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Water Infrastructure and Resiliency Finance Center

Water Finance Forum - Florence, Alabama

Water Rate Setting and Long-Term Fiscal Planning Focusing on Small Water and Wastewater Systems

The Finance Forum was held in Florence, Alabama at the Marriot Shoals Hotel, on July 7, 2017.

The forum was hosted by the Water Infrastructure and Resiliency Finance Center, EPA Region 4, and the Environmental Finance Center at University of North Carolina Chapel Hill (EFC at UNC).

Forum welcome and introductions by Jeff Hughes and Stacey Isaac Berahzer, EFC at UNC; John Covington, U.S. EPA Water Infrastructure and Resiliency Finance Center.


Small Water Utility Finance 101

Discusses how to think about the water system as a financial entity.

Benchmarking and Assessing the Financial Condition of the Water System

Session examines the key financial indicators that allow water systems to make informed decisions in planning and investment. In a hands-on exercise, participants learned how to calculate and interpret a water system’s operating ratio, debt service coverage ratio, current ratio, and days of cash on hand. Discusses how funders use these numbers in deciding whether or not to loan systems money needed for capital improvements.

Presenters: Stacey Isaac Berahzer and Jeff Hughes, EFC at UNC; David Austin, Jeremy Cormier, and Dana Eldridge, Georgia Environmental Finance Authority (GEFA))

Generating Needed Revenue

Provides an overview of best management practices in rate setting. Water utilities generally get most of their revenue from rates. In order to ensure proper funding of utilities, it is critical that small water systems fully understand both long-term fiscal planning and rate setting. Systems should understand how policy decisions that promote economic development or conservation can impact revenues and look to set rates that promote utility priorities while recovering the full cost of operation.

Asset Management

Provides two different approaches for embarking on asset management. Focuses on the components of “level of service” and “criticality.”

System Collaboration

Examines some of the benefits and examples of water systems collaboration. Collaborating with other utilities is one strategy to help systems address some of their challenges. There are many different ways systems can collaborate, from extremely informal information sharing sessions, to sharing of personnel or purchasing to assistance with regulatory compliance. In some cases of collaboration, several systems actually merge into one. We looked at an example where systems from different states have regionalized into one system.

Funders Overview

Discusses descriptions of individual financing programs and how they may interact with each other. There are several federal and state programs that provide financing for water infrastructure projects. Speakers included persons involved in administering the programs in the state.
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