The Harmony Borough Water Authority authorized the preparation of a water rate study by Keystone Alliance Consulting in conjunction with L. Robert Kimball & Associates. The goal of the study was to develop and recommend a water rate structure that would satisfy the revenue requirements of the Authority for a five-year period. Within that context the Authority requested that a new rate structure be developed which:

• Recovered the costs of the water system as equitably as possible from all customers
• Provided a reserve for anticipated capital projects and
• Identified separately the cost of providing fire service

The following services were performed in connection with the study:

• Reviewed the latest audited financial statements, the operating budget and the proposed capital improvement program.
• Determined the annual revenue requirements of the Authority’s operations and allocated those requirements between fixed and variable costs for the study period.
• Calculated the annual cost of providing fire service.
• Analyzed the pattern of customer water usage for a 12-month period from the customer records of the Authority.
• Compared the water revenues projected for the study period under the current rate structure with the annual revenue requirements.
• Designed alternative rate structures based on current customer usage patterns that recovered the revenue requirements allocated to the water system, including the cost of providing fire service.
• Assessed the impact of each rate structure on customers at various usage levels.
• Developed a rate model, which considered the annual revenue requirements for the water system and the alternative rate structures.

Several alternative structures were studied. The Authority discussed these structures, as well as their impact at various usage levels, in an effort to provide rates that were self-supporting without being onerous on any class of customer. At a public meeting the Authority approved an adjustment to its rate structure.