Hot Topics in Utility Management July 23, 2019 NCGFOA Conference Austin Thompson, Project Director

EFC GREATEST HITS OF 2018-2019

EFC GREATEST HITS OF 2018-2019 NC Water and Wastewater Rates Dashboard Trends in Water and Wastewater Rates (2009-2018) Trends in Water Use (2002-2017) 2018 System Development Fees 2018 NC Stormwater Dashboard 2019 Stormwater Report

How you pay for it matters. Dedicated to enhancing the ability of governments and other organizations to provide environmental programs and services in fair, effective, and financially sustainable ways through: Applied Research Teaching and Outreach Program Design and Evaluation How you pay for it matters.

2019 NC Water and wastewater rates dashboard

The Average North Carolinian pays… 2019 Survey Results The Average North Carolinian pays… $58.94/month for 4,000 gallons of water and wastewater, combined. Accounting for service populations and inside/outside rates.

2019 by the Numbers - Inside Rates Monthly water base charge Min non-zero: $3.25 Median: $16.55 Max: $50.00 Monthly wastewater base charge Min non-zero: $2.00 Median: $18.00 Max: $69.50 Highest volumetric rate per 1,000 gallons at 4,000 gallons/month $13.60/1000 gallons Water $25.00/1000 gallons Wastewater Yadkin County charges Median percentage of customer bill due to base charge at 4,000 55% Water 51% Wastewater

Trends in Pricing Water and Wastewater (2009-2018)

What did we do? Rates data from 2009-2018 245 water utilities 201 wastewater utilities Median Household Income data from US Census Matched to utility Bureau of Labor Statistics CPI-South Data Inflation data from 2009-2018 Blog Link

Median Water and Wastewater Bills at 4,000 Gallons per Month for Large and Small Utilities, 2009-2018 (NLarge=80 & NSmall=146) The median bill for small utilities is higher, both for water and wastewater at 4 Kgal Small Data analyzed by the Environmental Finance Center at the University of North Carolina, Chapel Hill. Data Sources: SDWIS and NC League of Municipalities and Environmental Finance Center's annual water & wastewater rates surveys. The cohort of utilities is consistent across all years.

“Average” Water Bills at 4,000 Gallons per Month, Relative to CPI-South, 2009-2018 (n=226) Data analyzed by the Environmental Finance Center at the University of North Carolina, Chapel Hill. Data Sources: SDWIS, BLS, and NC League of Municipalities and Environmental Finance Center's annual water & wastewater rates surveys. The cohort of utilities is consistent across all years. SDWIS service population values were linearly interpolated for 2014 and 2015 based on values from 2013 and 2016.

Key Takeaways Since 2009, in North Carolina, water and wastewater rates have risen faster than inflation. Based on both the last ten years and last five years of data, rates are expected to continue rising faster than inflation. Median Household Income is rising, but only realigned with inflation in 2017.

Trends in Water use (2002-2017)

Total Residential Usage vs Total Residential Usage vs. Total Residential Metered Connections For the Sample of 119 Utilities Present in 2002, 2007, 2012, 2016, & 2017 Clarify that this is sample.

Has Residential Use Shifted Differently Across the State Has Residential Use Shifted Differently Across the State? For the Sample of Utilities Present in 2002, 2007, 2012, 2016, & 2017 Total metered usage

Actual Number of Fair Bluff Customers - Water

Key Takeaways Changes in residential water use are not uniformly distributed across the state. In general, total metered use is declining across the state. This decline is total use is met with an increase in total connections, but we know not all utilities are growing. Declines in use mean something very different for Raleigh than they do for Fair Bluff. Copy this from most recent presentation

2018 system development fees report

What are we talking about? Article 8 authorizes local governments to charge SDFs for water and wastewater service under specific conditions and using an approved method to perform a supporting analysis which determines a maximum cost-justified fee. Article 8 went into effect for all such fees starting July 1, 2018

What did we do? Conducted a survey of local government utilities Mix of phone calls, web surveys, interviews Identified 81 utilities charging SDFs following Article 8s guidance Serving 63% of statewide water utility service population Assessed calculation method, fee basis, and the actual FY 2019 fees

What did we do? Created a report, published in 2019, that describes the results Can be found at this link Took this information and produced a report, available online.

Key Results Calculation Method SDF Calculation Methods-Water N=57 SDF Calculation Methods-Wastewater N=51 Talk about the different calculation methods here

Key Results Fee Basis

Key Results The Fees There are different patterns between the SDFs for water and wastewater For water, most of the SDFs tend to fall below $2,000 For wastewater, there is a much more even distribution across all price ranges

Key Results Fee Changes First thing we did was look at how costs changed from the last report…did they increase/decrease/stay the same?

Key Results Fee Changes Same results, but for wastewater  interested to see them side by side

2018-2019 NC stormwater Fees dashboard & Results

Stormwater Utility Fee Dashboard This is the third consecutive fiscal year, and the fifth year overall, in which the EFC has published the North Carolina Stormwater Fees and Fee Structures Survey. The EFC has completed surveys in 2009-10, 2011-12, 2016-17, 2017-18, and 2018-19. There have been 44 stormwater fee structures which have been included in all five of the surveys. Eight of the 44 utilities (18.2 percent) have not raised their fees since we began collecting data, and only one utility has raised fees in every year that we have surveyed.

Key Results Produced a report of findings in May 2019 Also includes results from a live poll during a Stormwater Webinar Link to the report can be found here

Number of Stormwater Utilities Key Results Year Number of Stormwater Utilities Estimated Revenue 2010 56 Municipal $138,949,938 2017 64 Municipal 3 County $208,009,005 $17,269,729 2019 81 Municipal 5 County

Key Results Distribution of Monthly Stormwater Fees for a Residential Property with 3,000 Square Feet of Impervious Surface

Key Results *For a subset of 44 utilities present in all 5 iterations of the stormwater fee survey 18.2% have not raised their fees since we began collecting data, and only one utility has raised fees in every year that we have surveyed. Of the 36 utilities that have raised fees at least once since 2010, eight have raised them at a rate slower than CPI 36.4% have residential fees at 3,000 square feet that, when adjusted for inflation, are lower today than in 2010

Key Takeaways Most stormwater spending in North Carolina is based primarily on what is feasible with the revenue generated from the existing fee Utilities are not necessarily basing stormwater utility fees on capital needs Bullet 2: which is why fees are not growing each year in the survey data.

Featuring bonus tracks! EFC GREATEST HITS OF 2018-2019 Featuring bonus tracks!

Guidance for Interlocal Agreements Currently available at this URL Condensed version at this URL

Guidance for Consolidation Will be available by the end of the month

2017-2018 NC Utility Management Survey 227 utilities (44 percent), of the 511 invited, participated in the survey. Examined the relationship between long-term planning and resiliency, as measured by financial stability and fewer regulation violations.

Financial Planning

Utility Forecasting

Current Billing Practices

Austin Thompson Thompson@sog.unc.edu 919.962.5795