1. Water and Wastewater Infrastructure Funding Strategies Jeff Hughes UNC School of Government Environmental Finance Center 919.843.4956 jhughes@sog.unc.edu www.efc.unc.edu

2. Workshop Acknowledgements UNC School of Government Public Water Supply Section, Division of Environmental Health, NC Department of Environment and Natural Resources US Environmental Protection Agency – Region 4 – Environmental Finance Program, Office of Chief Financial Officer

3. Workshop Objectives 1.Promote proactive capital funding planning and analysis 2.Improve understanding of funding sources and strategies 3.Improve understanding of the role of rates and fees in infrastructure investment 4.Provide forum for sharing capital funding perspectives, ideas, and experiences

4. Water and Wastewater Infrastructure Serving current “unserved” residents Serving growth Regulatory requirements Modernization/efficiency improvements Protecting source water Replacement and rehabilitation

5. What types of projects are in your utility's current CIP? (n=172) Largest component 59% 5% 9% 20% 3% 0% 2% 1% Preliminary results

6. Who is in the room? 1.Utility management 2.General management 3.Finance Office 4.Consultants/Comm unity Advisors 5.Others

7. Questions and… ….Burning Issues

8. Do you have an approved set of water/wastewater finance policies? 1.Yes 2.No 3.Workin’ on it…

9. Do you have an approved CIP? 1.Yes 2.No 3.Workin’ on it…

10. 46) Does your utility have a Capital Improvement Plan (CIP)? n = 258 Preliminary results

11. 53) What is included in your utility's CIP? n = 172 Preliminary results

12. 47) Is your utility's CIP approved by your Governing Board (City Council / County Commissioners / Board of Directors)? n = 174 Preliminary results

13. 32) Does your utility have a "finance policy" that sets financial targets and goals, such as reserve balance, debt service ratios, etc.? n = 256 Preliminary results

14. What period does your CIP cover? 1.< 3 yrs 2.3 - 5 yrs 3.6 - 10 yrs 4.> 10 yrs 5.Don’t know

15. 48) How many years does your utility's CIP cover? n = 164 Preliminary results

16. How do the majority of projects make it on to your CIP? 1.Pass rigorous business case evaluation 2.Too complicated to explain 3.I don’t know

17. Do you have a multi-year approved Capital Improvement Budget (CIB) 1.Yes 2.No 3.Workin’ on it…

18. 51) Does your CIP include a multi-year budget (i.e. your elected officials have approved a BUDGET for MORE THAN ONE YEAR)? n = 174 Preliminary results

19. What period does your CIB cover? 1.1 yrs 2.2 yrs 3.3 yrs 4.4 yrs 5.5 years or greater 6.Don’t know

20. Do you have a multi-year finance model that shows projected revenues and expenditures? 1.Yes 2.No 3.Workin’ on it…

21. Is your CIP integrated with a finance plan and/or rate model? 1.Yes 2.No 3.Workin’ on it…

22. Water and Sewer Projection Summary 8 Year Financial Plan

23. www.efc.unc.edu/tools

24. How have you funded most of your W&S capital during last five years? 1.Grants 2.Debt 3.Pay-go (current year receipts) 4.Capital Reserves 5.We’re still looking for funds…….

25. Percentage of capital needs in your CIP you are confident you can fund? 1.<10% 2.10%-25% 3.25%-50% 4.50%-75% 5.>75%

26. 44) Based on your experience, how often is your utility able to fund all of the necessary capital improvements? n = 254 Preliminary results

27. Acquiring Funds for Capital Infrastructure (Day Covered) 1.Save and spend later 2.Spend/pay as you go Spend borrowed funds and pay later 3.Spend grant funds and get “someone else” to pay