The Northampton, Bucks County, Municipal Authority employed Keystone Alliance Consulting to conduct a study of a sewer and water rates. The goal of the study was to determine the adequacy of its rates for a five-year study period and to evaluate the rate structure of each operation in terms of equitably recovering costs from all customers. With respect to the latter situation, the emphasis focused on the sewer rates because of concerns expressed by a number of customers regarding the fairness of a flat rate structure. While the water rates were not inherently perceived as being inequitable, the utilization of a completely volumetric charge with inclining block rates did raise an issue vis-ŕ-vis the recapture of costs among all customer classes.

Keystone performed the following services in connection with the study:

• Reviewed the latest audited financial statements, the operating budget, debt service schedule, and current growth projections.
• Determined the annual revenue requirements of the Authority’s operations and allocated those requirements between the water and sewer systems for the study period.
• Analyzed the pattern of water customer usage for a 12-month period.
• Compared the water and sewer 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 and anticipated growth that recovered the revenue requirements allocated to the water and sewer systems.
• Assessed the impact of each rate structure on customers at various usage levels.

Keystone met on several occasions with the Authority staff and the Authority Executive Director to review the study approach, collect data and discuss the findings.