In the past few years, the EFC has been asked to evaluate the different financial impacts of regionalization, from simple shared services agreements to full-on consolidation. Additionally, we have been evaluating barriers to and opportunities for the creation of new and different governance models. We have identified some key takeaways and, in the process, developed quite a few useful resources that might be of interest to communities or state and local leaders interested in moving the needle toward more regionalization in the water sector. Continue reading
Co-authored by Liz Harvell
Across North Carolina, population shifts, flooding and drought, changes in industry and manufacturing, and the continuous move toward a reduction in overall water use has continued to create partnership opportunities for large and small water and wastewater systems alike. For large systems anticipating future growth, increased and more economically-savvy water supply may be accomplished through partnering with surrounding communities; smaller systems struggling with increasing costs and decreasing revenues may look towards partnerships with other systems to increase access to capital and reap the benefits of economies of scale. Systems that find themselves with excess capacity due to the loss of large industrial customers may view selling water or wastewater services to neighboring communities as the only realistic way of plugging revenue holes. And while general economic downturns and natural disasters continue to drive water and wastewater customers to relocate, making their systems no longer financially sustainable without some type of intervention, various partnership models are appearing more and more appealing.
While the number of models for creating water partnerships is as numerous as the number of reasons systems have for pursuing them, the most common tool for creating water partnerships in North Carolina is the interlocal agreement.
There are hundreds, if not thousands, of these agreements in place throughout the state, ranging from simple agreements intended to cover sale of water by Community A to Community B, to a complex series of individual agreements that when taken together can be used to create a consolidated regional utility model.
Earlier this summer, the Environmental Finance Center at the University of North Carolina at Chapel Hill (EFC) published Crafting Interlocal Water and Wastewater Agreements, a guide laying out important considerations for communities contemplating how a local agreement might benefit their community. Using the EFC experience of providing direct assistance to communities developing partnerships over the last 20 years, this guide identifies 21 key topics of governance, financial, and technical issues that are integral to the success of these agreements. Below are 10 key topics, but be sure to see the full guide complete, with examples: Continue reading
Calling all North Carolina water and wastewater systems who are considering merging/regionalization or other state funding agencies that want to promote regionalization. The North Carolina Merger/Regionalization Feasibility Grant offers water and wastewater systems an opportunity to conduct a study to evaluate the merging of two or more systems. This program emerged from Session Law 2015-241 to help water and wastewater utilities explore pathways that can improve their finances and overall operating efficiency. Continue reading
Post originally published by the US Water Alliance
Now is a time of growing uncertainty and change in the water sector. Meanwhile, there are tens of thousands of water utilities and authorities in the United States. Collaboration will be essential to securing our nation’s water future. As the adage goes, there’s strength in numbers.
Consolidating water utilities is one of many options communities may consider to pool resources, streamline decision-making, and increase efficiency. While complex, consolidation may be an appropriate consideration when the community value proposition outweighs costs. Leaders need access to more information about the financial effects of consolidating water utility service to assess their options.
To meet that need, the US Water Alliance and the UNC Environmental Finance Center are releasing a new report, Strengthening Utilities through Consolidation: The Financial Impact. This report synthesizes the existing body of evidence and presents eight case studies from communities who have consolidated utility service in different ways and contexts. Continue reading
As utilities across North Carolina consider new ways of partnering with each other, including full consolidation, many are looking at the Water and Sewer Authority model as a potential governance structure. Local governments devolving water asset ownership and control to an Authority or other regional governance structure are often concerned about maintaining some form of control in input on essential services. Under the Authority model, local governments can continue to participate in governance by appointing members to the Authority board.
State statutes provide local government members with the ability to structure their boards to meet their local needs and conditions. Board structures vary across the state based on number of board seats, number of seats allocated to (appointed by) each member, and voting rights of members. In order to better understand the driving forces behind the existing structures, staff from the Environmental Finance Center at the University of North Carolina at Chapel Hill reviewed bylaws and articles of incorporation for all of the authorities, and additionally carried out informal interviews with individuals familiar with the board structures from many of the authorities.
The research focused on answering the following questions:
- What is the status of existing board representation structure for Authorities across the state relative to the communities they serve?
- What approaches were used to allocate seats on boards?
- Have boards been modified over the years and, if so, why and how?