News
March 2007 - Dan Jackson, Managing Director and CEO of Economists.com was a guest presenter at the Programme Symposium annual conference in March 2007 for the European Association for Evolutionary Political Economy.
The 2007 conference in Delft in the Netherlands focused on “Privatisation and Regulation: On the eco-evolution of Technology, Policy and Institutions” and addressed the question of regulation of public utilities and infrastructures from an evolutionary-institutional perspective. Mr. Jackson presented his findings on “The U.S. Water Industry: A Study in the Limitations of Privatization.” This was the third occasion for Mr. Jackson to be invited to speak before this body of scholars.
Wednesday, October 10, 2007 – The Daily Courier City moves ahead with analysis of water, sewer rates By Cindy Barks
PRESCOTT - In anticipation of the increases that an upcoming rate and fee analysis likely will recommend, the Prescott City Council heard opposing views this week.
While one speaker urged the council not to "cringe" from the increases that he said are necessary, another warned that escalating impact fees would drive away potential builders.
Ultimately, the council approved a $137,000 contract with Economists.com for the analysis of the city's water and sewer rates and fees.
The study should be complete by February, when council members will consider its recommendations.
Everyone involved appeared to agree that the analysis would recommend increases for sewer and water rates, as well as possible increases for the impact fees that the city charges to new homebuilders.
If that happens, it will add to the phased-in water-rate increases the city imposed for 2006 and 2007.
Local resident Howard Mechanic referred to the previous increases when he spoke about the direction of the public debate on the issue.
"I don't think the message is getting out that the rates are not outrageous," said Mechanic, a proponent of water conservation measures. The past increases, along with any future rate hikes, are necessary, in part to curb the water use in the area, he added.
"Unfortunately, the rates are going up higher, but the city doesn't really have a choice here," Mechanic said, noting that previous councils have deferred maintenance of water and sewer infrastructure. "Hopefully, you won't cringe (from more rate increases)," he told the council.
On the other hand, area resident Ethan Edwards contended that any more increases in impact fees could hurt the community's building industry.
"Impact fees - if they're not contained - they will exclude people from building here," Edwards said.
And maintaining that growth already pays for itself through the construction sales taxes that builders pay, Edward added, saying, "Impact fees are not needed."
Mechanic argued, however, that the city should "charge full and fair impact fees. We need to get the message out that the city is not gouging."
Public Works Director Craig McConnell explained at the outset of the discussion that the city had not evaluated its sewer rates since 1999.
"It's way overdue," he said of the analysis.
Councilman Jim Lamerson agreed that the analysis is necessary to help the city determine its true costs for providing water and sewer services to its residents.
"I understand why we have to address these water rates," Lamerson said, adding that the city has "subsidized" water for years. The study will enable the city to let its residents know, "Here's what it costs to deliver your water," he said.
September 6, 2007 – YUMA EXAMINES WATER RATES
By Jeffrey Gautreaux, The Sun, Yuma, AZ
Recommendations for new water and wastewater rates would mean the average home would have an increase from $48.18 per month currently to $59.47 per month starting in January. Dan Jackson of Economists.com, a consultant hired to study the city’s utility rates and fees, presented alternatives for rate increases to the Yuma City Council Tuesday night during a work session. Jackson said the size and type of increase could be debated, but the need to raise rates could not be ignored because growth in new accounts can’t cover the costs to increase capacity.
“You absolutely need to do some form of rate adjustment to ensure you can fund your capital improvement program,” he said. Jackson provided the council with three alternatives for raising the rates. One plan raised rates and implemented the maximum allowable water and wastewater capacity fees, which are one-time costs paid by new development to fund new facilities. The second plan made the same rate hike but didn’t change the capacity fees, and the third plan raised rates but less with less aggressive changes to the current inverted block structure. The inverted block structure is used as a way to spur conservation by charging customers higher rates as they use more capacity.
Because more capacity is needed to meet demands from growth and construction and fuel costs have gone up considerably, Jackson said the city will need to take out as much as $70 million in debt in 2007 and $30 million more in 2008 to fund its capital improvement projects for water and sewer.
A big part of this figure is $69.3 million to expand the Agua Viva Water Treatment Facility at Avenue 9E so that it will have a maximum capacity of 33 million gallons per day. Despite the price tag, Hank Baer, assistant public works director, said the facility would cost $2.66 per gallon of available capacity, which is in line with current prices across the state and country.
The council will have the opportunity during tonight's council meeting to award the contract for the plant to J.R. Filanc Construction Co. of Oceanside, Calif. The total cost of the project is $87.8 million.
The council said it is important to stay ahead of the growth they know will occur. "We almost can't build the capacity fast enough to keep up with the growth," said Councilman Paul Johnson.
Mayor Larry Nelson said the city cannot rely on impact fees to fund these new facilities because by the time the money is received, the added capacity is already needed.
The city has about 103,000 year-round water customers, and that amount nearly doubles in the winter. Baer said the annual water demand was a billion gallons higher in 2005 than it was in 2000.
The average user, who Jackson said would use about 2,000 cubic feet in capacity per month, would pay $48.18 per month now for water and wastewater. Under the first alternative, this would increase to $59.47 in 2007, $71.46 in 2008, $72.86 in 2009, $74.34 in 2010 and $75.88 in 2011.
Jackson said rates would be about $2 to $3 more on average each month if capacity fees are not raised. Ultimately, he said, it would be the council members' decision on how they felt the increase should be done.
"Rate-making is more of an art than a science," he said.
Jackson's presentation is the first step toward the new rates. The city's water and sewer commission will hold a public hearing on the rate increases Oct. 9, and the council is expected to have a public hearing Oct. 18.
The rates could be approved in November.
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Copyright (c) 2006, The Sun, Yuma, Ariz.
May 30, 2006 - FUNDING OPTIONS PROPOSED FOR BLUE RIDGE
Payson Roundup, Payson, Arizona
A preliminary water rate analysis and long-term financial study, presented at the Tuesday, May 23 special Town Council meeting, reported that Payson’s current fee structure falls short of funding needed to operate the town’s municipal water system.
Dan Jackson, Chief Executive Officer and Managing Director of Economists.com, a consulting firm serving infrastructure industries, also said a combination of rate increases, bonds and government grants will help the town fund its share of the Blue Ridge project.
As the town grows, and more residents place demands on the area’s natural resources, the water department must accommodate progress.
“Water is a business,” Jackson said. “It is run by the town like a business. It expects to bring in the revenues that are needed to pay the expenses without any outside assistance.”
The cost of finding and providing municipal water is on the rise worldwide.
