Catawba County’s Innovative Water Service Partnership Model

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 (Catawba County) that is not a direct utility service provider.  For more than 20 years, Catawba County has assisted many of the municipalities in the County install Continue reading “Catawba County’s Innovative Water Service Partnership Model”

Legislative Changes Affecting the Tools in the North Carolina Water Finance Toolbox

Water and wastewater utilities have a wide range of capital project needs. Most utilities have existing assets (treatment plants, water storage tanks, underground lines) that have reached the end of their functional life and need significant rehabilitation and replacement investment. Some utilities also have capital investment needs that are driven more by customer growth. These types of growth projects may include a new water line and storage tank to reach a new industrial park or a wastewater treatment plant expansion that provides capacity to a new residential sub-division.

Figuring out how to pay for the costs of water and wastewater capital in general is hard, but paying for the cost of growth related projects carries its own set of unique challenges. Existing customers are often wary of paying for projects to serve newcomers, particularly when their existing system has so many capital needs. In the past, water and wastewater utilities have used a variety of upfront fees to generate revenue that to offset the costs of serving new customers. Many utilities believed authority for these different fees was far reaching and granted in Continue reading “Legislative Changes Affecting the Tools in the North Carolina Water Finance Toolbox”

Utility Customer Assistance Partnerships

Reports such as the recently released American Society of Civil Engineers Infrastructure Report Card shine light on the critical infrastructure investment needs facing communities throughout the country. Given recent funding trends and future state and federal fiscal challenges, local utility customers will likely carry most of the responsibility for paying for these infrastructure upgrades. While the price of water and wastewater services is relatively modest, many households still find meeting their monthly obligations difficult. Even the wealthiest communities in the state have low income communities that may be challenged to pay their bills now and in the future. Continue reading “Utility Customer Assistance Partnerships”

The Birth of a New Federal Water and Wastewater Financing Program — WIFIA Arrives

What is WIFIA? WIFIA stands for the Water Infrastructure Finance and Innovation Act, the name of the federal act that authorized an interesting new federally managed water and wastewater infrastructure funding mechanism. WIFIA includes both direct loans and a new credit enhancement/guarantee mechanism (more on WIFIA guarantees in a future blog post). The WIFIA program was first created in 2014, but its funding appropriation and program guidance was not completed until the end of 2016. The US Environmental Protection Agency (EPA) announced the Notice of Funding Availability for WIFIA on January 10th, 2017. Borrowers interested in taking out a loan with this year’s funds have until April 10th, 2017 to submit letters of interest that will be considered by EPA.

Here’s how the EPA describes what a WIFIA loan has to offer:

“It can offer borrowers the advantage of developing customized terms, including sculpted repayment terms to match the specific needs of a project. Finally, the WIFIA program lends at a low, fixed interest rate equal to the Treasury Rate for a comparable maturity. (WIFIA Program Handbook)

As with most federal programs, it is important to read the fine print. WIFIA loans have some strings Continue reading “The Birth of a New Federal Water and Wastewater Financing Program — WIFIA Arrives”

Solar Schools and Environmental Finance

North Carolina is one of the leading states in the country when it comes to installing solar energy. The growth of solar in North Carolina has been a fascinating opportunity to study the impact of different environmental finance systems. While the financial incentives and environmental finance systems available to solar developers across the state have been critical to supporting the growth of solar; not all property owners have had equal access to these incentives. Given the importance of income tax incentives to solar developers, it’s not surprising that Continue reading “Solar Schools and Environmental Finance”

2016 Environmental Legislation: Place Matters!

How much the last legislative session impacted environmental management in your community largely depends on where you live in the state. It was a “short” legislative session and relatively few bills were passed, but several of the bills that were passed contained significant provisions likely to impact environmental quality in specific regions of the state. For example, the Drinking Water Protection/Coal Ash Cleanup Act requires that the owners of coal ash impoundments (ponds) that were shown to pollute groundwater provide impacted households with a permanent alternative water source. The Act also lays out the process and Continue reading “2016 Environmental Legislation: Place Matters!”

Good News, Bad News: Water in North Carolina

There have been a lot of water issues in the news recently. Here’s a summary of a few of the stories we’ve been following that involve the important and often complicated role state government plays.

Bad News. About a year ago, the NC Department of Health and Human Services advised hundreds of private well owners in Gaston and Rowan Counties that their well water was unsafe to drink due to levels of vanadium and hexavalent chromium that exceed state standards. This is about as bad as water news can get – throwing into question the safety of something as essential as water. This advisory was linked to continued concern over the impacts of improper coal ash storage and management. Later this advisory was lifted (see below), but not before the original advisory created a deep sense of concern.

Good News. In March of this year, North Carolina voters approved a state bond infrastructure referendum that will eventually lead to over three hundred million dollars Continue reading “Good News, Bad News: Water in North Carolina”

Four Finance Facts about Flint

As this blog is being written, water and community managers from across the country are talking about the water crisis that is occurring in Flint, Michigan. The City made a decision several years ago to discontinue buying Lake Huron water from Detroit in favor of an alternative supplier who was planning on constructing a major new transmission line to provide a “less costly” supply of Lake Huron water. While waiting for the project to be completed, the City relied on water from the Flint River. This source of water was determined to have a different chemical composition that led to water line corrosion causing lead to enter the drinking water supply. In addition to the acute public health impacts of the crisis, the impoverished community is facing a huge price tag to address their infrastructure problems.  Continue reading “Four Finance Facts about Flint”

Five Dangerous Myths for Small Water Systems

Small water systems serving 10,000 people or less comprise more than 94% of our nation’s public water systems. They are a large and diverse group, and are managed by a wide variety actors – from local and tribal governments, to mobile home park owners, to homeowners associations, to shopping mall operators and hotel managers. These managers often have many other, very different responsibilities and often face challenges in running the water system. In 2011, 25 percent of the nation’s smallest systems violated health-based standards in part due to their geographic isolation, small staff size, growing infrastructure needs and small customer bases. And as we wrote about earlier this year, small water systems with financial difficulties are more likely to have violations.

Since 2012, the Environmental Finance Center at UNC and the Environmental Finance Center Network have been working to help educate and build financial and managerial capacity within small water systems. Through our work under the Smart Management for Small Water Systems Project, we’ve noticed 5 dangerous myths in financial planning. These myths can appear wherever water system planning occurs, but seem to be most prevalent among smaller communities that are considering creating a new or significantly expanded water system.

Continue reading “Five Dangerous Myths for Small Water Systems”

How much does connecting to a water and wastewater system cost?

It varies and it depends. Need more details? It may cost as little as a few hundred dollars to connect to a rural water system in some areas of the state or $10,000 or more in other areas such as the coast or fast growing urban centers that are facing high infrastructure costs to add capacity. If $10,000 sounds excessive, consider that connection charges in certain communities in the country facing severe water supply and infrastructure challenges can run as much as $35,000 to $50,000 for a new connection. The median combined connection cost for a single family water and sewer connect charged by the 328 utilities who provide both services and were included in a connection charge survey completed last month came out to be just under $2,400.
Continue reading “How much does connecting to a water and wastewater system cost?”

Food Trucks, Waste, and Economic Opportunity

Landfill or Reuse?
Landfill or Reuse?

How do you turn a small urban park into a massive culinary festival? Invite 45 food trucks to show up for the afternoon. Planning a sunny 50 degree day after a week of rain helps as well. “Food truck rodeos” have become a popular way of bringing people into urban areas to support small businesses and food creations that often rely on local products.  The crowds that come for these events pump excitement and financial resources into urban areas, but they also lead to some less exciting by-products such as trash. At one time, the main objective for festival organizers in dealing with waste was to do it as quickly and sublimely as possible — spreading waste bins throughout. Many event organizers have started to rethink this approach and there has been a rapid increase in no and zero waste events. Environmental festivals like the Eno River Festival have long sought to minimize their environmental impact, but this trend has not been limited to environmental events. Mainstream events such as the NC State Fair and Sports Events have realized that with a little extra effort on their part, the waste system can be redesigned to reduce the event’s environmental impact.  Continue reading “Food Trucks, Waste, and Economic Opportunity”

Encouraging Property Improvements with Stormwater Fee Credit Programs

Greentown, USA wants to join some of its large older city peers such as Washington and Philadelphia that are rebranding themselves as Green Environmental Cities. Greentown wants to become the greenest small town in the country and would like to encourage property owners across their town to plant more trees, convert their rain shedding roofs into rain absorbing green space, and dig up their pavement and replace it with rain gardens and other stormwater systems that reduce run-off. They have started a media blitz promoting this green transformation, yet progress has been painfully slow. Older shopping centers, like the Southside Shopping Center, continue to produce torrents of rainwater runoff laden with oil and trash that pollutes the area’s waterways. Retrofitting existing space is costly and property owners have other competing needs for their scarce renovation dollars, and education alone only goes so far in promoting transformation. The city council is deadlocked between a contingent that wants to enact regulation that requires older properties to “Greenify” and a contingent that thinks the city should just use public grants to incentivize the transformation. Greentown, like many communities across the country, is stuck. What’s the solution? Continue reading “Encouraging Property Improvements with Stormwater Fee Credit Programs”

Taxes and Environmental Finance

In the span of a week, Americans witnessed two important days – Tax Day on April 15th, and Earth Day on April 22nd. While we saw many celebrations on Earth Day, on the infamous day that tax forms are due, moods were likely less cheerful as individuals throughout the country struggled to understand and complete a myriad of tax forms. However, perhaps the close proximity of these two important days is appropriate: taxes do play a crucial role in many environmental finance systems. For that reason, at this time of year I often try to relieve my form-fatigue with some reflection on the role taxes play in paying for environmental programs.

A long-time School of Government Faculty Member, Jake Wicker, used to say that governments never really pay for anything. Governments do the collecting – it’s the people who pay.  I’ve always remembered this and try to keep it in mind as I work with communities to Continue reading “Taxes and Environmental Finance”

Update on CDBG Funding for Water and Sewer Projects in North Carolina

The Community Development and Block Grant Program (CDBG) is one of the key public sources of funds for community water and sewer projects in North Carolina and across the country. While the amount of funds available for water and sewer projects is not as large as other federal programs such as joint EPA/State funded Clean Water and Drinking Water Revolving loan programs, or the United States Department of Agricultural Water and Waste Disposal Grant and Loan Program, the State Administered program has been an essential tool for lower wealth communities that may not have had the financial capacity to take out commercial or subsidized government loans. Larger units of government receive funds directly from the Housing and Urban Development (HUD) through their entitlement program and are responsible for how those funds are allocated.

Water and Sewer funding is one of many eligible uses of the pool of CDBG funds that states receive each year from HUD to help smaller local governments. States must adhere to federal regulations and guidelines in allocating and using funds, but have a wide latitude to customize their programs to meet the needs of their individual states. Regent legislative changes in North Carolina have resulted in significant changes in the amount of funds Continue reading “Update on CDBG Funding for Water and Sewer Projects in North Carolina”

An environmental finance option that will take your breath away

I spent part of this past October weekend among a huge crowd of families enjoying a wonderful combination of North Carolina fall weather, fun, food, entertainment, educational activities, and adventure activities.  Must have been the NC State Fair, right? Actually while the description may hold, the festival I’m referring to was 20 miles down the road in my town of Durham and was the Bull City Race Fest.  This race attracted over 6,000 runners, their families, and their friends from throughout the region and beyond into Downtown Durham to participate in an assortment of running races.

Bringing runners downtown
Bringing runners downtown

Continue reading “An environmental finance option that will take your breath away”

Budget Time and Water Finance

Much of the year, the focus on water finance seems to be oriented to how much needs to be spent on water and wastewater systems. The numbers are daunting and the national and local media are rife with reports of what it is going to take to improve our water and wastewater systems.

One of my colleagues at the School of Government, Jake Wicker, who passed away some time ago, was fond of saying, “Governments don’t pay for anything, only people pay – Governments just do the Collecting.” That phrase always comes to mind during budget time as different levels of government decide how much they are willing to collect for specific services.

This week was particularly interesting related to local, state Continue reading “Budget Time and Water Finance”

Clean Water State Revolving Loan Fund Has Money

Jeff Hughes is a Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

The Infrastructure Finance Section (IFS) of the North Carolina Department of the Environment and Natural Resources announced the release of their draft Intended Use Plan for the state’s Clean Water State Revolving Fund Program (CWSRF) last week. The CWSRF is one of two revolving loan programs that that the state manages in partnership with the United States Environmental Protection Agency (USEPA). Continue reading “Clean Water State Revolving Loan Fund Has Money”

Project Based Learning Takes on Future Environmental Challenges

Interested in innovation, community development, and education? The US Environmental Protection Agency seems to receive a lot of attention these days for their regulatory role, but they also play an important role in research with numerous programs supporting investigation into new ways of protecting the environment in an economically viable manner. The People, Prosperity, and the Planet  (P3) program supports student led research and design teams that focus on projects that address the intersection of environmental protection and community development. Want to be inspired? Take a few minutes to read what the future of sustainability and community development might look like based on the innovative ideas coming from our nation’s college students that won P3 design and research grants over the last few years.  Phase 1 winners are provided up to $15,000 to design an idea and present it at an expo. A small number of Phase 1 winners are selected for Phase 2  and are additional funds to further develop their projects.

Continue reading “Project Based Learning Takes on Future Environmental Challenges”

What can Four Dollars Get You? Quite A Bit if You Use it in the Right Way!

Jeff Hughes is a Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

Four dollars happens to be about the price of a gallon of gasoline these days, but it’s also what each student at University of North Carolina at Chapel Hill pays each semester to support renewable energy and energy efficiency. Unlike most of the cost of education for the average student, this is one component that is actually controlled by the students themselves and must be periodically voted on to remain a part of the student fee structure. The fee has existed since 2004 and has generated over $1.5 million dollars to support sustainable energy on campus. The last time the fee was up for a vote in 2009, it received 85% support. The fee is administered by the Continue reading “What can Four Dollars Get You? Quite A Bit if You Use it in the Right Way!”

The Next Big Site for Your Cleantech Economic Development Project – Your Local Wastewater Treatment Plant?

Jeff Hughes is a Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

What would you say to an economic development initiative that brings together a diverse set of partners; effectively advances local, state, and global environmental goals; relies on cutting edge technology; pays for staff planning and oversight time; creates local constructions jobs; leads to good publicity; and makes use of underutilized government assets?  Is it simply an economic developer’s pipe dream? Actually, several local governments in Wake County have   Continue reading “The Next Big Site for Your Cleantech Economic Development Project – Your Local Wastewater Treatment Plant?”

Financially Disadvantaged Customers and Essential Enterprise Services

Jeff Hughes is the Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

Many essential community and environmental services rely on an enterprise service model in which user fees cover the full cost of service provision. Services such as solid waste collection, water, wastewater, and electricity provide direct benefits to those that use them and in most cases the public is able (if not always happily) to pay a fee to cover those services. These services are run as businesses and as with any business operation, the successful delivery of services requires that the business be run in a financially sustainable manner.

Continue reading “Financially Disadvantaged Customers and Essential Enterprise Services”

Changing Face of Water Quality Finance?

Jeff Hughes is a Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

Jake Wicker, a long time faculty member at the School of Government, used to like to say that Governments don’t pay for anything and that it’s the people who pay – Governments just do the “collecting.”  The challenge in developing fair and sufficient water quality finance programs has often revolved around deciding how to distribute the collecting mechanisms between different levels of government. This summer, several developments mark a potential change, at least in the short term, in how water quality improvements are financed in North Carolina. The budget of  Continue reading “Changing Face of Water Quality Finance?”

Financial Innovation at Work: North Carolina Capital Access Program

Jeff Hughes is Director of the UNC Environmental Finance Center and a School of Government faculty member.

The corporation that owns the business at the end of Main Street has decided to close the business down rather than reinvest in needed new equipment. The corporation is willing to sell the business at a bargain price. A group of the business’s employees have created a new company and developed a business plan that shows a realistic path towards making the business profitable again. The employees believe that with a modest investment in new equipment, the business can thrive and continue to employ dozens of people. A local bank reviews the business plan and would like to provide the group with a loan, but under the current climate has had to institute stricter underwriting standards in response to recent loan losses due to the recession. In the end the stricter underwriting standards and fear of loan defaults results in the bank manager deciding that the bank must deny the loan.   At the final meeting in which the bank manager has to give the group the bad news, she expresses regret and tells the group that if the bank could only have a bit more security than the group can offer alone, the bank probably would have gone ahead with the loan.  Just as she finishes saying this, she pauses as if suddenly remembering something and excitedly turns to the group and says she just remembered reading something about a program that might change their decision.  Continue reading “Financial Innovation at Work: North Carolina Capital Access Program”

When Community Water and Wastewater Utilities Sell Alot Less Water

Jeff Hughes is a Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

Fixed costs vs. variable costs. Fundamental concepts for any business owner concerned with developing accurate business plans, financial models, and pricing strategies. The way in which these basic business concepts take shape for most water and wastewater utilities have made life very difficult for utility managers over the last few years as falling water sales due to customer conservation and industrial downsizing have Continue reading “When Community Water and Wastewater Utilities Sell Alot Less Water”

Economic Development, the Environment, and Knowing Where You Live

Jeff Hughes is the Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member.

Where you live matters. This may seem obvious to anyone in the community and economic development field in the process of promoting their local community, but it might not be as obvious when considering the environmental regulatory implications of a project. Many laws governing key aspects of community and economic development are place-agnostic. In other words, communities in western NC can normally do the same things as communities in the Sandhills as far as offering incentives. Not so in the world of environmental regulations, particularly in terms of water quality. Continue reading “Economic Development, the Environment, and Knowing Where You Live”

Energy Financing Programs Hit Road Block

Jeff Hughes is Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

It’s not often that a local governmental finance tool gets in the middle of a heated national environmental policy debate, but that’s exactly what has happened in recent months as questions and differences of opinion have arisen over the appropriateness of some applications of local government assessment authority to fund energy efficiency and renewable energy.  Within a two day period in early May, the US Department of Energy (DOE) issued a guidance document describing procedures for using local government property assessments for clean energy applications (PACE) and Freddie Mac and Fannie Mae, publically owned mortgage purchasers, issued cryptic warning letters to all their lenders stating that participation in some types of PACE programs described by the DOE are prohibited. Continue reading “Energy Financing Programs Hit Road Block”

Moving Beyond Grants

Jeff Hughes is the Director of the Environmental Finance Center at the UNC School of Government

Federal and state grants have long helped local governments support their community and economic goals. Many local governments and community organizations have grown to depend on grant assistance for a variety of programs and services ranging from cultural initiatives to the improvement of environmental infrastructure such as wastewater treatment plants. While grants have their place in community development, there are risks of over relying on them. The possibility of winning a grant   Continue reading “Moving Beyond Grants”

Thinking about Water and Sewer Impact Fees and Affordable Housing

Jeff Hughes is the Director of the School of Government’s Environmental Finance Center and a School of Government Faculty Member

A newly created local chapter of the affordable housing organization Habitat for Humanity begins planning the construction of their first group of homes in a fast growing NC town. The homes will be less than half the size of an average new home in other areas of the town and will have very small lot sizes. Representatives of the organization meet with local officials to discuss the local government fees that they will have to pay for each home. The group learns that the town just increased their water and sewer impact fees and is very surprised to learn that it will now cost almost Continue reading “Thinking about Water and Sewer Impact Fees and Affordable Housing”

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