenditures allow for rates lower than the maximum allowable rates. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The recommendations in this study may change the sewer charges for individual customer types, but the overall change is financially neutral as it is based on the FY 2026 budgeted cost. STRATEGIC GOAL: The District ensures its continued financial health through sound policies and procedures. LEGAL IMPACT: None. Attachments: A) Committee Action Form B) Raftelis Presentation C) Raftelis Cost of Service Study Draft Report ATTACHMENT A SUBJECT/PROJECT: Communicate to the Board the Results of the Current Sewer Cost of Service Study Prepared by Raftelis Financial Consultants, Inc. and Obtain Direction from the Board to Prepare the FY 2026 Budget Using the Cost of Service Study Results COMMITTEE ACTION: Otay Water District Wastewater Rate Study March 19, 2025 Attachment B Updates to Existing Rate Structure •Revised Return Factors ›Revised factors developed using District data as part of the Mass Balance. •Updated Wastewater Strengths ›Low strength commercial should have a lower strength than residential customers since they do not have a kitchen. 2 Fixed Charge Development •Realigned the Districts fixed charge to correspond more closely with the current cost structure. ›Recognize uniform customer service costs and certain capacity related collection system costs. 3 How do we set rates under Cost- -of-Service principles? 4 Design Rates Fixed System Charge by Meter Size, uniform volume rates by class. Distribute to Classes Single Family Residential, Multi-family Residential, Low Strength Commercial, Medium Strength Commercial, High Strength Commercial Cost Components Flow, BOD, TSS, Customer Service, Capacity, General Functionalize Collection Pipes, Lift Stations and Pumping, Screening and Grit Removal, Secondary Settling, Residual Processing, Customer Service, General How Much Money?Determine revenue requirement (Costs) Revenue Requirement (How Much to Collect) 5 (A)(B)(C) Expense 1 O&M 2,903,700$ 2,903,700$ 2 Debt Service 164,200 164,200 3 Rate Funded Capital 1,286,000 1,286,000 --- 4 Subtotal 2,903,700$ 1,450,200$ 4,353,900$ 5 Non-Rate Revenue (110,000)$ (358,192)$ (468,192)$ 6 Contribution to / (Use of) Reserves -$ (427,708)$ (427,708)$ --- 7 Total Revenue Required 2,793,700$ 664,300$ 3,458,000$ Description Operating Capital TotalLine Functionalize and Allocate to Cost Components •The cost component allocations (right table) summarize the revenue requirement ($3.46M) after functions have been allocated to cost components. 6 (A) Function 1 Collection Pipes 431,858$ 2 Lift Stations and Pumping 416,091 3 Screening & Grit Removal 126,151 4 Aeration Basins 244,303 5 Secondary Settling Basins 115,068 6 Residual Processing 500,825 7 Customer Service 168,654 8 Metro Contingency 456,370 9 General 444,380 - 10 Total 2,903,700$ Line Description O&M Cost Component 1 Flow 1,025,628$ 148,652$ (98,690)$ 1,075,590$ 2 BOD 600,550 6,634 (22,593) 584,592 3 TSS 467,833 11,032 (19,654) 459,211 4 Customer Service 227,402 - (7,675) 219,727 5 Capacity 582,287 856,174 (319,581) 1,118,880 ---- 6 Total 2,903,700$ 1,022,492$ (468,192)$ 3,458,000$ Non-Rate Revenue TotalLineDescriptionO&M Capital Cost to Serve Each Class 7 (A)(B)(C)(D) Class 1 SFR 2,696,710$ 2,721,249$ 24,539$ 0.9% 2 MFR 397,144 373,498 (23,646) -6.0% Commercial 3 Low Strength 272,044 257,167 (14,877) -5.5% 4 Medium Strength 63,735 72,053 8,318 13.1% 5 High Strength 28,367 34,032 5,666 20.0%---- 6 Total 3,458,000$ 3,458,000$ -$ 0.0% Description Revenue at Current Rates Revenue at Proposed Rates $ Change % ChangeLine Mass Balance 8 (A)(B)(C)(D)(E)(F)(G) 1 Total at RWCWRF and METRO 594,097 288 1,066,786 232 861,158 2 Less: I&I 5.0%29,705 200 37,092 200 37,092 ----- 3 Net Plant Influent 564,392 292 1,029,694 234 824,066 Commercial 4 Low Strength 57,762 100.0%57,762 200 72,126 175 63,110 5 Medium Strength 13,683 100.0%13,683 400 34,171 350 29,900 6 High Strength 3,996 100.0%3,996 800 19,958 700 17,463 ------- 7 Subtotal 75,441 75,441 268 126,256 235 110,474 8 Net Residential Flow 488,952 296 903,438 234 713,592 9 Less: MFR 88,079 88.0%77,510 296 143,215 234 113,120 ----- 10 Net SFR 521,631 79.0%411,442 296 760,223 234 600,472 Line BOD (lbs) TSS (mg/L) TSS (lbs)Description Billed Wastewater (Ccf) Return Factor Contributed Wastewater (Ccf) BOD (mg/L) Proposed System Fee (A)(B)(C) Meter Size 5/8"3.86$ 16.88$ 20.75$ 3/4"3.86 16.88 20.75 1"3.86 28.13 32.00 1 1/2"3.86 56.26 60.13 2"3.86 90.01 93.88 3"3.86 196.90 200.77 4"3.86 354.42 358.29 6"3.86 787.60 791.46 8"3.86 1,350.16 1,354.03 10"3.86 2,137.76 2,141.63 Description Customer Service Capacity Related Total •Customer service charge that does not vary by meter size. It costs the same to send a bill to any customer. •Capacity charge to recover collection system costs in proportion to meter size. Both collection pipes and water meters are sized according to potential volume. 9 Proposed Usage Fees •Flow component to recover costs associated with lift stations and a portion of Metro treatment costs that all customers share in. •BOD and TSS components to recover costs associated with treatment. Customers with dirtier wastewater pay proportionately more. 10 (A)(B)(C)(D) Class SFR 1.90$ 1.05$ 0.81$ 3.77$ MFR 1.90 1.05 0.81 3.77 Commercial Low Strength 1.90$ 0.71$ 0.61$ 3.22$ Medium Strength 1.90 1.42 1.22 4.54 High Strength 1.90 2.83 2.43 7.17 Description Flow BOD TSS Total SFR Bill Impacts 11 MFR Bill Impacts 12 Commercial Bill Impacts 13 Next Steps •Incorporate Study Results into the District’s FY 2026 Budget and Rate Model. 14 Question and Discussion? 15 16 End of Presentation Otay Water District Sewer Rate Study DRAFT REPORT / March 2025 Attachment C Otay Water District / Sewer Rate Study Contents 1. Executive Summary ..................................................................... 1 1.1. Current Sewer Rates .....................................................................................................1 1.2. Proposed Rate Changes ...............................................................................................2 1.2.1. Revised Sewer Return Factors ........................................................................................ 2 1.2.2. Updated Wastewater Strengths ....................................................................................... 2 1.2.3. Fixed Charge Development ............................................................................................. 3 1.3. Proposed Sewer Rates .................................................................................................3 1.4. Bill Impacts ....................................................................................................................4 2. Introduction .................................................................................. 6 2.1. Agency Overview ..........................................................................................................6 2.2. Study Overview .............................................................................................................6 2.3. Legal Requirements ......................................................................................................6 3. Cost of Service Analysis .............................................................. 8 3.1. Rate Setting Methodology ............................................................................................8 3.2. Units of Service .............................................................................................................9 3.2.1. Mass Balance.................................................................................................................. 9 3.2.2. Customers ..................................................................................................................... 12 3.2.3. Units of Service Summary ............................................................................................. 13 3.3. Revenue Requirement ................................................................................................ 14 3.4. Cost Functionalization (Steve Stopped) .................................................................... 15 3.5. Allocation to Cost Causation Components .............................................................. 16 3.5.1. O&M Allocation ............................................................................................................. 17 3.5.2. Capital Allocation .......................................................................................................... 18 3.5.3. Revenue Offset Allocation ............................................................................................. 19 3.5.4. Cost of Service Allocation Summary ............................................................................. 19 3.6. Unit Cost Development ............................................................................................... 20 3.7. Customer Class Cost of Service ................................................................................ 20 3.7.1. Customer Class Revenue Comparison ......................................................................... 21 4. Proposed Sewer Rates ............................................................... 22 4.1. Proposed System Fees ............................................................................................... 22 Otay Water District / Sewer Rate Study 4.2. Proposed Usage Fees ................................................................................................. 23 4.2.1. Flow Component ........................................................................................................... 23 4.2.2. BOD Component ........................................................................................................... 23 4.2.3. TSS Component ............................................................................................................ 24 4.2.4. Total Proposed Usage Fee............................................................................................ 24 4.3. Bill Impacts .................................................................................................................. 25 Tables Table 1: Current Rates ............................................................................................................................. 2 Table 2: Proposed Sewer Rates .............................................................................................................. 4 Table 3: Wastewater Volume Balance ..................................................................................................... 9 Table 4: Strength Loading Balance ........................................................................................................ 11 Table 5: Customers ................................................................................................................................ 12 Table 6: Units Summary ......................................................................................................................... 13 Table 7: FY 2025 Revenue Requirement ............................................................................................... 14 Table 8: Functionalization Summary ...................................................................................................... 16 Table 9: O&M Allocation ........................................................................................................................ 17 Table 10: Capital Cost Allocation ........................................................................................................... 18 Table 11: Revenue Offset Allocation ...................................................................................................... 19 Table 12: Cost of Service Summary ....................................................................................................... 20 Table 13: Unit Costs .............................................................................................................................. 20 Table 14: Customer Class COS ............................................................................................................. 21 Table 15: Class Revenue Comparison ................................................................................................... 21 Table 16: Proposed System Fees .......................................................................................................... 22 Table 17: Flow Component .................................................................................................................... 23 Table 18: BOD Component .................................................................................................................... 23 Table 19: TSS Component ..................................................................................................................... 24 Table 20: Total Proposed Usage Fee ..................................................................................................... 24 Table 21: SFR Bill Impacts ..................................................................................................................... 25 Table 22: MFR Bill Impacts .................................................................................................................... 25 Table 23: Commercial Bill Impacts ......................................................................................................... 26 Otay Water District / Sewer Rate Study 1 1. Executive Summary Public sewer agencies in California typically conduct cost-of-service and rate studies to ensure there is a strong nexus between rates charged to customers and costs incurred to provide service, as required by Proposition 218. The District engaged Raftelis to conduct this Sewer Cost of Service and Rate Design Study to establish a proposed sewer rate structure based on FY 2025 test data. The rates and charges calculated in this report are based on the costs to serve each customer class based on their sewer discharge and the strength (i.e. quality) of the discharge. 1.1. Current Sewer Rates The District currently has three customer classes: single family residential (SFR), multi-family residential (MFR), and commercial. Each class pays a monthly System Fee and a volumetric Usage Fee based on the amount of wastewater billed. The full schedule of charges for 2025 is shown in Table 1 on the following page. The District adopted a fixed charge that varies by meter size. MFR and commercial customers with a larger water meter pay a higher monthly fixed charge than those with a smaller water meter. All SFR customers pay the charge for a ¾” meter. Billed wastewater for SFR and MFR customers is based on their average monthly water consumption billed for the months of January through April, commonly referred to as the average winter consumption (AWC). Volume for commercial customers is based on the monthly average water use for a full year, referred to as the average annual consumption (AAC). Additionally, the AWC and AAC are reduced by 15%, known as a return factor, to recognize that not all water used is returned to the wastewater collection system. Commercial customers are further subdivided into low strength, medium strength, and high strength customers.1 The Usage Fees for higher strength customers are higher than for lower strength customers due to the increased costs the District incurs to treat higher strength (i.e. dirtier) wastewater. The strength of sewer discharge is determined by the biochemical oxygen demand (BOD) and total suspended solids (TSS) in the discharge. The monthly bill calculation is: (AWC x Return Factor x Usage Fee) + System Fee For example, a residential customer with an AWC of 9 Ccf currently pays: (9 x .85 x $3.56) + $19.87 = $47.10 1 Strength refers to the quality or “dirtiness” of the wastewater returned to the collection system. This concept is discussed in more detail in Section 4.6.2. Otay Water District / Sewer Rate Study 2 Table 1: Current Rates 1.2. Proposed Rate Changes Overall, Raftelis recommends maintaining the general rate structure, including fixed charges that vary by meter size, the use of return factors to determine wastewater contributions, and volume rates that vary according to strength loadings. However, several of these items should be updated. 1.2.1. Revised Sewer Return Factors To estimate the sewer discharge from each customer, the District currently applies an 85% return factor to monthly water use to recognize the fact that not all water used is returned to the sewer. Raftelis recommends implementing a unique return factor for each customer class to more closely align with the District’s data and industry standard assumptions. The proposed commercial return factor is 100%, assuming that all water used by these customers is returned to the sewer system. The proposed SFR and MFR return factors are 79% and 88% since these customers are likely to use water for outdoor irrigation needs that do not generate wastewater. 1.2.2. Updated Wastewater Strengths Raftelis examined the District’s assumptions regarding the strengths of wastewater contributed by each customer class. Strength refers to the quality, or “dirtiness”, of the wastewater. The District’s current rates assume that low strength commercial customers and residential customers contribute wastewater of similar (A)(B) Usage Fee (per Ccf) 1 SFR (AWC)3.56$ 85.0% 2 MFR (AWC)3.56 85.0% Commercial (AAC) 3 Low Strength 3.56$ 85.0% 4 Medium Strength 4.05 85.0% 5 High Strength 5.70 85.0% System Fee (per Month) 6 5/8"19.87$ 7 3/4"19.87 8 1"49.64 9 1 1/2"99.25 10 2"158.80 11 3"297.77 12 4"496.28 13 6"992.56 14 8"1,587.97 15 10"2,282.91 Current RatesDescriptionLine Return Factor Otay Water District / Sewer Rate Study 3 quality. Raftelis recommends assigning residential customers a higher strength, recovering a slightly higher share of treatment costs from residential customers. 1.2.3. Fixed Charge Development Raftelis has refined the methodology for the costs recovered in the District’s fixed charge. The proposed rates identify customer service costs to be recovered from all customers equally, regardless of the amount of wastewater they contribute. Additionally, costs associated with the collection system are recovered through a fixed charge that varies by meter size. Larger water meters have the ability to use more water than smaller meters. It is a common practice in setting wastewater rates to recover certain costs associated with maintaining the infrastructure required to provide wastewater service on demand. It is a reasonable assumption that customers with a larger water meter contribute more wastewater and should pay a proportionally higher share of fixed costs associated with the collection system, which is sized to safely convey wastewater from all customers. 1.3. Proposed Sewer Rates Table 2 presents the proposed test year2 sewer rates. All rates are based on the cost-of-service analysis described in Section 3. Note that the rates in this report do not include an annual revenue adjustment (or rate increase) for FY 2026. The proposed rates herein will be updated at a later date by District staff according to the revenue adjustment approved by the District Board of Directors. 2 Test year refers to the year selected to develop the cost of service and design rates. The test year in this study is FY 2025. Otay Water District / Sewer Rate Study 4 Table 2: Proposed Sewer Rates 1.4. Bill Impacts Since Raftelis recommends maintaining the same overall rate structure, the process to calculate a bill is the same as describe above. Under the proposed rates, the bill for the same 9 Ccf AWC customer is: (9 x .79 x $3.77) + $20.75 = $47.48 Figure 1 compares proposed SFR monthly bills with current bills at various wastewater discharge. The average monthly bill for a SFR customer is 9 hcf; this customer’s bill will increase 40 cents before adjusting for the additional revenue to be collected through the January 1, 2026 proposed rate increase. Additional bill impacts for other customers can be found in Section 4.3. (A)(B) Usage Fee (per Ccf) 1 SFR (AWC)3.77$ 79% 2 MFR (AWC)3.77 88% Commercial (AAC) 3 Low Strength 3.22$ 100% 4 Medium Strength 4.54 100% 5 High Strength 7.17 100% System Fee (per Month) 6 5/8"20.75$ 7 3/4"20.75 8 1"32.00 9 1 1/2"60.13 10 2"93.88 11 3"200.77 12 4"358.29 13 6"791.46 14 8"1,354.03 15 10"2,141.63 Line Return FactorDescriptionProposed Rates Otay Water District / Sewer Rate Study 5 Figure 1: SFR Bill Impacts Otay Water District / Sewer Rate Study 6 2. Introduction 2.1. Agency Overview Otay Water District (District) is a water, recycled water, and sewer service provider. The State Legislature authorized the establishment of the Otay Water District in 1956 as a California Special District under the provisions of the Municipal Water District Law of 1911, Division 20 (commencing with Section 71000) of the Water Code of the State of California. Otay Water District is a public agency that does not make a profit, where each end user pays only his or her fair share of the District’s costs to operate and maintain the public water, recycled water, or sewer facilities. Five directors, elected by voters to serve respective divisions, set the District’s ordinances, policies, taxes, and rates for service. Members of the Board of Directors serve four-year terms of office. The Board of Directors typically meets in open public session on the first Wednesday of each month at 3:30 p.m. at District headquarters. The public is welcome to attend these meetings. The District’s wastewater utility provides public sewer service to homes and businesses within the Jamacha drainage basin, serving approximately 17,000 residents across 4,700 accounts primarily in the Rancho San Diego area. Most wastewater is treated at the Ralph W. Chapman Water Recycling Facility (RWCWRF), which has the ability to treat up to 1.3 million gallons per day. The District also sends sludge byproducts to the Metropolitan Wastewater Joint Powers Authority (Metro) for processing. 2.2. Study Overview Public sewer agencies in California typically conduct cost-of-service and rate studies to ensure there is a strong nexus between rates charged to customers and costs incurred to provide service, as required by Proposition 218. The District engaged Raftelis to conduct this Sewer Cost of Service and Rate Design Study to establish a proposed sewer rate structure based on FY 2025 test data. Note that the rates in this report do not include an annual revenue adjustment (or rate increase) for FY 2026. The proposed rates herein will be updated at a later date by District staff according to the revenue adjustment approved by the District Board of Directors. 2.3. Legal Requirements California Constitution - Article XIII D, Section 6 (Proposition 218) Proposition 218, reflected in the California Constitution as Article XIII D, was enacted in 1996 to ensure that rates and fees are reasonable and proportional to the cost of providing service. The principal requirements, as they relate to public sewer service are as follows: 1. A property-related charge (such as water rates) imposed by a public agency on a parcel shall not exceed the costs required to provide the property-related service. 2. Revenues derived by the charge shall not be used for any purpose other than that for which the charge was imposed. 3. The amount of the charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel. 4. No charge may be imposed for a service unless that service is actually used or immediately available to the owner of property. Otay Water District / Sewer Rate Study 7 5. A written notice of the proposed charge shall be mailed to the owner of record of each parcel at least 45 days prior to the public hearing, when the agency considers all written protests against the charge. Raftelis follows industry standard rate setting methodologies set forth by the Water Environment Federation Manual of Practice No. 27: Wastewater Financing and Charges (WEF Manual 27) to meet Proposition 218 requirements and establishes rates that do not exceed the proportionate cost of providing water services on a parcel basis. The methodology in the WEF Manual 27 is a nationally recognized sewer industry ratemaking standard. Otay Water District / Sewer Rate Study 8 3. Cost of Service Analysis Section 3 details the cost of service (COS) analysis performed for the District’s sewer utility. A COS analysis distributes a utility’s revenue requirements to each customer class based on their proportionate share of total system sewer demand. The COS analysis completed by Raftelis for the District follows industry standard cost allocation principles as presented in the Water Environment Federation’s Manual of Practice No. 27, Financing and Charges for Wastewater Systems (WEF Manual No. 27). 3.1. Rate Setting Methodology The framework and methodology used to develop the COS analysis and to distribute the revenue requirement to each customer class is informed by the processes outlined in WEF Manual No. 27. COS analyses are tailored specifically to assess the costs incurred to collect and treat sewage from each customer class. However, there are distinct steps in every COS analysis to recover costs from customers in an equitable, and defensible manner: 1. Development of units of service: Each class has unique wastewater characteristics that determine their share of costs in later steps. These units include annual contributed wastewater, loadings of the BOD and TSS pollutants, the number of customers, and the number of ¾” equivalent accounts. 2. Revenue requirement determination: The rate-making process begins by determining the revenue requirement for the test year, also known as the rate-setting year. The revenue requirement represents the full cost that the District must recover from ratepayers in order to reliably provide water service. The revenue requirement includes the District’s operating costs, annual debt service, capital expenditures, and reserve funding as projected based on the annual budget, including any miscellaneous revenues that offset costs by reducing the total revenue that must be collected from rates. The test year for this study is FY 2025, using the adopted FY 2025 budget; these rates will be adjusted by District staff to recover the FY 2026 revenue requirement before adoption on January 1, 2026. The revenue requirement in this study was previously determined through the District’s internal financial planning process and provided to Raftelis. 3. Cost functionalization: O&M expenses and capital assets are categorized by their function in the system. Functions identified in this study include wastewater collection, lift stations, screening and grit removal, aeration, secondary settling, residual processing and disposal, customer service, and general administrative overhead. 4. Cost causation component allocation: Functionalized costs are then allocated to cost causation components based on their burden on the system. Cost causation components include flow (the volume of wastewater discharges), strength loading characteristics such as BOD and TSS, billing services, and capacity. 5. Unit cost development: The revenue requirement for each cost causation component is divided by the appropriate units of service to determine the unit cost for each component. 6. Revenue requirement distribution: The unit cost is utilized to distribute the revenue requirement for each cost causation component to customer classes based on each customer class’s service units. 7. Rate design: After allocating the revenue requirement to each customer class, we design and calculate rates to recover costs from the customers that cause the District to incur them. This process also includes a rate impact analysis and sample customer bill impacts. 8. Administrative record preparation and rate adoption: The final step in a rate study is to develop the administrative record in conjunction with the rate adoption process. This report serves as the administrative record for this study. The administrative record documents the study results and presents Otay Water District / Sewer Rate Study 9 the methodologies, rationale, justifications, and calculations used to determine the proposed rates. A thorough and methodological administrative record serves two important functions: maintaining defensibility in a stringent legal environment and communicating the rationale for revenue adjustments and proposed rates to customers and key stakeholders. 3.2. Units of Service The first step of the cost-of-service process is to determine the units of service that will be used to assign costs to each customer class. Each customer class has unique wastewater characteristics that are quantified and used to assign costs, ensuring that each class pays their share of costs in proportion to the impacts their wastewater system use characteristics place on the system. 3.2.1. Mass Balance A key feature of a sewer COS is the mass balance, which is used to estimate contributed wastewater flows and pollutant strengths using District data and assumptions based on industry standards. The goal is to balance the assumed wastewater flow and strengths directly contributed by customers with known information about wastewater from samples taken at the RWCWRF and Metro influent points to ensure that they are reasonable. The resulting volumes and pollutant loadings are used to distribute costs to the customer classes in Section 3.7. 3.2.1.1. Volume and Return Factors The first component of the mass balance concerns balancing the total volume of wastewater treated by the District with wastewater contributed directly by customers. Table 3 presents this process. Table 3: Wastewater Volume Balance (A)(B)(C) 1 Total at RWCWRF and METRO 594,097 2 Less: I&I 5.0%29,705 - 3 Net Plant Influent 564,392 Commercial 4 Low Strength 57,762 100.0%57,762 5 Medium Strength 13,683 100.0%13,683 6 High Strength 3,996 100.0%3,996 --- 7 Subtotal 75,441 75,441 8 Net Residential Flow 488,952 9 Less: MFR 88,079 88.0%77,510 - 10 Net SFR 521,631 79.0%411,442 Line Description Billed Wastewater (Ccf) Return Factor Contributed Wastewater (Ccf) Otay Water District / Sewer Rate Study 10 Column C, Line 1 shows the total amount of wastewater metered at the RWCWRF and Metro. Consistent with industry standards, this study assumes that 5% of that total is from infiltration and inflow, which is wastewater that enters the collection system via breaks and gaps in the pipes rather than through a service connection to an actual customer. The Net Plant Influent on Line 3 is the total estimated wastewater contributed by the District’s customers. After determining the net influent, we must estimate the amounts contributed by each customer class. This begins with billed volumes, as obtained from the District’s records. Commercial customers are billed based on their average use per month over a 12-month period (average annual consumption, or AAC). SFR and MFR customers are billed based on their average use per month in the January through April period (average winter consumption, or AWC). The amounts in Column A are the total volumes billed for the test year. The next step requires us to estimate the portion of water used that is returned to the sewer collection system. Most water is used indoors and is returned to the sewer. However, a portion of water use is for irrigation outdoors, which is not returned to the sewer. The mass balance recognizes this by applying return factors (shown in Column B) to estimate wastewater contributions (Column C, the result of multiplying the values in Column A by the values in Column B for each customer class). This study assumes that 100% of water billed to commercial customers is used indoors. Many commercial customers have separate irrigation meters for their outdoor water use needs; water delivered through irrigation meters are not billed for sewer use and are not included in Column A. Other customers that do not currently have an irrigation meter have a financial incentive to acquire one if their outdoor needs are significant. Therefore, it is a reasonable assumption that all water used through potable water meters by commercial customers is returned to the sewer. However, many SFR and MFR customers do not have an irrigation meter and potentially use a significant portion of their water for outdoor needs. Raftelis developed unique sewer return factors for each of these customer classes. For MFR customers, this factor was developed using the ratio of water use in April compared to the average monthly use for the entire year for this customer class3. Since April is generally the rainiest month in the region, customers would have very little outdoor water use. It is a reasonable assumption that all water used in April by MFR customers is for indoor needs. For the SFR class, the return factor is calculated from all of the preceding assumptions by subtracting commercial wastewater contributions (Column C, Line 7) and MFR wastewater contributions (Column C, Line 9) from the net influent (Column C, Line 3); the remainder must be from the SFR class. The SFR return factor is the result of dividing the estimated SFR wastewater contribution (Column C, Line 10) by the SFR billed wastewater (Column A, Line 10). Raftelis confirmed that this is a reasonable result by deriving the average water use per capita per day implied by this data. The District serves 4,611 SFR accounts (cited in Table 5 below) with an average household density of 3.07 persons4 and population of approximately 14,142, resulting in a 59.6 gallons used indoors per person per day. This value is consistent with those seen elsewhere in California and the United States. 3 6,844 Ccf used in April divided by 7,758 Ccf used in the average month equals 88%. 4 Per the Census Bureau ACS Survey Table B25124 for the Rancho San Diego census defined place. Otay Water District / Sewer Rate Study 11 3.2.1.2. BOD and TSS Pollutants The mass balance also estimates the total strength loadings for each class, as presented in Table 4. Strengths are expressed in milligrams of pollutant per liter of wastewater. The strengths in Columns B and D are then applied to the contributed wastewater in Column A to derive the pounds of each pollutant in Columns C and E5. Table 4: Strength Loading Balance The process and use of data to estimate strength loadings is conceptually similar to that used to develop contributed volumes. The average BOD strength of wastewater influent at RWCWRF is known from the District’s records (Line 1). Assumptions are made regarding commercial strengths (Lines 4 to 6) to determine the implied SFR strength (Line 10), which is checked for reasonableness. This study assumes BOD loadings of 200 mg/L and TSS loadings of 175 mg/L for low strength commercial customers and that loadings for medium and high strength commercial customers are 2 and 4 times higher, respectively. Overall, this results in an implied SFR BOD strength of 296 mg/L and TSS strength of 234 mg/L, which is comparable to the average influent concentrations. Since SFR customers are the majority of customers, this is reasonable. Raftelis believes these assumptions regarding commercial class strengths are valid for two reasons. First, they are within the range of values identified by studies completed by other utilities around California and the United States. In other words, the strengths assumed for the District’s customers are consistent with those assumed for similar customers in other areas. Second, the assumed strengths are consistent with the District’s data regarding wastewater characteristics of RWCWRF influent as well as residential flow. An assumption of 25 mg/L or 500 mg/L for low strength customers, for example, would result in significantly different implied residential strengths. Instead, the residential strengths are consistent with data seen elsewhere. 5 The calculation of pounds also includes the conversions of milligrams to pounds and liters to Ccf. (A)(B)(C)(D)(E) 1 Total at RWCWRF and METRO 594,097 288 1,066,786 232 861,158 2 Less: I&I 29,705 200 37,092 200 37,092 ----- 3 Net Plant Influent 564,392 292 1,029,694 234 824,066 Commercial 4 Low Strength 57,762 200 72,126 175 63,110 5 Medium Strength 13,683 400 34,171 350 29,900 6 High Strength 3,996 800 19,958 700 17,463 ----- 7 Subtotal 75,441 268 126,256 235 110,474 8 Net Residential Flow 488,952 296 903,438 234 713,592 9 Less: MFR 77,510 296 143,215 234 113,120 ----- 10 Net SFR 411,442 296 760,223 234 600,472 Line BOD (lbs) TSS (mg/L) TSS (lbs)Description Contributed Wastewater (Ccf) BOD (mg/L) Otay Water District / Sewer Rate Study 12 3.2.2. Customers Table 5, Columns A through F present the number of customers served by the District, arranged by their customer class and meter size as reported by the District’s billing records. This information is later used to develop unit costs and allocate costs in Section 3.7. Table 5: Customers (A)(B)(C)(D)(E)(F)(G)(H) Meter Size 1 5/8"105 - - - - 105 1.00 30 2 3/4"4,349 - 20 3 1 4,373 1.00 30 3 1"157 - 5 - - 162 1.67 50 4 1 1/2"2 - 12 5 4 23 3.33 100 5 2"- 39 16 5 2 62 5.33 160 6 3"- 5 1 - - 6 11.67 350 7 4"- 6 - - - 6 21.00 630 8 6"- - 1 - - 1 46.67 1,400 9 8"- - - - - - 80.00 2,400 10 10"- - 1 - - 1 126.67 3,800 ------ 11 Total Accounts 4,613 50 56 13 7 4,739 12 Total Eq. Meters 4,722 392 339 46 25 5,525 Comm. Low Comm. Medium Comm. High Total Eq. Meter Ratio Safe Flow (gpm)Line Description SFR MFR Otay Water District / Sewer Rate Study 13 3.2.3. Units of Service Summary Table 6 summarizes the units of service presented above. Flow, BOD, and TSS units were developed in Table 4, columns C, E, and G. The number of customers were presented in Table 5, Line 11; the account and ¾” equivalent meter totals in this table are annualized by multiplying the number of customers by 12 in order to show the total number of bills the District will issue. These units are later used to proportionally distribute costs to customer classes in Section 3.7. Table 6: Units Summary (A)(B)(C)(D)(F) Class SFR 412,088 761,417 601,415 55,356 56,668 MFR 77,510 143,215 113,120 600 4,708 Commercial - - - Low Strength 57,762 72,126 63,110 672 4,064 Medium Strength 13,683 34,171 29,900 156 556 High Strength 3,996 19,958 17,463 84 300 ----- Total 565,039 1,030,888 825,009 56,868 66,296 Units:hcf lbs lbs Number of Accounts, Annualized Number of Eq. Meters, Annualized Eq. MetersDescriptionFlowBODTSSAccounts Otay Water District / Sewer Rate Study 14 3.3. Revenue Requirement Table 7 shows the rate revenue requirement for FY 2025 (also referred to as the test year or rate-setting year). The revenue requirement is split into operating and capital categories (Columns A and B), which are later allocated based on O&M expenses and capital assets respectively. The expenses (Lines 1-3) are equal to FY 2025 budgeted expenses. The non-rate revenue (Line 5) includes interest earnings, late fees, cost sharing revenue, and other miscellaneous revenues that are applied as offsets to the final rate revenue requirement. The contribution to reserves adjustment (Line 6) is equal to FY 2025 projected net cash change and represents the decrease in the rate revenue requirement resulting from a projected use to reserves of FY 2025. All aforementioned values are from the District’s internal financial planning forecast for FY 2025 in absence of any additional rate increase. The final rate revenue requirement (Line 9) is calculated as follows: Total revenue required from rates (Line 7) = Revenue requirements (Line 4) + Non-Rate Revenue (Line 5) + Reserves (Line 6) Table 7: FY 2025 Revenue Requirement (A)(B)(C) Expense 1 O&M 2,903,700$ 2,903,700$ 2 Debt Service 164,200 164,200 3 Rate Funded Capital 1,286,000 1,286,000 --- 4 Subtotal 2,903,700$ 1,450,200$ 4,353,900$ 5 Non-Rate Revenue (110,000)$ (358,192)$ (468,192)$ 6 Contribution to / (Use of) Reserves -$ (427,708)$ (427,708)$ --- 7 Total Revenue Required 2,793,700$ 664,300$ 3,458,000$ Line Description Operating Capital Total Otay Water District / Sewer Rate Study 15 3.4. Cost Functionalization Assigning costs to functional categories is a critical step in the COS process. Functionalization identifies various activities (functions) and their costs that the District must carry out in order to provide general wastewater service. Put simply, the District must collect dirty wastewater, treat it to allowable standards of cleanliness, and manage the administration of the utility. The functions for the sewer utility are: 1. Collection: related to the system of pipes that collect and convey wastewater discharged by customers to the RWCRWF or Metro facilities. 2. Lift Stations and Pumping: related to operating lift stations that pump wastewater in parts of the collection system that cannot be gravity fed. 3. Screening and Grit Removal: related to the first step of wastewater treatment, the removal of large physical materials such as trash or other debris that has entered the collection system. 4. Aeration: a step in the wastewater treatment process that introduces oxygen to promote bacterial growth in the wastewater and increase aerobic biodegradation of organic materials. 5. Secondary Settling: related to the removal of organic solids that remain in the sewage following the aeration process. 6. Residual Processing and Disposal: related to disposal of sludge which is extracted from the wastewater treated at RWCRWF. The District sends sludge to Metro for disposal and is billed for this service. 7. Customer Service: related to billing and operation of customer call centers. 8. General: related to overhead such as utility management, finance, or other activities not directly related to one of the above functions. This step is completed for both the operations and maintenance (O&M) budget and the book value of the District’s plant assets in service. O&M was functionalized by District staff during the budgeting process based on a review of contractual, maintenance, and labor related costs expected in FY 2025. Assets were functionalized according to their description in the District’s records. The O&M functionalization also includes an additional Metro Contingency function. The District’s FY 2025 budget includes $900,000 for payment for wastewater treatment and sludge disposal services from Metro. However, this payment is not representative of an average year. The District typically treats most of it’s wastewater and sends only sludge (which has a high BOD and TSS concentration) to Metro for disposal. Approximately once every three years, including in FY 2025, the RWCRWF is temporarily shut down for maintenance. When this happens, all of the District’s untreated sewage is sent to Metro. Metro’s charge to the District is higher in FY 2025 due to the additional volume of sewage. In the remaining two out of three years, the District sends a lower volume of sewage at a higher strength loading. Therefore, the FY 2025 budgeted payment to Metro is separated into a baseline amount, included in the Residual Processing function, and a Metro Contingency amount to allow for more precise allocation in Section 3.5.1. The result of the functionalization process is shown in Table 8. Otay Water District / Sewer Rate Study 16 Table 8: Functionalization Summary 3.5. Allocation to Cost Causation Components The cost allocation process identifies the types of customer demands that are met by different functions of the system. Cost causation components are used to allocate costs to customers based on their use of the system. Cost causation components identified in this study include: 1. Flow: costs that are related to the quantity of wastewater generated. 2. BOD: costs that vary based on the biological oxygen demand (BOD) strength parameter of wastewater; Biochemical oxygen demand is a measure of wastewater strength based on the amount of organic matter contained in wastewater prior to treatment and measured in milligrams per liter (mg/L) or parts per million (ppm). The more organic matter in the wastewater, the more oxygen the microorganisms need to utilize the matter in the wastewater. 3. TSS: costs that vary based on the total suspended solids (TSS) strength parameter of wastewater; TSS is a measure of wastewater strength based on the amount of solid particles in suspension in wastewater prior to treatment, also generally expressed in milligrams per liter (mg/L) or parts per million (ppm). 4. Customer: component that serves to directly allocate customer service function costs. 5. Capacity: collection system costs that are related to the quantity of wastewater discharged but that the District has chosen to recover in the fixed charge. 6. General: costs not directly related to any of the causation components above. General costs are reallocated proportionally to all other causation components. Each function is allocated differently to the cost causation component that is best related to the way the District incurs costs. 1. Collection: allocated fully to the Capacity component. The size and cost of the collection system is directly related to amount of wastewater it is designed to convey. Once the pipes are designed and installed in the ground, the cost is fixed and does not vary from year to year. 2. Lift Stations and Pumping: allocated to the flow component since lift stations are designed and built based on the amount of wastewater they are expected to move. Costs are directly related to the size of the lift station. 3. Screening and Grit Removal: allocated fully to TSS since this operation is related to the removal of solids. (A)(B) Function 1 Collection Pipes 431,858$ 21,446,143$ 2 Lift Stations and Pumping 416,091 3,719,468 3 Screening & Grit Removal 126,151 271,694 4 Aeration Basins 244,303 122,919 5 Secondary Settling Basins 115,068 41,444 6 Residual Processing 500,825 10,551 7 Customer Service 168,654 - 8 Metro Contingency 456,370 - 9 General 444,380 294,374 -- 10 Total 2,903,700$ 25,906,592$ AssetsLineDescriptionO&M Otay Water District / Sewer Rate Study 17 4. Aeration: allocated fully to BOD since this process is related to the removal of organic materials that affect the amount of BOD. 5. Secondary Settling: allocated fully to BOD since this process is related to the removal of organic materials that affect BOD. 6. Residual Processing and Disposal: Metro’s billings to the District include cost components for volume and pollutants that directly correspond with the flow, BOD, and TSS cost causation components used in this study to develop the District’s retail rates. Therefore, this cost is allocated using factors derived directly from a five-year average of Metro’s charges to the District. 7. Customer Service: allocated fully to the Customer Service cost causation component to allow recovery on an equal, per customer basis. Regardless of the amount of wastewater they contribute, all customers receive one bill each month. The costs to send this bill is the same for all customers. 8. Metro Contingency: allocated 33% to flow since in 1 of out 3 years this amount is used to pay Metro for accepting increased wastewater flows. The remaining 67% is allocated to the General component to recognize the fact that this amount may be used on a variety of other general activities in other years. 9. General Overhead: allocated to the General component for proportional reallocation to all components. 3.5.1. O&M Allocation Table 9 shows the allocation of functionalized FY 2025 O&M expense forecast to each cost causation component according to the criteria described above. Total O&M expenses associated with each function (Column H) were determined in Table 8. Table 9: O&M Allocation (A)(B)(C)(D)(F)(G)(H) O&M Function 1 Collection Pipes 0.0%100.0%431,858$ 2 Lift Stations and Pumping 100.0%416,091 3 Screening & Grit Removal 100.0%126,151 4 Aeration Basins 100.0%244,303 5 Secondary Settling Basins 100.0%115,068 6 Residual Processing 38.7%17.2%44.1%500,825 7 Customer Service 100.0%168,654 8 Metro Contingency 33.0%67.0%456,370 9 General 100.0%444,380 ------- 10 Subtotal 760,665$ 445,403$ 346,972$ 168,654$ 431,858$ 750,148$ 2,903,700$ 11 Reallocation of General 264,963 155,147 120,861 58,747 150,429 (750,148) - ------- 12 Total 1,025,628$ 600,550$ 467,833$ 227,402$ 582,287$ -$ 2,903,700$ 13 Percent 35.3%20.7%16.1%7.8%20.1%0.0% Line Description TotalGeneralFlowBODTSSCustomer Service Capacity Otay Water District / Sewer Rate Study 18 3.5.2. Capital Allocation Capital assets are utilized in COS analyses to allocate the capital revenue requirement to the cost causation components. The distribution of a short-term capital plan to the cost causation components can be heavily weighted to specific cost causation components based on the type of projects. Using short-term planned capital projects to allocate capital costs would cause rates to fluctuate and cause customer confusion. The overall capital asset base, however, is considerably more stable in the long-term, and therefore is more representative of long-term capital investment in the District’s sewer system. Thus, functionalized capital assets, as presented in Table 8, are used to allocate capital costs to the cost causation components. Functionalized assets are allocated to the cost causation components using the same allocation factors as were used to allocate O&M costs in Table 9. Table 10 shows the allocation of capital assets by function to each cost causation component. The resulting overall asset allocation, expressed as a percent on Line 12, is then used to allocate the test year capital costs, including rate fund capital, debt service, and the use of reserves on Lines 13 to 15. The total test year capital needs are shown on Line 16. Table 10: Capital Cost Allocation (A)(B)(C)(D)(F)(G)(H) Asset Function Asset Value 1 Collection Pipes 0.0%0.0%0.0%0.0%100.0%0.0%21,446,143$ 2 Lift Stations and Pumping 100.0%0.0%0.0%0.0%0.0%0.0%3,719,468 3 Screening & Grit Removal 0.0%0.0%100.0%0.0%0.0%0.0%271,694 4 Aeration Basins 0.0%100.0%0.0%0.0%0.0%0.0%122,919 5 Secondary Settling Basins 0.0%100.0%0.0%0.0%0.0%0.0%41,444 6 Residual Processing 38.7%17.2%44.1%0.0%0.0%0.0%10,551 7 Customer Service 0.0%0.0%0.0%100.0%0.0%0.0%- 8 General 0.0%0.0%0.0%0.0%0.0%100.0%294,374 ------- 9 Subtotal 3,723,554$ 166,175$ 276,346$ -$ 21,446,143$ 294,374$ 25,906,592$ 10 Reallocation of General 42,797 1,910 3,176 - 246,491 (294,374) - ------- 11 Total 3,766,351$ 168,085$ 279,522$ -$ 21,692,634$ -$ 25,906,592$ 12 Percent 14.5%0.6%1.1%0.0%83.7%0.0% Capital Expense 13 Rate Funded Capital 14.5%0.6%1.1%0.0%83.7%0.0%1,286,000$ 14 Debt Service 14.5%0.6%1.1%0.0%83.7%0.0%164,200 15 Use of Reserves 14.5%0.6%1.1%0.0%83.7%0.0%(427,708) ------- 16 Total 148,652$ 6,634$ 11,032$ -$ 856,174$ -$ 1,022,492$ 17 Percent 14.5%0.6%1.1%0.0%83.7%0.0% TotalLineDescriptionGeneralCapacityFlowBODTSSCustomer Service Otay Water District / Sewer Rate Study 19 3.5.3. Revenue Offset Allocation Non-rate revenues collected by the District serve to offset the rate revenue requirement by providing funding that reduces the amount that must be recovered from rates to fund each cost causation component. Table 11 presents the allocation of these items. Non-rate revenue items in the operating fund are allocated in the same proportion as O&M expenses, expressed as a percent on Line 12 of Table 9. The exception to this is payments received from the Spring Valley Sewer District for the District’s operation of a shared lift station facility, which is fully allocated to the Flow cost causation component. Revenues in the capital funds are allocated according to capital assets, as shown in Line 12 of Table 10. Table 11: Revenue Offset Allocation 3.5.4. Cost of Service Allocation Summary Table 12 summarizes the net cost of service allocation from the values developed in Table 9, Table 10, and Table 11. (A)(B)(C)(D)(F)(G) Operating Fund 1 Late Fees 35.3%20.7%16.1%7.8%20.1%24,000$ 2 SVSD Shared Facility 100.0%12,000 3 Availability Fees 35.3%20.7%16.1%7.8%20.1%53,000 4 Interest 35.3%20.7%16.1%7.8%20.1%21,000 ------ 5 Subtotal 46,615$ 20,269$ 15,789$ 7,675$ 19,652$ 110,000$ Expansion Fund 6 Interest Income 14.5%0.6%1.1%0.0%83.7%500$ ------ 7 Subtotal 73$ 3$ 5$ -$ 419$ 500$ Betterment Fund 8 Availability Fees 14.5%0.6%1.1%0.0%83.7%51,000$ 9 Interest Income 14.5%0.6%1.1%0.0%83.7%1,700 ------ 10 Subtotal 7,662$ 342$ 569$ -$ 44,128$ 52,700$ Replacement Fund 11 Annexation Fees 14.5%0.6%1.1%0.0%83.7%116,292$ 12 Interest Income 14.5%0.6%1.1%0.0%83.7%188,700 ------ 13 Subtotal 44,340$ 1,979$ 3,291$ -$ 255,382$ 304,992$ ------ 14 Total 98,690$ 22,593$ 19,654$ 7,675$ 319,581$ 468,192$ Line Description TotalFlowBODTSSCustomer Service Capacity Otay Water District / Sewer Rate Study 20 Table 12: Cost of Service Summary 3.6. Unit Cost Development Having established the units of service for each customer class, the next step in the COS process is to calculate a unit cost of service for each cost causation component. Table 13 presents this calculation. The costs in Column A were previously summarized in Table 12 and the units in column B were summarized in Table 6. The unit cost in column C is the result of dividing the cost by the units. Table 13: Unit Costs 3.7. Customer Class Cost of Service Finally, the cost to serve each customer class is calculated by multiplying the customer class units of service for each cost causation component by the unit cost for each cost causation component, as performed in Table 14. For example, the SFR Flow amount of $784,439 shown in Line 1, Column A is determined by multiplying 412,088 Ccf (Table 6, Line 1, Column A) by $1.90 (Table 13, Line 1, Column C)6. Table 14 shows, that of the $3,458,000 required to operate the system, the SFR class is responsible for $2,721,249. 6 The unit costs in Table 13 are rounded to the nearest penny for display purposes. For this reason, manually calculating the distributed class cost of service as described does not exactly equal the results shown in Table 14. (A)(B)(C)(D)(F)(G) Expenses 1 O&M 1,025,628$ 600,550$ 467,833$ 227,402$ 582,287$ 2,903,700$ 2 Capital 148,652 6,634 11,032 - 856,174 1,022,492 3 Non-Rate Revenue (98,690) (22,593) (19,654) (7,675) (319,581) (468,192) ------ 4 Total 1,075,590$ 584,592$ 459,211$ 219,727$ 1,118,880$ 3,458,000$ TotalCapacityCustomer ServiceLineDescriptionFlowBODTSS (A)(C) Cost Component Flow 1,075,590$ 565,039 hcf 1.90$ BOD 584,592 1,030,888 lbs 0.57 TSS 459,211 825,009 lbs 0.56 Customer Service 219,727 56,868 Number of Accounts, Annualized 3.86 Capacity 1,118,880 66,296 Number of Eq. Meters, Annualized 16.88 - Total 3,458,000$ Units of Service (B) Unit CostDescriptionCost Otay Water District / Sewer Rate Study 21 Table 14: Customer Class COS 3.7.1. Customer Class Revenue Comparison Table 15 compares to the total proposed revenue requirements distributed to each class (Table 14, Column G) to the total revenue collected from each class under current rates. Note that the total revenue under either rate structure corresponds to the revenue requirement from Table 7, indicating that the proposed rates and rate structure changes are revenue neutral. Distributional impacts to the various customer classes are a result of the District’s changing cost structure and wastewater characteristics relative to the prior study that established the current rates, and due to refinement of the methodology to maintain adherence to cost of service principles. Table 15: Class Revenue Comparison (A)(B)(C)(D)(F)(G) Class SFR 784,439$ 431,782$ 334,756$ 213,885$ 956,388$ 2,721,249$ MFR 147,545 81,214 62,964 2,318 79,457 373,498 Commercial Low Strength 109,954 40,901 35,128 2,596 68,588 257,167 Medium Strength 26,047 19,378 16,643 603 9,384 72,053 High Strength 7,606 11,318 9,720 325 5,063 34,032 ------ Total 1,075,590$ 584,592$ 459,211$ 219,727$ 1,118,880$ 3,458,000$ CapacityDescriptionFlowBODTSSCustomer Service Total (A)(B)(C)(D) Class SFR 2,696,710$ 2,721,249$ 24,539$ 0.9% MFR 397,144 373,498 (23,646) -6.0% Commercial Low Strength 272,044 257,167 (14,877) -5.5% Medium Strength 63,735 72,053 8,318 13.1% High Strength 28,367 34,032 5,666 20.0%---- Total 3,458,000$ 3,458,000$ (0)$ 0.0% Description Revenue at Current Rates Revenue at Proposed Rates $ Change % Change Otay Water District / Sewer Rate Study 22 4. Proposed Sewer Rates 4.1. Proposed System Fees Table 16 presents the detailed calculation of the proposed fixed System Fees, which are based on the Customer Service and Capacity unit costs. Customer costs do not vary to by connection size or type. Therefore, the Customer unit cost, previously derived in Column C, Line 4 of Table 13, is applied uniformly to all System Fees (Column A). Capacity costs vary with the potential to contribute wastewater. The collection system is sized to safely convey the wastewater generated in a given area, based on the number and type of customers. The size of a customer’s water meter is used as a proxy for potential wastewater contributions. As part of the permitting process for new property uses, the District requires a count of water fixtures, such as sinks, toilets, and faucets, that will be installed at a new location. The required meter size is directly based on these factors. Therefore, it is reasonable to assume that customers with a larger water meter generate more wastewater. To derive the rate component that recovers Capacity costs, the unit cost (Table 13, Line 6, Column C) is multiplied by the AWWA capacity ratio for each meter size (Table 5, Column H). For example, the 1” meter Capacity cost (Column B, Line 3) is derived by multiplying the 5/8” equivalent cost (Line 1) by 1.67 (Table 4, Column H, Line 3). The fixed charge components in Columns A and B are added and rounded to the next penny in Column C to derive the total System Fee. Table 16: Proposed System Fees (A)(B)(C) Meter Size 1 5/8"3.86$ 16.88$ 20.75$ 2 3/4"3.86 16.88 20.75 3 1"3.86 28.13 32.00 4 1 1/2"3.86 56.26 60.13 5 2"3.86 90.01 93.88 6 3"3.86 196.90 200.77 7 4"3.86 354.42 358.29 8 6"3.86 787.60 791.46 9 8"3.86 1,350.16 1,354.03 10 10"3.86 2,137.76 2,141.63 Line Description Customer Service Capacity Related Total Otay Water District / Sewer Rate Study 23 4.2. Proposed Usage Fees Usage Fees are designed to recover the portion of the rate revenue requirement allocated to the Flow, BOD, and TSS cost causation components. 4.2.1. Flow Component Table 17 shows the calculation of the Flow rate component. Each class’s share of costs was previously calculated in Table 14, Column A and is restated below in Column A. Billable wastewater volumes from Table 4, Column C are shown in Column B. The Flow rate component in Column C is the result of dividing Column A by Column B. All customers pay the same amount per Ccf since Flow costs are those related to the volume of wastewater the District handles. Table 17: Flow Component 4.2.2. BOD Component Table 18 shows the calculation of the BOD rate component. Each class’s share of costs was previously calculated in Table 14, Column B and is restated below in Column A. Billable wastewater volumes from Table 4, Column C are shown in Column B. The BOD rate component in Column C is the result of dividing Column A by Column B. This rate component varies between customer class in proportion to the BOD strength of their contributed wastewater. Table 18: BOD Component (A)(B)(C) Class SFR 784,439$ 412,088 1.90$ MFR 147,545 77,510 1.90 Commercial Low Strength 109,954$ 57,762$ 1.90$ Medium Strength 26,047 13,683 1.90 High Strength 7,606 3,996 1.90 Description Cost Billed Units Rate ($/Ccf) (A)(B)(C) Class SFR 431,782$ 412,088 1.05$ MFR 81,214 77,510 1.05 Commercial Low Strength 40,901$ 57,762$ 0.71$ Medium Strength 19,378 13,683 1.42 High Strength 11,318 3,996 2.83 Description Cost Billed Units Rate ($/Ccf) Otay Water District / Sewer Rate Study 24 4.2.3. TSS Component Table 19 shows the calculation of the TSS rate component. Each class’s share of costs was previously calculated in Table 14, Column C and is restated below in Column A. Billable wastewater volumes from Table 4, Column C are shown in Column B. The TSS rate component in Column C is the result of dividing Column A by Column B. This rate component varies between customer class in proportion to the TSS strength of their contributed wastewater. Table 19: TSS Component 4.2.4. Total Proposed Usage Fee Table 20 presents the total proposed Usage Fee. The components in Columns A, B, and C (derived in Table 17, Table 18, and Table 19) are added and rounded to the next penny in Column D to derive the total Usage Fee. Table 20: Total Proposed Usage Fee (A)(B)(C) Class SFR 334,756$ 412,088 0.81$ MFR 62,964 77,510 0.81 Commercial Low Strength 35,128$ 57,762$ 0.61$ Medium Strength 16,643 13,683 1.22 High Strength 9,720 3,996 2.43 Cost Billed Units Rate ($/Ccf)Description (A)(B)(C)(D) Class SFR 1.90$ 1.05$ 0.81$ 3.77$ MFR 1.90 1.05 0.81 3.77 Commercial Low Strength 1.90$ 0.71$ 0.61$ 3.22$ Medium Strength 1.90 1.42 1.22 4.54 High Strength 1.90 2.83 2.43 7.17 Description Flow BOD TSS Total Otay Water District / Sewer Rate Study 25 4.3. Bill Impacts The following Tables present sample monthly bills for each customer class. Bill impacts reflect the complete effect of the new Usage Fee, new System Fee, and updated return factors in the test year but do not yet include the impact of the District’s revenue increase that will be applied before rate adoption in January 2026. SFR bills utilize the most common meter size and a range of average winter consumptions to provide a representative sample of impacts across many customers. MFR bill impacts show data for the District’s actual customers. Bills for individual apartment buildings have been consolidated into a total for each of the five complexes in the District. Commercial bills impacts include all bills for each of the District’s actual commercial customers. Table 21: SFR Bill Impacts Table 22: MFR Bill Impacts Meter Size Average Winter Consumption Current Billed WW Proposed Billed WW Fixed $Volume $Total $Fixed $Volume $Total $$% 1 3/4"3.00 2.55 2.37 19.87$ 9.08$ 28.95$ 20.75$ 8.93$ 29.68$ 0.74$ 2.5% 2 3/4"5.00 4.25 3.95 19.87 15.13 35.00 20.75 14.89 35.64 0.64 1.8% 3 3/4"9.00 7.65 7.11 19.87 27.23 47.10 20.75 26.80 47.55 0.45 1.0% 4 3/4"11.00 9.35 8.69 19.87 33.29 53.16 20.75 32.76 53.51 0.36 0.7% 5 3/4"14.00 11.90 11.06 19.87 42.36 62.23 20.75 41.70 62.45 0.21 0.3% 6 3/4"28.00 23.80 22.12 19.87 84.73 104.60 20.75 83.39 104.14 (0.46) -0.4% Line ImpactCustomer Demand Current Proposed Meter Size Average Winter Consumption Current Billed WW Proposed Billed WW Fixed $Volume $Total $Fixed $Volume $Total $$% 1 Multiple 1,790.92 1,522.28 1,576.01 3,732.02$ 5,419.32$ 9,151.34$ 2,645.16$ 5,941.56$ 8,586.72$ (565)$ -6.2% 2 Multiple 3,662.92 3,113.48 3,223.37 5,875.60 11,084.00 16,959.60 3,473.56 12,152.10 15,625.66 (1,333.93) -7.9% 3 Multiple 433.33 368.33 381.33 297.77 1,311.26 1,609.03 200.77 1,437.62 1,638.39 29.36 1.8% 4 Multiple 947.42 805.31 833.73 595.54 2,866.89 3,462.43 401.54 3,143.16 3,544.70 82.27 2.4% 5 Multiple 505.33 429.53 444.69 158.80 1,529.13 1,687.93 93.88 1,676.48 1,770.36 82.43 4.9% Line ImpactCustomer Demand Current Proposed Otay Water District / Sewer Rate Study 26 Table 23: Commercial Bill Impacts Meter Size Average Annual Consumption Current Billed WW Proposed Billed WW Fixed $Volume $Total $Fixed $Volume $Total $$% 1 3/4"3.58 3.04 3.58 19.87 12.32 32.19 20.75 16.25 37.00 4.81 14.9% 2 3/4"6.92 5.88 6.92 19.87 20.94 40.81 20.75 22.28 43.03 2.22 5.4% 3 3/4"5.00 4.25 5.00 19.87 24.23 44.10 20.75 35.85 56.60 12.51 28.4% 4 3/4"5.00 4.25 5.00 19.87 15.13 35.00 20.75 16.10 36.85 1.85 5.3% 5 3/4"1.17 0.99 1.17 19.87 4.03 23.90 20.75 5.31 26.06 2.16 9.1% 6 3/4"24.83 21.11 24.83 19.87 75.14 95.01 20.75 79.95 100.70 5.70 6.0% 7 3/4"14.92 12.68 14.92 19.87 45.15 65.02 20.75 48.04 68.79 3.77 5.8% 8 3/4"5.67 4.82 5.67 19.87 17.16 37.03 20.75 18.26 39.01 1.98 5.3% 9 2"86.58 73.59 86.58 158.80 261.99 420.79 93.88 278.79 372.67 (48.12) -11.4% 10 3/4"23.42 19.91 23.42 19.87 70.87 90.74 20.75 75.41 96.16 5.42 6.0% 11 3/4"5.83 4.96 5.83 19.87 17.64 37.51 20.75 18.77 39.52 2.01 5.4% 12 1 1/2"501.00 425.85 501.00 99.25 1,724.69 1,823.94 60.13 2,274.54 2,334.67 510.73 28.0% 13 3/4"1.00 0.85 1.00 19.87 3.03 22.90 20.75 3.22 23.97 1.07 4.7% 14 3/4"1.00 0.85 1.00 19.87 3.03 22.90 20.75 3.22 23.97 1.07 4.7% 15 1 1/2"32.50 27.63 32.50 99.25 157.46 256.71 60.13 233.03 293.16 36.44 14.2% 16 2"140.75 119.64 140.75 158.80 425.91 584.71 93.88 453.22 547.10 (37.61) -6.4% 17 3/4"4.17 3.54 4.17 19.87 12.62 32.49 20.75 13.43 34.18 1.69 5.2% 18 3/4"0.08 0.07 0.08 19.87 0.24 20.11 20.75 0.26 21.01 0.90 4.5% 19 2"41.33 35.13 41.33 158.80 200.24 359.04 93.88 296.34 390.22 31.17 8.7% 20 1 1/2"148.17 125.94 148.17 99.25 448.36 547.61 60.13 477.11 537.24 (10.38) -1.9% 21 2"7.67 6.52 7.67 158.80 23.21 182.01 93.88 24.70 118.58 (63.43) -34.9% 22 2"55.42 47.11 55.42 158.80 167.70 326.50 93.88 178.45 272.33 (54.17) -16.6% 23 1"25.83 21.96 25.83 49.64 78.16 127.80 32.00 83.17 115.17 (12.63) -9.9% 24 2"43.25 36.76 43.25 158.80 130.87 289.67 93.88 139.27 233.15 (56.53) -19.5% 25 3/4"32.58 27.69 32.58 19.87 98.59 118.46 20.75 104.91 125.66 7.20 6.1% 26 1"38.08 32.37 38.08 49.64 115.23 164.87 32.00 122.62 154.62 (10.25) -6.2% 27 2"80.50 68.43 80.50 158.80 277.12 435.92 93.88 365.47 459.35 23.43 5.4% 28 2"12.50 10.63 12.50 158.80 37.83 196.63 93.88 40.25 134.13 (62.50) -31.8% 29 2"36.00 30.60 36.00 158.80 108.94 267.74 93.88 115.92 209.80 (57.94) -21.6% 30 2"157.75 134.09 157.75 158.80 764.30 923.10 93.88 1,131.07 1,224.95 301.85 32.7% 31 2"73.58 62.54 73.58 158.80 253.30 412.10 93.88 334.05 427.93 15.83 3.8% 32 10"2,241.75 1,905.49 2,241.75 2,282.91 6,783.54 9,066.45 2,141.63 7,218.44 9,360.07 293.62 3.2% 33 3/4"2.92 2.48 2.92 19.87 10.05 29.92 20.75 13.26 34.01 4.08 13.7% 34 1 1/2"74.75 63.54 74.75 99.25 257.33 356.58 60.13 339.37 399.50 42.92 12.0% 35 1 1/2"1.00 0.85 1.00 99.25 4.85 104.10 60.13 7.17 67.30 (36.80) -35.3% 36 1 1/2"11.50 9.78 11.50 99.25 34.80 134.05 60.13 37.03 97.16 (36.89) -27.5% 37 1 1/2"79.25 67.36 79.25 99.25 239.81 339.06 60.13 255.19 315.32 (23.75) -7.0% 38 1 1/2"74.58 63.39 74.58 99.25 256.74 355.99 60.13 338.59 398.72 42.73 12.0% 39 1 1/2"58.42 49.66 58.42 99.25 176.78 276.03 60.13 188.11 248.24 (27.79) -10.1% 40 3/4"40.17 34.14 40.17 19.87 121.55 141.42 20.75 129.35 150.10 8.67 6.1% 41 1"341.00 289.85 341.00 49.64 1,031.87 1,081.51 32.00 1,098.02 1,130.02 48.51 4.5% 42 3/4"7.25 6.16 7.25 19.87 21.94 41.81 20.75 23.35 44.10 2.29 5.5% 43 1"10.58 8.99 10.58 49.64 32.02 81.66 32.00 34.07 66.07 (15.59) -19.1% 44 2"146.58 124.59 146.58 158.80 443.55 602.35 93.88 471.99 565.87 (36.48) -6.1% 45 3/4"1.00 0.85 1.00 19.87 3.03 22.90 20.75 3.22 23.97 1.07 4.7% Line ImpactCustomer Demand Current Proposed Otay Water District / Sewer Rate Study 27 Meter Size Average Annual Consumption Current Billed WW Proposed Billed WW Fixed $Volume $Total $Fixed $Volume $Total $$% 46 3/4"1.00 0.85 1.00 19.87 3.03 22.90 20.75 3.22 23.97 1.07 4.7% 47 2"37.92 32.23 37.92 158.80 114.75 273.55 93.88 122.10 215.98 (57.56) -21.0% 48 1 1/2"51.00 43.35 51.00 99.25 154.33 253.58 60.13 164.22 224.35 (29.23) -11.5% 49 2"22.58 19.19 22.58 158.80 68.33 227.13 93.88 72.71 166.59 (60.54) -26.7% 50 1"115.92 98.53 115.92 49.64 350.77 400.41 32.00 373.26 405.26 4.85 1.2% 51 2"137.75 117.09 137.75 158.80 416.83 575.63 93.88 443.56 537.44 (38.20) -6.6% 52 2"22.25 18.91 22.25 158.80 67.33 226.13 93.88 71.65 165.53 (60.60) -26.8% 53 2"56.25 47.81 56.25 158.80 193.64 352.44 93.88 255.38 349.26 (3.19) -0.9% 54 2"10.58 8.99 10.58 158.80 32.02 190.82 93.88 34.07 127.95 (62.87) -32.9% 55 2"46.08 39.17 46.08 158.80 139.44 298.24 93.88 148.38 242.26 (55.98) -18.8% 56 1 1/2"57.25 48.66 57.25 99.25 173.24 272.49 60.13 184.35 244.48 (28.01) -10.3% 57 1 1/2"52.75 44.84 52.75 99.25 181.59 280.84 60.13 239.49 299.62 18.77 6.7% 58 1 1/2"28.50 24.23 28.50 99.25 86.24 185.49 60.13 91.77 151.90 (33.59) -18.1% 59 1 1/2"31.75 26.99 31.75 99.25 96.08 195.33 60.13 102.24 162.37 (32.96) -16.9% 60 2"31.42 26.71 31.42 158.80 108.16 266.96 93.88 142.65 236.53 (30.44) -11.4% 61 2"152.33 129.48 152.33 158.80 524.40 683.20 93.88 691.58 785.46 102.26 15.0% 62 1 1/2"56.58 48.09 56.58 99.25 274.13 373.38 60.13 405.68 465.81 92.43 24.8% 63 1 1/2"35.42 30.11 35.42 99.25 121.93 221.18 60.13 160.81 220.94 (0.25) -0.1% 64 3/4"9.00 7.65 9.00 19.87 27.23 47.10 20.75 28.98 49.73 2.63 5.6% 65 2"5.00 4.25 5.00 158.80 15.13 173.93 93.88 16.10 109.98 (63.95) -36.8% 66 2"98.83 84.01 98.83 158.80 299.06 457.86 93.88 318.23 412.11 (45.75) -10.0% 67 3/4"1.33 1.13 1.33 19.87 4.02 23.89 20.75 4.28 25.03 1.14 4.8% 68 3"281.67 239.42 281.67 297.77 852.33 1,150.10 200.77 906.98 1,107.75 (42.36) -3.7% 69 1 1/2"19.83 16.86 19.83 99.25 60.01 159.26 60.13 63.85 123.98 (35.27) -22.1% 70 1 1/2"16.08 13.67 16.08 99.25 48.66 147.91 60.13 51.78 111.91 (36.00) -24.3% 71 3/4"16.42 13.96 16.42 19.87 49.69 69.56 20.75 52.87 73.62 4.07 5.8% 72 3/4"1.25 1.06 1.25 19.87 3.78 23.65 20.75 4.03 24.78 1.12 4.7% 73 1 1/2"38.83 33.01 38.83 99.25 188.13 287.38 60.13 278.41 338.54 51.16 17.8% 74 6"17.83 15.16 17.83 992.56 53.95 1,046.51 791.46 57.41 848.87 (197.64) -18.9% 75 1 1/2"54.25 46.11 54.25 99.25 164.16 263.41 60.13 174.69 234.82 (28.60) -10.9% 76 1 1/2"72.25 61.41 72.25 99.25 218.63 317.88 60.13 232.65 292.78 (25.10) -7.9% Line ImpactCustomer Demand Current Proposed STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: April 2, 2025 SUBMITTED BY: Ming Zhao, GIS Manager PROJECT: Various DIV. NO.ALL APPROVED BY: Adolfo Segura, Chief of Administrative Services Jose Martinez, General Manager SUBJECT: AWARD A PROFESSIONAL SERVICES CONTRACT TO AXIM GEOSPATIAL FOR THE ARCGIS GEOMETRIC TO UTILITY NETWORK MIGRATION IN AN AMOUNT NOT-TO-EXCEED $450,000 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award a professional services contract to Axim Geospatial (Axim) to migrate the District’s ArcGIS Geometric Network to the Utility Network in an amount not-to-exceed $450,000. COMMITTEE ACTION: Please see “Attachment A.” PURPOSE: To obtain Board approval for the General Manager to enter into a contract with Axim to provide software, data structure, and implementation services to migrate the District’s ArcGIS Geometric Network to the Utility Network in an amount not-to-exceed $450,000. ANALYSIS: The District has been using Esri’s ArcGIS Geometric Network (GN) as its asset management (AM) platform since 2001 to manage its water, wastewater, and reclaimed water infrastructure. With Esri’s end-of-life support announcement of the GN framework, the District must transition to the new ArcGIS Utility Network (UN) to maintain long-term essential support and functionality of critical AM program applications and services. This transition represents a significant technological AGENDA ITEM 5 advancement, offering improved data management, enhanced operational workflows, and a modern service-oriented architecture. To support the transition to UN, the District requires Geographic Information System (GIS) services. To procure these services efficiently while ensuring compliance with procurement policies, staff recommends utilizing a pre-negotiated contract available through the Federal General Services Administration (GSA) Multiple Award Schedule (MAS) program. The GSA is a federal agency that provides centralized procurement solutions for government entities, offering pre-negotiated contracts for a wide range of goods and services. GSA contracts provide pre-vetted vendors, competitive pricing, and a streamlined acquisition process, reducing administrative burden while maintaining procurement integrity. The GSA MAS program establishes long-term government-wide contracts with vendors that meet stringent qualification criteria. To ensure only highly qualified vendors participate, the selection process includes: • Competitive solicitation and evaluation of vendor qualifications, past performance, and pricing. • Negotiation of fair and reasonable pricing, ensuring cost efficiency for government agencies. • Compliance with Federal Acquisition Regulations (FAR), including vendor audits and performance tracking. Once a contract is awarded, agencies such as the District may "piggyback" on the GSA schedule through cooperative purchasing. The District’s Purchasing Policy (Section 6.2.3: Cooperative/Joint Purchases) explicitly permits the use of cooperative contracts, multiple award schedules, and agreements awarded by federal agencies, states, municipalities, or public agencies. Specifically, Section 6.2.3 states: “The Purchasing and Facilities Manager may utilize cooperative/'piggyback' contracts, multiple award schedules, and joint power agreements awarded by Federal agencies, any state, municipality, or public agency to purchase goods and services, up to the General Manager’s authorized approval limit or subject to Board of Directors’ approval when the General Manager’s authority is exceeded. These purchases are exempt from the District’s competitive solicitation requirements so long as the contracts, schedules, and agreements are solicited in a manner substantially consistent with District purchasing policies.” (Rev. 2017-05-03) Since GSA contracts are awarded through a structured competitive solicitation process, they align with the District’s requirement for substantial consistency with District purchasing policies, making them an appropriate procurement vehicle for this contract. The GSA contract for GIS services was originally awarded to Geographic Information Services, Inc. (GIS Inc.) under GSA Contract No. GS-35F- 0682R, following a negotiation process compliant with GSA procurement regulations. This contract was established to provide critical GIS services, including software licenses and IT professional support. In 2022, GIS Inc. was acquired by Axim, a leading geospatial solutions provider. Under the terms of the acquisition, Axim assumed all contractual obligations under the existing GSA framework, ensuring uninterrupted service to clients, including the District. Axim is an Esri Platinum Partner specializing in: • Enterprise GIS Solutions – Development and integration of GIS platforms to enhance operational efficiency. • Data Management & Analytics – Advanced spatial data analysis, visualization, and reporting. • Cloud & On-Premises GIS Deployment – Flexible GIS solutions that support both cloud-based scalability and on-premises reliability. • Geospatial Application Development – Custom GIS applications for asset management, emergency response, and infrastructure planning. Axim Geospatial is a leading provider of geospatial solutions with over 33 years of experience helping water utilities modernize their GIS infrastructure. As an Esri Platinum Partner, Axim specializes in ArcGIS Utility Network (UN) implementations and has supported over 45 water utilities, including some of the largest UN deployments in the country, such as City of Houston, Charlotte Water, and Austin Water. Axim was the first Esri business partner with a water utility focus to earn the Utility Network Management Specialty designation and played a key role in the beta development of the UN framework for the water domain. In addition to its expertise in GIS, Axim is the only firm to hold Platinum Partner status with both Esri and Cityworks, making it uniquely positioned to support the integration of GIS and enterprise asset management solutions. This dual partnership enables Axim to optimize workflows, improve asset tracking, and enhance operational efficiencies for water utilities. With a team of more than 1,300 geospatial professionals, Axim provides end-to-end GIS and asset management solutions, including enterprise GIS integration, data management, cloud and on-premises deployment, and geospatial application development. Their expertise in both ArcGIS and Cityworks ensures a seamless transition to modern GIS environments, minimizing disruptions and optimizing operational workflows for agencies like the Otay Water District. Following is a list of local water agencies where Axim has conducted similar work: • Olivenhain Water District • Padre Dam Municipal Water District • Sweetwater Authority • Vallecitos Water District In early 2024, Axim conducted a Utility Network Readiness Assessment for the District. This assessment included workshops and documentation evaluating the District's current GIS environment and readiness for migration. Axim's proposal outlines an implementation plan for transitioning the District to the UN framework, leveraging their extensive expertise and leadership in GIS transformations for water utilities. Axim brings unparalleled qualifications to this project, including: • Extensive Water Utility Experience: Axim was the first Esri partner focused on water utilities to earn the Utility Network Management Specialty designation and has implemented similar projects for clients such as the City of Houston, Charlotte Water, and Austin Water. • Esri and Cityworks Expertise: As a Platinum Partner of both Esri and Cityworks, Axim is uniquely positioned to align GIS systems with asset management platforms effectively. • Comprehensive Approach: Axim employs a structured five-phase implementation process to minimize disruptions, covering planning, design, development, testing, and final implementation. Project Scope and Activities The proposed project will focus on database schema preparation, data migration, system architecture design, and user training. Key activities include: • Geodatabase Design and Data Migration: Preparation and migration of data for water, wastewater, and reclaimed systems. • Pilot Testing: Validation of configurations and workflows before full-scale implementation. • System Integration: Seamless integration with existing systems, including Cityworks, POSM, InfoWater, and InfraMap. • User Training and Support: Comprehensive training for District staff to ensure successful adoption of the new system. Project Implementation Plan Axim’s structured implementation pattern includes readiness assessments, data preparation, database design, data mapping, and migration tool configuration. Following pilot testing and validation, the system will transition to an enterprise environment for further testing and final deployment. Key Phases and Timeline • Project Initiation (1–2 months): Team setup, timeline confirmation, and kickoff workshops. • Planning Workshops and Documentation (1–2 months): Development of detailed system architecture and workflow requirements. • Geodatabase Design (3–4 months): Database schema design and crosswalking data to the UN. • Data Migration Planning and Configuration (3–4 months): Configuration of data migration tools (e.g., FME) and processes. • Environment Support (1–2 months): Configuration of development, testing, and production environments. • Implementation Testing and Training (2–3 months): Pilot testing and initial user training. • Final Implementation (2–3 months): Full deployment of the production environment, system integrations, and system go-live. Project Schedule Axim anticipates an overall duration of approximately 18 months to complete this project scope. While the schedule is flexible, testing, user training, and final implementation tasks generally occur in a short sequence to complete the project. The project team may collectively decide to adjust the schedule during the project kickoff meeting. Task Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Project Initiation Planning Workshops and Documentation Geodatabase Design Data Migration Planning and Configuration Environment Support Implementation Testing and Training Final Implementation The structural, functional, and operational design of the ArcGIS Utility Network represents a transformative step forward for utilities and infrastructure GIS programs. By adopting this modern, service-oriented architecture, the District ensures its GIS capabilities remain aligned with contemporary best practices and positioned for future innovation. The District recommends awarding a professioanl services contract to Axim to implement the ArcGIS Utility Network and transition the District’s GIS infrastructure to this advanced framework. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Otay Water District, as a public agency, is authorized to make purchases available through GSA’s contracts and MAS program. By utilizing GSA contracts, the District can leverage pre-negotiated pricing, streamline procurement processes, and achieve cost savings. This approach aligns with the District's commitment to fiscal responsibility and operational efficiency while ensuring compliance with procurement regulations. The project will be completed under GSA Contract - Schedule 70 GS-35F- 0682R pricing. The total cost will be determined during the final negotiation phase, based on final scope of services. Axim has committed to minimizing disruptions and ensuring cost efficiency by leveraging their in-house expertise and established methodologies. The approved capital budget for FY25 for CIP P2715 Replacement and Update of the District’s Utility Network Framework, is $450,000. Based on financial analysis, the Project Manager anticipates that the budget will be sufficient to support this project. Finance has determined that 67% of the funding is available from the Replacement Fund and 33% from the Betterment Fund. STRATEGIC GOAL: This project aligns with the strategic objective of “Conversion of the District’s Enterprise Geographic Information System (GIS/Esri) from a Geometric Network to a Utility Network Model.” LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Proposal from Axim Geospatial ATTACHMENT A SUBJECT/PROJECT: AWARD A PROFESSIONAL SERVICES CONTRACT TO AXIM GEOSPATIAL FOR THE ARCGIS GEOMETRIC TO UTILITY NETWORK MIGRATION IN AN AMOUNT NOT-TO-EXCEED $450,000 COMMITTEE ACTION: This item was presented to the Finance & Administration Committee at a meeting held on March 19, 2025. The Committee supports presentation to the full Board. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full Board. © Axim Geospatial 2021. All Rights Reserved. Otay Water District ArcGIS Utility Network Implementation & Digital Twin Project GSA Contract Schedule 70 GS-35F-0682R November 19, 2024 Proposal Submitted by: John Garrido john.garrido@nv5.com 909.645.9560 Axim Geospatial, an NV5 Company ATTACHMENT B 1 November 19, 2024 Leonel Torres GIS Analyst 2554 Sweetwater Springs Blv Spring Valley, CA 91978 Leonel.torres@otaywater.gov Dear Leonel, Axim Geospatial, an NV5 company, is pleased to submit our proposal for the ArcGIS Utility Network Implementation project for your Water, Reclaimed and Wastewater systems. This project will be completed under the following GSA contract pricing, GISinc is a wholly owned subsidiary of Axim Geospatial. GSA Contract - Schedule 70 GS-35F-0682R Why Select the Axim Team?  Most Qualified Water Utilities Experience – Axim Geospatial is an Esri Platinum Partner, currently serving over 40 water utilities and was the first Esri business partner with a water utility focus to earn the Utility Network Management Specialty Designation while participating in the beta program for the development of the UN frameworks (Water Domain). Axim’s unmatched experience in the Utility Network involves some of the largest water implementation in the country including City of Houston, Charlotte Water, Austin Water, Aqua Water Supply Corp, and several others.  Premier GIS and Cityworks Provider –Axim is the only firm to achieve Platinum Partner status with Cityworks and Esri for our engagement, experience, and contribution levels within both technical communities. Axim also participates in Esri’s Partner Advisory (PAC) and CTO Councils, where we can influence business and technical initiatives within Esri. This partnership status allows our team to understand the intricacies of both environments, which will prove beneficial to supporting Otay Water District and continue to help optimize the District’s GIS environment well into the future.  Breadth and Depth of Experience – Axim Geospatial is known for its unmatched, personalized level of service across the country. With over 1,300 geospatial professionals, Axim is prepared to handle any aspect of the project that arises and minimize system disruptions and downtime to users. Please contact me if you would like additional information. We look forward to working together for the successful accomplishment of this project. Sincerely, John Garrido Account Executive John.garrido@nv5.com Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 2 IMPLEMENTATION PLAN AND METHODOLOGY Statement of Understanding Otay Water District (the District), CA, recognizes the value of investing in location technology to manage, analyze, and visualize data to support business processes and organizational missions. Over time, as location technology platforms and solutions advance, incremental adjustments and updates are periodically replaced by sweeping transformation. Such is the case for implementing the ArcGIS Utility Network (UN). As the foundation of a program and a defining contributor to success, the transition requires a great deal of strategy and planning. The District’s GIS platform originated in 2001 with Esri’s geometric network (GN) and AM/FM data model. Additionally, third-party systems have been developed to facilitate and streamline network editing, supporting operations, and maintenance workflows. The geometric network was an effective model for many years and technically remains so today. Still, the structure has also been slated for deprecation, triggering organizations nationwide to consider the eventual replacement by the ArcGIS Utility Network. The structural, functional, and operational design of the UN genuinely represents a significant transformation in the technological paradigm that supports utilities and infrastructure GIS programs. The magnitude of this transformation is expected to be as impactful and powerful as those from paper-to- digital and CAD-to-GIS. The underlying geodatabase model will change fundamentally, but the shift from a database-focused architecture to a service-oriented architecture will provide the foundation for contemporary GIS best practices and solution innovations for years to come. Present desktop solutions will be replaced by ArcGIS Pro, requiring users to reorient to software interfaces and standardize operating procedures, and configurations/integrations with asset management systems will need to be updated. We understand Otay Water District is looking for a partner to help facilitate and define the pathway for successfully adopting the ArcGIS Utility Network. Through a UN Readiness Assessment and Requirements Workshop, Axim has already engaged the District’s staff to understand the current technology and data landscape through a data and system architecture review to produce documentation to guide subsequent UN implementation. Our approach was holistic and encompassed architecture and environment, not strictly data, to help ensure the resulting system is responsive and capable of performing to standards and expectations. Axim will now focus on the data schema in preparing for the translation processes and target database structure to support existing data and ongoing business processes. To validate our understanding and the resulting output, we will facilitate a pilot implementation targeting a subset of the data and evaluating migrated data, workflows, and technical architecture. After completing a successful pilot initiative, Axim will facilitate the District’s transition to a production version of the ArcGIS Utility Network. This transition includes the implementation, adoption, training, data migration, and corresponding production release support. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 3 Conceptual Approach At a high level, all Axim implementations of the ArcGIS Utility Network follow the pattern above. Data and readiness assessments lead to data preparation, database design, data mapping, and migration tool configuration. Technical readiness assessments lead to staff preparation, architecture design, integration planning, and asset business rules. A series of one or more file geodatabase implementations include advanced configuration, network validation, integration development, and potential design refinements. This is first done in a file geodatabase and, upon initial acceptance, will be deployed and further tested in an Enterprise development environment. User acceptance testing must be established in this environment before final data migrations and the system go-live. This pattern has proven successful for Axim clients from a wide variety of scales and vendor support strategies. Detailed Approach The District currently maintains water, wastewater and reclaimed water data in respective geometric networks and now wishes to continue implementation of the ArcGIS Utility Network for all three systems. As a part of the Utility Network Readiness Assessment project, Axim hosted a remote Requirements Workshop in February of 2024 to facilitate the continued progress toward reimplementing. To describe how Axim will execute the project, our proposal follows a chronological narrative of our project approach. Each phase is essentially dependent on the successful completion of the predecessor and, as such, will be considered to occur in strict sequence unless otherwise coordinated and mutually agreed upon. Planning and Analysis The Planning and Analysis phase is an umbrella of project management and coordination tasks throughout each phase of the project’s lifecycle. Project Management Approach Axim employs two interwoven tracks to help ensure success. First, we bring a proven project management approach that establishes controls and ensures communications and delivery. Second, we offer a technical approach tailored to the scope of services through which our expertise is translated into solutions. The following sections provide an overview of our project management approach and a task-level breakdown of the technical approach. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 4 Each project engagement with Axim is structured according to five phases that have proven adaptable and repeatable and can reliably produce successful results. In the case of the proposed project with Otay Water District, we will leverage the established five phases to manage the overarching project and provide the structured approach necessary to guide the successful execution of each task.  Planning & Analysis: The Planning & Analysis phase starts our project lifecycle and sets the broad execution parameters. It is communication-centric, beginning with the project kickoff meeting and scheduling the project reviews. Axim will review the project’s budget and schedule and establish project controls, including a client satisfaction survey when the project is complete.  Design: The Design phase is the point in the project during which our UN team gathers information and documentation to guide the course of the effort. We will focus on establishing the background that will drive the project forward, which is a critical step before moving on to the development process. We work on relevant considerations such as functional requirements, database design, configuration requirements, system architecture, and compiling or creating all associated documentation.  Development: Although this is not a traditional development project, in the sense of coding or programming, we consider Development to encompass more generically the core effort of a project that centers on the primary deliverables. Development can also be considered a reference to the environment, in a way, since much of the work completed within this phase would be carried out in a lower tier from any production system to mitigate the potential for end-user disruption. Several iterations of user knowledge transfer and client review will occur throughout this phase to ensure proper direction and adjustments are made early in the process.  Testing & Acceptance: Testing and Acceptance will imply a narrower deployment-centric perspective. This phase addresses all aspects of QA/QC, deliverable review, and acceptance. This includes time to orient power users to the new system for adequate testing. This phase is vital and distributed into each task, with each core deliverable undergoing an internal and external review before eventual acceptance.  Implementation: Implementation is incorporated into each phase and refers to finalizing, presenting, and distributing all deliverables. Certain aspects or tasks of the Development Phase may be repeated to construct the necessary target environment. Still, much of the core deployment effort will be specific to the system or product(s) being released. A vital part of the Implementation phase may be a more formalized orientation for users to the new environment. Project Initiation One of the first steps in the proposed project is a kickoff meeting between Axim and the the District project management team intended to facilitate introductions, briefly review the scope, and initiate coordination for the project. Axim will prepare a meeting agenda, outline a project management plan, and draft initial documentation regarding communications, responsibilities, and protocols governing the project. Summary documentation and a detailed project plan will be provided to the District project manager following the kickoff meeting. We will establish monthly recurring status meetings at the kickoff meeting to identify upcoming tasks, review decision points, and discuss the project’s overall status. Technical calls will be scheduled separately with the appropriate stakeholders as needed. Axim will provide a monthly written status report detailing information on schedule and budget progress, tasks completed, risks, upcoming milestones, etc. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 5 Project Schedule Axim anticipates an overall duration of approximately 18 months to complete this project scope. While the schedule is flexible, testing, user training, and final implementation tasks generally occur in a short sequence to complete the project. The project team may collectively decide to adjust the schedule during the project kickoff meeting. Significant milestones and project activities can generally be summarized as follows: Task Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Project Initiation Planning Workshops and Documentation Geodatabase Design Data Migration Planning and Configuration Environment Support Implementation Testing and Training Final Implementation  Project Initiation (1-2 months): Initial project setup, including team assignments, timeline confirmation, and kick-off workshops.  Planning Workshops and Documentation (1-2 months): Conduct planning workshops to develop detailed documentation of the system architecture and workflow requirements.  Geodatabase Design (3-4 months): Complete the database schema design, including crosswalking data from the current system to the UN.  Data Migration Planning and Configuration (3-4 months): Configure data migration tools (FME) and set up processes for transitioning data into the UN.  Environment Support (1-2 months): Ensure the development, testing, and production environments are configured to support the UN deployment.  Implementation Testing (2-3 months): Pilot testing of the new systems, along with initial user training to validate configurations and workflows.  Final Implementation (2-3 months): Complete the transition to the production environment, ensure system integrations are finalized, and roll out the system for full operation. Summary of Key Actions:  Project kickoff meeting  Project management plan  Communication plan  Project status reporting Design Phase The Design phase comprises planning and design activities focused on determining the technical requirements to support business systems, data modeling, and outlining the migration transition. Data Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 6 conversion (FME) tools are configured, business rules are applied, and the initial configuration of the design is built. Staff is then trained for initial testing. Readiness Assessment and Implementation Plan As part of a previous project engagement, Axim reviewed the District’s water data and technical environment, resulting in a Water Data Readiness Assessment report. The District has since been referencing the report to guide its initial water data cleanup efforts. Unlike the full data readiness assessment that was performed for the water dataset, Axim will plan to provide an excel report of error counts and a FGDB of error locations for wastewater for the District to be able to easily identify and perform cleanup in parallel with the implementation. After evaluating the reclaimed system, Axim recommends the District address these errors separately throughout implementation as well as after migrating to the UN. Additionally, in collaboration with District staff, Axim prepared an Implementation Plan providing high- level direction on the sequence of events, general processes, and technical considerations for implementation. As noted in the Plan, schematic adoption and data migration efforts do not commonly impose a software update on organizations directly. There are, however, sometimes indirect or peripheral impacts that force a system upgrade. For example, adopting the ArcGIS Utility Network may affect the software and hardware. Unlike more traditional data structures, such as the Esri model with a geometric network, the official release of the ArcGIS Utility Network requires that users interface with the model at the desktop tier using a minimum of ArcGIS Pro 2.9 and ArcGIS Enterprise 10.9.1 (Server, Portal, Data Store, and Web Adaptor). Therefore, Axim strongly recommends implementation on the official Utility Network Management Release (NMR) for the most stable and long-term support. Notably, NMR 2 was released in early 2023, requiring ArcGIS Enterprise 11.1 and ArcGIS Pro 3.1. The NMR is designed to help organizations efficiently manage ArcGIS Enterprise and ArcGIS Pro software upgrades. The support cycle for Enterprise and ArcGIS Pro is four (4) years and two (2) years, respectively. Axim recommends remaining fully aligned to Esri’s 2023 NMR and beyond for long-term success with the UN. In addition to the Esri-specific software, Axim also recommends using the most current compatible OS version, Windows Server 2022, for all new servers to reduce future necessary upgrades. Summary of Key Actions:  Configure RBJ files: wastewater  Generate error report: wastewater  Generate FGDB of error locations: wastewater Integrations Planning Axim will work with District and third-party vendor staff to outline integration plans for the POSM, InfoWater, InfoSewer, InfoAsset Planner, KorTerra, and InfraMap cutovers. These plans will identify what activities need to occur, when they should be completed during the schedule, and who is responsible. The District has indicated that its staff will be responsible for updating the system configurations and will work with vendor staff to convert legacy data. Summary of Key Actions:  Outline POSM cutover plan  Outline InfoWater cutover plan  Outline InfoSewer cutover plan  Outline InfoAsset Planner cutover plan Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 7  Outline KorTerra cutover plan  Outline InfraMap cutover plan Local Development Environments Until the Testing phase, Axim will work primarily within our local server environment and file geodatabases (FGDB). The District will provide a complete export of the current water, wastewater, and reclaimed geodatabases, which we will deploy to our servers as the source for review, design, and migration activities. While the FGDB implementation activities will focus on a subset of the data, Axim needs to be able to review the complete database schema and holistically test for and anticipate migration scenarios that may occur outside the designated pilot area. The District will continue to edit and maintain the authoritative source data while Axim works against the exported, static data version. This static dataset will be used until the final Implementation phase, when the District will cease production editing activities and provide Axim with a complete, current export of the geodatabase. At specific points throughout, Axim may request a refreshed export of source data for more effective testing or configuration efforts. The intermediate data migration output and end-user products will be deployed to the District servers at appropriate times for the development, testing, and final implementation phases. Database Design Database design is facilitated through data modeling workshops, design documentation, database building, and final data mapping. Data Modeling and Design Workshops After completing the Data Readiness Assessment, the District launched a corresponding water data cleanup effort. In addition to the water cleanup effort, Axim expects there to be errors that will be recommended for cleanup generated from the wastewater data review. In parallel with this effort, the District is now ready to start designing a UN database schemas for the water, wastewater, and reclaimed water systems. Axim will first map the District’s existing source geodatabase features, attribute fields, and attribute values to the base UN base models provided by Esri for the water and wastewater domains. The reclaimed water system will be derived from Esri’s water base model and modified to include the necessary database design for the District’s reclaimed system. We assume this will be at Esri’s official 2023 Network Management Release (NMR) in alignment with the Implementation Road Map we previously delivered. Specifically, that consist of ArcGIS Enterprise 11.1, ArcGIS Pro 3.1, and version 6 of the UN. In preparation for a Design Workshop, Axim will begin mapping the District’s water, wastewater and reclaimed data to the respective ArcGIS Utility Network data models through feature class and attribute crosswalks. Usually, this is performed through standardized spreadsheets, which are then often used directly as the configuration inputs for the extract, transform, and load (ETL) migration tools. These Data Mapping crosswalks map the source data to the newly designed UN schema at both the feature class and attribute levels, even so far as mapping specific domain values. Axim will prepare the draft mappings to facilitate the data modeling workshop discussions. These discussions will allow Axim and the District to focus on verifying the feature, attribute, and domain mappings while identifying items that require extending the base model. After the workshops, Axim will finalize these Data Mapping crosswalks and provide them for client review and approval. Axim will initially populate these spreadsheets according to our experience and then Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 8 anticipates an iterative discussion during this phase to revise in preparation for the migration. Before the workshop, Axim will also host a brief UN Overview meeting to provide District staff with introductory information, allowing additional District staff to get oriented to the ArcGIS Utility Network. This initial overview is essential to lay the groundwork for understanding some of the technical and business drivers of the UN framework that may influence later data design and mapping decisions. Once the initial Data Mapping crosswalk spreadsheets are prepared, an Axim solution engineer intimate with the data modeling process, contemporary data models, and, most importantly, the ArcGIS Utility Network framework will facilitate a consolidated, 2.5-day on-site Data Modeling and Design Workshop for the three systems. Axim will coordinate with the District project management to identify and schedule the participating stakeholders. However, we assume that local access to calendars will allow District staff to take a lead role in the logistics. The agenda for the workshop will be finalized collaboratively with the District and will be considerate of schedules and availability. During the previous Readiness Assessment workshop, we discussed data-related technical requirements surrounding the water utility system, including business system dependencies. These discussions also included desired UN functionality, including business rules, tracing, and diagrams. Upon completing these initial requirement discussions, the Data Modeling and Design Workshop will be spent reviewing the database design requirements and detailed data mapping. These sessions will review the initial data mapping spreadsheets, allowing the District to review them in more detail with our team. This detailed data mapping is intended to identify and address places where the base Esri model must be extended for the District’s use, including additional feature types, attributes, and domain values. Any openings in the schedule will be leveraged to conduct summary conversations or can be used to facilitate broader conversations on technology conventions and standards that span all units. After the workshop, Axim will prepare a brief Workshop Summary document to review the meeting agenda and key findings, allowing the District to confirm we adequately captured the most important points of the discussions. Design Documentation The steps following the delivery of the workshop results transition to interpreting and translating those observations into the data model. Some requirements that result from the discussions will not immediately impact the eventual data model but may require process considerations. As we review data and processes with many clients, the existing structure can readily accommodate some perceived data model limitations with a deviation in workflow or process. Likewise, standard operating procedures and database management practices often emerge during discussions regarding data. These topics and their impact on the District will be noted in the design documentation, with a potential reference to remediation. However, if the effect does not directly influence the data model, we will not elaborate extensively. At this stage, Axim is ready to create Database Design documents detailing the proposed database schema resulting from the data modeling workshops. This documentation will primarily be Excel spreadsheets detailing all features, attribute fields, attribute values, and domains. In addition, concisely structured and supporting Word document narratives will explain key points and aid the spreadsheet’s navigation. Axim will provide a review meeting(s) to walk through the respective Database Design documents for the three systems. The District must thoroughly review these designs and provide any comments to Axim within five working days of the delivery of these documents. Upon conclusion of the review period, the District will provide Axim with a single source of consolidated feedback per system. Axim will track, review, and address the District’s feedback as appropriate in Jira and prepare finalized versions of the Data Mapping Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 9 Crosswalk spreadsheets and Database Design documents. When revisions are complete, Axim will coordinate with the District to begin the database build and migration processes. We have helped numerous utilities undertake similar implementations and ultimately approach the projects from a location technology and enterprise GIS perspective. As a result, we see our projects as partnerships with our clients rather than client-vendor contracts. Our domain expertise and understanding of best practices provide for strong collaborations when combined with our clients’ expertise in their respective industries. This creates a strong relationship that has generated much of our success and has allowed us to retain a singular, company-wide focus on GIS. In addition, we will rely on the District’s expertise in other specialized areas, such as engineering principles, to articulate related underlying requirements, which we can help encapsulate within the data model. Summary of Key Actions:  DRAFT Data Mapping Crosswalk spreadsheets: water, wastewater, reclaimed  UN Overview meeting  Onsite Data Modeling and Design Workshop (2½-day): water, wastewater, reclaimed data  Workshop Summary documentation: water, wastewater, reclaimed  DRAFT Database Design documentation: water, wastewater, reclaimed  Client Review meeting  FINAL Database Design documentation: water, wastewater, reclaimed  FINAL Data Mapping Crosswalk spreadsheets: water, wastewater, reclaimed  Client acceptance Development Phase The Development phase is the initial implementation of the technical design. This phase consists primarily of data conversion and FGDB UN configuration for all three systems, with opportunities for the District to review and approve the database builds. This work will be completed primarily by distributing file geodatabases and providing knowledge transfer to a small subset of core GIS stakeholders. The phase concludes by preparing the District’s Enterprise development environment for the ArcGIS Utility Network. It is imperative that the District plan for adequate time and focus during the review periods of the Development phase. The schema designs and configured UN functionality must be thoroughly tested and approved via iterative implementations while the UN is still in an FGDB format. In this manner, the UN is tested, and users become accustomed to its use through a single-user ArcGIS Pro deployment. Here, design adjustments must be made and verified before deployment into an Enterprise environment during the Testing phase. In some sense, the UN configuration is tested and verified in a file geodatabase before the workflows and services are tested during the Enterprise deployment. Data Conversion Data conversion transfers a source database to a new target database schema, accomplished by configuring extract, translate, and load (ETL) tools. The data conversion process will begin with migrations in file geodatabase format as part of the Development phase before migrating to Enterprise environments to support the final Testing and Implementation phases. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 10 Database Mapping and Build The geodatabase design task is a relatively straightforward, albeit time-consuming, task. First, Axim will craft the foundational UN schemas and modify or extend it as directed by the finalized Database Design and Data Mapping crosswalk documents. Axim will modify the Esri base asset package schemas (water and wastewater) to build UN models specific to the District’s design. This step allows us to capture and address all data design elements identified through the preceding design activities. The schema changes are expected to include new asset groups, asset types, domain values, and custom attribute fields. In addition, initial UN network management and attribute rules are configured to aid migration. Changes to the UN schema are made in the separate asset packages and then applied to the final UN geodatabases. These asset packages, essentially a file geodatabase, are more portable and easier to work with than an Enterprise geodatabase. Configuration of ETL Tools Once the database design is built into the asset packages, Axim will configure the FME/Data Interoperability migration tools in our environment to perform the data migration. While other migration tools exist (e.g., Esri’s Data Loading Tools and SSP Sync), Axim recommends using FME/Data Interoperability to perform the data migration. Axim will use local copies of the District geodatabases as the source for each system and the new asset packages as the target. This will ensure all feature class, attribute, and value mappings match those directed in the Data Mapping spreadsheets. The ETL configurations for each system will also include creating the associations necessary for UN functionality where appropriate. Axim will perform interim internal test migrations to confirm the proper functioning and configuration of the ETL tools before District review and approval. When all database changes have been applied and ETL tools configured, Axim will export respective draft Data Dictionaries per system for District review and approval. Axim will host a client review meeting to orient District staff to the database build and documentation. The Data Dictionary is essentially a text- based webpage representation of the data models. The District will have five days to review the Data Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 11 Dictionary and provide a single source of consolidated feedback per system to Axim. We will then evaluate feedback and adjust our database mappings and ETL configurations, as appropriate to the scope and designs. Migration of the actual source data into the target schema will continue in the subsequent steps. Summary of Key Actions:  Built ArcGIS Utility Network asset packages: water, wastewater, reclaimed  Local configuration of the FME/Data Interoperability data migration tools: water, wastewater, reclaimed  DRAFT Data Dictionaries: water, wastewater, reclaimed  Client Review Meeting  FINAL Data Dictionaries: water, wastewater, reclaimed FGDB Implementation Initial Data Migration and Testing Throughout the ETL configuration process, Axim will perform iterative data migrations on local servers to confirm the proper function of the ETL tool and address migration errors along the way. For each FGDB Implementation, Axim will create an FGDB UN (localized to a designated District area) per system and apply each system’s respective District service territory. We will then run FME/Data Interoperability to perform a data migration into the asset package of the full source database to identify a complete set of potential migration issues. Axim will then review the output data to confirm feature counts match and validate that the asset groups, asset types, and attributes are populated correctly. After postprocessing the UN to enable network topology, Axim will prepare a Build Error Report to summarize errors encountered during the migration and topology validation. Occasionally, these errors may require resolution in the source data, while others may reveal opportunities to modify UN connectivity rules. The District will be responsible for addressing errors resulting from source data issues. Axim will address issues resulting from tool configuration or deviations from the database design. Finally, we will confirm that associations, including any containers, have been created correctly via FME/Data Interoperability. To test subnetwork connectivity and tracing, Axim will designate subnetwork controllers for a small test area within each system and clean the dirty areas and errors within. We will create the test area of 2-3 neighborhoods nearest a treatment plant and will close or disconnect valves for all mains branching out along the shortest path to an adjacent pressure zone. We will test subnetwork and tracing functionality to ensure that the UN is operating as expected in each system and make necessary revisions to the schema and documentation. Knowledge Transfer and Client Review Once Axim has completed our initial data migration and testing, we will prepare to deliver a functioning FGDB UN for each system. We will begin by providing the District’s core GIS users with knowledge transfer on using and editing the UN. Knowledge transfer will explicitly orient staff on the District’s specific UN implementation. Training sessions are not intended to be all-encompassing or to replace the need for formal Esri training. Instead, they are meant to supplement and build upon that formal training and foundational GIS experience. Users are highly recommended to attend offerings through the Esri Academy on the use of ArcGIS Pro and the UN, particularly those within the Utility Network Fundamentals Learning Plan. This training is especially important for key technical stakeholders who will aid in the database design and pilot testing phases. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 12 As mentioned above, focused testing of complete UN functionality early in the process while still in the file geodatabase is crucial for a successful implementation. Furthermore, knowledge transfer at this point provides an extended period for users to acclimate to the UN rather than waiting until near the project’s end. Adopting the UN essentially represents a reimplementation of the District’s GIS system, and that process is more successful when staff is allowed a longer period to transition. The Axim knowledge transfer will introduce the UN’s essential functions and configuration changes completed through remote workshops. This introduction will serve as the handoff for the District to test and approve the data migration and UN functional configuration. Axim will prepare a Test Plan for each system outlining all functions the District should test and document as part of the acceptance process. Axim will also complete an initial technical Editing Best Practices document for editing tools and workflow. At the end of the workshops, we will provide the FGDB UNs, ArcGIS Pro project templates, and Test Plans for District use in acceptance. The FGDB implementation and knowledge transfer aim for the District to confidently determine that the UN is fully configured and operational as designed before deployment into an Enterprise environment. The District should plan to accommodate review and testing within a period of ten business days to confirm proper data migration and all UN functionality. Upon conclusion of the review period, the District will provide Axim with a single source of consolidated feedback documented in each system’s Test Plan. Axim will track District feedback in Jira (an issue management system) to support review and revision. As appropriate, Axim will prepare updates to the FME/Data Interoperability migration tool and the UN configuration. After this testing period, Axim will make necessary adjustments, remigrate source data, and build each UN for a second file geodatabase. We will provide the updates to the District for another five business day testing period and acceptance upon the delivery of each system. To underscore the importance of District testing and feedback, please note that Axim will not proceed to the Enterprise deployment without written acceptance of the deliverables within the Pilot Implementation. Again, the importance of these testing steps cannot be overstated. District staff will confirm that all source features were migrated into the proper UN asset type and that the attribution has completely migrated as expected. Additionally, basic editing workflows should be tested to ensure feature templates, configurations, and network management rules function as expected. While Axim will make every effort to review the data during our initial testing processes, District staff are more familiar with the specific data and are in a better position to identify potential data migration errors. Beyond feature classes, confirming that each source attribute was migrated into the correct target attribute, including the translation of any domain values, will be essential. Data migration errors or UN functional configuration issues must be addressed before final data migration and deployment to the District environment. Once migrated into the UN, bulk calculations to update attributes are notably more delicate and time- consuming. Summary of Key Actions:  Build FGDB ArcGIS Utility Network (2023 NMR): water, wastewater, reclaimed o Asset groups/asset types, attributes, domain values o Network management and attribute rules o Subnetwork definitions  Configure Data Conversion Tools (FME): water, wastewater, reclaimed Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 13  Develop error geodatabase and Build Error Summary report: water, wastewater, reclaimed  Perform conversion QA/QC (feature counts, attribution, domains): water, wastewater, reclaimed  FGDB Implementation: water, wastewater, reclaimed o Enabled network topology o Build Error Summary report o Designate subnetwork controllers (single zone)  Clean test area (FGDB, 2-3 neighborhoods and shortest path to adjacent pressure zone): water, wastewater, reclaimed  Consultation support for integrations (up to 48 hours of consulting): POSM, InfoWater, InfoSewer, InfoAsset Planner, KorTerra, and InfraMap  ArcGIS Pro project template updates: water, wastewater, reclaimed  Test Plans: water, wastewater, reclaimed  Editing Best Practices document: water, wastewater, reclaimed  Remote knowledge transfer sessions for core GIS staff/editors (up to 4 hours): water, wastewater, reclaimed  First District review (10-days)  Revisions from FGDB client feedback (database, ETL, and UN configuration)  Updated database schema: water, wastewater, reclaimed  Second District review (5-days)  Written District approval of Database Design, data migration, and UN configuration: water, wastewater, reclaimed Client Development Enterprise Deployment After acceptance of the FGDB Implementation deliverables, Axim will begin preparing for ArcGIS Enterprise deployment by staging the three system UN’s in our local Enterprise environment. The process continues with applying the asset packages and postprocessing the UN’s to enable branch versioning and network topology for each system. Axim will publish test map services in our local Enterprise environment to test the deployment works before exporting to FGDB’s for transfer to the District environment. Axim will prepare a Development Deployment Plan document for each system to direct the deployment of the UN within the District’s Development environment. This document will include technical information such as server names and URL paths, administrative accounts, file locations, template filenames, and map service names. The Deployment Plan documents are later converted into final technical configuration documentation at the end of Implementation. During the client Development Enterprise deployment, Axim will support District IT to prepare the Enterprise geodatabase and deploy the exported database. District staff will provide the necessary development and production environments. Axim will be responsible for deploying and configuring the final ArcGIS Utility Network within the architecture provided by District staff. Axim will configure the UN editors, administrative users, roles, and groups. This configuration will be limited to the core power users necessary for acceptance testing. Once Portal is configured, Axim will update the UN configuration of attribute rules, subnetworks, and traces as required to reference sources within the District environment. As part of the final database setup, we will establish branch versioning for the core power users. Axim will update the District’s ArcGIS Pro template for the new database paths, field visibility settings, and feature editing templates. We will publish three map services for the UN – one Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 14 for editing, a simple features service (read-only map service) and another simple features service (read- only feature service) used for general reference types of activities. An initial validation that the environment and UN are working will mark that the UN is nearly ready for final knowledge transfer to District staff and acceptance testing in an Enterprise environment. Finally, Axim will prepare a set of database administrative tasks in the form of a Python script to validate the network in the default version, recalculate subnetworks, and update database indexes. Cityworks Configuration Updates Inherent to the transition to the UN are underlying adjustments to the geodatabase schema, which will impact the configuration of Cityworks as a dynamic, GIS-centric solution with direct dependencies on the enterprise geodatabase. As a result, Axim is proposing to provide Cityworks reconfiguration of asset types will likely be required in order to align the utility asset types with the corresponding work activities, including inspections and work orders, in addition to report templates. To start, the team will collaborate with District staff to orient to the current Cityworks deployment and review the existing Cityworks environment. This exercise provides the technical context to guide subsequent configuration revisions, which center on adjustments to the defined asset types to ensure alignment with the published GIS services and Cityworks work activities. We suggest leveraging a lower tier Cityworks environment to perform the initial configuration updates, preferably that has recently rolled down from Production. We understand the District will upgrade Cityworks to maintain compatibility with ArcGIS Enterprise 11.1. We recommend that the District upgrades to Cityworks 23.x, which is compatible with Respond 5.x, in order to take advantage of the full UN integration capabilities, but a minimum of Cityworks 15.8.6 (compatible with Respond 4.3) is required. The three basic UN feature services (water, wastewater, reclaimed water) generated during development of the UN will be configured, with each containing up to 15 asset types. The subtypes defined in each feature services will be imported into Cityworks and will guide the mapping of work activities, service layer remapping, and service definition updates. Likewise, Axim assumes up to 50 Work Order templates spanning three feature services (up to 150 total) and up to 15 Inspections per services (up to 45 total) that will be remapped to the reflect the geodatabase schema adjustments. Additionally, organizations frequently develop report templates within Cityworks that consume feature data, which may be disrupted by underlying schema changes incurred by the UN implementation. Without available information on the structure, content, and volume of reports leveraged by Otay, Axim is proposing up to eight (8) hours of support to help update impacted report templates. This explicit allocation of time is intended to target updates to the content of existing reports and does not include support for transitioning reports from Crystal Reports to Active Reports or to develop new reports. The proposed time may directly support content updates to report templates, or if preferred by District staff, may encompass knowledge transfer and guidance to staff on updating report templates independently. Further, the newly introduced UN schema changes may have an impact on historical work activities depending on the differential between the current structure and target UN structure. As proposed, the NV5 effort to adjust configuration addresses one-to-one changes, wherein the only real change is the name of the feature layer that defines the asset type (e.g., wValve to SystemValve). For more complex changes, such as changes to the asset unique identifier field, Axim leverages ETL scripts to update the historic records within the database to ensure data history is preserved and prevent orphaned records in the Cityworks database. The magnitude of the more complex changes will not be known until the UN design phases are complete, but to accommodate a comprehensive approach and position the District for Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 15 maximum likelihood of a production ready migration, Axim has included up to 40-hours towards the development of ETL processes. Lastly, Axim will provide up to eight (8) hours to configure Trace capabilities within Cityworks, which will be available for end-users to run as needed directly from the Cityworks map. This functionality does require a minimum of Respond 5.x. As with reporting, this time is intended to include the initial configuration as well as knowledge transfer to provide the District with the tools to modify Trace configurations in the future. Knowledge Transfer At this point, additional knowledge transfer sessions are necessary to prepare District staff to adequately test the UN functionality and workflows within an Enterprise environment as well as Cityworks. In preparation, Axim will provide other documentation, including an updated Best Practices Workflow and Administrative documentation. Here, Axim will provide consolidated knowledge transfer sessions for editors and administrative staff. We plan to provide up to 4 hours total of knowledge transfer for end-users covering Enterprise editing workflows, QA/QC processes, reconciling and posting, and tracing. For the UN administrators, we plan to deliver up to 6 hours on managing the system, including publishing services, setting Portal user permissions, and database management. We assume administrators will have completed Esri’s formal ArcGIS Enterprise training in addition to the ArcGIS Pro and ArcGIS UN training. The UN Administrator Knowledge Transfer sessions will consist of up to three separate 2-hour sessions that are scheduled at this point of the project to allow staff to test the complete UN in the Enterprise environment and, later, a rapid transition between the Testing Phase and the final Implementation Phase activities. After completing all initial data migration activities, users will become familiar with and test the system. This knowledge transfer will reduce downtime during the final data migration and enable users to fully transition to the new production system immediately when that data is loaded. The District is ready to begin acceptance testing once knowledge transfer sessions for editors and administrators are complete. Summary of Key Actions:  ArcGIS Enterprise preparation: water, wastewater, reclaimed  Deployment Plan documentation: water, wastewater, reclaimed  District database preparation: water, wastewater, reclaimed  Configure core power users, roles, and groups in ArcGIS Portal  Update attribute rules, subnetworks, and traces for the District environment: water, wastewater, reclaimed  Establish branch versioning: water, wastewater, reclaimed  Update ArcGIS Pro template for District environment: water, wastewater, reclaimed  Publish 3 map services (editing, read-only simple feature service, read-only map service) for each system: water, wastewater, reclaimed  Cityworks core configuration updates, Trace map tool configuration, and ETL development for historic work activities  Database administrative tasks: water, wastewater, reclaimed  Updated Best Practices Workflow documentation: water, wastewater, reclaimed  Administrative documentation: water, wastewater, reclaimed Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 16  Consolidated knowledge transfer for editors (up to 4 hours)  Consolidated knowledge transfer for administrators (up to 8 hours) Testing Phase The final and formal Testing phase serves as the first review of a full Enterprise implementation of the UN, including a complete data migration of all source data, deployment of all software to the District’s development environment, user acceptance testing, and potentially server performance tuning. Testing Guidelines After completing the FGDB data migration and knowledge transfer, Axim will provide the District with a set of Test Plan documents updated to outline all items that must be tested for the fully migrated databases and the technical Enterprise environment. Axim will host a Client Testing Handoff meeting to discuss the testing guidelines and clearly identify what the District should be testing. Testing and Issue Tracking After the Client Testing Handoff meeting, District staff will perform implementation testing activities, supported by Axim, including the data migrations (any outstanding errors), technical environment (system performance, user permissions, Portal configuration, licensing), and UN functionality (connectivity and attribute rules, associations). Subnetworks and network tracing testing will also be limited to a small, cleaned area. Axim has reserved time to support testing and resolve issues in these areas. Until the UN is fully adopted in production, editing will continue in the present production database. Once the testing environment has been established, the District will perform system testing over ten consecutive business days and provide consolidated feedback in the Test Plan. Axim and the District will meet as needed to clarify comments or demonstrate potential issues. Staff will test database configurations, system functionality and performance, and ArcGIS Pro core UN functionality. Axim will track the District’s consolidated feedback within our issue-tracking system (Jira), where each report will be evaluated. All issues will be reviewed, and those determined to be within the project’s scope will be resolved as appropriate before the final implementation. Any issues determined to be out-of-scope may be considered part of a future enhancement or general GIS support tasking. Once all tracked items are resolved, Axim will consider the Testing Phase complete. During the testing phase, Axim will provide an orientation to Cityworks related to configuration updates and UN functionality. Participation in the orientation is limited to two to three power users who will review and validate the configuration changes and functionality against the available UN data. District staff will provide one cycle of feedback within five business days of the Cityworks orientation for Axim to review and address, as appropriate. If any reported issues are determined to result from Esri product bugs or similar, Axim will notify Esri on behalf of the District during testing. In the case resolution is unavailable until after project completion or requires an upgrade to the environment, the District will be responsible for deploying those independently and after the conclusion of this project. Summary of Key Actions:  Test Plan document: water, wastewater, reclaimed  Client Testing Handoff meeting (up to 2 hours per system) Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 17  Client Testing Review meetings (up to 4 hours per system)  Cityworks Initial Orientation (2 hours)  Testing support: water, wastewater, reclaimed  Integration testing support (up to 8 hours each – POSM, InfoWater, InfoSewer, InfoAsset Planner, KorTerra, and InfraMap)  Feedback tracked in Jira issue tracking system: water, wastewater, reclaimed  Environment adjustments (ArcGIS Enterprise, ArcGIS Portal users/groups, services) Implementation Phase After the Testing Phase is complete, the District will coordinate with Axim to perform the final Enterprise implementation tasks when ready. These include preparing the production environment, a data editing freeze, last data migration, production system testing, and final documentation. Additional general GIS consultation may follow here or be provided in other project phases. Environment As testing nears completion, the District staff will ensure the production environment matches the development environment. Axim has provided up to 8 hours total for additional consultation and direct implementation support to establish the production environment to mirror the development environment specifications. Axim will be responsible for deploying and configuring the final ArcGIS Utility Network within the architecture provided by District staff. System integrations are expected to be the responsibility of District staff. Axim will provide up to 24 hours of consultation support to guide final integrations before go-live deployment. Final Data Migration Following an opportunity to address any system performance tuning items resulting from the Testing Phase, the District will notify Axim of its readiness for the final Enterprise implementation process. This milestone will begin with the District declaring a freeze on the current production editing data and preparing a complete database backup of each system. Upon receiving this backup, Axim is expected to complete a full database migration into the approved Utility Network database schema with FME/Data Interoperability and provide a backup to the District within seven calendar days. This database contains the District’s latest complete production utility data migrated into the Utility Network schema. The District will deploy this backup to the production servers. Axim will provide final configuration items (attribute rules, Pro project, trace location feature class, database versioning) to reference the District’s production environment and preliminary validation that the database migration was completed successfully and the environment is operational. Once declared operational, this environment will be considered the District’s production Utility Network environment. Cityworks Production Configuration Changes The Axim Cityworks team will coordinate directly with both our UN implementation team and District staff to define the final cutover plan, including timing, sequence, and duration to help minimize impact to users. As part of this final step, we will apply the configuration changes to the production environment, including updates to the asset types, configuration of the Trace mapping tool, and execution of the ETL process as tested and accepted. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 18 Production Go-Live Immediately after the production environment is declared ready, two members of Axim’s team will arrive onsite for four days of production Go-Live support. Axim will be onsite to aid the District’s transition to the production environment as they release the ArcGIS Utility Network for general use. Our onsite team, supported by additional remote team members as may be necessary, will immediately address any issues noted by District staff. From the production environment declaration, the District will have ten business days to report any issues encountered with the final acceptance testing of the production environment. Axim will track, immediately review, and address those items determined to be defects in the implementation. Once all reported issues are resolved, Axim will consider the production environment fully implemented and ready for project acceptance. Post-Implementation Support After the ArcGIS Utility Network is released for general production use, the District will transition existing applications to consume the new UN services. During this time, Axim has planned for post-implementation support within thirty (30) days of system release by Axim to address minor configuration adjustments or provide supplemental knowledge transfer on the ArcGIS Utility Network. Final Technical Documentation With the UN fully implemented, Axim will finalize the Data Dictionary, Best Practices Workflow, and Administrative documents to reflect the collective Development and Production environments. Summary of Key Actions:  Consulting support in preparation of Production environment (up to 4 hours total)  Prepare ArcGIS Utility Network in Production environment: water, wastewater, reclaimed  Production environment validation: water, wastewater, reclaimed  District production database editing freeze: water, wastewater, reclaimed  Final complete database migration into ArcGIS Utility Network: water, wastewater, reclaimed  Production database deployment: water, wastewater, reclaimed  Production Cityworks configuration updates  Consolidated onsite Go-Live support for release of ArcGIS Utility Network Production issue tracking and resolution: water, wastewater, reclaimed  Post-implementation support per system (up to 72 hours total, within 30 days)  FINAL Data Dictionary: water, wastewater, reclaimed  FINAL Best Practices Workflow documentation  FINAL Administrative documentation Digital Twin Phase After implementation of the UN, Axim will support Otay in a pilot project for a Digital Twin of the pump station located at 440 Alta Rd, San Diego, CA 92154. The Digital Twin phase will consist of LiDAR scanning for the facility of interest with subsequent conversion of the scans into a BIM model and then into a 3D GIS. Incorporation into Cityworks for expanded asset management workflows will be a future effort and is considered outside of the proposed Digital Twin scope. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 19 Terrestrial Scanning A kick-off meeting will be held to review the proposed approach, assigning an on-site point of contact for the NV5 scan technician, validating access requirements to ensure all rooms/spaces are accessible at the time of visit, and confirming that any ceiling tiles will be removed prior to arrival on site. Once on site, NV5 will perform an evaluation walk to become familiar with the area of interest (AOI). We will place black and white checkerboard targets at multiple locations to ensure consistent accuracy across the full site. The team will use the NavVis VLX3 wearable mobile scanner for this project. Scanning is performed by walking slowly through the facility. Two sensors on the device are continuously recording data measurement and 360-degree photos are taken roughly every 10-15 feet until the entire project is complete (targeting the geometric accuracy specification of LOD300 modeling, as defined by BIMForum). Following the onsite scan, NV5 will perform a full data back-up and validation. A point-by- point quality control and coverage check will precede a global point cloud alignment. Once the data is fully reviewed and formatted, the team will generate a registered point cloud in Autodesk ReCap (.RCP) format for downstream modeling and a virtual walkthrough of the project will be made available. Drone Scanning To capture the roof and rooftop equipment, NV5 will fly a drone to capture the site. All drone related activities will have been pre-approved by FAA prior to being on site, if there is a requirement. BIM Modelling Following industry best practices, NV5 will convert the point cloud to a BIM model. Below is a simplified BIM Execution plan that our team will follow during this conversion process. Once modeling is complete, the Otay Team will have a period of one (1) week to review and provide written feedback to be incorporated into the models. Simplified BIM Execution Plan BIM Authoring Software Autodesk Revit 2021 Point Cloud Viewing Software Autodesk ReCAP 2021 BIM Project Template NV5 standard Naming Convention Standard NV5 standard Project Base Point / Elevation 0,0,0 / 0 ft. 0 in. Model Hosting Autodesk Construction Cloud GIS Attribution Axim Geospatial will facilitate two remote workshop sessions of up to one hour each to identify the data model and attribution for each asset to be consistent with internal convention or structure, if any exists. By default, a unique identifier will be created in the file geodatabase, which will be used as the key to form relationships between BIM and GIS. Assets to be included in the attribution are highlighted below: - 18 Pumps - 7 Tanks Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 20 - 43 Valves - 10 Misc Equipment (air compressors, generators, engines, etc) - 4 Indoor AC Units - 4 Outdoor AC Units - 6 Exhaust Fans - 1 Water Heater - 1 Oil Interceptor - 2 Lighting Panels BIM to GIS Conversion Axim will begin by preparing the Revit file to ensure it is complete and well-structured, with correct coordinate systems and naming conventions. A new project will be created within ArcGIS Pro derived from the BIM Revit file to allow NV5 to explore the BIM data. The team will then verify and set the coordinate system for the BIM data. The BIM data will then be exported to a file geodatabase so that the 3D data can be further refined, to include applying base symbology and attributes, as necessary, to match the desired output. Finally, with the 3D data updated, NV5 will create a scene layer package for Otay to publish and share, as needed. Summary of Key Actions:  Develop a point cloud of the full project  Provide a virtual walkthrough hosted online  Generate Revit BIM models for use in GIS. Models include architectural, structural, mechanical, electrical, and plumbing  Facilitate remote workshops for asset attribution (up to 2-hours)  Create 3D File Geodatabase & Scene Layer Package Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 21 Assumptions  All work will be performed remotely unless otherwise stated.  The District has or will acquire adequate licensing for ArcGIS Enterprise, ArcGIS Utility Network, Microsoft SQL Server, and FME/Data Interoperability.  Axim will implement the official Esri Network Management Release of the ArcGIS Utility Network available at the time of implementation, presently ArcGIS Enterprise 11.1 and ArcGIS Pro 3.1.  Software versions related to the implementation of the UN (e.g., Esri, SQL Server) will remain static from the point of project kickoff through final acceptance unless mutually agreed upon.  The District will upgrade Cityworks to a minimum of Cityworks 15.8.6 (Respond 4.3) to ensure compatibility with ArcGIS Enterprise 11.1 prior to the Cityworks reconfiguration activities. Note that Cityworks 23.x (Respond 5.x) is generally recommended by NV5 and is required to leverage advanced UN map tools from Cityworks.  Axim assumes that the District will leverage SQL Server as the final relational database and that the District will establish and provide the SQL Server environment and database.  The District will be responsible for the administration of the SQL Server environment and database, including, but not limited to, access control and backups consistent with the District’s preference or convention.  The District stakeholders have suitable familiarity with business and functional requirements to provide input that can accurately shape the design of the geodatabase.  The District GIS technical architecture for the Development and Production environments will meet or exceed the minimum technical specifications required for ArcGIS Enterprise and ArcGIS Utility Network before implementation.  The District will be responsible for any data aggregation, cleanup, or reconciliation before providing input or reference data to Axim.  While Axim will make every effort to review the data during our initial pilot testing processes, District staff will confirm that all source features were migrated into the proper UN asset type and that the attribution has completely migrated as expected.  At the final transition point, the District will facilitate a data freeze to exclude editing for a mutually agreed-upon time window during which final migration will occur.  The District will be responsible for communicating business system dependencies based on local knowledge. Dependencies not shared or known by the District will not be addressed as part of this scope.  Design and development related to specific business system integrations are not within the proposed project scope. Instead, general requirements to support those integrations will be noted while avoiding the specific technical implementation needs.  The District will address business system integrations after the production release of the UN.  Axim is not responsible for resolving issues determined to result from Esri or other third-party solutions, product or platform-related defects, or similar.  Training and knowledge transfer are meant to provide contextual knowledge on the Client environment rather than replace formal Esri training on ArcGIS Pro and the ArcGIS Utility Network. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 22  The City will upgrade Cityworks to version 15.8.6 at a minimum to support the configuration of UN (23.x is preferred for access to full UN functionality in Respond 5.x). Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 23 Pricing Axim Geospatial proposes a firm-fixed price of $435,500 to complete the ArcGIS Utility Network Implementation and Digital Twin Project for Otay Water District. This price includes all travel expenses and deliverables identified in this quote. Invoices will be sent monthly based on the overall project’s completion percentage. This pricing falls under the GISinc (a wholly owned subsidiary of Axim Geospatial, an NV5 Company) GSA Schedule 70 GS-35F-0682R. You may indicate your acceptance of the above proposal with a signature from authorized personnel at the Otay Water District. Otay Water District Signature: Name: Title: Date: Quotation Terms and Conditions This confidential quotation is valid for thirty (30) days unless otherwise stated and does not include shipping or tax unless otherwise stated. This quotation information is proprietary and may not be copied or released other than for the express purpose of system and service selection and purchase. This information may not be given to outside parties or used for any other purpose without written consent from Axim Geospatial. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 24 Standard Terms and Conditions These standard terms and conditions (“Terms and Conditions”) apply to any proposal, quotation and the resultant agreement relating to products and services sold by Axim Geospatial (herein after, “Axim”) to a customer (“Customer”). These Terms and Conditions, together with the proposal, quotation and contract, including any statement of work, herein SOW, shall constitute the entire agreement (“Agreement”) between the parties. These Terms and Conditions are governed by the terms of the applicable License Agreement for any incorporated software (“License Agreement”). Capitalized terms used and not otherwise defined herein shall have the respective meaning set forth in the License Agreement. 1. GENERAL PROVISIONS. This proposal including the SOW and all Terms and Conditions set forth herein, constitutes the entire agreement between Axim and Customer. The Terms and Conditions of the proposal shall govern and control the terms of any purchase order or purchase confirmation form from the Customer. Customer acknowledges that Axim has not authorized any of its sales agents or representatives to make any representations, warranties or agreements on behalf of, or to bind Axim in any way. This confidential proposal is valid for thirty (30) days and unless otherwise stated. 2. SCOPE OF SERVICES. During the term of the Agreement, Axim shall furnish the services in accordance with the SOW set forth in the proposal. 3. WORK PERFORMANCE. Axim agrees that all work performed hereunder shall be performed on a best effort basis by Axim’s staff having an appropriate experience and skill level, and in compliance with the SOW. 4. TAXES. Unless this Agreement specifies otherwise, the price included in the proposal does not include, and Customer is liable for and shall pay, all taxes, impositions, charges, and exactions imposed on or measured by this Agreement. Prices shall not include any taxes, impositions, charges, or exactions for which Customer has furnished a valid exemption certificate or evidence of exemption. 5. CHANGES. No changes, modification, amendment shall be binding upon Axim unless otherwise agreed to in writing. Customer’s authorized representative may in writing, direct changes within the general scope of the Agreement. If such change increases or decreases the cost or time required to perform this Agreement, Customer and Axim shall negotiate an equitable adjustment in the price and schedule to reflect the appropriate change. Axim shall adjust the proposal to reflect the change. Customer shall modify any purchase order or confirmation form and reissue to Axim accordingly. 6. INVOICE AND PAYMENT. Customer shall pay Axim within thirty (30) days after receipt of invoice or as per the terms indicated in the proposal. Axim will bill Customer monthly for all travel expenses and labor costs based on hours worked. 7. CANCELLATION. Customer shall provide thirty (30) days written notice to Axim prior to canceling an order. Customer will compensate Axim for all authorized services satisfactorily performed through the cancellation date under the payment terms in section 6 of these Terms and Conditions. 8. ASSIGNMENT. Neither party shall assign any of its rights or interest in this Agreement or subcontract all or substantially all of its performance of this Agreement without the other party’s prior written consent. 9. INDEMNITY. The parties shall indemnify and hold harmless the other, its officers and employees from and against damages, claims liabilities, fines, penalties and expenses (to include reasonable attorney’s fees) due to its negligent acts, willful misconduct, errors or omissions of any Axim employee during the performance of its obligations hereunder that arise out of (1) injuries or death to persons or damage to property, (2) services and/or deliverables agreed to under this order (3) violation of any federal, state, county or municipal laws. Axim’s total liability to Customer for any reason shall not exceed the total amount paid to Axim by Customer for the services provided under this Agreement. Axim’s duty to defend and hold harmless Customer shall not apply to any liability claim for damages or injuries arising from or as a result of the negligence of Customer or employees / agents of Customer. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 25 Axim shall have no liability for any claim of infringement to the extent based on (1) the use of a superseded or altered version of any Axim provided product or framework or (2) the combination, operation or use of the Axim provided product with software, hardware or other materials not furnished or authorized to be used by Axim. To the extent permitted by law, in no event shall either party be liable to the other for any lost revenues, lost profits, incidental, indirect, consequential, special or punitive damages of any kind. 10. WARRANTY. Axim warrants that it will perform the services in good faith and in conformance with professional industry standards. All Axim employees, that work on the project, shall have the knowledge, education, training, skills and experience of the subject matter to which they will be performing services. Axim warrants the completed application against bugs and defects for a period of 30 days after acceptance. Ongoing support, functional enhancements, or performance issues caused by a change in the customer’s IT environment are not included in the warranty. Coverage for these items will require a separate agreement. 11. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISION HEREOF, AXIM SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY LOSS, DAMAGE, COST OR EXPENSE (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND OPPORTUNITY COSTS), EVEN IF THE CUSTOMER HAS BEEN ADVISED, OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES. AXIM’S AGGREGATE LIABILITY FOR DAMAGES ARISING OUT OF, RELATING TO OR IN ANY WAY CONNECTED WITH THE RELATIONSHIP OF THE PARTIES, THIS AGREEMENT, ITS NEGOTIATION OR TERMINATION, OR PURSUANT TO ANY SOW (WHETHER IN CONTRACT OR TORT) SHALL IN NO EVENT EXCEED THE AMOUNT OF FEES RECEIVED BY AXIM FROM CUSTOMER PURSUANT TO THE APPLICABLE SOW UNDER WHICH THE ALLEGED LIABILITY AROSE. 12. FORCE MAJEURE. Neither party will be liable to the other for delays in performing any obligations under the Agreement due to circumstances beyond its reasonable control, including but not limited to revolts, insurrections, riots, wars, acts of enemies, national emergency, strikes, floods, earthquake, embargo, inability to secure materials or transportation, and acts of God, and other events beyond the reasonable control of the parties caused by nature or governmental authorities. 13. SERVERABILITY. If any provision of the Agreement is found to be invalid, illegal or unenforceable, then, notwithstanding such invalidity, illegality or unenforceability, the Agreement and the remaining provisions shall continue in full force and effect. In this event the parties will agree upon a valid, binding and enforceable substitute provision which shall be as close as possible to the commercial interests of the invalid or unenforceable provision. 14. GENERAL SERVICES ADMINISTRATION SCHEDULE. As indicated in the proposal, if applicable, this Agreement incorporates and shall be governed by the terms of a General Services Administration (GSA) Schedule entered by Axim and the U.S. Government. Axim’s GSA Schedule number: GS-35F- 682R. 15. GOVERNING LAW. This Agreement and any disputes arising out of, or relating to, this Agreement shall be governed by the laws of the State of Wisconsin without regard to the conflict of law rules thereof, provided that (i) contract provisions that have been incorporated directly from or by express reference to the Federal Acquisition Regulations (“FAR”), FAR supplements or GSA schedule terms, (ii) contract provisions that have been flowed down from a contract with the U.S. Government, and (iii) the Changes and Termination for Convenience articles, shall be construed and interpreted according to the federal common law of government contracts, as enunciated and applied by federal judicial bodies, boards of contract appeals, and quasi-judicial agencies of the federal government. 16. DISPUTE RESOLUTION. Customer and Axim shall endeavor to resolve any controversy, claim or dispute arising out of or relating to the Agreement, or the performance or breach thereof, by negotiation. Any claim that is not resolved by negotiation within thirty (30) days of notification shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The hearing locale will be held in the AAA office closest to Axim corporate headquarters. 17. OTHER. This Agreement shall be governed by and constructed in accordance with the laws of the State of Wisconsin without regard to conflicts of laws provisions thereof. Otay Water District | ArcGIS Utility Network Implementation – Water, Wastewater, Reclaimed 26 Both Axim and Customer will comply with all laws applicable to the Agreement. All notices given under the Agreement will be effective when received in writing. Notices to the Customer and Axim will be sent to the address provided in the proposal. Changes to the Agreement must be in writing and must be signed by both parties. 18. COMPLETE AGREEMENT. Customer acknowledges it has read the Agreement, understands it and agrees to be bound by its Terms and Conditions. This contract contains the entire agreement of the parties and supersedes any and all prior agreements, understandings and communications between Customer and Axim related to the subject matter of this contract. No amendment or modification of this contract shall bind either party unless it is in writing and is signed by Customer’s authorized representative and an authorized representative of Axim. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: April 2, 2025 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Michael Kerr, Information Technology Manager APPROVED BY: Adolfo Segura, Chief, Administrative Services Jose Martinez, General Manager SUBJECT: FY25 MID-YEAR REPORT OF THE DISTRICT’S FY23-26 STRATEGIC PLAN GENERAL MANAGER’S RECOMMENDATION: No recommendation. This is an informational item only. COMMITTEE ACTION: Please see “Attachment A”. PURPOSE: To provide a mid-year report on the District’s FY23-26 Strategic Plan for FY25. ANALYSIS: Summary The current Otay Water District Strategic Plan is a four-year initiative from the start of FY23 through the end of FY26. This report provides a mid-year update on the progress made during the plan's third year. Objectives – Target 90% The Strategic Plan objectives are designed to ensure the District’s execution of mission-driven strategies and the implementation of changes necessary to guide the agency, address emerging challenges, and foster a positive adaptation to change. FY25 mid-year results are 80%, with 28 of 35 active items completed or on schedule; one (1) objective is behind schedule, four (4) objectives are on hold, and two (2) have been AGENDA ITEM 6 reprogrammed. Objective Behind Schedule (1): INTERNAL BUSINESS PROCESS Strategy: Leverage the use of renewable and clean energy resources and reduce the use of hazardous chemicals. Objective: Reduce the District’s chemical footprint by substituting hazardous chemicals for similar, less hazardous chemicals. The ultraviolet (UV) disinfection system installation was delayed due to material shipment and availability issues. It is now scheduled for April 2025. Following installation, a four-month trial period will be conducted. The chlorine gas system will be decommissioned upon completion and approval by the Division of Drinking Water. Objectives On Hold (4): FINANCIAL Strategy: Maintain a long-range financing plan that sets forth the long- term funding needs of the District. Objective: Evaluate banking functions for lower cost and process efficiencies. Staff collaborated with online credit card providers to align interchange fees by account type to help analyze cost-saving measures. However, reporting limitations hindered the analysis, placing the project on hold. Limited bandwidth further postponed efforts to identify alternative solutions. If the data remains unavailable, new approaches will be investigated in the third and 0 5 10 15 20 25 30 35 40 45 28 1 4 2 0 On Schedule/Completed Behind On Hold Reprogrammed Not Started 28 of 35 Objectives are Completed or On Schedule (80%) fourth quarters to ensure the project advances toward reducing credit card processing costs. Objective: Evaluate the District’s cash reserve policies to consider optimal uses and levels of reserves, to ensure financial resiliency. This objective was on hold until the financial component of the ERP implementation was completed at the end of CY2024. It has since resumed in the third quarter. INTERNAL BUSINESS PROCESS Strategy: Leverage the use of renewable and clean energy resources and reduce the use of hazardous chemicals. Objective: Evaluate and implement energy-efficient systems. Staff completed the conceptual design for the first phase of the electrical charging infrastructure under CIP P2684 and submitted grant applications through the Clean Air for All (CAFA) Program. Following the grant submission on April 12, 2024, the project was paused for eight (8) months while awaiting funding approval. In December 2024, the grant was approved, securing $128,000 in funding. With funding in place, work resumed in January 2025. LEARNING AND GROWTH Strategy: Improve Organization Effectiveness. Objective: Implement a cross-functional innovation committee to advance the District’s culture of collaboration and process improvement among departments. This objective was placed on hold due to the conversion of the HR module in the ERP implementation and other employee priorities. However, the Innovation Committee met several months ago and began reviewing the employee recognition program during the first and second quarters. The Committee is scheduled to reconvene in the third quarter to continue its evaluation. REPROGRAMMED OBJECTIVES As objectives are regularly reviewed and adjusted throughout the year, and given the potential for unforeseen challenges, the mid-year strategic plan has been assessed and streamlined by deferring two (2) objectives to better align with current priorities and available resources. FINANCIAL Strategy: Invest in technology infrastructure to enhance customer engagement and satisfaction. Objective: Deploy Advanced Metering Infrastructure (AMI) technology in service areas to improve the District Operations. Approximately seven hundred meters were added to the advanced metering infrastructure (AMI) during the first quarter. Progress had been slow under the previous vendor, Master Meter, which hindered the project from meeting its initial installation targets. Meter changeouts are scheduled for fiscal year 2026 to address aging meters and support AMI’s continued expansion. However, the launch of the customer engagement portal remains on hold until further progress is made. A new meter vendor, Badger Meter, has been selected to continue the project. However, the transition will cause delays in AMI expansion and portal implementation as the district works through the contracting and initial deployment phases. Given these adjustments to the timeline, this objective was closed at the end of the second quarter and a new strategic objective focusing on meter technology will be introduced in the next iteration of the Strategic Plan. Strategy: Advancement of the District’s Asset Management Program. Objective: Cloud migration of the District’s enterprise Geographic Information System (GIS/Esri) and the associated Asset Management and Field Applications. The GIS-to-Cloud migration is behind schedule due to resource constraints from the ongoing ERP implementation and the transition to a new project manager. While this project remains a priority for the team, other critical initiatives, including the ERP implementation, require immediate focus. Given current staff capacity and workload, staff recommends postponing the project and incorporating it into the next iteration of the Strategic Plan. This approach allows for more effective resource allocation while reinforcing the team’s long-term commitment to completing the GIS migration. Key Performance Indicators (KPI’s) – Target 75% KPIs are designed to track the district’s day-to-day performance. These indicators measure the effectiveness and efficiency of essential operational services. The District’s overall KPI goal of 75% is considered “on target”. For FY25, mid-year results are above target at 0510152025303540 20 3 On Target Not on Target 87%, with 20 of 23 items achieving the desired level or better. KPI’s Not on Target (3): Planned Recycled Water Maintenance Ratio in $ Target: 70% of all labor costs spent on preventative maintenance per quarter and annually. In the second quarter, labor costs allocated for preventive maintenance accounted for 52%, falling short of the 70% quarterly target and affecting the year-to-date goal. This shortfall was primarily due to a main break and a 2" saddle leak on Olympic Parkway during the quarter, resulting in more corrective maintenance. Hydrant Maintenance Program Target: 20% of District fire hydrants maintained annually to accomplish 100% every five (5) years (305 fire hydrants per quarter and 1,220 fire hydrants annually). The Utility Maintenance crew serviced 322 fire hydrants, falling short of the mid-year goal of 610. In the first quarter, focus was placed on exercising critical valves, and staffing challenges in the second quarter further contributed to the shortfall. However, staff will prioritize achieving the target by the end of the fiscal year. Mark-out Accuracy Target: 100% mark-out accuracy per quarter and annually. The Survey Team completed 1,406 mark-outs in the first quarter and 1,474 in the second quarter. While no at-fault hits were in the second quarter, one facility was struck in the first quarter. The District's contract locator, Calburton, failed to mark a 1” water 20 of 23 Key Performance Indicators are On Target (87%) service, which was later damaged during a directional bore project. Fortunately, no injuries or property damage occurred. The missed mark was reviewed with the Calburton team to emphasize the importance of accuracy and prevent future occurrences. KPIs are defined using established AWWA performance benchmarks, water agency standards, and historical trends. Of the total measures outlined in the Strategic Plan, ten (10) are reported annually to include:  Water Rate Ranking  Sewer Rate Ranking  Water Debt Coverage  Sewer Debt Coverage  Reserve Level  Accounts Per Full-Time Employee (FTE)  Business Recovery Exercises  Vulnerability Assessments  Potable Tank Inspection and Cleaning  Injury Incident Rate One (1) measure is reported biennially to triennially:  Customer Opinion Survey Next Steps Staff will continue to focus on the plan’s objectives, key performance indicators, and emerging trends. Committee Reports – Slideshow The Strategic Plan mid-year results are presented to both the Engineering, Operations, and Water Resources Committee and the Finance and Administration Committee (“Attachment B”). The Strategic Plan is also available on the District’s website. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Informational item only; no fiscal impact. STRATEGIC GOAL: Strategic Plan and Performance Measure reporting is a critical element in providing performance reporting to the Board and staff. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – PowerPoint Presentation ATTACHMENT A SUBJECT/PROJECT: FY25 MID-YEAR REPORT OF THE DISTRICT’S FY23-26 STRATEGIC PLAN COMMITTEE ACTION: This item was presented to the Finance & Administration Committee at a meeting held on March 19, 2025. The Committee supports presentation to the full Board. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full Board. OTAY WATER DISTRICT STRATEGIC PLAN FY2025 Mid-Year Report 2023 2026 ATTACHMENT B BALANCED SCORECARD 2 Focuses on the financial performance of the District FINANCIAL Focuses on the District’s culture and development of staff to ensure there is a productive and skilled workforce in place LEARNING AND GROWTH Focuses on customer service levels, satisfaction, brand, and confidence CUSTOMER Focuses on business processes designed to deliver and improve customer objectives and services INTERNAL BUSINESS PROCESS 90% Total 35 ON SCHEDULE COMPLETED BEHIND SCHEDULE ON HOLD OBJECTIVES 80%3%11% MID-YEAR FY 2025 28 Objectives 28/35 = 80% Overall Target Active/Completed 35 Not Started 0 1 Objective 1/35 = 3% 4 Objectives 4/35 = 11% REPROGRAMMED 6% 2 Objectives 2/35 = 6% CUSTOMER Enhance and build public awareness of the District’s priorities, initiatives, programs, and services Collect and analyze customer feedback on District operations, projects, programs, service experience, and expectations Advance the District's web and social media presence Enhance internal communications, tools, and technology to disseminate information to District staff effectively Enhance education, outreach, and communication tools to the public on the understanding of water supply constraints and rates and how they affect/support a reliable water supply 4 Completed On Schedule Left to right: SEBASTIAN ROJAS AND DUSTIN SCHWEGEL Utility Maintenance Staff Outreach Event: Chula Vista Starlight Parade (December 14, 2024) FINANCIAL Maintain a long-range financing plan that sets forth the long-term funding needs of the District Evaluate grant funding opportunities Evaluate banking functions for lower cost and process efficiencies Evaluate the District’s cash reserve policies to consider optimal uses and levels of reserves, to ensure financial resiliency Conduct an evaluation of a health savings investment account program for an optional post-employment benefit Conduct a compensation study to evaluate labor industry conditions and the District’s competitiveness Invest in technology infrastructure to enhance customer engagement and satisfaction Evaluate Interactive Voice Response (IVR)/Online customer portal for water use management and assistance Deploy Advanced Metering Infrastructure (AMI) technology in service areas to improve the District Operation 5 MICHAEL KERR IT Manager Completed On Schedule Behind Schedule Reprogrammed On Hold INTERNAL BUSINESS PROCESS Leverage the use of renewable and clean energy resources and reduce the use of hazardous chemicals Evaluate and implement energy-efficient systems Evaluate and implement alternative energy opportunities Advance Clean Fleet Regulations District Implementation Program of Zero or near Zero Emissions Vehicles Reduce the District’s chemical footprint by substituting hazardous chemicals for similar, less hazardous chemicals Implement technologies to improve response time, security, and operational effectiveness Conversion of the District’s enterprise Geographic Information System (GIS/Esri) from a Geometric Network to a Utility Network Model Conduct needs assessment/replacement of District's financial management system Maintain and regularly evaluate internal financial controls Leverage Cityworks to further develop job task process standardization and work order cost modeling 6 Completed On Schedule Behind Schedule On Hold Left to right: OLIVIA READY, BETH GENTRY, AND RUNZAH POLIS Engineering Design Staff INTERNAL BUSINESS PROCESS Develop appropriate water resource mix to meet the water reliability needs of the community Use the Water Facilities Water Management Plan/Urban Water Management Plan to analyze future needs and prescribe approaches to meeting future requirements Evaluate City of San Diego’s recycled water purchase Develop the District’s long-term water supply strategies and planning efforts with regional partnerships Respond to anticipated water shortages through rate structure modification, conservation assistance, and outreach Monitor and modify the Water Shortage Contingency Plan, as needed Identify, evaluate, and implement new opportunities for recycled water, including potential for potable reuse 7 Completed On Schedule JULIANA LUENGAS Environmental Compliance Specialist Location: Rickey Pond at the San Miguel Habitat Management Area INTERNAL BUSINESS PROCESS Advancement of District's Asset Management Program Formalization of Standard Operating Procedures (SOP) and Planned Job Observations (PJO) Develop long-term strategic operations and maintenance program (Total Asset Management) Collect and maintain accurate asset records, including criticality, maintenance history, asset condition, and performance for continuous improvement Cloud migration of the District’s enterprise Geographic Information System (GIS/Esri) and the associated Asset Management and Field Applications Cyber and Physical Security Advance the use of the District's Supervisory Control and Data Acquisition (SCADA) system to further enhance the security and reliability of the distribution system and optimize administration Evaluate new disaster recovery solutions and advance the District's enterprise business continuity program 8 Completed Reprogrammed On Schedule Behind ScheduleJESUS LOZANO Pump Mechanic II LEARNING AND GROWTH Coordinate workforce planning activities to determine future needs, identify gaps, and implement actions to close the gaps Maximize opportunities to develop employees through training and mentoring Evaluate the implementation of learning and development programs in coordination with partner agencies Analyze and identify workforce trends to address critical gaps between the current workforce and future needs Improve Organization Effectiveness Negotiate successor Memorandum of Understanding (MOU) with the employee association and unrepresented employees to focus on recruitment and retention Implement a cross-functional innovation committee to advance the District’s culture of collaboration and process improvement among departments 9 Left to right: MARCO RAMIREZ AND BRANDON PERRY Utility Maintenance Staff Training: 32-hr. Confined Space Rescue Operations Training (September 2024) Completed On Schedule On Hold KEY PERFORMANCE INDICATORS MID-YEAR FY 2025 Overall Target 75% Total 34 Reported Quarterly 23 Reported Annually 10 87% 20 KPIs 20/23 = 87% ON TARGET NOT ON TARGET 13% 3 KPIs 3/23 = 13% Reported Biennial to Triennial 1 10 11 0.97 0.99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile TECHNICAL QUALITY COMPLAINT (AWWA | Customer Relations) LAWRENCE GARCIA Water Systems Operator III TARGET No more than 1.15 complaints per 1,000 customer accounts per quarter | No more than 4.6 complaints per 1,000 customer accounts annually CALCULATION Number of technical quality complaints per year/Number of active accounts per reporting period AWWA BENCHMARK Average of 75th Percentile, 2.6, and Median, 6.6, for population served between 100,001 – 500,000 (Combined Utilities) TARGET 100% of all health-related drinking water standards per quarter and annually CALCULATION Number of days the primary health regulations are met/Number of days in the reporting period AWWA BENCHMARK 100% - 75th Percentile for population served between 100,001 – 500,000 (Water)12 100% (FY 23 Q1 & Q2 Result) 98.58% 97.35% 95% 96% 97% 98% 99% 100% Q1 Q2 Q3 Q4 Result Target ANSWER RATE 100%100% 95% 96% 97% 98% 99% 100% Q1 Q2 Q3 Q4 Result Target POTABLE WATER COMPLIANCE RATE (AWWA | Water Operations) TARGET 97% average answer rate per quarter and annually CALCULATION Number of calls answered/Total number of calls 13 $999.07 $1,384.56 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 Q1 Q2 Q3 Q4 Result Target DIRECT COST OF TREATMENT PER MGD EDOARDO GONZALES Reclamation Plant Operator III TARGET No more than $1255 MGD spent in Q1 & Q4 and $1673 MGD spent in Q2 & Q3 | No more than $1464 per MGD spent on wastewater treatment annually CALCULATION Total O&M costs directly attributable to sewer treatment/Total volume in MG for one quarter 74% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target PLANNED RECYCLED WATER MAINTENANCE RATIO IN $ 14 TARGET 70% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance Cost 71%70% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target PLANNED POTABLE WATER MAINTENANCE RATIO IN $ TARGET 70% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance Cost 15 97%97% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Q1 Q2 Q3 Q4 Result Target PLANNED WASTEWATER MAINTENANCE RATIO IN $ 99.99%99.94% 95% 96% 97% 98% 99% 100% 101% Q1 Q2 Q3 Q4 Result Target BILLING ACCURACY TARGET 99.8% billing accuracy per quarter and annually CALCULATION Number of correct bills/Number of bills issued during the reporting period TARGET 80% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance Cost 0%0%0% 1% 2% 3% 4% 5% 6% 7% Q1 Q2 Q3 Q4 Result Target CONSTRUCTION CHANGE ORDER INCIDENCE 16 3.3% 4% 0% 1% 2% 3% 4% 5% 6% 7% Q1 Q2 Q3 Q4 Result Target DISTRIBUTION SYSTEM LOSS TARGET Less than 5% of unaccounted water per quarter and annually CALCULATION (Total Potable Water Purchased + Total Recycled Water Purchased & Produced) – (Total Measured Billed & Unbilled Water)/(Total Potable Water Purchased + Total Recycled Water Purchased & Produced) TARGET No more than 5% per quarter and annually CALCULATION Cost of Change Orders (not including allowances)/Original construction contract amount (not including allowances) 17 16-inch recycled water pipeline installation on Olympic Parkway (July 31, 2024) 14% 48% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target CIP PROJECT EXPENDITURES VS. BUDGET TARGET 95% of the budget annually Q1: 15% + Q2: 21% + Q3: 29% + Q4: 30% = 95% CALCULATION Actual Expenditures/Annual Budget 25% 54% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target EASEMENT EVALUATION AND FIELD INSPECTION 18 JOSUE BEAS Construction Inspector I TARGET 100% assigned easements, evaluated via desktop tools, and inspected annually 25 easements per quarter | 100 easements are assigned for FY25 CALCULATION Number of easements evaluated and inspected/Total easements assigned for the period 0 00 2 4 6 8 10 12 14 16 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile 0.14 0.28 0 2 4 6 8 10 12 14 16 18 20 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile POTABLE WATER DISTRIBUTION SYSTEM INTEGRITY (LEAKS) (AWWA | Water Operations) 19 POTABLE WATER DISTRIBUTION SYSTEM INTEGRITY (BREAKS) (AWWA | Water Operations) TARGET No more than 0.625 leaks per 100 miles of distribution piping per quarter | No more than 2.5 leaks per 100 miles of distribution piping annually CALCULATION 100 (Number of leaks)/Total miles of distribution piping AWWA BENCHMARK 2.5 – 75th percentile for population served between 100,001-500,000 TARGET No more than 0.75 breaks per 100 miles of distribution piping per quarter | No more than 3 breaks per 100 miles of distribution piping annually CALCULATION 100 (Number of breaks)/Total miles of distribution piping AWWA BENCHMARK 3 – 75th percentile for population served between 100,001-500,000 0 00 0.5 1 1.5 2 2.5 3 Q1 Q2 Q3 Q4 Result Target RECYCLED WATER SYSTEM INTEGRITY (LEAKS) 20 0 0.98 0 0.5 1 1.5 2 2.5 3 Q1 Q2 Q3 Q4 Result Target RECYCLED WATER SYSTEM INTEGRITY (BREAKS) TARGET No more than 0.625 leaks per 100 miles of recycled distribution system per quarter | No more than 2.5 leaks per 100 miles of recycled distribution system annually CALCULATION 100 (Number of leaks)/Total miles of recycled distribution system TARGET No more than 0.75 breaks per 100 miles of recycled distribution system per quarter | No more than 3 breaks per 100 miles of recycled distribution system annually CALCULATION 100 (Number of breaks)/Total miles of recycled distribution system 21 1236 1159 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Q1 Q2 Q3 Q4 Result Target SYSTEM VALVE EXERCISING PROGRAM 238 84 0 50 100 150 200 250 300 350 Q1 Q2 Q3 Q4 Result Target HYDRANT MAINTENANCE PROGRAM TARGET 20% of District valves exercised annually to accomplish 100% every five years 1023 valves per quarter | 4092 valves annually CALCULATION Total number of valves exercised per year TARGET 20% of District fire hydrants maintained annually to accomplish 100% every 5 years 305 fire hydrants per quarter | 1220 fire hydrants annually CALCULATION Total number of fire hydrants maintained 22 99% 100% 95% 96% 97% 98% 99% 100% 101% Q1 Q2 Q3 Q4 Result Target MARK-OUT ACCURACY 0 00 1 2 3 4 5 6 7 8 9 10 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile SEWER OVERFLOW RATE (AWWA | Wastewater Operations) TARGET 0 overflows per quarter and annually CALCULATION 100 (Number of sewer overflows during the reporting period)/Total miles of pipe in the sewage collection system AWWA BENCHMARK 0 – 75th Percentile for population served between 0-50,000 TARGET 100% mark-out accuracy per quarter and annually CALCULATION Number of mark-outs performed without an at-fault hit, which is damage to a District facility that results from a missing or erroneous mark-out/Total number of mark-outs 23 Left to right: SCOTT MANCHAN, RYAN RENZ, AND JOEL GONZALEZ Utility Maintenance Staff Training: Crane Operator Training (September 30, 2024) 9.57 28.95 0 10 20 30 40 50 60 70 80 90 100 Q1 Q2 Q3 Q4 Result Target SAFETY TRAINING PROGRAM TARGET 6 hours per field employee per quarter | 24 hours per field employee annually CALCULATION Total qualified safety training hours for field employees/Average number of field employees 9.57 21.84 0 5 10 15 20 25 30 35 40 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile TRAINING HOURS PER EMPLOYEE (AWWA | Organizational Development) 24 1.42% 2.10% 0% 1% 2% 3% 4% 5% Q1 Q2 Q3 Q4 Result Target EMPLOYEE VOLUNTARY TURNOVER RATE TARGET 3.9 hours per employee per quarter | 15.6 hours per employee annually CALCULATION Total qualified training hours for all employees/Average number of FTEs AWWA BENCHMARK 15.6 – Median for combined utilities TARGET Less than 1.25% turnover per quarter | Less than 5% turnover annually CALCULATION Number of voluntary terminations (not including retirements)/Average number of employees RESOURCE LINKS Otay Water District Website | Strategic Plan FY23 - FY26 Strategic Plan Digital Publication QUESTIONS?