Little Rock Wastewater Utility

Raftelis was retained by Little Rock Water Reclamation Authority (LRWRA) to perform a comprehensive cost-of-service analysis and system valuation study. LRWRA was implementing a significant capital improvement program in compliance with a consent order with the State of Arkansas and the EPA to eliminate sanitary sewer overflows. The requirements of this consent order were placing substantial pressure on LRW’s costs and wastewater rates and fees. The major components of the project included:

• Development of a 10-year comprehensive financial plan including LRWRA’s operation, maintenance, and administration as well as financing of its major capital improvement program
• Determination of LRWRA’s cost of providing wastewater service to its various customer classes
• Development of wastewater user rates to fairly and equitably recover the cost of providing wastewater collection, treatment, and disposal service from the various customer classes
• Review and update of miscellaneous fees
• Analysis of alternative system growth charges to be assessed to new customers
• Determination of the current value of LRWRA’s collection and treatment assets

In addition to the financial planning and cost-of-service aspects of this engagement, the Raftelis team worked closely with the LRWRA-created Rate Advisory Committee (RAC). The RAC was made up of community leaders who were known and trusted by the customers of the LRWRA. At the outset of the engagement, Raftelis explained the process and logic behind the financial planning and cost-of-service study approach. We also sought feedback from the RAC regarding the most important objectives that the community had for the wastewater rates. Throughout the engagement, we regularly engaged with the RAC to share updates on the process and seek additional feedback. At the conclusion of the engagement, the RAC drafted a memorandum supporting the recommendations of the study.

Later, LRWRA again engaged Raftelis to update the 10-year financial plans and cost-of-service analysis, including a scope of services similar to the 2011 study. Raftelis finalized the updated study and provided an updated financial planning model for the City’s future use.