LASAN Wastewater Cost of Service Model Independent Review
Financial Model Review
LA Sanitation (LASAN)
Los Angeles, CA
Hyperion Water Reclamation Plant
Source: LA Sanitation
SHA Analytics, LLC is part of the team selected by the LA Sanitation (LASAN) to provide as-needed strategic management support services at a programmatic level for LASAN’s Watershed Protection, Clean Water, and Solid Resources programs through 2020. Tasks include reviewing and analyzing policies and capital improvement investments, evaluating programs’ financial viability and developing strategies to ensure long term viability and rate sustainability.
As part of this contract and on behalf of LASAN, SHA Analytics, LLC conducted a QA/QC review of the Wastewater Cost of Service Model. This model was developed by another firm and is used by LASAN to evaluate changes in the cost of wastewater services to inform future wastewater rate schemes. As part of our review, we evaluated the functionality of the revenue and expenditure projections, revenue requirement calculations, flow of funds calculations, functional cost allocations, and rate design calculations. Additionally we reviewed the underlying assumptions within the model to ensure consistency with the Solid Resources (SR) Fee and Multi-family Bulk Item Fee (MBIF) models developed by SHA Analytics, LLC to ensure consistency in key underlying assumptions such as number of accounts and inflationary and other growth factors.