Many of the local governments we assist at the Environmental Finance Center struggle to raise enough money to support their environmental services. Often, we work with these communities to improve the finance and management of their systems through better rate setting, cost controls, and long-term planning. But another solution for struggling communities is to increase and strengthen their customer base through community and economic development.
EPA has a number of programs and resources aimed to revitalize communities through “Smart Growth” economic development, which builds upon existing assets, takes incremental actions to strengthen communities, and builds long-term value to attract a range of investments. In previous posts, we looked at aspects of EPA’s Smart Growth initiative including their new Framework tool for Small Cities and Towns as well as Smart Growth efforts here in North Carolina. This post examines another aspect of the Smart Growth initiative: the Building Blocks for Sustainable Communities program.
Continue reading “Community Development through EPA’s Building Blocks for Sustainable Communities Program”
Many small towns and rural areas had an economy that was built on a single economic sector (for example, logging, mining, or manufacturing) that has changed significantly by technology and/or market forces, leaving residents without jobs and governments without a healthy tax base. Some communities respond with an economic revitalization strategy that seeks to attract major employers to replace lost jobs. Another approach is “Smart Growth” economic development, which builds upon existing assets, takes incremental actions to strengthen communities, and builds long-term value to attract a range of investments.
This past year, the U.S. EPA released Framework for Creating a Smart Growth Economic Development Strategy: A Tool for Small Cities and Towns. This tool is intended for small to medium sized cities and towns that have stagnant population growth, struggling economies, and areas of divestment. It is the latest in a slew of resources available from EPA on Smart Growth, including other tools, publications, technical assistance, and case studies. Continue reading “EPA Resources on Smart Growth Economic Development”
In past posts, we have discussed how governments can use financing programs to encourage energy improvements and how energy improvements can turn undesirable properties into economic opportunities. In fact, economic development and job creation are some of the major benefits touted by governmental energy programs, even above and beyond the potential environmental benefits of such programs.
The non-profit American Council for an Energy-Efficient Economy (ACEEE) has written extensively on the job creation benefits of energy programs, including a fact sheet and a series of case studies. Many other entities have put out their own case studies, such as World Resources Institute (WRI).
But what is the best way to measure job creation? Is there a consistent, accepted methodology to measure the economic impact of energy programs so that programs can be compared to each other? Continue reading “How to Measure Job Creation from Energy Efficiency and Renewable Energy Programs”
At the beginning of September, the US EPA announced that it had awarded almost $2 million to 19 small businesses nationwide to develop and commercialize technologies that tackle critical environmental problems through its Small Business Innovation Research (SBIR) Program.
Through these types of programs, governments can encourage economic development through investing in firms working on environmental and energy improvement technology. Governments can also encourage economic development by creating incentives for existing businesses to improve energy management and by helping to foster a market for energy improvements in residential properties. Continue reading “Encouraging Environmental and Energy Improvements through Financing Programs”
In previous posts, we have discussed where to find data to help make smart financial and managerial decisions. Another vital data source for any enterprise is its own financial statements, from which enterprises can calculate key financial indicators. In March, we discussed operating ratio. This post will discuss another key financial indicator–debt service coverage ratio.
Debt service coverage ratio is an important indicator for many aspects of community and economic development. For this blog, let’s look at key financial indicators from the perspective of a business-like unit within government–a water or wastewater system. Key financial indicators are a way for that enterprise to get a snapshot of its financial health and to determine whether it needs to make adjustments to its rates, and they should be calculated annually when financial statements are released. Debt service coverage ratio, as the name suggests, measures the system’s ability to pay its long-term debts. Continue reading “Key Financial Indicators: Debt Service Coverage Ratio”
In previous posts, we have discussed where to find data to help make smart financial and managerial decisions. Another vital data source for any enterprise is its own financial statements, from which enterprises can calculate key financial indicators.
Let’s look at key financial indicators from the perspective of a business-like unit within government–a water or wastewater system. Key financial indicators are a way for that enterprise to get a snapshot of its financial health and to determine whether it needs to make adjustments to its rates, and they should be calculated annually when financial statements are released. One important financial indicator is operating ratio, which measures the ratio of annual operating revenues to annual operating expenses. To be a true enterprise fund that is self-supporting, a system should strive to have at least as much operating revenue as it has operating expenses, if not more. Otherwise, the system would be operating at a loss.
Continue reading “Key Financial Indicators: Operating Ratio”
Ever need to know how many single-family wood-framed houses were sold in the Midwest last year? Or the latitude and longitude of every farmers market in Wisconsin that sells herbs, flowers, and soap? What about the number of planes that sat on the tarmac more than three hours this past June? Or the annual sales volume of book stores in the United States for the past 20 years?
These might sound like crazy questions, but all of the above information is available through the federal government’s data portal www.data.gov. Data.gov houses more than 130,000 data sets that are freely available for download (and, no, that’s not a typo—more than one hundred thirty thousand data sets). These data can be invaluable resources for making smart managerial and financial decisions for our economic development, community development, and environmental services. Continue reading “Where to Find Data for Smart Managerial and Financial Decisions”
When the five small water systems in Hampton County, South Carolina decided to band together to create the Lowcountry Regional Water System (LRWS), they, like many other small water systems across the country, faced a number of managerial and financial obstacles. Among these challenges were a flat growth rate, degraded and inadequate infrastructure, artificially low rates, and an economically disadvantaged population. Each of the five communities in this rural county charged vastly different amounts for their service, with monthly rates for 5,000 gallons of water and sewer ranging from as low as $36.50 to as high as $62.67. Whether the rates of the new, regionalized water system were “affordable” for all customers became a top concern for the LRWS. Continue reading “New Tool Helps Communities Assess the Affordability of Services”
Many government-owned wastewater systems in the United States are enterprise funds. That is, they are business-like units within the overall government that should be self-sustaining, taking their revenue from the rates and fees charged to wastewater customers rather than from taxes. Ideally, wastewater utilities base their rates and fees on the full cost of providing wastewater service, not just on operating expenses and routine maintenance costs. Full cost rates and fees would also include taxes and accounting costs, contingencies for emergencies, and, perhaps most importantly, costs related to capital infrastructure—principal and interest on long-term debt and reserves for capital improvement. Continue reading “Taxing Toilet Paper —Wastewater Finance Savior or Regressive Burden?”
In previous posts, we have talked about publicly available data on inflationary measures including the Consumer Price Index and the Construction Cost Index as well as on commercial energy use from the US Energy Information Administration (EIA) and the US Census. The US Census also has a rich set of data on the financial position of households within our community. These data are especially relevant and helpful for determining the affordability of government utility services such as water and wastewater rates. Continue reading “Understanding the Financial Position of Households Using the American Community Survey”
Twelve drummers drumming, eleven pipers piping, ten lords a leaping, nine ladies dancing…
If you are like me at this time of year, busy with last-minute gift shopping, you may have the sinking feeling that every year it costs more and more to buy presents for our loved ones. To put it another way, a dollar just doesn’t seem to go as far as it used to.
This is not your brain playing tricks on you but rather a real world encounter with the important economic concept of inflation. For those of us working on community and economic development, the idea that the value of a dollar changes over time should impact our thinking on everything from the buying power of our citizens to the future cost of capital improvements. Continue reading “The Buying Power of a Dollar, for Christmas Gifts and Beyond”
There is a popular notion that people find living near energy generation facilities undesirable. There are concerns about health, odor, and aesthetics, to name a few. But does living near electricity generation impact property values? Continue reading “Wind Energy and Property Values”
Local governments may find opportunities for economic development through energy programs and energy installations. Some communities have even used energy installations to turn otherwise undesirable properties into economic opportunities. Continue reading “Using Energy Programs to Turn Undesirable Properties into Economic Opportunities”
Energy and sustainability programs can be important economic development initiatives for governments. Governments interested in initiating energy efficiency and renewable energy programs for their business and industry should first learn about how those businesses and industry sites use energy.
Two of the largest public data sets available from the federal government can help—the US Census and the US Energy Information Administration. Continue reading “Understanding the Energy Use of Your Business and Industry”
Quick trivia question—what is the northernmost town on earth?
If you answered Santa’s Village, sorry. The man from the North Pole has had a busy week, but the actual answer is Longyearbyen in the Svalbard archipelago. Continue reading “Economic Development at the Top of the World”
Government-backed energy efficiency programs provide opportunities for all types of buildings to reduce their electricity consumption and save money—from single family residences and affordable housing facilities to small businesses and industrial plants. These same energy improvements also have positive environmental benefits, reducing the pollution caused by electricity generation.
There are also several acknowledged economic development benefits to energy efficiency programs. If the program helps a small business with thin margins save money on its energy bills, it might help that small business stay open. And investments in energy efficiency create demand for local jobs for contractors, auditors, and other related fields. Continue reading “When Energy Efficiency Programs Are About More Than Saving Energy”
In 1971 in South Korea, a public official presented a draft enforcement decree for the Pollution Prevention Law to the country’s cabinet. The minister of the Economic Planning Board, also vice prime minister at the time, was not impressed, first calling the official an “idiot” and then further berating him, saying “I know environmental issues are important, but any money that might be used for the environmental problem can be used to build one more factory.”
The story above, taken from Professor Tae Hoon Moon’s 2004 article “Environmental Policy and Green Government in Korea,” relates an occurrence from half-way around the world 40 years ago. But the basic question involved is still relevant today in our own place and time—does protecting the environment slow economic growth? Continue reading “The Economic Benefits of Protecting Healthy Watersheds”
Glenn Barnes is a senior project director at the Environmental Finance Center based at the UNC School of Government.
Electricity rates have been a hot topic lately in North Carolina, especially for customers of Duke Energy. For small- and medium-sized manufacturers in the state, the Department of Energy provides resources to help them save on energy costs.
The DOE’s Industrial Assessment Centers (IACs) provide eligible small- and medium-sized manufacturers with no-cost energy assessments. Additionally, they educate the next generation of energy managers. Continue reading “Helping Small- and Medium-Sized Manufacturers Save Money on Energy”
Glenn Barnes is Senior Project Director with the Environmental Finance Center based at the UNC School of Government.
This past July, the state issued a letter to notify North Carolina cities and counties of an opportunity to access a relatively inexpensive source of capital: Qualified Energy Conservation Bonds, or QECBs (as covered in this post by Mary Tiger).
These bonds can be issued for a variety of energy projects including installing energy efficiency and renewable energy in public buildings, rural development involving the production of electricity from renewables, certain energy research, mass commuting facilities, demonstration projects, public education campaigns, and green community programs. The green community programs provision is what allows cities and counties to promote energy efficiency in the community at large. Continue reading “Using Qualified Energy Conservation Bonds to Promote Energy Efficiency in the Community”
Glenn Barnes is senior project director with the Environmental Finance Center based at the UNC School of Government.
Increasingly, units of government are taking an interest in improving the energy efficiency of public buildings as well as residential and business units throughout the community. Efficiency improvements reduce energy consumption, which in turn saves money and limits environmental impacts.
Recently, the US Environmental Protection Agency released guidance on energy efficiency in affordable housing, which may or may not be owned by the unit of government itself. This is the latest guide in their series on local government climate and energy strategy and is part of their larger state and local climate program. Continue reading “Promoting Energy Efficiency in Affordable Housing”
Glenn Barnes is Senior Project Director with the Environmental Finance Center based at the UNC School of Government.
In the 1989 film Field of Dreams, Kevin Costner plays a farmer who hears a whisper in the cornfields. “If you build it,” the whisper says, “he will come.” He is inspired to plow down his corn and build a baseball field that eventually brings Shoeless Joe Jackson and others to play.
Recently, local governments have been hearing whispers as well, many spurred on by the availability of ARRA funds, to create renewable energy and energy efficiency financing programs for residents and businesses. And for communities that are interested in implementing energy finance programs, from rebates to grants to loans, there are resources available from the Department of Energy on program design and capitalization.
But what happens if a local government “builds” an energy finance program but nobody comes? What is the best way to ensure that all of the hard work that goes into creating an energy finance program pays off with a large number of satisfied participants? Continue reading “Driving Demand for Energy Finance Programs”