City of Raleigh

Raleigh, North Carolina, United States

Financial and Rate Consulting

Raftelis has been providing financial consulting assistance to the City of Raleigh (City) Public Utilities Department (CORPUD) since 2008.

CORPUD originally engaged Raftelis to develop conservation-based rates that would enable the City to meet its capital planning needs while minimizing the impact to its customers. A rate model was developed that was able to test the effects of implementing a conservation-based water rate structure and analyze the impacts of a new rate structure on customers of the system. Shortly thereafter, Raftelis worked with CORPUD as it implemented its new customer information and billing system, to ensure that the new system captured the appropriate information for future enhancements to the rate structure, as well as better financial planning capabilities. This process also included the implementation of monthly billing.

Since that time, Raftelis has performed numerous studies for the City of Raleigh including a cost-of-service and rate studies, capital recovery fee studies, and financial feasibility evaluations four revenue bond issues with total proceeds of approximately $420 million. CORPUD was able to obtain a AAA credit rating and maintains that rating presently.

Raftelis continues to assist CORPUD in annual rate updates, budgeting, capital and debt planning, and interjurisdictional contract administration. As part of contract administration, Raftelis provides annual support to CORPUD related to its merger Town agreements and the annual management and update to support verification that the agreement terms are being satisfied.

Raftelis has also worked with City staff to develop a dedicated funding source for its varied infrastructure asset renewal program. The infrastructure replacement charges provide dedicated funding for a 50-year replacement cycle of the City’s water and sewer lines.

Lastly, Raftelis has worked with the City to develop water and sewer capital facilities fees. In 2012, Raftelis developed the City’s capital facilities fees. The fees have been modified in 2017 and again in 2018 to be in compliance with the new North Carolina general statute 162A.

Financial Analysis of Volume-Based Solid Waste Collection

Raftelis is assisting the City of Raleigh (City) in evaluating volume-based systems (VBS) for collecting residential waste and increasing recycling for the City’s Solid Waste Services Department (Department). The project involves developing a financial planning model for the Department to be used in the future for planning, budgeting, and rate setting. In addition, the model will be used to model various VBS options. An integral part of the study are the assumptions regarding customer behavior for solid waste and recycling under various VBS options. To develop a range of assumptions, the Raftelis team will gather case study information from various communities throughout the country that implemented a VBS option. In addition, we will map garbage and recycling data by route with census track data within the City to further refine its assumptions, and more importantly, to identify any social equity impacts on various customer demographics. The Raftelis team will ultimately document the study results in a report and present study findings to the City Council.

Financial Planning for Stormwater Program

Raftelis is currently working with the City of Raleigh Stormwater Program to evaluate the level of service provided to the community and assist with financial planning for long-term funding of the capital program. Raftelis developed a sophisticated financial model to consider a variety of scenarios including differing future capital needs, operational program enhancements (adjustments to level of service), rate structure alternatives, sensitivity to changes in units of service, and consideration of debt funding some capital needs. In addition to this work, Raftelis also has a long history of working with the City of Raleigh Public Utilities Department (PUD), assisting with financial planning, rate-making, and organizational/process evaluations.

Finance Department Organizational Analysis

CORPUD initiated an organizational analysis and development program, which resulted in the creation of a new CORPUD strategic plan. Central to this strategic plan was the recognition to focus on developing a structured employee and leadership development program. In support of this and other organizational development initiatives, CORPUD began an effort to institutionalize continuous improvement processes through the use of LEAN and Six Sigma methods.

Raftelis was retained to conduct a functional area review of key business processes using our structured organizational strengthening process, organized around four phases which include:

  • Engage: Establishing Strengthening Objectives and Outcomes
  • Assess: Determining Current Situation and Performance Levels
  • Compare: Determining Best Practice Goals
  • Enhance: Implementing Results via Continuous Improvement