Analysis of a uniform, comprehensive cost analysis method for Virginia municipal water and wastewater systems

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1987
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Virginia Polytechnic Institute and State University
Abstract

Municipal water and wastewater systems in Virginia are faced with substantial capital needs for the expansion, replacement, and improvement of existing facilities, and the construction of new facilities. To compound this problem, the financial environment surrounding these utilities is changing from one in which grant financing is being replaced by debt financing, and the overall availability of federal and state aid is declining. The literature on utility management emphasizes the use of a "user-pays" approach that makes use of a comprehensive method of cost analysis.

This thesis tests the hypothesis that a uniform, comprehensive cost analysis method can be developed to effectively meet the cost analysis needs of municipal water and wastewater systems in Virginia. This is accomplished in a four step process: development and distribution of a questionnaire to all municipal water and wastewater systems in Virginia; analysis of the survey results; description and analysis of the Government Finance Officers Association's comprehensive cost analysis workbook for water and wastewater utilities; and evaluation of this workbook in several Virginia communities.

The results of this work show that a comprehensive cost analysis method can be developed which will effectively meet the cost analysis needs of water and wastewater operations in Virginia. However, such a method does have its shortcomings, and further research is recommended.

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