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Feasibility Evaluation of the Arkansas Valley Pipeline Water Works! Committee July 2003 Section 5 -Institutional Evaluation The selection of a preferred institutional framework is a subjective process, but the underlying objectives for this new entity are not. The entity must be capable of accomplishing a number of known and defined functions. Alternative administrative frameworks were explored for institutions that could own, govern, and operate the Arkansas Valley Pipeline. Desirable characteristics for such an institution were defined, and advantages, disadvantages, and potential fatal flaws were identified for each alternative. Evaluation criteria were established to evaluate the alternatives. The evaluation criteria deemed essential to success of the Arkansas Valley Pipeline include: • Ability to apply for, receive, dispose of Federal or state appropriations and repay any loans from funding agencies; • Powers and abilities to raise revenues to pay off loans, and to construct and operate the water system. At a minimum, this must include the ability to set and collect water tap fees and operating charges; • Ability to contract with other levels of government; and • Ability to construct and operate a water system within the initial service area. Additional evaluation criteria that appear to be generally preferable for achieving success include: • Governance, which covers all necessary aspects of a domestic water service, but also is accountable to its customers and responsive to stakeholders; • Ability to hire employees on its own to operate the pipeline and the water system; and • Flexibility, especially in the ability to add new areas of service based upon a formal petition process. In examining the alternative institutional frameworks, some exhibit fatal flaws, but others satisfy the essential objectives and the preferable evaluation criteria to some degree. Four institutional frameworks were identified and examined for the prospective Lower Arkansas Valley Pipeline project. Screening of the four types of institutional frameworks concluded that two institutional frameworks, a Water Conservancy District or a Water Authority, appeaz to be the most advantageous due to their flexibility and responsiveness to stakeholders. One thing is certain: an existing entity or group of entities having direct interest in the Arkansas Valley Pipeline Project, such as a county or group of counties, must step forward to establish the GEI Consultants, Inc. ~ 3 01284 03-07-21 feasibilty reDOrt executive summary