17999_Authority_December

!" !"#$%&'"()*'+ !!"!!#$%$&'$(!)*)+ s ound F InancIal m anagement , r evenue g eneratIon , and c ost r eductIon : a s trategIc a PProach For a uthorItIes LJ ƌĂŝŐ ,͘ WĂůŵĞƌ͕ W ͕ K͕ ƌŝĞ tĂƚĞƌ tŽƌŬƐ īĞĐƟǀĞ ĮŶĂŶĐŝĂů ŵĂŶĂŐĞŵĞŶƚ ŝƐ ƚŚĞ cornerstone of a successful authority. From maintaining clean audits to ŐĞŶĞƌĂƟŶŐ ĂůƚĞƌŶĂƟǀĞ ƐŽƵƌĐĞƐ ŽĨ revenue, each decision impacts not ŽŶůLJ ĂŶ ĂƵƚŚŽƌŝƚLJ͛Ɛ ĮŶĂŶĐŝĂů ŚĞĂůƚŚ ďƵƚ also the community it serves. In this ĂƌƟĐůĞ͕ ǁĞ͛ůů ĞdžƉůŽƌĞ ƐƚƌĂƚĞŐŝĞƐ ƚŚĂƚ ůĞĂĚ ƚŽ ƐŽƵŶĚ ĮŶĂŶĐŝĂů ŵĂŶĂŐĞŵĞŶƚ͕ ĂŶĚ ŝĚĞŶƟĨLJ ŶĞǁ ƌĞǀĞŶƵĞ ĂŶĚ ĐŽƐƚ ƌĞĚƵĐƟŽŶ ŽƉƉŽƌƚƵŶŝƟĞƐ Ͷ Ăůů ŝŶ ĂŶ ĞīŽƌƚ ƚŽ ƐƚƌĞŶŐƚŚĞŶ LJŽƵƌ ŽƌŐĂŶŝnjĂƟŽŶ͘ ^Êçė &®ÄƒÄ‘®ƒ½ DƒÄƒ¦›Ã›Äã͗ d«› ƒ‘»Êě &ŽĐƵƐ ŽŶ ƚŚĞ ƐƐĞŶƟĂůƐ͗ ůĞĂŶ Audits, Sound Funding Strategies, Appropriate Rates, and Maintaining Required Debt Service Coverage dŚĞ ĨŽƵŶĚĂƟŽŶ ŽĨ ĂŶLJ ĂƵƚŚŽƌŝƚLJ͛Ɛ ĮŶĂŶĐŝĂů ŚĞĂůƚŚ ŝƐ ĞŶƐƵƌŝŶŐ ƚŚĂƚ ƚŚĞ ĞƐƐĞŶƟĂůƐ ĂƌĞ ŝŶ ƉůĂĐĞ͘ Clean audits , for example, provide assurance to stakeholders, ratepayers, and lenders ƚŚĂƚ ƚŚĞ ŽƌŐĂŶŝnjĂƟŽŶ ŝƐ ŵĂŶĂŐĞĚ ĞĸĐŝĞŶƚůLJ ĂŶĚ ƚƌĂŶƐƉĂƌĞŶƚůLJ͘ Ƶƚ ĐůĞĂŶ ĂƵĚŝƚƐ ĂƌĞ ŽŶůLJ ƉĂƌƚ ŽĨ ƚŚĞ ĞƋƵĂƟŽŶ͕ as strong internal controls and ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ĂĐĐŽƵŶƟŶŐ ƐƚĂŶĚĂƌĚƐ ŝƐ ƚŚĞ ĨŽƵŶĚĂƟŽŶ͘ ƵƚŚŽƌŝƟĞƐ ŵƵƐƚ also set rates that fully support infrastructure investments and ŽƉĞƌĂƟŽŶƐ ͕ ĞŶƐƵƌŝŶŐ ƚŚĞ ĐŽŶƟŶƵĞĚ ĚĞůŝǀĞƌLJ ŽĨ ƐĂĨĞ͕ ƌĞůŝĂďůĞ ǁĂƚĞƌ͕ Žƌ ǁŚĂƚĞǀĞƌ ƐĞƌǀŝĐĞ LJŽƵƌ ĂƵƚŚŽƌŝƚLJ provides. Equally important is maintaining adequate debt service coverage ͕ ǁŚŝĐŚ ŝƐ ĐƌŝƟĐĂů ƚŽ ƉƌĞƐĞƌǀŝŶŐ Ă ĨĂǀŽƌĂďůĞ ĐƌĞĚŝƚ ƌĂƟŶŐ ĂŶĚ ĞŶƐƵƌŝŶŐ ĚĞďƚ ĐŽŵƉůŝĂŶĐĞ ǁŚŝĐŚ ĂīĞĐƚƐ ƚŚĞ ďŽƩŽŵ ůŝŶĞ ĞdžƉĞŶƐĞƐ͘ By focusing on these elements, ĂƵƚŚŽƌŝƟĞƐ ƉŽƐŝƟŽŶ ƚŚĞŵƐĞůǀĞƐ ĨŽƌ long-term success. ÊÙÙÊó ^ÃÙã͗ òÊ®— Wƒù®Ä¦ DÊٛ d«ƒÄ E›‘›Ý݃Ùù With elevated interest rates ŵĂŝŶƚĂŝŶŝŶŐ ƚŚĂƚ ƉŽƐŝƟŽŶ͕ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĂƌĞ Ă ƐŝŐŶŝĮĐĂŶƚ ĐŽŶƐŝĚĞƌĂƟŽŶ͘ A smart funding strategy involves ƐĞĞŬŝŶŐ ƚŚĞ ůŽǁĞƐƚ ƉŽƐƐŝďůĞ ƌĂƚĞƐ͘ ƚ ŽŶĞ ƉŽŝŶƚ͕ ŵĂŶLJ ĂƵƚŚŽƌŝƟĞƐ͕ including mine, relied heavily on ŵƵŶŝĐŝƉĂů ďŽŶĚƐ ǁŚĞŶ ƌĂƚĞƐ ŚŽǀĞƌĞĚ around 2.5%. ,ŽǁĞǀĞƌ͕ ǁŝƚŚ ĐƵƌƌĞŶƚ ƌĂƚĞƐ ĂƉƉƌŽĂĐŚŝŶŐ ϱй͕ ǁĞ͛ǀĞ ƐŚŝŌĞĚ ŽƵƌ ĂƉƉƌŽĂĐŚ͘ Programs like the Pennsylvania Infrastructure Investment Authority (PENNVEST) can ƉƌŽǀŝĚĞ ůŽŶŐĞƌ ƚĞƌŵƐ͕ ůŽǁĞƌ ŝŶƚĞƌĞƐƚ and reduced closing fees, saving millions in interest over the life of Ă ůŽĂŶ͘ &Žƌ ŝŶƐƚĂŶĐĞ͕ ďŽƌƌŽǁŝŶŐ ΨϱϮ million, like the Erie Water Works did ǁŝƚŚ ƚǁŽ W EEs ^d WƌŽŐƌĂŵŵĂƟĐ Financing (Pro-Fi) loans, saved nearly ΨϮϭ ŵŝůůŝŽŶ ŝŶ ŝŶƚĞƌĞƐƚ ƉĂLJŵĞŶƚƐ ŽǀĞƌ ϮϬ LJĞĂƌƐ ǁŚĞŶ ĐŽŵƉĂƌĞĚ ƚŽ ŽƚŚĞƌ ĂǀĂŝůĂďůĞ ŽƉƟŽŶƐ͘ dŚĞ WƌŽͲ&ŝ ĂƉƉƌŽĂĐŚ ƚŽ W EEs ^d ĂůůŽǁƐ ĨŽƌ ŵƵůƟƉůĞ ƉƌŽũĞĐƚƐ ŝŶ ŽŶĞ ĂƉƉůŝĐĂƟŽŶ͕ ĂĚĚŝŶŐ ǀĂůƵĞ ƚŚƌŽƵŐŚ ƟŵĞ ƐĂǀŝŶŐƐ ĂƐ ƚŚĞ process requires dedicated resources to complete. dŚĞ ůĞƐƐŽŶ ŚĞƌĞ ŝƐ ĐůĞĂƌ͗ ƐĞĞŬ ǀĂůƵĞ ĨŽƌ LJŽƵƌ ƌĂƚĞƉĂLJĞƌƐ ĂŶĚ ĐŽŶƐŝĚĞƌ ĂůƚĞƌŶĂƟǀĞ ĨƵŶĚŝŶŐ ƐŽƵƌĐĞƐ͕ ůŝŬĞ ŐƌĂŶƚƐ͕ ǁŚĞŶĞǀĞƌ ƉŽƐƐŝďůĞ͘ dŚĞLJ expect you to do it. So do it. ÖÖ½ù ¥ÊÙ 'كÄãÝ͗ ‘ã &ƒÝ㠃ė ^ãƒù W›ÙÝ®Ýã›Äã Grants are a vital source of non- ƌĞƉĂLJĂďůĞ ĨƵŶĚŝŶŐ ĨŽƌ ĐƌŝƟĐĂů ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ƉƌŽũĞĐƚƐ͘ dŚĞ ŬĞLJ ŝƐ ƚŽ ĂƉƉůLJͶĂŶĚ ƚŽ ĂƉƉůLJ ŽŌĞŶ͘ tĂŝƟŶŐ ƚŽŽ ůŽŶŐ ƚŽ ƐƵďŵŝƚ Ă ŐƌĂŶƚ ĂƉƉůŝĐĂƟŽŶ ĐĂŶ ƌĞƐƵůƚ ŝŶ ŵŝƐƐĞĚ ŽƉƉŽƌƚƵŶŝƟĞƐ͕ ǁŚŝůĞ ƉĞƌƐŝƐƚĞŶƚ ĞīŽƌƚƐ ŽŌĞŶ ƉĂLJ Žī͘ /Ŷ ŽŶĞ ƉĂƌƟĐƵůĂƌ ĐĂƐĞ͕ / ĚĞĚŝĐĂƚĞĚ ĮǀĞ ĚĂLJƐ ŽĨ ŵLJ ƟŵĞ ŝŶ ŽƌĚĞƌ ƚŽ ĐŽŵƉůĞƚĞ Ă ΨϭD ŐƌĂŶƚ ĂƉƉůŝĐĂƟŽŶ͘ dŚĂƚ ŝŶǀĞƐƚŵĞŶƚ ŝŶ ƟŵĞ ƌĞƐƵůƚĞĚ ŝŶ Ă ΨϮϬϬ͕ϬϬϬ Ă ĚĂLJ ƉĂLJďĂĐŬ ǁŚŝĐŚ ǁĂƐ ǁĞůů ǁŽƌƚŚ ŝƚ͘ ,ĞƌĞ͛Ɛ ƚŚĞ ƚŚŝŶŐ͕ ƚŚĞ ǁŝŶ ǁĂƐŶ͛ƚ ŝŵŵĞĚŝĂƚĞ͖ / ŚĂĚ ĂƉƉůŝĞĚ ĨŽƌ a similar grant for the same project ŝŶ ƚŚĞ ƉĂƐƚ ǁŝƚŚŽƵƚ ƐƵĐĐĞƐƐ͕ ďƵƚ perseverance and experience led us to eventual success. My advice is to get your project shovel-ready and then apply for money. /ƚ͛Ɛ ŶŽƚ ĂůǁĂLJƐ ƌĞƋƵŝƌĞĚ ďƵƚ ŝƚ͛Ɛ Ă ŚĂďŝƚ ƚŚĂƚ ƐŚŽǁƐ ŽƌŐĂŶŝnjĂƟŽŶĂů ĐŽŵŵŝƚŵĞŶƚ ĂŶĚ