Funding & Financing: Why Choices Matter
Funding and Financing to Sustain Public Infrastructure: Why Choices Matter
By: Dr. Janice Beecher, Michigan State University, Center for Community and Economic Development
Investment in public infrastructure, including the provision of essential services through capital-intensive networks, is critical to supporting economic development and, more so, the quality of places and lives. The sustainability of public utilities and other infrastructure systems depends on spending to an optimal compliant service level and raising revenues that fully cover the cost of service. Sustaining infrastructure relies on both funding and financing mechanisms, which should not be confused. This primer provides a framework for understanding the difference between funding and financing and why policy choices for these functions matter. Funding choices affect the distribution of burdens on service consumers; financing choices affect the cost of capital for service providers. These implications tend to receive less attention than behavioral incentives for economic efficiency. The portfolio of alternative funding and financing methods and instruments is described along with how they relate to structural and governance models for service delivery. The report provides key statistics and trends across U.S. infrastructure sectors, with highlights for Michigan.
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Private Water Utilities: Actions Needed to Enhance Ownership Data
Private Water Utilities: Actions Needed to Enhance Ownership Data
The roughly 50,000 drinking water utilities in the United States face steep costs—more than $470 billion over the next 20 years, according to EPA estimates—to repair and replace drinking water infrastructure. These costs are passed on to customers through water rates. States regulate the rates charged by privately owned water utilities. EPA has responsibilities to implement programs to further the health protection objectives of the Safe Drinking Water Act.
In this report, GAO reviews private for-profit drinking water utilities and rates. This report examines, among other things, (1) information available from EPA and other sources about the number and characteristics of private for-profit water utilities in the United States, and (2) Drinking Water SRF assistance provided to private for-profit water utilities. GAO reviewed EPA SDWIS data, Drinking Water SRF data, and Global Water Intelligence data, as well as EPA’s and others’ documents. GAO also interviewed EPA and water utility stakeholders.
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Why Ratepayers Protections are Needed
Why Ratepayers Protections are Needed in the U. S. Water Utility Privatization Push
By: Peggy Gallos, Executive Director, Association of Environmental Authorities
In this article, Executive Director of the Association of Environmental Authorities Peggy Gallos explores heightened interest in water sector investing as a significant factor driving privatization in New Jersey, and impacts these transfers of ownership have on rate payers.
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From Profit to Polity
From Profit to Polity: A U.S. Water Utility’s Transition to a Government-Shareholder Model
By: Dr. Janice Beecher
The Pennichuck Corporation, located in New Hampshire, U.S., offers a unique opportunity to explore the rare structural transition from investor-ownership to a government-shareholder model for a long-standing regional water utility. In early 2012, concluding a ten-year dispute, the City of Nashua leveraged its power of eminent domain to become Pennichuck’s sole shareholder not by a taking but by a stock purchase agreement transferring the entirety of the company’s regulated and unregulated assets. The study draws on primary documentation and data to review the terms of the transaction and contrast the ex-ante and ex-post models. Utility operations and state economic regulation remained constant over the transition, thus controlling for their potential effects. A trend analysis of financial and other data provides evidence of outcomes, including the lower cost of capital and operations. This information-rich case illustrates the arduous process of public taking, which questions the institutionalized policy asymmetry favoring private over public acquisitions that undermines structural competition.
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Water Pricing & Affordability: Public vs Private Ownership
Water Pricing and Affordability in the US: Public vs Private Ownership
By: Xue Zhang, Marcela González Rivas, Mary Grant, Mildred E. Warner
Report examining the 500 largest community water systems in the US to explore if ownership is related to annual water bills and the percent of income that low-income households spend on water. Results show that, among the largest water systems, private ownership is related to higher water prices and less affordability for low-income families. In states with regulations favorable to private providers, water utilities charge even higher prices. Affordability issues are more severe in communities with higher poverty and older infrastructure. Water policy needs to address ownership and regulation and explore new mechanisms to ensure water affordability for low-income residents.
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Open Meeting Laws
Open Meeting Laws 3d Ann Taylor Schwing
Open Meeting Laws are designed to give citizens the information they need to understand decisions made by their elected representatives. This resource provides a compendium of open meeting laws at the federal, state, and local level.
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Risks Posed by Water Privatization
The Risks Posed by Water Privatization
A July 2020 memo from In the Public Interest outlining a few of the serious risks posed by water privatization deals and provides examples of communities that have dealt with the harmful consequences of water privatization. Risks highlighted include:
- Loss of public control and decision making
- Reduced access and affordability
- Declines in quality that jeopardize health and safety
Click below to read the full memo.
El Cerrito Green Infrastructure Plan
El Cerrito Green Infrastructure Plan: Improving Stormwater Quality in El Cerrito and its Watersheds
The City of El Cerrito is one of 76 local government entities subject to the requirements of the California Regional 
Water Quality Control Board for the San Francisco Bay Region’s (RWQCB’s) Municipal Regional Stormwater Permit (MRP). The MRP was last reissued in November 2015. The MRP mandates implementation of a comprehensive program of stormwater control measures and actions designed to limit contributions of urban runoff pollutants to San Francisco Bay.
This Plan will guide El Cerrito’s shift from conventional “collect and convey” storm drain infrastructure to more resilient, sustainable stormwater management that reduces runoff volumes, disperses runoff to vegetated areas, harvests and uses runoff where feasible, promotes infiltration and evapotranspiration, and uses natural processes to detain and treat runoff. This will include implementing, where and when feasible, Green Infrastructure features such as pervious pavement, bioretention facilities (“rain gardens”), green roofs, and rainwater harvesting systems. This Plan details how these methods can be constructed on public and private parcels and within the public right-of-way.
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Exploring GSI Funding & Financing Options for Eugene
Exploring Green Stormwater Infrastructure Funding and Financing Options for Eugene, Oregon
With over 400 public property GSI facilities and 1,200 private property facilities, and intentions to continue to install additional green infrastructure facilities, Eugene faces challenges with the rising cost of ongoing operation and maintenance (O&M) of public facilities and oversight of maintenance of private facilities, which are currently the responsibility of the City’s Parks and Open Space Division. To support the City’s efforts to build green infrastructure throughout the community on public and private property while meeting operation and maintenance needs, in partnership with WaterNow, American Rivers, and Corona Environmental Consulting, a multidisciplinary team of city engineers, financial managers, and GSI operators from City Public Works have been exploring funding, financing, and incentives that may be available to Eugene.
In particular, WaterNow worked with the City to explore funding and financing options for addressing the rising cost of GSI facility maintenance and to further enhance investment in GSI facilities on public and private property for accelerated environmental benefits. This report details WaterNow’s exploration of approaches to closing the identified funding gap for ongoing O&M costs, examination of Eugene’s options to leverage municipal bonds or other forms of debt to finance capital investments in public and private GSI facilities, and provides a hypothetical example of how Eugene might finance an enhanced GSI program.
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Debt Funding for Water Conservation Programs
Debt Funding for Water Conservation Programs
The cheapest and quickest way for cities and towns is to use less “grey” infrastructure and concentrate on conservation, efficiency, and green infra- structure. But 
those solutions can be hard to implement on a large scale. Sometimes it is because engineers are more comfortable knowing what will happen with pumps and pipes. But often it is because we can’t figure out ways to fund large investments in things that don’t look like the assets we used to build. Many water agencies are effectively dealing with water shortages or growth in their service areas by creating “new” water out of already-developed supplies. A number of agencies have “turf buy-back” programs that will pay customers to replace their lawns with low-water-use landscaping. Others are starting major programs to provide efficient washing machine, toilet, and greywater reuse system rebates. Others are providing property owners and developers with incentives to install stormwater capture systems. Each of these actions creates mini-reservoirs that collectively provide substantial public benefits to local water utilities and their ratepayers. To really make a difference, these programs need to be larger than what can usually be funded through an agency’s operating budget without an unwelcome large increase in rates. That is why it is so important to consider how to use debt funding as part of the capital program, allowing the costs to be spread over the life of the benefits.
This report outlines how water utilities can debt fund water conservation programs. Click the link below to download the full report.
