Raftelis was engaged by the City of Akron (City) to perform a comprehensive cost of service, rate design, and financial planning study for the City’s wastewater utility. The City is faced with significant challenges in their efforts to comply with a combined sewer overflow (CSO) consent order that will require more than $1 billion of capital improvements through 2027.
Raftelis developed a cost of service and financial planning rate model that was used to evaluate the current rate structure and recommend alternatives that could provide more equitable revenue recovery while also creating a more stable revenue stream in the future. The engagement included working with representatives from many City departments to educate staff outside of the utility and to incorporate their perspectives so that the recommendations were consistent with the vision and goals of the whole City. Raftelis also assisted the City in determining recommended rates for their five wholesale customers and working with the City to negotiate new contracts with these customers.
The financial model integrated multiple scenarios for achieving the CSO controls that were required by the consent order and provides the City with the ability to monitor the impacts to customers. This engagement included detailed analysis of customer bill impacts arising from various rate structure alternatives and capital financing scenarios. Customer impacts were evaluated in the context of the Environmental Protection Agency’s (EPA) 1997 Guidance on Financial Capability Assessment as well as the Integrated Planning Framework concepts. The City has opened a dialogue with the EPA to utilize integrated planning in meeting regulatory requirements and Raftelis provided financial support throughout this process.