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3:00pm - 3:45pm ID: 273 / Session 18B: 1 Main Technical Program Topics: Utility & Assessment Management, Leadership, Social Equity, Workforce Development Keywords: affordable housing, impact fee, sdc
Affordable Housing and Tiered Development Impact Fees
Chris Storey, Erin Blue, Ron Wierenga
Water Environment Services, United States of America; ,
One of the emerging issues in utility management and capital financing is how to address the impact of affordable housing on a wastewater system. Utilities often receive pressure to waive or reduce development impact fees for what is seen as more desirable or diverse and potentially more equitable housing supply. This is counterbalanced by the challenge that if those developments do not pay for the cost of their impact to the system, another segment of the customer base will. This leaves the utility stuck between two valid policy goals and leaving both groups unhappy with any changes made.
To create a path forward, Clackamas Water Environment Services (WES) explored a more nuanced effort to measure the impact of housing size as a proxy for water consumption on the wastewater system. As a regional wastewater system crossing multiple water providers, WES does not assign equivalent dwelling units (EDUs) based on direct water consumption data, but used the traditional “a house is a house” model with a 20% discount for multi-family dwellings. WES pulled winter water consumption data from several underlying water providers, then cross-indexed with census data and home size information to create a model of flow contributions to the system.
WES found a statistically significant difference in wastewater discharges that correlated to the size of the dwelling, with small 800 square foot dwellings at one end and 3000 square foot dwellings at the other. After slicing the data several different ways, WES established key deviations from the baseline consumption of a 2000 square foot home. These deviations supported the creation of a 5-tiered EDU assignment (and therefore development impact fee assignment) for new development that reduced the cost of affordable housing, and increased the cost of large homes.
This nuanced distinction created a path forward to enabling lower affordable housing fees while having a strong, evidence-based approach that there was no subsidy being given by another customer segment. WES proposes to share how the analysis was done, how to draw conclusions from the data, and how to implement a tiered development impact fee structure.
Brief Biography and/or Qualifications Chris Storey, WES Assistant Director: Chris joined WES in 2018 as the Assistant Director, where he oversees the administrative, financial, regulatory and main policy initiatives of the utility. Prior to becoming Assistant Director, Chris was Senior Legal Counsel for WES and other areas of Clackamas County and led the County’s transaction group. He joined WES and Clackamas County in 2006.
Erin Blue, Financial Analyst: Erin serves as WES’ lead for budget development and key financial analysis, and provides overview and support to virtually all areas of WES’ financial system. Prior to joining WES, Erin was co-owner of a business and then manager of that division after it was acquired, and brings a deep intellectual curiosity and knack for analysis to complex challenges.
3:45pm - 4:30pm ID: 177 / Session 18B: 2 Main Technical Program Topics: Utility & Assessment Management, Recycled Water & Resource Recovery Keywords: Funding strategies, affordability, ratepayer communications, planning
Five Things to Know About Saving Ratepayers Millions of Dollars with WIFIA
Clark Worth, David Stangel
Murraysmith, United States of America; ,
Every water and wastewater utility in the United States should be aware of and consider participating in the Environmental Protection Agency’s Water Infrastructure Finance & Innovation Act (WIFIA) loan program. The benefits to your community and ratepayers can have generational impact. Our staff has supported more than $1.4B in WIFIA loan Letters of Interests and subsequent applications. This presentation covers the five things utilities should know about WIFIA:
What projects are eligible for WIFIA? Projects that qualify for Drinking Water SRF and Clean Water SRF are also eligible for WIFIA. Projects that cost $20M+ (or $5M+ for communities less than 25,000 population) can apply. The WIFIA loan can cover 49% of eligible project costs.
What are the benefits to ratepayers of WIFI loans? Very low interest rates, funds disbursed on a reimbursement basis, and flexible loan terms give utilities a flexible financial tool that maximizes the benefits to your ratepayers.
How do you apply? The annual cycle starts as early as April with a call from the EPA inviting communities to submit a Letter of Interest (LOI). This LOI provides the EPA with a detailed analysis of project costs, revenue, benefits, impacts, and risks that takes months to prepare but is due in just 90 days. Top scoring LOIs are invited by EPA to submit a loan application. Approved loans close in 12 to 18 months.
What are the chances of success? WIFIA is well funded—the right projects have good odds of success. In FY 2020, there was $5.5B in loan authority. EPA selected 55 of 67 projects to apply.
A strong LOI is key to success. Applicants need to approach it like a proposal, providing evidence that the project meets all 16 review criteria. Projects that are ready to proceed and creditworthy applicants are likely to score well.
Attendees of this presentation will have the information they need to take a closer look at WIFIA funding for their agency, potentially saving their ratepayers millions—or hundreds of millions—in interest payments
Brief Biography and/or Qualifications Clark Worth, principal at Barney & Worth, specializes in funding and ratepayer communications for water-wastewater-stormwater utilities. A consultant for over 40 years, Clark has served hundreds of clients in the Pacific Northwest and across the U.S. He completed a bachelor’s degree in political science and graduate studies in public administration at the University of Oregon. He began his career working for two Oregon Governors.
David Stangel, PE, principal at Murraysmith, has more than two decades of engineering experience, specializing in the master planning of water and wastewater collection systems. Based in Murraysmith's Boise office, David serves as a senior advisor to clients across the Pacific Northwest as they face the increasingly difficult need to balance infrastructure investment needs with affordability. He completed his bachelor's degree in geography and a master's in water resource engineering from Oregon State University.