Five Degrees of Financial Analysis—For Free!

By Mike Matichich, Principal Technologist and CH2M HILL’s Technology Leader for Financial Services in Water

Mike Matichich, Principal Technologist and CH2M HILL’s Technology Leader for Financial Services in WaterLike many utilities, Hillsboro, Oregon’s Clean Water Services wanted a way to analyze the financial and nonfinancial aspects of potential capital investments in order to increase the value proposition for customers and to ensure efficient water resource management. The difference is, they did something about it!  Clean Water Services not only operates four treatment plants, but also builds and maintains flood management and water quality projects and manages flow in the Tualatin River to improve water quality and protect fish habitat.  Because of their diverse mission, they’ve embraced innovation under a banner that they call “Controlling Our Destiny.”

In 2002, CH2M HILL was hired by Clean Water Services to work with the utility to develop a user-friendly tool to support these alternative evaluations, and in 2009 managers refined the tool even further. What resulted from this partnership is a modeling tool known as ProjectSelectTM, based in the 2007 version of Microsoft Excel, which includes present value, pay-back period, and equivalent annual cost of various options and allows users to take a range of cost estimates into consideration, based on the accuracy of the cost estimates. It also can factor in relevant nonfinancial considerations, such as impact on operational efficiency, contribution toward sustainability or other community objectives, and opportunities to coordinate work with other infrastructure projects.

The Excel-based model provides ease of widespread use by staff due to its familiar spreadsheet application.  And, Clean Water Services and CH2M HILL have decided to offer ProjectSelectTM as freeware—meaning any transportation, facility, utility, or any other infrastructure operation can download and use it for free.

Learn more about ProjectSelectTM and the success Clean Water Services is experiencing using the tool, as well as download the freeware, in my article, “Evaluating Investment Options: Water resource management utility develops freeware that transportation, facilities, and virtually any other infrastructure operation can use” in the December 2010 issue of Public Works Magazine.

Mike Matichich has more than 25 years of experience in managing and conducting strategic financial planning, management consulting, policy analyses, facility planning, and infrastructure management studies for public and private projects.

All of Mike Matichich’s articles from the Public Works “Road to Recovery” series:

-December 2010: Evaluating Investment Options: Water resource management utility develops freeware that transportation, facilities, and virtually any other infrastructure operation can use.

-August 2010: When two utilities become one: Three major initiatives, conducted simultaneously, avert “merger mania” by maximizing connections and minimizing disruption.

-June 2010: Risk-based budgeting: Combining condition assessments with risk analyses to target renewal and replacement investments.

-April 2010: How much is your time and effort worth? Calculating the point of diminishing returns when pursuing funding opportunities.

-February 2010: Entrepreneurial expansion: Managers in Southern California combat drought by enhancing their product portfolio.

-October 2009: Regulatory pressures lead to funding innovation: Creating a dedicated revenue stream for services that were formally ‘free.’

-August 2009: Beyond the stimulus: Tweaking capital budgets and financial plans to provide for the future.

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