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
Did you know there are over 250 publicly owned small water systems serving less than 1,000 connections in North Carolina? In the case of water and wastewater utilities, bigger can often mean better.
The Environmental Finance Center at the University of North Carolina at Chapel Hill was asked earlier this year to take the lead on a wastewater regionalization study for a small town of 700 people in Western North Carolina. The Town (which will remain anonymous as the study is still in progress) had been awarded a regionalization grant from the North Carolina Department of Environmental Quality’s Division of Water Infrastructure (DWI) to study alternatives to their existing wastewater business model. Continue reading
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
Glenn Barnes is senior project director with the Environmental Finance Center based at the University of North Carolina at Chapel Hill. He is the co-director of the Smart Management for Small Water Systems Project.
Drinking water systems of all sizes can benefit from partnering with other water systems in many ways. Small drinking water systems in particular are most able to benefit from partnerships because of the issues they face with economies of scale, access to capital, and use of trained operators.
Physical interconnections between systems—pipes that bring water regularly, periodically, or during emergencies from one water system to another—are perhaps what most people think about when they hear “water system partnerships.” Systems interested in physical interconnections should ensure that the contract governing the interconnection is comprehensive, and many small drinking water systems have used physical interconnections to help bring down their cost of service. Continue reading