BACKGROUND

Located in Central Oregon, the City of Madras is a community of approximately 6,800. The city's Public Works department had been operating the water system in accordance with a water service master plan that was generated from a 2014 consultant's report. The report identified several issues, including compliance, but provided no direction on how to solve them. Their master plan sat unaddressed for almost four years.

In addition, implementing the 30-year master plan would require rate increases to generate the needed revenues. Madras buys water from the North Unit Irrigation District at a bulk rate and then resells the water to its residents. The water rates were already high, making it impossible for them to clearly explain them to elected officials. "We couldn't get the message across," says Jeff Hurd, Public Works Director. "It's a part of the staff's undifferentiated search for higher numbers, which is why they came from all over the system and were telling us, 'this lack of analysis and political support for rate increases is a problem.'"

By 2018, they hadn't yet begun to tackle the master plan. In that year, City Finance Director Kristal Hughes met the Waterworth team at the Oregon Government Finance Officers Association conference. She immediately saw the potential of the software. She says her first thought was, "Oh my gosh — we can actually use this."

"I think the best thing is whenever we can say with confidence that if we don't raise rates, then it is going to negatively affect our cash flow. And being able to demonstrate that quickly allows us to have better conversations both between ourselves as a staff, and also have more confidence with the council, the governing board."

Kristal Hughes, Finance Director
City of Madras, Oregon

ENTER WATERWORTH

Madras met the value of Waterworth right away. They were able to quickly and easily experiment with different rate scenarios, and the approach would show them both immediate cash flow and long-term revenue goals. Waterworth's model made it easy to look at operating expenses, whereas the consultant's report focused primarily on capital projects. And the best part, according to Hurd, is that the same data that Waterworth's visualization tools give them helped them with council presentations. "Good visuals get meetings adjourned," he says. "And elected officials love it."

This improved understanding has led to better conversations with elected officials. After starting with Waterworth, Madras city council approved a 2% increase in water rates, with a similar increase the following year. In 2019, Hughes says Waterworth's visualization tools helped her to explain the rate increase with confidence that it wouldn't have a negative effect on cash flow. "I think the best thing is whenever we can say with confidence that if we don't raise rates, then it is going to negatively affect our cash flow. And being able to demonstrate that quickly allows us to have better conversations both between ourselves as a staff, and also have more confidence with the council, the governing board," she says.

Additionally, by modeling the increase for staff to see and explain in real time to elected officials, Waterworth's visualization tools have helped provide elected officials with a deeper understanding. This, in turn, allows them to more clearly articulate their decisions, and understand the ramifications. "I don't think we'd be able to do strategic planning without it," says Hughes. "It's like something that's always in the back of my mind. It's always there. It's not even a step, it's a step that's always there. It's just there. It's a tool that makes it a happy place."

The city has already been able to use the revenue generated from the 2019 rate increase toward water infrastructure improvement projects, such as road works, while leveraging that improved cash flow to gain funding for further master plan projects.

"[Waterworth] is a financial forecasting tool rather than just a rate study tool."

Kristal Hughes, Finance Director
City of Madras, Oregon

A TOOL FOR TODAY, A TOOL FOR THE FUTURE

Madras now has a tool that they can use to plan for the long term. According to Hughes, Waterworth is "A financial forecasting tool rather than just a rate study tool." This has allowed them to consider all expenditures and existing revenues on their own, instead of just focusing on meeting those revenue targets. They have now switched out of a five-year schedule of rate increases.

And they've done it far more easily and more efficiently than they might have with universally unpredictable. Says Hughes: "If you're budgeting for a large organization, say with 10,000s, civilian ratios 30 spreadsheets, then you try to apply a long-range forecast to that — oh my, it gets cumbersome really quickly. And if you're trying to incorporate historical data — to identify trends, for instance — it's impossible to do manually." Says Hughes: "By having it all in one place, we can quickly run scenarios."

A key difference for Hughes is the way Waterworth is "very intentional in how it projects forward (to model different scenarios), whether the assumptions are a percentage increase or a dollar amount." To demonstrate both the immediate and long-range impact on revenue. "It's almost like the app," she says. "You can easily drill down into the system."

And Waterworth has helped the city to meet their client's, where they are and take them to the next step. "It's almost like the app," she says. "You can easily drill down into the system."

"Your customer service is by far the best I've come into contact with."

Kristal Hughes, Finance Director
City of Madras, Oregon

SUMMARY

When Madras signed on with Waterworth, the city was at a standstill when it came to water rates and system improvements. The 2014 consultant's report hadn't addressed the issues with the city's water system, including compliance issues, but failed to provide any direction on how to address them. As a result, their master plan that came out of that report sat unaddressed for almost four years.

By 2018, they hadn't yet begun to tackle the master plan. In that year, City Finance Director Kristal Hughes met the Waterworth team at the Oregon Government Finance Officers Association conference. She immediately saw the potential of the software. She says her first thought was, "Oh my gosh — we can actually use this."

The city has already been able to use the revenue generated from the 2019 rate increase toward water infrastructure improvement projects, such as road works, while leveraging that improved cash flow to gain funding for further master plan projects.