Cost-Of-Service Analysis

Albany, OR

Galardi Rothstein Group Principals conducted comprehensive water and wastewater system financial planning, rate, and SDC studies. Deb Galardi worked with a city council-appointed task force to evaluate funding options, develop financing plans for each system, and to design rates and SDCs to equitably recover the system costs from new and existing customers. Excel-based computer modeling systems were also developed for the city for use in future rate updates.

Bend, OR

Deborah Galardi conducted a comprehensive water and sewer rate study for the City of Bend. The scope of the study included the development of financial plans, policies and rates for each utility. Rates were developed under a cost-of-service framework – where costs are allocated to customer classes in proportion to system demand characteristics. Special issues addressed in the study include conversion of flat rate water customers to volume-based rates, water conservation and lifeline rates, volume and strength-based sewer rates, and fire protection costs. A system of computer updating models was also developed to allow the city to conduct future updates of the rates and financial plans.

McMinnville, OR

Deborah Galardi conducted wastewater rate, financial planning, and SDC analyses for the City of McMinnville. The city is implementing a $50 million capital improvement plan to comply with new water quality standards and increase system capacity. Ms. Galardi developed a long-term financial plan, and calculated wastewater rates and SDCs based on the projected revenue requirements and approaches selected by a council-appointed task force.

Deborah Galardi also assisted the City in the evaluation of alternative wet weather treatment programs. A funding strategy was developed for the capital improvements, and rate and SDC impacts were analyzed. Deborah Galardi also conducted a rate equity review study for the City.

Monmouth, OR

Deborah Galardi developed 20-year financial plans to meet the City’s projected capital and operation and maintenance costs for the water and wastewater systems. Rates were developed based on a cost of service analysis, whereby costs were functionalized and classified by service characteristic, and then allocated to customer classes in proportion to use. Ms. Galardi worked with the city to review alternative rate structures and evaluate utility system financial policies. Ms. Galardi has worked with the City over the past five years to update the financial plans.

Newburg, OR

For the City, Deborah Galardi Consulting worked with a citizens’ rate review committee to update the water and sewer rates and SDCs in 2002, 2004, and 2006. The city has a policy to review rates every two years. For each study, Ms. Galardi updated the system revenue requirements, user characteristics, and cost allocations based on current budgets and capital improvement plans. She also worked with the city to evaluate rate structure issues, like pressure zone surcharges, and she developed enhancements to the city’s rate models.

Salem, OR

Galardi-Rothstein principals conducted a comprehensive cost of service rate study tailoring industry-standard practices to the City’s unique circumstances. This work was conducted in the context of master plans for the City’s water, stormwater and wastewater utilities that identified over $400 million in needed future capital improvements over a 20 year forecast period. The cost-of service study was highlighted by a substantial evaluation of commercial customer class peak water demand and sewage strength loadings, and resulted in significant customer class disaggregation. The studies featured extensive public involvement with monthly meetings of a City Council appointed task force, televised public rate forums, and web site postings of informational materials and customer feedback questionnaires.

Deborah Galardi has served as the City’s financial consultant of record for the past five years.

Tucson, AZ

Galardi Rothstein Group Principals have conducted water rate analyses for the City of Tucson, Arizona, annually since 1999. Analyses have included evaluation of water utility revenue requirements, financial plans, cost of service analyses, rate designs, and special research and analyses. Some of the special issues that have been addressed include water conservation rates, low-income assistance programs, and pricing of reclaimed water. The project team has also worked with a citizen water advisory committee to develop rate proposals that meet the community objectives and stated council policies.

Winnipeg, MB

Galardi Rothstein Group Principals completed a comprehensive sewer and water cost-of-service rate analysis study for the City of Winnipeg. The study featured an extensive public involvement program initiated in response to public concerns regarding economic development rate incentives and projections of extremely high future capital improvement requirements (i.e., $200-million water treatment plant costs, $400-million combined sewer overflow project costs). The study involved all aspects of utility cost-of-service analysis including evaluation of revenue requirements, allocation of costs to service characteristics, and rate design. Of particular concern in the analysis was the potential disaggregation of the commercial customer class, evaluation of winter month averaging for determining residential billing units, and the potential rate impacts of economic development incentives for industrial customers. The project team also developed water rate structure alternatives to encourage water conservation. The City’s Sewer Rate Advisory Committee comprised of a diverse set of stakeholder group representatives developed consensus recommendations for City Council consideration.