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The Northeast Ohio Regional Sewer District: Strategies for Financing a 3 Billion Longterm CSO Control Plan

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Abstract:

The Northeast Ohio Regional Sewer District (District) is the largest wastewater treatment provider in the state of Ohio with a service area of approximately 380 square miles within and around the City of Cleveland. The District operates its system in an efficient manner with a primary goal of protecting the water quality of Lake Erie and the Cuyahoga River. The District is facing an unprecedented challenge of investing more than 3 billion over the next 25 years to enhance its combined sewer system to improve control of combined sewer overflows (CSO). It must implement this program with a declining population, industrial customer loss, reduced levels of consumption, and an aging core infrastructure.

Recognizing these challenges, the District conducted a comprehensive financial planning and cost of service analysis to determine an appropriate program of rates while preserving the financial integrity of the utility. Internal optimization strategies were employed, such as commodity purchase agreements and benefit program restructuring, to maximize operational efficiencies and reduce costs. The sheer size of the capital program required creative funding strategies, including prioritizing the capital plan and customizing the District's debt service profile with the appropriate mix of state revolving loans and revenue bond financing. Significant emphasis needed to be placed on well crafted financial, debt management, and reserve polices, to enhance the District's credit profile and ensure cost-effective access to the capital markets.

Even with these strategies the District needed to explore other opportunities through rate design to provide recommendations which were tenable politically. Tactics such as enhanced affordability program initiatives and an aggressive public outreach and education campaigns provided a sound framework for securing the necessary approval of the rate recommendations.

In the end, although there was no silver bullet, the District's proactive approach to financial planning, rate design, and public outreach served as a basis for crafting a successful strategy of pricing for its services against the backdrop of unprecedented challenges.

Document Type: Research Article

DOI: https://doi.org/10.2175/193864712811694451

Publication date: 2012-01-01

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  • Proceedings of the Water Environment Federation is an archive of papers published in the proceedings of the annual Water Environment Federation® Technical Exhibition and Conference (WEFTEC® ) and specialty conferences held since the year 2000. These proceedings are not peer reviewed.

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