As the nation struggles to repair, maintain, and expand its infrastructure, public-private partnerships are gaining traction as a strategy for delivering traditionally “public” services. Public-private partnerships (or P3s) are touted on the idea that public projects can benefit from the private sector’s increased competition, more accurate pricing, expanded financing options, and more flexible personnel and procurement processes. In return, the private sector is given the opportunity to access a market otherwise served by the public. It can be a mutually beneficial relationship.
The water industry is facing unprecedented capital needs, needs which will largely be recovered through increased rates. Sitting between public utilities and the public are governing boards trying to make the right decision for their community and the utility. What information do governing boards need to approve a water rate increase? What are the most effective methods of communicating the need for a rate increase?
This post was co-written by Mary Tiger and Lexi Kay
For about 20 residents in North Topsail Beach, NC, the new year brought a new fix for a lingering problem. This month construction began to address severe erosion and flooding that has been affecting these homes for years. Though the homes are oceanfront now, they were never intended to be. Several years ago the residences in front of these homes had to be condemned due to the erosion, and now as the sand dunes continue to shrink in size, current homeowners face the same fate. As a temporary solution, the town is investing in sandbag revetment, which will serve as a barrier between the homes and the ocean. This will buy the town and homeowners more time to craft a more permanent solution.
Unfortunately, this scenario is becoming more common in communities around the country. But what can homeowners do to manage these problems, and what role should local governments play?
Non-residential water customers use nearly 43% of public water supplied in the United States. In fact, their portion of public water demand has increased over the past twenty years as water efficiency in the residential sector has improved. Studying customer behavior has become an essential management strategy for most businesses. Yet this group of water customers is largely understudied by utilities, in large part because it is an extremely diverse customer classification. There are many ways to slice-and-dice the data. This blog post describes one way of identifying the big changes that big customers make.
The study: Over the past year, the Environmental Finance Center has worked with the North Carolina Urban Water Consortium and Valor Analytics to develop meaningful and feasible metrics to track non-residential water customers’ behavior. Utilities can incorporate these metrics into their practices to better understand and anticipate non-residential water customer water use and revenue impacts.
Meaningful metrics: One such metric is called the plateau: a significant and sustained change in water use behavior.
The Environmental Finance Center has partnered with Arcadis, Raftelis Financial Consultants, ICMA, and Stratus Consulting to get to the bottom of what meaningful communication between water utilities and their governing boards regarding rates and finances looks like. What do the boards want to know? How do they want to know it? It’s easy in a research project to want to focus on measurable results. If you do ‘x’, then you’ll achieve ‘y’. But it’s not that easy with communication.
We spent a week interviewing water utility staff and their governing board members in the Southeast last month, and their insight on the topic should be no surprise to anyone that has been involved in any relationship. Below are some of the insights shared by board members on effective strategies about how staff can foster their support for rate increases.