DDPA 8200 Week 5 Assignment: Using Cost Benefit Analysis to Evaluate Water/Waste Water Treatment Capacity

Simulations and scenarios provide a powerful means to help exercise and improve your decision-making abilities; and explaining a topic to others is a great way to increase your knowledge of that topic. This week’s Assignment asks you to assume the role of a city manager who aims to convince others of the benefit of using cost benefit analysis. This Assignment will help you increase your knowledge of cost benefit analysis and sharpen your managerial communication skills.

1. Review this week’s Learning Resources to deepen your understandings of cost benefit analysis in the public sector. 

2. Review this week’s Learning Resources addressing memorandum writing. 

3. Review the first four steps described in the U.S. Army Cost Benefit Analysis Guide from this week’s Learning Resources. 

4. Read the scenario provided and consider the value of applying cost benefit analysis to address the scenario. 

You are the city manager of a municipality of 250,000 citizens located in a county with 250,000 more residents living in unincorporated areas surrounding the city. Recently, a large automaker announced its plans to locate an assembly plant in the unincorporated area of the county. The new facility is expected to bring new growth to the city and county. 

Through a joint service agreement with the county, the city furnishes water to all county residents and is expecting to provide service to the new auto plant. Historically, the user rates charged to county residents residing outside the city have been substantially higher than those charged to city residents. As a result of the higher user fees, providing water to unincorporated areas has been a source of revenue for the city. 

The city’s main water treatment plant is more than 40 years old and is operating near capacity. Also, the maintenance costs of the plant are starting to increase at an alarming rate. With the anticipated new demand of more water, the city needs to make a decision about expanding its water treatment capacity. 

The mayor and council are looking for guidance on how to determine the best way to increase the city’s water treatment capacity. The mayor is a former military officer and is familiar with the U.S. Army’s approach to cost benefit analysis. The mayor is trying to convince her fellow councilmembers that the city needs to develop a cost benefit analysis to determine the best course of action. You agree with the mayor’s approach to decision-making; however, some older members of the council have some doubts about the use of cost benefit analysis as a decision-making tool. The cost benefit doubters claim that they are elected to make decisions for the city, and they do not want to relinquish their decision-making responsibilities to some opaque operations research technique that the average citizen could not possibly understand. In order to convince the council of the value of cost benefit analysis, the mayor has asked you to write a memorandum addressing the first four steps in the U.S. Army Cost Benefit Analysis Guide.

Write an assignment of 4 to 6 pages, not including the reference and title pages)

Write a memorandum in which you address the first four steps described in the U.S. Army Cost Benefit Analysis Guide as they relate to the city’s need to increase its water treatment capacity. 

Note: For Step 4, you do not need to actually develop cost estimates. Instead, please provide guidance on how you might go about deriving estimates.

Purdue Online Writing Lab. (n.d.). Memos: General introduction. https://owl.purdue.edu/owl/subject_specific_writing/professional_technical_writing/memos/index.html

How to write a cost benefit analysis

wilymanager. (2011, November 17). How to do a cost benefit analysis: A 3-minute crash course [Video]. YouTube. https://www.youtube.com/watch?v=Qt8HNNWIV-c