Public Outreach Begins with the Board

There are many elements in the process of identifying and adopting a set of rate adjustments. Arguably, the most important element is stakeholder acceptance to achieve understanding from the public regarding why additional funds are needed. However, utilities often undervalue the role of a public outreach campaign for City management and the governing council, commission, or board prior to the vote. The foundation for the most effective rate implementation is built upon more than just approval, but decision maker buy-in to the overall objectives of the utility.Central Arkansas Water (CAW), the water provider to the Little Rock and North Little Rock greater metropolitan areas, engaged Raftelis Financial Consultants, Inc. (RFC) to conduct a water rate study in 2011. Over the course of the project, RFC conducted a cost of service analysis, developed a long-term financial plan, and determined the set of annual rate adjustments necessary to meet annual budgetary needs. After this process, the real work began. The project team ran numerous rate smoothing scenarios and utilized certain mechanisms, such as a rate stabilization reserve, to mitigate large one time rate increases. CAW staff reevaluated the CIP to determine if projects could be shifted, also in an effort to mitigate large one time rate increases. CAW staff began having individual meetings with the city mayor, and the board of commissioners, educating them on the current situation and seeking their input. Due to economic concerns in the area and a significant increase in wastewater rates by the wastewater service provider, CAW elected to postpone implementing a rate increase for 2012. The project team revisited the analysis the next year and began running scenarios again. CAW staff resumed meetings with commissioners and ultimately, a three year rate adjustment plan was unanimously passed with the support of all involved.The discussion will highlight CAW’s water rate study and the resulting rate adjustments; however, the primary focus will be the extensive efforts of CAW’s leadership. Public outreach begins with the decision makers. Utility personnel and community leaders will benefit from recognizing in this case study how laying the groundwork early in the process, working behind the scenes to educate and discuss the utility’s position with each council person or commissioner personally, can be a very effective process for successful adoption and endorsement of utility rate adjustments. Additionally, CAW’s staff will convey the reality that rate increases do not occur in a vacuum and that other public concerns or circumstances such as economic conditions, tax rate increases, other utility increases, etc., should be factored into assessing customer burden and overall stakeholder acceptance. CAW staff worked diligently for nearly two years, and was rewarded with a successful and satisfyingly uneventful vote for implementation of a three year rate plan.