Smart Benchmarking, Water Rates Dashboard.Hawaii.10€¦ · Ala Moana Hotel, Honolulu Erin Riggs...
Transcript of Smart Benchmarking, Water Rates Dashboard.Hawaii.10€¦ · Ala Moana Hotel, Honolulu Erin Riggs...
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www.efc.sog.unc.edu
Smart Benchmarking, Water Rates Dashboard
Hawai’i Water Works Association Annual MeetingOctober 9, 2019Ala Moana Hotel, Honolulu
Erin RiggsSenior Project Director
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Dedicated to enhancing the ability of governments and other organizations to provide environmental programs and services in fair, effective, and financially sustainable ways through: Applied Research Teaching and Outreach Program Design and Evaluation
How you pay for it matters
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Smart Management for Small Water Systems efcnetwork.org
• Activities in every state, territory, and the Navajo Nation. All small drinking water systems are eligible to receive free training and technical assistance.
• Individualized technical assistance, workshops, small group support, webinars, eLearning, online tools & resources, blogs
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Hawai’i System by Ownership
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What do they all have in common?
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Are my rates too high?
• Human nature to compare!
• Looking at neighbors can be useful if done appropriately…
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The Most Common Financial Indicator??Compare with Caution!!
$563
$753
$298 $282
$524
$1,032
$497
$582
$414
$643$669
$843
$0
$200
$400
$600
$800
$1,000
$1,200
2004
2005
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Financial Benchmarks
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Five Rules of Benchmarking
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Choose your peer group wisely.
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Example System
Compare to your peer group
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Compare Your Rates to Rates of Systems that have Similar …
LocationSize Rate Structure
$
Demographics Type Financials
$
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Being in the middle of the pack is ok!
This Photo by Unknown Author is licensed under CC BY
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Who is really the best situated?
$563
$753
$298 $282
$524
$1,032
$497
$582
$414
$643$669
$843
$0
$200
$400
$600
$800
$1,000
$1,200
2004
2005
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Dashboard: Bill Comparison
Darkest green band = middle 50% of utilities
Half of all utilities in your peer group have bills that fall within this range
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Pay attention to extremes.
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Dashboard: Bill Comparison
Yellow = the lowest and highest 10% of utilities
10% of utilities in your peer group have bills lower than 90% of other utilities,10% have bills higherthan 90% of utilities
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Never consider rates alone.
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Supplemental Data
• Audited financial statements of local governments as well as private and non-profit systems
• Water system data from SDWIS (US EPA)
• Socioeconomic data from 2015 American Community Survey (US Census)
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Example System
Compare to benchmarks
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Indicators generally fall on a continuum.
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Dashboard: Cost Recovery
Red = costs exceed revenues; a concern for financial sustainability
_Operating revenues_Operating costs
(including depreciation)
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Dashboard: Affordability
The percentage of median household income (MHI) spent annually on water bills
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EFC Affordability Assessment Tool
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When To Benchmark
• As part of your annual rate review
• When presenting to boards or other decision makers on the need to change rates
• When explaining rates to customers
• For private systems, as part of your PUC rate case
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EFC Benchmarking Tools
• https://www.youtube.com/watch?v=QkwTJe-Nbuk
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2016 HI Water Rates Survey
• EFC collected utilities’ rate sheets in 2016 and 2017 from systems and from PUC
• Rates for residential and commercial water customer classes
• Base charges and volumetric rates
• Calculated how much systems charge customers for various consumption points
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Example System
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Technical Assistance
• Starting point is looking at existing needs of the small system
• Lay out the “As Is” scenario…provide a snapshot of the financial health of the system at the time we are assessing them
• Affordability
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When low rates aren’t a good thing…
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Actual Number of Customers ‐ Water
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Water Use Per Customer
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Eastern North Carolina
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Eastern North Carolina
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Questions?
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www.efc.sog.unc.edu
Environmental Finance Center at the University of North CarolinaSchool of Government, Knapp-Sanders BuildingCB #3330Chapel Hill, NC 27599-3330USA
Erin [email protected](919)966-3126