Conference Agenda

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.

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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