Agency Response: Agree, Implementation Date – July 6, 2022
1.3 Review Denver Water’s Annual Service Fee Cost Estimate – The Wastewater Management Division should develop and document a process to review the annual cost estimate for billing service fees that Denver Water provides to ensure no erroneous costs are present before the city agrees to the annual fee.
This review should include, at a minimum, an evaluation of the direct costs allocated to the city and the number of accounts Denver Water has for the city to ensure costs are proportioned accurately.
Agency Response: Agree, Implementation Date – Sept. 30, 2022
2.1 Revise the Decision Analysis for Sewer Billing to Align with Governmental Best Practice – The Wastewater Management Division’s analysis to move sewer billing in-house should align with city and county government best practice. At a minimum, this should include the consideration of the following:
- Strong executive direction.
- Stakeholder Input.
- Service Requirements.
- Flexibility of the arrangement to bill in-house.
- Reversibility of the arrangement to bill in-house.
- Transition Costs.
- Communication.
- Cost and Service Quality (consideration of qualitative as well as quantitative factors.)
Agency Response: Agree, Implementation Date – Dec. 31, 2022
2.2 Improve Upon the Net Present Value Analysis Tool – In addition to Recommendation 2.1, the Wastewater Management Division should improve upon its net present value analysis to include all incremental costs identified and to ensure cost estimates and discount rates reflect the most current available information. Additionally, the analysis should consider the riskiness of estimated future cash flows. This can be accomplished in two ways:
- Requiring a higher cost-savings threshold for project acceptance for riskier projects.
- Using higher discount rates for more risky cash flows.
Agency Response: Agree, Implementation Date – Dec. 31, 2022