AWWA INF52167

The funding of capital projects for water utilities is becoming more difficult as the needto provide infrastructure to support growth, to meet increasingly stringent environmentalregulations, and to replacing aging facilities competes with the pressure to minimize rateincreases. Municipal water utilities that are unable to meet the capital infrastructureneeds without substantial rate increases are often under pressure to significantly reducecosts or to consider privatization. An effective method to minimize the rate impact of acapital improvement program is to develop an integrated capital and financial planningprocess. This process should include financial models to assist in determining theoptimal funding plans that minimize rate increases while maintaining a financially viablewater system. A financial planning model, when used in an integrated capital and financial planningprocess, can be a valuable tool to determine the financial impact of future regulatoryrequirements or deferring, accelerating or changing the size of a capital project.However, this type of sensitivity analysis requires the development of considerableamounts of information on current and projected revenues and expenses. Some examplesof the data requirements are future capital needs, projections of operation andmaintenance costs, current and future debt service requirements, and forecasts of thedifferent sources of revenue available. This paper will describe the benefits of a financialmodel to water infrastructure planning when used within an integrated capital andfinancial planning process. Finally, the results of using this process over the last fiveyears to meet the infrastructure needs for the City of Phoenix, Arizona, water system will bediscussed. Includes tables, figure.

Product Details

Edition:

Vol. - No.

Published:

01/01/2000

Number of Pages:

7

File Size:

1 file , 130 KB