Agenda - 06-12-2007-4gg - Laserfiche WebLink

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c'~. A .i ~`~! Cs+•1~~ EFLAND SEWER SYSTEM Proposal for Rate Study for Small Wastewater Collection Utility STATEMENT OF SIGNIFICANCE Cost of Service and Pricing The goal of cost of service studies is to develop rates and charges that best meet a utility's goals and objectives. RFC has conducted 150 such projects in the last five years and our personnel have conducted more than 600 during their careers. As a result of our experience with numerous utilities, both large and small, we have developed many different rate structures based on the needs and preferences of the utility and/or its customers and stakeholders. RFC's typical methodology for conducting a rate study includes the following tasks: Conceptual Design - to identify the utility's objectives in order to ensure that we develop the most appropriate rates and rate structures. During this task, we work with the client to identify and prioritize objectives such as rate equity and affordability, revenue sufficiency, conservation orientation, and rate stability. Development of a Rate Model -the model is the tool by which rates are calculated, and it allows for ongoing financial planning and sensitivity analyses. Each rate model is custom built for the utility; however, we do have a project proven rate model template that we use as a basis for developing a utility's rate model We develop models so that they may be manipulated and updated by utility staff. Public Outreach and Education - incorporates varying degrees of stakeholder/customer input throughout the study. Due to our extensive experience with cost of service and pricing studies, we are very comfortable presenting results to a utility's governing body (city council, board of commissioners, etc.) Rate Survey RFC conducts the most comprehensive national water and wastewater rate survey. The AlY/IYIA/BFC lY/ater and Tl~arte2vater Bate Survey ("Survey' is conducted every two years, with the most recent version completed in 2006. The Survey includes data on rates and charges as well as rate structures and other fees. As a result of conducting this survey, RFC has a large database of rate-related information for utilities across the country. We will be able to use this data as needed to help the City develop rates and rate structures that are consistent with current industry trends. Affordability The challenge of addressing affordability concerns is complicated by the broad diversity of situations, constraints and policy considerations that must be addressed to provide ratepayer assistance. As discussed later in this proposal, RFC has the experience that the County will require in working to develop a rate structure to appropriately accommodate all income levels. ONSULTANTS, NC 4