United States        Office of Water       August 1989
             Environmental Protection    (WH-546)
             Agency

4>EPA       Financial Management
             Evaluation

             Appendices
                                          Primed on Recycled Paper

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              United States        August 1989
              Environmental Protection
              Agency
              Office of Water (WH-546)          .     ~
              Financial Management
              Evaluation

              Handbook For
              Wastewater Utility
EPA
8007
1989.3

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           Table of Contents
                                      Page
Introduction'	    2
           ' ->r
Financial  Evaluation Questions  ....    4
     J.. 5  Year Budget Costs  . ...-*k.   .6 f
     2. Budget Comparison  .. *.	    8
       *
     3. Budget Process  	   10
               /y                 '
     4. Budget increa.se  	...4-   12
    « 5. Equipment Replacement 	   14
     6. Energy Costs 	   16
     7. Total Debt	   18
     8. 'Debt  Retirement  	   20
     9. Revenue Review  	    22
    10. Residential Water Usage ...   24
    11. Commercial/IndustrialiUsers   26
    12. Minimum Billing  	   28
    13. Cash  Flow 	   30
    14. Rate  Increase 	   32
    15. Delinquent Accounts  	   34
Glossary 	   36
Appendices  	   43
References  ....;	   48

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     This  document  was prepared after a series of
one-day   Financial   Management   Workshops   were
conducted  in  the  various  regions  of  the  U.S.
Environmental Protection Agency.

     The  author  wishes  to  thank John H. Samson,
U.S.  EPA,  Office  of Municipal Pollution Control,
Washington,   DC;    Dr.  William  T.  Engel,  Jr.,
Director,  South  Carolina  Environmental  Training
Center,  Sumter, SC;  and Richard I. Phillips, P.E.
and    Gary    Champy,    Vermont   Department   of
Environmental   Conservation,  Waterbury,  VT,  for
their assistance in preparation of this document.

     This  document  was  developed under EPA Grant
No.  CT  901659-1-0 and South Carolina Contract No.
7-793-92139-12/27/87.
                                 Larry A. Parker
                                 December 30, 1988
            Larry A. Parker, P.E., GET
        Larry A. Parker & Associates, Inc,
                    6 Lee Drive
               Wheeling, WV   26003
                    (304)242-9600
                  Consultant for:

                  South Carolina
           Environmental Training Center
           Sumter Area Technical College
                Sumter, SC   29150
                   (803)778-1961

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o>

o
CM
                           Table of Contents
                    Financial Management Evaluation
         Introduction ................................. .........  5

         Basic Management Considerations ............... ........  7

         Use of Appendices .....................................  8

         Facility Review Outline ...............................  9

         I .  Management ......................................... 11

              A. Financial Management Program .................. 13
              B. Program Objectives ............................ 14
              C. Organizational Structure ...................... 15
              D. Staffing ...................................... 16
              E. Personnel Policies ............................ 17
              F. Employee Relations ............................ 18
              G. Office Procedures ............................. 19
              H. Operation Plans ............................... 20
              I . Regulations Review ............................ 21
              J. Treatment Facilities .......................... 22
              K. Safety Program ................................ 23
              L. Financial Documents ........................... 24
              M. Management Summary ............................ 25

         II . Budgeting ......................................... 27

              A. Second Visit .................................. 29
              B. Remaining Financial Data ...................... 30
              C. Budget Review ......... . ....................... 31
              D. Overall Budgets .-; ............................. 32
              E . Revenue Budget ................................ 33
              F. Operations Budget ............................. 34
              G. Maintenance Budget ............................ 35
              H. Budget Control ................................ 36
              I . Equipment Replacement Budget .................. 37
              J. Capital Improvement Budget .................... 38

         III .  Cost Recovery .................................... 39

              A. Accounting Issues ............................. 41
              B. Cash Flow ..................................... 42
              C. Purchasing Control ............................ 43
              D. Sewer Use Ordinances .......................... 44
              E. Rate Structure ................................ 45
              F. Cost Recovery Procedures ...................... 46
              G. Cost Recovery Status .......................... 47
              H. Billing & Collection .......................... 48
              I . Delinquent Accounts ........................... 49
              J. Wastewater Collection  ......................... 50
              K. Equipment Reserve Fund ........................ 51

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              Wastewater Utility
              FINANCIAL
            MANAGEMENT
            EVALUATION
             HANDBOOK

            December 30, 1988
                Prepared for

       U.S. Environmental Protection Agency
       Office of Municipal Pollution Control
              Washington. DC
cr>

O
CM

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      This  document  was prepared after  a
series of one-day Financial Management Work-
shops were conducted in the various  regions of
the U.S. Environmental Protection Agency.

      The  author wishes  to  thank John  H.
Samson, U.S. EPA, Office of Municipal Pollu-
tion Control, Washington, DC; Dr. William T.
Engel, Jr.,  Director,  South Carolina Environ-
mental  Training  Center,  Sumter,   SC;  and
Richard I.  Phillips,  P.E.,  and Gary Champy,
Vermont Department of  Environmental Conserva-
tion, Waterbury, VT,  for their assistance in
preparation of this document.

      This  document was  developed  under EPA
Grant  No.  CT 901659-1-0 and  South Carolina
Contract No. 7-793-92139-12/27/87.

                        Larry A. Parker
                        December 30, 1988
         Larry A. Parker, P.E., GET
     Larry A. Parker fi Associates, Inc.
                 6 Lee  Drive
             Wheeling,  WV 26003
               (304) 242-9600

               Consultant for:

               South. Carolina
        Environmental Training  Center
        Sumter  Area Technical College
              Sumter,  SC 29150
               (803) 778-1961

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IV. Planning 	  53

     A. Past Planning  	  55
     B. Planning Policy  	  56
     C. Operations Planning  	  57
     D. Capital Improvement  Plans  	  58
     E. Capital Improvement  Schedule  	  59

V. Financing 	  61

     A. Current Financing  	  63
     B. Future Financing Needs  	  64
     C. Financing Options  	  65

VI. Financial Reporting  	  67

     A. Current Financial  Reports  	  69
                     APPENDICES
Appendix A - Management  	     71

      Introduction  	     73
      Management Responsibilities  	     74
      Problem Solving Outline  	     75
      Organization  Chart  	     76
      Typical Staffing  	     77
      Brief Job Description  	     78
      Employee Appraisal  	     79
      Benefit Items  	     80
      Office Procedures  	     81
      Purchase Policy 	     82
      Wastewater Utility  Description  	     83
      Management Audit  	     85
      Key Management Issues  	     86

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Appendix B - Budgeting  	     89

      Financial Documents  	     91
      Budgeting Procedures  	     92
      Direct & Indirect Costs  	     93
      Budget Process Steps  	     94
      Ranking Budget Requests  	     95
      Typical Budget Outline  	     96
    .  Budget vs. Actual 	     97
      Cost of Service 	     98
      Revenue Budget 	     99
      Estimates of Revenue  Requirements  	    100
      Electrical Energy 	    101
      Typical Operating Costs  	    102
      Training Expenditures  	    102
      Identifying High  Cost Areas  	    103
      Replacement Reserve  	    104
      Replacement Inventory  	    105
      List Major Items  	    106
      Typical Future Expansi m Costs  	    107
      Major Expenditure Ex?  >le  	    108
      Sinking Fund Example    	    109
      Sinking Fund Factor     	    110
      Loan Example 	    Ill
      Capital Recovery  Factors  	    112
      Borrowing vs. Savings  	    113
      Sinking Fund Work Sheet  	    114
      Typical Sinking Fund  Policy  	    115

Appendix C - Cost Recovery  	    117

      Accounting Systems  	    119
      Accounting Files  	    122
      Cash Management 	    123
      Purchasing System 	    124
      User Charge System  	    125
      Cost Recovery Concepts  	    128
      Cost Recovery Outline  	    129
      User Fee Projection  	    131
      User Charge Summary  	    132
      User Charge Distribution  	    133
      User Charge Comparison  	    134
      Current Debt Summary  	    135
      Financial Condition  Summary  	    135
      Cost Recovery Summary  	    136
      Customer Billings 	    138
      Connection Fee Computation  	    139
      Repair Computation  	    140
      Collection Procedures  	    141
      Collection Policy 	    142
      Delinquent Account Policy  	    143
      Water Disconnect  	    144
      Tax Sale  	    145

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     FINANCIAL MANAGEMENT

        Evaluation Handbook


      WASTEWATER UTILITIES

Introduction

    Wastewater    facilities   are  Capital
intensive    and   highly  complex  systems
involving   management   techniques that are
not    typical     of    normal   government
operations.     The United States Congress
expects   these  wastewater  utilities  to
have  sophisticated management procedures,
since  these  facilities  are  governed by
the  laws   and  regulations of the country.
Many   systems    were   built  using  funds
appropriated  by  the   Congress  requiting
that  they  be   managed  properly  for the
benefit of the  people.

    The   U.S.    Environmental  Protection
Agency  and most state  agencies have found
in  their   inspections   and  contacts that
many  wastewater • facilities  do  not have
the  necessary  staff,   skills,  operation
and   maintenance  budgets,  and  overall
management  plans to  operate their systems
as  they  were   intended.    Sometimes  at
great  expense  to  the  communities,  the
 xisting  management  concept has had to be
reevaluated   and  completely   reorganized
since  the  utilities   were  constantly in
trouble.    This  has  caused a  poor  image,
the   loss  of   needed   new  commerce  and
industry  to  the community, and increased
user  fees  for  the  customers' wastewater
treatment   service.     The community often
has  to  pay  higher  rates because of past
mistakes and overdye  improvements.

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     During   the  last  few years,  the U.S.
 EPA,    state   agencies,   and  many  state
 training    'center™    have   become   more
 involved     with    training    in   basic
 management    concepts  needed  to   operate
 these   facilities.    Many communities have
 participated  in  some  of  these  training
 efforts  and several positive changes have
 been   made   to  improve  the management  of
 these   systems.    This  handbook  is based
 upon   the  findings   and  actions  that have
 been   taken  by  the author and several  of
 the     state    agencies    in   conducting
 investigations of wastewater facilities.

    This  handbook   has  been specifically
 designed  for  on-site inspectors  to use  in
 evaluating     the   financial   management
 capability   of  wastewater utility systems
 that    have   been    funded   by    federal
 construction   grants.       It  has  been
 specifically  designed   for  small systems
 treating  less  than  5  mgd of wastewater
 per day.

    When  the   term  management is  used,  it
 refers  to   a   municipal   sanitary  board,
 commission   of  public  works,  mayor  and
 council,    or    any    other  appointed  or
 elected   body   responsible for  the overall
 management   of   the wastewater   utility.
 Day-to-day     operations     are    usually
 supervised   by  a  superintendent  or  chief
 operator  at  a  middle  management level.

    This  financial   management evaluation
 is  based   on  answering a  series of  yes or
no   questions   about    the   utility  and
determining    basic   information   on  its
status.    This  evaluation   also  requires
the  use  of Appendices dated  December 30,
1988,   and  the  attendance   at  a  one-day
Financial  Management Workshop.
                      3

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Appendix D - Planning  	  147

      Utility Planning  	  149
      Basis for Planning  	  150
      Operations Planning  	  151
      Capital Planning  Steps  	  152
      Financing an Expansion  Project  	  153
      Capital Project  Schedule  	  154

Appendix E - Financing  	  155

      Debt Management  	  157
      Types of Financing  	  158
      Financing 	  159
      Debt Service Factor  Table  	  160
      Inflation Factor  Table  	.-	  161
      Financial Indicators  	  162
      Balance Sheet Analysis	  163
      Financing Sources  	  166
      Types of Bonds  	  166

Appendix F - Record Keeping  	  167

  1.  Record Keeping  Concept  	  169
  2.  Types of Reports  	  169
  3.  Report Information  	  170
  4.  Operations Reports  	  170
  5.  Maintenance Reports  	  171
  6.  Plant Performance  Reports  	  171
  7.  Performance Records  	  172
  8.  Financial Reports	  172
  9.  Balance Sheets  	  173
 10.  Purchase Orders  	  174

References 	  175

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Introduction
     This  booklet  contains  an outline for making
an  intensive  financial management evaluation of a
wastewater  utility  and  a  compilation of various
materials  in  associated  Appendices  that  aid in
such an evaluation.
     This  publication,  however,  is  actually  an
extension   of   a   condensed   booklet   entitled
Wastewater  Utility Financial Management Evaluation
Handbook,  December  30,  1988.    The Handbook was
designed   for   on-site   inspectors   to  use  in
evaluating  the  financial management capability of
small  wastewater  utilities  treating  less than 5
mgd of wastewater per day.
     The  use  of this booklet is also dependent on
the  attendance  at  a one-day Financial Management
Workshop.

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          Wastewater Utility

        Financial Management
               Evaluation
                (Facility)
        Date:	

    Follow   the   accompanying   Response
Outline  to aid in answering  the  following
questions:

 1. Are the last 5 years  of budget
    information available?         Y or N

 2. Are actual vs. budget comparisons
    made at least quarterly?       Y or N

 3. Are officials and  operators involved
    in the budget process?         Y or N

 4. Has the budget increased  > 5%/year
    for the last 5 years?         Y or N

 5. Is there an equipment replacement and
    rehabilitation budget item?    Y or N

 6. Are total  energy costs <  10%
    of the 0 & M budget?           Y or N

 7. Is the debt paid by billing
    < 25% of the total budget?     Y or N

 8. Will present debts be retired
    within 20  years of issuance?   Y or N

 9. Do revenues cover  OM  & R  and
    debt service at all times?     Y or N

10. Are revenues based on metered
    or estimated water use?        Y or N

                    4

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11.  Do  commercial  and  industrial
     'isers  pay  on  volume/strength?  Y or N

12.  Is  the minimum residential  billing
     > ?6.00/jno. or $72/yr.?         Y or N

13.  Is  there always sufficient  cash
     for  all "accounts  payable"?    Y or N

14.  Has  there  been a rate  increase
     within the last 24  months?      Y or N
15. Are  delinquent  accounts  <  3%
                                      \
     of  the  total  budget?            Y or  N
    Count  the  number  of  questions
    answered "Yes."
    Rate  the  "Yes"  answers  according  to
    the following:

          14 - 15 -  No major problems
          12 .- 13 =  Some  problems exist in
                    areas answered  "No"
          10 - 11 =  Significant  problems
                    exist in "No" areas
          < 10    =  Major financial
                    management problems
                    exist
    The   on-site   inspector  should  use
information    in    this   booklet,   the
Appendices,  and  the  references  to help
resolve     any    financial    management
problems.

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                    FINANCIAL MANAGEMENT APPENDICES


                         WASTEWATER UTILITIES


Basic Management Considerations

    Wastewater  facilities  are  capital  intensive and highly complex
systems  involving  management  techniques  that  are  not  typical of
normal  town  government  operations.    The  United  States  Congress
expects  these  utilities to have sophisticated management procedures,
since  these  facilities  are  governed by the laws and regulations of
the  country.  Many systems were built using funds appropriated by the
Congress  requiring  that  they be managed properly for the benefit of
the people.

    The  U.S.  Environmental Protection Agency and most state agencies
have  found  in  their  inspections  and contacts that many wastewater
facilities  do  not. have  the  necessary staff, skills, operation and
maintenance  budgets,  and  overall  management plans to operate  their
systems  as  they  were  intended.   Sometimes at great expense to the
communities,   the   existing   management   concept  has  had  to  be
reevaluated  and  completely  reorganized,  since  the  utilities were
constantly  in  trouble.    This  has caused a poor image, the loss of
needed  new commerce and industry to the community, and increased user
fees  for  the customers' wastewater treatment service.  The community
often  has  to  pay  higher rates because of past mistakes and overdue
improvements.

    During  the  last  few  years the U.S. EPA and many state training
centers  have  become  more involved with training in basic management
concepts  needed  to  operate these facilities.  Many communities have
participated  in  some  of these training efforts and several positive
changes  have  been  made  to improve the management of these systems.
This  publication  is  based  upon  the findings and actions that have
been  taken  by  the  author  and  several  of  the  state agencies in
conducting financial management audits of many communities.

    These  Financial  Management Appendices are intended for expanding
the  evaluation  of  the financial management capability of wastewater
utility   systems  that  have  been  funded  by  federal  construction
grants.    They  have  been  specifically  designed  for small systems
treating less than 5 mgd of wastewater per day.

    When  the  term  management  is  used,  it  refers  to a municipal
sanitary  board, board of selectmen, commission of public works,  mayor
and  council,  or  any other appointed or elected body responsible for
the   overall  management  of  the  wastewater  utility.    Day-to-day
operations  are  usually  supervised  by  a  superintendent  or   chief
operator at a middle management level.

    The  financial  management  investigation  is based on reviewing  a
series  of  topics  with  the utility and answering basic questions on
their status to obtain the necessary information.

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                    FINANCIAL MANAGEMENT  EVALUATION
                            Use of Appendices
    These  Appendices  are  designed  to assist  in  the  investigation  of
the  financial  status   of  the  wastewater  utility.   After  an  initial
financial  review  has   been made  using the  small  Financial  Management
Evaluation  Handbook,  a more   complex investigation  may  be desirable
using  the  following  intensive   evaluation.   This  type of  evaluation
would  normally  require about  four  visits  by  the investigators.  More
visits  may  be  made depending  on  the complexity  of the system or the
amount of time provided  during each visit.

    The  in-depth  Facility  Review   Outline  starting  on the next  page
contains  a  suggested   schedule   of  activities to  discuss  on  each  of
four  visits.    The visits may  change due to a number of  factors.   It
is merely presented as a starting  schedule.

    The  series of questions starting on page 11 are intended to guide
the  interviewer in the  intensive  evaluation  of the  various  units  that
make  up  a  typical  wastewater   management  system.    Each   of  the
questions  may  be  answered  yes  or  no to determine the status of the
topic.    If  the  utility is in perfect condition,  all five questions
for each topic would be  answered yes.

    Count the "yes" answers for  each  five-question unit:

         5: Unit appears satisfactory
         4. Minor problems
         3: A few problems need  attention
         2: Detailed attention needed
         1: Very serious problems  need attention
         0: Unit needs full scale  training effort

    The  overall  status for  each major secton indicates which areas
need special emphasis:
                                     Average  "Yes" Answers
              Management
              Budgeting
              Cost Recovery
              Planning
              Financing
              Record Keeping

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      FINANCIAL MANAGEMENT
             Response Outline

    This     response    action    outline
corresponds  to each question asked in the
evaluation  form on Pages 4-5 and provides
further   information  on  how  to  obtain
necessary  financial  information,  on  the
wastewater    collection   and   treatment
utility.    The  Appendices dated December
30,   1988,   must   be  used  to  aid  in
obtaining    the    necessary    financial
information„

    All  questions  answered  "No"  on the
evaluation  indicate  areas  of concern in
the    utility's   financial   management.
These  areas  must be further investigated
using the outline below.

 1.  5-Year Budget Costs

    It  is  important  to  obtain  as much
historical    financial   information   as
possible  from  the  utility to aid in the
evaluation.    This  should include actual
cost   figures,   rate  schedules,  annual
audits, and other financial reports.

    a. Try to obtain the last 5 years of
       budget and actual expense data.

    b. Place  the information into an
       annual wastewater budget format.
       (Appendix B-96)

    c. Compare the annual cost
       information over the years of
       record to determine significant
       cost areas.

    d. Recommend, future budget line items
       for any costs that currently do
       not have their own budget line.

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     TYPICAL BUDGET OUTLINE


                    Collection  Treatment
Personnel Services.
  Salaries/wages     $           $
  F.I.C.A.
  Unemploy- ins.
  Worker's gomp,
  Health insurance
  Retirement          	     	
    Subtotal:        $           $

0 & M Expenses
  Office supplies   $           $
  Postage
  Telephone
  Electricity
  Natural gas
  Water
  Veh.  gas & oil
  Chemicals
  Operating sup.
  Equipment rep.
  Training
  Travel	      	
    Subtotal:        $            $

Capital Outlay
  Replacement  ace.   $            $
  Improvement  ace.
  Expansion account
  Depreciation ace.   	r    £ 	__
    Subtotal:        $            $

Debt Service
  Debt  & interest    $            %
  Cushion fund
  Contingency  fund    	      	
    Subtotal:        $            $


         TOTAL:      $            S

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                   FINANCIAL MANAGEMENT EVALUATION
                        FACILITY REVIEW OUTLINE
                           Possible Schedule
            (Use Rating Sheets that correspond to outline)
I.   Initial Visit - Management Review
    A. Explain financial program to management officials
    B. Provide program objectives to utility staff
    C. Review organizational structure
    D. Review staffing
    E. Review personnel policies
    F. Review employee relations
    G. Review utility procedures
    H. Review sewer collection and treatment plant operations  plan
    I. Review regulatory procedures
    J. Tour collection and treatment facility
    K. Review safety program
    L. Collect important financial documents
    M. Summary

II.  Second Visit - Budget Review
    A. Discuss any remaining guestions from the  first  visit
    B. Collect any remaining financial data
    C. Review budget information for last 5 years
    D. Review overall budget
    E. Review revenue budget
    F. Review operations budget
    G. Review maintenance budget
    H. Review budget control
    I. Review equipment replacement budget
    J. Review capital improvement budget
                                   9

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III. Third Visit - Cost Recovery
    A. Review accounting issues
    B. Review cash flow procedures
    C. Review purchasing control
    D. Review cost recovery procedures
    E. Review billing and collection
    F. Review delinquent accounts
    G. Review wastewater volumes
    H. Review rate structure
    I. Review sewer use ordinances
    J. Review cost recovery status
    K. Review equipment reserve fund
IV.   Final Visit - Planning, Financing, and Financial Reporting
    1. Planning
         A. Planning policy
         B. Capital improvements
    2. Financing
         A. Current financing
         B. Future financing
    3. Financial Reporting
         Current financial reports
                                  10

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 2.  Budget Comparison

    The    last    5   years   of   budget
information'   can  provide  some  valuable
Information  of the financial condition, of
the  utility.    The  wastewater utility's
budget  roust  b©  completely separate from
any     other    activities.        Actual
expenditures  must  be used instead of the
forecast  budget  figures tfor all previous
years.
    a. Tabulate the budget and actual
       cost information.
       (AppendiK B-97.)

    b. Compare the budget vs. actual
       expenses to determine if past
       budgets have been within 5% of
       actual costs.

    c. Determine if consistent
       differences occurred with any
       specific expense items. '

    d. Recommend that the utility perform
       this review at least quarterly and
       make adjustments as required.

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         BUDGET vs. ACTUAL
            EXPENDITURES

            (Period of Record)'

            % of
           Budget jBudget. Actual.  ±_or__n
 Per.  Serv.
   F.I.C.A.
   Benefits
     Subtotal:
 Q &  M  Exp.

   Office        %  $
   Chemicals
   Supplies
   Energy
   Vehicles
   Repairs
   Operation
   Maint.
    Subtotal:      ?~
Capital Outlay

  Replace.      % $
  Improve.
  Deprec.
    Subtotal:     $"
Debt Service

  Debt  &  int.   % §        $
  Cont. funds	
   Subtotal:      $        $"

TOTAL:            $        $

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               I. Management
    It is important to review the overall
management  of  the  wastewater treatment
facility.    Each  major activity must be
carefully  evaluated  using the numerical
rating  system.    Important  information
must   be  collected  to  facilitate  the
evaluation.

    Additional information is provided in
Appendix A to aid the investigator.
                    11

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I.   MANAGEMENT

    A. Explain the Financial Management Program  to Officials

    It  is  important  to  obtain  complete  cooperation  of  the  utility
management,   which   can  consist  of  a  sanitary  board,  board   of
selectmen,  mayor  and  council,  commission  of public  works,  or some
other  type  of controlling board.  Explain  in detail that  the  purpose
of  the  survey  is to determine if the financial management status  of
the  wastewater  utility may be improved.  Determine if  management has
a  concept for solving problems.  If  improvement is needed, additional
steps will be taken to suggest possible action.

    There   must   be   complete  understanding  and  support   by  the
management  officials.  This may have to be  developed over  a period  of
two  or  three  meetings  for some organizations.  After completion  of
the  initial  meeting.  answer  the   following   questions according  to
instructions on page 8.


         (1) Was there a majority of  members present?           	

         (2) Did they seem interested?                          	

         (3) Was there a positive attitude?                     	

         (4) Did they ask good questions?                       	

         (5) Do they seem willing to  cooperate?                 	

                                       Score:
    Summary:

         (1) Do you feel there will be good cooperation?

         (2) Does the score indicate any problems?

         (3) See Appendix A: 73 - 75.

         (4) Comments:
                                  13

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 3,  Budget Process

    it   is   important  that  budgets  be
prepared  based  on  actual  need  and not
what  management feels that customers will
pay  without  complaining*  Budgets should
have  exact  reasons for every expenditure
and   include   a   companion  section .to
discuss   the   budget   document.     The
operation   of   the   utility  is  budget
driven.    This  is  the primary course of
operation.

    The   budget   process   includes  the
operator,   superintendent,   clerk,   and
officials  working together.  The operator
and  superintendent must present the needs
for  the  coming year to the officials for
a realistic budget preparation.


    a. Discuss the budget process with
       officials, clerks, and operators.
       (Appendix B 94).

    b. Discuss any specific information
       found in item 1 on Page 6 that
       is appropriate for any problem
       areas.

    c. Recommend that future budgets be
       developed using all leading
       staff members, if they are not
       currently involved.
                    10

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BUDGET PROCESS STEPS
      Estimate Operating
        Expenses and
      Capital Improvement
          Requests
      Rank and Prioritize
       Budget Requests
       Develop a Budget
        Framework and
        Structure by:
           *  Item
         *  Activity
       Identify Revenue
           Sources
        Prepare Budget
          Document
         Approve and
        Adopt Budget
           Implement
           Budget
             11

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I.   MANAGEMENT (cont.)

    B. Discuss Program Objectives with Utility Staff

    Meet  separately  with  utility staff,  if possible.  At a minimum,
this  should  consist  of  the  superintendent,  chief operator,  sewer
supervisor,  and  office  manager or billing clerks.  Explain that  the
purpose  of  the  survey  is  to determine  if the  financial management
status   needs   improvement   and  that  you  will  need  their  full
cooperation.


         (1) Was the Superintendent or Chief Operator present? 	

         (2) Was the chief billing clerk available?            	

         (3) Did you meet all necessary staff?                 	

         (4) Does the billing office appear efficient?         	

         (5) Does the office have adequate  billing equipment?  	
                                       Score:


    Summary:

         (1) Did you obtain good cooperation?

         (2) Does the score indicate any problems?

         (3) Comments:
                                   14

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I. MANAGEMENT (cont.)

    C. Review Organizational Structure

    It  is  important to determine the organizational structure,  since
many  times  a  poor  organization can contribute to overall  financial
management   problems.    Often,  small  systems  have  a  very   loose
organization  that  does  not always put authority at the  right  level.
This  needs  to  be  formally  addressed.  Management should  supervise
with  one  voice.   The superintendent or chief operator should  report
to  just  one  person  and  not  receive  requests from each  member of
council or a commission.


         (1) Is there a distinct line of authority?            	

         (2) Did you obtain a formal organizational chart?     	

         (3) Does management supervise by one authority?       	

         (4) Does management review organization needs yearly? 	

         (5) Is the organizational structure satisfactory?     	

                                       Score:
    Summary:

         (1) Is the organizational structure satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix A: 76.

         (4) Comments:
                                  15

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 4.  Budget Increase

    Budgets   should  increase  yearly  at
least  by the national inflation rate of 4
to  7%.    Every  part  of" the wastewater
utility  operations  must  be evaluated to
determine  the  areas  that  will  require
additional increases.
    a. Calculate the percent of budget
       change for the decrease or
       increase for each line item for
       each year of record.
       (Appendix B-97).

    b. List any budget line item that has
       not increased more than 5% for any
       year.

    c. Determine if there are any
       significant reasons why these
       items have not had any increases.

    d. If necessary, recommend budget
       increases in areas where a
       deficiency could be causing
       problems with OM t ft.
                    12

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         BUDGET INCREASE

                      198    198     198

Personnel Services
  Wages                                %
  F.I.C.A.
  Unemploy. ins.
  Worker's Comp.
  Health Insurance
  Retirement          	   	    	
    Subtotal:                          %

Q& M Expenses
  Office supplies                      %
  Postage
  Telephone
  Electricity
  Natural gas
s Hater
  Veh. gas & oil
  Chemicals
  Operating sup.
  Equipment rep.
  Training
  Travel              	   	   	
    Subtotal:                          %

Capital Outlay
  Replacement ace.                      %
  Improvement ace.
  Expansion account
  Depreciation ace.    	   	   	
    Subtotal:                          %

Debt Service
  Debt & interest                      %
  Cushion.fund
  Contingency fund     	   	   	
    Subtotal:    .                      %
    TOTAL:

                    13

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I. MANAGEMENT  (cont.)
    D. Review  Staffing
    Staffing   size  and  expertise  are  extremely   important   for  the
proper  operation  of  any   wastewater utility.  Many  times  people  are
hired for positions without  any prior experience or  training.
    An  evaluation  of   the  current staffing  is important  to determine
if  it  contributes  to  any management problems.   A  well-staffed  and
trained   organization   can  often  implement  good   cost  effective
operations.
          (1) Is  the present  staff size sufficient?              	
          (2) Are adequate salaries paid for their experience?   	
          (3) Are all wastewater treatment  operators  certified?  	
          (4) Is  adequate training provided?                     	
          (5) Do  key operators belong  to the WPCF?               	
                                       Score:
    Summary:
          (1)  Is  the  present  staffing  satisfactory?
          (2)  Does  the  score  indicate  any  problems?
          (3)  See Appendix  A:  77.
          (4)  Comments:
                                   16

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I.  MANAGEMENT (cont.)

    E. Review Personnel Policies

    It   is   important   that  each  employee  have  a  detailed   job
description  that  shows  exactly  what is required.  Job descriptions
are  also  necessary  for  each council member or board member stating
his/her  job function with respect to the utility activities.  All  job
descriptions must be reviewed annually and updated as necessary.

    The  utility should have an employee appraisal system that is used
at   least  annually.  Management should have personnel procedures that
include  visiting  the  operators  at  the  treatment plant  to discuss
important  topics and reviewing financial needs.  There should also be
a  training  plan to allow each operator to attend at least  one  formal
short course during the year.


         (1) Does each employee have detailed job description? 	

         (2) Are job descriptions updated annually?            	

         (3) Is there a formal employee appraisal system?      	

         (4) Is annual training allowed for each employee?     	

         (5) Does management visit employees on the job site?  	

                                       Score:
    Summary:

         (1) Are there any personnel policy problems?

         (2) Does the score indicate any problems?

         (3) See Appendix A: 78 - 80.

         (4) Comments:
                                  17

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 5.  Equipment Replacement and
     Major Rehabilitation Line Item

    An    equipment   replacement   budget
should    include   all   pumps,   motors,
vehicles,  and  any  other  equipment that
has  a  useful  life less than the life of
the  total facility.  The listed equipment
should  show    date  placed -into service,
useful   life,  and  expected  replacement
cost.     All  equipment  expected  to  be
replaced  within  the  next 5 years should
be  itemized by year.  Set aside costs can
be  prorated  throughout  the  life of the
equipment.
    a. Obtain a list of all equipment and
       major rehabilitation that costs
       more than $1,000.

    b. List year each equipment piece was
       placed into service.

    c. Project the remaining service life
       of each equipment piece.

    d. Estimate current replacement cost.

    e. Summarize this information.
       (Appendix B-105).

    f. Determine the current set aside
       budget cost to replace
       equipment using appropriate
       Sinking Fund factors.
       (Appendix B-110).

    g. Recommend this line item in
       B-96 be recalculated each year
       and included- in the budget.
                    14

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     EQUIPMENT REPLACEMENT
             INVENTORY
    Equip.  Otig. , Year   Remain. Replac.
    & Reh.  Cost   Ser.   Life   Cost
  1.


  2.


  3.
t

  4.


  5.


  6.


  7.


  8.


  9.


10.
                 15

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I. MANAGEMENT (cont.)
    F. Review Employee Relations
    Morale  of  wastewater  treatment  personnel  is  very   important.
Management  sometimes  does not make any particular employee  relations
effort, which leads to dissatisfied operators.
    It  is  important  to  evaluate  the current staff to determine  if
this causes any financial management problems.

         (1) Has there been a low turnover of personnel?       	
         (2) Has employee absenteeism been very low?           	
         (3) Do all employees know exactly what is expected?   	
         (4) Are there good communications from management?    	
         (5) Are all salaries and benefits competitive?        	
                                       Score:
    Summary:
         (1) Are there any employee relations problems?
         (2) Does the score indicate any problems?
         (3) See Appendix A: 80.
         (4) Comments:
                                   18

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I.   MANAGEMENT (cont.)
    G. Review the Utility Office Procedures
    It  is important to review, in the beginning, the office where  the
utility  bills  are  prepared  and revenue is collected.   Determine if
billing  procedures  appear  adequate and if collection procedures  are
uniform  for  all customers.  Review the size of  the office and  number
of   employees.   Collect some basic information on number  of new sewer
taps  during  the last 5 years, user charges increases, and the  number
of  delinquent accounts.  Review any financial reports.

         (1) Is the ratio of clerk(s)-to-customers < 1:800?    	
         (2) Is the office well organized?                     	
         (3) Are bills prepared using efficient equipment?     	
         (4) Do customer relations appear satisfactory?        	
         (5) Have office procedures kept pace with needs?      	
                                       Score:

    Summary:
         (1) Do the office procedures appear satisfactory?
         (2) Does the score indicate any problems?
         (3) See Appendix A: 81 - 82.
         (4) Comments:
                                  19

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 6. Energy Costs

    Energy  costs  are  often  the largest
single  expenditure.   Electrical and fuel
costs  have  been  steadily  rising  every
year.  These must be adequately forecast.
       List electrical equipment
       nameplate voltage and amperage £qc
       all motors.

       Include energy requirements for
       lighting, heating, air
       conditioning, and major laboratory
       equipment.

       Estimate current yearly operating
       time for all units and determine
       percent in-use time.

       Calculate estimated KWH for each
       unit and determine daily average.

       Summarize the information.
       (Appendix 'B-101).

       Review any equipment class that
       exceeds usage > 10% of the total
       energy used.

       Recommend, if possible, that these
       high energy use items be
       investigated for possible energy
       reduction without losing operation
       efficiency.  Reduce power use
       during peak periods.

       If necessary, recommend a detailed
       energy audit.
                    16

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        ELECTRICAL ENERGY


Lift Sta.
                    % of    Cost/  Total
              KWH    Total    KWH    Cost
   A
   B
   C
  Total:
Treatment
  Plant

Raw Sew.Pump.
Pretreat.
Primary
Secondary
Sludge
Other
   Total:
Summary;

   Cost/KWH
   Peak Demand
   Total  KWH
   Total  Cost
   Cost/day
   Total  flow/mo,
   Cost/MG
                   17

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I. MANAGEMENT  (cont.)

    H. Review  Sewer Collection  and Treatment Plant  Operation  Plans

    It  is  important  that  the utility  have a  formal  operation  policy
that  includes  statements   about keeping  the utility  in  compliance by
providing  proper  operation  of  the collection  system and wastewater
treatment   plant.      This  written  plan  should be   updated when
significant    changes  are   made  and  should   be   reviewed   at   least
annually.

    The  operations plan should include  review  of any  long range needs
such  as  sludge  deposition  or upgrading operations.  The operations
plan  should include topics  on  performance of certain  units or process
control goals.


         (1) Is there a good written operations plan?          	

         (2) Are  long range  operational  problems  addressed?    	

         (3) Does the operator  keep operation plans updated?   	

         (4) Does the operator  understand  process control?     	

         (5) Is present sludge  disposal  practice  satisfactory? 	

                                       Score:
    Summary:

          (1) Are there any  operational  problems?

          (2) Does the score indicate  any  problems?

          (3) Comments:
                                   20

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I.  MANAGEMENT (cont.)

    I.  Review Regulation Procedures:

    Management  need to be familiar with state and federal regulations
as  they  apply  to  the  operation  of  the collection and wastewater
treatment   facilities.     They  should  routinely  review  Discharge
Monitoring  Reports  (DMRs)  and  know why any parameter may be  out  of
compliance.     Out  of  compliance  items should have internal reports
citing the reasons for NPDES violations.

    The  utility  should  have  a  proper  sewer  use and pretreatment
ordinance,  so  that if violations are caused by any of these factors,
they  may be swiftly enforced.  If any compliance problem is caused  by
lack  of  money  to correct the situation, it must be properly funded.
These  regulatory policies may need to be emphasized during the  course
of the assistance program.


         (1) Does management understand fed./state regulations?	

         (2) Was the WWTP in NPDES compliance during last year?	

         (3) Does management review DMRs monthly?              	

         (4) Is a report prepared when out of compliance?      	

         (5) Is there a sewer use/pretreatment ordinance?      	

                                       Score:
    Summary:

         (1) Are there any regulatory problems?

         (2) Does the score indicate any problems?

         (3) Comments:
                                  21

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 7.  Total Debt

    The  total debt owed by the wastewater
utility   is  extremely  important.    The
total  debt  service  should  be less than
25%  of  the total budget paid by customer
billing.    Debts  that exceed this amount
place  a severe burden on the customer for
past capital costs.
    a. Determine the percentage that the
       total debt service payment
       represents of the total budget.
       (Appendix B-97).

    b. If the debt service payment is
       > 25% of the total budget,
       recommend review by a financial
       consultant.

    c. If short-term debts are not being
       paid off on time, adjust the
       budget to pay off these short-term
       debts.
                    18

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       TOTAL DEBT SERVICE
             % of
            Budget   Budget"   Actual
Per. Ser.
  Subtotal:
0 & M:
  Subtotal:
Cap. Out.:
  Subtotal:
Debt
Interest
Cushion
Contingency
  Subtotal:  	%   $
    TOTAL:
                  19

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I.  MANAGEMENT (cont.)

    J. Tour Collection and Treatment  Facilities

    It  is  important to  tour  the  entire wastewater  utility  during  the
first  visit/  if you are not  familiar with  its operations.  This tour
should  start  with a visit  to lift stations and a review  of the sewer
system  to  determine  if  there   are  any  major  problems which will
require large expenditures in  the  future.

    A  visit  should  be  made to the  wastewater  treatment plant to
determine   overall   status   with respect  to  equipment   condition,
immediate and long term needs,  and compliance status.

    A  survey  should  also  be made  of the  laboratory  to  determine if
there  are any problems with testing, equipment, and general reporting
procedures.


         (1) Do sewers appear  adequate?                        	

         (2) Do lift stations  appear  satisfactory?             	

         (3) Does operation  &  maintenance appear satisfactory? 	

         (4) Is there an  absence of odor at  the fence line?    	

         (5) Does the laboratory appear satisfactory?          	

                                       Score:
    Summary:

         (1) Does the system have problems  that need attention?

         (2) Does the score indicate any problems?

         (3) See Appendix A: 83 - 87.

         (4) Comments:
                                   22

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I. MANAGEMENT (cont.)

    K. Review Safety Program

    The  utility should have a written safety policy that  includes  all
activities  of  every  employee.    Separate  safety   rules   should be
written  for  each  important  operation and posted at the job  site in
addition to being compiled in a safety manual.

    Employees  should  have  had  some type of formal  safety  training.
It  is  important to review any lost time accidents, since these  often
affect  the  budget  and  can  usually  be  prevented.   All  accidents
involving  the  injury  of  any  employee  or  the damage  of  equipment
should have a formal report.

    A  good  operating facility will have a safety file  of reports  and
safety  publications,  such  as  those produced by the Water  Pollution
Control Federation.


         (1) Does management have a formal safety program?      	

         (2) Are safety rules written for each major operation?	

         (3) Is there a formal accident report system?          	

         (4) Does management review each accident?              	

         (5) Does management receive any safety publications?   	

                                       Score:
    Summary:

         (1) Are there any safety problems?

         (2) Does the score indicate any problems?

         (3) Comments:
                                   23

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 8.  Debt Retirement

    A  wastewatec  treatment  plant  often
lasts  only about 20 to 25 years with good
maintenance.    If  the  years of the debt
exceed  this  amount, an extreme financial
burden  will  be  placed  on the customers
for  a  facility  that  has  outlived  its
usefulness.
    a. List all outstanding short-term
       and long-term debts, interest
       rates, issuance years, and year of
       retirement.
       (Appendix C-135)

    b. Determine if any debts will not be
       retired within 20 years of
       issuance.

    c. Determine from officials if
       facility will need any equipment
       replacement or major
       rehabilitation before debt
       retirement that is not being
       funded from'current set-aside
       funds.

    d. If major improvements are required
       before debt retirement, recommend
       that a consultant be used to
       evaluate and determine
       future costs.
                    20

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   CURRENT DEBT SUMMARY
Type of            Year    Int.    End
 Debt       Amount  Start   Rate    Yr.
1.
2.
3.
4.
5.
                21

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I.  MANAGEMENT  (cont.)

    L. Collect  Important  Financial  Data  Documents

    It  is  necessary   to  collect   some  basic  documents  such  as  user
charge  schedules/   budgets,   monthly  financial   reports,   and other
important   documents    that    should    be  readily   available   for   a
well-managed  facility.    It  is ideal  to collect these  reports  for the
last 5 year period  for  future use.


         (1) Did you obtain rate  schedules for last  5 years?   	

         (2) Did you obtain budget  records for last  5 years?   	

         (3) Did you obtain financial  reports for  last  5 years?	

         (4) Did you obtain any other  important  documents?      	

         (5) Did you find the clerks willing to  cooperate?      	
                                        Score:
    Summary:
         (1) Do you  feel  there  are  sufficient  documents?

         (2) Does  the  score  indicate  any  problems?

         (3) Comments:
                                   24

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I.   MANAGEMENT (cont.)



    M. Summary



          1. The utility is managed by a:









          2. This organizational structure  is:









          3. Management cooperation will probably be:










          4. The physical condition of the  overall utility  is:









          5. The fiscal condition of the utility is:










          6. The total staff number is:
          7. Personnel policies are:
          8. The operations plan is:
          9. Management's concept of state/federal  regulations  is:
         10. The safety program is:
                                   25

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 9.  Revenue Review

    The  revenue  musk  meet  all budgeted
financial  requirements  of  the facility.
It  is important that all utility revenues
remain  in  the  system and are never used
for  any  other purpose.  Revenues must be
based  on  actual  need  of the. utility to
meet  its  responsibility,  for providing a
service  to the customers and meeting both
short-term    and   long-term   regulatory
commitments.

    a. Determine if annual revenues were
       sufficient to meet expense budget
       requirements for each record
       period.
       (Appendix B-96 and B-99)

    b. List any period that had deficient
       revenues.

    c. Determine reason for revenue
       shortages.

    d. Recommend changes that would help
       increase revenue required for
       critical areas.
                    22

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          REVENUE BUDGET
    The  annual  revenue  budget  reflects
how  much  money  the utility will receive
from "• customers  and other revenue sources
to spend on the operation of the utility.
    Estimated billing:
    Penalties & Int. :
    Connection fees:
    Other:
         TOTAL:
               0 & M Budget

    The  revenue  budget  must reflect the
needs  of  the operation, maintenance, and
replacement   budget,   which  include  at
least these important factors:

         Administration
         Billing & collection
         Operations
         Maintenance
         Replacement
         Support services
         Debt services
         Dedicated funds
              Capital Budget

    The . capital budget reflects long-term
objectives    resulting    from    capital
projects  and generally relies on specific
financing.
                    23

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               II. BUDGETING
    Budgeting  is  the  process where all
revenues  and  expenditures are separated
into  appropriate categories for managing
the  funds.   Estimates are made for each
item   and   then   compared   to  actual
operation.

    The   budget   should   be   strictly
followed  to  determine if revenues match
actual   expenditures.      If   revenues
decrease  from  expectations, adjustments
will  have  to  be  made for revenues and
expenditures.

    Additional  information  is  provided
in Appendix B to aid the investigator.
                    27

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II.   BUDGETING

    A.  Discuss Any Remaining Questions from the First Visit

    A  follow-up  meeting  with  some  members  of  management   may  be
necessary  during the second visit, since they are sometimes not  clear
on  the  objectives  after just one meeting.  It  is also advisable not
to overwhelm them with too many questions in the  first session.

    A  second  meeting is also advisable so that  some questions  may  be
asked  a  second  time  and to expand on some of  the earlier comments.
You  should  also be prepared to offer some minor suggestions during a
second visit from the findings found during the first visit.

    It  is ideal to again probe for answers that  are not always  easily
obtained,  such  as  number and amount of delinquent accounts, certain
budget items, and hidden financial problems.


         (1) Does management understand their role?            	

         (2) Are delinquent accounts under control? (< 3%)     	

         (3) Are all single line items <20% of budget?         	

         (4) Is the minimum bill for 3,000 gals.  > $6.00?      	

         (5) Is the utility free of any financial problems?    	

                                       Score:
    Summary:

         (1) Does management fully understand  their system?

         (2) Does the score indicate any problems?

         (3) Comments:
                                  29

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10.  Residential Hater Usage'

    It   is.  important  that  water  usage
figures  used  for  wastewater  charges be
accurately  measured or estimated, so that
proper    billing    will   be   provided.
Customers  must  pay  their  fair share of
actual services used.
    a. Obtain copy of residential rate
       structure document.

    b. Review billing records to
       determine if charges are based on
       usage data.
       (Appendix C-127)

    c. If flat rates are used, recommend
       that all wastewater billing be
       performed on actual or estimated
       wastewater volumes discharged to
       sewers.

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            USER CHARGE

           METHODOLOGY

    The  users must be divided into proper
classes,  so   that  it   is  known how many
users   are   in   each  class  and  their
respective volumes.


    Management must determine:

         All  classes  of  users
         Factors that determine classes
         Characteristics of all users
         Individual user volumes
         Appropriate  rate


    User classes:

         Residential
         Commercial
         Industrial
         Institutional
    Residential rates:

      1.  Equivalent dwelling unit -
           Used for unmetered water
           Determined from best estimates
      2.  Volume measurements -
           Actual metered usage
           Similar waste concentration
                   25

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II.  BUDGETING (cont.)

    B. Collect Any Remaining Financial Data

    It  is  important  to  obtain  all necessary  documents  and  reports
from  the utility to aid in the evaluation.  Any  corrections  should  be
made  and  the  data become part of  the  investigation  file.   The  basic
documents  include the last 5 years  of rate schedules, annual budgets,
and  financial  reports.   Other information should  include number and
amount  of  delinquent  accounts, and debt service information  showing
principal, interest rate, and duration of the  loan or  bonds.

    If  any  of  this  information is not available, it  indicates that
some problems exist in their overall  financial management.


          (1) Did you obtain rate schedules for last  5  years?    	

          (2) Did you obtain the last  5 years of budgets?        	

          (3) Did you obtain delinquent accounts information?    	

          (4) Did you obtain all financial reports requested?    	

          (5) Did you obtain all debt  service reports?           	

                                       Score:
    Summary:

         (1) Did you obtain  all  necessary  information?

         (2) Does the  score  indicate  any problems?

         (3) See Appendix  B:  91.

         (4) Comments:
                                   30

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II.  BUDGETING (cont.)

    C. Review Budget Information for Last 5 Years

    The  last  5 years of budget can provide some valuable  information
of  the  financial condition of the utility.  First,  review the budget
to  determine  if  the wastewater utility is completely separated  from
any  other  activities.    Then, review the budget totals to determine
the percent of yearly increases to see if they appear  reasonable.

    Other  important  factors  to  consider include the number of  line
items  and  if  actual  expenditures  are  compared   monthly  with the
prescribed  budget  amount.  It is also important to  determine if  they
keep  a  fixed asset inventory and make yearly calculations of present
worth.


         (1) Is there a separate wastewater utility budget?    	

         (2) Does the budget have sufficient line items?       	

         (3) Is there a monthly actual-to-budget comparison?   	

         (4) Is there a fixed asset inventory?                 	

         (5) Does the inventory include present worth?         	

                                       Score:
    Summary:

         (1) Does the information indicate proper budgeting?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 92 - 95.

         (4) Comments:
                                  31

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11.   Commercial" and Industrial Users
                          ••v f'Vf'
    It  is  important  that 'all'commercial
and   industrial  customers  pay  for  the
services ,  they   are  provided.  "' Volume
discounts ,  are   usually 'not  justified.
Some   wastewater  discharges  from  these
sources  may  require extra treatment that
should  not  be  passed  on to residential
users.       Instead,   they   must   have
surcharges  depending  on the strength and
type of waste.
    a. Interview the superintendent and
       chief operator to determine if
       there are high strength wastes
       from industries that exceed
       concentrations of > 300 mg/L BOD
       or TSS.

    b. Obtain commercial and industrial
       rate structure documents to
       determine if surcharges are
       included for high;strength wastes.

    c. Review the surcharge information
       to determine if it is adequate for
       all commercial and industrial
       users.             . -
          •»     i'
    d. Recommend that appropriate
       surcharges be used where
       applicable and that commercial and
       industrial volume discounts not be
       used.
                    26

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            COMMERCIAL &
          INDUSTRIAL USERS
    It  must  be  known   if  the wastewater
treatment  plant  has had   any changes in
the   average   and   peak   influent  BOD,
suspended   solids,  and  other  important
characteristics.   If these  data are above
normal  values,  it indicates that the user
charges must be  reevaluated.
User Charge Rates;

1. Surcharge -
     Use for any wastewater that has a
     concentration  over  set values, such
     as 250 - 300 mg/L BOD or suspended
     solids.

2. Quality/Quantity -
     Determine costs for unusual wastes
     Incorporate minimum and/or maximum
       volumes charges

3.  Establish Pretreatment Ordinance
                   27

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II.  BUDGETING  (cont.)

    D. Review Overall Budgets

    This  should  include   the   review  of  the  OM  & R line  items  to
determine  if   sufficient   funds   are  available  to  provide  adequate
operations.     A special contingency fund should also be available for
unplanned  events  that  might   require  substantial  maintenance.    A
review  should  also  be  made   to determine  if  previous  line item
activities have been neglected  because of lack of money.

    The   investigator   should    determine  if  the  accounts   appear
satisfactory  for  the size of  the system.  This can be done by  making
a  comparison   with  some   similar situations and knowing  the  needs  of
the utility.


         (1) Has the revenue budget always matched expenditures?	

         (2) Is there a sufficient OM & R budget?              	

         (3) Is there a contingency fund for special needs?    	

         (4) Do all line items  have sufficient funds?          	

         (5) Are all accounts satisfactory?                    	
                                        Score:


    Summary:

          (1) Does  the  overall  budget  appear  satisfactory?

          (2) Does  the  score  indicate  any  problems?

          (3) See Appendix  B:  96  -  98.

          (4) Comments:
                                   32

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II.  BUDGETING (cont.)
    E. Review Revenue Budget
    The  revenue  budget should be reviewed by management  to determine
if  the expected revenue from billing and any other sources will  cover
the  needs.    If  the  revenue  does  not match the total expenditure
budget, a rate survey will be necessary.
    It  is extremely important that all utility revenues remain in  the
system  and  are never used for other purposes.  There  have been  times
when  some  salaries  of  councils or commission members that do  other
functions  are  paid  totally  from  the  utility.   This  should  never
happen.

         (1) Is there a separate revenue budget?               	
         (2) Is there a forecast of future customer needs?     	
         (3) Is the revenue budget compared with actual income?	
         (4) Are revenues recovering total costs?              	
         (5) Are all revenues used only for the utility?       	
                                       Score:
    Summary:
         (1) Is there a satisfactory revenue budget?
         (2) Does the score indicate any problems?
         (3) See Appendix B: 99 - 100.
         (4) Comments:
                                  33

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12.  Minimum  Billing

    The  minimum  bill sshouHd ^ay ffor  fixed
costs   that   ace  not  depeiwlent  on   the
volume  of  .wastewater  'di&cha&g&d,.   This
should  include   such   &ac.to;i8S  as  normal
salaries,  office  expenditures, lighting,
heating,  and debt service.  ?Any customer
cost  less than about .$12 per  iyeax usually
indicates tremble.
    a. Obtain minimum residential,
       commercial,  and iindustrial /.rates.

    b. If mifv-imum  billing ;i3oes-aot cover
       routine  Efcx-ed  expenses, reecosromend
       a finasnccial  consultant .Eavli?ew of
       the minimum .billing  jSt:cj£d,bure to
       cover such cexpenses.

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TYPICAL MINIMUM
     BILLING
NO.. Oft
Cust.
15&
450
500^
6002
ftOO
1,000
lf.13BO?
l.&to
1,1003
I, SOU)
1.909
2,0080?
2 600
Kim Rate per
'MM.- 1000 gal
$? G'iQ&. $ 1.00
£*50 2*50
8,311 1.70
5*50 Oi50
4^5* Iv25
3IOK 0*85
U2Si U43
6^00^ 1,20ft
GF> 1*1 \ •'• A ?
V*f* -J-«J-' JL •* Tl *
241^ .0,95
Ts 73^ Vl: >^i
•J *• ft &-1. A-«- 4feV»
2i jss? 11 2r
31 1& 1.12?
3000 gal
Example
$ 8.00
14.00
8.31
5,50
5.75
3.00
5.54
6.00
6.33
4.95
3.72
6.22
4.27

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II.  BUDGETING (cont.)

    F. Review Operations Budget

    The  operations  budget  should include all activities required to
operate  the  system  properly  and to stay in compliance.  One of the
key  elements  in  the  operation  is  the  amount  of  energy and its
associated  costs.   Energy costs should be measured on a monthly cost
per  wastewater  unit  treated,  so  that  it  is  easier to determine
differences and their causes.

    Energy  cost  often  is  the  single most important expenditure in
operating  a  wastewater  utility.    If these costs exceed 10% of the
total  operations  budget,  there  is probably a need for an extensive
investigation  to determine if these costs can be reduced.  It is also
important  to  review the overall operations budget to determine if it
is sufficient.


         (1) Are all operating budget items satisfactory?      	

         (2) Is there a specific energy budget?                	

         (3) Does energy budget show costs by units (kwh/gal)? 	

         (4) Are power costs < 10% of the operations budget?   	

         (5) Is the operations budget satisfactory?            	

                                       Score:
    Summary:

         (1) Does the operations budget appear satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 97, 102.

         (4) Comments:
                                  34

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II.  BUDGETING (cont.)

    G. Review Maintenance Budget

    The  maintenance  budget  must  be  adequate to keep all equipment
operating  in  its  best  condition.   The budget should reflect  exact
line  items  for  certain pieces of equipment.  The maintenance budget
must   be   based  on  preventive  maintenance,  not   just  corrective
maintenance.

    Other  important  factors  include  a  running  inventory  of  small
parts  on hand and the use of good preventive maintenance records that
show when maintenance is performed and its associated  costs.


         (1) Is the maintenance budget satisfactorily  itemized?	

         (2) Is there an inventory of small parts?             	

         (3) Is Preventive Maintenance routinely performed?    	

         (4) Are there formal Preventive Maintenance records?  	

         (5) Do employees always have sufficient small  parts? 	

                                       Score:
    Summary:

         (1) Does the maintenance budget appear satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 97.

         (4) Comments:
                                  35

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13.  Cash Flow

    A  utility  that  has an adequate rate
structure  and  collects  all  bills  in a
timely  manner  usually  does  not  have a
cash   flow   problem.      Factors   that
contribute  to  lack  of  proper cash flow
are.,usually  poor  revenue  estimates and
unplanned    expenditures   not   properly
forecast in the budget.
    a.  Interview clerk and review records
       to determine if there* has always
       been sufficient cash flow for all
       "accounts payable."

    b.  Determine if the billing cycle is
       too long for proper cash flow,
       such as 30 days or longer.

    c.  Compare current billing cycle with
       any state laws or regulations to
       determine if cycle may be
       shortened.

    d.  List periods where cash flow was a
       problem.

    e.  Determine if cash problems may be
       caused by poor budgeting.
                    30

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        CASH MANAGEMENT

    Cash  management  is  a system used to
control   the   following   items  of  the
wastewater utility:

         Receipts
         Deposits
         Surpluses

    The  elements  of  a  cash flow system
should include the establishment of

         cash information systems
         timely billing
         short-term payment period
         proper disbursement procedures

    Excess  funds  should  obtain the best
interest  rate  for the time the funds are
available.    Some of these funds may only
be   available  for  short-term  benefits,
while   others   may   be   available  for
long-term investments.

         Short-term funds:

              Excess monthly cash
              Uncommitted accounts
              Operating accounts

         Long-term funds:

              Deposit fees
              Improvement  reserves
              Replacement  set-a-sides
                    31

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II. BUDGETING (cont.)

    H. Review Budget Control

    It  is  important  that  budgets are prepared based on actual need
and   not   what   management   feels   customers   will  pay  without
complaining.   Budgets should have exact reasons for every expenditure
and  include  a  companion  narrative  section  to  discuss the budget
document.

    A  review  of  past  budgets  and  the time given to them would be
important  to know.  If it is indicated that budgets are always a last
minute  activity, it generally means that very little thought is given
to  them.  In addition to the line items, there should be a separation
of  certain  activities  such  as  sewer,  treatment  plant processes,
laboratory, and administration.


         (1) Are annual budgets always prepared on time?       	

         (2) Are there sufficient line items for each area?    	

         (3) Does the budget contain activity levels?          	

         (4) Are new line items easily added as required?      	

         (5) Does the operator help prepare the budget?        	

                                       Score:
    Summary:

         (1) Is the budget control process satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 96 - 99.

         (4) Comments:
                                  36

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II.   BUDGETING (cont.)

    I. Review Equipment Replacement Budget

    An  equipment replacement budget should include all pumps, motors,
vehicles,  and  any equipment that has a useful life less  than that  of
the  total facility.  All equipment expected to be replaced within  the
next  5  years  should  be  itemized  by  year.  Costs can be prorated
throughout  the life of the equipment, so that funds will  be available
when needed for replacement.

    It  is  important  that  all  equipment be listed with its date  of
placing  in  service,  useful life, and its expected replacement  cost.
These  costs  should  include  installed  value,  since  labor   is   an
important part of the total cost.


         (1) Are there line items for specific equipment?      	

         (2) Is there a listing of replacement equipment?      	

         (3) Does the listing include a useful life column?    	

         (4) Is the replacement cost prorated  in the budget?   	

         (5) Does the replacement cost include labor?          	
                                       Score:
    Summary:

         (1) Are replacement costs included  in the budget?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 104 - 105, 108  - 115.

         (4) Comments:
                                  37

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14.  Rate Increase

    A  well-maintained  facility is one in
which   all   necessary   costs   will  be
recovered   through  proper  user  charges
that  are  increased  as needed.  The rate
structure  should  be  reviewed  at  least
yearly.

    It  is  important  that • there  is  an
official  policy  stated  in  writing that
the  wastewater  utility  will be operated
on a self-supporting basis,
    a. Obtain the date of the last rate
       increase.

    b. Determine why there has not been a
       rate Increase for more than 24
       months.

    c. Recommend a rate increase if the
       current rate does not adequately
       support the budget.  An
       independent consultant may have to
       be used to' provide adequate rates,
       if budget and rate structure are
       unknown.
                    32

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            WASTEWATER

          TREATMENT RATE

             •     	, 19	
   (Gallons treated/month:	 X 1,000)

Per. Expenses:
   Salaries     $ 	
.   F.I.C.A.      	
   Benefits                 $ •
Utilities:
  Electric
  Telephone
Supplies:
  Chemicals
Repairs:
Maintenance:
  	  $
Capital Exp.:
  Replacement   $
  Expansion
Debt Service:
  Debt &  Int.  $
  Cont. Fund
          Total Expenses:    $
Cost/1,000 g.:
         Gals, treat.: 	 X 1,000

         -'-$      '
                   33

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II. BUDGETING  (cont.)

    J. Review  Capital Improvement Budget

    Capital  improvement projects should  be  reviewed  at  least  once  per
year  and  an  estimated  budget developed for  the  various  activities.
Many  projects can be divided  into  several small  parts and  implemented
over a period  of a few years.

    It  is  important  to   have  a  capital improvement policy  with  the
goals  to  be  accomplished.    Long   range  projects  should have  their
funding included as a part  of  the regular user  charges.


          (1) Is there a capital improvement  plan?              	

          (2) Is there a capital improvement  budget?            	

          (3) Is the capital  improvement budget  sufficient?     	

          (4) Are capital improvements  considered  in user  fees? 	

          (5) Is there a capital improvement  schedule?          	

                                       Score:
    Summary:

         (1) Is there a satisfactory capital  improvement  budget?

         (2) Does the score  indicate any  problems?

         (3) See Appendix B:  107.

         (4) Comments:
                                   38

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            III. COST RECOVERY
    Cost recovery is the process by which
all    operations/    maintenance,    and
replacement  costs  are  easily recovered
through proper user charges.

      The cost recovery procedure defines
the  need  for revenue and determines how
it  will  be met.  The procedure includes
adeguate  accounting  technigues to track
all  financial transactions and generates
the  necessary status reports.  Good cash
management   consists   of   forecasting,
tracking,   and  investing  of  temporary
surplus funds.

      Additional information may be found
in Appendix C.
                    39

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15.  Delinquent Accounts

    Proper   procedures  must  be  enacted
that   provide   for   a   termination  of
services  for  any  customer that does not
pay  in  a  timely  manner.    An adequate
advanced  deposit  system will also aid in
providing  the  payment  when  termination
does not produce a payment.

    If  termination  of  services  is  not
feasible,   other   procedures   such   as
property sale may be considered.
    a. Obtain delinquent account policies
       and procedures.

    b. Compare policies with appropriate
        state statutes.

    c. Determine the average number of
       delinquent accounts for each of
       the last 5 years or period of
       record.

    d. Determine the delinquent dollar
       amount for the last several
       billing periods.

    e. Calculate the percentage of the
       total budget that represents
       delinquent accounts.

    f. Recommend strong implementation of
       the collection of delinquent
       accounts.
                    34

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       DELINQUENT ACCOUNT
             PROCEDURES
    The  U.S.  Supreme  Court stated in 1978
in  the  Memphis Light, Gas, and Water vs.
Willey  s.   Craft  that there must be "DUE
PROCESS"   in    any   action   against   a
delinquent   utility customer.    To  help
provide  proper  "DUB.PROCESS," there must
be   proper procedures  guided  by  legal
council.    Some  of   the  items for these
procedures  include the following:

    1.  Bills  must be  submitted on a
        routine schedule. •

    2.  Statements must show amount due
        and when payment is due.

    3.  A "Past Due Notice" must be
        mailed when account is
        delinquent.

    4.  A "Turn-off" notice must be
        mailed within stated time.

    5.  An  attempt must be made to
        contact the head of the
        household by telephone or in
        person.

    6.  If  customers have illness or some
        unusual conditions, time must be
        given  for  them to move in with
        friends or  relatives or into
        public assistance shelters.

    7.   Services  can be terminated only
        during normal business hours
        Monday to  Friday.
                   35

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III.  COST RECOVERY

    A.  Review Accounting Issues

    A  wastewater  utility  must have an appropriate accounting system
that  has  been  set up by someone familiar with acceptable accounting
practices.    The overall method of accounting can be on a cash basis,
accrual  basis,  or  a  modified  accrual  system.    It  is extremely
important  that  every  transaction be carefully recorded and that all
financial activities are known.

    A  wastewater utility is generally operated as an enterprise  fund,
since  it  should  be treated like a business.  There should always be
knowledge  of  the  financial  status.    If  possible, a visit to the
accountant  who  maintains  or audits the facility's books may provide
useful  information.


          (1) Is the utility set up as an enterprise fund?      	

          (2) Are proper journals and ledgers used for accounts?	

          (3) Are total OM & R costs known?                     	

          (4) Are indirect costs properly identified?           	

          (5) Is the accounting system reviewed by a CPA firm?  	

                                       Score:
    Summary:

         (1) Is the present accounting system satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix C: 119 - 122.

         (4) Comments:
                                  41

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III. COST RECOVERY  (cont.)

    B. Review Cash  Flow Procedures

    A  utility  that  collects  sufficient  user  charges   in  a  timely
manner  will generally have an adequate  cash  flow and will  not have  to
be  concerned  with meeting its normal financial commitments.  It will
also  be  able  to  meet all OM & R  costs without difficulty.   If  there
is  any  indication  that expenditures are directly  controlled by cash
in bank, then the utility has a cash  flow problem.

    Other   factors   to   consider   are  the  number   of   outstanding
delinquent   accounts.      These   overdue  funds  are   sometimes  the
difference  between  good  and  poor  cash flow.  Such overdue  accounts
must  be  actively  pursued and charged  penalties and interest.   It  is
also  important  that  billing  is  timely  and  mailed as quickly  as
possible, since revenues are always behind the service  provided.


         (1) Does the utility always  have sufficient cash?     	

         (2) Are all OM & R costs recovered by user  fees?      	

         (3) Is expense control related  to available cash?     	

         (4) Are delinquent accounts  charged  penalties  & int.? 	

         (5) Are billings timely &  payment due within 30 days? 	

                                       Score:
    Summary:

         (1) Does the utility have a cash  flow problem?

         (2) Does the score  indicate any problems?

         (3) See Appendix C: 123.

         (4) Comments:
                                   42

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              GLOSSARY
ACCOUNTING;   The procedure that tracks
all financial transactions and generates
status reports.

ACCOUNTS RECEIVABLE:  An amount that is
owed to the utility by its customers that
has not yet been received.

ACCRUAL BASIS: The method of accounting
under which revenues are recorded when
they are earned (whether* or not cash is
received at that time) and expenditures
are recorded when goods and services are
received (whether cash disbursements are
made at that time or not).

AMORTIZATION;  The process of allocating
an asset, a liability, or an amount over
future  accounting  periods.    It  is the
gradual reduction or liquidation of an
account according to a specified schedule
of times and amounts.

ANNUITY;/  A series of equal money
payments made at equal intervals during a
designated period of time.

ASSESSMENT; (1) The process of making the
official valuation of property for tax
purposes.
   (2) The valuation placed on property.
    (3) The charge placed against property
for the. purpose of constructing
improvements such as water and sewer.
                    36

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ASSETS  (Capital):  Property  of  a  permanent
nature  or intended  for  long continued  use
or possession, such as  pumps,  motors,
trucks, and meters.

ASSETS  (Fixed):  Permanent property  such
as land, buildings, sewer collection
pipes,  and  tanks.

ASSETS  (Intangible); Any element  of value
applied to  permanent property  of  a
non-physical nature such as cost  of
organization and development.

ASSETS  (Tangible):  Permanent property  of
a physical  nature  such  as lands,
buildings,  wells,  plant eguipraent,  and
permanent improvements.

AUTHORITY;  A government or  public agency
created to  perform a single function such
as a sewer  authority.   Usually such'units
are financed from  service charges or
fees.

BALANCE SHEET;   A  statement showing 'the
financial position  of an enterprise at a
specific date, prepared from records to
show assets, liabilities, and  equities.

BETTERMENT; An addition or  change made to
a fixed or  capital  asset which is
expected to prolong its life,  expand its
capacity, or increase its efficiency
beyond  initial design parameters, and
over and above that arising from
maintenance. The cost is added to the
book value of the  asset.

BILLING  CYCLE;    The  time   from date of
bill  to  end  of  payment  period, usually
about 20 days.

                    37

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III.  COST RECOVERY (cont.)

    C. Review Purchasing Control

    It  is  important that the utility have a formal purchasing policy
that  includes  the  use  of  numbered  purchase  requisitions.  Formal
policies  are  necessary  to  outline  the  types of approval that are
required  for  various  levels  of purchasing.  It is  important that  a
purchase  cost  review be made before any item is ordered, so that the
best price may be obtained.

    The  chief  wastewater  operator  should  be  authorized  to  make
certain  expenditures  without  prior  approval,  providing  they  are
normal  budget  items.  This would allow important items to be ordered
without  waiting  several  days for a formal council or board meeting.
It  is  also important to have a formal record system  showing when any
item was received after purchase and what its condition is.


         (1) Is there a formal purchase requisition procedure? 	

         (2) Can the operator order items within  the budget?   	

         (3) Is there accountability for items received?       	

         (4) Is there a satisfactory cost comparison?          	

         (5) Are all P.O.s entered into a specific journal?    	

                                       Score:
    Summary:

         (1) Is there a satisfactory purchasing policy?

         (2) Does the score indicate any problems?

         (3) See Appendix C: 124.

         (4) Comments:
                                  43

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III. COST RECOVERY  (cont.)

    D.  Review Sewer  Use  Ordinance

    All  wastewater   utilities  must  have  a  proper  sewer  use  ordinance,
which  includes   the   types   of  wastes   that  can  be  introduced  to  the
sewer.    The  ordinance   should  include  conditions  when  the  wastes
require  a  surcharge  because  of   abnormal   conditions.     The sewer
ordinance should  contain  prescribed  pretreatment conditions.

    It  is  important  that   the  ordinance meet all  local,  state,  and
federal  legal  requirements.   The ordinance must  be  available for  all
customers.    The  wastewater   management must also have procedures to
fairly enforce the  ordinance.


         (1) Is ordinance on  file for  all customers to review? 	

         (2) Is current management aware  of its requirements? 	

         (3) Is the ordinance being  actively enforced?         	

         (4) Are  the  surcharges adequate  for special  wastes?   	

         (5) Are  public meetings  held  to  inform customers?     	

                                       Score:
    Summary:

          (1)  Is  the  sewer  use/pretreatment  ordinance  adequate?

          (2)  Does  the  score  indicate  any  problems?

          (3)  Comments:
                                   44

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BONDS;  A written promise to pay.a debt by
specified   sums  of  money  at ' specified
future  dates*    Bonds are typically used
for long-term debt.

BONDS,    GENERAL   OBLIGATION;   When   a
government  pledges  its  full  faith  and
credit  to the repayment of bonds which^it
issues  through  Various  means  including
taxes or other revenues in sowe cases.

BUDGETING;   Identifies needs for spending
and allocates resources among needs.

CAPITAL   BUDGET;   A   plan  of  proposed
capitalexpenditures      that     is
usually   part   of  the  complete  annual
budget,  which includes both operating and
capital outlays.

CAPITAL     COSTS;    Costs    of    major
rehabilitation,  betterments, expansion or
upgrading.

CAPITAL    OUTLAYS;   Expenditures   which
result    in   the   acquisition   of   or
addition to fixed, assets.

CASH   BASIS;  The  method  of  accounting
under  which  revenues  are  recorded when
received  in  cash  and  expenditures  are
recorded when paid.

CASH  MANAGEMENT;  Forecasting,  tracking,
and investing of temporary surplus funds.

COMMERCIAL   USER;   All   retail  stores*
restaurants,  office buildings, laundries,
and other private establishments.
                    38

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COST  RECOVERY;   The   system  that  defines
the  need   for   revenue  and  determines  how
it will be  met.

DEBT  MANAGEMENT;   Includes  locating  funds
for    capital     construction   and    the
repayment of  borrowed  funds.

DEBT  SERVICE;   Payment   of   interest  and
repayment   of  principal   to  holders of  a
debt instrument.

DIRECT  EXPENSES;  Those  expenses  which  can
be  charged directly as  a part of the cost
of   materials    or  service,   or  charged
directly  to  a   department   or   operating
unit,  as   distinguished  from overhead  and
other   indirect   costs   which  must  be
prorated through  many  activities.

ENCUMBRANCES;  Obligations   in the'form of
purchase    orders/   contracts or  salary
commitments  which are   chargeable  to an
account that  is  reserved.

.ENTERPRISE  FUND;  A   fund   established to
account  for  water  and   sewer operations
that   are  financed   and operated  in  a
manner   similar    to    private   business
enterprises.   The  intent of  the  governing
body   is   that   all   costs   of   providing
services  be  financed  or  recovered  through
user charges.

EQUITY;     The  difference   between assets
and liabilities.

FLAT  RATE;    A  rate  that is  not based on
water  usage,  but  is  usually based on  a
fixed price.

GRANTEE;   A municipality  that  has executed
a federal grant agreement.

                    39

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III.    COST RECOVERY (cont.)

    E.  Review Rate Structure

    The  rate  structure  includes the necessary user charges  that  are
required  for  the  operation,  maintenance,  and  replacement  costs of
equipment.    This  must be reviewed at least annually to determine if
adequate  revenues  will  be  available  to  recover  all costs.  Some
utilities  establish  the  user  charges  and  then adjust  the expense
budget  accordingly.    This,  of  course, is a very poor practice  and
usually  catches up with the utility at some later period.  The saying
of  "pay now" or "pay more later" is certainly very true of wastewater
utilities.

    There  have  been some cases where low rates have caused customers
to  use  much  more water than necessary and place a great  burden upon
the  wastewater  treatment  plant.  Proper user charges can promote or
inspire water conservation in some cases.


          (1) Do charges include unusual treatment  requirements?	

          (2) Do the charges consider high power demand costs?  	

          (3) Do the user charges promote water conservation?   	

          (4) Do the user charges reflect demands on the system?	

          (5) Do the user charges separate types of customers?  	

                                       Score:
    Summary:

         (1) Are the user charges properly  reviewed  annually?

         (2) Does the score indicate any problems?

         (3) See Appendix C:  125 -  134.

         (4) Comments:
                                   45

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III.  COST RECOVERY  (cont.)

    F. Review Cost Recovery  Procedures

    Complete   cost    recovery   is   based   on   the   premise   that   all
wastewater  utility   costs   will  be recovered   through   proper   user
charges.    In  order  to  obtain   this  goal,  the user  charges  must be
reviewed each year to establish  the  proper  level.

    It  is  important  that   there   is   an   official policy  stated in
writing   that   the    wastewater    utility will  be   operated on  a
self-supporting  basis.    This  should also include a policy  requiring
the  use  of  meters   for  measuring all   water  used by  customers and
ultimately  discharging to   the  sewers.   Special  high strength waste
should have a surcharge since treatment  may be  more costly.


         (1) Is there an annual  user fee evaluation?           	

         (2) Is there a written  self-supporting policy?        	

         (3) Is there proper public  education  on  user charges?  	

         (4) Is there a surcharge for high  strength wastes?     	

         (5) Are all  users properly  and  accurately  metered?     	

                                       Score:
    Summary:

          (1) Are there  proper  cost  recovery procedures?

          (2) Does  the score  indicate  any  problems?

          (3) Comment:
                                   46

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GENERAL   ACCEPTED	ACCOUNTING   PRINCIPLES
JGAAPJ;Uniform   minimum   standards  of
guidelines  for  financial   accounting and
reporting. .

INDIRECT  COST;  A  cost necessary for the
functioningof the organization as whole,
but  which  cannot be directly  assigned to
one activity.
 *                 . f
INFILTRATION;  Water other than wastewater
that   enters  a  sewer  system  from   the
ground  through  such  means as defective
pipes, connections, or manholes.

INFLOW;• Water  other than wastewater  that
enters  a  sewer system from such areas as
roof   leaders,   yard   drains,    cooling
towers,    storm    water, -.and   surface
drainage.

INSTITUTIONAL;      Includes     .  schools,
churches,  hospitals, nursing homes, penal
facilities and other similar  users.

JOURNAL; A  record  in  which   entries  are
recorded in chronological order..

LIABILITIES;    Amounts the utility  owes  to
others.

LIABILITIES  (current);     Amounts  due  in
the  near  future  such as payroll  earned,
but  not  paid,  and  upcoming  payments  to
vendors for goods received.

LIABILITIES   (long-term);       Items   due
beyond ' the  end  of  the  current  fiscal
year.     This  is almost always  the amount
of  outstanding debt that is not  due until
the following years.
                    40

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LIABILITIES    (restricted);    This  would
consistofanyamounts  due   from other
current assets such as bond payments.

MINIMUM  BILLING;  A  fee charged even when
services are not used.

MODIFIED   ACCRUAL  BASIS;  The  basis   of
accounting  under  which  expenditures  and
liabilities  are  recorded  when   services
are   incurred,  and   revenues are  recorded
when  received  or  when  both   measurable
and/or available.

OPERATION  &   MAINTENANCE;  Functions that
result  in  expenditures during  the useful
life    of   the   treatment   works    for
materials,  labor,  utilities,   and  other
items    necessary    for   managing    and
maintaining the facility.

OVERHEAD;      Those   elements    of  cost
necessary  to.  perform  the activity which
cannot  be  determined  readily,   such   as
management services.

PURCHASING;  The  system  that  allows  the
utility  to procure and store needed goods
and services.

REHABILITATION/REPLACEMENT;   Expenditures
for  obtaining  and installing replacement
or  rehabilitated  equipment, accessories,
or   appurtenances,  which  are  necessary
during  the  useful  life of the treatment
works  to  maintain  the  performance   for
which the works were designed.
                    41

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III.  COST RECOVERY (cont.)

    G.   Determine the Cost Recovery Status

    There  should be enough financial information available  throughout
the  year  to  show  if the wastewater system has proper cost  recovery
without  waiting  until the end of the year.  Some questions to  answer
include  what  revenue  would  be  available if everyone just  paid  the
minimum  bill  or  will  individual customer deposit  funds pay for  all
delinquent accounts.


         (1) Does the monthly cash balance  indicate the status?	

         (2) Is the minimum bill adequate for all fixed costs? 	

         (3) Is the cost of operating each  activity known?     	

         (4) Is a cost recovery analysis determined annually?  	

         (5) Are industries paying by concentration of wastes? 	

                                       Score:
    Summary:

         (1) Can the cost recovery status be determined?

         (2) Does the score indicate any problems?

         (3) See Appendix C: 128 - 130.

         (4) Comments:
                                  47

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III. COST RECOVERY  (cont.)

    H. Review Billing and Collection Procedures

    A  formal  policy  should  be  provided  that outlines  the  billing
dates  and  collection  procedures.  These should also be incorporated
in  a  customer information sheet, so that each customer knows  exactly
what  is  expected.   It is important that all bills be mailed  on  time
and overdue notices go out on  time.

    It  is important that water cut-off be performed when required  and
that  adequate  payment  be made when the water is  turned back  on.   It
is  important  that  all  customers  know  their rights as  well as  the
rights of the utility.


         (1) Are bills mailed  within 5 days after reading?      	

         (2) Are there information sheets for customers?        	

         (3) Are overdue notices mailed within 5 days?          	

         (4) Do late payments  include interest and  penalties?   	

         (5) Is there a formal cut-off procedure?               	

                                       Score:                   	
    Summary:

          (1) Are bills  and  notices mailed on  time?

          (2) Does the score indicate  any problems?

          (3) See Appendix C:  138  - 139.

          (4) Comments:
                                   48

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REHABILITATION/REPLACEMENT  COST;  The cost
of  major  rehabilitation  or  replacement of
property   as   of  a  certain date,  which can
render   similar    service  as   originally
intended.       Major    rehabilitation  and
replacement  are  incremental   elements of
operating   costs.     They  are  variable,
depending  upon levels of  expenditures for
maintenance.    These  are  the expenditures
to  maintain   the capacity and  performance
for  which the  works were  designed.   It is
not  a  capital cost and does not  increase
the book value  of an asset.

SERVICE  CHARGE: A  charge  levied on a user
of  the  treatment  works  which  includes a
user  charge, a charge  for capital reserve
and debt service.

SOLVENCY;    The ability to  meet long-term
obligations.

SURCHARGE;      An  additional  or  premium
charge  for  services  beyond  the  normal
charges.

TRANSACTION;   A  business  event  that  is
recorded in the accounting records.

USER  CHARGE:   A charge levied on users of
a    treatment   works  for   the  costs  of
operation,  maintenance, and  replacement.
                    42

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    APPENDICES to HANDBOOK

    This  is a separate document entitled*
FINANCIAL	MANj^EMENT     EVALUATION
APPENDICES,  December 30,  1988.
Introduction	 P.......   5

Basic Management Considerations  ....   7

Use of Appendices .,.,..,..,,..	   8

Facility Review Outline 	 	   9

I.  Management 	,	  11

    A. Financial Management  Program   13
    B. Program Objectives '..........  14
    C. Organizational  Structure  ....  15
    D. Staffing	,	  16
    B. personnel Policies  	  17
    F. Employee Relations  	,  18
    G. Office Procedures  .'.	  19
    H. Operation Plans	  20
    I. Regulation Review	  21
    J. Treatment Facilities'	  22
    K. Safety Program	  23
    L. Financial Documents  	  24
    M. Management Summary	  25

II.  Budgeting	  27

    A. Second Visit  	  29
    B. Remaining Financial Data  ....  30
    C. Budget Review 	  31
    D. Overall Budgets  	  32
    E.'Revenue Budget  ..............  33
    F. Operations Budget  ,	  34
    G. Maintenance Budget  ..........  35
    H. Budget Control  ,.,..,,	  36
    I. Equipment Replacement  Budget   37
    j. Capital improvement Budget  ,.  38
                    43

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III. COST RECOVERY (cont.)
    I. Review Delinquent Accounts
    Some  systems  have  problems with customers not paying on  time  or
moving away without paying their bills.
    It  is  important that there be a sufficient deposit system to pay
for  any  uncollectable bill before a turn-off procedure is initiated.
This  is  usually  a two-month period.  There should also be a  penalty
fee and interest fee for overdue bills.

         (1) Is there a proper delinquent account policy?       	
         (2) Does billing require payment within 30 days?       	
         (3) Are delinquencies < 5% of operating budget?        	
         (4) Is there a penalty and interest policy?            	
         (5) Does the deposit always pay for unpaid accounts?   	
                                       Score:
    Summary:
         (1) Are delinquent accounts a problem?
         (2) Does the score indicate any problems?
         (3) Comments:
                                  49

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III.  COST RECOVERY  (cont.)

    J.  Review Wastewater Collection

    Normal   wastewater  billing  does   not   account   for   inflow   and
infiltration  problems.    There  needs   to   be   an adequate  study  and
correction  of this  issue, so that  this  extra water does not  enter  the
wastewater  treatment  plant.   Another  souce of  extra wastewater that
is  not billed is the use of private water supplies that may  discharge
into  the collection system.  Some  customers  use  both  public  water  and
their own water for  some large volume uses.

    It   has  also   been  found  in  some  areas   that  illegal  sewer
connections   have   been  made  without  knowledge  of  the   utility.
Wastewater  flow  measurements in the collection  system may help catch
any  of these situations.  At the time of these measurements,  sampling
near some industries could help find any  high strength wastes.


         (1) Are sewer flows compared to  actual billings?      	

         (2) Have all infiltration/inflow problems been solved?	

         (3) See Appendix C: 140.

         (3) Have all private water sources been  identified?   	

         (4) Is there a surcharge policy  for  industrial wastes?	

         (5) Is there an on-going program to  find  illegal  taps?	

                                       Score:
    Summary:

         (1) Are all wastewater collections accounted?

         (2) Does the score indicate any problems?

         (3) Comments:
                                  50

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III.  Cost Recovery	   39

    A. Accounting Issues	   41
    B. Cash Flow	   42
    C. Purchasing Control	   43
    D. Sewer Use Ordinances  	   44
    E. Rate Structure  	   45
    F. Cost Recovery Procedures  	   46
    G. Cost Recovery Status	   47
    H. Billing &'Collection  	   48
    I. Delinquent Accounts 	   49
    J. Wastewater Collection  	   50
    K. Equipment Reserve Fund  	   51

IV.  Planning 	   53

    A. Past Planning	   55
    B. Planning Policy 	   5i
    C. Operations Planning 	   57
    D. Capital Improvement Plans  ....   58
    E. Capital Improvement Schedule  .   59

V.  Financing	   61

    A. Current Financing 	   63
    B. Future Financing Needs  	   64
    C. Financing Options 	   65

VI.  Financial Reporting 	   67

    A. Current Financial Reports  ....   69
                    44

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Appendix A - Management  	   71

    Introduction  	   73
    Management Responsibilities  	   74
    Problem Solving Outline	   75
    Organizational Chart	   76
    Typical Staffing	   77
    Brief Job Description  ...»	   78
    Employee Appraisal	   79
    Benefit Items  	   80
    Office Procedures	 ...   81
    Purchasing Policy	   82
    Wastewater Utility  Description  ..   83
    Management Audit  	   84
    Key Management Issues	   85

Appendix B - Budgeting  	   89
                                      "i
    Financial Documents	   91
    Budgeting Procedures  	.'.. |  951
    Direct & Indirect Cost's  	*  9$
    Budget Process Steps  	   94
    Ranking Budget Requests  .........   95
    Typical Budget Outline	   96
    Budget vs. Actual  	   97
    Cost of Service 	   98
    Revenue Budget 	   99
    Revenue Requirements  	 100
    Electrical Energy  	 101
    Typical Operating Costs	 102
    Training Expenditures	 102
    Identifying High Cost Areas  	 103
    Replacement Reserve  	 104
    Replacement Inventory	 105
    List Major items  	 106
    Typical Future Expansion Costs  .. 107
    Major Expenditure Example  ....... 108
    Sinking Fund Example	 101
    Sinking Fund Factors	 lift
    Loan Example  	,	 Ill
    Capital Recovery Factor	 JIJI
    Borrowing vs. Savings  	 113
    Sinking Fund Work Sheet  	 114
    Typical Sinking Fund Policy  	 115

                    45

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III.  COST RECOVERY (cont.)

    K.  Determine If There Is a Sufficient Equipment Reserve Fund

    There   should  be  a  reserve,  fund  for  future  replacement   of
equipment  such as pumps, motors, and other important equipment.  This
reserve  fund  should  be  based  on  useful life of equipment, and  it
should   provide  for  immediate  replacement when needed.  The  reserve
fund  should  be based on the normal life cycle.  Salvage value of the
original equipment should be considered.


         (1) Is there an equipment replacement policy?         	

         (2) Does the policy include specific equipment  lists? 	

         (3) Is the fund set aside as a separate account?      	

         (4) Has the fund been sufficient in the past?         	

         (5) Is there a sufficient future reserve fund?        	

                                       Score:
    Summary:

         (1) Is the equipment replacement fund satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix C: 108 - 115.

         (4) Comments:
                                  51

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               IV. PLANNING
      Planning  is  the  process  that  a
utility  uses  to determine future needs.
A  systematic  plan  is  developed rather
than  just  allowing the utility to react
to situations as they occur.
      Additional
in Appendix D.
information may be found
                    53

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Appendix C - Cost Recovery  	   117

    Accounting Systems  	   119
    Accounting Files	   122
    Cash Management  	...,.   123
    Purchasing System 	....   124
    User Charge System	   125
    Cost Recovery Concepts..........   128
    Cost Recovery Outline  	,»...   129
    User Pee Projection	   131
    User Charge Summary  	.'.-......   132
    User Charge Distribution  	   133
    User Charge Comparison.....	   134
    Current Debt Summary 	   135
    Financial Condition Summary  ....   135
    Cost Recovery Summary  	   136
    Customer Billing	   138
    Connection Fee Computation  	   139
    Repair Computation	   140
    Collection Procedure	   141
    Collection Policy		   142
    Delinquent Account Policy ......   143
    Water Disconnect  -.	   144
    Tax Sale	   145
                              ~^> , -
Appendix D - Planning	   147

    Utility Planning  	   149
    Basis for Planning	   150
    Operations Planning 	   151
    Capital Planning Steps  	   152
    Financing an Expansion  Project  .   153
    Capital Project Schedule  	   154
                    46

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Appendix E - Financing  	   155

    Debt Management	   157
    Types of Financing  	   158
    Financing	   159
    Debt Service Factor Table  ......   160
    Inflation Factor Table	   161
    Financing Indicators'.....	   162
    Balance Sheet Analysis	   163
    Financing Sources 	   166
    Types of Bonds	   166

Appendix F - Record  Keeping  ........   167

    1.  Record Keeping Concept 	   169
    2,  Types of Reports ...........   169
    3,  Report Information	   170
    4.  Operating Reports	   170
    5.  Maintenance Reports	   171
    6.  Plant Performance Reports ..   171
    7.  Performance Records  	   172
    8.  Financial Reports	   172
    9.  Balance Sheets 	„	   173
   10.  Purchase Orders ............   174
                    47

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IV.  PLANNING


    A.  Review Past Planning

    Management  sometimes  does  not know why existing facilities were
constructed  or  what criteria were used for design purposes.  A well-
planned  utility  will  have  records  from  consultants  and  meeting
minutes outlining previous planning actions.

    It   is  important  to  know  the background of the facility and if
management   has  any  interest  since  this  may  affect  the  future
operation of the utility.


         (1) Are minutes or records available for past actions?	

         (2) Is there an adequate set of as-built drawings?    	

         (3) Are cost data available for the current facility? 	

         (4) Does planning of the facility appear satisfactory?	

         (5) Is planning for the next 5 years adequate?        	

                                       Score:
    Summary:

         (1) Do past planning activities appear satisfactory?

         (2) Does the score indicate any problems?

         (3) See Appendix D: 149.

         (4) Comments:
                                  55

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IV.  PLANNING  (C0nt.)


    B. Review  Planning Policy

    Many  wastewater  utilities do not adequately plan for the future.
They  often  just  drift   along until some major incident happens that
requires them  to take corrective action.

    Determine  if  there   is a written planning policy that states any
planning  goals  for  at   least  the next 5 years.   It is important to
review  the  utility  to   observe  if  any  problems need an  immediate
planning  effort.    The   treatment plant operator should be  a part of
the overall planning effort.


         (1) Is there a written planning policy?               	

         (2) Are long range plans free of problems?            	

         (3) Does the operator participate in planning?        	

         (4) Does management understand planning policies?     	

         (5) Will the facility be satisfactory for next  5 yrs.?	

                                       Score:
    Summary:

         (1) Is there adequate planning  for the  future?

         (2) Does the score  indicate any problems?

         (3) See Appendix  D:  150.

         (4) Comments:
                                   56

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            REFERENCES
 1.  Government Financial Research
    Center, Financial Capability
    Guidebook, May 1978.

 2.  Government Financial Research
    Center, Wastewater Utility
    Management Manual, July 1981.

 3.  Maine Training Institute, The
    Financial Management Process.

 4.  U.S. Environmental Protection
    Agency, A Guide to the Selection
    o£  Cost-Effective Wastewater
    Treatment Systems, Technical Report
    430/9-75-002, July 1975.

 5.  U.S. Environmental Protectibn
    Agency, Analysis of Operations &
    Maintenance Costs for Municipal
    Wastewater Treatment Systems,
    430/9-77-015, May 1978.

5.   U.S. Environmental Protection
    Agency, An Instructional Delivery
    System  for Manpower Management, A
    Report  for Water Pollution Control
    Agencies, April 1979.

 7.  U.S. Environmental Protection
    Agency, Construction Costs for
    Municipal Wastewater Conveyance
    Systems: 1973-1977, 430/9-77-015,
    May 1978.
                   48

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 8.  U.S. Environmental Protection
     Agency, Construction Costs  for
     Municipal Wastewater Treatment
     Plants; 1973-1977, 430/9-77-013,
     MCD-37, January 1978,

 9.  U.S. Environmental Protection
     Agency, Costs, of Wastewater
     Treatment by  Land Application,
     Technical Report 430/9-75-003,
     June 1976.

10.  U.S. Environmental Protection
     Agency, Estimating Water Treatment
     Costs, Volume 1 Summary,
     600/2-79-162a, August 1979.

11.  U.S. Environmental Protection
     Agency, Estimating Water Treatment
     Costs, Volume 2, Cost Curves
     Applicable to 1 to 200 mqd
     Treatment Plants, 600/2-79-1626,
     August 1979.

12.  U.S. Environmental Protection
     Agency, Estimating Water Treatment
     Costs, Volume 3, Cost Curves
     Applicable to 2,500 qpd to  1 mqd
     Treatment Plants, 600/2-79-162c,
     August 1979.

13.  U.S. Environmental Protection
     Agency, Estimating Water Treatment
     Costs, Volume 4, Computer User's
     Manual for Retrieving and
     Updating Cost Data,  600/2-79-162d,
     August 1979.

14.  U.S. Environmental Protection
     Agency, Financial Management
     System for Publicly-Owned Treatment
     Works (Accounting Options),
     430/9-84-005,  June 1984.
                    49

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IV.   PLANNING (cont.)

    C. Review Operations Planning
    Operations  planning includes specific, measurable objectives such
as  compliance  criteria  to  meet  the  NPDES  permit.  Resources are
estimated  to  meet  these requirements, so that the objectives may be
met.
    Certain  cost  factors  should  be  estimated  such  as  cost  for
treating  1,000  gallons of wastewater or cost for removing each pound
of BOD or total suspended solids.

         (1) Does the utility perform operations planning?     	
         (2) Are managers involved in operations planning?     	
         (3) Does the planning establish operating objectives? 	
         (4) Does the planning estimate the resources needed?  	
         (5) Have performance standards been  identified?       	
                                       Score:
    Summary:
         (1) Is the operations planning satisfactory?
         (2) Does the score  indicate any problems?
         (3) See Appendix D:  151.
         (4) Comments:
                                   57

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IV.  PLANNING  (cont.)


    D. Review Capital  Improvement Plans

    Most  wastewater   collection  and  treatment  utilities  should have
some  capital  improvements  plans   that   need  implementation.  It  is
important  to  review  any actions  that are pending and determine if a
long range capital improvements budget has been initited.

    An  important  step   for  any   utility  is  to have a schedule for
future  capital  improvement  projects.   A capital improvement budget
should be part of the  overall budget.


         (1) Is there  a formal capital improvement program?    	
         (2) Are there capital  improvement plans for next 5 yrs?_

         (3) Are capital  improvements  > 5% of operation budget?_

         (4) Are improvement costs  included in the next budget?__

         (5) Is there a capital  improvement reserve fund?      	

                                       Score:
    Summary:

         (1) Are there adequate capital improvement plans?

         (2) Does the score indicate any problems?

         (3) See Appendix D: 152 - 153.

         (4) Comments:
                                  58

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15.  U.S. Environmental  Protection
     Agency, j^novatiye  and  Alternative
               -_
     430/9-78-009, February  1980.

16,  U.S. Environmental  Protection
     Agency, L-ogking at  User Charges,  A
          ___
     430/09-87-0008, September  1987.
                 o
17.  U.S. Environmental Protection
     Agency, Management of  Small-to-
     M_e_d i um__S_i_ze__d Hun icJL pa 1  Wa s t ewa t e r
     Treatment Plants/ 430/9-79-013
     June 1979.

18S  U.S. Environmental Protection
     Agency, Ma i n t e_na nee _ Ma na_geroenj:
     Systems f gr_M_u n i ci PJJ _1_ W a s te wa t e r
     Facilities, 430/9-74-004,
     October 1973.

19.  U.S. Environmental Protection
     Agency, Mu n i c i pa 1 Wa s t ewa t e r
     Fac i 1 i ty__ F ' i n a ncj._al Man axemen t Wo c k
     Booj<, 1986,

20,  U,s. Environraental Protection
     Agency, Package W a t e c T r ea_tin_e nt
     Plants, Volume 2, A Cost
     Evaluation,  600/2-80-008b,
     July 19BO,"

21.  U.S. Environmental Protection
     Agency, Touch i nq A3. 1 The  Bases ,  A
     Financial Management Handbook
     Your Wastewater Treatment
     Prolect, 430/9-86-001,
     September 1986.
                    50

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22.  U.S. Environmental Protection
     Agency, Wastewater Utility
     Recordkeeping, Reporting and
     Management Information Systems,
     430-9-82-006, July 1982.

23.  Virginia Tech Center for Urban and
     Regional Studies, Costing and
     Rate-Setting Workshop for Virginia
     Water and Sewer Utilities, Draft -
     July 1987.
                   51

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IV.   PLANNING (cont.)


    E.  Review Capital Improvement Schedule

    Capital  improvement  plans  must have a schedule for  implementing
the   necessary  improvements.    It should be based on an  actual needs
schedule, not on other factors, such as elections.

    The  capital improvement schedule should also be based on specific
objectives  and  priorities.    These should be developed  for at least
the  next five years with an annual review and updating.

         (1) Is there a capital improvement project schedule?  	

         (2) Is the schedule based on adequate priorities?     	

         (3) Does the 5 year plan include annual expenditures? 	

         (4) Does the schedule include a method of financing?  	

         (5) Does the budget include these scheduled costs?    	

                                       Score:
    Summary:

         (1) Is the capital improvement schedule adequate?

         (2) Does the score indicate any problems?

         (3) See Appendix D: 154.

         (4) Comments:
                                  59

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               V.  FINANCING
     Financing is the process that allows
the  utility  to borrow money that is not
already available to complete a project.

      Today's  financial  market  permits
opportunity  to  consider  many different
financing options.

      Additional information may be found
in Appendix E.
                    61

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V.  FINANCING


    A. Review Current Financing

    Most   utilities   have   had  to  finance  some   portion   of   the
construction  of the facility .  They often  think  that borrowing money
is  a  way  of  life  which  will  always  be with  them.   Thousands  of
dollars are spent for interest each year.

    It  is crucial that utilities do not have debts that  exceed 25%  of
their  total  budget.   Utilities should not always be borrowing money
to  the  maximum time limit, which is often  40 years.   Many  facilities
last  a  much  shorter period, and thus require refinancing  at  a later
date.


         (1) Is the present debt payment < 25% of  total budget?	

         (2) Is the present principal < 3 times total  budget?   	

         (3) Will the present loan be paid off in  < 20 years?   	

         (4) Will the present WWTP outlast the current loan?   	

         (5) Is the present interest rate <  6 per  cent?        	

                                       Score:
    Summary:

         (1) Is there a financing problem?

         (2) Does the score indicate any problems?

         (3) See Appendix B: 96 - 97, E: 157 -  158.

         (4) Comments:
                                  63

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V. FINANCING

    B. Review Future Financing  Needs
    It  is important to  determine  if  the  wastewater  treatment  facility
will  last  at  least as  long as the  loan or  outstanding  bonds.   If  it
is  apparent  that  major  capital  improvements  or  replacements will  be
necessary  that  require  financing, the amount  of  future  loans must  be
determined.

         (1) Is there a  financial  debt policy limit?           	
         (2) Is the current  financing adequate  for next 20  yrs?	
         (3) Is it possible  to  reduce the current  loan period? 	
         (4) Will any loan be paid off during next 20 years?   	
         (5) Will the facility  be  adequate after  loan pay-off? 	
                                       Score:
    Summary:
          (1) Will  future  financing  be  required?
          (2) Does  the  score  indicate any  problems?
          (3) Comments:
                                   64

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V.  FINANCING

    C. Review Financing Options
    Today's  financial  market presents many options for financing  the
initial  construction,  rehabilitation,  or  upgrading  of  wastewater
utilities.      Often  a  utility only looks at one conventional money
source  and  does  not  review  the many options or creative  financial
situations that are available.
    Financing  alternatives  provide  several  choices  to communities.
They  may  include  private  participation in construction, ownership,
operation, and financing.  These alternatives must be evaluated.

         (1) Is the present financing arrangement satisfactory?	
         (2) Will it be satisfactory for the next 5 years?     	
         (3) Is the utility capable of reviewing future options?,
         (4) Can the utility obtain increased financing?       _
         (5) Can the customers afford additional financing?    _
                                       Score:
    Summary:
         (1) Can the utility handle future financing?
         (2) Does the score indicate any problems?
         (3) See Appendix E: 159 - 166.
         (4) Comments:
                                  65

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          VI. FINANCIAL REPORTING
      It  is important that all financial
actions  be carefully reported, reviewed,
and analyzed.

      Additional information is available
in Appendix F.
                    67

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VI.  FINANCIAL REPORTING


    A. Review Financial Reports

    A  properly  managed  utility  will have certain routine financial
reports   readily   available.    Detailed  cost  information  and  an
understanding   of  operations  are  necessary  to  make  an  accurate
assessment  of  operating  costs.  These reports should be  reviewed to
determine the true financial status.

    Determine  if  the  current reports are adequate to show important
aspects of the utility.


         (1) Are all transactions posted daily?                	

         (2) Are all cash receipts deposited daily?            	

         (3) Are revenues & expenses compared with the budget? 	

         (4) Do delinquent accounts appear in monthly records? 	

         (5) Are adequate monthly financial reports prepared?  	

                                       Score:
    Summary:

         (1) Are there adequate financial reports available?

         (2) Does the score indicate any problems?

         (3) See Appendix F: 169 - 174.

         (4) Comments:
                                  69

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 Appendix A
MANAGEMENT

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                   INTRODUCTION
     A  well-run  wastewater  utility  happens only
when  there  is  good  management.  Good management
consists  of a governing board that takes an active
interest  in  all  phases  of  the operation of the
utility.  This  requires  active review and problem
solving  of  the  utility  activities.   On-the-job
visits  to  lift  stations, sewer repair sites, and
wastewater treatment facilities must be made.

     Good  management  will  speak  with one voice,
reward  those who have performed above average, and
discipline those who perform poorly.
                         73

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    MANAGEMENT
    RESPONSIBILITIES
Meet legal NPDES requirements
Provide adequate accounting system
Provide proper budgeting
Plan for future
Implement adequate user charges
Provide adequate record system
Provide good public relations
Provide good working conditions

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MANAGEMENT  PROBLEM SOLVING OUTLINE
           Define Problems
          D e t e r rn i n e C a u see
                  ....I.	
        C o n s i d e r A11 e r n a t i v e s
         T o El :i. rn i n a t e  Cause
        C onsid e r  8ene f i t s a nd
    . i a b i 1 i t i e 
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                     IYPiCAL_ORGANIZAIION_CHART
                 Uastewater Collection  and Treatment-
   Chief
 Operator
Operator I
Operator I I
|0
Operator III
Laboratory
Technican
                              Official
                                Board
                            Super intendent
                              Maintenance
                                Foren'ian
                              Elec tr i cian
                              Mechanic  I
Mechanic II
                          Office
                          Manager
                       Billing Clerk
                     A c c OLI n t i n g C1 e r k
                                  76

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                           TYPICAL STAFFING
Administration

    Superintendent

    Billing Clerk

    Accounting Clerk

              Subtotal:


Operations

    Chief Operator

    Operator I

    Operator II

    Operator III

    Laboratory Technician

              Subtotal:


Maintenance

    Electrician I

    Mechanic I

    Mechanic II

    Laborer

              Subtotal:
                                        Estimated Annual Requirements
                                        Manhours     No. of Employees
Total Requirements:
(Manhours divided by 2080 = number of employees per year)
                                  77

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                          BRIEF JOB  DESCRIPTION
                          Wastewater  Utility
Superintendent:     Responsible   for   administration,  operation,  and
              maintenance  of  entire  wastewater  utility.  Exercises
              direct   authority   over  all   functions  and  personnel.
              Organizes    and    directs   activities   for   planning,
              budgeting  and   operating   the  facility  to  keep  in NPDES
              compliance.

Office  Manager:
Billing
                    Responsible   for   all  office activities  including
              billing,    collection,   accounting,  purchasing,  budget
              control, and payroll.

         Clerk:    Responsible for  billing, collection,  and associated
              record  keeping.
Accounting  Clerk:
              proper
              transactions.

Chief  Operator:    Supervises  and
              operators   and  other   plant
              schedules   and
              NPDES limits.
                      Assists  with  billing and collection, and keeps
                      journals and ledgers  for  recording all financial
                                      coordinates  activities  of plant
                               UI.UCL.   plant  personnel.   Prepares work
                               determines  process  control needs  to meet
Operator  I:
              Performs  duties  of  normal  operations,  takes  samples, and
              makes process  changes  as  required.
Operator  II:  Assists Operator  I  as  needed,  records measurements such
              as flow, waste  loads, and  sludge  return  rates.

Operator  III:    Assists   Operators  I and  II as  directed  and  performs
              routine tasks.

Lab  Technician:  Performs  all bacteriological, chemical,  and  physical
              tests  as  required  to  provide  process control and final
              effluent data.

              Foreman:    Supervises  all   preventive  and  corrective
              maintenance   for   entire   plant.    Plans,  schedules, and
              directs  all  maintenance  work.     Submits  maintenance
              budgets    and  keeps   maintenance   records    for  all
              equipment.
Maintenance
Electrician:
Mechanic:
                Performs   all   electrical   preventive  and   corrective
              maintenance.   Keeps  adequate  spare  parts and  records.
             Performs   preventive   and
              machinery and  equipment.
corrective  maintenance on all
Installs new equipment.
Laborer:    Performs general  cleaning  tasks  at plant,-  performs  building
              and    grounds    maintenance,   paints    equipment   and
              facilities,  and  operates  equipment  such as  backhoes.
                                   78

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                      TYPICAL EMPLOYEE APPRAISAL
Job Knowledge:
           Poorly informed
           Lacks knowledge in some areas
           Moderately informed
           Understands almost all phases
           Has complete mastery
Quality of Work:
           Usually below minimum acceptable quality
           Often below minimum acceptable quality
           Acceptable quality most of time
           Often above acceptable quality
           Consistently exceeds acceptable standards
Quantity of Work:
           Does not meet minimum requirements
           Does just enough to get by
           Volume of work satisfactory
           Very industrious: does more than required
           Superior work production record
Stability During Crisis and Under Pressure
           Goes "to pieces"
           Occasionally "blows up"
           Has average tolerance for crisis
           Tolerates most pressure
           Thrives under pressure
Accuracy in Work Duties
    	  Makes frequent errors
    	  Makes recurrent errors
    	  Usually accurate
    	  Is precise most of time
    	  Is almost always accurate
Creativity in Finding Better Ways to Perform Work
    	  Rarely has a good idea
    	  Occasionally has new idea
    	  Has average number of new ideas
    	  Frequently suggests new ways to perform work better
    	  Continually seeks new and better ways of doing things
                                  79

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                     TYPICAL BENEFIT ITEMS
Benefit Time
  Holidays
  Sick Leave
  Training
  Vacation

Fringe Benefit Costs
  Hospital Insurance
  Life Insurance
  Retirement
Typical Hours (Annual)
          72
          56
          40
          80

Typical Amount (% of Pay)
           5
           3
           6
                               80

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                       TYPICAL OFFICE PROCEDURES
A.  Contacts with the customer should be friendly and courteous both
    in person and on the telephone.

    Good office procedures should  include:

         *  Answering telephone calls promptly
         *  Extending a pleasant greeting to customers
         *  Identifying yourself
         *  Showing a real interest in  the conversation
         *  Being sympathetic with problems
         *  Being responsive
         *  Being patient


B.  Office correspondence is important  to good public relations.

    The following points should be apparent:

         *  Friendly style writing
         *  Clear, brief and accurate points
         *  Important points first
         *  Good language
         *  Neat letters and reports


C.  Office Appearance

    The office should have a pleasing appearance to  the public.

    The following items are important:

         *  Neat and clean
         *  Not cluttered
         *  Good file system
         *  Easy access to records
         *  Customer information easily available
                                   81

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                        TYPICAL PURCHASE POLICY
                   Plant Operator Spending Authority
1.   The plant operator can make purchases up to $200 as long as a
    single purchase does not either exceed $200, or cause the
    budgeted line item amount or the total budget to be exceeded.

2.   The plant operator cannot make expenditures if expenses exceed
    the budgeted line item amount, the total budget, or $200.  The
    plant operator will submit quotes and data to officials
    concerning such purchases.  Officials will make financial
    decisions and allocate the necessary funds for the plant operator
    to make necessary purchases.

3.   The plant operator will give necessary purchase orders, invoices,
    and receipts to the treasurer within five days of the purchase.

4.   The treasurer will then post the purchase in the treasurer's
    ledger and forward the purchase orders, invoices or receipts to
    the Board members within ten days.

5.   The officials shall approve vouchers, purchase orders, invoices,
    receipts and return them to the treasurer.

6.   In an emergency situation, when a major breakdown occurs and the
    facility would remain unoperable until expenditure is made, the
    plant operator has the authority to make the minimum expenditure
    necessary to achieve operable status after notifying one of the
    Board members.
    Plant Operator:
    Date:
    Board Officials:
    Date:
                                   82

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                WASTEWATER UTILITY DESCRIPTION
     Town:
     Mailing address:
     Contact Person:
     Telephone: 	
Collection System

A. Number of customers:
     1. Residential -
     2. Commercial -
     3. Industrial -
B. Area of collection system  (acres or  sq. miles):
C. Size of collectors: 	in. X 	lin.  ft,
                       	in. X 	lin.  ft,
                       	in. X 	lin.  Ft,
                              in. X           lin.  ft,
D. Separate or combined sewers:

E. Any overflow devices:  	

F. Latest I/I study:  	

G. Any I/I problems:  	
H. Any corrective sewer sealing action  performed:

I. Type of collection system:
     1. Gravity -                             	
     2. Number of lift stations -             	
     3. Pressure system -                     	
     4. Number of pressure points  -           	
     5. Vacuum system -                       	
J. Date collection system constructed:

K. Last modifications:
     Type of action -  	
                               83

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                      UTILITY DESCRIPTION (cont.)
    L. Is system adequate?
         1. Present -
         2. Future -

    M. List sewer use ordinance and conditions
         1. Residential -
         2. Pretreatment -
II.  Treatment System

    A. Design size:                              	MGD

    B. Average flow:                             	MGD

    C. Type of system:  	
    D. Describe each process unit  (type, size, retention time)

         1. 	

         2. 	

         3. 	

         4. 	

         5. 	

         6. 	

    E. Permit limits:
                                       Permit            DMRs
         1. 5 day BOD -              	        	
         2. Suspended solids -       	        	
         3. pH -                     	        	
         4. Ammonia-N -              	        	
         5. Nitrate-N -              	        _____
         6. Phosphorus -             	        	
         7. D.O. -                        	
       Treatment Problems:

         1.  	

         2.  	

         3.
                                  84

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                           MANAGEMENT AUDIT
     Institutional Status

    A.  Organizational structure:

    B.  Positive conditions:  	

    C.  Negative conditions:  	
    D.  Is there adequate management?

    E.  Any changes needed?  	
II.   Operations Personnel

    A.  Collection system personnel:

         1. Number of people -                   _
         2. Adequate? -                          _
         3. Total years of service -             _

    B.  Treatment Personnel:

         1. Number of people -                   _
         2. Adequate? -                          _
         3. Total years of service -             _

III. Administration

    A.  Organization:

         1. Number on board, commission or council
         2. Elected or appointed -
         3. Term -
         4. Overall interest -

    B.  Office:

         1. Number of clerks -                   _
         2. Number of supervisors -              _
         3. Total years of service -             _
                                  85

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                         KEY MANAGEMENT  ISSUES


I.    Are there Organizational Plans  for  both the  wastewater  facility
      and the governing body?

         A. Shows lines of authority?
         B. Reporting requirements?
         C. Staff responsibilities?
         D. Inter-department relationship?


II.  Are there Job Descriptions with  appropriate Work  Standards?

         A. Work goals?
         B. Performance evaluations?
         C. Incentives?


III. Does the Superintendent or Chief Operator  have  direct  contact
     with the governing body?

         A. As an organization?
         B. With particular individuals?


IV.  Does the ^Superintendent or Chief Operator  help  develop the
     wastewater budget?

         A. What is the involvement?
         B. Is the routine staff  informed?
         C. Is there long range planning?


V.    Is there a formal comprehensive budget document?

         A. Identify the cost of  major function
         B. Is there a contingency reserve?
         C. Are the budget items  realistic?


VI.   Is there a capital replacement  fund?

         A. Increasing accumulations?
         B. Capped amount?
         C. Has the fund been raided?
                                   86

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VII.  Does the Superintendent or Chief Operator have purchasing
     authority within the budget without further approval?

         A. Is there a maximum amount?
         B. How are emergency situations handled?


VIII. Is an annual independent audit conducted?


IX.   Are routine budget-to-actual reports made?


X.    Are sewer user fees adequate?

         A. Are they based on the system needs?
         B. Are the revenues autonomous from other  funds?
         C. Are costs fairly distributed?
                                V,

XI.   Are billing and collection procedures adequate?


XII.  Is the budget adequate to meet personnel needs?

         A. Staffing?
         B. Training?
         C. Incentives?


XIII. Are Operation and Maintenance records adequate?


XIV.  Is there a formal documented safety program?


XV.   Is there a sewer use ordinance and pretreatment program?
                                  87

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Appendix B
BUDGETING

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          IMPORTANT FINANCIAL DOCUMENTATION TO REVIEW







Documents usually available by copies:



     - Annual audits



     - Annual budgets



     - Budget vs. actual costs



     - Debt summary



     - Delinquent accounts by billing periods



     - Rate schedules





Documents usually too voluminous to copy:



     - Account ledgers



     - Bank documents (check registers, statements)



     - Billing records



     - Daily journals (cash receipts, disbursements)



     - Income statements



     - Payroll records



     - Purchasing records  (invoices)
                              91

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                    BUDGETING PROCEDURES







     Management   should  first  define  what  constitutes  a



capital  expense  and  what  items  are considered operation,



maintenance and replacement  (OM  & R) expenses.



     A  capital  program  involves  development  of short and



long  term  plans  to  refurbish  and  expand  the  utility's



physical  facilities.  This  includes planned expenditures for



improvements  and  betterments to buildings, land, sewers and



major  pieces  of  equipment which have significant value and



extend the useful life of the treatment works.



     The  current  operating  expense  budget  includes those



items  considered  to  be routine operation, maintenance, and



replacement  expenses.  The  current budget generally involves



a   one-year  plan  for  the  day-to-day  operations  of  the



treatment system.



     The  budget  should  identify  0,M  &  R  costs for each



activity  such  as  the collection system, primary treatment,



secondary treatment, laboratory, and administration.



     Once  the  unit process costs have been established, the



next  step  is  to  divide   these  costs  by the total annual



volume  and/or  loadings,  as  appropriate  to  produce  unit



costs.



     Utilities  need  to  be  concerned  with  three types of



budgets:



          *  Revenue



          *  Operation, Maintenance, and Replacement



          *  Debt Service
                              92

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                   DIRECT and INDIRECT COSTS
                 A Budget Is a Management Tool


                          Use it to  :

                             PLAN

                          ADMINISTER
      Budget Process:

          Illustrate how much will be spent
          Establish work priorities
          Measure the quality of work performed
          Ensure availability of resources
     Line items may be direct or indirect:

      Direct                            Indirect
Operating expenses
Maintenance expenses
Equipment purchases
Salaries and wages
Debt Service
Fringe benefits
Bill collection
Overhead for office, etc
                              93

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 Develop A Budget
   Framework and
   Structure by:
      * Item
    * Activity
 Identify Revenue
      Sources
 Review Operating
   Expenses and
Capital Improvement
     Requests
Rank and Prioritize
  Budget Requests
  Prepare Budget
     Document
Approve and
Adopt Budget


      Implement
      Budget
         94

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                    RANKING BUDGET REQUESTS
Are Costs Realistic?

Are They Based on Past Performance?

Is Staff Being Used Efficiently?

Who Is Involved in Budgeting?
     Chief operator
     Clerk
     Board, commission, or council

Problems in Budgeting
     Not enough money
     Capital budget cuts
     Inadequate revenue budget
     Excessive transfers from reserves
     Inadequate budget controls
     No activity budgets
                              95

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                        TYPICAL BUDGET OUTLINE
                                     Activity

                             Lift    Primary   Secondary
                   Sewers  Station    Treat.     Treat.    Lab  Admin.
Personnel Services
    Salaries/wages
    F.I.C.A.
    Unemploy. Ins.
    Worker's Comp.
    Health Insur.
    Retirement
          Total:

O & M Expenses
    Office supplies
    Postage
    Telephone
    Electricity
    Natural gas
    Water
    Vehicle gas & oil
    Chemicals
    Operating supplies
    Equipment repairs
    Training
    Travel
         Total:

Capital Outlay
    Replacement ace.
    Improvement ace.
    Expansion ace.
    Depreciation fund
         Total:

Debt Service
    Debt & interest
    Cushion fund
    Contingency fund
         Total:
    TOTAL:
                                  96

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                    BUDGET VS. ACTUAL EXPENDITURES
                          (Period of Record)
Per. Services
    Salaries
    Benefits
      Subtotal:
0 & M Expenses
    Office
    Chemicals
    Energy
    Operation
    Maintenance
      Subtotal:
Capital Outlay
    Expan./improv.
    Replace./rehab.
    Sinking Fund
      Subtotal:
Debt Service
    Debt & int.
    Cont. funds
      Subtotal:

    TOTAL:
                    % Of
                   Budget
Budget
Actual
+ or -
% Change
                                  97

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                        COST  of  SERVICE
                           Total  Cost
Direct Cost


Overhead Cost


  Direct
Operating
  Cost
General
Overhead
  Cost
Department
 Overhead
   Cost
                               98

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                         Revenue Budget
     The annual revenue budget reflects how much money the

utility will receive from customers and other revenue sources

to spend on the operation of the utility.

          Estimated customer billing:        $ 	
          Penalities and interest:             	
          Connection fee:                      	
          Other:
                       Total:
                          OM & R Budget

     The  operations, maintenance, and replacement budget should

reflect the major activities of the utility and include a

listing of other important factors:

          Administration
          Billing and collection
          Operations
          Maintenance
          Replacement
          Support services
          Debt services
          Dedicated fund
                         Capital Budget

     The  capital budget reflects long-term objectives resulting

from capital projects and generally relies on specific

financing.
                              99

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              ESTIMATES of REVENUE REQUIREMENTS

     Allocating  annual  costs  and  estimating  the  revenue
requirements of each user group is a three-step process.
     First,  the  unit  costs of collection and treatment are
developed/ which include:
               * Collection Costs
                    Lift stations
                    Sewer repairs
               * Pre-Treatment
                    Bar screens
                    Grit chamber
               * Primary Treatment
                    Physical
                    Sludge
               * Secondary Treatment
                    Aeration
                    Sludge removal
     Second,  the  unit  costs are multiplied by the loadings
for each user group:
               - Residential
               - Commercial
               - Industrial
     Third,- other factors are considered such as:
               Administration
               Billing and Collection
               Dedicated Funds
                               100

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                       ELECTRICAL ENERGY
Lift Stations



     A

     B

     C


  Total:


Treatment Plant

Raw sewage pumping

Pretreatment

Primary treatment

Secondary treatment

Sludge treatment

Other

Total:


Summary

     Cost/KWH

     Peak Demand

     Total KWH

     Total Cost

     Cost/day

     Total flow/month

     Cost/MG
       % of
KWH    Total
Cost/KWH
Total Cost
                              101

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                      TYPICAL OPERATING  COSTS
 OPERATION


Collection

Primary

Secondary

Advanced

Sludge

Laboratory

Customer
Service
         LABOR


Pump station & sewers

Plant operations

Plant operations

Plant operations

Condition & transport

Testing

Meter reading
Billing operations
Administration  Managers
       OTHER


Repair parts, powers

Parts, power, chemicals

Parts, power, chemicals

Parts, power, chemicals

Parts, power, chemicals

Supplies, power

Billiing supplies
Postage

Office supplies, insur.
                   TYPICAL TRAINING  EXPENDITURES
                     *  WAGES DURING TRAINING
                  *  REPLACEMENT DURING  TRAINING
                                 j. s\t\ v ji jj
                           *  REGISTRATION
                              *   BOOKS
                                 102

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            IDENTIFYING HIGH COST AREAS
     The  line  items of the operating budgets  (not
including  debt  service)  should  be  reviewed  to
determine  if any item constitutes more than 20% of
the   total  operating  cost.    The  debt  service
accounts  should  not be more than 25% of the total
budget.   If these items exceed the stated amounts,
this  indicates  a  major  financial  problem   that
needs attention.

     Another  purpose of reviewing budget to actual
costs   is   to  determine  if  monthly  costs  are
significantly  higher  than  projections.    If any
operating  cost exceeds the annual prorated cost by
20%, this indicates a significant overrun.

     A  third indication of high cost areas relates
to  any excessive item that is 20% or more than the
previous  year or when compared with a similar  size
plant.

     The  high  cost items of most treatment plants
are  labor  and  energy.  If these two items exceed
50%  of  budget,  it  is a sign of problems.  If it
exceeds 75%, it shows a very significant problem.
                         103

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                          REPLACEMENT RESERVE
    Section   212(3)   of   the  Clean  Water  Act  defines   equipment
replacement  as  expenditures  for obtaining and  installing  equipment,
accessories,  or appurtenances during the  useful  life  of  the treatment
works,  necessary  to  maintain  the capacity and  performance for which
the  POTW  was  designed.   The  level of replacement reserve needed to
meet   these   costs   is  that  required   to  maintain   capacity  and
performance of the physical plant. .

    To  determine an annual reserve amount  with an  accounting basis, a
calculated  annual  depreciated  system  can  be  used.   This requires
determination  of the depletion  of an asset's value.   Most small POTWs
do not practice any form of asset depreciation.

    These replacement costs may  be determined by:

         Straight-line method -  distributes the replacement  cost of
                                 an asset in equal amounts in each
                                 accounting  period during  the
                                 estimated  service life.

    The  annual  replacement costs may be  upgraded  using  EPA inflation
factors or Engineering News-Record cost index.
                                   104

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                    EQUIPMENT REPLACEMENT INVENTORY
                                  and
                         MAJOR REHABILITATION
    Equipment  Original   Year Placed   Remaining   Current  Estimated
    & Rehab.      Cost     in Service    Life(yrs.)  Replacement  Cost
 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.
    ESTIMATED ANNUAL COST FOR EQUIPMENT REPLACEMENT  FOR  NEXT  5  YEARS
         a. 198
         b. 198"
         c. 198"
         d. 198"
         e. 198"
                  GROWTH PROJECTIONS  (Next  10 years)

    1. Population

    2. Industrial
                                  105

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     LIST MAJOR MAINTENANCE or REPLACEMENT ITEMS
                  (10 Year Period)
Major Units
     Lagoons
     Oxidation-ditch
     Sludge handling
Grounds & Buildings

     Riding mowers
     Electrical panels
     Heating system
     Roofs
     Ventilation
Pumps
     Grinders
     Raw sewage
     Sludge
Sewers
     Trunk lines
     Lift stations
Treatment
     Aerators
     Blowers
     Chlorinators
     Diffusers
     Flow meters
     Gages
     Valves
Safety
     SCBA
     Oxygen meters
                         106

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               TYPICAL FUTURE EXPANSION COSTS
Collection System Costs
    Sewers
  .  Lift Stations
Treatment Plant Costs
    Pretreatment facility
    Primary facility
          Treatment
          Sludge pumping
    Secondary facility
          Aeration
          RAS pumping
          WAS pumping
          Sludge dewatering
          Chlorination
          Laboratory
          Miscellaneous
    Engineering cost
    Legal cost
    Financing cost
                              Subtotal
                              Subtotal
$
$
                              Subtotal
          Total Construction Cost:
                              107

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AJOR  EXPENDITURES
    1988-1998
 (Assume 3% Inflation)
ITEM
Lagoon Cleaning
3 Blowers ($5,330 ea.)
2 Chlorinators ($1,500 ea)
Flow Meter & Recorder
2 Pump Sta. Pumps ($5,000)
Assorted Valves & Gages
5 Diffusers
Reroof Building
Rebuild Electrical Panel
TOTAL:
1988
$ 20,000
15,990
3,000
3,450
10,000
3,000
3S120
2,400
3,000
$ 63,960
1998
$ 27,000
21,490
4,030
4,640
13,440
4,030
4,190
3,250
4,030
$86,100
       108

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SINKING   FUND  EXAMPLE
  A,  SAVINGS ASSUMPTIONS
     - 6% Savings interest rate compounded annually
     - Yearly payments
     - Expenditures occur within 10 or 20 year period
     - 3% inflation rate

  B.  SINKING  FUND  PAYMENT EQUATION
     - F,V. x S.F.F. = Yearly payment
     - F,V. =  Future Value of estimated expenditures
     - S.F.F. = Sinking Fund Factor (Interest Factor
       Table)

  C.  USING SINKING FUND EQUATION
          i, 100 X .07587 = $6,532/year
                  109

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SINKING FUND FACTORS
Interest
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
5%
1.000
0.487
0.317
0.232
0.180
0.147
0.122
0.104
0.090
0.079
0.070
0.062
0.056
0.051
0.046
0.042
0.038
0.035
0.032
0.030

00
80
21
01
97
02
82
72
69
50
39
83
46
02
34
27
70
55
75
24
6%
1.000
0.485
0.314
0.228
0.177
0.143
0.119
0.101
0.087
0.075
0.066
0.059
0.052
0.047
0.042
0.038
0.035
0.032
0.029
0.027

00
44
11
59
40
36
14
04
02
87
79
28
96
58
96
95
44
36
62
18
7%
1.000
0.483
0.311
0.225
0.173
0.139
0.115
0.097
0.083
0.072
0.063
0.055
0.049
0.044
0.039
0.035
0.032
0.029
0.026
0.024

00
09
05
23
89
80
55
47
49
38
36
90
65
34
79
86
43
41
75
39
8%
1.000
0.480
0.308
0.221
0.170
0.136
0.112
0.094
0.080
0.069
0.060
0.052
0.046
0.041
0.036
0.032
0.029
0.026
0.024
0.021

00
77
03
92
46
32
07
01
08
03
08
70
52
30
83
98
63
70
13
85
9%
1.000
0.478
0.305
0.218
0.167
0.132
0.108
0.090
0.076
0.065
0.056
0.049
0.043
0.038
0.034
0.030
0.027
0.024
0.021
0.019

00
47
05
67
09
92
69
67
80
82
95
65
57
43
06
30
05
21
73
55

1.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
10%
000 00
476 19
302 11
215 47
163 80
129 61
105 41
087 44
073 64
062 75
053 96
046 76
040 78
035 75
031 47
027 82
024 66
021 93
019 55
017 46
         110

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      LOAN   EXAMPLE
A.  BORROWING ASSUMPTIONS
   -  8% Interest Rate
   -  Yearly Payments
   -  10 Year Loan
   -  3% Inflation Rate

B.  LOAN PAYMENT  EQUATION
   -  L x CRF = Yearly payment
   -  L = Loan amount
   -  CRF = Capital Recovery Factor (Table of interest
      factors)

C.  USING LOAN PAYMENT EQUATION
        i,100 x .149  = $12,828/year
                111

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CAPITAL RECOVERY FACTORS
Interest
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
*•% f\
21
22
23
24
25
5
1.05
0.538
0.367
0.282
0.231
0.197
0.173
0.155
0.141
0.130
0.120
0.113
0.106
0.101
0.096
0.092
0.089
0.086
0.083
0.08G
0.078
0.076
0.074
0.072
0.071
6
1.06
0.545
0.374
0.289
0.237
0.203
0.179
0.161
0.147
0.136
0.127
0.119
0.113
0.108
0.103
0.099
0.095
0.092
0.090
G . 087
0.085
0.083
0.081
0.080
0.078
7
1.07
0.553
0.381
0.295
0.243
0.210
0.185
0.167
0.153
0.142
0.133
0.126
0.120
0.114
0.110
0.106
0.102
0.099
0.097
O.OS4
0.092
0.090
0.089
0.087
0.086
8
1.08
0.561
0.388
0.302
0.250
0.216
0.192
0.174
0.160
0.149
0.140
0.133
0.126
0.121
0.117
0.113
0.110
0.107
0,104
0.102
0.100
0.098
0.096
0.095
0.094
9
1.09
0.569
0.395
0.309
0.257
0.223
0.199
0.181
0.167
0.156
0.147
0.140
0.134
0.129
0.124
0.120
0.118
0.114
0.112
G.103
0.108
0.106
0.104
0.103
0.102
10
1.10
0.576
0.402
0.315
0.264
0.230
0.205
0.187
0.174
0.163
0.154
0.147
0.141
0.136
0.131
0.128
0.125
0.122
0.120
0.117
0.116
0.114
0.112
0.111
0.110
12
1.12
0.592
0.416
0.329
0.277
0.243
0.219
0.201
0.188
0.177
0.168
0.161
0.156
0.151
0.147
0.143
0.140
0.138
0.136
0.134
0.132
0.131
0.130
0.128
0.127
           112

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BORROWING VS.
    SAVINGS
    Comparison
Fund Method
Yearly Payments
User Cost:
lnt.(Exp.)/Earn
Pres. Val. Cost
i
Borrowing
$ 12,828
128,280
(34,728)
81,422
Savings
$ 6,532
65,320
20,780
55,719
Difference
$ 6,296
62,960


25,703
 1998 Expenditures: $86,100
       113

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                SINKING FUND
              Accounting Work Sheet
 Year  Action   Deposit  Withdrawal  Interest  Balance

1988 Payment  $6532            $    0   $  6532
1989   "       6532               392    13456
1990   "       6532               807    20795
1991   "       6532              1248    28575
1992   "       6532              1714    36821
1993   "       6532              2207    45563
1994   "       6532              2734    54829
1995   "       6532              3290    64650
1996   "       6532              3879    75061
1997   "       6532              4504    86097
 1998   Withdrawal           86097     0       0
                    llh

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            TYPICAL SINKING FUND POLICY
    For Wastewater Facility Major Expenditures
    The  purpose  of  the Sinking Fund Policy is to
establish  a  list  of  expenditures,  the  time of
expenditure  saving,  estimated  expenditure  costs
and  payment  amounts  for expenditures as required
by the local sinking fund ordinance.

    Attached     is     a     list     of     major
maintenance/replacement   expenditures   likely  to
occur  within  a 10-year period.  By the year 1998,
an  estimated  expenditure  of  $	  will  be
needed   for  these  major  maintenance/replacement
expenditures.    Starting  in  the year 1989 in the
months   of   June   and  December,  an  amount  of
$	  shall be deposited in a savings account
semi-annually.     The  funding for the expenditures
will  come  from users, and payments will terminate
to  this  fund  when expenditures have been made or
when  the  fund is at the acceptable level to cover
the   cost.     The  accumulated  assets  shall  be
liquidated  only  for  the original purpose of this
policy  with  the dedication of payment amounts set
forth  by  authorized  officials  according  to the
sewer ordinance regulating a sinking fund.

    Duly adopted by 	 on
              , 1989.
    Officials:
                         115

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  Appendix C
COST RECOVERY

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                          ACCOUNTING SYSTEMS
    Wastewater  utilities  must  establish  an  accounting system that
reflects  the  budget  system  and  conforms  with  generally accepted
accounting principles.  Installing such a system requires:

                   Establishing the books of account

                    Plans for gathering information

                     Determining types of accounts

                   Establishing a chart of accounts

                     Determining types of records

            Establishing billing and collection procedures


    The  revenue  structure  of  the  accounting  system  should  list
revenues  by  user  classes,  compare actual receipts to estimates and
include amounts billed but not yet received.

    The  accounting  system  must allow separation of capital expenses
from  0,M  &  R  expenses  and  include a formal encumbrance system so
management   can  determine  assets  and  outstanding  liabilities  in
addition  to  the  account  balance.    The cost structure should also
reflect  the  operating  budget of the wastewater utility and its unit
processes.    The  accounting  system  should  permit  reports  to  be
developed which compare budget figures to actual expenses.

    Enterprise  fund  accounting  is  used  to  account for wastewater
operations  where  there  is  a  significant  need  for  financing the
utility's  cost  through  service  charges.    An  enterprise  fund is
designed  to  gather  total  costs and to indicate the extent to which
user charges are sufficient to recover total costs.

    The objectives of an accounting system include:

                     Recording revenue receipts

                     Billings by individual users

                     Reporting total 0,M & R costs

      Determining changes in assets, liabilities, & fund balances
                                  119

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                       ACCOUNTING SYSTEMS  Cont.)

    Each  accounting  transaction  generates  a source  document, which
includes  the  amount  of money  involved,  who paid or received  it,  the
purpose  of  the  transaction,   and  the activity that  is  responsible.
Source  documents  are  summarized  by  the  accounting system  for  the
utility into "books of original  entry."

    Accounting  reports provide  a broad range of information  necessary
for  effective financial management.  These reports  show what has been
received  in  revenues and what  was spent.  They also show revenue  and
expenses  for  the year to compare with the budget.  These records  are
summarized into "books of final  entry" for monthly or annual  reports.

    The  final  stage  of  the   accounting cycle is  the audit process.
This  usually  happens  at   the  end of the fiscal year  with a visiting
auditor reviewing the accounting reports.

    One  important  aspect   of   accounting  is  when  a transaction is
recorded  in the books, which is the basis of accounting.   In the cash
method,  revenues  are  entered  when  actual  cash  is received   and
expenditures  are  entered   when checks   are  written.     Some  small
wastewater  systems  operate in this manner, while  many utilities  use
the accrual basis of accounting.

    The  accrual  method means that revenues are accounted when billed
rather  than  when  payment  is  actually made.  Expenses are  obligated
when purchased, not when the check is actually written.

    The  principle  of accrual accounting  methods is to match revenues
and  expenses  that  result  from activities of a given month or year.
It  gives  a  clear  picture of the  financial  implications  of  the
facility's operations within a given period.

    Items needed to generate source documents include:

              * Current chart of accounts

              * Forms for reporting transactions

                    - Payroll checks
                    - Purchase orders
                    - Invoices
                    - Customer bills
                    - Customer receipts

    In   order   tc  evaluate  financial   performance,   the   following
accounting reports are needed:

         * Balance sheet which reports assets, liabilities -and
           account balance at the end of the month.

         * Budget vs. actual reports for both revenue and  expenses.

         * Operating statement on whether  revenues exceed  or  fall
           short of expenses.
                                   120

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          ACCOUNTING SYSTEMS MUST PROVIDE:
General Accounting

     Ledgers updated
     Journal entry
     Customer billing
     Inventory
     Purchasing
     Payroll data
     Financial reports

Facilities Inventory

     Existing assets
     Updated purchases

Customer Billing

     Meter data
     Billing statements
     Cash receipts
     Delinquency
     Reports
Payroll

     Timesheet processing

     Paycheck processing
       - Salary & wages
       - Health insurance
       - Life insurance
       - Social security
       - Unemployment
       - Wage tax
       - Workers' compensation

Personnel Records

     Awards
     Applications
     Payroll register
     Performance evaluation
     Promotion

Purchasing

     Ordering
     Receiving
     Payment
                          121

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INTEGRATED ACCOUNTING SYSTEM FILES
            *  Billing





            *  Budget





            *  Customer





            *  Employee





            *  General Ledger





            *  Inventory





            *  Invoice





            *  Journal Entry





            *  Purchase Order





            *  Timesheet





            *  Vendor
                122

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                            CASH MANAGEMENT
    Cash  management  is  a  system  used  to  control  the wastewater
utility's  receipts and deposits to ensure that cash will be available
to  meet  obligations  when  due  and to invest excess cash on a short
term  basis.  The goal of a cash management program is to maximize the
amount of cash available for short term investment.

    Surplus  cash  for  investment  can often be found in a variety of
fund  accounts  (e.g.,  sewer  operating  accounts,  collection funds,
deposit   fees,   construction   reserves,   and  capital  improvement
accounts).   Any idle funds should be obtaining the best interest rate
for the time the funds are available.

    Interest  earned  from  the  investment of surplus funds can be an
important  source  of  supplemental  income  for  the  utility.  It is
prudent  to  maintain  cash  for unexpected demands and contingencies.
Before  initiating a cash management system, it is advisable to review
local  ordinances,  state  statutes,  and  federal regulations for any
applicable restrictions.

    The   elements   of   a   cash  flow  system  should  include  the
establishment  of  effective  cash information systems, timely billing
and collection, disbursement procedures, and cash budgeting.
                                  123

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                 PURCHASING SYSTEM



     Purchasing  involves buying required goods and



services  in  the proper quantity at the right time



for  the  most  competitive  price  from  the  best



supplier.      Most   small   wastewater  treatment



facilities  purchase at the last minute, preventing



the  most cost-effective procurement.  These crisis



purchases  aid in keeping the facility in financial



trouble.



     All  purchases  should  have numbered Purchase



Orders  or Requisitions.  Small parts purchases may



be   set   up  at  local  vendors  using  "blanket"



purchase  orders  for  specific  items often needed



for   routine   repairs,   sewer  taps,  and  other



recurring situations.







                    PURCHASING



                * Requisition form



                * Bids (Quotation)



               * Receipts documents



                    * Invoice







                     INVENTORY



            *  Inventory number system



                *  Receiving report



          *  Inventory number assignment



                *  Maintenance data



                 *  Annual report
                          124

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                          USER CHARGE SYSTEM
                           (40 CFR 35.2140)


     The  user  charge  system  must  be  designed to produce adeguate
revenues    reguired   for   operation   and   maintenance   including
replacement.  The user charge system includes:

     (a) User Charge System Based on Actual Use

          This system shall provide that each user pays its
          proportionate share of OM & R costs of treatment based on
          actual usage.  This is the most common form of charges.

     (b) User Charge System Based on Ad Valorem Taxes

          (1) System must have been in existence on December 27,
              1977.
          (2) The ad valorem user charge system is for users that
              introduce no more than 25,000 gal/day of domestic
              sanitary wastes.
          (3) Each industrial and commercial user class which
              discharges more than 25,000 gal/day of sanitary wastes
              pays its share based upon actual use.

     (c) Notification

          Each user charge system must provide that each user be
          notified at least annually in conjunction with a regular
          bill of the rate and that portion of the user charges or ad
          valorem taxes which are attributable to wastewater
          treatment services.

     (d) Financial Management System

          Each user charge system must include an adeguate financial
          management system that will accurately account for
          generated revenues.  The system should show expenditures
          for operation and maintenance including replacement based
          on an adeguate budget that  identifies the basis for
          determining the annual OM & R costs, the costs of
          personnel, material, energy and administration.

     (e) Charges for Operation and Maintenance for Extraneous Flows

          The user charge system shall provide that the costs of
          0 & M for all flow not attributable to users (I/I) be
          distributed among all users.

                           USER CHARGE GOAL

                     MUST MEET NPDES PERMIT LIMITS
                             AT ALL TIMES

          OM & R costs are reguired to be paid by user charges to
     operate the facility at a specific treatment level to meet NPDES
     permit conditions.


                                  125

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                USER CHARGE REQUIREMENTS
    *   The community must require  that adequate  revenues
be   collected   for   the  operation,  maintenance,  and
replacement   (OM   &   R)   of   the   treatment  works.
(Replacement  generally   refers   to equipment which has a
useful life of < 20 years).

    *    The  community must require that each  user which
discharges  pollutants that cause an increase in  the cost
of  managing  the  effluent  or  sludge from  the treatment
works shall pay for such  increased  cost as a surcharge.

    *    Each user must pay its  proportional share of the
OM  &  R  cost of the treatment  works based  on  the user's
proportionate   contribution   to   the  total   wastewater
loading.   Flat rate charges and  volume discounts are not
acceptable.

    *    Each  user must  be notified at least annually of
the sewer rates.

    *    The  community   must  have an accurate record of
revenues  and  expenditures  for  the wastewater treatment
works, which must be separate  from  water service.

    *    The  system  must  account  for  charges  due to
infiltration and inflow (I/I).

    *    The  user  charge  must  be  enforceable for all
customers.

    *    The  user  charge  must  take precedence  over any
terms  or  conditions  of any  other contracts which are
inconsistant with federal laws.

    *    The  user  charge  must  be  reviewed  at  least
annually  to  insure that is accurate for the life of the
project.
                             126

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                        USER CHARGE METHODOLOGY
    It  must  be  known  if the wastewater treatment plant has had any
changes  in  the average and peak influent BOD, SS and other  important
characteristics.   If these data are above normal values, it  indicates
that  the user charges must be reevaluated.  The users must be divided
into  proper  classes  so  that it is known how many users are in each
class, their discharge characteristics, and their respective  volumes.

    Management must determine:

                         All classes of users

               Factors that determine different classes

                     Characteristics of all users

                  Individual user wastewater volumes

                           Appropriate rates


User Classes:

    1. Residential

    2. Commercial

    3. Industrial

    4. Institutional

User Charge Rates:

    1. Equivalent Dwelling Unit Rate -
         Used for unmetered water from private wells
         Determined from best estimates of water use

    2. Volume rates -
         Determined from actual water usage
         Knowledge of waste strength

    3. Surcharge -
         Used for high strength wastes
         Used with normal volume rates

    4. Quality/Quantity -
         Determine costs for unusual waste
         Incorporate minimum volumes


                    Establish User Charge Ordinance
                                  127

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              COST RECOVERY CONCEPTS
     The  management  of  every  wastewater utility
should  understand  cost recovery concepts and have
a  definite  policy.    Utilities  need  to recover
enough  money  to pay the annual cost of operating,
maintaining,  and  replacing  equipment.  Recouping
all  costs  is essential if a wastewater utility is
to be self-sufficient.

     A  program needs to be established to generate
sufficient  revenues  to  recover all system costs.
The  utility  must operate as a business enterprise
system.

     The  steps  to  develop a cost recovery system
include:

     1. Identification of each cost item

     2. Allocation of costs

     3. Compilation of facility operating data

     4. Estimation of annual revenue requirements

     5. Classification of users

     6. Establishment of user charges

     7. Billing and collection
                         128

-------
                  COST RECOVERY OUTLINE
     1. Identification of Cost Items
          All   expense  items  must  be  identified  to
recover  100%  of  the utility's costs.  The major items
include:
          * Labor
          * Materials, supplies, and equipment
            replacement
          * Capital costs
          * Administrative costs
          * Debt service
     2.  Allocation of Costs
          Costs  should  be  allocated  to specific cost
centers  after the cost of treatment has been identified
and   classified.    These  centers  reflect  particular
activities  or  processes  that  account  for  different
types of treatment such as:
          * Collection
          * Primary treatment
          * Secondary treatment
          * Sludge disposal
          * Customer costs
     3. Compilation of Facility Operating Data
          The   operating   data  must  be  compiled  to
provide  the basis for allocating costs and establishing
rates.    Operating  data  include wastewater parameters
such as:
          * Flow
          * BOD
          * Suspended solids
          * Heavy metals
                              129

-------
              COST RECOVERY OUTLINE  (cont.)

     4. Estimation of Annual Revenue Requirements

          Annual  revenue requirements are the amount of
cash  needed  for the utility operations to be recovered
through  user charges.  Federal regulations require that
the  user  charge portion of the revenue requirements be
identified.


     5. Classification of Users

          Customers  must  be identified individually or
by  user class to provide a basis for allocating utility
cost  to users in proportion to their use and wastewater
strength.    Commercial  and  industrial users should be
charged  according  to  the  actual  waste  load  to the
system.


     6. Establishment of User Charges

          Sewer  service  charges,   including  the  user
charge  portion,  are established to recover the revenue
requirements  from each user or user class in proportion
to their use of the system.

     The  type  of  rate  structure  used depends on the
types  of  customers using the system and the ability to
measure    wastewater   characteristics   and/or   water
consumption.    The  common  types   of  rate  structures
include:

          * Flat rate

          * Volume rate

          * Volume rate plus surcharge

          * Quantity/quality rates


     7. Billing and Collection

          The  final  step in developing a cost recovery
system   is   to  develop  procedures  for  billing  and
collecting sewer service charges.

     Billing   procedures  are  established  to  collect
usage  data  from individual customers, to compute bills
based  on  the  selected  rate structure, and to prepare
and mail invoices.

     Collection  procedures include  tracking outstanding
bills and following up on delinquent accounts.
                               130

-------
                          USER FEE PROJECTION
                                 Last Year
                                   Actual
                Last Year
                  Budget
 Next Year
Projection
Personnel Services
    Salaries & wages
    F.I.C.A.
    Unemployment insurance
    Worker's compensation
    Health insurance
    Life insurance
    Retirement
         Total:

0 & M Expenses
    Office supplies
    Postage
    Telephone
    Electricity
    Natural gas
    Water
    Gas & oil
    Chemicals
    Operating supplies
    Equipment repairs
    Training
    Travel
    Subscriptions
    Uniforms
    Professional dues
         Total:

Capital Outlay
    Depreciation fund
    Expansion account
    Improvement account
    Replacement account
         Total:

Debt Service
    Debt & interest
    Cushion fund
    Contingency fund
         Total:
              TOTAL:
         Rate per 1,000 gal
	Total Cost	
Total gal. per yr.71,000
                                  131

-------
                         USER CHARGE SUMMARY
1.  No. of customers:
             Residential -
             Commercial -
             Industrial -
2.  Percent of total revenue:
             Residential -            	%
             Commercial -             	%
             Industrial -             	%

3.  Daily wastewater volume:
             Residential -            	mgd
             Commercial -             	mgd
             Industrial -             	mgd

4.  Minimum charge: $ 	 for 	 gallons/month.

5.  $ 	/ 1,000 gallons per month over 	 gallons/month

6.  $ 	/ Ibs. BOD (surcharge for extra BOD loading)

7.  $ 	/ s/s (surcharge for extra s/s loading)

8.  $ 	/ customer/month for debt retirement (for each class)

9.  What is the average total sewer charge per user?
             Residential -  $    '
             Commercial -   $ 	
             Industrial -   $ 	
                                 132

-------
                        WASTEWATER USER CHARGES
                       Distribution of Customers
             (Total Customers or Accounts:
                         0-30        31-100      101-500      >500
Customer Class   No.  (1000 gal.) (1000 gal.)  (1000 gal.)  (1000 gal.)

Residential
    5/8 in.
    3/4 in.
    1   in.

Commercial
    3/4 in.
    1   in.
    1 1/4 in.
    1 1/2 in.

Industrial
    2 in.
    3 in.
    4 in.
    6 in.
                                  133

-------
USER CHARGE COMPARISON
NO. Of
Community Customers
A 155
B 450
C 500
D 600
E 800
F 1,000
G 1,100
H 1,100
I 1,100
J 1,500
K 1,600
L 2,000
M 2,600
Minimum
Charge
$ 6.00
6.50
8.31
5.50
4.50
3.00
1.25
6.00
6.33
2.10
3.72
2.35
3.15
Rate Per
1,000 qal.
$ 1.00
2.50
1.70
0.50
1.25
0.85
1.43
1.20
1.42
0.95
1.24
1.29
1.12
Example Bill
3,000 qal.
$ 8.00
14.00
8.31
5.50
5.75
3.00
5.54
6.00
6.33
4.95
3.72
6.22
4.27
           134

-------
                         CURRENT DEBT SUMMARY
  Type  of  Debt    Amount   Year Started   Interest Rate   Ending  Year
 1.

 2.

 3.

 4.

 5.
                      FINANCIAL CONDITION SUMMARY
I.    Initial Cost:

    A. Collection -                               $

    B. Treatment -                                $

    C. Debt -
         1. Initial date -                        $
         2. Original loan amount -                $
         3. Interest rate -                       $
         4. Loan duration -                       $
         5. Current loan principal owed -         $
         6. Any changes needed in financing -     $
II.   Budget:

    A.  Last 5 years breakdown -           198
                                          198"
                                          198"
                                          198"
                                  135

-------
                         COST RECOVERY SUMMARY
1.  How many wastewater customers are there in the system?
         Residential:
         Commercial:
         Industrial:
2.  What is the current average flow treated?    	 mgd


3.  What is the current estimated wastewater flow for each category?

         Residential: 	 mgd
         Commercial:  	 mgd
         Industrial:  	 mgd


4.  What is the level of wastewater treatment at the facility?

              	 % Primary
              	 % Secondary
                     % Advanced
5.  How much money was  required  for constructing  the  treatment  plant?

         Total:        $ 	
         Local  share:   	
         Federal grant: 	
         Federal loan:  	
         State  grant:   	
         State  loan:
6.  What are the annual  operating  costs?   $ 	
    (Do not include  debt  service)


7.  How much money  is  reserved  annually  for equipment  replacement?

         $
                                   136

-------
8.   How much money is required for annual debt service?

         Principal: $ 	
         Interest:
            Total:

         % of Budget:
9.   What are annual revenues?

         Connection fees:  $
         Customer penalties:
         Interest:
         User charges:
         Other:

              Total:
10.  What is the current average annual sewer service charge?

         Residential: $ 	/household
         Commercial:    	/establishment
         Industrial:    	/facility
                                  137

-------
             CUSTOMER BILLINGS
          *  Meter Reading Books
             *  Payment Notice
          *  Connection Application
             BILLING DOCUMENTS
Billing summary
Statements
Delinquency notice
Penalty register
Shut-off notice
Customer status
Individual meter log
Customer listing
                    138

-------
                      CONNECTION FEE COMPUTATION
    Connection Address:
A.
B.
D.
Date of Connection:
Labor :
1. hours X $ . /hr.
2. hours X $ . /hr.
3. hours X $ . /hr.
4. hours X $ . /hr.
Equipment:
1. Vehicle(
2. Vehicle(
3. Vehicle(
4. Equip. (
5. Equip. (
6. Equip. (
Parts & Supplies:
1. Part( );
2. Part( . );
3. Part( ):
4. Part( ):
5. Part( ):
6. Part( ):
Administration & Management:
1. Clerk( ):
2. Clerk ( ):
3. Mang. ( ) :
4. Ch.0p( ):
5. Other ( ):
6. Other ( ):

(Name:
(Name:
(Name:
(Name:

)
)
)
)
Labor subtotal:
) miles X $0. /mile
) miles X
) miles X
) hours X
) hours X
) hours X
Equipment
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
Parts & Suppl
hours X $
hours X $
hours X $
hours X $
hours X $
hours X $
$0. /mile
$0. /mile
$ . /hour
$ . /hour
$ . /hour
subtotal :
/unit
/unit
/unit
/unit
/unit
/unit
ies subtotal
/hour
/hour
/hour
/hour
/hour
/hour
Administration subtotal:
= $
=
=
=

$
= $
=
=
=
=
=

$
= $
= $
= $
= $
= $
= $

: $
= $
= $
= $
= $
= $
= $

$
•
•
•
•

•
•
•
•
•
•
•

•

.
a
.
.
.

•

.
m
t
m
.

•
                   Total Connection Cost:
                   Prepared By: 	
                   Date:
                                  139

-------
                           REPAIR COMPUTATION
    Repair Item:
A.
B.
D.
Dat
Lai:
1.
2.
3.
4.
Eqi
1.
2.
3.
4.
5.
6.
Parl
2!
3.
4.
5.
6.
Adm:
1.
2.
3.
4.
5.
6.
:e of Repair:
:>or :
hours X $ . /hr.
hours X $ . /hr.
hours X $ . /hr.
hours X $ . /hr.
aipment :
Vehicle*
Vehicle*
Vehicle*
Equip. (
Equip. (
Equip. (
:s & Supplies:
Part* ):
Part* );
Part* ):
Part* ):
Part* ):
Part* );
Lnistration & Management:
Clerk* ):
Clerk* ):
Mang. ( ) :
Ch.Op* ):
Other* ):
Other* ):

(Name:
(Name:
(Name:
(Name:


)
)
)
Labor subtotal:
) miles X $0. /mile
) miles X $0.
) miles X $0.
) hours X $
) hours X $
) hours X $
/mile
/mile
/hour
/hour
/hour
Equipment subtotal:
: No. X $ . /unit
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
Parts & Supplies
hours X $
hours X $
hours X $
hours X $
hours X $
hours X $
/unit
/unit
/unit
/unit
/unit
subtotal
/hour
/hour
/hour
/hour
/hour
/hour
Administration subtotal:
= $
= .
= .
= .

$
= $
=
= .
= .
= .
= .

$
= $
= $
= $
= $
= $
= $

: $
= $
= $
= $
= $
= $
= $

$
                    Total Repair Cost:
                    Prepared By: 	
                    Date:
                                   140

-------
     COLLECTION
    PROCEDURES
Delinquent Utility Accounts
 1. DISCONNECT SERVICE
 2. PERFORM TAX SALE
 3. ATTACH A LIEN
 4. SMALL CLAIMS COURT
          ill

-------
COLLECTION  POLICY
 *  WRITTEN

 *  ADOPTED BY GOVERNING BODY

 *  PROVIDES A PLAN
 *   ESTABLISHES FUNCTIONS
    - AMOUNT OF INTEREST
    - WHICH COLLECTION PROCEDURE
    - RESPONSIBILITIES
    - LEEWAY OF TAX COLLECTORS

 *   INVOLVE KEY PARTICIPANTS
    - TAX COLLECTORS
    - TREASURER
    - WATER/SEWER PERSONNEL
    - COMMISSIONERS/TRUSTEES/SELECTMEN
    - HEALTH OFFICER
              Hi2

-------
                 DELINQUENT ACCOUNT  COLLECTION  POLICY
                          (By Sale of  Property)

                                 EXAMPLE
1.  SEWER CHARGES ARE DUE ON THE  DATE  INDICATED  ON THE SEWER BILL AND
    ARE DELINQUENT AFTER THAT  DATE.


2.  DELINQUENT ACCOUNTS WILL BE CHARGED  A  10%  TAX COLLECTOR'S FEE AND
    INTEREST OF 1% MONTHLY OR  PARTIAL  MONTH  FROM THE DUE DATE.


3.  THE MUNICIPAL TREASURER SHALL  FILE A LIEN  ON THE PROPERTY AND
    ISSUE THE WARRANT ON DELINQUENT ACCOUNTS,  IDENTIFYING ALL
    DELINQUENT PAYERS TO THE TAX  COLLECTOR WITHIN 20 DAYS OF THE DUE
    DATE.


4.  UPON RECEIPT OF THE TREASURE'S WARRANT,  THE  TAX COLLECTOR SHALL
    IMMEDIATELY GIVE NOTICE TO EACH DELIQUENT  RATE PAYER OF THE
    FOLLOWING:
                AMOUNT DELINQUENT
                MONTHLY INTEREST  CHARGE
                TAX COLLECTOR'S FEE
                DATE AND LOCATION  WHERE  PAYMENT  CAN BE MADE
                TOTAL AMOUNT INCLUDING FEES  AND  CHARGES


    THE NOTICE SHOULD INCLUDE  THE  FOLLOWING  STATEMENT:
                IF YOUR BILL REMAINS UNPAID  AFTER THE DUE DATE ON
                THIS NOTICE, YOU  WILL  BE RESPONSIBLE FOR ANY
                ADDITIONAL FEES AND COSTS  ASSOCIATED WITH THE TAX
                SALE ACCORDING TO  STATE  STATUTES.  THIS NOTICE SHALL
                BE GIVEN AT LEAST  20 DAYS  BEFORE PAYMENT DATE.


5.  IF PAYMENT IN FULL IS NOT  RECEIVED WITHIN  90 DAYS OF THE ORIGINAL
    DUE DATE, THE TAX COLLECTOR SHALL  BEGIN  THE  TAX SALE PROCESS BY
    FILING A FORMAL NOTICE AND AN  ATTESTED COPY  OF THE WARRENT IN THE
    TOWN CLERK'S OFFICE UNLESS AN  ACCEPTABLE ARRANGEMENT TO MAKE A
    PAYMENT IS MADE WITHIN A 30-DAY PERIOD.  IF  FULL PAYMENT IS NOT
    MADE WITHIN 6 MONTHS OF THE ORIGINAL DUE DATE, THE TAX COLLECTOR
    SHALL BEGIN THE TAX SALE PROCESS.

    DULY ADOPTED BY THE BOARD  OF 	 FOR THE
                                    OF
    ON THIS 	 DAY OF 	,  19
    CONCURRENCE: 	 TAX COLLECTOR

(This document must drafted according  to  state and local  statutes.)
                                   143

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  WATER  DISCONNECT
A.  IMPLEMENTATION DEPENDS ON	
   -  IS WATER SYSTEM MUNICIPALITY OWNED?
   -  WHAT IS THE QUALITY OF THE WATER SYSTEM?

B.  ATTRIBUTES:
   -  NORMALLY RAPID PAYMENT
   -  LESS EFFORT THAN TAX SALE
   -  MORE EFFORT THAN LIEN
   -  CAN BLOCK SEWER SERVICE

C.  IMPORTANT PROCEDURES
   -  BILL MUST BE DELINQUENT
   -  DISCONNECT NOTICE MUST BE SENT TO OWNER &
      RENTERS
   -  DEBTORS MUST  BE GIVEN TIME TO PAY BY
      INSTALLMENT
   -  SERVICE MUST BE  RESTORED WITHIN  24 HOURS
      AFTER PAYMENT

-------
            TAX   SALE
A.  IMPLEMENTATION DEPENDS ON FIRM
    POLICY OF TAX COLLECTOR
    - CAN RESULT IN CONSISTENT COLLECTION
    - NOT AS RAPID AS WATER DISCONNECT
    - SAME PROCEDURE AS DELINQUENT PROPERTY TAX
      COLLECTION
    - DON'T NEED A WATER SYSTEM FOR
      IMPLEMENTATION

B.  IMPORTANT PROCEDURES
    - WARRANT MUST BE FILED BY SPECIFIED DATE
    - MUST ADVERTISE IMMEDIATELY THE LAND FOR SALE
      AT PUBLIC AUCTION
    - MUST GIVE SUFFICIENT NOTICE TO TAXPAYER
    - MUST GIVE NOTICE TO LENDING INSTITUTIONS
    - MUST POST SALE NOTICE IN PUBLIC PLACE IN
      TOWN OF SALE
                   Ilt5

-------
Appendix D
PLANNING

-------
                           UTILITY PLANNING

1.   Wastewater utilities must:
    - Know their future direction,
    - Have planning document:
         a. Have written policy
         b. List future needs for next 5 years
         c. Tabulate estimated costs
         d. State progress bench marks for each year
         e. State present wastewater treatment demands
              (1) Present treatment volume: 	mgd
              (2) Number of customers: 	
              (3) Total wastewater budget: $ 	
              (4) Average user charge per household:  $
         f. Predict factors for next 5 years for  item e.
         g. Include sewer and plant operators, clerks, and
            management in all planning activities.
         h. Include public hearing with newspaper coverage.
2. Planning elements:
         *  Policy setting
         *  Problem identification
         *  Implementation
3. Two major planning units:
         *  Operations
         *  Capital improvements
                                  149

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 BASIS  for  PLANNING
        RECORDS
      Performance
      Maintenance
      LONG RANGE
     O & M Budgets
    Capital Budgets
  EMERGENCY PLANNING
     Standby Power
    Operating Plan
Preventive Maintenance
          150

-------
         OPERATIONS PLANNING







*  Determine Operating Objectives





*  Estimate Staff Needs





*  Set Performance Criteria





*  Set Priorities





*  Develop Operations Plan





*  Analyze Financing Options





*  Review and Evaluate
                 151

-------
STEPS IN CAPITAL  PLANNING
  Determine the  Utility
  Activity, Goals,  and
       Obj actives
    Estimate Capital
      Requirements
      Determine the
   Acceptable  Capital
      Outlay Level
       Set  Priorities
      Develop Capital
   Improvement Plan and
     a Capital Budget
     Analyze Financing
          Options
        Review and
         Evaluate
            152

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      FINANCING AN EXPANSION PROJECT
                  EXAMPLE

     Capital Project Cost Per Customer

Capital Cost     =  $ 100,000
No. of Customers =        100
Cost/customer    =  $   1,000
               Customer Cost

Years to pay:              5 yrs.         10 yrs.
Interest rate:              10 %             10 %
Debt service factor:       0.231            0.130
(From debt table)
Annual cost/customer: $   231.00         $ 130.00
Total cost/customer:  $ 1,155.00       $ 1,300.00
                    153

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                       CAPITAL PROJECT SCHEDULE
 Project        Current                   Forecast Year
Category       Estimate    	   	   	   _
Collection


Primary


Secondary


Advanced


Sludge
Customer
 Service
Administration$

              $"
                                  154

-------
Appendix E
FINANCING

-------
                            DEBT MANAGEMENT
    Some  form  of financing is usually necessary to construct any new
wastewater  treatment  facility or to provide for treatment expansion.
Debt  management consists of repaying loans, deciding on future loans/
and considering a quicker pay back on existing loans.

    Borrowed  money may be in the form of government guaranteed loans,
conventional  loans  or  various  types  of  bonds.    Some government
sponsored  loans  may  have  lower than regular market interest rates,
while  conventional  bank  loans  will  have  slightly higher interest
rates.    Bonds  often  have  attractive  interest  rates,  since they
usually provide some tax advantage to the investors.

    The  most  common  type  of bond is the revenue bond, which repays
its  value  from  the  revenue  of the utility.  The pay back of these
bonds is based on appropriate user charges.

    Bonds  may mature up to 40 years after  issue.  This maximum period
is  not  the  ideal period, since many wastewater treatment facilities
may not last 40 years without spending great sums of money.
                                  157

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                          TYPES OF FINANCING










    Capital financing may be used to expand,  improve, or  rebuild an



existing facility or to build an entirely new plant.





    Financing may be in the form of grants, loans, or existing



set-a-side funds.





    Types of financing for capital projects are:





              * U.S. EPA Construction Grants



              * Farmer's Home Administration



              * Housing & Urban Development



              * State Grants



              * State Loans



              * Investment Banks



              * Local Banks



              * Private Leaseback



              * Various Types of Bonds



              * Special Assessment
                                   158

-------
   FIWANCIKG
 COST RECOVERY
From all users
 CAPITAL COSTS
  Obligation
     Bonds
    Revenue
     Bonds
  Assessment
     Bonds
    Federal
     Loans
       159

-------
                       Debt Service  Factor Table
Interest                             Term  (in  years)
  Rate
    8
   10


   11


   12

0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
5
212
225
231
237
244
250
257
264
271
277

0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
10
111
123
130
136
142
149
156
163
170
177

0
0
0
0
0
0
0
0
0
0
15
.078
.090
.096
.103
.110
.117
.124
.131
.139
.147

0
0
0
0
0
0
0
0
0
0
20
.061
.074
.080
.087
.094
.102
.110
.117
.126
.134

0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
25
051
064
071
078
086
094
102
110
119
127

0
0
0
0
0
0
0
0
0
0
30
.045
.058
.065
.073
.081
.089
.097
.106
.115
.124
                                   160

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                        INFLATION FACTOR TABLE
    Inflation  affects  costs  each  year a project is planned but  not



started.    Generally,  inflation for the years 1986 to 1988 have been



between  4  and  6%.    A  value  should  be chosen when making  5-year



projections.







Inflation     Year 1      Year 2     Year 3     Year 4     Year  5







   2 %        1.000       1.020      1.040      1.061      1.082







   4          1.000       1.040      1.082      1.125      1.170







   6          1.000       1.060      1.124      1.191      1.262







   8          1.000       1.080      1.166      1.260      1.360







  10          1.000       1.100      1.210      1.331      1.464







  12          1.000       1.120      1.254      1.405      1.574
                                  161

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                         FINANCIAL  INDICATORS
                        (Balance  Sheet Analysis)
Indicator/ %

Debt Ratio
     Measure
Relation to assets
Desired Level
     20%
Current Ratio
Solvency of fund
Ideal: 200%
Min.  : 100%
Quick Ratio
Solvency of fund
     100%
Debt/Equity
  Ratio
Receivables
as % of
Current Assets
Investments
As a % of
Current Assets
Reliance on debt
for capital
financing
Unpaid user charge
Whether max. assets
are invested to
earn interest
     Warning

Rapid increase in
ratio indicates
over reliance on
debt financing.

Falling ratio
indicates
inability to pay
future
obligations.

Falling ratio
indicates
inability to pay
future
obligations.

Increasing ratio
indicates bond
financing that
should be
monitored.

Increase implies
falling rate of
collection and
need to improve
billing

Decrease implies
need for
aggressive cash
management
                                   162

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                        BALANCE SHEET ANALYSIS
                              (Worksheet)


Current Assets               3 yrs. ago      2 yrs. ago      Last yr.


 1. Cash                     $               $              $

 2. Investments

 3. Accounts receivable

 4. Other current assets
 5. Total current assets
   (Lines 1-4)
Restricted Assets

 6. Customer deposits

 7. Construct, ace. bal.

 8. Funds for debt ser.

 9. Other restrict, assets

10. Total restrict, assets
    (Lines 6-9)

11. Property, plant & Equip.
    (Net of accum. deprec.)

12. Total restricted assets  $
    (Lines 5 + 10 + 11)


Current Liabilities

13. Accounts payable

14. Accrued bond interest

15. Current portion of bonds

16. Current lease-purchase

17. Other cur. liabilities

18. Total current liabilities $
    (Lines 13-17)
                                  163

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                        BALANCE SHEET ANALYSIS
                           (Worksheet - cont.)

Current Liabilities          3 yrs. ago      2 yrs. ago      Last yr.
Payable from
Restricted Assets

19. Matured revenue bonds    $               $              $
20. Revenue bond interest
21. Accrued bond interest
22. Current bond portion
23. Other current liabilities
    payable from rest, assets  	    	     	
24. Total current liabilities  $
    (Lines 19-23)
Long-Term Liabilities
25. Revenue bonds
26. Gen. obligation bonds
27. Lease purchase agreements
28. Other long term liab.
30. Total liabilities
    (Lines 18 + 24 + 29)
Eguity & Totals
31. Contributed capital
32. Retained earnings
33. Total fund equity
    (Line 31 + 32)
34. Total li-abilities
    and fund eguity
    (Lines 30 +33)
                                  164

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                        BALANCE SHEET ANALYSIS
                           (Worksheet - cont.)


Ratios                         3 yrs. ago     2 yrs.  ago      Last  yr


35. Net funded debt           $               $               $
    [(Lines 14-16 + 19-22
     + 25-27) - line 8]

36. Net working capital
    + net fixed assets
    (Line 5 + 17 - 18)

37. Debt ratio
    (Line 35 + 36)

38. Current ratio
    (Line 5 + 18)

39. Cash investments
    & receivables
    (Line 1-3)

40. Quick ratio
    (Line 39 + 18)

41. Debt/Equity ratio
    (Lines 30 + 33)

42. Receivables as %
    of current assets
    (Lines 3+5)

43. Investments as a
    % of current assets
    (Lines 2+5)
                                   165

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                            FINANCING  SOURCES
Source

General
obligation
bonds
Revenue
bonds
Capital
fees
 Repayment

10-30 years,




10-30 years,
Assessment   10-30 years
bonds
Revolving    10-20 years
loans
Paid by new
customers.
    Advantages

Immediate benefits.
Lower interest rates,
Immediate benefits
                Immediate benefits
                Immediate benefits.
Provides additional
funds.
 Disadvantages

Tied to property
tax base.
Property owners
liable.

Higher interest.
                        Requires
                        legislative
                        approval.

                        Increased rates.
Requires
customer to pay
for late
hook-up.
                               TYPES OF  BONDS

      General Obligations

         Usually based on  property  value

         Low interest

         May need voter approval

         May have debt limitations

         May have additional  requirements  over  other  methods

         Financing costs are  lower  because less  documentation
         required

      Revenue Bonds

         Supported directly by user charges only

         Usually do not require voter  approval

         May have higher rates

         May not lend as much as  other methods

         Require specified reserve  funds

         Can be used to finance projects beyond  boundaries

                                   166

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   Appendix F
RECORD KEEPING

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                      1. RECORD-KEEPING CONCEPTS


    All   utility  record  keeping  starts  with  customer  usage  and
includes all facets of accounting.

    Costs  must  be  recorded  for  each  piece of equipment and every
treatment unit.

    A  normal accounting system usually uses an enterprise fund, which
is treated like a business.

    There  should  be a chart of accounts, which includes all items in
the budget.

    Record  keeping  includes  equipment  inventory,  chemical  usage,
energy   consumption,  and  all  matters  pertaining  to  the  utility
operation.

    Assembling  monthly  expenditures  of  plant  operations  involves
recording   monthly   expenses   and  disbursements.    These  include
personnel  services,  energy,  chemicals,  and  other normal operating
costs.

    Keeping  records  is  important for the long-term operation of the
system.  Good records should:

         * Verify unit process efficiency.
         * Assist in making decisions affecting plant operations.
         * Assist in planning and maintenance.
         * Provide a basis for budgeting and staffing.
         * Provide a basis for justifying system expansions.

    Are the following present?

         * Operating reports.
         * Work schedules.
         * Activity reports (i.e., time cards).
         * Expenditure reports (i.e., lab, supplies, energy).
         * Cost analysis reports.

                          2. TYPES OF REPORTS


                        *  Operating Reports

                        *  Financial Reports

                        *  Maintenance Reports

                        *  Purchasing Reports
                                  169

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           3. REPORT INFORMATION
Reports should tell:
       *  How the WWTP is operating





       *  How much it is costing





       *  If there is enough money to operate





       *  When equipment needs maintenance





       *  When equipment needs replacement
           4. OPERATING REPORTS







           *  Compliance Status





           *  Treatment Efficiency





           *  Energy Use





           *  Chemical Use
                    170

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              5. MAINTENANCE REPORTS



      *  What maintenance has been performed?


    *  What maintenance needs to be performed?


     *  Was the spare parts inventory reduced?


*  How much time was spent on individual equipment?


     *  Does some equipment need replacement?


          *  Are there inventory records?


         *  Are there maintenance records?

                    Preventive
                    Corrective
                    Contract
           6. PLANT PERFORMANCE REPORTS


             How is the WWTP performing?


           What volume of flow is treated?


         What is the raw wastewater strength?


            What is the compliance status?


   Are there sufficient chemical and physical data?


           -  Are there energy records?

                  Rates by month?

                  Usage by month?
                        171

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                       7. PERFORMANCE RECORDS
   Measure
      Wastewater
  Customers
Workload
Efficiency
Effectiveness
   Gallons treated
     Cost/gallon
Days out of compliance
No. of contacts
Manhour/contact
Response time
                         8.  FINANCIAL REPORTS
                    *   Statements  for management

                    *   Information to control  costs

                    *   Show:
                           Monthly budget  to actual  costs
                           Monthly revenue
                           Balance sheet
                           Cost  of service
                           Trial balance
                           Encumbrances
                           Cash  reconciliation
                           Bond  report
                           Contingency  fund
                                  172

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                       9. BALANCE SHEET
   Assets

Cash on hand
Investments
Accounts receivable
Prepared expenses
Materials & supplies
Equipment (less depreciation)
Facility (less depreciation)
Improvements progress

     Total Assets
   Liabilities

Accounts payable
Notes payable
Bonds payable
Customer deposits
Debt service
Total
Liabilities
                              173

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                      10. PURCHASE ORDERS
Purchase orders become expenditure records

All P.O.s must have consecutive numbers

Separate records are ideal for:

     Purchased equipment
     Vendor supplies
     Operating services

Purchasing guidelines:

     Standards of conduct
          - unprejudiced buying
          - no hidden deals
          - use proper conduct
          - use quotations for high expenditures

Purchasing Limits & Authority

          - Limited Purchase Item - used for goods or  services
            costing < $100.  (No higher approval).

          - Verbal Quotation - for goods or services costing
            < $1,000  (at least three quotes).

          - Written Quotation - for goods or services  costing
            < $5,000  (at least three written quotes and  full
            approval).

          - Sealed Bid Items - for goods or services costing
            > $5,000  (formal public advertisement  for  bids  and
            full approval).

          - Emergency Orders - when the public  health  or  safety
            is in jeopardy,  order from the nearest vendor.
                               174

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                              REFERENCES
 1.  Government Financial Research Center, Financial Capability
    Guidebook, May 1982.

 2.  Government Financial Research Center, Wastewater Utility
    Management Manual, July 1981.

 3.  Maine Training Institute, The Financial Management Process.

 4.  U.S.  Environmental Protection Agency, A Guide to the Selection of
    Cost-Effective Wastewater Treatment Systems, Technical Report
    430/9-75-002, July 1975.

 5.  U.S.  Environmental Protection Agency, Analysis of Operations &
    Maintenance Costs for Municipal Wastewater Treatment Systems,
    430/9-77-015, May 1978.

 6.  U.S.  Environmental Protection Agency, An Instructional Delivery
    System for Manpower Management, A Report for Water Pollution
    Control Agencies, April 1979.

 7.  U.S.  Environmental Protection Agency, Construction Costs for
    Municipal Wastewater Conveyance Systems: 1973-1977, 430/9-77-015,
    May 1978.

 8.  U.S.  Environmental Protection Agency, Construction Costs for
    Municipal Wastewater Treatment Plants: 1973-1977, 430/9-77-013,
    MCD-37, January 1978.

 9.  U.S.  Environmental Protection Agency, Costs of Wastewater
    Treatment by Land Application, Technical Report 430/9-75-003,
    June  1976.
              -£

10.  U.S.  Environmental Protection Agency, Estimating Water Treatment
    Costs, Volume 1 Summary, 600/2-79-162a, August 1979.

11.  U.S.  Environmental Protection Agency, Estimating Water Treatment
    Costs, Volume 2,  Cost Curves Applicable to 1 to 200 mqd Treatment
    Plants, 600/2-79-162b, August 1979.

12.  U.S.  Environmental Protection Agency, Estimating Water Treatment
    Costs, Volume 3,  Cost Curves Applicable to 2,500qpd to 1 mqd
    Treatment Plants, 600/2-79-162C, August 1979.

13.  U.S.  Environmental Protection Agency, Estimating Water Treatment
    Costs, Volume 4,  Computer User's Manual for Retrieving and
    Updating Cost Data, 600/2-79-162d, August 1979.

14.  U.S.  Environmental Protection Agency, Financial Management System
    for Publicly-Owned Treatment Works (Accounting Options),
    430/9-84-005, June 1984.
                                  175

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15.  U.S. Environmental Protection Agency, Innovative and Alternative
     Technology Assessment Manual, 430/9-78-009, February 1980.

16.  U.S. Environmental Protection Agency, Looking at User Charges, A
     State Survey and Report, 430/09-87-0008, September 1987.

17.  U.S. Environmental Protection Agency, Management of Small-to-
     Medium Sized Municipal Wastewater Treatment Plants, 430/9-79-013,
     June 1979.

18.  U.S. Environmental Protection Agency, Maintenance Management
     Systems for Municipal Wastewater Facilities, 430/9-74-004.
     October 1973.

19.  U.S. Environmental Protection Agency, Municipal Wastewater
     Facility Financial Management Work Book, 1986

20.  Environmental Protection Agency, Package Water Treatment  Plants,
     Volume 2, A Cost Evaluation, 600/2-80-008b, July 1980.

21.  U.S. Environmental Protection Agency, Touching All The Bases, A
     Financial Management Handbook for Your Wastewater Treatment
     Project, 430/9-86-001, September 1986.

22.  U.S. Environmental Protection Agency, Wastewater Utility
     Recordkeepinq, Reporting and Management Information Systems,
     430-9-82-006, July 1982.

23.  Virginia Tech Center for Urban  and Regional Studies, Costing and
     Rate-Setting Workshop for Virginia Water and Sewer Utilities,
     Draft - July 1987.
                                   176

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