When setting rates, most water and wastewater utilities are concerned (at least to some extent) about whether their customers can afford the resulting bills. Many utilities are also wondering how they can assist the poorest segments of their customer base with the cost of water/wastewater service. However, a frustrating problem is that a lot of low income people live in multifamily housing, such as apartments, and do not actually have an account with the water utility. Even though they don’t receive a bill directly, these tenants are paying for the water/wastewater service indirectly via their rent. So some utility managers have been grappling with effective ways to provide assistance to these water users. Different theories involving vouchers etc. have been espoused, but one utility seems to have actually solved the problem.
Author: Stacey Berahzer (Page 2 of 6)
SOG Environmental Finance Ctr
Water and Wastewater utilities receive “credit ratings” just as a private individual has a FICO® score. While organizations like the Fair Isaac Corporation calculate personal credit scores, for entities like local government utilities, the three groups that generate credit ratings are Fitch Ratings, Moody’s, and Standard and Poor’s (S&P). For the utility, a higher rating means better access to credit, and at more favorable terms. S&P published the criteria it used for “Water, Sewer, And Drainage Utility Revenue Bonds” in 2008. To say that things have changed with the economy since 2008 is an understatement! In 2014 S&P solicited comments on its re-worked methods and assumptions for calculating these credit ratings. The new criteria will result in credit rating changes to 1 in 4 utilities (of the 1,600 utilities that S&P rates). Some ratings will go down. How can your utility be among the 200 that will have a higher credit rating?
About 96% of the population in Puerto Rico receives water from the Puerto Rico Aqueduct and Sewer Authority (PRASA). But the other 4% of the population is supplied by about 240 very small water systems. In teaching workshops this year in Oklahoma, Kansas, Georgia and Colorado, it’s obvious that despite their similarities, each state’s small water systems believe that they face unique management challenges. Puerto Rico systems, however, may have a bona fide claim on uniqueness.
Workshop in Arecibo, PR. Hosted by Universidad de Puerto Rico en Arecibo
With their lush vegetation, high annual rainfall levels, and panoramic views of water, you might think that Caribbean islands have escaped many of the water management problems that other communities experience. But managing water in this setting has many challenges. Recurrent flooding problems are plaguing many islands. In Trinidad these problems are rooted in increased development and behavioral practices such as pollution. Managing this flooding, along with providing adequate and reliable public water supply, requires creative financing mechanisms.
Depending on where you live, you might have wandered through scaffolding that supports new high-rises in a rapidly-developing city, or driven past brand new housing developments cropping up where wetlands used to thrive. You might have wondered about the environmental impacts of construction and the long-term impacts of newly paved surfaces replacing natural habitat. Fortunately, the EPA requires developers to consider these impacts prior to construction in order to avoid adverse impacts, minimize their impacts, and finally, provide compensatory mitigation for the unavoidable impacts to wetlands. But how do local and state governments organize systems and structures to manage these processes?
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