This presentation argues that the investment by a
municipality in a water utility is at risk due to the hazards
associated with owning and operating a water system,
and that a return on the investment is appropriate to
justify placing the investment at risk.
The presentation reviews why municipalities own water
utilities, explains the justification for earning a return,
and describes the process for setting an appropriate
return. These arguments are based on three key
assumptions that include:
the water utility is entirely owned by the municipality;
the municipality is at risk due to the hazards
associated with owning and operating a water utility; and,
the municipality owns the water utility by choice and
could sell the utility if certain conditions were met,
including the defeasance of outstanding debt and
ensuring the ongoing provision of water service to the
community. The presentation goes on to answer questions that include: Why Does a
Municipality Own
the Water Utility; Why Should the
Utility Earn a
Return; By What Authority Does
the Municipality Decide
What is an Appropriate
Return; When is the Return
Established, Earned
and Measured; What Should the
Municipality Consider in
Authorizing the Return
Contained in the Budget
and Water Rates; What Are the Criteria for
Considering a Method for
Establishing a Return; What Are the Risk-
Based Return
Methods; How Much of the Return
to Transfer to the
Municipality; What are the
Barriers; and, Added Reasons For
a Municipality
Owning the Water Utility.
| Edition : | Vol. - No. |
| File Size : | 1
file
, 1.4 MB |
| Note : | This product is unavailable in Ukraine, Russia, Belarus |
| Number of Pages : | 16 |
| Published : | 06/01/2007 |
