AWWA ACE65303

This powerpoint presentation begins by outlining the history of fire protection cost, and the two philosophies for determining the costs of fire protection, incremental and proportional. The presentation cites two sources for determining who pays for fire protection: AWWA Manual M1, Water Rates, Chapter 30; and, an article in the June 1982 issue of the Journal AWWA titled, "Water Utility Costs and Rate Design for Fire Protection Services", by C.W. Corssmit and D.D. Green. A case study at the City of Missoula, Montana in 2005-2006 is outlined, beginning with the issues that include: Hydrant Charges (Fire Protection Cost) Escalations versus Property Tax Limitations; percentage of property in the city that is tax exempt; and, lack of a real cost-of-service (COS) methodology. Background information is provided on the City of Missoula, Montana, including statistics on fire hydrant cost vs. city's property taxes collection. The city's view of contested issues include: the city is not the beneficiary of fire protection service; the fire hydrant assessment formula imposes an unjust and adverse fiscal impact to the city; and, Mountain Water Company's (MWC's) fire hydrant assessment formula is an inequitable and obsolete rate practice, not based on proportional COS standards. Topics outlined include: ruling; Wisconsin Public Service Commission; Iowa Utility Board; California Public Utilities Commission; COS Rate Design; FPC Rate Steps; Revenue Requirements; Example of Cost Allocation Unit Processes; Cost Allocation Functions (Base Extra Capacity Model); and, recommendations for M1.