Town of Levinton Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Town of Levinton Case Solution

Abstract

The Levinton town is located on the pacific coast of California. The population of the town is 2000 residents. The town population is increasing every year as per estimates 30 new homes are being made every year. There is well established water and sewerage system maintained by the municipal department. There is need to expand this system so as to accommodate the increasing population. There were several arguments and disputes among different parties involved including senior townsmen and public authority personnel’s. It is suggested to take debt by issuing bonds as this fund will be then used against expansion. Moreover, aplan is needed to be made so that every accept that.

The water and sewerage system caused deficit income for municipal department. The initiation fee and usage fee are not as per standards. Moreover, the usage is dependent on the estimates not actual. There is no meter installed to bill the actual units used. Significant considerations need to be made to revise the policy and make the surplus into profit. Furthermore,steps should be taken in line in order to accommodate the expansion plan and manage the debt taken.

By revising the policy such as increment in the usage fee and decrease in the initiation fee, with another change that the new subscription of the service will not only be required to pay initiation fee only but also now initiation fee plus half of the usage fee in the first year of the service, the deficit not only changes into break-even but significant surplus with a good average growth as well.

Town of Levinton

Cross-subsidization

The townsmen have several conflicts regarding the costs that would be occurred as a result of the expansion of the water system. They were of different view sand each one had their own perspectives. In this situation it is more suitable to make one decision that will be beneficial for the town as a whole not biased to anyone’s benefit.

Firstly, it is suggested that since the usage system is not accurate and based on the estimates rather than actual consumption, there might be inefficient system of charges and collection. The estimates might be wrong and not reflective of the actual usage. There should be meters installed at each household and they should be charged accordingly at their actual usage. Furthermore, it is more likely that this will cause better collection of fees and will cause more revenue to the municipal department.

For expansion, the whole burden should not be borne-by the new residents. Although the marginal water system is mainly for the use of facilities by the new users however,this upgrade in town facilities causes prosperity to overall town, thus the cost should be bear by the all townies accordingly.There should only be exception given to lawns owners, and other than this all residents should be charged for both sewer and water consumption. Moreover, both new and existing residents should be charged a slight more usage fee. In addition to this,there is policy of no charge in the year of initiation of service. Therefore, this should also be eliminated.

As discussed it is thought that the costs will be financed and there will be no more deficits. The estimate based usage charges might be a major problem and by usage of meters this will be solved. Moreover, meter installation cost and maintenance should be incorporated in the usage bill of each townie. However, if deficit still exists then this should be borne by the tax payers. Nonetheless,the deficit will be much lower and this will cause fewer burden son tax payers..................

Town of Levinton Harvard Case Solution & Analysis