The Warwick Township Water & Sewer Authority authorized Keystone Alliance Consulting to evaluate the adequacy of its current water and sewer rates. In particular, the study was intended to address the issue of the billing of sewer for water used for lawn irrigation and the filling of swimming pools. The summer usage dilemma had been raised by a number of customers. However, due to varying geographic, economic and social factors, there is no common solution to this problem and each case must be studied individually.

Keystone undertook the following services in connection with the analysis and update:

• Reviewed financial data.
• Determined the annual revenue requirements of the Authority’s operations and allocated those requirements between the water and sewer systems.
• Compared the water and sewer revenues projected for the study period under the current rate structure with the annual revenue requirements.
• Reviewed and analyzed past water consumption records in an effort to quantify the issue of water used for irrigation being billed for sewer and determine the impact of credit meters and other structural changes that address the summer usage situation.
• Developed a billing analysis for customer usage derived from the customer records of the Authority for the previous 12-month period.
• Developed an alternative rate structure based on current customer usage patterns and anticipated growth that recovered the revenue requirements allocated to the water and sewer systems separately.
• Prepared projected cash flow statements under the proposed rates for the study period for both the water and sewer systems.
• Calculated the impact of the revised rates on customers at various usage levels.

As a result of this study, the Authority adopted a rate change which to date has eliminated customer complaints over the summer usage issue.