Four Finance Facts About Flint

Written by: Jeff Hughes Jeff Hughes is the Director of the Environmental Finance Center at the University of North Carolina at Chapel Hill. As this blog is being written, water and community managers from across the country are talking about the water crisis that is occurring in Flint, Michigan. The City made a decision several years ago to discontinue buying …

Key Financial Benchmarks for Water Systems: Conservation Signal

Written by: Glenn Barnes Glenn Barnes is a Senior Project Director with the Environmental Finance Center at the University of North Carolina at Chapel Hill.  At our workshops and through our discussions with water systems during technical assistance work, many water systems, in particular small systems, ask what seems like a simple question: “Are our rates right?” I suspect our initial answer …

Who is Supplying Water in Puerto Rico?

Written by: Stacey Isaac Berahzer Stacey Isaac Berahzer is a Senior Project Director with the Environmental Finance Center at the University of North Carolina at Chapel Hill.  About 96% of the population in Puerto Rico receives water from the Puerto Rico Aqueduct and Sewer Authority (PRASA). But the other 4% of the population is supplied by about 240 very small …

Key Financial Indicators for Water and Wastewater Systems: Current Ratio

Written by: Glenn Barnes Glenn Barnes is a Senior Project Director with the Environmental Finance Center at the University of North Carolina.  In previous posts, we outlined how to use the financial statements of a water or wastewater system to calculate the key financial indicators of operating ratio (a measure of self-sufficiency), debt service coverage ratio(a measure of a system’s ability to pay …

Four Trends in Government Spending on Water and Wastewater Utilities Since 1956

Written by: Shadi Eskaf Shadi Eskaf is a Senior Project Director with the Environmental Finance Center at the University of North Carolina.  According to data collected and published by the Congressional Budget Office (CBO), federal, state and local governments in the United States spent more than $2.2 trillion in the last 59 years on operations, maintenance and capital infrastructure of …

The Revenue Ups and Downs of the Water Business

Written by: Rachel Baum Rachel Baum is a graduate student at the University of North Carolina studying environmental financial risk management. The Upside: The water business sells one of the most important, if not the most important, products on earth. It is a product that can be used for thousands of purposes and one that has limited competitive pressures compared to other …

Five Dangerous Financial Myths for Small Water Systems

Written by: Jeffrey Hughes Jeffrey Hughes is the Director of the Environmental Finance Center at the University of North Carolina.  Small water systems serving 10,000 people or less comprise more than 94% of our nation’s public water systems. They are a large and diverse group, and are managed by a wide variety actors – from local and tribal governments, to …

Key Financial Indicators for Water and Wastewater Systems: Days of Cash on Hand

Written by: Glenn Barnes Glenn Barnes is a Senior Project Director with the Environmental Finance Center at the University of North Carolina.  In previous posts, we outlined how to use the financial statements of a water or wastewater system to calculate the key financial indicators of operating ratio (a measure of self-sufficiency) and debt service coverage ratio (a measure of a system’s ability …

Key Financial Indicators for Water and Wastewater Systems: Operating Ratio

Key financial indicators are a way for a system to get a snapshot of its financial health and to determine whether it needs to make adjustments to its rates, and they should be calculated annually when financial statements are released. One important financial indicator is operating ratio, which measures the ratio of annual operating revenues to annual operating expenses. To be a true enterprise fund that is self-supporting, a system should strive to have at least as much operating revenue as it has operating expenses, if not more. Otherwise, the system would be operating at a loss.

What Does Santa Claus Charge for Water and Wastewater Service?

The call came in on a December morning several years ago. When I saw the caller ID said “Santa Claus” I decided not to answer the phone. My thought was “seriously, what will these telemarketers think of next?!?” Later that morning, I noticed that caller had left voicemail. To my surprise, there was a message about water rates from the Mayor of Santa Claus, Georgia.