Author: Jeffrey Hughes (page 1 of 5)

Catawba County’s Innovative Water Service Partnership Model

It seems like almost everyone, including regulators and utility organizations, recognize the benefits and need for expanded partnerships and collaboration in the water and wastewater sector. Small towns are finding it difficult to meet their growing infrastructure and regulatory needs and are talking with each other and their larger neighbors about different regional service models.

Partnerships are not limited to small systems; the cost of new water and wastewater supply is so great, that even large, financially healthy systems are increasingly working together to share costs and partner on  large facilities. Most of these partnerships involve two or more utilities working together, but in at least one North Carolina county, one of the key partners in many of the region’s recent water partnerships is a local government that is not a direct utility service provider.  For more than 20 years, Catawba County has assisted many of the municipalities in the county to install high impact water and wastewater projects without ever sending out a single water or wastewater bill to a retail customer. Continue reading

Interested in a Water Public Private Partnership? Start with Realistic Expectations!

The Environmental Finance Center at The University of North Carolina recently completed a study which compiled and analyzed examples of alternative delivery models in nine communities across the country. This research was supported by EPA’s Water Infrastructure and Resiliency Finance Center and through partnership with the West Coast Water Infrastructure Exchange. Most of the communities profiled used public private partnerships between private companies and governmental entities to build, upgrade and/or manage essential water or wastewater facilities. The models were diverse: one of the examples involved an innovative partnership between two governmental agencies – Allentown and the Lehigh County Authority. Another involved a partnership in Prince Georges County to install distributed stormwater facilities.

Alternative delivery models, particularly models that involve a high degree of private sector participation and private sector arranged financing, can generate significant passion both in favor and against the approach. Critics complain that profit motive in an area as important as public health and environmental protection can lead to unaffordable or inequitable services, while advocates see these partnerships as a way of providing an influx of expertise; creating structural financial incentives that promote performance; and allocating risk more effectively.

Our study looked at only a fraction of the alternative project delivery examples across the country, but in our analysis we encountered neither miracles nor devastation in the wake of these partnerships. What we found in most cases was the implementation of management approaches that, like so many other innovative tools, resulted in some challenging situations, but which when used prudently were able to advance a range of diverse local objectives. After reviewing promises and outcomes across the country, it became clear that communities entering into these approaches need to have realistic expectations. While we looked at a relatively small numbers of cases, we did notice some very important trends in outcomes that communities may want to consider when crafting expectations.

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WIFIA! EPA’s New Billion Dollar Water and Wastewater Loan Program Hits the Street

What is WIFIA? WIFIA stands for the Water Infrastructure Finance and Innovation Act, the name of the federal act that authorized an interesting new federally managed water and wastewater infrastructure funding mechanism. WIFIA includes both direct loans and a new credit enhancement/guarantee mechanism (more on WIFIA guarantees in a future blog post). The WIFIA program was first created in 2014, but its funding appropriation and program guidance was not completed until the end of 2016. The US Environmental Protection Agency (EPA) announced the Notice of Funding Availability for WIFIA on January 10th, 2017. Borrowers interested in taking out a loan with this year’s funds have until April 10th, 2017 to submit letters of interest that will be considered by EPA.

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Important Water Impact Fee Development in North Carolina: To be or not to be, that is the question…

“To be or not to be?” This is the famous question that haunted Shakespeare’s Hamlet as he struggled with his existence. It is now also the question that may be haunting some municipal water managers throughout North Carolina after a recent North Carolina Supreme Court decision involving water impact fees. The School of Government’s Local Government Finance Attorney Kara Millonzi recently wrote an excellent blog on the case that explains the legal background and repercussions. Read it!

At the heart of the issue is the phrase “to be” that is found in the enabling statutes that authorize water fees for some types of utilities in North Carolina (Water and Sewer Authorities, County Water Districts). These words are not found in the almost identical statutes that authorize fees for other public water utilities (Counties, and Cities):

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Four Finance Facts about Flint

As this blog is being written, water and community managers from across the country are talking about the water crisis that is occurring in Flint, Michigan. The City made a decision several years ago to discontinue buying Lake Huron water from Detroit in favor of an alternative supplier who was planning on constructing a major new transmission line to provide a “less costly” supply of Lake Huron water. While waiting for the project to be completed, the City relied on water from the Flint River. This source of water was determined to have a different chemical composition that led to water line corrosion causing lead to enter the drinking water supply. In addition to the acute public health impacts of the crisis, the impoverished community is facing a huge price tag to address their infrastructure problems.

As often happens with a crisis, the attention on Flint’s situation is shining a light on challenges that are by no means unique to Flint. While there are many specific circumstances that contributed to the problems in Flint, many of the underlying financial issues facing Flint will have or already have had an impact on water systems across the country. Here are four financial facts that played out in Flint that every water and community manager should be thinking about:

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