Financial and management consulting to provide an improved utility fee structure for sustainable financial planning and customer equity

Venice Stormwater Utility Rate Study

Increasing red tide along Florida’s west coast put heat on stormwater management in the City of Venice—City Council was looking for capital projects to remove nutrients from stormwater. However, the existing stormwater rate structure was complicated, outdated, barely supporting operations, and couldn’t fund new projects.

Our financial and management consultants were charged with reviewing the existing utility fee structure to develop a sustainable financial plan. First, we determined the revenue required to recover utility operations, maintenance, and capital costs. We then performed a detailed billing unit analysis of the gross, pervious, and impervious area. As part of the stormwater rate design, we developed modifications to the current fee structure that enhance the simplicity and defensibility. Through a stakeholder working group, we then conducted interactive sessions to elicit feedback, guidance, and buy-in. Initially, customer impacts were larger than expected so our team reworked the rates with multiple options to consider. Ultimately, we found palatable rate changes that Council unanimously voted to approve.

The changes we made to the rate structure resulted in not only more customer equity but also more City revenue. While customers paid closer to their contributions to the stormwater system, more money came through the utility to pay for capital projects.