Raftelis assisted the City of Topeka (City) with a 10-year financial plan, a cost-of-service study, and rate design services for its water, wastewater, and stormwater utilities. The financial plan required forecasts of water, wastewater, and stormwater units of service, a projection of expected future revenue at existing rates, and a projection of future operating and capital expenditures. The culmination of this process was a determination of the overall rate revenue increase necessary to cover operation and maintenance expenditures, meet debt service coverage requirements, and allow for adequate operating reserves. Raftelis developed alternative financial plans to reflect various levels of, and funding options for, the City’s 10-year capital improvement program.
In addition to the 10-year financial plan, the scope of work also involved a cost-of-service study to determine how the total revenue requirement determined in the financial plan should be allocated among the City’s customer classes to ensure fair and equitable rates which recover costs from each customer class in accordance with how they are incurred by the water, wastewater, and stormwater utilities.
Raftelis also worked with City staff to develop several alternative rate designs in pursuit of the City’s policy goals. Among the rate design tasks were the development of irrigation rates, the development of readiness-to-serve charges (which recognize the potential demand a customer can place on the water and wastewater systems), demand management rates to reward water conservation, and system development charges. In addition to calculating the rates under various alternatives, Raftelis worked with the City to phase-in the impacts of moving the existing rate structure to one more closely aligned with cost of service. Once the phase-in rates were determined, Raftelis developed a bill-frequency tabulation to enable the City to evaluate the impacts of the new rates on customers at various levels of water consumption and developed charts to aid the utility staff in communication with the City’s executive, the City Council, and the public.
While our national presence allowed us to bring an industry-wide perspective to bear on the City’s unique challenges, our local presence on this engagement, which was handled by our Kansas City Office, allowed us to form a collegial working relationship with City staff. This engagement featured frequent face-to-face meetings with City staff, at relatively minor cost to the City. When such meetings were challenging due to scheduling concerns, we utilized web conferences to ensure City staff could access the project team at any time.
