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NACWA is pleased to announce the release of the Association’s 2011 Financial Survey (Survey). Since 1981, NACWA has conducted a triennial financial survey of its membership to provide clean water agencies, government officials, and the public, important insight into the financing and management of clean water utilities.  In addition to the full Survey report that is now available electronically, NACWA also developed a hardcopy summary that highlights the key findings and conclusions from the Survey.  Together the full downloadable Survey report and the highlights document provide a complete picture of how clean water utility managers continue to balance providing wastewater collection and treatment services with responsibly managing their community’s resources.

Included with this Member Update is a link to NACWA’s website to download your complimentary copy of the Survey report and the detailed data spreadsheet , as well as additional ordering information.  A hardcopy of the highlights document will be mailed to every NACWA member representative in the next week.

Survey Indicates Sustained Increases in Costs, Capital Spending and Long-Term Debt Levels

The 2011 Survey shows that clean water utilities are facing sustained increases in capital expenditures and operations and maintenance costs.  Some of the additional costs are due to new regulatory requirements and the controls required to comply with existing Clean Water Act mandates, including sanitary and combined sewer overflow requirements.  Other increasing costs, such as those for energy and chemicals, are dictated by external factors often beyond the control of the utility.

With higher costs and greater capital expenditures comes the need for additional revenue.  The Survey shows that rates and charges for residential and industrial customers have increased at more than three times the overall rate of inflation from 2007 to 2010.  In both NACWA’s 2005 and 2008 survey reports, it was noted that the rapid increase in long-term debt, coupled with increasing capital needs could impact the ability of utilities to meet future funding needs through debt financing mechanisms.  The 2011 Survey data show that long-term debt is up 24 percent between 2007 and 2010 and up nearly 75 percent between 2001 and 2010.  Debt service payments comprise, on average, 26 percent of total expenditures for agencies responding to the Survey.

The Survey suggests that clean water utilities are continuing efforts to improve efficiency and sustainability through energy recovery initiatives, implementation of asset management programs, and implementation of utility management/excellence programs.   Service levels also continue to steadily improve with increasing levels of treatment and high removal efficiencies for key pollutants.  Since the release of NACWA’s last Financial Survey in 2008, clean water utilities have continued to focus attention on the status of their physical assets, working to characterize the condition, value, and longevity of those assets so they can better plan for future needs.  Eighty five percent of Survey respondents indicated that asset management programs are being implemented at their utilities.

Sound Financial Position of Clean Water Community Faces Ongoing Challenges

Overall, clean water agencies continue to demonstrate a strong financial position, but the increasing reliance on long-term debt to finance assets and the large portion of utility budgets dedicated to servicing that debt, have and will continue to present challenges for communities nationwide.

Many communities continue to struggle due to the impacts of the faltering economy coupled with increasingly costly Clean Water Act regulatory requirements.  It will be important to continue to track the trends detailed in the 2011 Survey closely in future surveys.

Survey Data Availability

Access to the downloadable 2011 Financial Survey, including the detailed data spreadsheet , is available on the publications portion of the NACWA website.  The highlights document, provided in hardcopy to each Association member via mail, was designed to provide a brief overview of the Survey’s findings for regulators, Congress, utility boards and the public.  An electronic version  of the summary document is also available for free download from the NACWA website for members and non-members.  Please contact NACWA if you are interested in receiving additional hardcopies of the summary document.  The survey is also available for purchase by non-members on the NACWA website.