Municorn.us Financial analysis for water and sewer utilities

Cost-of-service and rate studies, bond feasibility, stormwater and impact fee reviews, consolidation studies, and system valuations. We build each from your audited statements, capital improvement plan, and billing records. Every figure names the document it came from.

Email us Cambridge, MA · Dallas, TX
What we do

How a rate is built, and what it rests on.

A rate is either built from a study or adopted as a percentage increase. We rebuild the calculation from your own records and document where each figure came from.

What we calculate

  • Operating cost: treatment and billing
  • Principal and interest each year
  • Projects in the capital plan
  • Total revenue required each year
  • Cost caused by each class
  • The rate that recovers it

What each figure rests on

  • The cost it recovers
  • The document it came from
  • The allocation method used
  • Its place in the file

What you receive

  • The written study
  • The spreadsheet model, yours
  • A file behind every figure
  • Slides for the council meeting
  • Us at that meeting
The study

What the study contains.

IllustrativeNames, dates and figures invented.

Setting the rate

What does it cost to serve each customer?

Cost of service

City of Ellery water fund · FY27 · distributed to single family, multifamily, commercial, industrial, irrigation and wholesale

Base demandAWWA M1 base-extra capacity method, on average-day volume from production records$4,180,000
Maximum day demandMaximum day peaking factor 2.1×, from five years of production records$1,940,000
Maximum hour demandMaximum hour peaking factor 3.4×, from storage and pumping records$860,000
Customer accounts and billingAccount count by class, from the billing extract$1,120,000
Meters and servicesMeter equivalents by size, from the meter inventory$640,000
Public fire protectionHydrant count and the fire flow the distribution system is sized for$410,000

We cannot show a basis your own records do not support. Where a cost was never allocated in writing, we say so rather than construct one. We are not lawyers; the cost-basis memo is written to be handed to yours.

The public hearing

What happens to the bill on Elm Street?

Bill impact

City of Ellery · monthly water bill · current schedule against FY27 proposed

  1. 2,000 gallons, a lifeline account$18.40 to $19.10 · +3.8%Proposed schedule, 5/8-inch meter
  2. 5,000 gallons, a median household$34.60 to $37.90 · +9.5%Billing extract, median winter use
  3. 10,000 gallons, a high-use household$61.20 to $69.40 · +13.4%Billing extract, 90th percentile
  4. A summer irrigation account$142.00 to $166.50 · +17.3%Billing extract, July and August
  5. A 2-inch commercial meter$486.00 to $521.00 · +7.2%Proposed schedule, 2-inch service
  6. Median bill against 20th-percentile income1.9% of household incomeACS table B19080, 5-year 2019-2023

Budget season

Can we afford the capital plan?

Financial plan

City of Ellery water fund · FY27 to FY32 · $8.4M lead service line replacement, drawn FY29

Coverage falls below the 1.20× covenant in FY30 and does not recover. Scenario B holds it with a 9.5% increase in FY29.

YearNet revenueDebt serviceCoverageMargin over 1.20×
FY27$6.02M$4.18M1.44×+0.24×
FY28$6.18M$4.31M1.43×+0.23×
FY29$6.35M$5.25M1.21×+0.01×
FY30$6.41M$5.94M1.08×−0.12×
FY31$6.52M$6.11M1.07×−0.13×
FY32$6.64M$6.18M1.07×−0.13×

Net revenue and debt service from the adopted capital plan and the state loan schedule. The 1.20× minimum is the bond ordinance, section 5.2.

YearNet revenueDebt serviceCoverageMargin over 1.20×
FY27$6.02M$4.18M1.44×+0.24×
FY28$6.18M$4.31M1.43×+0.23×
FY29$7.02M$5.25M1.34×+0.14×
FY30$7.28M$5.94M1.23×+0.03×
FY31$7.46M$6.11M1.22×+0.02×
FY32$7.61M$6.18M1.23×+0.03×

Same debt service. Net revenue reflects a 9.5% increase adopted in FY29 and no increase after it. Bond ordinance, section 5.2.

If the coverage your bonds require is higher than what your customers can pay, rate design cannot close the gap. That is a decision for the board, and the subject of a separate study.

The usual dispute

When somebody says the rate is wrong.

A resident, a homebuilder association, or an industrial account disputes what it is being charged. The dispute is usually one of three things.

  1. The basis exists and was never written down. The cost is real, and none of it sits in a document anyone can produce. We reconstruct it from your records.
  2. The defect is procedural. The notice, the public hearing, or the supporting material that was supposed to be available on request. Cheaper to fix before a complaint is filed.
  3. The charge is higher than the cost of serving them. We say so, calculate the difference, and show what a version supported by the cost would look like.
People

Who you would be working with.

All three of us, start to finish. No account manager and no handoff.

Ammar Cephas Plumber
Ammar Cephas Plumber Rate design and municipal finance

Former CIO for a Texas city: fee schedules, utility billing, ERP migration. Penn economics, public capital markets at Chicago.
Cameron Obrecht
Cameron Obrecht Metering, production and physical systems

Electrical engineer at Bose, UIUC grad. In-line flow metering, sensing and high-voltage assemblies: the instruments a production record comes from.
Vincent Cavanna
Vincent Cavanna Data governance and the record

Full-stack engineer for Word on Fire, Amazon before that. Portals, CRM and data-quality systems, which is where a billing record lives.
Questions

What people ask first.

How is this different from what our engineer already does?

Your engineer sizes the plant and the pipe and produces the capital cost. We turn that figure into the revenue requirement, the rate by class, the household bill and the coverage ratio. That section is often subcontracted.

Does this mean rates go up?

If the capital plan is funded and the current rate does not cover it, yes. What the study adds is the amount, which customer classes carry it, and the calculation behind both.

Can we charge less to households that cannot pay?

Partly, and the law is unsettled. The safer reading is that a charge has to track the cost of serving a property, which limits income as a basis. We set out the structures and their exposure; your attorney decides.

What if somebody challenges the rates?

The questions will be whether the cost basis was documented and whether the notice and hearing were done properly. Both are built into the study rather than assembled afterwards.

Can you help us evaluate an offer to buy our system?

Yes. We value the system, model the bill path under a sale, and set that beside remaining independent. We work for the utility, never for a buyer on the same system, and take no fee on a transaction.

What does it cost?

A fixed fee per study, set by the size of the system and how much of the record is already published. Consolidation feasibility studies are usually paid for by a state or federal program.

The first read

We will read your last rate study at no charge.

Send the last rate study, the audited financial statements and the current rate schedule. We will show you which figures the study still supports and what the next one has to answer. These are usually published already.

[email protected]
Based in
Cambridge, MA and Dallas, TX
Who it is for
Water and sewer utilities, and the cities and districts that own them
What we need from you
The last study, the audited statements, the rate schedule
Who you get
All three of us on the job, start to finish

The water loss index is a sample of the record work, built from public data.