Principals of Ranson Financial Group LLC have developed a unique methodology of evaluating the effectiveness of the Utility Systems’ rate structures for a number of the cities and rural water districts in Kansas. The rate reviews are prepared utilizing customized spreadsheet modeling and are instrumental in determining if the Utility System’s rates are effective in covering the System’s expenditures in a sufficient manner. In addition to evaluating the System’s existing rate structure, the rate reviews also provide the suggestions for the optimal rate structure and the proposed impact of the rate increase on the financial situation of the System.
Please contact Henry Schmidt for more information.
Utility Rate Review Process
The process is simple if you wish to have a utility rate review completed:
- Contact us for quote of cost for review if necessary (Water Utility Review may be covered under Free Technical Assistance);
- Send basic information to start the review. The date we receive all the basic information is the date we use to set the priority of which reviews will take priority over others. This date is useful if we have several reviews being worked on at once. The sooner you get the basic information in the better;
- Once we receive the basic information we will look through it to determine if additional information is needed. If we end up requesting additional the priority date does not change we just cannot start working on it and will move on to the next analysis that needs to be completed. Once we receive the additional information we will start the analysis. The date we start the analysis will also be the start date for the system’s free year of technical assistance.
After completing the initial review, we will set-up a call to review the preliminary information (this is typically done with the Bookkeeper or City Clerk). If the review was fairly simple to complete this call may only last approximately 30 minutes to an hour. This step allows us to fix any problems in our forecasted figures and allows us to align our forecasts with those of the System. Once the initial review is completed, we will update our forecasted figures and continue on with the review. The next step is the final review. The final review can be with the Bookkeeper or City Clerk, but may also be with the Mayor, Council/Board Members, or Operator. The final review can be done over the phone or in person.
The final review will show the current situation of the system and if needed what increase is adequate to support the System. We can also go back and create different scenarios that will show what the needed increase, if any, is under several different scenarios. Some examples of the additional scenarios are 1.) Budgeting for planned upcoming capital outlay projects in the future; 2.) Building in a budget for unplanned capital outlay projects in the future; 3.) Build in transfers to any number of reserve funds and, 4.) Build in debt for upcoming projects that require loans or bonds to finance.
The final review will show a summary of all the different scenarios and how they each affect the system. The system can then decide how to implement the change(s) if they so choose.