Develop financial sustainability and infrastructure in the water sector

Utilities face aging infrastructure, evolving regulatory demands, and increasing pressure to adopt sustainable energy solutions.

Utilities must integrate robust financial planning, strategic capital improvement programs, and rigorous construction oversight into their operational frameworks.

Comprehensive financial planning and municipal advisory

A sustainable financial strategy begins with thorough financial planning and municipal advisory services tailored to the unique needs of water utilities. This includes conducting detailed utility revenue requirement studies and cost-of-service analyses that provide a clear understanding of the bond funding necessary to support ongoing operations and capital investments.

Debt structure

Strategic financial planning also encompasses bond financing, where structuring debt appropriately can optimize long-term debt and rate-funded capital to ensure long-term fiscal health and minimize rate impact on utility customers.

Federal incentives

Leveraging federal incentive programs, such as Inflation Reduction Act tax credits and State Revolving Fund forgivable loans, can provide significant financial benefits. By making smart use of the clean‑energy and other incentives that remain, utilities can continue to cut costs and support sustainability despite the tighter rules under recent federal legislation.

Strategic capital planning budgeting and reporting

Capital improvement planning and performance reporting are cornerstones of fiscal sustainability for water utilities.

A well-structured capital plan prioritizes infrastructure investments, optimizes resource allocation, and mitigates risks associated with deferred maintenance or project scope changes. Integrating capital planning with performance reporting and financial management allows utilities to forecast funding needs accurately and align projects with strategic objectives.

Recommended capital planning practices

• Establish clear budget preparation
• Create structured governance and policies and procedures surrounding decision-making
• Align capital programs with long-term financial goals

This approach supports compliance with bond requirements and enhances transparency and accountability.

Rigorous construction auditing and project controls

Effective construction auditing and project controls are critical to delivering capital projects on time, within budget, and in compliance with contractual and regulatory requirements.

This includes early engagement to support strong contract terms for engineer and contractor agreements, construction delivery methodologies, competitive bid requirements, and monitoring. This includes labor tracking and time reporting, contract compliance reviews, and risk assessments throughout the project lifecycle.

Robust governance structures and process reviews help identify inefficiencies and potential risks early, allowing utilities to implement corrective actions proactively. By maintaining stringent oversight, utilities can reduce cost overruns, prevent schedule delays, and improve overall project outcomes.

Integrated advisory services for utilities

Combining financial advisory, capital planning, and construction audit services provides utilities with a comprehensive framework to manage their infrastructure investments effectively. This integrated approach supports sustainable growth, enhances operational efficiency, and ensures compliance with evolving regulatory and funding requirements.

It’s essential for utilities to focus on modernizing infrastructure and incorporating sustainable practices, and working with advisors who understand the technical and financial complexities of the sector can help.

Municipal advisory services are offered through Baker Tilly Municipal Advisors, LLC, a registered municipal advisor, controlled by Baker Tilly Advisory Group, LP.