E•Train Spring 2002

"Show-me Ratemaker:"
It's not just for the "Show-me State"

By Harriet Emerson, MSJ
NETCSC Contributing Writer

Nobody wants to raise water rates, especially
elected officials But if a town sets its water or sewer rates too low to cover all the costs associated with the plant, it may be living on borrowed time.

How does a small community with no paid accountants, engineers, or lawyers deal with rate setting on top of broken pipes, new security fencing, and operator training?

David Kindelspire , an environmental specialist with the Missouri Department of Natural Resources, walks students through a water rate analysis using the "Show-me Ratemaker" software. Photo by Jill A. Ross.

Why should communities analyze
their user rates?

To decide whether or not they need to analyze user
rates, local officials in small communities should
consider these questions:

Do our rates cover current costs?
Will our rates cover future costs?
Will we have money to handle repairs,
replacements, and unexpected expenses?
Are our rates fair to our customers?
Are we able to build new facilities?
Are we going to apply for grants and loans?
Are we prepared if the economy, inflation, or
interest rates change?
Is our population growing or declining?

If you answered “No” or “I don’t know” to any of
these questions you should consider doing a rate
analysis.

What information is needed to perform
a user charge analysis?

Current rates, charges, surcharges, hookup fees,
other revenue sources, etc.
Actual operating and debt expenses for the past
12 months.
Water losses or sewer system infiltration/inflow (I/I)
for the past 12 months.
Account balances at the start of the past 12-month
period.
Customer volume usage (billed amounts) for past
12 months, 3 winter months for sewer.
Total actual water produced or sewage treated for
past 12 months to determine water loss or I/I.

Help is here

The Missouri Department of Natural Resources (DNR) developed “Show-me Ratemaker,” a Microsoft Excel-based software program that can analyze a water or sewer utility’s finances and help management plan for the future by adjusting user rates. This easy-touse spreadsheet program can not only generate a precise rate analysis but can also create a five-year financial projection that will help
safeguard the future of your system—and, best of all, it’s free.

David Kindelspire, environmental specialist with Missouri DNR’s Environmental Assistance Office, recently introduced “Ratemaker” to a full class at the National Environmental
Training Center for Small Communities’ (NETCSC) annual Environmental Training Institute in Morgantown, West Virginia.

David Kindelspire: From Navy flyer to environmental trainer

No one is born a great trainer. It takes a good attitude, a desire to teach, and lots of experience.

Although David Kindelspire was born in Missouri and knew he and his wife would one day return home, he spent 20 years as a Navy flyer, stationed in places like Pensacola, Florida; Norfolk, Virginia; and Monterey, California. He already had a bachelor’s degree in biology and managed to stay in one place long enough to earn a master’s degree in aeronautical engineering. But pilots do more than just fly.

“Navy flyers have many collateral duties (non-flying responsibilities) on a day-today basis,” Kindelspire explained. “In my last flying job, I was the safety officer
(department head) for the squadron, which included 30 officers and 150 enlisted men.

“A big part of that job was to provide safety training on an on-going basis,” he said. “I facilitated outside speakers and often presented materials, demonstrations, and related training on my own. This helped me develop my creative skills to keep the training interesting and worthwhile.

“My final job in the Navy was working at Atlantic Fleet Headquarters, the site responsible for all ships, aircraft, and people assigned to the Atlantic Fleet, which includes approximately 40 percent of the entire Navy,” Kindelspire said.

“I had to develop and present weekly briefings on all Navy activities of interest to some very high-ranking leaders. I guess that’s where I developed my (socalled)
presentation skills and learned how to relax in front of people.

“Sometimes, those leaders asked very specific and pointed questions!” he added. “I had to be prepared for anything, and I certainly learned how to think on my feet.

“During the past three (of six) years working for the state of Missouri, I’ve been involved in many workshops—about
50—most of which are geared toward local government leaders and the like. Each attendee at a workshop has his or her specific area of interest as it applies to their individual community.

“We try to make the workshops relevant to all, but often have to get into discussions of very specific topics as we
respond to questions. Again, thinking on our feet!”

Kindelspire, who knows that summer mountains hold more appeal for his audience than water rates, approaches his subject with an energetic style and dry wit. Those attending are inside on a sunny day because they realize this subject is essential. While both water and sewer versions of “Ratemaker” are available, this training session focused on water rates. For the last six years, the Missouri DNR has presented “Ratemaker” as part of its EMI [Environmental Management Institute] workshop, unofficially nicknamed “Things you need to know but have no way of knowing.”

Kindelspire explained that the EMI workshop covers eight to 10 topics in each two-day session, including drinking water, wastewater, solid waste, hazardous waste, Stormwater Phase II, Missouri’s sunshine law (Freedom of Information), and “Ratemaker.”

For the last three years Missouri DNR has presented “Ratemaker” as a stand-alone session. So far, more than 450 people have attended sessions in addition to the full house at NETCSC’s Institute.

“There are 2,400 small towns in Missouri, and 2,300 of them need to look at their rates. We attempt to assist these small towns through the maze of government funding requirements,” Kindelspire said. “Ninety percent of
the towns [we help] are under 1,000 people, and 75 percent of those are under 500.

“Planning: that is what small towns across the country do not do. They tend to live almost day-by-day and pray nothing bad happens to jeopardize their infrastructure or the services they provide to their communities,” Kindelspire
said, adding that this software is designed for the “part-time mayor who drives a pickup truck and runs a meeting once a month, someone with little to no experience in government (i.e., environmental) regulatory processes.”

Local government officials, water and sewer district managers, agency personnel, and technical assistance providers all benefit from “Ratemaker.” As it turns out, many of the workshop attendees are women. Why? “Mostly mayors send clerks to the training. I have a lot
of respect for clerks,” he commented. “Often the only continuity in small town government is the clerk.”

Kindelspire said that earlier this year Missouri DNR tried a “hands-on” workshop; however, most attendees did not bring all the information needed to fully use the program.
“The hard part is getting good, reliable data,”
he said. “Garbage in, garbage out. But all attendees either learned more about the software’s capabilities or got a running start on completing an analysis.”

What’s the future for “Ratemaker”?

“We hope to put ourselves out of the user rate analysis business,” Kindelspire laughed. “We hope that communities around the country see the software as a tool to help them develop their infrastructure, plan for their financial future, and continue to protect public health and the environment. We think it’s a unique tool with capabilities that can apply to almost any community.

“We realize it’s not the definitive solution to all situations, but the adaptability of the program gives it the flexibility to be used to great advantage in most places,” he said. And what’s the secret to a great analysis? “Just do it. Then, do it some more.”

The “Show-me Ratemaker” directions are straightforward, and it’s possible to print out pages and fill them in by hand if you’re not great with computers. With moderate computer literacy you can set up your own files and perform the entire process.

To obtain this useful software, go to the Missouri DNR’s Environmental Assistance EMI Software Suite at www.dnr.state.mo.us/oac/emiapps.htm. This site includes both the “Show-me Sewer Ratemaker” and “Show-me Water Ratemaker” user charge analysis software programs. The site also contains links to assistance resources, sample ordinances, and slide shows, including a full-day “Ratemaker” PowerPoint workshop. Other helpful slide shows include drinking water system issues, local government planning, and how to conduct public meetings.

“Ratemaker,” free to anyone via the Web, is now being used all over the country. Since 2002, the Missouri DNR has presented workshops in Arizona, Colorado, Florida,
Massachusetts, New Hampshire, New Mexico, New York, South Dakota, and Vermont. State budget cuts will prevent Missouri DNR from training out-of-state for the foreseeable future. “We will still hold in-state workshops (usually in February or March). And out-of-state attendees are welcome,” Kindelspire said.

Those from outside Missouri seeking assistance with user charge analysis should be able to get help from their state’s primacy agency, the U.S. Environmental Protection Agency’s Environmental Finance Center, the Rural Community Assistance Program, or a similar agency that serves their state or region.

“We will try to put callers in contact with local or regional assistance agencies familiar with ‘Ratemaker,’” Kindelspire said. “However, our focus is on in-state communities.”

Before presenting user rates based upon “Show-me Ratemaker” to their communities, Missourians can call their user charge specialist at (800) 361-4827 or (573) 526-6627. You may also e-mail Kindelspire at nrkindd@mail.dnr.state.mo.us.