Key insights

• Annual rate increases above the rate of inflation are sometimes necessary to help municipalities close gaps in asset management funding and manage debt. It is also important to understand local affordability limits and consider how rate increases may impact residents with low income.
• External stakeholder engagement with local cities, towns and users is key to understanding attitudes and opinions on water and wastewater rates. Communication about why rates are increasing is important to gain support for financial plans.
• Cross-departmental collaboration is essential for developing a financial model and completing the internal analysis. Cross-departmental collaboration is also important to establish accountability, consistency and oversight over the financial model.
• A user rate financial model can be used to determine annual rates by combining the full costs with projected water consumption. The model should be updated annually and reviewed to monitor progress on financial targets.

Read the full case study.