Stewart, Benjamin

Benjamin Stewart is with Stantec, based in California.

Titles from this speaker

Description: Pain, With Gain: Independent Reviews to Challenge and Improve Utility Financial...

Pain, With Gain: Independent Reviews to Challenge and Improve Utility Financial Outcomes

Abstract

Summary Today's water industry provides clean drinking water, sanitary sewer, and stormwater management services, as it always has, but the management and public policy aspects of water utility management bear little resemblance to the structures and processes of the past. As much as technologies and regulatory limits have changed, changes in the institutional framework and in customer and stakeholder expectations have more profound on the daily obligations of senior management. This presentation offers insight into the benefits of a truly independent review process regarding rates, rate setting, and cost of service analyses. Bringing in industry professionals with no prior involvement in as part of a review process is necessarily complicating and somewhat disruptive. But the benefits of an unhindered review can be profound and lead to increased support for rates and necessary rate management practices in a community. Abstract Well-run utilities invest time and resources to create the strong financial plans necessary for a sustainable future. Comprehensive rate studies are part of that process, following industry best practices and tried and true methods to craft rates to meet the agency's objectives and recognize institutional and legal constraints. All rate studies rest on fundamental assumptions, the quality of available data, policy direction and shared understanding, and reliance (generally entirely appropriate) on assumptions and judgements from the past. To master the multitude of details necessarily involved in rate studies, utility staff and consultants must dive deeply into the particulars, unavoidably losing a degree of independence in the process. For this reason, a fresh perspective to conduct thoughtful and diligent top-to-bottom review of the process and work products can provide serious value in the form of improved outcomes, transparency, and buy-in from everyone involved. This presentation will summarize the following unique benefits of this form of independent review using recent work with the City of San Diego Independent Budget Analyst (IBA) and Public Utilities Department (PUD), and the City of Sacramento City Auditor's Office and Department of Utilities (DOU) conducting different but similar independent reviews of utility plans and studies. Three key ideas are emphasized: - Question everything — Independent reviewers should not be involved in the project at any point prior to reviewing a complete and final work product, including sources of data, data availability, current assumptions, historical assumptions rolled forward from previous studies, and various other undocumented input parameters. As a result, the reviewer has very little room to offer the benefit of the doubt, requiring inquiry into anything and everything that was not immediately apparent. One example, was the review of combined sewer system (CSS) cost allocation factors for cost-sharing between Sacramento DOU's Storm Drainage and Wastewater funds. With little to no explanation in the report, a historical split of 75%/25% was used to allocate CSS costs between the Storm Drainage and Wastewater funds, respectively. Inquiry and investigation into this topic led to development of alternative allocation schemes based on flow, capacity, and water quality parameters, and after consideration a combination of flow and capacity were used to present alternative financial planning results based on a modified approach. The change provided a stronger cost basis for both storm drainage fees and wastewater rates, improved the quality of the allocation basis for this item to be more in line with other cost allocation assumptions. - Healthy skepticism — As rate consultants we are a group of primarily accounting, finance, and economics backgrounds. As a result, it occasionally easy to focus our advice and our professional judgement in those areas, but when somebody from engineering says 'the value should be X' we accept the input without significant questioning. In our role as reviewer we balanced the need to be diligent, thorough and independent with the fact that we are not here to be an obstacle to ensure we provide the greatest value to the City. To this end, we were occasionally compelled to push back on some of the more technical points. When summary statistics suggested an out-of-balance wastewater mass balance equation, we drilled into all inputs and assumptions, ultimately landing on unusually high loading factors attributed to the residential customer class as an anomaly. Though the general approach was not unusual or even necessarily significantly lacking, when considering the cost allocation results, the assumptions appeared to be unsupported in this specific circumstance. Lacking more complete or up to date information at this time, PUD agreed that a more comprehensive sampling and loading analysis of both residential and commercial customer classes would be completed before the next cost of service study. - Propose independent alternatives — As the consultant we evaluate numerous alternatives in multiple facets of nearly every study; however, these are typically driven by the client based on conversations focused on organizational objectives. By contrast, independent reviewers follow the path of the study as documented in a report and with that fresh perspective, come up with questions and suggest alternative outcomes for consideration. Recognizing the models used to develop the original plans were not our own, and we were not tasked with developing new rates or plans for adoption, we stopped short of developing recommended rate changes. In recent projects we limited our analysis to high-level impacts in terms of required cumulative rate increases, or to analysis of the customer class level breakdown of potential revenue generation. For PUD's wastewater COS, we presented this information for each individual recommendation, and for the combined effect of all recommendations to clearly illustrate the relative magnitude of every change. This process also helped illustrate the connectivity between financial planning decisions and customer class impacts as changes to use of fund balance impacted the percentage distributions out of the COS/rate model. Also, because we were not necessarily following the guidance of PUD in determining what alternatives to present, we simply followed the data and our own professional judgement (incorporating that point of healthy skepticism) to consider alternatives that may be initially viewed as unpopular. For example, one recommendation included greater use of fund balances to reduce the first year's rate increase. While we recognized and appreciated the rationale for the first year's increase to be higher, and the desire for larger fund balances to maintain a healthy amount of conservatism in the forecast, we offered the perspective that sufficient levels of conservative estimates might already have been layered into the analysis. The fresh perspective revealed the layering of conservatism, which was entirely understandable as a part of the initial rate process, during which it would have appeared reasonable to choose the conservative option every time. Some of the recommendations from these projects were implemented, some were not. This is not unexpected or troubling. The success of the independent review process is not contingent upon full, or even partial implementation of any resulting recommendations. Embracing a serious independent review process assures stakeholders that the analysis was thoroughly vetted; that independent recommendations were received, documented, and a response provided; and that transparency with decision makers and the public was truly maximized. The independent rate review process is not a substitute for sound financial planning and analysis, it serves to demonstrate the quality of the process and to build support by contributing light, openness, and accountability.

This paper was presented at the WEF/AWWA Utility Management Conference, February 21-24, 2022.

SpeakerStewart, Benjamin

Presentation time

11:30:00

12:00:00

Session time

10:30:00

12:00:00

SessionShaping Rates Through Policies & Second Opinions

Session number17

Session locationHyatt Regency Grand Cypress, Orlando, Florida

TopicData Analytics, Finance, Rates, Sustainability And Social Responsibility

Author(s)

B. StewartA. BurnhamL. Celaya

Author(s)B. Stewart 1; A. Burnham 2; L. Celaya 3

Author affiliation(s)Stantec 1; UMC Speaker 2; City of San Diego 3

SourceProceedings of the Water Environment Federation

Document typeConference Paper

PublisherWater Environment Federation

Print publication date Feb 2022

DOI10.2175/193864718825158266

Volume / Issue

Content sourceUtility Management Conference

Word count13

Description: Strength Based Billing: An Updated Cost Allocation and Billing Framework for San...

Strength Based Billing: An Updated Cost Allocation and Billing Framework for San Diego's Metro Wastewater System

Abstract

This presentation explains how San Diego is using an inclusive and rigorous approach to update and improve regional cost allocation processes in place for over 20 years. The City's 'Strength Based Billing' project is being undertaken by a diverse and multi-disciplinary team comprising representatives from the City of San Diego Public Utilities Department (PUD), the Metro Wastewater Joint Powers Authority (JPA), and Stantec. The project is developing a new cost allocation and billing framework for the City of San Diego's Metro wastewater system, ensuring a viable and efficient solution for billing the participating agencies (PAs) while promoting transparency and ease of understanding. The existing inter-jurisdictional agreement required an update due to recent developments related to the City's investment in its Pure Water advanced water purification program. Additionally, the potential for similar investment by some of the PAs in additional reuse projects necessitated a comprehensive assessment of cost allocation factors to ensure fair distribution of costs among the participants while not disincentivizing future reuse opportunities. The project recognized the importance of delivering a viable solution that could be implemented efficiently and effectively. The multi-disciplinary team, consisting of engineering, finance, and operations experts, collaborated closely to develop a cost allocation and billing framework that minimized complications for the City in billing the agencies for service and ensured the PAs could understand and plan for their bills every year. To achieve this, the team conducted a comprehensive analysis of cost causative factors using a functional-design basis to develop cost allocation factors for the City's major conveyance and wastewater treatment assets. As with all cost of service analyses, these factors were developed using imperfect data and a significant level of ambiguity, requiring in-depth conversations between technical experts with deep and diverse understandings of the City's conveyance and treatment infrastructure and future capital plans and needs. These asset-based allocation factors allowed for the allocation of categories of costs and offsetting revenues to measurable parameters, including flow, COD, TSS, brine, and capacity. Allocation factors accounted for technical drivers, regulatory considerations, and the role each facility played in the greater treatment system. By considering these factors, the team aimed to create a framework that accurately reflected the usage and capacity characteristics of the system, aligning those characteristics with the evolving needs of each agency, leading to fair and transparent billing. The financial experts on the team explored alternative rate design and billing approaches, taking into account the specific perspectives and requirements of the PAs and the City. Rate design alternatives focused on various approaches to fixed and variable revenue recovery and the basis for recovering operations and maintenance costs vs. capital costs. This discussion also focused on developing billing structures that were easy to understand, allowing the agencies to grasp why their bills were what they were. The team aimed to ensure that the billing process was predictable and consistent, enabling the PAs to plan for their bills effectively and to explain the level of charges and the reason for any changes to their local communities and elected officials while also recognizing that the rate design and billing is expected to be robust and dynamic enough to accommodate known and projected changes in water and wastewater over the coming decades. By including representatives from both the City and the PAs throughout the project, stakeholder engagement was prioritized to gather valuable feedback and insights from all parties. This collaborative approach ensured that the proposed cost allocation and billing framework was practical, feasible, and aligned with the agencies' expectations. By actively involving the agencies in the process, the team fostered transparency, increased understanding, and reduced potential complications during implementation. The project has now reached the stage where the initial framework proposal will soon be presented to the PAs for detailed feedback and discussion. This iterative process will allow for further refinement and validation of the proposed framework, ensuring that it meets the needs of both the City and the PAs, and minimizes potential complications in billing or planning. The Stantec team, in close collaboration with the representatives from San Diego and the Metro JPA, will ultimately develop a cost allocation and billing framework that is not only fair and equitable but also efficient and user-friendly. By ensuring that the final product is a viable solution, the team aims to simplify the billing process for the City and enhance the participating agencies' ability to understand and plan for their bills, ultimately supporting the region's sustainable water management goals.

This paper was presented at the WEF/AWWA Utility Management Conference, February 13-16, 2024.

SpeakerStewart, Benjamin

Presentation time

15:30:00

17:00:00

Session time

15:30:00

17:00:00

SessionUtility Financing - A Multi-Faceted and Long Term Effort

Session number27

Session locationOregon Convention Center, Portland, Oregon

TopicFinancial Resilience including funding mechanisms, Rate and Fee studies, and Affordability.

Author(s)

Stewart, Benjamin

Author(s)B. Stewart1, A. Jones2, W. Zieburtz

Author affiliation(s)Stantec Consulting Services Inc. 1; City of San Diego, Public Utilities Department 2;

SourceProceedings of the Water Environment Federation

Document typeConference Paper

PublisherWater Environment Federation

Print publication date Feb 2024

DOI10.2175/193864718825159255

Volume / Issue

Content sourceUtility Management Conference

Word count17

Value of Water Campaign: The Economic Benefits of Investing in Water Infrastructure

Abstract

As part of the US Water Alliance's Value of Water Campaign, Stantec and One Water Econ conducted a national study of the United States' water infrastructure funding gap and its economic impacts. Chronic underinvestment in drinking water, wastewater, and stormwater systems has left a substantial funding shortfall that threatens service reliability and economic vitality. This analysis quantifies both the costs of inaction and the benefits of closing the gap, using updated infrastructure needs data and input-output economic modeling (IMPLAN) to capture ripple effects across the economy. The study builds on prior research by incorporating more comprehensive stormwater funding needs, emerging infrastructure needs (i.e., PFAS mitigation and lead service line replacement) and providing state-level breakdowns of needs and impacts. This abstract focuses on national-level findings. The findings illustrate the magnitude and stakes of the funding gap. In 2023 alone, roughly one-third of U.S. water infrastructure requirements (about $78 billion) went unfunded. If current funding levels persist, this annual gap could double by 2042, resulting in a cumulative shortfall approaching $2.4 trillion. The consequences of underinvestment are severe: a hypothetical one-day nationwide water service outage would cost an estimated $120 billion in lost economic output (including a $68 billion drop in GDP) and put over half a million jobs at risk. Conversely, investing to close the gap would generate broad economic benefits. Bridging the funding gap over the next two decades (approximately $161 billion per year) is projected to support about 1.2 million jobs annually and increase GDP by $165 billion per year. Every dollar invested yields robust returns-about $2.6 in total economic output and $1.4 in GDP for each $1 spent-while also enhancing public health, environmental quality, and resilience. Employment trends in the water sector reveal additional opportunities and challenges. Water infrastructure jobs tend to offer wages above the national average, with strong benefits in rural communities where economic opportunities may be limited. The sector supports a diverse range of occupations, from skilled trades and engineering to planning and operations, making it a key contributor to workforce development. However, workforce shortages and aging personnel present risks to long-term service reliability, underscoring the need for investment not only in infrastructure but also in talent pipelines. This collaborative research offers a data-driven case for sustainable water infrastructure investment. By quantifying both the costs of inaction and the returns of intervention, the study provides clear metrics to inform technical planning and policy decisions. It underscores that closing the water funding gap is not only critical to prevent service disruptions and economic losses, but also a strategic opportunity to stimulate job creation, economic growth, and long-term resilience.

This paper was presented at the WEF/AWWA Utility Management Conference in Charlotte, NC, March 24-27, 2026.

Presentation time

16:30:00

16:50:00

Session time

15:30:00

17:00:00

SessionFinancing the Future: Strategies, Resilience, and Value in Water Infrastructure Investment

Session locationCharlotte Convention Center

TopicFinancial Resilience

Author(s)

Stewart, Benjamin, Clements, Janet, Simonson, Emily