2019 Water and Wastewater Finance Workshop...AWWA’s 2018 SOTWI Report The top five most important issues facing the water industry: 1.Renewal and replacement (R&R) of aging water

2019 Water and Wastewater Finance Workshop

Department of Environmental Quality

Division of Water Infrastructure

February 2019

SWIA Master Plan Vision

The state will best be able to meet

its water infrastructure needs by

ensuring individual utilities are, or

are on a path to be, viable systems

A viable system is one that functions

as a long-term, self-sufficient

business enterprise, establishes

organizational excellence, and

provides appropriate levels of

infrastructure maintenance,

operation, and reinvestment that

allow the utility to provide reliable

water services now and in the future

AWWA’s 2018 SOTWI Report

The top five most important issues facing the water industry:

1.Renewal and replacement (R&R) of aging water and wastewater infrastructure (#1 last four years)

2.Financing for capital improvements (#2 last four years)

3.Public understanding of the value of water systems and services (#3 or 4 last four years)

4.Long-term water supply availability (#3 or 4 last four years)

5.Public understanding of the value of water resources (#5 last four years)

Water Infrastructure Funding Programs

•Clean Water State Revolving Funds (SRF)• $110 million/year

• $30 million project funding limit*

•Drinking Water SRF • $80 million/year

• $20 million project funding limit*

• Public utilities also eligible

•CDBG-Infrastructure• Water and sewer – $20 something million

• $2 million grant maximum

• Non-entitlement areas only

• Towns and counties onlyDepartment of Environmental Quality

Federal conditions

apply to all these

programs


•State Reserve Programs• $10 million/year recurring appropriations for grants

• Some revolving loan funds

•Projects – loans and grants• Maximums: loans – $3 million / year; targeted rate

loans – $3 million / 3 years; and grants – $3 million / 3 years

•Asset Inventory and Assessment grants• $150,000 maximum / 3 years

•Merger Regionalization Feasibility grants• $50,000 maximum / 3 years



•Two funding rounds per year

•Spring• Clean Water SRF

• Drinking Water SRF

•Fall • Clean Water SRF

• Drinking Water SRF

• CDBG-I

• State Reserve projects

• Asset Inventory and Assessment grants

• Merger Regionalization Feasibility grants


New!


•One project application for all programs• Same application for consideration across all programs• Considered at same time • Indicate if willing to take a loan when applying for

grants

•Meet to discuss projects / applications • Unique or large projects• Design-build • Accelerated schedule

•Training for all programs• How to apply – notices via NC Water Listserv (UNC–

EFC)• Funded – now what?



Application training for Spring 2019 cycle (deadline April 30)


Hickory

Friday, March 22, 2019(40 seats available)

Western Piedmont Council of Governments

1880 2nd Avenue NWHickory, NC 28601

Research Triangle Park

Monday, March 25, 2019 (30 seats available)

Triangle J Council of Governments

4307 Emperor Boulevard, Suite 110Durham, NC, 27703

Mount Olive

Thursday, March 28, 2019(50 seats available)

The Train Depot

110 West Main StreetMount Olive, NC 28365

• All session are from 10:00 a.m. – 12:00 p.m.

• Please RSVP to Jennifer Haynie at [email protected]

(919.707.9173) by Friday, March 15

• Please provide your name, organization, e-mail, phone number,

and the location you plan to attend


•Two years to proceed to construction (maximum)• Establish milestones to maintain funding

• Some exceptions

•Terms of loans• ½ market rate (20-Bond Index)

• Targeted rates (current 0%) available if qualify for grant

• No interest during construction

• Usually 20-year maturity or useful life which ever is less

•Fees • 2% loans

• 1.5% grants

• None for CDBG-IDepartment of Environmental Quality


Summary of Fall 2018 Funding Applications


Project TypeFunding

Requested

No. of

Apps.*

CDBG-I grants $47 M 29

DW (SRF and State Reserve) $216 M 28

WW (SRF and State Reserve) $247 M 33

Asset Inventory and Assessment grants $22 M 165

Merger/Regionalization Feasibility grants $585,000 12

* Complete, eligible applications

Asset Inventory & Assessment Grants - Funding

Funding RoundNo. of

Applications

Funds

RequestedNo. Funded

Funding

Provided

Spring 2016 182 $19,974,375 42 $5,126,444

Fall 2016 196 $22,798,900 65 $8,274,229

Fall 2017 168 $22,271,726 37 $4,657,384

Fall 2018 165 $21,710,442 tbd tbd

“This process has opened our

eyes as staff as well as opened

the line of communication to our

governing board on the condition

and needs of our aging

infrastructure.”

Some Infrastructure Issues Are Not Apparent

Photo courtesy Rob Armstrong, City of Lumberton

Water Infrastructure Funding – Looking Ahead

Committee to Study Rates – S.L. 2017-57 (budget)• Fee and charge setting including collection of those

fees and charges

• Proper accounting controls to ensure transparency

• Whether regionalization could facilitate financially healthy systems with lower fees and charges to customers

• Monitor aging water and sewer infrastructure to ensure proper maintenance and repair, including how this responsibility impacts the financial health of the public enterprise


Sewer System Customer “Density” in NCF

eet

per

Pers

on

Sewer System Population

NC Water & Sewer Utility Operating Margins

Utility Viability

Town

Number of

Wastewater

Customers

Current Monthly

Residential Wastewater

Bill for 3,500 gal/month

Wastewater

Billed in FY

2016-17

Fairmont 1,102 $28.87 $452,500

Fair Bluff 374 $45.53 $306,872

Cerro Gordo 11 + Schools $34.75 $27,275

Boardman 40 $33.25 $22,241

Proctorville 59 $30.00 $17,886

Total Wastewater Billed in FY 2016-17 $826,774

•The statewide median bill for 3,500 gal/month of wastewater is ~ $32.50

•For communities with populations of 3,000 or less, the state median bill for 3,500 gal/

month of wastewater is ~ $35

Town

Estimated Capital Costs to Rehabilitate / Replace Water and

Wastewater Systems based on Asset Condition

Preliminary Estimated Range

Next 1-10 Years Next 11-20 Years Total Next 1-20 Years

Fairmont $21 - $37 million $23 - $27 million $44 - $64 million

Fair Bluff $6 - $11 million $9 - $12 million $15 - $23 million

Cerro Gordo $1.4 - $3 million $0.8 - $2.3 million $2.2 - $5.3 million

Boardman $0.4 - $0.9 million $0.2 - $0.3 million $0.6 - $1.2 million

Proctorville

(Wastewater

Costs Only)

$0.5 - $1.1 million $0.3 - $0.5 million $0.8 - $1.6 million

•All Towns pay a portion of wastewater treatment plant costs based on Interlocal Agreement

•Total water and wastewater billed by all Towns in FY 2016-17 = $1.35 M

Town

Estimated Costs per Year to Operate & Maintain

Water and Wastewater Systems with Additional Annual Costs

to Operate & Maintain Rehabilitated / Replaced Water and

Wastewater Systems – Preliminary Estimated Range

Next 1-10 Years

(Cost per Year)

Next 11-20 Years

(Cost per Year)

Additional FTE (*)

(Staff) Needed

Fairmont $1.3 - $1.6 M / year $1.7 - $2.4 M / year 3

Fair Bluff $620 K - $798 K / year $822 K - $1.1 M / year 2

Cerro Gordo $142 K - $188 K / year $194 K - $257 K / year 0.6

Boardman $81 K - $109 K/ year $112 K - $148 K / year 0.4

Proctorville

(WW only)$80 K - $97 K / year $99 K - $129 K / year 0.3

Shared staff needed for WWTP and main pump stations 2

Total Additional

FTE Needed = 8.3

•These costs will increase if capital projects are not implemented•All Towns pay a portion of WWTP O&M based on Interlocal Agreement•Total water and wastewater billed by all Towns in FY 2016-17 = $1.35 MM = millions of dollars; K = thousands of dollars(*) FTE = Full Time Equivalent staff


•Grant funding • Connect NC Bonds finished*

• State loan program available to match

• Will appropriations increase?

•Outreach to local officials• Water infrastructure funding (e.g., limited grants)

• Master plan

• Resources



•SRFs• Leveraging (SRF issues debt)

• FA under contract – analysis just beginning

•America’s Water Infrastructure Act (AWIA) of 2018• Contains aspects of SRF-WIN Act

• Allows SRFs to obtain funding through WIFIA

• 100% of funding (not WIFIA standard of 49%)

• SRF process not WIFIA

• EPA guidance not yet provided

• Funding authorized ($5 million); not appropriated


Division of Water Infrastructure

https://deq.nc.gov/about/divisions/water-infrastructure

State Water Infrastructure Authority

https://deq.nc.gov/about/divisions/water-infrastructure-

draft/state-water-infrastructure-authority

https://deq.nc.gov/about/divisions/water-infrastructure

https://deq.nc.gov/about/divisions/water-infrastructure-draft/state-water-infrastructure-authority

Documents

2019 Water and Wastewater Finance Workshop...AWWA’s 2018 SOTWI Report The top five most important issues facing the water industry: 1.Renewal and replacement (R&R) of aging water