REQUEST FOR PROPOSALS
COST OF SERVICE STUDY
Proposal Due:
Wednesday, September 28, 2026
4:30 P.M.
Mail To:
P.O. Box 719003
Santee, California 92072-9003
Office Location:
9300 Fanita Parkway
Santee, California 92071
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TABLE OF CONTENTS
I.
INTRODUCTION .....................................................................................................................3
II. DISTRICT BACKGROUND.........................................................................................................3
III. EAST COUNTY ADVANCED WATER PURIFICATION PROGRAM..................................................4
IV. CURRENT BILLING STRUCTURES..............................................................................................4
V. PROPOSAL.............................................................................................................................6
VI. REQUIRED DELIVERABLES.......................................................................................................7
VII. SUBMISSION REQUIREMENTS ................................................................................................7
VIII. SELECTION PROCESS ..............................................................................................................8
IX. EVALUATION CATEGORIES .....................................................................................................8
X. CURRENT PROJECT SCHEDULE ................................................................................................8
XI. PERFORMANCE OF WORK ......................................................................................................9
XII. DISCLAIMERS.........................................................................................................................9
Attachment:
1: Agreement for Professional Services
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I.
INTRODUCTION
Padre Dam Municipal Water District (District) seeks proposals from qualified consultants to conduct a Cost of
Service Study (COSS) for its potable water, recycled water and wastewater operations. The goal is to develop
transparent, defensible, and legally compliant utility rates in accordance with Proposition 218 and Proposition
26. All recommendation must be based on sounds cost of service principles and supported by comprehensive
documentation and clear legal rationale. The selected consultant will:
• Evaluate the District’s current rate structures, cost allocation methods, and customer classifications for
water, recycled water, and wastewater services.
• Address uniform and tiered rate structures, taking into account AB 2180 and legal challenges such as
Coziahr v. Otay Water District and Patz v. City of San Diego.
• Recommend improvements to rate structures, including tier allocations, fixed/variable rates, and
concentration-based charges.
• Assess operating costs, capital needs, and major initiatives like the East County AWP Program.
• Develop a flexible model able to analyze the impact of varying levels of CIP expenditures, reserve
requirements, and operational costs on rates.
• Ensure the model will identify what portion of rates and charges are from internal operations and what
portion are attributable to external providers.
• Show the bill impact (both dollar and percentage) of each scenario, comparing current bills to proposed
bills for each customer class.
• Create a clear method to calculate the impact of pass-through increases on rates.
• Develop annually updatable methods for cost allocation, overhead rates, and miscellaneous fees,
ensuring compliance with audit and grant/loan requirements, and District policies.
• Prepare 10‑year financial projections to support planning and rate smoothing.
• Ensure proposed rate structures are practical, easy to administer, and clear for customers.
• Clearly describe their technical approach to each task, identify anticipated challenges, and develop
strategies to address them.
This Request for Proposal (RFP) outlines the Project goals, required services, selection process, proposal
guidelines, and the requirements and procedures for submitting proposals. Failure to follow all instructions in
this RFP may result in disqualification. The District reserves the right to waive minor informalities at its sole
discretion. No single factor will determine the final award.
II. DISTRICT BACKGROUND
Padre Dam serves approximately 100,000 people across 72 square miles in eastern San Diego County, including
Santee, Blossom Valley, Crest, Dehesa, Alpine, Harbison Canyon, Flinn Springs, and portions of Lakeside and El
Cajon. The District is divided into two major geographic service areas, the Western Service Area (WSA) and the
Eastern Service Area (ESA). The District provides potable water, sewer, recycled water, and park and recreation
services in its WSA. Only potable water service is provided to the ESA. The elevation gain from the Santee Valley to
the District’s highest reservoir is over 2,000 feet.
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The District currently imports 100 percent of its potable water supply from the San Diego County Water
Authority (SDCWA), but will eventually purchase 30 percent of its supply from the East County AWP Program
(see below). The District’s potable water distribution system includes 14 pumping stations, 28 storage reservoirs,
19 pressure zones, and 18 pressure reducing stations.
The District provides sewer services to approximately 69,000 customers in Santee and portions of San Diego
County and El Cajon. Its collection system consists of sewer mains, lift stations, and flow diversion structures.
Before decommissioning its Water Recycling Facility in October 2025, the District treated and recycled about 40
percent of its sewer flows, averaging two million gallons per day (MGD) for irrigation and Santee Lakes, and sent
the remainder to the City of San Diego's Metropolitan Wastewater System (Metro) for treatment and disposal.
Once the AWP Program is operational, most District wastewater will be treated by, and recycled water will be
purchased from, the East County AWP Program.
III. EAST COUNTY ADVANCED WATER PURIFICATION (AWP) PROGRAM
The East County AWP Program, a partnership between Padre Dam, the City of El Cajon, the County of San Diego
and Helix Water District, will create a sustainable, drought-proof local potable water source. In doing so, the
Program will diversify East County's water supply, reduce reliance on imported water, and meet up to 30 percent
of the region’s current potable water needs. By treating wastewater locally, the Program also reduces
dependence on the Metro system. The AWP Program is scheduled to begin treating wastewater and distributing
purified water by June 2027. This COSS should account for the AWP Program as an alternative to purchasing
water from SDCWA and to relying on Metro for wastewater treatment.
IV. CURRENT BILLING STRUCTURES
The District’s rate structures are summarized below. Details on utility rates, billing, and fees are available in
Sections 8 and 10 of the District’s Rules and Regulations on its website.
Potable and Recycled Water Operations
The District’s current water rate structure distinguishes between residential and non-residential customers, with
rates and charges designed to equitably recover both fixed and variable costs of providing service.
Customer Classes:
The District recognizes different customer classes with distinct rate structures:
• Residential: Includes a multi-family class and three single-family sub-classes, based on Equivalent
Dwelling Units (EDUs).
• Non-Residential: Includes commercial, government, irrigation, agriculture, and recycled irrigation
classes.
Commodity Charges:
Commodity charges are designed to recover a portion of the District’s fixed costs and its variable costs
of providing water service. These charges are structured as follows:
• Residential: The District uses a three-tier rate structure, with higher charges for increased water use
to cover added system costs. These costs include sizing, operating, and maintaining pipes, reservoirs,
pump stations, and other facilities. The tiers also recognize certain residential customers already
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paid for a portion of the costs related to sizing the water system to provide additional capacity to
serve them. The amount of capacity purchased is determined on equivalent dwelling units (EDUs),
so water allotments within each tier are determined by the number of EDUs assigned to each multi-
family and single-family residential customer.
• Non-Residential: Commodity rates for non-residential customers are uniform by service type,
designed to equitably allocate costs among customers with widely varying water use.
Monthly Water Systems Charge:
The charge is based on the size of a customer’s water meter to recover the incremental costs of sizing
facilities to sufficiently deliver water to properties served by larger meters. The District’s water systems
charge is used to help recover a portion of fixed operating and infrastructure costs.
Scope of Work:
Consultant is expected to perform the following tasks related to the Water Operations:
• Design rates for residential tiers, non-residential types, and recycled water customers.
• Create a clear process for calculating the impact of pass-through increases.
• Update allocations for customer types and tiers as appropriate.
• Assess Eastern Property Tax credit.
• Propose new monthly fixed charges and demonstrate their connection to fixed costs.
• Develop new pumping rates.
• Clearly define rates in terms of internal verses external costs.
• Ensure customer classes are charged appropriately.
• Provide a user-friendly, flexible rate model.
• Provide comprehensive documentation and clear legal rationale for all recommendations.
Sewer Operations
The District’s current sewer rate structure distinguishes between single-family residential, multi-family
residential, and commercial/industrial customers with distinct rate schedules for each.
Customer Classes:
• Residential: Includes single-family and multi-family classes. The multi-family class is divided into
multi-family dwellings/apartments, mobile home parks, and condominiums/townhomes.
• Commercial/Industrial: Includes hotels, motels, RV parks, rest homes, and other businesses.
Commodity Charges:
The sewer commodity charge is designed to recover a portion of the District’s internal costs for collecting
and maintaining the wastewater system and the external cost paid to Metro and, eventually, the AWP
Program.
• Residential: The commodity charge for residential customers is uniform. The rate is applied to
estimated wastewater flow for each customer. Customers without a full-year of water-use history
are charged a “New Customer Rate”.
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This is the opportunity summary page. It provides an overview of this opportunity and a preview of the attached documentation.
