Full Description

This presentation argues that the investment by amunicipality in a water utility is at risk due to the hazardsassociated with owning and operating a water system,and that a return on the investment is appropriate tojustify placing the investment at risk.The presentation reviews why municipalities own waterutilities, explains the justification for earning a return,and describes the process for setting an appropriatereturn. These arguments are based on three keyassumptions that include:the water utility is entirely owned by the municipality;the municipality is at risk due to the hazardsassociated with owning and operating a water utility; and,the municipality owns the water utility by choice andcould sell the utility if certain conditions were met,including the defeasance of outstanding debt andensuring the ongoing provision of water service to thecommunity. The presentation goes on to answer questions that include: Why Does aMunicipality Ownthe Water Utility; Why Should theUtility Earn aReturn; By What Authority Doesthe Municipality DecideWhat is an AppropriateReturn; When is the ReturnEstablished, Earnedand Measured; What Should theMunicipality Consider inAuthorizing the ReturnContained in the Budgetand Water Rates; What Are the Criteria forConsidering a Method forEstablishing a Return; What Are the Risk-Based ReturnMethods; How Much of the Returnto Transfer to theMunicipality; What are theBarriers; and, Added Reasons Fora MunicipalityOwning the Water Utility.

Product Details

Edition: Vol. - No. Published: 06/01/2007 Number of Pages: 16File Size: 1 file , 1.4 MB