The City of Boulder (City) has engaged Raftelis (previously The Novak Consulting Group) for a variety of services since 2010, including a structural review of the City of Boulder’s (City) downtown development districts, economic vitality functions, and parking operations. This study assessed both the staffing levels and organizational alignment of the Downtown, University Hill Management Districts, and Parking Services Department. Most recently, the firm was hired to conduct a detailed contract service analysis, which involved identifying specific service levels for facility and maintenance functions and comparing the costs of continuing with existing contracts versus bringing them in-house. Additionally, the City engaged the firm to assist with the development of performance measures associated with the City’s strategic plan. The project entailed working with several staff groups to identify goals and specific performance measures for each of the City’s key performance areas.
The City engaged the firm to conduct a structural review of the City’s Finance Department and assess the staffing of the Budget and Purchasing functions. The City was highly decentralized, and tremendous capacity existed within operating departments to serve their own needs, but the central offices (Budget and Purchasing) were unable to provide appropriate service levels and support the City Manager. Resources were reassigned to create a more robust Budget Office, and additional resources were made available to the Purchasing function to better meet customer expectations. Subsequently, a similar review was completed for the City’s Human Resource Department. The firm assisted the City with the development of a long-term financial model that will allow the City to better forecast future general fund revenues and expenditures.
Our team has also assisted the City with an assessment and outreach for its Human Services programs, an organizational assessment of the new Community Vitality Department (a combination of the City’s downtown district management along with parking and access services), an assessment of Planning and Development Services, and an assessment of Recreation Center In-Sourcing.
Raftelis was retained by the City of Boulder to evaluate and complete a comprehensive water, wastewater, and stormwater rate assessment and to develop rate alternatives for each utility. The study included a detailed review of policies and practices incorporated in separate utility rate models maintained by the City and of potential improvements to the utility rate structures. As part of the study, Raftelis also reviewed the City’s separate utility financial planning forecasts and revenue requirements and provided recommendations on utility debt service coverage and cash reserve policies. Findings and recommendations were adopted by City Council in May 2017 with rate structure modifications effective January 1, 2018, implementing rate structure modifications while increasing the overall rate revenue for each respective utility.
The City had implemented an individualized customer water budget-based rate structure nearly a decade ago. As part of our study, Raftelis assessed the effectiveness of the water budget rate structure by reviewing customer water use behaviors and revenue generated and comparing against other utilities in Colorado and California with similar water budget rate structures. The City adopted recommended changes to the water budget rate structure which reduced indoor allocations for single-family residential and multi-family residential customers by 1,000 gallons per month per dwelling unit while increasing rate revenues to generate an additional 8% in 2018. The adopted rate structure also reduced the number of potential water budget rate structure options for commercial, institutional, and industrial (CII) customers – replacing the Average Monthly Use (AMU) water budget option used by most CII customers with one that includes each customer’s average winter consumption plus outdoor budget tied to irrigable area and 15 gallons per square foot. The AMU rate structure had been tied to 2005 customer water use since implementation in 2007 and a change was needed to better align ongoing customer water budgets with more recent water use while providing an efficient water budget for outdoor customer use. A Historical Monthly Use (HMU) water budget option is still available to CII customers with seasonal use not tied to irrigation which uses a rolling three-year monthly average as basis for each customer’s monthly water budget.
The City’s wastewater utility faces rising capital costs associated with increased regulatory requirements combined with repair and replacement needs. The adopted wastewater rate structure was designed to improve overall revenue stability by recovering 25% of the annual revenue requirements through the fixed charge and adjusting the volume rate accordingly as the previous rate structure recovered 4% through the fixed charge resulting in revenue instability as billed sewer volume use continues to trend lower on a per account basis. Raftelis also recommended updates to the City’s Industrial Pre-Treatment Program (IPT) administrative fees and extra-strength surcharges for high-strength customers.
The City’s stormwater collection and drainage systems are faced with equitably recovering increased operating and capital requirements following the flooding experienced in Boulder in the fall of 2013. The City’s rate structure was perceived as being overly complex and was implemented before the City had individual property pervious and impervious area information. The City adopted a rate structure which included a fixed charge for all properties and an impervious area rate aligned with the City’s philosophy to equitably recover utility costs from customers while promoting green and pervious spaces throughout the City. Raftelis also worked with the City to evaluate incentives for sustainable stormwater management practices through updates to the credits program applicable to new development.
To assist in the review of multiple rate structures for each utility, Raftelis developed a customer bill impact analysis tool which calculated the dollar and percent bill impact monthly and annually for each individual customer for each utility, as well as the combined utility bill. This detailed customer bill impact supported an informed decision-making process by identifying the impact to all customers resulting for each alternative, and assisted Raftelis and City staff in developing and refining rate structure alternatives for each utility, as well as detailing expected customer bill impacts across the three utilities and the various alternatives evaluated.
Throughout the project, Raftelis worked extensively with City staff to refine interim study findings and recommendations. Raftelis and City staff presented final recommendations to the standing Water Resource Advisory Board (WRAB) in late 2016 and early 2017. The resulting WRAB endorsed findings and recommendations were presented to City Council and adopted in May 2017.
Raftelis helped Boulder evaluate assessment methods and estimate revenue potential from modifications to utex funding greenhouse gas mitigation programs. In 2007, the City passed a Climate Action Plan (CAP) tax that levied a per kilowatt-hour charge on electricity consumption within the City, and these revenues were used to fund the City’s efforts to meet its climate change goals. The CAP was re-authorized by City voters in 2014 and is set to sunset in 2023, unless re-authorized by voters. Over time, purchasing power has decreased as costs have increased while revenues have started to decline with increased conservation and the growth of untaxed renewable energy options. The City also recognizes the need for additional funding to meet its aggressive climate goals and the greenhouse gas emission mitigation efforts. Furthermore, the CAP tax is assessed only to electric use, but does not tax natural gas or vehicle-based emissions. The City understands that reaching net zero climate emissions requires the electrification of energy and that disadvantaging electricity through an electriconly CAP tax runs counter to their end goal.
The City is in preliminary stages of further investigations regarding feasibility of more inclusive carbon assessments to include natural gas and fossil fuels consumed by vehicles. Raftelis created a mod-el to estimate potential revenues and economic impacts based on different taxing methods. Raftelis also helped the City to evaluate carbon tax methods and fees according to various metrics such as affordability, ease of implementation, social equity, revenue stability and use defensibility. Throughout this project, Raftelis worked with the City to validate data, develop quantitative models in a transparent, logical process, and refine potential options. This project was characterized by openness and transparency as Raftelis clarified assumptions and the limits of model projections. City staff presented the findings of the study to Council and has received direction to continue efforts to explore these identified options.
Raftelis was retained by the City of Boulder to evaluate and complete a comprehensive water, wastewater, and stormwater rate assessment and to develop rate alternatives for each utility. The study included a detailed review of policies and practices incorporated in separate utility rate models maintained by the City and of potential improvements to the utility rate structures. As part of the study, Raftelis also reviewed the City’s separate utility financial planning forecasts and revenue requirements and provided recommendations on utility debt service coverage and cash reserve policies. Findings and recommendations were adopted by City Council in May 2017 with rate structure modifications effective January 1, 2018, implementing rate structure modifications while in-creasing the overall rate revenue for each respective utility.
