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The Technology Hurdle for Water Finance Managers and CFOs

By Greg Baird

Let’s face it, if our roots are in government finance, we are a conservative breed. Our backgrounds prior to becoming a water finance manager, director or CFO have been from accounting, budgeting or investments.

In any case, our training and experience have included conservative investments and low rates of return, declining revenues, avoidance of audit findings and political budget allocation meetings. At the end of the fiscal year, we have a sigh of relief because all of our efforts secured a safe debt ratio margin and some cash reserves on hand.

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What happens when a technology-related issue comes our way? We avoid it. After all, it is an IT thing.

While this attitude has kept us away from some form of extra work outside of our comfort zone, the truth is that we actually have a fiscal duty and obligation to explore and evaluate technology options just as if we were reviewing investment portfolio options, collateral for developer deals or RFPs for rate consultants.
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Deconstructing Water Affordability & The Utility Payment Performance Challenge

smart phone illustrationBy Jeff Lipton

Collecting revenue is the lifeblood of any business. Without timely and predictable collections, business operations are strained, budgeting for expenses falters and long-term planning becomes increasingly difficult. Investment decisions are delayed and the impending uncertainty can create an environment of fear among staff.

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Ensuring regular and predictable cash collection is clearly one of the most crucial aspects of any business operation. This is particularly true for water utilities where it is common for fixed operating expenses to greatly exceed the amount of fixed revenue charged to customers in the form of water rates. When customer demand varies due to seasonal precipitation patterns, so does revenue. This makes reliable payment performance even more important to water utilities who have to contend with very large capital expenditures on a semi-regular basis.
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The Irony of Financial Planning & Budgeting…

pen on paperBy Kristy Neckowicz

Each year, financial and capital program managers must strike a balance between rate increases and the requirement to modernize our water and wastewater utilities. As our sights are fixated on the nation’s aging and failing water infrastructure, we have neglected to look internally at the costly and manual processes that desperately need improvement also.

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The typical budget planning process for a utility is akin to a leaky water pipe; the wasted productivity is expected and tolerated. And, just like a leaky pipe runs the risk of becoming a big break, there is a risk of adverse financial performance if we neglect to streamline the process. So, why do we turn a blind eye to the inefficiencies of the typical planning process? It’s because most of us have a status-quo bias called loss aversion. We have a hard time making decisions that are in our long-term interests if they require any sacrifice in the short term. It is also a common belief that fixing this inefficient process requires a huge investment in money and effort to overhaul our enterprise financial systems and business intelligence tools. Like the fabled shoemakers, planners allocate budget for everyone else, but rarely reserve any budget for their own needs. Luckily, with the right tools and a good partnership, there are some easy solutions for our typical planning challenges.
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AMWA: The Time Is Now for Congress to Recommit to WIFIA

capitol buildingBy Diane VanDe Hei

Washington has heard a lot of talk over the past year about the need to address the nation’s aging infrastructure, but there has been little agreement among Democrats and Republicans about how to go about it. However, a program created by Congress four years ago is actually starting to fulfill its potential as a source of low-cost capital for major drinking water and wastewater projects. Efforts to reauthorize this innovative program should be a priority on Capitol Hill in the months ahead.

BE SURE TO REGISTER FOR THE 2018 WATER FINANCE CONFERENCE TO LEARN MORE.

The U.S. Environmental Protection Agency’s (EPA) Water Infrastructure Finance and Innovation Act program, better known as WIFIA, was created as part of the Water Resources Reform and Development Act of 2014. Modeled after the Department of Transportation’s successful TIFIA program, WIFIA was intended to generate a source of low-interest financing for large-scale drinking water and wastewater infrastructure projects nationwide.
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Value for Money…and Beyond

New Financing Options Demand New Evaluation Tools

By Mike Matichich

Water agencies are faced with a widening array of delivery and finance options for their major capital programs. That is good news, as the industry likely will need everything from the U.S. EPA’s relatively new WIFIA loan program to ‘pay for performance’ models and long-term concessions that will attract private capital and options in between to fund the growing backlog of infrastructure needs.

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In assisting clients throughout North America to develop implementation plans for their projects, I have found more clients want to at least consider a broader array of delivery and finance options for their programs, whether it be for building a new WWTP, financing a major rehabilitation of an existing WTP or funding a green infrastructure program for stormwater management.
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Examining Legal Considerations in Funding Customer Assistance Programs

By Alyse Greenberg

As water utilities work to upgrade aging infrastructure, address changes in water supply and demand, and meet regulatory requirements, many of the increased costs are passed through to customers. Increased rates mean that more utility customers may face difficulties in paying their bills. This can lead to increased arrearages, late payments, disconnection notices, and service terminations. To address these challenges and help their lowest income customers maintain access to water services, utilities are exploring the feasibility of customer assistance programs (CAPs).

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Recognizing this need, The Water Research Foundation partnered with other water sector organizations to produce Navigating Legal Pathways to Rate-Funded Customer Assistance Programs: A Guide for Water and Wastewater Utilities. The project includes participation from both the former Water Environment & Reuse Foundation and Water Research Foundation, allowing a perspective from the wastewater and drinking water industries. Those organizations merged effective January 2017 to form The Water Research Foundation.
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