Since early 2016, Raftelis has been engaged with the Michigan Department of Treasury working to develop solutions to the financial challenges facing the City of Flint’s (City) water utility. Following the onset on the Flint Water Crisis, the Governor of Michigan formed the Flint Water Interagency Coordinating Committee (FWICC) to develop solutions to the crisis. The committee is comprised of members from the City of Flint, Genesee County and various subject matter experts. In addition, the State Treasurer was made chair of the Karegnondi Water Authority (the Authority) subcommittee which was tasked with evaluating Flint’s commitment to joining the Authority and examine the City’s water rates. Raftelis was initially engaged to evaluate the largest cost drivers of the City’s existing rates, explain why the City’s rates are so much higher than comparable communities and project the trajectory of water utility costs in the absence of any outside intervention. The results of Raftelis’ analysis were presented by the Treasurer to the FWICC and the Governor on May 13, 2016.
In 2017, Raftelis was engaged again to develop a financial plan and rate design options for the City’s water utility. A key aspect of this engagement has involved the development of a financial planning model which incorporates operating and capital expenditures and projected customer demand to develop a sustainable financial plan for the City’s water utility. Raftelis has worked closely with City staff and other State consultants to incorporate reasonable assumptions around the challenges facing the City (e.g. declining per capita consumption, low collection rates). In addition, Raftelis staff are developing rate design options which will mitigate the impact on lower volume users while generating the revenue necessary to put the utility on a self-sustaining path.
