The Montgomery Township Municipal Sewer Authority authorized Keystone Alliance Consulting to conduct a sewer rate study. The goal of the study was to develop and recommend a sewer rate structure that would satisfy the revenue requirements of the Authority and unify the rates throughout the service area which consisted of three separate rate districts. In addition, the Authority requested that the recommended rate structure reflect, to the extent possible and feasible, the actual cost to provide service to its customers.

Keystone undertook the following in connection with the rate study:

• Reviewed the latest financial data, including the proposed operating budget for next fiscal year.
• Determined the annual revenue requirements of the Authority’s operations for the study period and allocated those requirements between its fixed and variable components.
• Reviewed the annual depreciation and evaluated changes in the life of the assets.
• Compared the revenues projected for the study period under the current rate structures with the annual revenue requirements and quantified any deficiencies.
• Developed an alternative rate structure applicable to each year of the study period in accordance with the goals set forth by the Authority.
• Compared the impact of the alternative rate structure on customers at various usage levels for each of the three existing rate districts.