HomeMy WebLinkAbout04.26.22 Work Session
CITY OF ST. JOSEPH
www.cityofstjoseph.com
75 Callaway Street East | Saint Joseph, Minnesota 56374
Email: cityoffices@cityofstjoseph.com | Phone: 320.363.7201 | Fax 320.363.0342
St. Joseph City Council Work Session
April 26, 2022
5:00 PM
The St. Joseph City Council will meet to discuss the following items:
1. Community Center
2. Compensation Study and Staffing
3. ARPA Funding
4. TIF/Tax Abatement and Assistance Requests
5. Water and Sewer Financial Planning Software
6. Robert’s Rules of Order
7. Park and Recreation Update
8. Adjourn
Council Agenda Item
MEETING DATE: April 26, 2021
AGENDA ITEM: Compensation Study & Staffing
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The Personnel Committee is
supportive with moving forward with completing a compensation study and hiring a full-time
Administrative Assistant.
BACKGROUND INFORMATION: Last year during city council budget discussions, an office
specialist was included as a future hire due to the increasing administration work. Additionally, a
compensation study was included in the 2022 budget to be completed. The proposed compensation study
would review job classification and include a market survey. The study would be completed in four
months.
BUDGET/FISCAL IMPACT: Compensation Study – Budgeted for 2023
Administrative Assistant Position – Anticipated to be a Grade 5
$18.91 - $27.25 per hour
ATTACHMENTS: Compensation Study Proposal – Flaherty & Hood, P.A.
Administrative Assistant Job Description
REQUESTED COUNCIL ACTION: Discussion only
2
QUOTE
To: Therese Haffner, City Administrator, City of St. Joseph
From: Brandon M. Fitzsimmons, Shareholder Attorney
Karina G. Patino, Legal Analyst
Date: August 18, 2021
Re: Quote for Job Classification and Compensation Update
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Flaherty & Hood, P.A. hereby submits this quote to conduct a Job Classification and
Compensation Update for City of St. Joseph (City), which includes a description of the purpose
and need for the review, the scope of services to be provided and timeline, and costs.
Purpose and Need
Flaherty and Hood, P.A. completed a job classification and compensation study for the City of
St. Joseph in 2019 that reviewed and drafted analysis and recommendations for job analysis, job
titles, job evaluation points, pay, implementation, and reviewing, maintaining, and updating is
classification and compensation components. The City did not elect to have Flaherty and Hood,
P.A. complete a market survey as part of its study. The City internally performed certain job
classification and compensation system functions and established certain components of it.
Based on this process, the City Council approved in 2020:
Flaherty and Hood, P.A. Job Evaluation System
Updated Position Titles and Job Evaluation Points
City of St. Joseph’s Classification and Compensation Plan
City of St. Joseph’s Base Pay Schedules
To implement the Classification and Compensation Plan, current City administration has
reviewed the City’s previous internal process and recommendations related to job classification
and compensation, along with the current job descriptions, job evaluation points, and base pay.
To maintain and update these components to be consistent with the Classification and
Compensation Plan and address the prior process’ issues, City administration felt that it was
necessary to update these components of its job classification and compensation system,
including conducting a market survey.
Scope of Services and Timeline
Flaherty & Hood, P.A.’s job classification and compensation review services for St. Joseph’s
approximately 18 positions will include the following with the subsequent timeline:
Page 2 of 4
Phase Services Timeline
after Start
1.
Review City’s job classification and compensation system
components, which includes
o Job descriptions and points
o Fair Labor Standards Act (FLSA) exempt status
o Base pay schedule
o Pay equity report
o Other governing documents (e.g., labor contracts, policies)
0 - 3
Weeks
2.
Job evaluation
o Review and establish or update points for certain positions
using Flaherty & Hood Job Evaluation System
o Management reviews, comments, and makes any necessary
changes on job evaluation system and updated job specific
points
o Update and determine Fair Labor Standards Act exempt status
4-7
Weeks
3.
Market survey
o Establish market entities and sources based on statistical
analysis and market selection questionnaire to City Determine
benchmark jobs to compare
o Compile, review and analyze market compensation data for all
job classifications, including wages and pay structure and
contributions to health insurance
Draft market comparison data spreadsheets and discuss with City of
St. Joseph’s management
2-6
Weeks
4.
Pay structure and schedule
o Based on statistical analysis or market pay and job points,
establish or propose modifications to pay structure and schedule
that includes pay ranges related to job points
o Analyze and modify pay schedule for compliance with
Minnesota Pay Equity Act
o Analyze financial and individual employee impact
7-11
Weeks
5.
Final report and implementation
o Prepare a final report describing the study results and
implementation recommendations
o Present findings and recommendations, including written and/or
oral report to City of St. Joseph city council
12-14
Weeks
6. Update job descriptions
o Review and draft updated format and text for job descriptions
16-18
Weeks
7.
Pay equity compliance testing
o Prepare and provide to the City of St. Joseph a complete pay
equity report on proposed job points and pay to ensure com
Provide any submit required communications and reports to MMB
14-16
Weeks
Page 3 of 4
Costs
The services listed above can be provided by Flaherty & Hood, P.A. for a lump-sum of $7,000.
The costs would include the services above, travel time, mileage, and copy costs for internal use.
The City will be billed for 3/5 of the total cost at the start of the study and 2/5 of the total cost
once the study is complete.
Other and Additional Services
Other Services
Flaherty & Hood, P.A. can provide the following other services city-wide:
Services Total Cost
Prepare PowerPoint and present to incumbent employees explaining the
Job Evaluation Point Review $750
Interview using position questionnaires for incumbent employees
addressing the skill, effort, responsibility and working conditions of their
position
$3,500
Establish supplemental variable pay system, such as performance pay,
merit pay, and/or skills or competency pay $2,000
Additional Job Classifications or Same Job Classifications after Review is Complete
Services Total Cost
Draft, review, and analyze position questionnaires for incumbent
employee, if any, and management addressing the skill, effort,
responsibility and working conditions of the position, and draft new or
updated job description and establish points after initial job
classification pointed
$800
Establish or update points $350
Compile, review and analyze market compensation data, including
wages, wage structure, and health insurance benefits, for a job
classification
$800
Compile, review and analyze market compensation data other than
wages, wage structure, and health insurance contributions
$600 per
category
Items in addition to those above or other labor relations, employment law, and human resources
services are available to City of St. Joseph and will be billed at the reduced CGMC member
hourly rates for attorney and analyst plus expenses.
Page 4 of 4
Consultants
Brandon M. Fitzsimmons, Shareholder Attorney
Brandon is a shareholder attorney and head of Flaherty & Hood, P.A.’s labor, employment law,
and human resources practice. Brandon provides legal advice and representation services for
public entities throughout Minnesota in labor relations, employment law, and human resources
matters, including job classification, compensation, and pay equity issues. Brandon has his
Bachelor of Arts in Political Science with Distinction, cum laude, from Creighton University and
his Doctor of Jurisprudence (J.D.) from William Mitchell College of Law. Brandon is a member
of the National and Minnesota Public Employer Labor Relations Associations, SHRM, and
MSBA - Labor and Employment Law Section.
Karina G. Patino, Legal Analyst
Karina is a Legal Analyst with the law firm of Flaherty & Hood, P.A. Karina compiles, reviews,
researches, and develops analysis in the areas of job classification and compensation, labor law,
and employment law for public sector clients. Karina has a Bachelor of Science degree in
Paralegal Studies from the Minnesota School of Business. She is a member of the Twin Cities
Compensation Network, Society for Human Resources Management, World at Work
Compensation Institute, and the Minnesota Paralegal Association.
If you have any questions related to this initial quote or would like to discuss the proposed scope
of services, please contact us at your convenience at (651) 225-8840. Thank you for your
consideration and the opportunity to submit this initial quote.
POSITION: ADMINISTRATIVE ASSISTANT
DEPARTMENT: Administration
IMMEDIATE SUPERVISOR: City Clerk
HOURS WORKED: 40 Hours per Week, Generally, 8:00 AM – 4:30 PM
FLSA STATUS: Non-Exempt
SUMMARY
Performs intermediate administrative support work providing administrative, clerical, and receptionist
duties in support of daily City operations, and related work as apparent or assigned. Work is performed
under the moderate supervision of the City Clerk.
ESSENTIAL FUNCTIONS
• Provides general administrative assistance to City Hall administration and remains flexible in
providing administrative assistance to all City departments
• Serves as the receptionist at the administrative window
• Receives, screens, and routes calls, greets visitors, provides information, explanations, and
assistance to the public and other employees or refers to appropriate person, and performs a wide
range of clerical support activities
• Prepares documents such as forms, statements, memos, correspondence, reports, and planning
commission and city council meeting minutes
• Assists the general public at front counter with licenses, permits, payments, etc.
• Provides administrative support for city licensing and permits
• Processes cash, ACH payments and credit card payments; post daily deposits.
• Maintains park shelters and facility scheduling including scheduling in calendar software,
distributing forms, verifying rental fee and deposit have been collected and forwarding monthly
calendar and updates to the appropriate departments
• Distributes accounts payable invoices and assist with mailing checks for payment of invoices
• Provides website, social media and newsletter updates to City Clerk pertaining to park scheduling
and other information pertinent to the essential functions for public information
• Office manager for general office equipment and supplies
• Assists with mass mailings
• Assists with elections
• Serve as Administrative Liaison for Safety Committee, maintain safety training attendance for
city staff
• Maintain computer hardware and software inventory
• Coordinates and implements document imaging for other departments
• Performs other duties as assigned
REQUIRED KNOWLEDGE, SKILLS AND ABILITIES
• Thorough knowledge of City and department policies and procedures
• Thorough knowledge of business English, spelling and arithmetic; general knowledge of standard
office practices and procedures
• General knowledge of customer service, billing and collection procedures; skill in the use of
personal computers, associated software packages, hardware, and job-specific peripheral
equipment
• Excellent mathematical and basic accounting and finance skills
• Skill in handling customer complaints and general information requests through phone and/or
personal contact
• Ability to handle confidential information with discretion
• Ability to work with limited supervision and as part of a team
• Ability to work under time constraints; ability to work with basic mathematical calculations and
keep track of money and receipts
• Ability to communicate effectively in oral and written form
• Ability to utilize work time properly and productively
• Ability to act in a decisive manner, using good judgment
• Ability to use tact and diplomacy and to promote a cooperative atmosphere within the City
operations as well as with the public
• Ability to present an attitude of professionalism while maintaining the values and attitudes of the
community
• Ability to establish and maintain effective working relationships with co-workers, supervisors,
other departments, and the general public
WORKING CONDITIONS/PHYSICAL REQUIREMENTS
• This work requires the occasional exertion of up to 10 pounds of force
• Work regularly requires sitting, speaking or hearing and using hands to finger, handle or feel,
frequently requires repetitive motions and occasionally requires standing, walking, reaching with
hands and arms, pushing or pulling and lifting
• Work requires close vision, distance vision, ability to adjust focus and color perception; vocal
communication is required for expressing or exchanging ideas by means of the spoken word and
conveying detailed or important instructions to others accurately, loudly or quickly
• Hearing is required to perceive information at normal spoken word levels and to receive detailed
information through oral communications and/or to make fine distinctions in sound
• Work requires preparing and analyzing written or computer data, operating machines and
observing general surroundings and activities
• Work has no exposure to environmental conditions
• Work is generally in a moderately noisy location (e.g. business office, light traffic)
QUALIFICATIONS
• High school diploma or GED and moderate experience in clerical services including customer
contact and some finance and accounting experience, or equivalent combination of education and
experience
• Associates/Technical degree preferred
SPECIAL REQUIREMENTS
• Valid driver's license in the State of Minnesota.
Council Agenda Item
MEETING DATE: April 26, 2022
AGENDA ITEM: American Rescue Plan Act (ARPA) Reporting
SUBMITTED BY: Administration/Finance
PREVIOUS COUNCIL ACTION: Council accepted the ARPA federal grant. Council approved server
upgrade, technology upgrades (St. Joseph Government Center, Public Works Facility, & Fire Hall),
cellular meter reads with ARPA grant funds. Council approved the standard allowance for the revenue
loss provision.
BACKGROUND INFORMATION: The federal government passed ARPA establishing Coronavirus
Relief Fund to states and local governments. The City of St. Joseph is considered a Non-Entitled Unit
(NEU) for receiving funding due to population under 50,000. The State of MN determined the allocation
formula for NEU’s. NEU’s received half their funding in 2021, the second half twelve months later. For
St. Joseph, we received $401,666.86 in 2022 and expect the second half in July 2022 for a total of
$803,334. Expenditures must be incurred by Dec. 31, 2024.
The US Treasury issued their Final Rule for the eligible uses of the ARPA funds. There are four main
categories for funding.
1. To respond to the COVID-19 public health emergency or its negative economic impacts.
2.To respond to workers performing essential work during the COVID-19 public health
emergency by providing premium pay to such eligible workers of the recipient, or by
providing grants to eligible employers that have eligible workers who performed essential
work.
3. For the provision of government services, to the extent of the reduction in revenue of
such recipient due to the COVID-19 public health emergency, relative to revenues
collected in the most recent full fiscal year of the recipient prior to the emergency.
4.To make necessary investments in water, sewer, or broadband infrastructure.
The categories are fairly broad. The US Treasury published FAQs for specific spending guidance. For
more information, please visit the US Treasury website at https://home.treasury.gov/policy-
issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recovery-
fund/non-entitlement-units.
Part of the Final Rule clarified #3 above for the loss of revenue. The Final Rule allows communities to
use a blanket assumption of up to $10M revenue loss. The projects funded by ARPA grant dollars can be
used on any governmental function less replacement of lost taxes or supplementing pension funds.
Council approved this provision in Feb. 2022.
Now almost a year into the grant program, and requests starting to add up, staff wanted to provide council
with an update on where we are at with the ARPA dollars. Staff is trying hard to put forth meaningful
projects that may not otherwise be done if it were not for the grant money. Recommendations mentioned
in Nov. 21 during the budget process included the main server, finance software, cellular meter reads,
rescue van, security cameras and technology updates. These items account for about half of the ARPA
3
grant dollars. Staff recommends not spending down immediately as other needs may come up before the
deadline of Dec. 31, 2024. The CARES grant we received in 2020 had to be spent and paid for over a
couple months. We followed a different process in spending down the CARES grant as a result.
The table below summarizes the current ARPA grant transactions tracked in Fund 104.
ARPA Grant Transactions Additions Deductions Balance
7-26-21 initial grant proceeds 388,930.46 388,930.46
11-23-21 redistribute unawarded grant proceeds 12,736.40 401,666.86
12-30-21 initial server payment 85,262.39 316,404.47
1-13-22 server payment 1,480.00 314,924.47
Additional costs approved by city council through April 18, 2022 as well as the July 2022 final
proceeds.
ARPA Grant Transactions Additions Deductions Balance
2022 Remaining server upgrade costs 13,257.61 301,666.86
3-7-22 Technology equipment/upgrades 24,169.82 277,497.04
4-4-22 Cellular water meters 40,000.00 237,497.04
4-18-22 Fire Hall technology updates 18,385.00 219,112.04
7-22 final grant proceeds 401,666.86 620,778.90
Projects recommended by staff, but not yet approved by city council.
ARPA Grant Transactions Additions Deductions Balance
2022 Rescue Van, city share 96,000.00 524,778.90
2022/2023 Finance software conversion 100,000.00 424,778.90
2022/2023 Security cameras 109,180.00 315,598.90
The amount of ARPA grant dollars remaining at this time is $315,598.90 after approved and proposed
projects are accounted for.
Council Agenda Item
MEETING DATE: April 26, 2022
AGENDA ITEM: Water & Sewer Financial Planning Software
SUBMITTED BY: Finance
PREVIOUS COUNCIL ACTION: Council hired Carl Brown Consulting to complete a rate analysis of
the water and sewer rates in 2015/2016.
BACKGROUND INFORMATION: The finance department has conducted comprehensive rate
studies the past several years. The studies consider operations, capital needs, debts, conservation
measures and economic factors. Analyzing the rates is very cumbersome with many factors effecting the
rate needs. Law changes and stringent water/wastewater quality requirements add to the complexity.
Public Works and Finance attend annual seminars to try to keep up with current factors effecting the city
utilities. The City also participates in annual rate surveys to compare rates with the local communities
and within the State/Region.
From time to time it is recommended to have an external company review the rates. Many cities conduct
these reviews periodically as laws and regulations change. In 2015, there were updated to the water
conservation laws the City had to ensure we complied. In addition, the water and sewer funds we
struggling post the 2008 Great Recession. The City carried a large debt burden in these funds that did not
anticipate the housing crash. As a result, large user fees were needed over a few years. The rate analysis
in 2015 helped us get through a few difficult years. The City paid $14,690 for the rate analysis of the
water and sewer funds in 2015.
Staff recommends hiring a firm to provide an outside look at the financial health of the water and sewer
funds. It has been six years since the last look from a consultant and many moving parts are coming into
play that effect these utility funds. It is a good idea to have updates roughly every five years.
In 2021, Finance audited each utility billing account and made improvements to how the units are charged
in the utility billing system. In addition, the Badger meter reading device and software were updated in
2021 for more accuracy of meter readings and evaluating the data. In 2022, Council approved converting
up to 200 meters with cellular meter reading end points. The cellular reads will be much more user
friendly for the customer and city staff.
Finance has been looking at the way we charge our fixed charges (known as line charges for water and
sewer on the utility bills). There may be a more equitable way to calculate these charges. Currently in
city ordinance, a user is charged on a per unit basis. A single-family home is charged 1 unit. An
apartment is charged for each residential unit. For instance, a 35-unit apartment is charged 25 units. For
commercial, businesses are charged one unit unless a multi-tenant building. Multi-tenant commercial
accounts are charge the number of tenants for the units. CSB has a special calculation to determine the
number of units based on the sewer use agreement with CSB. There is a disparity in what the City
charges a single-family home versus a commercial account such as Kennedy Community School. Both
are charged one unit. The school needs a larger capacity. Staff would like to consider options to update
how we charge the line charges as a result.
5
St. Cloud hired AE2S to complete a rate analysis and to assist with the Foley allocations as they consider
connecting to the St. Cloud wastewater treatment facility. Another consultant, Waterworth, working with
St. Cloud in their utility’s division reached out to us on the software program they use for long-term
financial modeling. The finance model works alongside the rate analysis to quickly see the impacts in
rate changes. In addition, the financial model provides a “what if” scenario graphing results to assist with
decision making. This may be the timing effects of the Foley reimbursements to the City of St. Joseph,
adding a new lift station to the system, major repairs such as the sewer forcemain repaired recently,
adding large industrial type user, etc. The financial modeling can incorporate the rate analysis, but also
does so much more.
Vicky and Lori received a demo of the Waterworth financial model. The software is unique and cannot
be compared exactly to another company. There are other companies that can provide some of the
features. Waterworth is also able to do some rate analysis. Lori reached out to St. Cloud Utilities for
feedback. Their comment was “You are going to love it!” Staff had Waterworth prepare a short demo for
the council workshop to get a snapshot of what the program can do. The link to the video is below. The
video will be also be presented during the meeting.
https://www.loom.com/share/272482446e454310b5ce9c4977bac2a5
The cost to set up the long-term financial modeling with Waterworth is $7,490 annually for the water and
wastewater funds. To add storm sewer to the mix, the cost is $9,990. With three or more services areas,
any additional services Waterworth supports can be added at no addition charge. The 5-year enterprise
capital equipment plan has $8,000 in the fund for a comprehensive rate analysis. Waterworth offers a 90-
day free trial of their financial model. The quote includes some rate analysis including converting the line
charges. If we need a more in-depth analysis, Waterworth charges $10,000.
Based on what St. Joseph paid in 2015 from a small company, Waterworth’s rates are very reasonable. If
council would rather just look at a rate analysis without the financial planning module, staff will need to
get quotes. A rate analysis by itself will only consider the current conditions of the water and sewer
funds. While long-range rates will be provided, it will not include the unknowns that may (and will) pop
up over the years. As larger unique impacts are known, a consultant may need to be hired to update the
rate analysis to determine how the City will need to react to the issue.
BUDGET/FISCAL IMPACT: $7,490
ATTACHMENTS: Waterworth Quote
Waterworth Services
Memorandum
Please make checks payable to Waterworth Innovations Inc.
Payment by major credit card also accepted – please ask for details
1
QUOTE
Lori Bartlett
Finance Director
City of St. Joseph, Minnesota
lbartlett@cityofstjoseph.com
via email
March 21, 2022
Waterworth Innovations Inc.
PO Box 23118
Victoria BC V8V 4Z8
Canada
IRS EIN: 98-1320761
CA GST #: 789699 329 RT0001
Item Description Line Total
Waterworth/Muniworth Annual
Subscription: 2 Service Areas
Water Service Area
Wastewater Service Area
Professional Support Package for Water
Professional Support Package for Wastewater
$7490
Total USD $7490
Professional Support Package included with subsciption
• Unlimited 1 on 1 assistance with all included tools
• Expert advice with Financial modeling, Cost of Service Analysis, and Rate Design
• Onboarding of external financial model or Pro Forma into Waterworth’s Financial Model and refining
model
• Assistance with presenting models internally or to Boards/Councils
• Assistance with onboarding instructions for Assets, Population, Flows or Billing Data
• Training of new staff on Waterworth
90-day Free Trial
City of St. Joseph will receive complimentary access to Waterworth's Water and Wastewater Service Areas, along
with the Professional Support Package, for the first 90-days following their Get Started Meeting.
At the end of the 90-day term, City of St. Joseph may choose to:
(1) Start the Waterworth Annual Subscription at the above quoted price.
(2) Close their Waterworth account and all information will be deleted from our servers. There is no ongoing
obligation from either party.
3+ Service Areas
If the organization subscribes to 3 service areas, they will then have access to all service areas that
Waterworth/Muniworth supports. Customer Success staff will provide access to new service areas upon request.
Thank you,
Emily Mathison
Sales and Marketing Manager
w: www.waterworth.net
e: emily@waterworth.net
t: 206-848-7171
1 844 349 2837
info@waterworth.net
All prices in USD.
waterworth.net CONFIDENTIAL – NOT FOR CIRCULATION
Waterworth and Muniworth Services
Standard Services
Professional Support Package – included with subscription
• Unlimited 1 on 1 coaching and assistance with all included tools
• Expert advice with Financial Modeling, Cost of Service Analysis, Infrastructure Analysis and
Rate Design
• Onboarding of external financial model or Pro Forma into Waterworth’s Financial Model and
refining model
• Assistance with project management and organization to help meet deadlines and stay on
track of priorities
• Training to help you more effectively communicate with elected officials and between
departments
• Assistance with analysis of complex datasets, and impact analysis of any scenarios or
proposed changes
• Assistance with presenting models internally or to Boards/Councils
• Assistance with onboarding instructions for Assets, Population, Flows or Billing Data
• Training of new staff on Waterworth
Additional Services
All items in the following additional services packages can be completed by staff with
Waterworth’s expert guidance as included in the Professional Support Package for no additional
charge.
However, if staff would like to outsource this work to Waterworth as a turnkey solution, please see
pricing below. Prices are one time, stated as a budget, and in addition to a Waterworth/Muniworth
subscription.
Infrastructure Analysis Package - $2000
Using an export of the entire linear and non-linear asset inventory from a GIS, Waterworth staff will:
• Work with the data to make it able to be onboarded into Waterworth’s system
• Work with the customer to establish unit costs and ensure the data provided is correct
• Perform analysis of the system infrastructure, identifying possible infrastructure deficits and
identifying upcoming asset replacement projects
• Determine recommended annual capital reinvestment costs over time, looking as far as 100
years into the future
• Produce a report based on the findings and optional presentation of this report
1 844 349 2837
info@waterworth.net
All prices in USD.
waterworth.net CONFIDENTIAL – NOT FOR CIRCULATION
Rate Recommendations Package - $3000
Using an export of a year of billing data from the customer’s billing software, Waterworth staff will:
• Manipulate the raw data to be able to be onboarded into Waterworth’s system
• Perform an integrity analysis of the data to ensure as few errors or bad data as possible
• Analyze the billing data to determine equity between customer classes, as well as revenue
stability and analysis of water use distribution across customer base
• Reconcile the billing data using Waterworth’s rate card tool
• Provide up to 3 rate recommendations based on organization's goals for water sustainability
and revenue requirements
• Produce a report detailing findings and recommendations, and optional presentation of this
report
Cost of Service Package - $5000
Using the customer's accurate financial revenue requirements, asset inventory, and billing datasets,
Waterworth staff will:
• Establish relevant functional cost components
• Determine relevant customer categories including inside/outside customers
• Develop an allocation of operating expenses to functional components
• Develop an allocation of asset base to functional components
• Allocate cost responsibility between customers based on demand characteristics
• Establish return on rate base according to utility-basis methodology
• Compare current customer cost allocation with new recommended allocation
• Develop a rate schedule for transitioning to new allocation
• Produce a report including findings and recommended 3 year rate schedule, and optional
presentation of this report
Full Rate Study - $10,000
A full rate study by Waterworth includes all services and deliverables of the Infrastructure Analysis,
Rate Recommendations and Cost of Service packages, in addition to a 1 year Waterworth/Muniworth
subscription.
If any additional miscellaneous services are required, Waterworth can refer agencies to one of its
partners.
Alternatively, users may conduct their own rate study using the Waterworth platform without
additional support services for no additional charge. In this case, all services in the Professional
Support Package are available and work plan may be developed with Waterworth staff to guide this
process.
MEMORANDUM
Date: April 26, 2022
To: St. Joseph City Council
From: Lori Bartlett, Finance Director
Subject: Waterworth Continuous Utility Rate Management and Forecasting Solution
Introduction and Summary
Setting water rates is an annual challenge for staff. It requires considerable effort to ensure
rates are both affordable for residents, but also sufficient to meet the long-term costs of
providing the service. Waterworth, a continuous utility rate management and forecasting
solution, will enable us to complete rate reviews more efficiently and effectively, and
communicate results more easily. Using this tool (which includes professional support) will make
the need for rate changes more transparent and defensible to residents. There will also be less
risk that renewal of critical infrastructure will be underfunded over the long term, which will mean
a more sustainable community (see www.waterworth.net).
Recommendation
THAT City Council approve use of Waterworth to set water rates for at least one year,
after which staff will review the results and determine whether to continue using the tool
on an ongoing basis.
Discussion
Setting water rates is difficult because it requires striking a delicate balance between collecting
sufficient revenue to cover all costs associated with providing the service, and keeping rates low
so they are affordable. Staff must do this analysis every year to ensure revenues will meet
budget needs. Since this is time consuming, it can draw effort away from other important
projects. Results rely on complicated Excel-based financial models that are not easy to interpret
or communicate. This can make it difficult to defend proposed changes to residents. However,
the alternative of bringing in outside consultants is prohibitively expensive, and supporting these
kinds of contracts is also very labor intensive.
Recent advances in cloud-based technology have made a promising new option for water rate
management possible. Waterworth is an affordable and easy to use cloud-based solution that
will allow us to continue to do rates analysis in-house, combined with professional support,
when and if we need it. It also employs clear data visualization and is made for collaboration.
Waterworth users report to save 50-90% of their cost and time on rate analysis and approval
compared to using in-house Excel models or outsourcing to consultants.
The founder of Waterworth, JP Joly, has worked in rates consulting for over a decade, and
invested his experience into developing this new tool. Because of this experience, the
Waterworth team can also provide professional support to users via zoom, phone, email and
online chat. Waterworth is being used successfully by over 100 communities around North
America.
Waterworth is funded through an annual subscription and professional support package for a
price of $7,490 for 2 service areas or $9,990 for 2 service areas. By comparison, the cost of a
consulting contract to undertake a water rate study can range from $15,000 to $150,000 or
more, depending on what is included in the scope of work. Subscribing to Waterworth does not
entail any long-term commitments. Staff can simply export our data and discontinue use at any
time with no penalty, then either revert to doing rates analysis entirely in-house or explore other
options.
The advantages of using Waterworth include the following:
• easy access to real-time, readily-communicated information about the full costs of
funding our water services and our revenue options to meet that requirement;
• enhanced ability to run different scenarios and explore opportunities to control costs and
keep rates as low as possible;
• the simple graphic interface provides better ability to communicate the need for rates
and rate changes — decision-makers and the public will be able to clearly see how
revenue is used to fund essential water services;
• reduced risk of underfunding infrastructure replacement, which will reduce public health
and safety risks and lead to a more liveable community over the long-term;
• reduced staff effort on annual rates analysis, freeing up capacity to focus on other
important projects;
• low cost compared to using consultants, with no long-term commitments required; and,
• ability to access professional support any time to help with rate setting challenges and
ensure we are following best practices.
Staff recommend that we commence a one-year trial of Waterworth, with the option of
continuing use in future years if it proves to be a better way forward for water rate management
for our community.
Regards
Lori