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Financial Capacity Definitions

Revenue Sufficiency

  • Rates and fees cover the full cost of your water system's service.
  • All costs and revenues are known and can be measured.
  • Reserves or savings are available for unexpected expenses (i.e., a rainy day fund) and asset repair and replacement.

Credit Worthiness

  • The water system has sufficient credit worthiness to allow it to access funds for an emergency or for implementation of a capital improvement plan.
  • The water system can access capital through public or private sources.

Fiscal Management and Controls

  • The water system keeps adequate books and records, uses appropriate budgeting, accounting, and financial planning methods, and manages revenues effectively.
  • The water system monitors and minimizes potential risks to meeting financial obligations.

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