Details

Subject(s)

• Sewage disposal—United States—Finance [Browse]

Issuing body

• Water Environment Federation. Financing and Charges for Wastewater Systems Task Force [Browse]

Related work(s)

WPCF Task Force on Financing & Charges. Financing and charges for wastewater systems. [Browse]

Series

• Manual of practice ; Number 27. [More in this series]
• WEF manual of practice ; Number 27

Summary note

This 4th edition of Financing and Charges for Wastewater Systems provides an overview of current industry practices that should be considered for financing and establishing rates and charges for wastewater collection and treatment systems. In addition, this Manual of Practice reflects and is responsive to changes in the industry over the last decade that have occasioned a heightened awareness about wastewater utility financial management and the equitable distribution of cost responsibilities across customer groups or classes. These changes, including tightening environmental regulation and replacement of aging infrastructure, have resulted in a pronounced increase in the cost of wastewater services. At the same time, the portion of costs paid through federal and state assistance programs have declined, challenging the affordability of this vital service. In this context, guidance on wastewater rate-setting practices, and particularly the distribution of costs across user groups, is of critical importance. As individual wastewater utilities address their financial management challenges, it is important that their practices for setting rates and charges be responsive to the unique circumstances and values of the communities they serve. Accordingly, this manual offers industry-accepted guidance in addressing these challenges without prescribing specific methods. In many instances, acceptable methodological alternatives are presented. Financing and Charges for Wastewater Systems is structured to provide the reader with an overview of financing mechanisms for wastewater systems and a framework for development of wastewater rates and charges.

Bibliographic references

Includes bibliographical references and index.

Source of description

Description based on print version record.

Contents

• Intro
• TITLE PAGE
• COPYRIGHT
• CONTENTS
• LIST OF FIGURES
• LIST OF TABLES
• PREFACE
• Chapter 1: Introduction
• 1.0 INTRODUCTION
• 2.0 HISTORICAL OVERVIEW
• 3.0 WATER POLLUTION CONTROL ACT, AS AMENDED
• 4.0 MEASUREMENT OF BENEFIT AND USE
• 5.0 MANUAL OF PRACTICE CHAPTER CONTENTS
• 6.0 UNITS OF MEASUREMENT
• 7.0 REFERENCES
• Chapter 2: Institutional Issues
• 2.0 INSTITUTIONAL ORGANIZATION
• 2.1 Single Community
• 2.2 Independent Authority
• 2.3 Special Purpose District
• 2.4 Multipurpose District
• 2.5 Joint Ownership
• 2.6 Regional Agencies
• 2.7 Private Ownership
• 3.0 SELECTING THE APPROPRIATE INSTITUTIONAL ORGANIZATION
• 4.0 INTERNAL ORGANIZATIONAL CONSIDERATIONS
• 4.1 System Operations
• 4.2 Staffing and Data Availability
• 4.3 Utility Billing Systems
• 5.0 OTHER INSTITUTIONAL CONSIDERATIONS
• 5.1 Lender Requirements
• 5.2 Multiparty Agreements
• 5.3 Contract for Service Outside of Local Jurisdiction
• 5.4 Special Service Contracts and User Agreements
• 5.5 Privately Owned Utilities and Public-Private Partnerships
• 6.0 SELECT GOVERNMENTAL REGULATIONS
• 6.1 Clean Water Act User Charge Regulations
• 6.2 Other Governmental Regulations
• Chapter 3: Financial Management and Accounting for Wastewater Systems
• 2.0 POLICY DEVELOPMENT AND ADOPTION
• 3.0 FINANCIAL PLANNING
• 4.0 BUDGETING
• 5.0 COST ACCOUNTING AND FINANCIAL REPORTING
• 6.0 FINANCIAL RESERVES
• 7.0 FINANCIAL MANAGEMENT AND ACCOUNTING-CONCLUSIONS
• 8.0 REFERENCES
• Chapter 4: Financing Capital Improvements
• 2.0 CAPITAL AND FINANCIAL PLANNING PROCESS
• 3.0 ESTABLISHING CAPITAL FINANCING POLICIES
• 4.0 SOURCES OF CAPITAL FUNDING AND FINANCING
• 5.0 INTERNAL FINANCING SOURCES
• 5.1 User Charges
• 5.2 Special Assessment
• 5.3 Ad Valorem Taxes.
• 5.4 System Development Charges
• 5.5 Equity
• 5.6 Cost Reductions
• 5.7 Depreciation
• 5.8 Intra-Municipal Loans
• 6.0 EXTERNAL FINANCING SOURCES
• 6.1 Public Financing
• 6.2 Public Financing Alternatives
• 6.2.1 General Obligation Bonds
• 6.2.2 Revenue Bonds
• 6.2.3 Green Bonds
• 6.2.4 Special Assessment Bonds
• 6.2.5 Commercial Paper
• 6.2.6 Government Loans and Grants
• 6.3 Private Financing
• 6.3.1 Private Placements
• 6.3.2 Public-Private Partnerships
• 6.4 Contributions
• 6.5 Leasing
• 6.5.1 Capital Leasing
• 6.5.2 Certificates of Participation
• 7.0 ISSUING MUNICIPAL SECURITIES: THE PROCESS
• 7.1 Private Placement
• 7.2 Negotiated Sale
• 7.3 Competitive Sale
• 8.0 FINANCING CONSIDERATIONS FOR INVESTOR-OWNED UTILITIES
• 9.0 SUMMARY
• 10.0 REFERENCES
• Chapter 5: Determination of Revenue Requirements
• 2.0 APPROACHES TO DETERMINE REVENUE REQUIREMENTS
• 2.1 Cash-Needs Approach
• 2.2 Operations and Maintenance Expenses
• 2.3 Operations and Maintenance Reserve
• 2.4 Debt Service Payments
• 2.5 Capital Expenditures
• 2.6 Equipment Replacement
• 2.7 Other Cash Requirements
• 2.8 Reserve Fund Payments
• 2.9 Debt Service Coverage
• 2.10 Revenue Requirement Offsets
• 2.11 Total Revenue Requirements from Rates
• 3.0 TOTAL REVENUE REQUIREMENT FROM RATES AND THE COST-OF-SERVICE PROCESS
• 4.0 CONCLUSION
• Chapter 6: Allocating Costs of Services to Cost-Causative Components
• 1.0 INTRODUCTION TO COST ALLOCATIONS
• 1.1 Steps to Cost Allocation
• 1.2 Timing
• 2.0 LEGAL GUIDELINES
• 3.0 TYPES OF WASTEWATER UTILITY SERVICE FUNCTIONS AND COSTS
• 4.0 COST-ALLOCATION PROCESS
• 5.0 COST OR ACTIVITY CENTERS
• 6.0 COST COMPONENTS
• 7.0 COST-CAUSATIVE FACTORS
• 8.0 FUNDAMENTAL COST-ALLOCATION APPROACHES
• 9.0 DESIGN-BASIS COST-ALLOCATION METHODOLOGY.
• 9.1 Design-Basis Allocation of Facility Investment and Payment-in-Lieu-of-Taxes
• 9.1.1 Net Capital Costs
• 9.1.2 Payment-in-Lieu-of-Taxes
• 9.2 Design-Basis Allocation of Net Operations and Maintenance Expenses
• 9.3 Additional Design-Basis Considerations
• 9.3.1 Approach Advantages
• 9.3.2 Approach Limitations
• 10.0 FUNCTIONAL COST-ALLOCATION METHODOLOGY
• 10.1 Functional-Basis Allocation of Net Facility Investment and Payment-in-Lieu-of-Taxes
• 10.1.1 Net Capital Costs
• 10.1.2 Payment-in-Lieu-of-Taxes
• 10.2 Functional-Basis Allocation of Operations and Maintenance Expense
• 10.3 Additional Functional-Basis Considerations
• 10.3.1 Approach Advantages
• 10.3.2 Approach Limitations
• 11.0 WHOLESALE/OUTSIDE CITY CUSTOMER CLASS CONSIDERATIONS
• 12.0 SUMMARY
• 13.0 SUGGESTED READING
• Chapter 7: Distribution of Costs-of-Service to Customer Classes
• 2.0 CUSTOMER CLASSES
• 2.1 Classification Factors
• 2.2 Classification Approaches
• 3.0 UNITS OF SERVICE
• 4.0 WASTEWATER VOLUMES
• 5.0 WASTEWATER STRENGTHS
• 6.0 CUSTOMER SERVICE
• 7.0 UNUSED CAPACITY CHARGES
• 8.0 OTHER UNITS OF SERVICE
• 9.0 FACILITY BALANCE ANALYSIS
• 10.0 SUMMARY OF CUSTOMER CLASS UNITS OF SERVICE
• 11.0 UNIT COSTS AND DISTRIBUTION OF COSTS TO CUSTOMER CLASSES
• 12.0 COMMUNAL AND SPECIFIC COSTS
• 13.0 RETURN ON INVESTMENT
• 14.0 SUMMARY
• 15.0 REFERENCES
• 16.0 SUGGESTED READINGS
• Chapter 8: Development and Design of a Schedule of Rates and Charges
• 2.0 SELECTION OF RATE FORMS
• 2.1 Rate Components
• 2.1.1 Fixed Charges
• 2.1.2 Volume Rates
• 2.1.3 Constituent Rates
• 2.1.3.1 Advantages
• 2.1.3.2 Disadvantages
• 2.2 Rate Evaluation Matrix
• 3.0 DETERMINATION OF BILLING UNITS
• 3.1 Customer Fixed Units
• 3.1.1 Units by Meter/Account
• 3.1.2 Units by Meter Size
• 3.2 Customer Volumetric Units.
• 3.2.1 Metered Water Usage
• 3.2.2 Winter Averaging
• 3.2.3 Percentage of Metered Water Consumption
• 4.0 DEVELOPMENT OF THE RATE SCHEDULE
• 4.1 Systemwide Uniform Volume Rates
• 4.2 Industrial Waste Surcharges and Pretreatment
• 4.3 Uniform Rates by Customer Class
• 4.4 Bill Impact Analysis
• 5.0 WHOLESALE AND CONTRACT CUSTOMERS
• 6.0 POLICY-BASED ADJUSTMENTS
• 6.1 Low-Income Affordability
• 6.2 Economic Development and Business Retention
• 6.3 Rate Transitioning
• 6.4 Water Conservation Efforts
• 7.0 IMPLEMENTATION ISSUES
• 7.1 Data and Billing System Constraints
• 7.2 Ordinances
• 8.0 SUMMARY
• 9.0 REFERENCE
• Chapter 9: Wet Weather Financing and Cost Recovery
• 2.0 EFFECT OF WET WEATHER FLOWS
• 2.1 Effect on Combined Sewer Systems
• 2.2 Effect on Separate Sanitary Sewers
• 2.3 Effect on Municipal Separate Storm Sewer System
• 3.0 WET WEATHER CAPITAL FINANCING ALTERNATIVES
• 3.1 Public Stormwater Management Capital Initiatives
• 3.2 Private Stormwater Management Capital Initiatives
• 4.0 WET WEATHER COST RECOVERY
• 4.1 Delineation of Wet Weather Management Responsibilities
• 4.2 Key Considerations in the Recovery of Wet Weather Costs
• 4.2.1 Equity of Cost Recovery
• 4.2.2 Recognizing Historical System Development
• 4.2.3 Revenue Stability
• 4.2.4 Fee Reduction Options
• 4.2.5 Legal Considerations
• 5.0 WET WEATHER RATE-SETTING APPROACH
• 5.1 Delineation of Program Costs
• 5.2 Stormwater Fee Policies and Legal Considerations
• 5.3 Stormwater Revenue Requirements
• 5.4 Impervious Area Billing Units
• 5.5 Stormwater Unit Cost
• 5.6 Stormwater Rate Design
• 6.0 CASE STUDIES
• 6.1 District of Columbia
• 6.1.1 Overview
• 6.1.2 Key Driver
• 6.1.3 Costs Recovered
• 6.1.4 Rate Structure
• 6.2 City of Philadelphia, Pennsylvania
• 6.2.1 Overview
• 6.2.2 Key Driver
• 6.2.3 Costs Recovered.
• 6.2.4 Rate Structure
• 7.0 SUMMARY
• 9.0 SUGGESTED READINGS
• Chapter 10: System Development Charges
• 2.0 LEGAL CONSIDERATIONS
• 2.1 Right of Local Governments to Regulate Development
• 2.2 Regulation Versus Taxation
• 2.3 Banberry Factors (Standards of Reasonableness)
• 2.4 Rational Nexus
• 2.5 Good Faith Intent
• 3.0 PLANNING A SYSTEM DEVELOPMENT CHARGE PROGRAM
• 3.1 Capital Program Planning
• 3.2 Level of Service
• 3.3 System Development Charge Calculation Methods
• 4.0 SYSTEM DEVELOPMENT CHARGE CALCULATION METHODS
• 4.1 Examples of System Development Charge Methodologies
• 4.1.1 Buy-In Approach
• 4.1.1.1 System Valuation
• 4.1.1.2 Capacity Determination
• 4.1.2 Planned Facility/Growth Approach
• 4.1.3 Combined Approach
• 5.0 SYSTEM DEVELOPMENT CHARGE SCHEDULE STRUCTURES
• 5.1 Scaling Measures
• 5.2 Geographic Area
• 6.0 OTHER CONSIDERATIONS FOR SYSTEM DEVELOPMENT CHARGE PROGRAM MANAGEMENT
• 6.1 Timing of System Development Charge Collection
• 6.2 Alternative Fee Calculation
• 6.3 Administrative
• 6.4 Accounting and Tracking
• 6.5 System Development Charge Review and Adjustment
• Chapter 11: Wet Weather Financing and Cost Recovery
• 2.0 BACKGROUND: RATE-SETTING AUTHORITY
• 3.0 Executive Summary: Rate Implementation Overview
• 4.0 Phase 1: Developing the Rate Implementation Plan
• 4.1 Project Team
• 4.2 Rate Study Scope
• 4.3 Rate Study Data Needs
• 4.4 Stakeholder Interests and Concerns
• 4.5 Communications Plan
• 4.5.1 Communication Protocols
• 4.5.2 Communication Strategy
• 4.5.3 Communication Methods
• 4.6 Timeline for Implementation
• 4.7 Project Budget
• 5.0 Phase 2: Plan Implementation and Stakeholder Outreach
• 5.1 Rate Analysis.
• 5.1.1 Revenue and Revenue Requirements Projections.

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ISBN

1-57278-349-4

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