wrf #4455 “rate approval process communication strategy and … 4455... · 2016-06-14 · 2....
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© 2016 Water Research Foundation. ALL RIGHTS RESERVED. © 2016 Water Research Foundation. ALL RIGHTS RESERVED. No part of this presentation may be copied, reproduced, or otherwise utilized without permission.
WRF #4455 “Rate Approval Process Communication Strategy and Toolkit”
June 7, 2016
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
4455 Resource Access
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Finance Knowledge Portal
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Current and Upcoming Finance Projects
2016
• *Capital Funding Imperatives: Best Practices for Identifying, Prioritizing, Funding, and Resourcing Capital Improvement Programs
• Identifying and Evaluating Opportunities for Reducing Variability of Utility Revenues
2017 • Customer Assistance Programs for Multi-Family Residential and Other Hard
to Reach Customers • New and Emerging Capital Providers for Infrastructure Funding
RFPs
• Challenges and Practical Approaches to Water Reuse Pricing • Alternative Project Delivery Performance Evaluation and Decision Support
Tool for Water and Wastewater Capital Projects
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Presenters
• John Mastracchio, Arcadis • Shadi Eskaf, University of North Carolina
Environmental Finance Center • Rick Giardina, Raftelis Financial
Consultants • Karen Raucher, Abt Associates • Richard Atwater, Southern California
Water Committee
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The Project
Water Research Foundation – Rate Approval Process Communication Strategy and Toolkit
Objective Identify and develop communication strategies, specific messages, and tools that can be used to gain support during their rate approval process
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The Research Team Principal Investigators
Other Team Members
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The Scope of the Research Efforts
1. Research literature related to the rate approval process
2. Conduct a survey of local governments
3. Facilitate interviews, webinars, and workshops
4. Develop framework for messaging and communication
5. Create toolkit to support successful communications
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Survey of Local Governments
• Board leaders and staff • Last adjustment request
(size, outcome) • Last adjustment approval
(size) • Adjustment processes
(who, what, how) • Adjustment
communication messages • Perceptions of
effectiveness
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Survey Sampling and Response
Chief Administrative Officers Chief Elected Officials
Matched surveys sent 5,750 (4,439 cities; 1,311 counties)
5,750 (4,439 cities; 1,311 counties)
Surveys returned 2,110 781
…from local governments that manage and set rates for water utilities
1,408 329
Matched sets from same local government 202
Survey was administered by ICMA from May through August 2014 Analysis conducted by the UNC Environmental Finance Center in 2014-2015
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Most respondents reported that rate increases were approved when requested
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And they reported receiving what they asked for
% of Rate Increase Request Approved (when a single request was made)
Most got what they asked for!
n=804
% of
Res
pons
e
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Are utilities getting the rate increases that they need?
n=1,349
The rate increase that was proposed was:
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Ten Tips to Having Higher Rates Approved (what statistically worked for >1,000 utilities) 1. Ask for more
2. Build trust between board and staff
3. Use experienced staff to oversee process
4. Use a third party to present rate adjustment request
5. Include information about capital needs
6. Describe the impact of the rate increase on assets
7. Link rate requests to long-term plan
8. Describe the impact to the customers in a clear manner
9. Get the public involved
10.Comparisons help
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
The Scope of the Research Efforts
1. Research literature related to the rate approval process
2. Conduct a survey of local governments
3. Facilitate interviews, webinars, and workshops
4. Develop framework for messaging and communication
5. Create toolkit to support successful communications
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Focused Interview Participants
Tampa Bay Water
Oklahoma City Water Utilities
Trust City of Johnson
City Water & Sewer Dept.
Denver Water
El Paso Water Utilities
Charlotte-Mecklenburg
Utilities
Mohawk Valley Water Authority
Middlesex Water Co.
Los Angeles Dept. of Water & Power
Tualatin Valley Water District
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Lessons Learned by Board Members and Utility Management
1. Focus on the Need for the Rate Increase 2. Focus on the Value and Resiliency of the
System 3. Focus on Customer Service 4. Make Communications Continuous and
Consistent 5. Build Trust and Confidence in the Utility 6. Focus on Community Involvement and Visibility 7. Build strong relationships with the Board 8. Governance can be factor in rate case success
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Lessons Learned Workshop
THREE THEMES • Focus communication on your rate
need/risk and tie it to community values
• Share your rate-related guiding principles
• Use good, basic communication strategies
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LESSONS LEARNED
THEME 1 – FOCUS COMMUNICATION ON YOUR RATE NEED/RISK AND TIE IT TO COMMUNITY VALUES
• Articulate the Need for Additional Revenues or Restructuring the Rates
• Tie Your Rate Need to Community Values
• Affordability and Hard-to-Reach Household Issues
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THEME 2 – SHARE YOUR RATE-RELATED GUIDING PRINCIPLES
DENVER WATER, CO
• Fair, equitable, and easy to understand • As low as good service will permit • Based on the cost to provide service for the water used • Supports a financially strong and stable organization
that can ensure its customers have reliable, high-quality water now and in the future
• Promotes opportunities for customers to benefit in the wise use of water
LESSONS LEARNED
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THEME 2 – SHARE YOUR RATE-RELATED GUIDING PRINCIPLES
EASTERN MUNICIPAL UTILITY DISTRICT, CA
• Fairness and equitable to achieve customer buy-in • Intuitive and interactive - gave customers an
opportunity to make adjustments based on personal information
• Increases awareness of water use - resulted in conservation and revenue neutrality
• Open communication – allowed two-way dialogue with customers
LESSONS LEARNED
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THEME 2 – SHARE YOUR RATE-RELATED GUIDING PRINCIPLES
ALBUQUERQUE/BERNALILLO COUNTY WATER AUTHORITY, NM
• A rate structure that can be easily implemented • Cost-of-service principles should be followed • Economic impact of a rate structure on customers
shall be analyzed • The rate structure should help achieve the
community’s water conservation goals • Financial integrity of the systems must be
maintained
LESSONS LEARNED
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THEME 3 – USE GOOD, BASIC COMMUNICATION STRATEGIES
• Communication Needs to be: — an Ongoing Activity — Audience Based
• Specific Communication: — Objectives for Internal Staff — Ideas for Elected Officials — Ideas for Customers—Use Data to Identify the
Message Needs • Develop and Repeat a Consistent Theme • Communication Requires Transparency
LESSONS LEARNED
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KEY TAKE AWAY
DELIVER ON YOUR PROMISES
It’s not the rate study – if it is a continuous process, if it is about our needs, value, etc….the rate study will be accepted
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
The Scope of the Research Efforts
1. Research literature related to the rate approval process
2. Conduct a survey of local governments
3. Facilitate interviews, webinars, and workshops
4. Develop framework for messaging and communication
5. Create toolkit to support successful communications
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Communication Tools:
Objectives • Support your ability to:
A. Identify the need for and benefit/consequences of rate change
B. Meet the special needs of Governing Board members
C. Connect the need with a community value D. Build trust and understanding
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Communication Tools:
A: Identify the key need-benefit/consequence based
themes.
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Communication Tools:
A: Identify the key need-benefit/consequence based themes.
Examples: • Need - Replace aging infrastructure
Benefit - reduction in pipe breaks, traffic jams, water outages
• Need- Additional future water resources Consequence – significant future water rationing during drought conditions
• Need - Maintain financial viability Benefit - high bond rating
• Need - Treatment plant upgrades Consequence - inability to meet new and revised regulatory requirements
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Communication Tools:
B: Meet the Special Needs of Governing Board members
• Build collaborative relationships with policymakers
• Share metrics that matter in layers • Tell a rate story • Build community-wide utility trust
and understanding
Plan ahead for the challenges inherent to communicating with policymakers
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Communication Tools:
B: Meet the Special Needs of Governing Board members
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Tool #5: Metrics that Matter: A Rate Case Visualization Tool
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Communication Toolkit:
#3: Connecting with community values
Tips: —Articulate & Share Guiding Principles —Identify critical audience segments —Identify value connectors
Tools:
—Tool #10: Rate Setting Guiding Principles —Tool #11: Using Surveys and Focus Groups to
Identify community values
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Communication Toolkit:
#3: Connecting with community
values
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Communication Toolkit:
#4: Build Trust & Understanding
Use on-going communication that focuses on:
Visibility, Transparency, Community Involvement
—Make communication on-going —Articulate utility wide efficiencies —Focus on customer service —Be visible and involved —Share rate setting guidelines
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Communication Toolkit:
#4: Build Trust & Understanding
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Communication Tools:
Tool #14: Messages that Resonate
The intergenerational message We do not want your children to have this problem.
All customers want to know is what is in it for me? We tell them that it is for their kids and their grandkids.
“The rate increase is a vote for the community’s future. Not a vote for a rate increase”.
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Communication Tools:
Tool #14: Messages that Resonate
Sustainability and Reliability
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Communication Tools:
Tool #14: Messages that Resonate
39
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Communication Tools:
Communication Toolkit
Summary of basic rate communication
guidelines
Long-term communication
strategy checklist
List of information to share with
governing boards
Examples of messages that
resonate
Dashboard communication tool
Interactive guide for using the toolkit
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
The Scope of the Research Efforts
1. Research literature related to the rate approval process
2. Conduct a survey of local governments
3. Facilitate interviews, webinars, and workshops
4. Develop framework for messaging and communication
5. Create toolkit to support successful communications
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Utility Perspectives
• Value of the research and utilization of the tools
• Always helpful to utility managers to learn from others on their experiences on what works
• Communications with customers is a organizational effort not the responsibility of a few staff members
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Utility Perspectives (cont’d)
• Utilities need to also collaborate effectively
with all other local governmental entities to avoid confusing and potentially conflicting messages or “turf battles”
• Management and board leadership a critical
‘team effort’ to support rates in the context of strategic investment in the utility’s services
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
Key Takeaways
1. No silver bullet – Success comes with repetition, perseverance, and persistence
2. Focus communication efforts on needs and values, rather than the rate increase itself
3. Trust plays a huge role in successful rate adoption
4. General communication guidelines and tips can help along the way
© 2016 Water Research Foundation. ALL RIGHTS RESERVED.
4455 Resource Access