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What You Need to Know about Small Drinking Water Systems: Barnes

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This presentation was delivered at NADO's 2018 Annual Training Conference, held in Charlotte, NC on October 13-16. For more information, visit: https://www.nado.org/events/2018-annual-training-conference/

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What You Need to Know about Small Drinking Water Systems: Barnes

  1. 1. Glenn Barnes Environmental Finance Center The University of North Carolina at Chapel Hill 919-962-2789 glennbarnes@sog.unc.edu What You Need to Know About Small Drinking Water Systems
  2. 2. • Who is regulated, and by what • How drinking water finance works • Infrastructure funding programs • The role for Regional Development Organizations Our Session
  3. 3. Dedicated to enhancing the ability of governments and other organizations to provide environmental programs and services in fair, effective, and financially sustainable ways through: • Teaching and Outreach • Direct Technical Assistance • Applied Research • Tool Development
  4. 4. The Environmental Finance Center Network (EFCN) is a university-based organization creating innovative solutions to the difficult how-to-pay issues of environmental protection and improvement. The EFCN works with the public and private sectors to promote sustainable environmental solutions while bolstering efforts to manage costs. Environmental Finance Center Network (EFCN)
  5. 5. Smart Management for Small Water Systems Asset Management Rate Setting and Fiscal Planning Leadership Through Decision- making and Communication Water Loss Reduction Energy Management Planning Accessing Infrastructure Financing Programs Workforce Development Water Conservation Finance and Management Collaborating with Other Water Systems Resiliency Planning Managing Drought
  6. 6. Who is regulated, and by what?
  7. 7. How We Get Drinking Water Private Wells Bottled Water Regulated Drinking Water Systems
  8. 8. 25 people (or 15 connections) 60 days a year at least Water is treated or altered in some way What Entities are Regulated as Drinking Water Systems?
  9. 9. Local Governments Mobile Home Parks HOAs and Condos Apartments Private Water Companies $ What Entities are Regulated as Drinking Water Systems? Community Water Systems
  10. 10. Non-Community Water Systems
  11. 11. In the United States, there are “public” drinking water systems 147,413 Source: EPA SDWIS Database as of July 1, 2016
  12. 12. Most Water Systems are Small They serve 10,000 or fewer customers 97% Source: EPA SDWIS Database as of July 1, 2016
  13. 13. Collectively, Though, Large Systems Serve Far More Total People 21% Source: EPA SDWIS Database as of July 1, 2016
  14. 14. • Public health • Fire protection • Livable communities • Quality of life • Economic development Importance of Safe Drinking Water
  15. 15. • Systems are responsible for public health • Safe Drinking Water Act • Revised Total Coliform Rule (TCR) • Groundwater Rule • These are legally enforceable standards Regulatory Framework
  16. 16. EPA, and Your Primacy Agency
  17. 17. Regulations go beyond just the environment and public health
  18. 18. Regulatory Framework Systems hire people—labor laws Systems use equipment— occupational safety laws
  19. 19. Regulatory Framework Some are governmental— information transparency Systems are monopolies
  20. 20. How drinking water finance works
  21. 21. • Water is not their primary business • There are no direct charges for water use. The cost of water comes out of the overall budget of the entity Non-Community Systems Price of Gasoline Weekly Collections Admissions Ticket
  22. 22. • Some types of community systems don’t charge directly for water. The cost of water is captured in rent or other types of fees Community Systems Monthly Rent Condo/HOA Fees Housing Fees
  23. 23. • Other community water systems do charge for water directly, and usually based on the volume of water received • Water is a service or a commodity Community Water Systems Local Governments $ Private Water Companies
  24. 24. • Base fee per billing period regardless of usage • Some charge based on usage Funding Mechanism: Rates
  25. 25. Funding Local Government Services General Government: Taxes Enterprise Funds: Rates & Fees
  26. 26. • Often their rates have to be approved by the public utility commission within a state (“public service commission”) • In some states, governmental systems also have to have their rates approved by a utility commission Private Water Companies
  27. 27. Rates come in all shapes and sizes
  28. 28. This is a rate sheet...
  29. 29. So is this... (Annual Rates)
  30. 30. And this...
  31. 31. And this...
  32. 32. Even this! (Please don’t do this)
  33. 33. Are our rates right? It depends...
  34. 34. Water System Objectives Full cost recovery/ revenue stability Encouraging conservation Fostering business- friendly practices Maintaining affordability
  35. 35. Full cost recovery/ revenue stability Encouraging conservation Fostering business- friendly practices Maintaining affordability Bring in enough revenue to cover the full cost of running the water system: • O&M • Capital needs • Debt service Why do this?
  36. 36. Full cost recovery/ revenue stability Encouraging conservation Fostering business- friendly practices Maintaining affordability Use pricing to encourage customers to reduce their water consumption Why do this?
  37. 37. Full cost recovery/ revenue stability Encouraging conservation Fostering business- friendly practices Maintaining affordability Use pricing to encourage businesses and agriculture to locate to your community or stay in your community Why do this?
  38. 38. Full cost recovery/ revenue stability Encouraging conservation Fostering business- friendly practices Maintaining affordability Ensure that all customers in your water system are able to afford enough water to live on Why do this?
  39. 39. • Charges for water cover the entire cost of running the water system today and into the future “Full Cost Pricing”
  40. 40. Types of Costs Capital Costs Debt ServiceOperating Costs
  41. 41. Water is “Capital Intensive”
  42. 42. http://www.infrastructurereportcard.org/ Aviation D Ports C+ Bridges C+ Public Parks D+ Dams D Rail B Drinking Water D Roads D+ Energy D+ Schools D Hazardous Waste D+ Solid Waste C+ Inland Waterways D Transit D- Levees D Wastewater D+
  43. 43. Infrastructure Wears Out
  44. 44. Infrastructure Wears Out Water Tank Leak
  45. 45. How do we pay for this water infrastructure?
  46. 46. Hope for Divine Intervention
  47. 47. • Pay as you go • Save in advance and pay • Borrow and pay later • Grants (let someone else pay) Ways To Pay for Infrastructure Money from system customers Not easy to come by
  48. 48. The Infrastructure Needs Per Residential Connection are Much Greater for Small Systems From 2007 DWINSA and 2006 CWSS
  49. 49. Infrastructure Funding Programs
  50. 50. Navigating to Funding Tables Step 1: efcnetwork.org Step 2: Select “Funding Sources by State or Territory” under the Resources Tab
  51. 51. Click on an individual state to view funding table.
  52. 52. https://ofmpub.epa.gov/apex/wfc/f?p=165:1::::::
  53. 53. • Assist with grant and loan applications • Facilitate discussions around regionalization and partnerships • Assist with mapping of assets • Promoting broader economic development • Host and promote trainings The Role for Regional Development Organizations
  54. 54. https://www.nado.org/rdos-supporting-water- infrastructure-and-improving-quality-of-life-2/
  55. 55. https://efcnetwork.org/events/webinar-regional- development-organizations-supporting-water-infrastructure- and-improving-quality-of-life/
  56. 56. What have you done at your RDO to support drinking water systems?
  57. 57. Glenn Barnes Environmental Finance Center The University of North Carolina at Chapel Hill 919-962-2789 glennbarnes@sog.unc.edu What You Need to Know About Small Drinking Water Systems

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