Step 4 – How Do I Carry Out This Plan?

In the previous section, you may have discovered that you should be reserving additional money every year to cover the cost of rehabilitating and replacing your assets. Preparing a financial forecast (by estimating how much revenue you expect for the next five years) will help you determine if you will need to supplement your revenues to carry out your asset management plan.

If you don’t already have a five-year forecast, the Budgeting Worksheet will help you complete this task. In addition, to increase or more efficiently use your revenues to operate and maintain your system and carry out your asset management plan, you can:

• Create additional reserve accounts.
  Reserve all or some of the money you will need in a protected capital improvement reserve account and create an emergency account to fund unexpected repairs and replacements. You may be restricted in how much money can be placed in reserve accounts. Check with your state or tribal coordinator for more information.
• Form partnerships.
  Working with other water systems may allow you to lower costs, simplify management, and continue to provide your customers with safe drinking water.
• Consider increasing rates.
  Alternatively, consider assessing a flat fee for infrastructure improvements or funding of a reserve account. Check with your state for rate-setting information.
• Apply for financial assistance.
  Banks and government agencies can provide funds for infrastructure projects such as treatment facilities, distribution lines, and water source development. If you do not have enough funds to pay for needed capital improvements, you can apply for loans and grants. Although you will pay interest on loans which will, over the long term, increase your costs, loans will allow you to address needed system improvements without dramatically increasing rates or assessing fees to cover the costs. Seek financial advice from your city clerk, a certified accountant, or contact your State or Regional Tribal Capacity Development Coordinator if you are considering a loan to fund capital improvement projects. Also consider programs that may provide financial assistance to help you fund major infrastructure improvement and replacement projects.