wrf #4455 “rate approval process communication strategy and … 4455... · 2016-06-14 · 2....

© 2016 Water Research Foundation. ALL RIGHTS RESERVED. © 2016 Water Research Foundation. ALL RIGHTS RESERVED. No part of this presentation may be copied, reproduced, or otherwise utilized without permission.

WRF #4455 “Rate Approval Process Communication Strategy and Toolkit”

June 7, 2016

4455 Resource Access

Finance Knowledge Portal

Current and Upcoming Finance Projects

• *Capital Funding Imperatives: Best Practices for Identifying, Prioritizing, Funding, and Resourcing Capital Improvement Programs

• Identifying and Evaluating Opportunities for Reducing Variability of Utility Revenues

2017 • Customer Assistance Programs for Multi-Family Residential and Other Hard

to Reach Customers • New and Emerging Capital Providers for Infrastructure Funding

• Challenges and Practical Approaches to Water Reuse Pricing • Alternative Project Delivery Performance Evaluation and Decision Support

Tool for Water and Wastewater Capital Projects

Presenters

• John Mastracchio, Arcadis • Shadi Eskaf, University of North Carolina

Environmental Finance Center • Rick Giardina, Raftelis Financial

Consultants • Karen Raucher, Abt Associates • Richard Atwater, Southern California

Water Committee

The Project

Water Research Foundation – Rate Approval Process Communication Strategy and Toolkit

Objective Identify and develop communication strategies, specific messages, and tools that can be used to gain support during their rate approval process

The Research Team Principal Investigators

Other Team Members

The Scope of the Research Efforts

1. Research literature related to the rate approval process

2. Conduct a survey of local governments

3. Facilitate interviews, webinars, and workshops

4. Develop framework for messaging and communication

5. Create toolkit to support successful communications

Survey of Local Governments

• Board leaders and staff • Last adjustment request

(size, outcome) • Last adjustment approval

(size) • Adjustment processes

(who, what, how) • Adjustment

communication messages • Perceptions of

effectiveness

Survey Sampling and Response

Chief Administrative Officers Chief Elected Officials

Matched surveys sent 5,750 (4,439 cities; 1,311 counties)

5,750 (4,439 cities; 1,311 counties)

Surveys returned 2,110 781

…from local governments that manage and set rates for water utilities

1,408 329

Matched sets from same local government 202

Survey was administered by ICMA from May through August 2014 Analysis conducted by the UNC Environmental Finance Center in 2014-2015

Most respondents reported that rate increases were approved when requested

And they reported receiving what they asked for

% of Rate Increase Request Approved (when a single request was made)

Most got what they asked for!

Are utilities getting the rate increases that they need?

n=1,349

The rate increase that was proposed was:

Ten Tips to Having Higher Rates Approved (what statistically worked for >1,000 utilities) 1. Ask for more

2. Build trust between board and staff

3. Use experienced staff to oversee process

4. Use a third party to present rate adjustment request

5. Include information about capital needs

6. Describe the impact of the rate increase on assets

7. Link rate requests to long-term plan

8. Describe the impact to the customers in a clear manner

9. Get the public involved

10.Comparisons help

Focused Interview Participants

Tampa Bay Water

Oklahoma City Water Utilities

Trust City of Johnson

City Water & Sewer Dept.

Denver Water

El Paso Water Utilities

Charlotte-Mecklenburg

Utilities

Mohawk Valley Water Authority

Middlesex Water Co.

Los Angeles Dept. of Water & Power

Tualatin Valley Water District

Lessons Learned by Board Members and Utility Management

1. Focus on the Need for the Rate Increase 2. Focus on the Value and Resiliency of the

System 3. Focus on Customer Service 4. Make Communications Continuous and

Consistent 5. Build Trust and Confidence in the Utility 6. Focus on Community Involvement and Visibility 7. Build strong relationships with the Board 8. Governance can be factor in rate case success

Lessons Learned Workshop

THREE THEMES • Focus communication on your rate

need/risk and tie it to community values

• Share your rate-related guiding principles

• Use good, basic communication strategies

LESSONS LEARNED

THEME 1 – FOCUS COMMUNICATION ON YOUR RATE NEED/RISK AND TIE IT TO COMMUNITY VALUES

• Articulate the Need for Additional Revenues or Restructuring the Rates

• Tie Your Rate Need to Community Values

• Affordability and Hard-to-Reach Household Issues

THEME 2 – SHARE YOUR RATE-RELATED GUIDING PRINCIPLES

DENVER WATER, CO

• Fair, equitable, and easy to understand • As low as good service will permit • Based on the cost to provide service for the water used • Supports a financially strong and stable organization

that can ensure its customers have reliable, high-quality water now and in the future

• Promotes opportunities for customers to benefit in the wise use of water

LESSONS LEARNED

EASTERN MUNICIPAL UTILITY DISTRICT, CA

• Fairness and equitable to achieve customer buy-in • Intuitive and interactive - gave customers an

opportunity to make adjustments based on personal information

• Increases awareness of water use - resulted in conservation and revenue neutrality

• Open communication – allowed two-way dialogue with customers

LESSONS LEARNED

ALBUQUERQUE/BERNALILLO COUNTY WATER AUTHORITY, NM

• A rate structure that can be easily implemented • Cost-of-service principles should be followed • Economic impact of a rate structure on customers

shall be analyzed • The rate structure should help achieve the

community’s water conservation goals • Financial integrity of the systems must be

maintained

LESSONS LEARNED

THEME 3 – USE GOOD, BASIC COMMUNICATION STRATEGIES

• Communication Needs to be: — an Ongoing Activity — Audience Based

• Specific Communication: — Objectives for Internal Staff — Ideas for Elected Officials — Ideas for Customers—Use Data to Identify the

Message Needs • Develop and Repeat a Consistent Theme • Communication Requires Transparency

LESSONS LEARNED

KEY TAKE AWAY

DELIVER ON YOUR PROMISES

It’s not the rate study – if it is a continuous process, if it is about our needs, value, etc….the rate study will be accepted

Communication Tools:

Objectives • Support your ability to:

A. Identify the need for and benefit/consequences of rate change

B. Meet the special needs of Governing Board members

C. Connect the need with a community value D. Build trust and understanding

A: Identify the key need-benefit/consequence based

themes.

A: Identify the key need-benefit/consequence based themes.

Examples: • Need - Replace aging infrastructure

Benefit - reduction in pipe breaks, traffic jams, water outages

• Need- Additional future water resources Consequence – significant future water rationing during drought conditions

• Need - Maintain financial viability Benefit - high bond rating

• Need - Treatment plant upgrades Consequence - inability to meet new and revised regulatory requirements

B: Meet the Special Needs of Governing Board members

• Build collaborative relationships with policymakers

• Share metrics that matter in layers • Tell a rate story • Build community-wide utility trust

and understanding

Plan ahead for the challenges inherent to communicating with policymakers

B: Meet the Special Needs of Governing Board members

Tool #5: Metrics that Matter: A Rate Case Visualization Tool

Communication Toolkit:

#3: Connecting with community values

Tips: —Articulate & Share Guiding Principles —Identify critical audience segments —Identify value connectors

Tools:

—Tool #10: Rate Setting Guiding Principles —Tool #11: Using Surveys and Focus Groups to

Identify community values

#3: Connecting with community

values

#4: Build Trust & Understanding

Use on-going communication that focuses on:

Visibility, Transparency, Community Involvement

—Make communication on-going —Articulate utility wide efficiencies —Focus on customer service —Be visible and involved —Share rate setting guidelines

#4: Build Trust & Understanding

Tool #14: Messages that Resonate

The intergenerational message We do not want your children to have this problem.

All customers want to know is what is in it for me? We tell them that it is for their kids and their grandkids.

“The rate increase is a vote for the community’s future. Not a vote for a rate increase”.

Sustainability and Reliability

Communication Toolkit

Summary of basic rate communication

guidelines

Long-term communication

strategy checklist

List of information to share with

governing boards

Examples of messages that

resonate

Dashboard communication tool

Interactive guide for using the toolkit

Utility Perspectives

• Value of the research and utilization of the tools

• Always helpful to utility managers to learn from others on their experiences on what works

• Communications with customers is a organizational effort not the responsibility of a few staff members

Utility Perspectives (cont’d)

• Utilities need to also collaborate effectively

with all other local governmental entities to avoid confusing and potentially conflicting messages or “turf battles”

• Management and board leadership a critical

‘team effort’ to support rates in the context of strategic investment in the utility’s services

Key Takeaways

1. No silver bullet – Success comes with repetition, perseverance, and persistence

2. Focus communication efforts on needs and values, rather than the rate increase itself

3. Trust plays a huge role in successful rate adoption

4. General communication guidelines and tips can help along the way

4455 Resource Access

wrf #4455 “rate approval process communication strategy and … 4455... · 2016-06-14 · 2....

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