Modeling The Financial Health Of Public Water Systems
Author(s)
Jordan, Jeffrey L.
Witt, Harvey J.
Wilson, James R.
Advisor(s)
Editor(s)
Hatcher, Kathryn J.
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Abstract
The purpose of this paper is to present a theory
and a model for assessing the financial health of public water
systems. Using financial information from 25 water utilities
in Georgia, the paper seeks to identify the causal relationships
between the financial performance of a water utility and its
fiscal position. The need for a theoretical understanding of
water utility financial health is the result of the increasingly
stringent performance requirements under the Safe Drinking
Water Act (SDWA). The issue has become particularly
important for small water systems which will be exposed to
significant financial demands. A set of fmancial ratios was
developed and tested in a model that was based on liquid
asset theory. The model contained five variables designed to
account for liquid assets, current debt, cash-flow, and level of
expenses. The variables fit the need of water utilities to
provide an adequate level of operation and maintenance to
meet current and future system needs as well as SDWA
standards.
Sponsor
Sponsored and Organized by: U.S. Geological Survey, Georgia Department of Natural Resources, The University of Georgia, Georgia State University, Georgia Institute of Technology
Date
1995-04
Extent
Resource Type
Text
Resource Subtype
Proceedings