WRF #4455 Rate Approval Process Communication Strategy and Toolkit June 7, 2016

Transcription

1 WRF #4455 Rate Approval Process Communication Strategy and Toolkit June 7, 2016 No part of this presentation may be copied, reproduced, or otherwise utilized without permission.

2 4455 Resource Access

3 Finance Knowledge Portal

4 Current and Upcoming Finance Projects 2016 *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 RFPs 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

5 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

6 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

7 The Research Team Principal Investigators Other Team Members

8 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

9 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

10 Survey Sampling and Response Chief Administrative Officers Matched surveys sent 5,750 (4,439 cities; 1,311 counties) Surveys returned Chief Elected Officials 5,750 (4,439 cities; 1,311 counties) 2, from local governments that manage and set rates for water utilities 1, 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

11 Most respondents reported that rate increases were approved when requested

12 And they reported receiving what they asked for % of Response Most got what they asked for! % of Rate Increase Request Approved (when a single request was made) n=804

13 Are utilities getting the rate increases that they need? The rate increase that was proposed was: n=1,349

14 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

15 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

16 Focused Interview Participants Tualatin Valley Water District Mohawk Valley Water Authority Middlesex Water Co. Los Angeles Dept. of Water & Power Denver Water Oklahoma City Water Utilities Trust City of Johnson City Water & Sewer Dept. Charlotte- Mecklenburg Utilities El Paso Water Utilities Tampa Bay Water

17 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

18 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

19 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

20 THEME 2 SHARE YOUR RATE-RELATED GUIDING PRINCIPLES DENVER WATER, CO LESSONS LEARNED 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, highquality water now and in the future Promotes opportunities for customers to benefit in the wise use of water

21 LESSONS LEARNED THEME 2 SHARE YOUR RATE-RELATED GUIDING PRINCIPLES 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

22 LESSONS LEARNED THEME 2 SHARE YOUR RATE-RELATED GUIDING PRINCIPLES 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

23 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

24 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

25 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

26 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

27 Communication Tools: A: Identify the key needbenefit/consequence based themes.

28 Communication Tools: A: Identify the key needbenefit/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

29 Communication Tools: B: Meet the Special Needs of Governing Board members Plan ahead for the challenges inherent to communicating with policymakers Build collaborative relationships with policymakers Share metrics that matter in layers Tell a rate story Build community-wide utility trust and understanding

30 Communication Tools: B: Meet the Special Needs of Governing Board members

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

32 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

33 Communication Toolkit: #3: Connecting with community values

34 Communication Toolkit: #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

35 Communication Toolkit: #4: Build Trust & Understanding

36 Communication Tools: 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.

37 Communication Tools: Tool #14: Messages that Resonate Sustainability and Reliability

38 Communication Tools: Tool #14: Messages that Resonate 39

39 Communication Tools: 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

40 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

41 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

42 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

43 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

44 4455 Resource Access