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HomeMy WebLinkAboutRES2025-031 Electric Uniform System of Accts ConversionSponsored by: Kat Sorensen CITY OF SEWARD, ALASKA RESOLUTION 2025-031 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ACCEPT THE PROPOSAL WITH UTILITY ACCOUNTING & RATES SPECIALISTS, LLC FOR THE CONVERSION OF THE ELECTRIC DEPARTMENT'S ACCOUNTING METHOD FROM THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD FRAMEWORK TO THE RURAL UTILITY SERVICES UNIFORM SYSTEM OF ACCOUNTS, IN THE AMOUNT OF $44,860 WITH A 20 % CONTINGENCY WHEREAS, the City of Seward Electric Department has determined that transitioning from the Governmental Accounting Standards Board (GASB) framework to the Rural Utility Services (RUS) Uniform System of Accounts will enhance financial transparency, regulatory compliance, and operational efficiency; and WHEREAS, the City conducted a Request for Prqposal (RFP), receiving proposals from qualified vendors, with Utility Accounting & Rates Specialists, LLC (UARS) submitting the most comprehensive proposal, demonstrating expertise, experience, and a detailed three-phase approach; and WHEREAS, the UARS proposal includes assessment of current accounting practices, comprehensive training for City employees on the new accounting system, and full assistance through the transition to ensure alignment with Railbelt Reliability Council reporting standards; and WHEREAS, UARS has proposed a fee of $44,860 for the complete three-phase project, and the City seeks to include a 20% contingency, bringing the total project appropriation to $53,832 to accommodate additional staff training needs and unforeseen expenses. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Council hereby authorizes the City Manager to accept the proposal with Utility Accounting & Rates Specialists, LLC, for the conversion of the Electric Department's accounting method to the RUS Uniform System of Accounts. Section 2. Funding in the amount of $53,832 ($44,860 + 8,972.00), the fee plus a 20% contingency, is hereby appropriated from the Electric Department expense code line 15000-3001- 7009 contracted services account to funds to cover the cost of services and additional training associated with the accounting system conversion. This expenditure was appropriated into the City's FY25_26 Operating Budget. Section 3. This resolution shall take effect immediately upon adoption. CITY OF SEWARD, ALASKA RESOLUTION 2025-031 Page 2 of 2 PASSED AND API'ROVED by the City Council of the City of Seward, Alaska this 14th day of April 2025. THE CITY OF SEWARD, ALASKA Sue McClure, Mayor AYES: Osenga, Finch, Barnwell, Crites, Warner, Wells, McClure NOES: None ABSENT: None ABSTAIN: None ATTEST: Kris Peck City Clerk (City Seal) City Council Agenda Statement Meeting Date: April 14, 2025 To: City Council Through: Kat Sorensen, City Manager From: Taylor Crocker, Electric Operations Supervisor Subject: Resolution 2025-031: Authorizing the City Manager to Accept the Proposal from Utility Accounting & Rates Specialists, LLC for the Conversion of the Electric Department's Accounting Method from the Governmental Accounting Standards Board Framework to the Rural Utility Services Uniform System of Accounts, in the Amount $44,860 With a 20% Contingency Background and justification: The City of Seward Electric Department currently utilizes the Governmental Accounting Standards Board (GASB) method for financial reporting and accounting. Transitioning to the Rural Utility Services (RUS) Uniform System of Accounts (USoA) will align the Electric Department's accounting framework with industry standards across the Railbelt Utilities, enhancing financial transparency, accuracy, and regulatory compliance. This conversion is essential to meet the audit requirements of the Railbelt Reliability Council (RRC) and to enable effective cost -based decision -making, improved capital accounting, and robust financial planning An open Request for Proposals (RFP) was issued to seek qualified consultants to assist in this accounting transition. Utility Accounting & Rates Specialists, LLC (UARS) submitted the winning proposal, offering a detailed and structured three-phase approach: • Phase One: Assessment of existing accounting practices, development of a comprehensive work plan, and preliminary chart of account mapping. • Phase Two: Testing and parallel operation in a controlled environment, validating financial data integrity, and ensuring accurate budgeting and reporting capabilities under the new system. • Phase Three: Full implementation of the Uniform System of Accounts, comprehensive staff training, ongoing validation of financial reporting, and ensuring compliance with Railbelt Reliability Council audit standards. UARS proposed a fee of $44,860.00 to complete all three phases. However, to ensure thorough training and smooth transition, it is prudent to authorize additional funding of 20% ($8,972.00), bringing the total authorized amount to $53,832.00. This additional allocation is recommended to adequately cover supplemental training and any unforeseen support required by staff during the transition. This strategic investment will substantially improve the City's financial reporting practices, align Seward with other utilities on the Railbelt, and strengthen the City's ability to accurately manage its electric utility operations well into the future. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: Strategic Plan: Other: Total amount of funds listed in this legislation: $ 53,832.00 This legislation: Creates revenue in the amount of: Creates expenditure in amount of: Creates a savings in the amount of: Has no fiscal impact X Funds are: X $ 53,832.00 $ Budgeted Line item(s): 15000 3001 7009 0000 00000 Not budgeted Not applicable Affected Fund: General Boat Harbor Motor Pool Available Fund Balance SMIC Parking Other X Electric Water $ Wastewater Healthcare Note: amounts are unaudited $53,832.00 Finance Director Signature: Shy X Yes Attorney Signature: Not applicable Comments: Attorney Review Administration Recommendation X Adopt Resolution Other: CITY OF SEWARD mil(„ -,.< ��r„ rt.: -i!r rr la Utility Accounting & Rates Specialists, LLC Utility Accounting & Rates Specialists, LLC Russ Hissom, CPA, Principal 936 Prairieview Circle Oconomwoc, WI 53066 608 628 4020 russ.hissom©uarsconsulting.com City of Seward GASB to RUS Uniform System of Accounts Conversion Services April 1, 2025 U utility Accounting & Rates Specialists, LLC March 12, 2025 Mr. Taylor Crocker, Electric Operations Manager Mr. Kris Peck, City Clerk City of Seward 410 Adams Street P.O. Box 167 Seward, AK 99664 Subject: Proposal for GASB to RUS Uniform System of Accounts (USoA) Conversion Services Dear Mr. Crocker and Mr. Peck, Utility Accounting & Rates Specialists (UARS) is pleased to submit this proposal to assist the City of Seward Electric Department in converting its financial reporting framework to the Rural Utility Services (RUS) Uniform System of Accounts (USoA). UARS has extensive expertise in guiding electric cooperatives and utilities through USoA conversions, capital accounting enhancements, and work order process improvements, ensuring seamless integration with existing financial systems while maintaining regulatory compliance and financial transparency. In addition, UARS provides both on -site and online industry training for national associations as well as individual cooperatives and utilities, equipping teams with the knowledge needed for effective accounting practices and financial management. With a strong foundation in RUS, FERC, and GASB accounting structures, UARS specializes in aligning financial processes with industry best practices while maintaining seamless integration with existing municipal financial systems. The project approach ensures regulatory compliance, improved cost tracking and capital asset accounting processes, and enhanced financial transparency, all critical for meeting Railbelt cooperative audit requirements. The proposed work plan focuses on: ✓ Mapping and implementing the USoA within the City's financial software ✓ Generating and validating the accuracy of electric department financial reporting monthly and annually ✓ Recommending changes to existing capitalization and depreciation practices and assemblies tracking ✓ Training staff to ensure smooth adoption of new reporting procedures ✓ Developing financial reporting templates aligned with industry best practices ✓ Ensuring consistency and compliance with Railbelt Reliability Council reporting requirements This proposal remains binding for 120 days from the submission deadline of April 1, 2025. I am excited about the opportunity to contribute to this project and look forward to discussing the proposal further, as well as supporting the conversion and related activities. Please contact me with any questions or to schedule a discussion at russ.hissom@uarsconsulting.com or 608 628 4020. Sincerely, Russ Hissom, CPA, Principal Utility Accounting and Rates Specialists, LLC Uarsconsulting.com 2 Utility Accounting and Rates Specialists, LLC Table of Contents 1. Project Background 4 2. Project Contact 4 3. Understanding of the project 4 4. Project approach and methodology 6 Project Kick-off and Policy Priorities Discussion 6 Phase 1— System review and workplan development 6 Phase 2— Testing and parallel operations 7 Phase 3 — Full chart of accounts conversion and validation 7 Project Timeline 8 5. Staffing plan and qualifications 10 6. Company qualifications 11 7. Fee proposal 13 8. References 14 9. Fee structure for ongoing accounting support 15 Appendix A — Resume Appendix B — Client Listing Appendix C — Key Features of a Railbelt Reliability Council Audit Table 1 — Phase 1 Project Steps, 6 Table 2 — Phase 2 Project Steps, 7 Table 3 — Phase 3 Project Steps, 7 Table 4 — Proposed project timeline, 8 Table 5 — Proposed total project fees, 12 Table 6 — Project References, 13 Table 7 — Fee Structure for Ongoing Accounting Support, 14 Utility Accounting and Rates Specialists, LLC 3 Project Background, Contact, and Understanding of the Project 1. Project Background UARS appreciates this opportunity to present this proposal to provide GASB to RUS Uniform System of Accounts (USofA) conversion services to the City of Seward Electric System (SES). You will find the project approach will meet SES's objectives in aligning the financial records with industry best practices, aligning financial reporting with RUS standards, and support future growth as well as audits of transmission costs by the Railbelt Reliability Council (RRC). 2. Project Contact The single point of contact for the project is: Utility Accounting and Rates Specialists, LLC Russ Hissom, CPA, Principal Russ.hissom(cr�uarsconsulting.com 608 628 4020 3. Understanding of the project Overall project framework The City of Seward Electric System (SES) is undertaking a strategic transition from the Governmental Accounting Standards Board (GASB) framework to the Rural Utility Services (RUS) Uniform System of Accounts (USofA) to enhance financial reporting accuracy, compliance, and alignment with industry best practices. This shift is crucial for improving transparency, cost tracking, and regulatory alignment, especially with future Railbelt Reliability Council (RRC) audits of transmission costs. The project will be delivered in three structured, gated phases, each requiring approval from the City Manager, CFO, and Electric Utility Manager before proceeding to the next stage. The phases are as follows: • Phase One focuses on assessing the City's existing accounting framework and developing a comprehensive work plan to transition to RUS USoA. This phase involves mapping the existing chart of to the RUS structure, identifying gaps in financial reporting, proposing solutions, and developing a revised cost estimate for subsequent phases. • Phase Two involves benchmark testing of the proposed chart of accounts and parallel operation in a test environment to ensure data integrity before full implementation. This phase is critical in refining business processes and validating budgeting, actuals, and reporting functionality. At the conclusion of this phase a revised cost and effort estimate will be made for Phase 3. • Phase Three marks the final transition to the new accounting system, encompassing full implementation, validation of 12 subsequent monthly financial statements, and the pre - audit annual financial statement. The details of this phase include the chart of accounts conversion, capital accounting policy review and recommendations, training and support, RTO compliant financial statement design consistent with other Railbelt cooperatives, and validating financial reporting on a monthly and annual basis. This will ensure that SES's financial records meet the requirements for an audit by the RRC. The key features of a Railbelt Reliability Council audit are shown in Appendix C. 4 Utility Accounting and Rates Specialists Project goals Meeting the project goals will provide SES with a strong financial reporting framework and records that meet best practices in the industry. The overall project goals include: • Align Financial Records with Industry Standards — Transition from GASB to RUS USofA to ensure compliance with rural utility accounting best practices. • Enhance Financial Transparency and Accuracy — Improve cost tracking, budgeting, and reporting for operations, capital projects, and debt service. • Ensure Regulatory Compliance — Structure financial records to support RRC audits and align with other RRC transmission owners. • Develop a Unified Chart of Accounts — Create a bidirectional account mapping system between the City's existing framework and the RUS accounting structure for seamless reporting. • Facilitate Cost -Based Decision Making — Implement a financial structure that enables data - driven planning, forecasting, and rate -setting. • Improve Capital Accounting Processes — Align capitalization, depreciation, and asset tracking with electric cooperative industry standards. • Implement Bi-Directional Budgeting & Reporting — Ensure financial systems support budget - to -actual reporting with one -to -many relationships for improved accuracy. • Support Audited Financial Statement Pre6aration — Ensure monthly financial validations and accurate year-end financial statements to support audits and regulatory reviews. • Minimize Disruptions During Transition — Execute a phased approach to implementation, allowing for benchmark testing and process refinements before full adoption. • Provide Staff Training and Support — Equip finance and electric department personnel with RUS accounting knowledge and best practices to manage the new system effectively. • Enhance Long -Term Financial Sustainability — Establish financial processes that support future utility growth, capital investments, and operational stability. Railbelt audit compliance considerations Major benefits to SES of this project include compliance with RRC audit and reporting requirements and alignment with industry best practices. RRC audits are conducted to assess financial compliance, operational efficiency, and adherence to industry best practices. The RRC plays a key role in overseeing the transmission operations and ensuring coordination among member organizations. These audits focus on financial reporting standards, cost allocations, and rate structures, making the implementation of the RUS Uniform System of Accounts critical for compliance. As the RUS USofA is activity based, transitioning to RUS standards will ensure that SES's financial statements are transparent, consistent with industry norms, and capable of withstanding regulatory scrutiny.2 2 The key features of a Railbelt Reliability Council audit are shown in Appendix C. 5 Utility Accounting and Rates Specialists, LLC Project Approach and Methodology 4. Project approach and methodology The approach to this transition is structured into three gated phases, each requiring approval from the City Manager, CFO, and Electric Utility Manager before proceeding. The phased work plan ensures minimal disruption, allowing SES to maintain operations while implementing the new accounting framework. The project will include: • Development and implementation of a bidirectional Chart of Accounts • Conversion of financial processes to RUS standards • Testing and validation of financial reporting methods • Staff training and ongoing technical support The following methodology outlines the detailed approach for each phase, ensuring a structured, effective, and compliant transition. Client service approach The foundation of the project is built on the utmost attention to client service. Discussions will be held with the City Finance Team and the Electric Operations Manager to ensure that the project approach meets the City's and SES's goals, and then we will deliver the services to meet all project timelines and provide frequent communication and updates to the City and SES project team and other designated parties. There will be same -day responses to emails, calls, and texts. Project updates will be provided throughout the project through web meetings, using that face-to-face contact to apprise the City/SES project team of project status, questions, and issues that may arise. In -person meetings will be held for project kick-off and staff training. UARS's focus is on client service, and you will be served with timely feedback and responses. Project Kick-off and Policy Priorities Discussion The process begins with a project kick-off meeting with the City Manager, CFO and the Electric Utility Manager (the City of Seward project team). During this meeting, project communication, updates, data requests, and the project timeline and milestones will be discussed. This phase includes the initial data request. Meetings: In -person meeting for project kick-off Deliverables: Preliminary project workplan, data request, scheduled project status updates Phase 1 — System review and workplan development Phase 1 sets the foundation for the project and the activities in Phases 2 and 3 of the project. The goal is to assess the City's existing accounting framework and develop the comprehensive workplan to make the full transition to the RUS Uniform System of Accounts (USofA). The project steps are as follows: Table 1 — Phase 1 Project Steps 1.01 System assessment 1.02 Develop chart of account mapping • Review existing financial reports, chart of accounts, and transactions to identify gaps. • Map current financial accounts to RUS USoA classifications for budgeting, actuals, and reporting. Utility Accounting and Rates Specialists 6 I c 1.03 Financial statement integration • Align balance sheet, income statement, cash flow statement, and owner's equity statement with RUS standards. • Map chart of accounts to financial statements 1.04 Revise preliminary workplan 1.05 Revise cost estimate for Phases 2 and 3 • Create a detailed transition plan, identifying resources, risks, and mitigation strategies. • Reassess internal and external resource requirements and revise cost estimates for Phases Two and Three. Meetings: Status updates and information discussion Key Deliverables: Chart of accounts, Bi-directional chart of accounts map (City to RUS USofA), Revised workplan, Revised cost estimate for Phases 2 and 3, Scheduled project status updates Milestones Achieved: Completion of Chart of Accounts mapping draft, Approval of transition workplan, Revised cost estimate for Phases 2 and 3 Phase 2 — Testing and parallel operations Phase Two involves benchmark testing of the proposed chart of accounts and parallel operation in a test environment to ensure data integrity before full implementation. This phase is critical to validate data flow, transaction accuracy, and financial statement outputs. The phase will be used to confirm that the budget - to -actual reporting works correctly under RUS standards. UARS will perform this phase with a combination of on -site fieldwork and remote computer access. The project steps are as follows: Table 2 — Phase 2 Project Steps Task Description 2.01 Development and testing of chart of accounts and financial processes Activities • Discussion with software provider on migration plan. Implement test environment running parallel to the existing accounting system. • Validate data flow, transaction accuracy, and financial statement outputs. • Confirm that the budget -to -actual reporting structure functions correctly under RUS standards. 2.02 Refinement and system adjustments • Identify potential errors, missing accounts, or reporting mismatches. • Adjust processes for depreciation, capital accounting, and expense allocations. 2.03 Financial cost estimate revision for Phase 3 • Evaluate the workload required for full implementation and finalize cost estimates. Meetings: Status updates and information discussion Key Deliverables: Reporting on testing results, Revised cost estimate for Phase 3, Scheduled project status updates Milestones Achieved: Successful benchmark testing of financial reports, Approval of Chart of Accounts integration into SES's financial processes, Updated cost estimate for Phase 3 implementation Phase 3 — Full chart of accounts conversion and validation Phase Three marks the final transition to the new accounting system, encompassing full implementation, validation of 12 subsequent monthly financial statements, and the pre -audit annual financial statement. The final outcome goal is to meet the goals of the City and SES in financial reporting, policy preparation, staff training, and regulatory compliance. The project steps are as follows: Utility Accounting and Rates Specialists, LLC 7 I c Table 3 — Phase 3 Project Steps 3.01 Conversion and implementation Activities • Map the current GASB chart of accounts to the RUS USofA framework. • Identify and address perceived gaps or inconsistencies in financial reporting practices. • Develop and implement the bi-directional data flow methodology to enhance budget accuracy • Develop the output process to generate independent financial statements for the electric department. 3.02 Capital accounting policy review and recommendations 3.03 Training and support 3.04 RRC compliance and financial alignment 3.05 Financial statements and reporting Align capitalization and depreciation policies with electric utility standards. Develop processes for implementing small retirement units and assemblies based on RUS and SES standards. • Establish methodologies for tracking Total Utility Plant and Net Plant in service. Provide recommendations for capital asset tracking and reporting processes based on stakeholder's input. Conduct workshop of training for finance and electric department staff on revised accounting procedures. • Ensure financial statements are structured consistent with other RRC transmission owners. • Design financial records to support future RRC audits. • Using a combination of on -site fieldwork and remote computer access, validate 12 monthly and the annual financial statements post -transition and develop budget to actual reports. Meetings: Status updates, information discussion, reporting on each segment, stakeholder discussions on capital asset tracking, training session for SES and City staff on changes Key Deliverables: Process flows for financial statements and tracking of total and net plant, Reporting on testing results, Capitalization and depreciation policies, Training materials and session, Monthly and annual validated financial statements, Budget to actual reports, Financial records designed to support RRC compliance audits, Scheduled project status updates Milestones Achieved: Successful migration of SES financial records to new chart of accounts, Update of capitalization policies and procedures, Staff training session, Validated financial statements, Designed SES financial records that are RRC audit-ready3 Project Timeline The project timeline will be finalized jointly with you to meet your schedule. The following table shows the preliminary timeline which can be adjusted after our initial discussions. Table 4— Proposed project timeline Protect Phase May ll S Month jiLly Aueust September Qctober. November December 'Alum Feb.luly LVLD Project management and biweekly updates Phase 1 Phase 2 Phase 3 (except following items) Phase 3 . Training Phase 3 - Financial statement verification Phase 3 - Audit -ready financial statements With a May/June, 2025 project kick-off, the new chart of accounts can be designed, implemented, and fully operational in time for the audit of the year ending December 31, 2025. While ongoing financial 3 The key features of a Railbelt Reliability Council audit are shown in Appendix C. Utility Accounting and Rates Specialists, LLC 8 statement verification will continue to cover a full annual cycle, the majority of the work is expected to be completed by January 2026, with ongoing work through July, 2026 just for statement verification. The project timeline will be reviewed, refined, and finalized during the kickoff meeting to ensure alignment with project goals and requirements. 9 Utility Accounting and Rates Specialists, LLC Staffing Plan and Qualifications 5. Staffing plan and qualifications Industry Leadership & Regulatory Expertise Mr. Russ Hissom, Principal at Utility Accounting and Rates Specialists, has spent over 35 years assisting utilities and cooperatives with their accounting, financial strategy, financial audits, rate studies, and expert witness service needs. Russ was a partner at the 10th largest US accounting and consulting firm — Baker Tilly, for 20 years, where he served clients as an audit partner for utilities that follow GASB standards, and provided rate and financial consulting services. Russ has successfully guided organizations through Uniform System of Accounts (USoA) implementations, work order process improvements, fixed asset accounting system conversions, financial audits, and regulatory compliance efforts. His experience also includes FERC-regulated transmission accounting, including Attachment 0 filings for Open Access Transmission Tariff (OATT) compliance. A seasoned expert in rate studies, Russ has prepared or overseen hundreds of electric rate studies, including generation, transmission, and distribution pricing models. He has testified before federal and state regulatory commissions, including ongoing testimony before the Public Utility Commission of Texas regarding transmission rate filings. His deep understanding of RUS and FERC accounting standards enables him to assist cooperatives and utilities in structuring their capitalization policies, financial reporting, and cost allocation methods in compliance with industry best practices. Russ has also held a certification as a Certified Information Systems Auditor and has worked with many software platforms and is experienced in assisting utilities with system conversions. Russ will provide you with all the services in the request for proposal. As your principal point of contact, he will manage all aspects of the project, ensure timely delivery of all deliverables, and provide ongoing support after the initial services are delivered. Educator, Author, and Industry Thought Leader Beyond his consulting work, Mr. Hissom is a national speaker, educator, and author in the utility industry. Since 2000, he has taught in -person FERC and construction accounting courses for the American Public Power Association (APPA) and regularly speaks at national energy industry conferences. Currently, he is developing a five -part webinar series on RUS accounting for the National Rural Electric Cooperative Association (NRECA). His thought leadership extends into publishing, with four textbooks on utility accounting and rate strategy and numerous articles at the website Utility Insights. Additionally, he leads continuing professional education (CPE)-certified online courses on RUS and FERC accounting, certified by the National Association of State Boards of Accountancy (NASBA). Mr. Hissom's resume is included in the appendix to this proposal. You may ask, "How can a smaller firm effectively meet the needs of the City of Seward and SES?" With decades of experience, Russ is committed to exceeding client expectations through exceptional service and industry expertise. Key factors that enable him to exceed expectations include: • Your utmost satisfaction is his goal in serving you. You can ask project references about their experience with the service they received. • Years of experience in serving co-ops and utilities leads to a shortened learning curve, which adds value to the hours of service provided to clients and the ability to meet all deadlines • Balancing and scheduling the project workload effectively will result in meeting all project milestones and delivery due dates • Decades of experience in serving the accounting needs of co-ops and utilities, as well as data conversion and implementation projects leads to great efficiencies, and results that will ensure financial reporting meets the goals of SES for both reporting and planning and is compliant with Railbelt Reliability Council requirements 10 Utility Accounting and Rates Specialists Company Qualifications • A proven track record of successfully completing projects exactly like those requested by the City and SES. • Industry leadership, demonstrated through articles, videos, courses and conference presentations, providing clients with insights into the latest trends that can be applied to their operations. Please contact client references to learn about their satisfaction with the services and outcomes provided by Utility Accounting & Rates Specialists. Additionally, please consider interviewing Russ directly for firsthand insight into his expertise and ability to meet the City and SES's needs. 6. Company qualifications Trusted Expertise in Utility Accounting and Rate Strategy Electric Cooperatives and utilities partner with Utility Accounting and Rates Specialists (UARS) to establish a solid financial foundation, ensuring they can effectively serve their customers with reliable and affordable services. With decades of experience, UARS provides expert guidance tailored to the unique needs of generation, transmission, and distribution entities, helping them navigate complex financial, regulatory, and accounting challenges. Recent Client Success Stories Project references are provided in the reference section of this proposal, but here are a few recent success stories for similar projects delivered to cooperatives and utilities: • Banning, CA Electric Department — UARS transitioned the Banning Electric Department from a municipal chart of accounts to the FERC Uniform System of Accounts, resulting in financial reporting tailored to the electric utility. • Hibbing, MN Utilities (HPU) — UARS led the transition of electric, gas, steam, and water services from a municipal chart of accounts to the FERC Uniform System of Accounts (electric, steam, and gas utilities) and NARUC USofA for the water utility. This project included account design, implementation of the chart of accounts on Caselle financial software, the development of financial reports for the HPU Commission, and comprehensive rate studies for each utility. Mr. Hissom also served as the outsourced full -charge accounting controller for HPU from 2022 — 2024, responsible for day-to-day accounting needs, financial reporting, and preparation of reports for the annual audit. He currently serves HPU with monthly accounting services for their construction projects. • Holyoke, MA Gas and Electric — UARS is currently assisting in transitioning electric work order and fixed asset accounting to NISC software, including the design of assembly units and fixed asset records. • Fayetteville, NC Utilities — UARS assisted in transitioning electric work order accounting and fixed asset management to an Oracle Enterprise Resource Planning (ERP) platform. This included designing assembly units and fixed asset records to align with industry standards. • Tipmont, IN Electric Cooperative — UARS evaluated the use of software systems (NISC) and MicroSoft Power BI reporting in connection with electric and broadband services. • Lower Valley Water and Sewer District, El Paso, TX — UARS transitioned water and sewer fixed asset management records and reporting to Tyler Munis software platform. • Illinois Municipal Electric Agency — UARS reviewed the FERC transmission rate filings (Attachment 0) for IMEA's investor -owned transmission provider for accuracy and use in testimony in a rate case before the Federal Energy Regulatory Commission. • Basin Electric Cooperative — Mr. Hissom testified in a rate case before the Federal Energy Regulatory Commission on accounting under the RUS Uniform System of Accounts (USoA) and the methodology electric cooperatives use to develop transmission and distribution rates for their members. • Lower Colorado River Authority — Mr. Hissom testified on accounting and cost allocations in LCRA's transmission rate filing before the Public Utilities Commission of Texas. 11 Company Qualifications Why UARS is the Right Partner for This Project Utility Accounting & Rates Specialists (UARS) is the ideal partner to support the Seward Electric System in transitioning to the RUS Uniform System of Accounts (USoA), enhance capital reporting, and train your team. UARS' expertise in utility accounting, financial compliance, and rate studies ensures a seamless and efficient implementation that aligns with industry best practices. What UARS Will Deliver for this Project: • Unmatched Expertise in Industry Accounting — UARS is a recognized industry leader in accounting for cooperatives and utilities, with a proven track record of delivering high -quality accounting consulting services, providing thought leadership, and training utility and co-op accounting in best practices for financial reporting and accounting. • Unmatched Expertise in Chart of Account Conversions — With decades of experience, UARS has successfully guided municipal utilities and cooperatives in financial conversions, accounting system integrations, and cost allocation modeling. Our deep understanding of transitioning to the Uniform System of Accounts (USofA) allows us to tailor our approach to align with the Electric Department's unique operational and financial structure. • Exceptional Client Service & Communication — We have successfully served cooperatives and utilities across the United States, Canada, and Guam, delivering outstanding client service through a combination of on -site fieldwork and virtual meetings. Frequent communication and project transparency are at the core of our approach, ensuring clear expectations, proactive problem -solving, and on -time deliverables. • Comprehensive Training & Implementation Support — A successful transition requires staff expertise, and UARS will provide in-depth training on accounting procedures, work order management, and financial reporting under the new system. Mr. Hissom will work closely with City staff and SES to develop sustainable processes that ensure long-term success. At UARS, we are committed to delivering solutions that enhance financial transparency, operational efficiency, and regulatory compliance. We look forward to the opportunity to support the Seward Electric System in this critical financial transformation. 12 Fee Proposal 7. Fee proposal We appreciate the opportunity the City has given us to propose on project. The fees for all project phases are shown in the following table: Table 5 — Proposed total project fees Task Services Phase 1 1.01 Project kick-off and system assessment 1.02 Develop chart of accounts mapping 1.03 Financial statement integration 1.04 Revise preliminaryworkplan 1.03 Revise cost estimate for Phases2 and 3 Total Phase 1 Travel expenses Total Phase 1 Fees and Expenses Hours Hourly Rate 3 5 25 5 8 5 2 5 2 5 40 Total 220 5 660 220 5,500 220 1,760 220 440 220 440 $ 8,800 $ 1,900 $ 10,700 Phase 2 2.01 Development and testing of chart of accounts and processes 25 5 220 5 5,500 2.02 Refinement and system adjustments - ID potential errors 8 5 220 1,760 2.02 Adjust processes for depreciation, capital accounting, and allocation 6 5 220 1,320 2.03 Revise cost estimate for Phase3 1 5 220 220 Total Phase 2 40 $ 8,800 Travel expenses $ 1,900 Total Phase 2 Fees and Expenses $ 10,700 Phase 3 3.01 Conversion and implementation 8 5 220 5 1,760 3.02 Capital accounting policy review and recommendations 8 5 220 1,760 3.03 Training workshop 8 $ 220 1,760 3.04 RRC compliance and financial alignment 6 5 220 1,320 3.05.0 Develop budget to actual reports 4 5 220 880 3.05.1 Monthly validation of 12 statements 48 5 220 10,560 3.05.2 Validate annual audit -report financial statements 16 5 220 3,520 Total Phase 3 98 $ 21,560 Travel expenses $ 1,900 Total Phase 3 Fees and Expenses $ 23,460 Total Phase 1, 2, and 3 Fees and Expenses $ 44,860 The quoted fee above is based on the information outlined in the request for proposal. The scope of services for Phases 2 and 3 will be initiated only upon authorization by the City and SES and will be preceded by an updated cost estimate reflecting the services required for those phases. 13 Utility Accounting and Rates Specialists References 8. References We urge you to contact these references to discuss their satisfaction with the services we provided. Contact information for each reference is in the following table. A comprehensive listing of utilities and cooperatives served is in the Appendix to this proposal. Table 6 — Project References Utility/Organization Contact Information City of Banning, CA Mr. Tom Miller, General Manager Electric Utility Phone: 909 253 2839 Email: tmiller@banningca.gov Services UARS transitioned the Banning Electric Department from a municipal chart of accounts to the FERC Uniform System of Accounts, resulting in financial reporting tailored to the electric utility. Hibbing, MN Public Utilities Mr. Luke Peterson, General Manager Phone: 218 421 3926 Email: luke.peterson@hpuc.com UARS led the transition of electric, gas, steam, and water services from a municipal chart of accounts to the FERC Uniform System of Accounts, including account design and implementation on Caselle financial software. Mr. Hissom served as HPU's full -charge accounting controller from 2022-2024, managing daily accounting, financial reporting, and audit preparations. He continues to provide monthly accounting services for HPU's construction projects. In 2024, he was part of the team that prepared cost of service studies for the HPU electric, gas, steam, and water utilities. Fayetteville, NC Utilities Ms. Rhonda Haskins, Chief Financial Officer Phone: 910 223 4001 Email: rhonda.haskinsa@faypwc.com UARS assisted in transitioning electric work order accounting and fixed asset management to an Oracle Enterprise Resource Planning (ERP) platform. This included designing assembly units and fixed asset records to align with industry standards. Holyoke, MA Gas and Electric Ms. Brooke McMahon, Director of Finance and Accounting Phone: 413 536 9318 Email: bmcmahon@hged.com UARS is currently on the project team assisting in transitioning electric work order and fixed asset accounting for Holyoke to NISC software, 14 References Utility/Organization Contact Information ervices including the design of assembly units and fixed asset records. American Public Power Ms. Heidi Lambert, Director of Education Association Phone: 202 467 2921 Email: hlambert@publicpower.org Mr. Hissom has been presenting APPA classes on public utility accounting, work order accounting, and advanced utility accounting three times each year since 2000. He also speaks at national APPA conferences on accounting and rates topics. 9. Fee structure for ongoing accounting support Once Phases 1 through 3 have been completed, the City and SES may require ongoing consulting and accounting support to provide electric department accounting services for administering and managing the USoA financial reporting system. UARS would be pleased to provide these services as needed by the City and SES on an hourly basis based on the following flat hourly rate: Table 7 — Fee Structure for Ongoing Accounting Support Year Hourly Rate 2026 $225 2027 $230 2028 $235 Travel expenses for any on -site field work will be charged at cost. 15 Appendix A Resume Russ Hissom, CPA russ.nissom. utill tyeducation.com 6U8 628 4020 PROFILE Russ serves the Power and Utilities industry by nelping organizations enhance and maximize the value of their cost -of -service studies, ratemakrng accounting, financial management, and twsiness processes. Industry Participation American Public Power Association American Waterworks association American Institute of CPA's Edison Electric Institute - Florida Municipal Electric Association Institute of Internal Auditors • ISACA (CISA) Experience Principal Utility Accounting & Rates Specialists, LLC Utility Accounting & Rates Specialists is a firm that delivers rates, financial, and accounting consulting services to power and utility organizations Russ specialties include: • Cost of service and rate design studies • Expert testimony for FERC and state regulatory bodies, and in arbitration and litigation - Economic analysis studies • Outsourced controller and Chief Financial 0fficer services • Accounting consulting and standards implementation • Electric work order systems implementation consulting • Speaker at national and state conferences • Instructor for industry learning academy courses • Author of industry articles and textbooks on accounting and rates topics January 2021 - present Partner 1983 - 1986, 1987.2020 Baker Tilly, US Huss served as a Baker Tilly Energy and Utilities Group partner for over 20 years, serving power and utilities organizations across North America with financial and rates consulting. Chief Financial Officer wPPI, Energy Russ served as the CFO of WPM, Energy, where he established its accounting systems. reporting frameworks, and assisted in developing member rates. Education BSA - Accounting University of Wisconsin - Milwaukee ut,htyeducationinsights com 1986 16 Appendix B Clients Served Arkansas Massachusetts • Conway Utilities • Paragould Utilities California • Anaheim Utilities • Banning Utilities • Burbank Power and Water • Biggs Electric Utility • California Public Utilities Commission • City of Modesto • Colton Electric Utility • Glendale Utilities • Gridley Electric Utility • Imperial Irrigation District • Liberty Utilities • Modesto Irrigation District • Northern California Power Agency • Pacific Gas & Electric • Riverside Utilities • Sacramento Municipal Utility District • San Diego Gas & Electric Utility • Southern California Edison • Southern California Public Power Authority • Trinity Public Utilities District Connecticut • Norwich Utilities • Concord Utilities • Holyoke Gas and Electric • Massachusetts Municipal Wholesale Power • North Attleborough Utilities • Shrewsbury Electric and Broadband Minnesota • Hibbing Public Utilities • Rochester Utilities • Southern MN Municipal Power Company • Xcel Energy Nebraska • Cedar -Knox Public Power District • Elkhorn Public Power District • Lincoln Electric • Niobrara Valley Public Power District • Omaha Public Power District New York • Long Island Power Authority • New York Public Service Commission North Carolina • Fayetteville Utilities North Dakota • Basin Electric Power Cooperative Ohio • Public Utilities Commission of Ohio Colorado • Colorado Springs Utilities • Fountain Water Utility • WAPA Florida • • • Guam • Clewiston Utilities Jacksonville Energy Authority Florida Municipal Power Authority Gainesville Regional Utilities Kissimmee Utility Authority Guam Power Authority Guam Water Authority Illinois • Illinois Municipal Power Agency • Naperville Utilities • St. Charles Utilities Indiana Oklahoma • Grand River Dam Authority • Oklahoma Gas and Electric • Oklahoma Municipal Power Authority South Carolina • Kiawah Island Water • Santee Cooper Power Authority • South Carolina Public Service Commission Tennessee • Nashville Electric Service Texas • • Bryan Utilities CPS Energy Garland Utilities Lower Colorado River Authority New Braunfels Utilities Washington • Energy Northwest 17 Client Client • Aubum Utilities • Richmond Utilities • Tipmont Electric Cooperative Iowa • Cedar Falls Utilities • Harlan Utilities • Muscatine Utilities Maryland • Easton Utilities Maine • Maine Public Service Commission • Chelan Public Utility District • Douglas County Publiic Power District Wisconsin • Holland Utilities • Kaukauna Utilities • Kiel Utilities • Manitowoc Public Utilities • New London Utilities • Oconomowoc Utilities • Rice Lake Utilities • Saukville Water and Sewer Utility • WE Energies • Wisconsin Public Service, Inc. • WPPI Energy 18 Appendix C The key features of a Railbelt Reliability Council audit from the RRC FAQ site include: 1. Regulatory Compliance: • Ensuring adherence to standards set by the Railbelt Reliability Council (RRC), which develops and enforces reliability, transmission, and interconnection standards for the Railbelt Bulk Electric System (BES). 2. Financial Statement Accuracy: • Assessing the precision and completeness of financial statements, including balance sheets, income statements, and cash flow statements. 3. Revenue & Cost Allocation Review: • Analyzing revenue streams, rate structures, and cost allocation methodologies to ensure accurate tracking of expenses related to generation, transmission, and distribution. 4. Capital Assets & Depreciation Analysis: • Reviewing capitalization policies, asset management practices, and depreciation schedules to ensure proper recording and valuation of assets. 5. Internal Controls & Risk Assessment: • Evaluating the effectiveness of internal financial controls, fraud prevention mechanisms, and risk management policies. 6. Power Cost Recovery & Regulatory Reporting: • Validating filings related to power cost equalization and other regulatory cost recovery mechanisms to ensure compliance with state and federal regulations. 7. Governance & Stakeholder Reporting: • Ensuring that reporting to boards, commissions, and the public meets transparency standards and provides insights for strategic financial improvements. These features collectively ensure that Railbelt utilities operate transparently, comply with regulatory standards, and maintain financial integrity. 19