Water Partnerships Which best describes your role? A. I work for a - - PowerPoint PPT Presentation

Water Partnerships

I work for a water utility I work for an organization th.. Other

55% 30% 15%

Which best describes your role?

• A. I work for a water

u;lity

• B. I work for an
• rganiza;on that

advises water u;li;es

• C. Other

Data from informal poll of approximately 40 water system managers

Technical Financial Managerial Other

8% 12% 54% 27%

What is your role in your organiza;on?

• A. Technical
• B. Financial
• C. Managerial
• D. Other

Data from informal poll of approximately 40 water system managers

Less than 5 years Between 5 and 15 years More than 15 years

29% 33% 38%

How long have you worked in this role? (In total, at all organiza;ons you may have worked at.)

• A. Less than 5 years
• B. Between 5 and 15

years

• C. More than 15 years

Data from informal poll of approximately 40 water system managers

Male Female

52% 48%

What is your sex?

• A. Male
• B. Female

Data from informal poll of approximately 40 water system managers

Less than 10% of normal yea... Between 10% and 30% of n... More than 30% of normal ye... Don’t Know

27% 27% 23% 23%

Does your organiza;on have a reserve fund sufficient to cover unexpected cost increases in a given year without leading to a rate increase (choose 1)

• A. Less than 10% of

normal yearly costs

• B. Between 10% and

30% of normal yearly costs

• C. More than 30% of

normal yearly costs

• D. Don’t Know

Data from informal poll of approximately 40 water system managers

Pre-Survey

Transfer of treated water between water u;li;es is a way of ensuring that u;li;es have sufficient water during periods of drought. The following ques;ons are meant for us to beYer understand your prior knowledge of water transfer agreements between u;li;es.

1 “Not at all familiar” 2 “A little bit familiar” 3 “Moderately Familiar” 4 “Familiar, but not an expert” 5 “Very Familiar”

24% 31% 21% 10% 14%

How familiar are you with water transfers between water u;li;es, on a scale of 1 to 5? (1 “not at all familiar”, 5 “very familiar”)

• A. 1 “Not at all

familiar”

• B. 2 “A liYle bit

familiar”

• C. 3 “Moderately

Familiar”

• D. 4 “Familiar, but not

an expert”

• E. 5 “Very Familiar”

Data from informal poll of approximately 40 water system managers

Yes No Don’t Know

77% 5% 18%

Other than for emergency purposes, has your water u;lity ever bought or sold water to another u;lity in the past?

• A. Yes
• B. No
• C. Don’t Know

Data from informal poll of approximately 40 water system managers

Based on what you know about transfers, what are the pros and cons of transfer agreements for your par;cular u;lity?

1 “Not at all receptive” 2 “Would rather not rely on a.. 3 “A little receptive” 4 “Receptive” 5 “Very Receptive”

25% 38% 4% 17% 17%

How recep;ve would you be to having a drought plan that required you to rely on transfers as part of your drought management strategy, (either buying or selling) on a scale from 1 to 5? (1 “not at all recep;ve”, 5 “extremely recep;ve”)

• A. 1 “Not at all

recep;ve”

• B. 2 “Would rather not

rely on any transfers”

• C. 3 “A liYle recep;ve”
• D. 4 “Recep;ve”
• E. 5 “Very Recep;ve”

Data from informal poll of approximately 40 water system managers

The Jordan Lake Partnership: Interlocal Coopera7on for a Sustainable and Secure Water Supply

Don Greeley 2016 Water and Wastewater Finance Workshop February 9, 2016

NC Drought Monitor

Historic Droughts

Image credit: hYps://www.sercc.com/drought

• Nov. 2007

• Mutual need to reduce drought risk
• Economies of scale
• Technical constraints (one more

intake allowed; limited sites)

• Streamline the approval process
• Strength through partnerships

“We learned you have to work together – stop figh7ng wars. If you don’t, you will have other people deciding what happens in your ci7es and towns.”

Wayne Hill, former Chair of GwinneY County, Georgia Commissioners, regional Chamber of Commerce event, Cary, NC, May 13, 2008

The Jordan Lake Partnership What is the Partnership?

• Interlocal effort begun in 2009 to

coordinate planning and further development of the regional water supply to meet future needs

• Local government led ini;a;ve –

demonstrate that local leadership can solve regional water planning challenges

Who are the Partners?

Apex Cary Chatham County Durham Hillsborough Holly Springs Morrisville Orange County OWASA PiYsboro Raleigh Sanford Wake County

• Develop & maintain buy-in from all governing boards
• Develop regional water supply plan
• Submit coordinated Jordan Lake alloca;on requests

to State

• Explore op;ons for addi;onal facili;es to access

Jordan Lake water supply

• Coordinate with upstream & downstream

stakeholders, state agency staff, and environmental groups

Accomplishments

• Consensus approval of preferred regional soluAon
• Coordinated Jordan Lake allocaAon requests
• Phase I InterconnecAons Inventory
• Interconnec;on Improvements
• Chatham - Durham and Cary - Raleigh
• Phase II Interconnec;ons Modeling complete in 2016
• Western Intake facility planning

Cost Sharing

• Each Partner invests in overall Partnership
• Investment in individual projects is op;onal
• Cost share for most projects is not complex
• Costs are based on size of the Partner
• Typically 2-3 levels of costs for a project
• Long term planning on cost share for large projects
• Coordinated Jordan Lake alloca;on requests

• Plan future infrastructure investments
• Western Intake, treatment and transmission

facili@es

• Regional interconnec@ons
• Broaden focus of regional collabora;on
• Emergency response planning
• Water efficiency educa@on
• Water shortage indicators
• Planning for Triangle Water Partnership

www.jordanlakepartnership.org

The Big Mo’

Western Intake Study

A shared intake will be more efficient and likely to obtain regulatory approval than individual intakes for each Partner Feasibility Study was completed in 2014 Conceptual level study evaluated the feasibility of a shared raw water intake for: Chatham, Durham, PiYsboro, OWASA Study Included: Evalua;on of three (3) alterna;ves: Review of Partnership op;ons Development of a conceptual level perminng and a construc;on schedule for the Preferred Alterna;ve

Wholesale Water Agreements

Jeff Hughes Environmental Finance Center University of North Carolina at Chapel Hill

What Would You Do? A small town purchases wholesale wastewater service from a neighboring community/town. The legacy contract requires the payment of double the large community retail rate. Rates have risen drama;cally and are approaching $150 per month for customers. And the small town has inflow and infiltra;on problems in their sewer system.

hYp://geocommons.com/maps/179148

Crating Successful Inter-local Agreements

Available at

hYp://efc.sog.unc.edu/

Format

– Ques;ons to consider, descrip;ons, example text – Advice for genng inter-local agreements right, avoid pivalls – NOT drat contract – NOT every issue that will come up in every document

What are Issues you Discuss or Put Down in Wri;ng in your Inter-System Agreements?

§ Service area boundaries § Usage limits § Meter maintenance and ownership § Water quality § Capital costs § Resale or capacity § Water pressure § Communica;ons, service interrup;ons § Conserva;on status and measures

… and more.

Begin with Service Areas

Current boundaries Planned future boundaries Unserved areas Annexation Growth Process to change or expand boundaries in the future Extend whose lines to new areas? Service Area Maps

Capital Costs

§ How does the agreement assure that water suppliers receive

adequate payment for use of their capital?

§ How does the agreement address what happens when facili;es

need to be upgraded and expanded?

§ Does the agreement specify

minimum purchase requirements?

Common Methods

§ Rolling capital costs into the commodity charge (with a

minimum?)

§ An upfront capacity fee § A recurring capacity fee linked to reserved capacity or actual

maximum purchase over a year

§ Purchaser assumes a percentage of seller’s debt service § Pass through retail customer impact fees

Examples 1: Capital Costs

“At the occurrence of such capital improvements, should Monroe issue long-term debt to finance, in whole or part, its water and sewer u@lity capital improvement program, Monroe agrees to nego7ate with Union the terms and condi7ons of financing Union's share of the capital improvements to the WWTP, conveyance, and disposal facili7es providing allocated capacity to Union.” (Union – Monroe)

Examples 2: Minimum Purchase Requirements

“Town will bill the County monthly for the actual amount of

water sold and delivered to it at the then applicable rate; provided however, the Town will bill and County will pay for a minimum quan7ty of 500,000 gallons per month regardless

• f whether or not the County actually uses such

quan7ty.” (Chatham - Siler City) “ … the minimum daily volume shall be one million four hundred thousand (1,400,000) gallons per day.” (Halifax – Roanoke)

Determining Who Owns Unused Capacity?

§ All partners? § A seller? § A buyer? § Who shows use of it in 5, 10, 20 years?

Variable Charges

What does the agreement say about how commodity charges are calculated and modified over @me?

– A. No men;on – B. CPI/infla;on index – C. Cost accoun;ng – D. Linked to retail rate increases

Working Together

§ Does the agreement address non-revenue water or excessive

inflow/infiltra;on?

§ Does the agreement allow for varia;ons due to emergencies? § Are there agreed-upon exit clauses and situa;ons?

Using Transfers to Augment Water Supply

Greg Characklis

• Dept. of Environmental Sciences & Engineering

Institute for the Environment

University of North Carolina at Chapel Hill

Image Credit: www.skysiteaerial.com

Reliability is typically maintained using large volumes

• f infrequently used capacity

50% of capacity used 2 times in 28 years

Using transfers to manage drought: Research Triangle

§ 4 utilities, 9 reservoirs and 2 watersheds: is there spare capacity during drought? § Some transfer agreements exist, usually “take-or-pay” or “mutual aid” § Working on a new approach involving “risk-based” transfer agreements

3 6 9 12 15 1.5 Miles E.M. Johnson WTP Dempsey E. Benton WTP Cary WTP Jones Ferry Road WTP Williams WTP Wade Brown WTP Cary Raleigh Durham OWASA Lake Michie Little River Reservoir Falls Lake Lake Benton Lake Wheeler

• B. Everett

Jordan Lake Cane Creek Reservoir Stone Quarry University Lake

Interconnections between utilities Raw water lines Treated water lines Water treatment plant (WTP)

Neuse River Haw River Cape Fear River

Reservoirs often have surplus capacity

(particularly in the early stages of life)

1965 1969 1973 1977 1981 1985 1989 1993 1997 150 170 190 210 230 250 270 290 310 Year Annual Usage (Ac-ft x1000)

Supply Demand

Annual Volume (Acre-foot x1000)

Seller

• Buyer

Agreements based on risk-of-failure triggers

20 40 60 80 100 120

Reservoir Level (%)

α = 1% α = 5% α = 10%

Jan Mar May Jul Sep Nov

• Risk-of-failure varies by time of year
• Transfers triggered when storage drops below Risk-of-failure level

Interruptible Clause

Interruptions

48 MGD Capacity

*

Year 1 Year 3 Year 5 Year 7

Cary/Apex Water Demand (MGD*)

* MGD = million gallons per day

Transfer Agreement => 7 MGD

Transfers used occasionally to augment supply

(Durham with 2021 projected demands)

Comparison of Alternatives: OWASA

(Costs over the period 2010-2025)

*Based on annualized costs over 20 years at 6% interest

10 20 50 60

Costs ($MM)

Fixed Cost Average Cost 5% Risk Level

New Reservoir* Dredge Existing Reservoir* Take-or-Pay Transfer Contract Risk-based Contracts Historic Conditions (! = 2%) Risk-based Contracts Climate Change 3 (! = 2%) Risk-based Contracts Historic Conditions (! = 10%) Risk-based Contracts Climate Change 3 (! = 10%)

(5.1 MGD) (1.2 MGD) (7.0 MGD) ( ) = Available Supply (7.0 MGD) (7.0 MGD) (7.0 MGD) (7.0 MGD) ( ) = Supply Increase

Limiting Financial Impacts

(Durham 2015)

Mitigation Costs ($MM) Revenue Losses ($MM) DDF

• Insurance

Contracts

Closing Thoughts

• Developing new water supplies is becoming more difficult, so

demand management and transfers being considered more

• Transfers have the potential to reduce the storage capacity

required to maintain reliability, and long-term supply costs

• More detailed regional supply modeling will often be

necessary to identify attractive transfer opportunities

• Swings in revenues (demand management) and costs

(transfers) need to managed if new strategies are to take over

Research Team and Funding

University of North Carolina

• Faculty
• Prof. Greg Characklis
• Students
• Reed Palmer (M.S.)
• Casey Caldwell (M.S.)
• Brian Kirsch (Ph.D.)
• Harrison “H.B.” Zeff (Ph.D./M.S.)
• David Gorelick (M.S.)

Cornell University (previously Penn State)

• Faculty
• Prof. Pat Reed
• Students
• Jon Herman (Ph.D.)

Funding Sources

• NaAonal Oceanic and Atmospheric

AdministraAon (NOAA)

• NaAonal Science FoundaAon

(Water Sustainability & Climate)

Questions?

Post Survey

Now that you have learned more about transfers, we would like to ask you some follow up ques;ons.

1 “Not at all receptive” 2 “Would rather not rely on a.. 3 “A little receptive” 4 “Receptive” 5 “Very Receptive”

9% 30% 13% 39% 9%

How recep;ve would you be to having a drought plan that required you to rely on transfers as part of your drought management strategy, (either buying or selling) on a scale from 1 to 5? (1 “not at all recep;ve”, 5 “extremely recep;ve”)

• A. 1 “Not at all

recep;ve”

• B. 2 “Would rather not

rely on any transfers”

• C. 3 “A liYle recep;ve”
• D. 4 “Recep;ve”
• E. 5 “Very Recep;ve”

Data from informal poll of approximately 40 water system managers

Yes No Don’t Remember

60% 15% 25%

Is your answer to ques;on 2 the same as in the pre-survey?

• A. Yes
• B. No
• C. Don’t Remember

Data from informal poll of approximately 40 water system managers

Did the informa;on session change your recep;veness toward transfers, Yes or No? Please explain in detail below.

Are there any considera;ons about transfer agreements that maYer to you, but were not discussed in the informa;on sessions? If so, please describe these considera;ons and why they are important.