Case Study

Miami Dade Water and Sewer Department, Financial Management Benchmarking

The Miami Dade County Water and Sewer Department (WASD) enacted a rate freeze in 1996 and a further residential rate reduction in 2001. WASD's growth demands, coupled with its large ongoing capital program to meet state and federal regulatory requirements, meant that WASD would soon have to enter the bond market for the first time since 1999. To help secure the best possible rating for its new debt while limiting rate increases to customers, the County asked PFM to review its reserve policies and revenue requirements. PFM examined WASD's projected financial position, as well as its current reserve policies and those of comparable utilities, nationally and in Florida. Considering this information, as well as the context provided by WASD's last bond ratings, PFM suggested changes to the utility's reserve accounts that would allow WASD to meet its immediate revenue requirements while preserving emergency funds, maintaining working capital, and creating an effective rate stabilization fund. WASD is currently taking the proposed new rates to the County Commission for approval.