Financial Capability Analysis for City of Marion (OH)
Client: City of Marion
Location: Marion, OH
Hazen and Sawyer prepared a Financial Capability Analysis (FCA) for the City of Marion to determine the affordability and sustainability of the City’s proposed Long Term Control Plan (LTCP). The FCA was performed using the standard metrics established under EPA’s 1997 Guidance for Financial Capability Assessment and Schedule Development and supplemental information allowed for under EPA’s Revised Final Guidance issued in November 2014.
Project Outcomes and Benefits
- Evaluated the LTCP cost per household using quintile incomes in addition to median household income.
- Analyzed demographic trends, poverty rates, population percentage receiving government benefits and constraints to future municipal financing to assess the capacity of the utility and its ratepayers to bear the full costs of the LTCP
A new LTCP is required to meet Marion’s Clean Water Act (CWA) obligations including the reduction of Combined Sewer Overflows. Although the LTCP was found to result in a “high burden”, because the cost per household would reach about 2.3 percent of MHI, the standard metrics still underestimated the magnitude of the financial burden that would be placed on the ratepayer base. For example, using quintile household income data found the cost per household approaching 3 percent for 40 percent of the resident population. Marion’s financial capacity to finance large infrastructure is also constrained by a slowly decreasing and aging population, stagnant economic development, and persistent deep pockets of poverty, with more than 26.7 percent of the population living in poverty according to the most recent census data.
To mitigate the high economic impact of the LTCP, Marion will need to work with its regulators to prioritize and configure infrastructure investments to ensure the sustainability and affordability of those investments while meeting CWA obligations.
For more information on this project, or to discuss a similar project in your area, contact Alan Karnovitz at email@example.com