City of Calgary

Calgary, Alberta, Canada

Raftelis conducted a comprehensive financial review of the water, wastewater, and stormwater utilities operated by the City of Calgary’s Utilities and Environmental Protection Department (UEP). The objective of the financial review was to assess UEP’s current and projected levels of financial risk and to make recommendations regarding how to mitigate these risks by modifying UEP’s financial policies, financial management practices, governance structure, and financial management organizational structure.

The project included: conducting detailed interviews with UEP senior executives and high-level management personnel; reviewing UEP financial, engineering, and planning documents; analyzing the assumptions used in UEP’s long-range financial planning models; and comparing UEP financial and managerial performance to the benchmarks used by U.S. credit ratings agencies to assess the default risk of water and wastewater utility debt.

As part of this comprehensive financial review, Raftelis analyzed a wide variety of UEP and Utilities financial information including action plans and UEP rate models for the water, wastewater, and drainage utilities. Raftelis worked with City staff to develop mutually agreeable scenario planning assumptions used to forecast and model the utilities’ financial performance. This led to the development of recommendations to existing City financial policies and the establishment of both short-term and long-term financial performance targets.

Raftelis also assisted UEP with a comprehensive benchmarking and policy review process for the utility’s billing adjustment process for leaks with undetermined causes. This review included looking at 13 other large utilities in Canada and the United States to compare different elements of the policy, including the frequency of leak adjustments provided, the number of months that can be included, the amount of the leak adjustment, and the requirements for leak adjustment eligibility. Similar information was gathered to address bill adjustments for high bills with undetermined causes. As a result of this exercise, Raftelis made recommendations to UEP regarding the definitions of “leak” and “undetermined high consumption,” eligibility criteria, and the procedures for adjustments moving forward.