# Public rate-model comparison and design implications

**Research milestone:** bounded review for the independent LCA WaterWorks demonstration.
**Prepared:** 2026-11-08.
**Worker scope:** public financial-model methods and comparators; no tariff certification, website implementation, production integration, or publication.
**Evidence language:** VERIFIED means the stated public document or official explanation was inspected. It does not mean every underlying consultant workbook was obtained or independently recalculated.

## Findings that affect the demonstration

The strongest numerical comparators are LCA's own 2027–2031 Suburban, City and Administration capital plans. Philadelphia supplies a Pennsylvania public-utility example of a documented financial-planning, cost-of-service, rate-design, and public-review process. Wellington supplies a municipal example of separate enterprise-fund financial models, explicit billing determinants, capital fees, and stakeholder review. These support model structure and documentation. They do not establish LCA's permissible rates, contractual allocations, or a peer-calibrated probability distribution.

| Comparator | Evidence actually reviewed | Useful design lesson | Scope limitation |
| --- | --- | --- | --- |
| LCA 2027–2031 Suburban Division capital plan | Official five-year Water, Wastewater and City cash/project tables; administrative allocations; public October 26 budget and detailed cash schedules | Preserve the original plan, keep a complete cash ledger, distinguish customer receipts from other revenues, and explain differences in budget and CIP categories and reconcile project-table conflicts | A capital plan and annual budget use different snapshots and accounting groupings; the reanchored 2028–2031 forecast is a derived demonstration, not an adopted LCA forecast |
| Philadelphia 2025 general water-rate proceeding | Official proceeding index, dates, consultant testimony/workpaper listings, determination and effective dates | Version every input and assumption; separate financial planning, cost-of-service allocation, tariff design, and household impacts; retain an inspectable record | The index and study architecture were reviewed; consultant workbook calculations were not reproduced. Philadelphia's governance and tariffs do not govern LCA |
| Town of Wellington, Colorado, 2025 rate-and-fee study explanation | Official municipal explanation of the study, fund structure, billing bases, workshops, and prior study | Model water, wastewater, and drainage separately; represent meter size, included usage, tiers, sewer billing basis, hardship support, and capital fees explicitly | The municipality's public explanation was reviewed; the consultant's financial model was not independently recalculated. Colorado rules and local choices are not Pennsylvania restrictions |

## 1. LCA: quantitative comparison across all three funds

The revision uses Suburban Water, Suburban Wastewater and City Division as separate executable planning scopes. Annual balances remain within their fund. The original adopted conceptual capital plans and the approved 2027 budget are distinct evidence snapshots. Their schedules are not fully comparable, so the demonstration uses a documented budget anchor and derived scenarios rather than claiming a single adopted five-year financial forecast.

**Primary sources:** [Suburban capital plan](https://www.lcawaterworks.org/wp-content/uploads/2026/10/2027-2031-Capital-Plan-Suburban-Division.pdf), printed pp.3–4 and36–37; [City capital plan](https://www.lcawaterworks.org/wp-content/uploads/2026/10/2027-2031-Capital-Plan-Allentown-Division.pdf), printed pp.3–6 and51 (physical PDF55 for printed51); [Administration capital plan](https://www.lcawaterworks.org/wp-content/uploads/2026/10/2027-2031-Capital-Plan-Administration.pdf), printed pp.3–4; [October 26 packet](https://www.lcawaterworks.org/wp-content/uploads/2026/10/2026October 26-BoardAgendaLCA.pdf), PDF13 executive summary,16 detailed cash,18 cash buckets; [official status page](https://www.lcawaterworks.org/lca-finances/).

### Capital schedules and the $5.6 million conflict

The project tables total $361,312,000 including administration, consistent with the official rounded $361 million headline. Original condensed cash tables total $355,712,000. City 2029 is the entire $5.6 million difference: its cash table shows $48,219,500, while water projects $32,860,000 + wastewater projects $20,197,000 +50% administrative allocation $762,500 equal $53,819,500. The City funding narrative also reports wastewater $91,897,000 while its project schedule reports $97,497,000. AD-S-21 Wet Weather Improvements Phase 1 includes $5.6 million in 2029, matching the discrepancy; the precise reason for omission remains unverified.

The central demonstration uses the project-table capital amounts including allocated administration, preserving the original condensed cash interpretation as a named alternative. This is an explicit source reconciliation decision. Neither interpretation authorizes projects or borrowing.

| Nominal USD, capital including allocated administration | 2027 | 2028 | 2029 | 2030 | 2031 | Five years |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Suburban Water |13,186,250|12,536,250|6,541,250|5,836,250|5,416,250|43,516,250|
| Suburban Wastewater |10,116,250|23,231,250|16,356,250|3,431,250|2,026,250|55,161,250|
| City, project-table interpretation |55,897,500|72,487,500|53,819,500|41,812,500|38,617,500|262,634,500|
| All three, reporting total only |79,200,000|108,255,000|76,717,000|51,080,000|46,060,000|361,312,000|

The admin narrative explicitly allocates 50% to City and 50% to Suburban. The 25%each water/wastewater split is inferred from exact differences between project and cash tables. Administration is already included in the normalized fund capital amounts and must not be added again.

### Budget cash and accounting categories

The detailed2027 schedule reconciles exactly to unrestricted closing cash $7,546,095 Water; $10,447,425 Wastewater; $53,947,019 City. City executive summary is $1 lower. Restricted cash remains outside spendable cash.

SW detailed supplier and employee outflows are $14,631,896. Adding other-capital cash payments $551,599 produces summary expense $15,183,495. The original CIP operating expense $13,312,885 is therefore not comparable to the summary grouping without qualification. No inspected source explains the remaining $1,319,011 difference against detailed operating outflows. Reanchored future costs are derived assumptions, not evidence that a later budget simply increased identical CIP costs.

SWW detailed operating cash $18,147,802 plus other-capital payments $517,251 equals summary $18,665,053. Its $30,345,659 composite receipts already include $5,725,000 grants. Budget2027 new borrowing is zero, against CIP $2,175,000. Keeping future CIP debt service is an illustrative published-schedule sensitivity; it is not a fully reconciled debt issuance forecast.

City detailed operating cash $27,796,458, lease $1,442,981, acquisition $50,697,500, other-capital cash payments $6,126,740 and debt payments $19,170,291 reconcile. Grouping $5.2 million from other-capital payments into headline capital $55,897,500 is an **inferred classification**, leaving $926,740 other payments. This yields nondebt/noncapex cost $30,166,179 versus summary expense $30,047,113; summary debt $19,289,357 carries an offsetting $119,066. Total cash burden agrees. The model must document its grouping and preserve the raw source bridge.

### Source balances, coverage and scenario implications

City condensed cash balances fail annual rollforward by $547,148, $567,501, $588,616 and $610,526 in 2028–31. These are source discrepancies, not rounding. Derived scenarios calculate closing cash from their ledger rather than inserting source ending balances. SW reconciles; SWW differences are $1 rounding.

Published cash days generally divide unrestricted cash by annual operating expense/365, excluding investments. Published indenture coverage must remain separate from planning coverage, especially where grants and pretreatment revenues have different eligibility. A numerical demonstration result is not a covenant or agreement certification.

The public plans provide useful reference assumptions: SW 1% annual volume growth, City 0%, grant timing and borrowing schedules. Historical class volumes and audited costs give independent sensitivity context. They do not calibrate event probabilities. See [DATA_GUIDE.md](DATA_GUIDE.md) for historical trends, class definitions and normalization rules.

## 2. Philadelphia: traceable financial planning and public review

**Primary source:** [Philadelphia Water, Sewer and Storm Water Rate Board — 2025 general proceeding](https://www.phila.gov/departments/water-sewer-storm-water-rate-board/rate-proceedings/2025-general-proceeding/).

The official index records advance notice on February 18, 2025, formal filing on March 31, 2025, and a determination on July 23, 2025, with rates effective September 1, 2025 and September 1, 2026. The record lists Raftelis testimony and schedules, Black & Veatch testimony/workpapers, financial workpapers, and subsequent discovery attachments. This is verified evidence of an inspectable analytical and review process; it is not a claim that the worker downloaded and validated each financial workbook.

The relevant lessons are:

- A revenue-requirement forecast, a cost-of-service allocation, and a tariff schedule are distinct analytical products. A fund-wide rate multiplier demonstrates sensitivity but cannot prove class-level cost causation or a lawful tariff allocation.
- Keep data versions, assumptions, proposed rates, decisions, and effective dates explicit. A proposed input must not become an adopted rate merely because it appears in a budget presentation.
- Preserve workpapers and intermediate reconciliations so that reviewers can follow source amounts through operating costs, capital financing, revenue requirements, and household bills.
- Add customer-impact views after the tariff determinants are known; an average bill alone is insufficient for distributional analysis.

**Additional official index:** [Philadelphia Water Department reports](https://www.phila.gov/documents/water-department-reports/) lists a Rate Structure Evaluation Plan dated January 30, 2026. Its listing is a future research lead, not a completed quantitative comparator in this milestone.

## 3. Wellington: separate funds and explicit billing determinants

**Primary source:** [Town of Wellington — Rate and Fee Information](https://wellingtoncolorado.gov/501/Rate-Fee-Information).

The official explanation describes a March 2025 comprehensive Raftelis update of water and wastewater financial models, development of a stormwater model, and evaluation of high-strength surcharges and capital investment fees. It connects the work to the 2022 study and public Rate Advisory Group process. It describes separate water, wastewater, and drainage enterprise funds and lists 2025 public workshops.

The page explains meter/tap-size base charges and usage tiers, including the first 3,000 residential gallons in the base charge; residential sewer bills using a January–March winter average, updated in April; and commercial wastewater based on actual monthly water consumption less a 15% adjustment. These are local Wellington billing rules, not defaults for LCA.

Useful implications for the next LCA model are:

- Represent service, municipality, customer class, meter size, fixed charge, blocks, and wastewater billing determinants in a versioned tariff table.
- Keep developer/capital fees separate from recurring rate revenue; do not scale all revenues with retail rate increases.
- Keep hardship or affordability programs visible as a separate policy and funding decision.
- Preserve fund boundaries even when a single dashboard shows all services.
- Use stakeholder review as an input to requirements, not as numerical proof that a particular tariff is permissible.

## 4. Gaps that must remain explicit

1. **No peer-derived optimal rate.** The reviewed sources do not support transferring another utility's rate percentage, debt-coverage threshold, cash target, or customer-class allocation to LCA.
2. **No comprehensive LCA cost-of-service model yet.** Public aggregate receipts do not establish fixed-versus-variable revenue shares, eligible customer-class exposure, or municipal pass-throughs. The demonstration's fund-wide rate exposure and typical-household demand mix are assumptions.
3. **No calibrated probability distribution.** Low/base/high scenarios and stress cases are possibilities, not empirical event probabilities. Historical actual growth is not a distribution of future rate requirements.
4. **No production ERP contract verified.** The LCA meeting index lists a January 12, 2026 Munis ERP Upgrade Board Upgrade Review. This supports the relevance of future Munis work, not a claim that an API, data schema, access path, or live connector has been verified. The demonstration connector must remain explicitly synthetic.
5. **No legal substitution.** Public peer methods do not replace LCA's agreements, applicable Pennsylvania law, bond documents, or approval process. These belong in the separate constraints review.
6. **Comparison scope is bounded.** Philadelphia's proceeding and Wellington's official explanation were inspected; their consultant financial workbooks were not independently recalculated. LCA's public CIP is the quantitative comparator actually extracted here.

**Further official local-study lead:** [LCA meeting and minutes index](https://www.lcawaterworks.org/meetings-minutes/) lists a July 10, 2023 Act 537 Phase 1 Financial Evaluation Summary associated with Raftelis. Availability of that item was identified, but its full calculations were not reviewed for this milestone.

## Revision status

The revision extraction covers 2016–2025 customer classes and operating expense history,2023–2025 fund income statements, all three detailed2027 cash bridges and all three original CIP cash schedules. Official source conflicts remain explicit above. Peer comparison remains the bounded earlier review; no new consultant workbook replication is claimed. Implementation validation belongs in `MODEL_REVIEW.md` and `STATE.md`.