For many local government officials across the United States, the question isn't where to spend money, but what to cut, and many of those cuts have come from infrastructure spending. Cities and counties are spending less on schools, roadways, sewer and water systems than they have in decades. In fact, municipal infrastructure spending alone is down by nearly 30 percent since 2009, according to a recent report from the U.S. Department of Commerce. Those cuts are likely to have far-reaching implications such as undermining public health and safety as roadways, drinking water and sewage systems continue to deteriorate.
However, money is available for infrastructure improvements. In fact, since the beginning of the recession in 2008, both the federal government and individual states have taken an active role in assuring that funds are available for all types of projects. And, even though the flow of funds has slowed over the past year or two, numerous sources of financial assistance for infrastructure projects exist. The problem is that many municipal managers just don't know where to look for those funds.
]]>From the abstract:
Utility transfers to the local government's general fund can represent a substantial financial obligation for a publicly owned utility and are often disputed. This article addresses what is reasonable, fair, and legal in relation to such transfers and provides recommendations for local governments. Local government officials should: recognize that funding nonutility-related operating or capital costs with utility revenues is not considered a utility best management practice by credit-rating agencies; routinely calculate--and maintain written documentation for--allocations that equitably represent the cost of general fund services provided to the utility; be able to provide written evidence justifying the fairness of the amount or percentage of a transfer representing a rate of return on the utility's investment, provided the transfer is legal and allowable by debt covenants; promote government transparency by separating transfer components in utility budgets; and adopt financial policies that allow easy calculation and projection of transfer amounts.
Water is essential to life and critical for a healthy community, prosperous economy,
and clean environment. our nation's water infrastructure is vital to the treatment,
distribution, and protection of clean drinking water. yet age, continued strain
from population growth, lack of investment, and emerging threats from climate
change have increased the burden on our current water infrastructure system and
waterways.
From the abstract:
Water professionals are striving to surmount the challenges they face, but without political will and public support, they may be at an impasse.
One idea floating around on how to help cities pay for water infrastructure has already helped finance big transportation projects with large, low-interest loans directly from the feds.
]]>From the abstract:
Water budget rates are gaining attention in the water sector. Although clearly well-intended, the water budget approach to rates raises serious theoretical and practical issues familiar to applied regulatory economics. In essence, water budget rates exemplify "social rate-making," that is, a system of pricing that departs from traditional economic standards in the interest of serving social goals--in this case water conservation. The inherent problem with this particular rate structure, however, is not its good intentions but its disconcerting implications. The troubling irony of water budget rates appears to be lost in the deliberation.
See also:
Money Matters: Managing Utility Cashflow Instability Under Conservation-based Rates
Source: Grant Hoag and Rowe McKinley, Journal AWWA, Volume 104 Issue 3, March 2012
(subscription required)
Locals seek innovative solutions to meet the nationwide demand for water infrastructure repair and expansion....
...As water authorities and their managers face an estimated $1.5 trillion bill to rebuild the underground infrastructure essential to our nation's water supply, an increasingly important issue has emerged in finding the means to finance the investment while controlling the rates paid by users, who are accustomed to paying an average of less than a penny per gallon....
]]>From the abstract:
The massive investment needed for buried drinking water infrastructure in the United States totals more than $1 trillion between now and 2035.
The need will double from roughly $13 billion a year today to almost $30 billion (in 2010 dollars) annually by the 2040s, and the cost will be met primarily through higher water bills and local fees, according to a new AWWA report.
"Buried No Longer: Confronting America's Water Infrastructure Challenge" is a call to action for utilities, consumers and policy makers and recognizes that the need to replace pipe in the ground "puts a growing stress on communities that will continue to increase for decades to come."
The new report includes more than 35 tables and graphs detailing information by region and utility size
]]>Our nation's freshwater infrastructure faces a critical juncture. Largely built on systems developed during the 19th and early 20th centuries, our water infrastructure is aging, our technology outdated and our governance systems ill equipped to handle rising demand and environmental challenges. Additional strain is being placed on these systems from a variety of sources, including pressures from urbanization and changing climate conditions, such as increases in both droughts and extreme one-day precipitation events.
While these challenges are significant, they are not insurmountable. In fact, they can be viewed as drivers of much-needed change in how we finance and develop our water systems to meet future demands. New financing models and pricing flexibility, which are necessary to pay for new infrastructure and to support legacy systems, provide enormous opportunity for positive transformation necessary to keep pace with the rapid changes being experienced by counties, municipalities and investor owned utilities.
This report seeks to tackle these issues and deliver some recommendations on how to understand and confront the pressing need for more sustainable and integrated water infrastructure financing models.
]]>The latest report shows that our nation's drinking water and wastewater infrastructure is aging and failing, and that investment is not keeping up the need. The focus of this report is on the pipes, treatment plants, pumping stations, and other infrastructure that make up the nation's public drinking-water and wastewater systems. Most public water and wastewater systems are owned and operated by local or regional government agencies. Drinking-water systems may also be privately owned and operated under contract with public agencies. In accordance with the definitions used by the U.S. Environmental Protection Agency (EPA), in the pages that
follow we consider both types of systems to be "public." Moreover, this report analyzes two types of infrastructure needs:
1. building new infrastructure to service increasing populations and expanded economic activity; and
2. maintaining or rebuilding existing infrastructure that needs repair or
replacement.
This report estimates the economic and job creation impact of a major investment in water infrastructure in the United States. This number--$188.4 billion--is based on the level of investment necessary, as estimated by the Environmental Protection Agency, to manage stormwater and preserve water quality across the country. We find that an investment of $188.4 billion spread equally over the next five years would generate $265.6 billion in economic activity and create close to 1.9 million jobs.
We argue that maximizing the use of green infrastructure--infrastructure that mimics natural solutions--is essential to meet the stormwater management needs of our communities while also providing a number of additional co-benefits.
We provide job creation estimates for each of the 50 states and review the workforce opportunities that would result from such an investment, analyzing a representative set of occupations in industries related to water infrastructure. We find that new jobs generated by these investments could be good jobs that are broadly accessible to American workers.
]]>The survey includes the following:
• Organization/Administration
• Planning
• Operations
• Finance/Accounting
• Stormwater User Fees and Billing
• Quality Issues/Best Management Practices
• Public Information/Education
• Major Challenges/Events Affecting Utilities
Responses were received from 70 utilities in 20 states. All of these utilities are funded in whole or in part through user fees. Approximately 81% of the respondents serve a city, rather than a county or region. The population served by the respondents ranges from 5,800 (Fort Meade, FL) to 4 million people (Los Angeles, CA) and the area served varies from 6 to 2,000 square miles.
]]>With the economic outlook still uncertain, finances--especially as they relate to infrastructure rehabilitation--are weighing heavily on water industry professionals.
Once primarily focused on engineering and operations, utilities now operate in a complex environment in which they must balance the multiple needs of diverse groups of stakeholders.
]]>