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Conserving Water through Smart Growth and Density

Smart Growth programs—developing urban areas with a variety of building types and land uses in a concentrated space—are touted for their potential to spur economic development through the creation of more attractive, environmentally sustainable, and walkable communities. One underlying theme is that increased urban density allows people to access a variety of shops, housing options, and recreational areas without having to hop in their cars. The most commonly cited potential benefits of smart growth include improved public health, higher air quality due to reduced vehicle traffic, more efficient use of land, protection of valued natural or open spaces from sprawl, increased property values because of high demand, and often greater community involvement in the development process.

A recent post on the School of Government’s Community and Economic Development blog outlined some examples of Smart Growth programs here in North Carolina, and Glenn Barnes earlier wrote about five ‘tools’ included in the EPA’s Building Blocks for Sustainable Communities program. This post examines what I think is a sometimes overlooked benefit of Smart Growth and higher densities: water conservation.

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Planning, Policy, and Communication Strategies for Rate Increases: One Utility’s Perspective

Guest Post by Shane Hoffman

The water industry is entering a period of increasing costs and declining consumption. Inflationary costs for water utilities are far outpacing normal inflationary costs as measured by the All Items Consumer Price Index (CPI). The need to replace aging infrastructure such as distribution mains and treatment facilities is expected to increase dramatically in the future. Further, in recent years water-saving devices and appliances coupled with increased awareness of conservation have decreased indoor and irrigation-related consumption. These two factors lead to lower revenue and higher costs over the long term. Given these trends, many utilities will need to pass rate increases to ensure financial stability and continued delivery of safe, high quality water. But success in rate increases isn’t always easy: to accomplish this, water utilities will need to develop a comprehensive strategy involving the areas of planning, policy, and communication.

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A Whole New World – of Stormwater!

Many of you know us for our Financial Sustainability and Rates Dashboards, but you may not know that these are not just limited to water and wastewater rates: there’s also stormwater! In recent years stormwater has perhaps not received the attention it deserves. Five years ago the EFC created stormwater fee dashboards for North Carolina and Georgia, and this year we’re taking them to a whole new level. For 2017 we are unveiling new stormwater dashboards for both Georgia and (eventually) North Carolina with a host of new features. The new dashboard comes at a time when  stormwater has been catapulted into the limelight as the hot topic of the moment in Georgia environmental legislation.

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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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Are Utilities that Need to Raise Rates Actually Raising Rates?

What happens if a water utility collects less in revenues than it pays in expenditures in one year? It will raise some alarms, but some utilities might be able to weather that shortfall by dipping into their reserves and bounce back the following year. But what happens if a water utility collects less in revenues than it pays in expenditures in three consecutive years? That is probably a strong indication that the rates it is charging its customers are too low. Assuming that expenses cannot be significantly reduced, a rate increase is almost certainly necessary. So are utilities in this position raising rates the following year, or are there obstacles that may be chronically preventing the adoption of rate increases? In this post, I analyze ten years of financial and rates data from hundreds of North Carolina utilities to explore this question.

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