Full Document Text
January 2012
Financing Sustainable
Water Infrastructure
Convening Report
©2012
Published by The Johnson Foundation at Wingspread
Racine, Wisconsin
Printed on post-consumer recycled paper
Meeting Convened by
American Rivers
Ceres
The Johnson Foundation at Wingspread
July – August, 2011
Financing Sustainable
Water Infrastructure
Convening Report
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Convening Report
Financing Sustainable Water Infrastructure
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Report Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Challenges We Face:
Obstacles to Transforming Our Water Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Opportunities and Solutions:
Sustainable Financing for Sustainable Infrastructure. . . . . . . . . . . . . . . . . . . . . . 19
Steps for Creating Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Attachment A: Background Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Attachment B: Concept & Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Attachment C: Wingspread Meeting Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Attachment D: Meeting Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Contents
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Our nation’s freshwater infrastructure faces a critical juncture. Largely built on systems
developed during the 19th and early 20th centuries, our water infrastructure is aging, our
technology outdated and our governance systems ill equipped to handle rising demand and
environmental challenges. Additional strain is being placed on these systems from a variety of
sources, including pressures from urbanization and changing climate conditions, such as increases
in both droughts and extreme one-day precipitation events.
While these challenges are significant, they are not insurmountable. In fact, they can be viewed
as drivers of much-needed change in how we finance and develop our water systems to meet
future demands. New financing models and pricing flexibility, which are necessary to pay for
new infrastructure and to support legacy systems, provide enormous opportunity for positive
transformation necessary to keep pace with the rapid changes being experienced by counties,
municipalities and investor owned utilities.
This report seeks to tackle these issues and deliver some recommendations on how to understand
and confront the pressing need for more sustainable and integrated water infrastructure financing
models. This report is the product of a meeting convened by The Johnson Foundation at
Wingspread, in collaboration with American Rivers and Ceres, which brought together a group of
experts to discuss ways to drive funding toward the infrastructure we need for the 21st century.
Specifically, this group focused on the following questions:
• What new financing techniques can communities use to pay for integrated and sustainable
infrastructure approaches?
• How can we direct private capital toward more sustainable water management projects?
The report finds that while options for more cost-effective, resilient and environmentally sustainable
systems are available, they are not the norm. In fact, investment in inflexible and expensive
“siloed” water systems is still pervasive, despite the fact that money available for financing water
infrastructure is increasingly scarce.
Of equal concern is the inefficiency of the existing systems, which lose some 6 billion gallons
of expensive, treated water each day due to leaky and aging pipes—some 14 percent of the
nation’s daily water use. This point is underscored by the fact that the American Society of Civil
Engineers gives the nation’s water systems a D-, the lowest grade of any infrastructure including
roads and bridges.
Executive Summary
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The report also details the various financing mechanisms available to different water systems. While
municipal bonds are the debt instrument of choice for utilities large enough to be able to attract
capital from markets, the vast majority of water systems must rely on cash, state revolving loan funds,
or other low-interest loan programs at the state and federal level. In fact, only about 1,500-2,000 of
the roughly 52,000 water systems in the United States are large enough to issue their own bonds.
Given these constraints, some systems are turning to private equity as a financing source.
There are, of course, numerous obstacles and challenges that stand in the way of transforming
our water systems to ones that are more sustainable, resilient and cost-effective. One of the
main impediments to change is the very nature of the systems themselves, where potable water,
wastewater, stormwater, greywater and rainwater are not treated as part of an interconnected
system, but rather as distinct, separately financed and regulated units.
In addition, the rate-paying public and locally elected officials must come to grips with the temporary
nature of federal subsidies for infrastructure. Once these subsidies expire, ratepayers are left holding
the bag for funding further maintenance, inspection and upkeep, which can be politically unpopular.
Therefore, many jurisdictions are not able to fully recapture all relevant costs, leading to long-term
financial shortfalls and suboptimal maintenance and upkeep of systems.
While these challenges and obstacles are formidable, the report makes clear that they are not
insurmountable. Progress towards more sustainable, resilient and cost-effective systems is attainable,
particularly if a long-term view is taken. While there is no silver bullet, the report outlines pathways
that will improve chances of success. These include:
• Recognize that local pressures will drive local solutions. Our water systems are as diverse
as the drivers of change that impact them. But solutions are emerging at the local level, including
green infrastructure, closed loop systems and recycling. Financing models need to be developed
that can support this type of local activity, which can then be scaled up.
• Consumers should be given choices and options. Today’s water systems typically provide
one product at a single price—focusing on potable water. While that has served us well, it is also
true that potable water is the most expensive kind of water and is widely used for non-drinking
purposes such as watering lawns, flushing toilettes and showering. Consumers should be given
options that include differentiated rates for drinking water versus other types. Additionally, water
systems should explore how to move beyond “minimum cost rates” in order to meet customer
demands.
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• The financial health of our water systems is directly linked to their long-term sustainability.
Our nation’s water systems need to embrace various financing changes in order to ensure long-
term sustainability. These include full-cost accounting of water services; incorporating value-
added services into the revenue picture to better align customers’ perceived value with products
delivered; improving the capture and dissemination of performance data to drive efficiency; and
considering consolidation of certain systems to enhance efficiency.
• Innovative financing models should be pursued to increase efficiency, add value to
customers, and lower costs for providers. These models should include: mechanisms to expand
the pool of water service funding to non-traditional partners; increasing incentives and markets
for distributed water services that include “low impact development,” such as on-site treated
wastewater for buildings; and other green infrastructure initiatives.
• Alternative market-based solutions should be explored and evaluated for scalability. These
solutions could include: properly valuing and pricing ecosystems services, which provide enormous
value yet are largely unaccounted for in the present system; developing securities to aggregate
customer-financed projects such as greater “where it falls” water management; and creating private
investment opportunities for efficiency gains from such things as retrofitting and closed-looped
water systems in order to reduce system impacts and improve efficiency at both the building and
neighborhood levels.
This summary provides an overview of the main sections and themes contained in the report, but is
not a substitute for the full breadth of depth offered in the following pages.
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Report Process
The Johnson Foundation, in collaboration with
American Rivers and Ceres, convened a group of
experts at Wingspread to discuss ways to leverage
public funding and incentives as well as private
financing to drive innovation and resources toward
more sustainable and integrated management of
water resources in the United States. This meeting
was set apart from similar efforts to discuss
water infrastructure systems by the unique mix of
expertise represented. Public and private water utility
managers, investment managers, investors, municipal
bond raters and underwriters, non-governmental
organizations, foundations and other stakeholders
gathered to discuss the range of issues being faced
and begin to chart the pathways toward innovative
and sustainable funding mechanisms that support
the long-term sustainability of our water systems—
both built and natural.
The needs of communities vary significantly even
though their challenges are similar. There is not a
consistent approach that will work for all, rather a
range of options and tools that allow for customized
approaches that meet a range of interests. The shift
toward a more sustainable and economically viable
future will not likely be driven primarily by sweeping
legislation or legal mandates, but by thousands of
local infrastructure investment decisions. If those
decisions are going to
result in a more sustainable
future, utilities must
look for a portfolio of
financing alternatives at
the same time they are
developing alternatives
for more resilient systems.
The convening was
designed around three
elements of a facilitated
dialogue process. Two
virtual convenings and
one in-person meeting were conducted during the
summer of 2011 as follows:
• Webinar 1, July 26, 2011:
“What is Sustainable Water Infrastructure?”
• Webinar 2, August 10, 2011:
“Unpacking the Financing Options”
• In-person convening at The Johnson Foundation
at Wingspread, Racine, Wisconsin,
August 16–18, 2011
Commitments to action
A unique component of this
meeting was that each of the
participants offered to advance
solutions to the issues brought
forth in the conference by
committing to specific actions.
Those commitments are included
in this report.
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Source: World Meteorological Organization (WRO), Geneva, 1996, Global Environmental Outlook (GEO), 2000, United Nations Environment
Programme (UNEP), Earthscan, London, 1999. Slides courtesy of Mark Shannon, Center of Advanced Materials for the Purification of Water with
Systems (WaterCAMPWS), used with permission.
Water withdrawal as a percentage of total available water
1995 2025
more than 40% from 20% to 10%
from 40% to 20% less than 10%
Background
As the nation’s water infrastructure ages and
populations grow beyond the capacity of existing
systems, we will need to deploy hundreds of
billions of dollars to repair and expand drinking
water, wastewater, and stormwater infrastructure.
Simultaneously, our water infrastructure needs
to be more flexible and resilient to increasingly
unpredictable climate conditions that are forecast
to become even more volatile in the future. As with
our transportation and energy infrastructure, the
nation’s water infrastructure is at a critical juncture.
An increasing array of options are emerging for
transitioning toward more cost-effective, resilient,
and environmentally sustainable solutions. However,
investment in expensive, inflexible “siloed” water
systems remains the norm. Regardless of the kind of
systems we design, money for water infrastructure
will be tight. We will need to identify new financing
alternatives and spend those funds on the most
effective use of our limited resources.
Through presentations, breakout session discussions
and background materials, participants in the
convening explored the fundamental underpinnings
of the challenges we face. In order to identify lasting
and more sustainable solutions, we first need to
understand:
• The looming freshwater crisis
• The water industry and water sector, and how our
infrastructure is managed
• What “sustainable” water infrastructure means
• Principles of financing water systems, including
how funds are raised and deployed
A looming freshwater crisis
Many parts of the world face serious freshwater
problems, and these are forecast to increase
dramatically over the next 10 to 15 years
(see Figure 1). Arid areas in the United States
have long been challenged by scarce water, but
population growth, competing economic uses,
and dramatic changes in precipitation patterns are
straining many areas to previously unknown levels.
Average Sector Use:
Domestic 10 percent, Industry 20 percent, Agriculture 70 percentFigure 1
A USGS study that looked at tree rings over the
past 500–1,000 years showed an unprecedented
decline in snowpack in the Rockies since the
1980s as compared to the historical record. Snow
“reservoirs” provide water for 70 million people in
the West, thus precipitation shifts will have a major
impact on a large swath of the economy.1 Nationally,
estimates suggest that by 2040 we may need from
29 to 62 percent more water to serve our growing
population and higher energy demands.2 (Energy
uses more water, primarily for energy generation and
cooling, than any other sector except agriculture.)
And although technology and water efficiency efforts
may flatten that curve, we will still need to be vigilant
to avoid having clean water supplies become a
serious constraint to economic growth.
Across the entire country, communities are struggling
to meet increased water needs, to respond to
longer and deeper droughts, and changes in snow
and rainfall patterns, and also to limit damage from
more intense storms. Over the past 100 years,
the occurrence of extreme one-day precipitation
events has increased (see Figure 2). Models for
the Great Lakes, the drinking water source for 40
million people, suggest that raw sewage overflows
into the lakes could increase by 20 to 50 percent
as city sewers are increasingly overwhelmed by
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1
“USGS Study Finds Recent Snowpack Declines in the Rocky Mountains Unusual Compared to Past Few Centuries,” U.S. Department of the
Interior, accessed January 6, 2012, http://www.doi.gov/news/pressreleases/USGS-Study-Finds-Recent-Snowpack-Declines-in-the-Rocky-
Mountains-Unusual-Compared-to-Past-Few-Centuries.cfm.
2
Figures courtesy of Mark Shannon, Center of Advanced Materials for the Purification of Water with Systems (WaterCAMPWS).
The figure shows the percentage of the land area of the lower 48 states where a much greater than normal portion of total annual precipitation has
come from extreme single-day precipitation events. The bars represent individual years, while the line is a smoothed nine-year moving average.
Source: U.S. EPA, “Climate Change Indicators in the United States,” April, 2010, http://www.epa.gov/climatechange/indicators/pdfs/
ClimateIndicators_full.pdf.
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
25
20
15
10
5
0
Percent of land are
a
Year
Extreme One-Day Precipitation Events in the Lower 48 States, 1910-2008Figure 2
more intense storms.3 The U.S. EPA estimates
that today between 1.8 and 3.5 million Americans
get sick annually from recreational contact with
sewage-contaminated waters from sanitary sewer
overflows.4 And if pathogens in sewage penetrate
water treatment defenses the risks are much more
serious, as Milwaukee experienced in 1993 when
400,000 were sickened and 80 people died from
cryptosporidium in the city’s drinking water.5
Added to these challenges is the fact that existing
water infrastructure systems in the United States
are rapidly aging, with many pipes and treatment
plants already beyond their effective lives. The
American Society of Civil Engineers (ASCE) gives
the nation’s water systems the lowest grade of all
infrastructure, a D-, though bridges and roads get
much more attention.6 Ten years ago, EPA estimated
that by 2020 the deteriorating age and condition of
nearly half the water and sewer pipes in the United
States would be considered “poor,” “very poor,”
or “life elapsed” (see Figure 3). This is not only
inconvenient and a strain on local ratepayers when
replacement costs hit, but nationally, we lose over
six billion gallons of expensive, treated water each
day because of leaky, aging pipes. That represents
14 percent of the nation’s daily water use. Even
more worrisome, we are losing large elements of our
natural or “green infrastructure” that provide hard-
to-price but extremely valuable ecosystem services
from flood storage to water supply and filtration, and
that also serve as the basis for $730 billion in annual
United States economic activity, according to the
outdoor recreation industry.7
According to the EPA, 22 states have lost at least
50 percent of their original wetlands and seven
states have lost over 80 percent of their original
wetlands (see Figure 4). Wetland losses continue
to climb despite efforts over the past thirty years to
slow the pace. Many small streams—the capillaries of
the watershed—are also routinely filled in or forced
underground into pipes where they are not available
to wildlife and unable to perform essential functions
like slowing and storing rainwater and recycling
excess nutrients. In addition, development in
floodplains and engineered structures like riverbank
hardening, levees, and floodwalls eliminate the
natural ability of rivers to move within their floodplains
and store floodwater.
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3
U.S. EPA, A Screening Assessment of the Potential Impacts of Climate Change on Combined Sewer Overflow (CSO) Mitigation in the Great
Lakes and New England Regions (Final Report), (Washington, DC, EPA/600/R-07/033F, 2008).
4
“SSO Fact Sheet: Why Control Sanitary Sewer Overflows?” U.S. EPA, July 21, 2003, accessed January 10, 2012, http://www.epa.gov/npdes/
sso/control/index.htm.
5
N.J. Hoxie, J.P. Davis, J.M. Vergeront, R.D. Nashold, and K.A. Blair, “Cryptosporidiosis-associated mortality following a massive waterborne
outbreak in Milwaukee, Wisconsin,” American Journal of Public Health 87 (1997): 2032-2035.
6
American Society of Civil Engineers, accessed January 6, 2012, http://www.infrastructurereportcard.org.
7 Outdoor Industry Foundation, “The Active Outdoor Recreation Economy,” Fall, 2006, http://www.outdoorindustry.org/images/researchfiles/
RecEconomypublic.pdf?26.
Source: U.S. EPA, “The Clean Water and Drinking Water Infrastructure
Gap Analysis,” September, 2002, http://water.epa.gov/aboutow/
ogwdw/upload/2005_02_03_gapreport.pdf.
9%
33%
11%12%
13%
23%
2020
Fair
Life elapsed
Excellent
Poor
Good
Very Poor
Projected Percentage of
Pipe by Classification, 2020Figure 3
Losing our natural infrastructure has costly impacts.
As wetland losses have risen, the Army Corps of
Engineers has increased flood control expenditures,
but flood damages have risen faster.8 The effect
on aquatic fish and wildlife is also telling: In North
America, 40 percent of freshwater species are
extinct or at risk of extinction, and scientists have
documented a 50 percent decline in populations of
freshwater species over 30 years.9
Managing our water infrastructure
Our water infrastructure serves a number of
purposes. Water supply, wastewater, and
stormwater are the most recent divisions, though
in reality it is all “one water” simply moving through
our systems in stages of cleanliness and delivery.
In this meeting, the conversation focused primarily
on urban uses of water: residential, commercial,
and industrial supply, wastewater treatment, and
stormwater management. The agencies that oversee
these responsibilities vary in their form, governance,
ownership and structure. They include public as well as
private systems, and public systems that are managed
by private contract. Their jurisdiction may coincide
with a municipality or they may be a special district
that doesn’t directly align with political boundaries.
Oversight can be appointed or elected. They may
supply directly to “retail” customers (homeowners,
businesses, etc.) or supply to a wholesale customer
which in turn redistributes, or both.
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8
D. Hey, J. Kostel, and D. Montgomery, “An Ecological Solution to the Flood Damage Problem,” in Finding the Balance Between Floods,
Flood Protection, and River Navigation, ed. Criss and Kusky (Center for Environmental Sciences at Saint Louis University, 2009), 73-80.
http://www.wetlands-initiative.org/images/pdf-docs/pulblications/FLOOD/research/eco_soln_flood_damage_problem.pdf.
9
“Native Aquatic Species,” Pacific Rivers Council, accessed January 6, 2012, http://pacificrivers.org/conservation-priorities/native-aquatic-species.
Twenty-two states have lost at least 50 percent of their original wetlands. Seven states—Indiana, Illinois, Missouri, Kentucky, Iowa, California,
and Ohio—have lost over 80 percent of their originial wetlands. Since the 1970s, the most extensive losses of wetlands have been in Louisiana,
Mississippi, Arkansas, Florida, South Carolina, and North Carolina.
Source: Mitch and Gosselink, Wetlands, 2nd Edition, (Van Nostrand Reinhold, 1993).
-31
-38
-52
-30
-33
-36
-52
-67
-48
-35
-35
-49
-42
-50
-87
-81
-59
-59 -50 -23
-27
-49
-42-24
-46
-85 -90
-56
-60
-20
-35
-9-28
-37
-74
-39
-54
-73
-50
-89
-87
-72
-46
-27
-38
-56
-50-91
-0.1
-12
Percentage of Wetlands Acreage Lost, 1780s–1980sFigure 4
What do we mean by
“sustainable” water systems?
Rather than re-hash the meaning of “sustainable”
in the context of municipal water systems, we were
able to build upon earlier efforts that addressed
the components of sustainability.10 Multiple
themes emerge from among the reports. Our water
infrastructure, designed in the 19th and early 20th
centuries, no longer meets today’s needs and
challenges. Water management agencies have
focused for over 100 years on the hardware of water
and wastewater management: the pipes, pumps and
reservoirs needed to move the drinking water, waste
and stormwater through the system or store it until
needed. These rigid systems were designed and
operated based on the assumption of stationarity
in our natural systems. Those assumptions are
now seen as short-sighted and no longer match
our understanding of nature. We need to transition
from systems built around managing water under
historical conditions of “certainty” to those built
around flexibility to respond to unpredictable
or rapidly changing conditions. First, we need
to conceptualize our water infrastructure as an
integrated system of natural water resource systems
(green), and built/engineered pipes and treatment
plants. We also need to move from an emphasis on
centralized infrastructure to decentralized systems
that are more resource and energy efficient, and
scalable from the site to city level. We have to
integrate all water systems to use the “right water
for the right need” (e.g. watering landscapes with
rainwater or non-potable water), reducing treatment
costs and the length of pipe needed to fulfill
specific water needs. We must start extracting the
significant resources (nutrients and energy) found in
wastewater rather than discarding them as waste.
And finally, every dollar spent on water infrastructure
must provide multiple benefits, such as lowering
urban temperatures, increasing green space and
parks, or creating local jobs.
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Principles of sustainable water infrastructure
Basic principles for sustainable water infrastructure management:
1. Adaptable —Maximize flexibility and future adaptability to climate change and other conditions
2. Watershed scale—Plan and implement infrastructure at a watershed scale
3. Natural infrastructure—Protect and restore natural system functions
4. Decentralize—Integrate decentralized, distributed green infrastructure that replicates natural hydrology with
built infrastructure
5. One water—Integrate drinking water, wastewater, and stormwater and fit the best water to the use
6. Resource Efficiency—Optimize conservation and efficiency investments before developing new supply or
expanding treatment
7. Multiple benefits—Maximize the environmental, social, and economic benefit of every infrastructure dollar
8. Pricing—Price water, wastewater, and stormwater for ratepayers/customers to meet the total cost of
sustainability requirements
9. Full life cycle—Plan, manage, and account for full life cycle infrastructure expenditures
10. Asset management—Apply best industry practices for repair/rehabilitation and replacement and innovative
management
11. Good governance—Governing boards, city councils, and special utility boards should be designed to ensure
sustainability and transparency
10
R.D. Bolger, D. Monsma, and R. Nelson, “Sustainable Water Systems: Step One—Redefining the Nation’s Infrastructure Challenge. A report of
the Aspen Institute’s Dialogue on Sustainable Water Infrastructure in the U.S.,” May, 2009. Additional references can be found in Attachment A:
Background Materials.
These are the realities of our fiscally-constrained
and climate-altered world. We are at a turning point
with our water infrastructure investment. We can
either continue to build the equivalent of 1960s-era
mainframe computers or move to laptops, tablets
and cloud storage. (Refer to Attachment A for more
background on sustainable water infrastructure.)
Understanding the
financing of water systems
Water systems have two primary approaches to
financing system improvements and maintenance:
cash financing or debt financing. Cash financing
is limited to the revenue at hand, which is usually
from water rates, service fees, connection fees from
new accounts, or taxes. Because water treatment
and delivery is a capital-intensive endeavor, cash
is usually insufficient to finance major system
enhancements. Debt financing is the typical way
that utilities raise upfront capital to invest in their
systems. For systems large enough to sell debt
on the capital markets, municipal bonds are the
debt instrument of choice. Water utilities can issue
revenue bonds that are backed by cash flows from
water rates, fees or dedicated taxes, or they can
issue general obligation bonds that are backed by
the general tax-raising ability of the local government.
Systems whose capital needs are too small for the
bond market typically rely on state revolving loan
funds or other low-interest lending programs at the
state and federal level. Only about 1,500-2,000 of
the roughly 52,000 water systems in the United
States are large enough to issue their own bonds
(see Figure 5). For the rest, cash or federal or state
loans and grants are the predominant means of
financing system improvements.
Because cash, public grants and low-interest
loans are limited, and because smaller systems
may be serving populations with lower income and
operating at diseconomies of scale, their funding
needs and solutions are very different from those
of large water systems which deliver the majority of
water in the United States. As funding needs and
system disrepair become dire, many
of these systems may have few
options other than public-private
partnerships or privatization.
Following the economic downturn,
the ease of financing capital
improvement plans through the
capital markets changed. The
housing collapse took with it
the bond insurers that protected
investors from unexpected credit
default of bond issuers, meaning
that credit quality—including the ability to honor
debt obligations by securing sufficient revenue—was
more important than ever. In addition, the spread
(or difference in interest rate) for AAA-rated issuers
and AA or A widened significantly from before the
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Funding options
• Rates and charges
• Property taxes
• Fees (e.g. connection)
• Grants
• Insurance
• Customer services
• Private investment
• Debt-based capital
financing
Source: U.S. EPA, EPA Factoids: Drinking Water and Ground Water Statistics for 2008,
(EPA/816/K-08/004, 2008).
0
20
40
60
80
100
Utilities Population (292 million)
Percentag
e
Population Served
Utilities and Population by System Size
<500 501–
3,300
3,300–
10,000
10,000–
100,000
>100,000
One percent of the utilities serve
46 percent of the populationFigure 5
downturn. Whereas AA-rated systems in 2008 that
may have only paid 0.20 percent more to finance a
capital improvement project than the highest-rated
entities, in 2011 they were paying 1.0 percent more
in interest. The spread in interest rates is even
higher for issuers in some states—in 2010, some
1.8 percent higher for California systems, for
example. For a typical bond issuance of several
hundred million dollars, this higher interest brings
significantly more cost to ratepayers. The increased
spread is offset, however, by extraordinarily low
market rates. Whether the spread between the
least risky utilities and the rest will remain as wide
after economic recovery is unknown. However, the
increasing sensitivity of investors to hidden risks
and the growing repository of tools available to
investors to assess water risks suggest that utilities
can expect to see increasing costs and scrutiny for
capital financing.
Investor-owned utilities (IOUs)
While most water utilities in the United States are
owned by local governments, around 20 percent
of water is delivered and treated by investor-
owned utilities. Many of these are publicly-traded
companies, but some are privately owned. For these
companies, the ongoing need to recover costs
and build more efficient systems to manage costs
remains the same as in the public sector. Unlike
most utilities owned by local governments, IOUs
must submit proposed rates to regulators in Public
Utility Commissions. These regulators shape the
operating environment, recoverable costs and return
on equity for IOUs and are an important audience
for enabling sustainable water management within
regulated markets.
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11
Though often confused with each other, the private sector and private capital are not synonymous.
As the debt capacity of public systems comes
against significant funding needs, some systems
are turning to private equity or infrastructure funds
to finance system improvements. Private capital
can and does play very different roles in the water
sector, a nuance that is often lost in the discussion
around “privatization” of water assets. At one end
of the spectrum, public water utilities can outsource
management of some aspects of the system to
the private sector—this is often done through a
time-limited contract or may even be implemented
through a lease of assets. For example, a public
water utility may contract a large water services
provider to manage the day-to-day operations of a
water or sewage treatment plant. In many cases,
private capital may have nothing to do with this
arrangement, as the water services provider may
be a publicly-traded company.11 This arrangement
is very different from the role that a private equity
or infrastructure fund may play. A private equity
fund may construct a water treatment plant using
investor capital, with return to investors generated
by water sales to a public utility. In some instances,
a private equity or infrastructure fund may even
wholly privatize a water system, so all assets and
management responsibilities are in the hands of the
fund. Privatization of public systems can meet the
immediate needs of distressed systems, but the rate
of return required by private investors is generally
much higher than for municipal bond investors.
Whatever the source of financing, capital is never
free. Ultimately the money invested in the system and
the premium to the investor must be paid. Revenues
from ratepayers will continue to be the primary
source of repayment.
The Challenges We Face:
Obstacles to Transforming Our Water Systems
of the water sector as a whole, the upfront capital
and resulting rate increases that will be sought as
these systems age could accumulate to present
real affordability challenges to customers. In recent
years funding shortfalls have led to renewed calls
for federal funding of infrastructure. The National
Infrastructure Bank is one vehicle that has been
proposed to allocate federal funding to leverage
private capital. At present, however, the proposed
fund does not address the need to prioritize
sustainable and resilient infrastructure.
Increasing conservation, decreasing
revenue, increasing costs
One trend that many utilities are seeing is
decreased per capita use of water. For example,
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Financing Sustainable Water Infrastructure
Source: CollinsWoerman
As we think about a strategy for financing more
sustainable water infrastructure systems, we
need to do so with a clear understanding of the
complex challenges the industry is facing and an
understanding of the financing factors influencing
the alternatives. By helping industry members and
key stakeholders understand the challenges, we
hope to generate more promising decisions and
a new way of doing business. At the same time,
we are beginning to shift the conversation with the
capital investment community to help create a means
of better informing their decisions and helping to
remove financial hurdles to developing more resilient
water systems. The group discussed a wide range of
potential challenges.
A historically segregated
approach to water management
Presently, most systems are managed as centralized
and single-purpose water infrastructure, each
focusing on one part of a whole: drinking water,
wastewater and stormwater (see Figure 6).
There is a growing consensus that such siloed
systems are not effectively adapted to the challenges
that the water industry will face in the 21st Century.
Furthermore, they do not allow for an integrated
approach to managing for mutual benefits
and harnessing the value of the resources.
Several negative consequences result, one of which
is financial.
The cost of financing siloed systems
Because water systems are rarely integrated, many
households and businesses are being serviced by
two to three different water utilities. This means
that the water-related debt burden for households
and businesses may be multiples of the average
system’s long-term debt per household. If drinking
water utilities’ unmet capital needs are representative
Siloed SystemsFigure 6
starting in the 1960’s, Seattle Public Utilities has
periodically projected water demand and proactively
responded by implementing
conservation programs,
including conservation
pricing, to help offset future
demand (see Figures 7a
and 7b). Despite a near
doubling of the population
the projected increases
have never materialized
and total water use has
instead decreased over
the last twenty years. The
Seattle experience is an
extreme example of a trend
observed in other regions.
From a natural resource
conservation perspective,
this trend is beneficial. But
it raises challenges for utilities faced with large fixed
costs for infrastructure capitalization, growing per
unit operating costs and decreasing revenues.
Lack of full-cost pricing
Another broad challenge for the full spectrum of
water agencies is the need to recover costs for the
regular maintenance and improvement of the system.
In most cases, a substantial portion of the initial
capital investment was heavily subsidized by federal
grants, thus allowing utilities to provide service
without passing on the infrastructure’s full cost,
much less the externalized costs of water withdrawal
or pollutant discharge. Customers who have enjoyed
these subsidies often do not understand why
their water rates are suddenly increasing as new
investments are made to maintain infrastructure. As
a result, many utilities choose to defer maintenance,
deploy capital investments, and instead forgo
improving their systems’ environmental performance
while running operating deficits. Understandably,
locally elected or appointed officials are often
reluctant to accept a rate structure that would allow
full recapture of all relevant costs, including the
routine inspection and maintenance of the system.
This leads to long-term financial shortfalls and
equipment that is insufficiently maintained
and updated.
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Financing Sustainable Water Infrastructure
Full life cycle costs of
water systems
• Operations
• Maintenance
• Repair and replacement
• Growth/expansion
• System improvements consistent
with industry standards
• Evolution and transformation
This covers drinking water,
wastewater, and stormwater.
Additionally, some participants
highlighted the costs associated
with un-captured externalities
such as carbon emissions.
Source: Seattle Public Utilities
1967 SWD Forecast
1973 RIBCO Forecast
1980 Complan Forecast Medium
1980 Complan Forecast Medium-Low
1985 Complan Forecast Medium
1993 WSP Forecast
1997 Revised Forecast
2001 WSP Forecast
2003 Official Forecast
2006 Draft Forecast
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
360
340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
Annual
M
G
D
250
225
200
175
150
125
100
75
50
25
0
Annual
M
G
D
Year
Year
Actual Annual
Actual Demand
1990 Forecast with
No Conservation
2007 Forecast with Conservation
Unattributed Savings
Transitory Savings
Conservation Programs
Plumbing Code
Rate Impacts
System Operation Improvements
Long-Range Planning
Water Demand and Past Forecasts for Seattle Public UtilitiesFigure 7a
Lack of continuous funding that
covers long-term, full life cycle
of our water systems
Cash flows from rates, fees and taxes often fall
short of covering the full costs of the system. As a
result, systems must seek debt financing to address
both upfront capital and long-term maintenance.
Within the sector, there is no expectation of utilities
consistently matching revenues to the full cost of
service delivery and system maintenance (including
replacement and repair schedules, triple bottom
line impacts and long-term asset management).
Furthermore, the utilities are not expected to take
system maintenance costs into consideration for
long-term planning (see Figure 8). As a result,
systems are chronically underfunded.
Instead, needed system improvements frequently
are deferred as revenues are only sufficient to meet
debt obligations and operational costs. In some
places, growth itself was relied upon to finance the
maintenance of the existing system, in the form of
connection fees. When growth slowed, some utilities
absorbed significant shocks to their revenue. The
alternative—matching the full costs to maintain the
system to consistent revenues—is so rarely practiced
that the sector as a whole could benefit from
guidance.
Lack of accounting for
natural infrastructure or other
ecosystems services
Our accounting systems have difficulty recognizing
unconventional assets, particularly the natural
assets that provide water storage, filtration, and
delivery. This makes it difficult to include the value
such assets provide on a utility’s balance sheet,
or to finance the acquisition or development of
these assets. In many cases the acquisition and
management of these assets are much more
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Financing Sustainable Water Infrastructure
Source: Seattle Public Utilities
1967 SWD Forecast
1973 RIBCO Forecast
1980 Complan Forecast Medium
1980 Complan Forecast Medium-Low
1985 Complan Forecast Medium
1993 WSP Forecast
1997 Revised Forecast
2001 WSP Forecast
2003 Official Forecast
2006 Draft Forecast
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
360
340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
Annual
M
G
D
250
225
200
175
150
125
100
75
50
25
0
Annual
M
G
D
Year
Year
Actual Annual
Actual Demand
1990 Forecast with
No Conservation
2007 Forecast with Conservation
Unattributed Savings
Transitory Savings
Conservation Programs
Plumbing Code
Rate Impacts
System Operation Improvements
Impact of All Forms of Conservation
Water Demand and Past Forecasts for Seattle Public UtilitiesFigure 7b
economical than built infrastructure such as
treatment plants and reservoirs; the most well-known
case of this is New York City’s purchase of forested
upstream land that filtered the city’s water at a tenth
of the cost of a conventional filtration plant.
Investor expectations
Whether public or investor-owned, utilities rely
on capital markets to finance water infrastructure.
While public water systems have traditionally been
financed through the municipal bond market, the
extraordinary needs of many systems are leading
policymakers and utility directors to look beyond the
bond market for much-needed capital. For investor-
owned utilities, both shareholders and bondholders
provide investment capital. Consequently, investor
expectations shape the way both public and investor-
owned utilities manage water.
Among those expectations are that the sector’s
revenue streams are secure because the service
is essential and monopolistic, and that the sector
is managed by risk-averse professionals using
proven technology. These factors cause the sector
to be viewed as low risk, which for public systems
especially results in a low risk premium demanded by
municipal bond investors. Participants at Wingspread
discussed emerging trends that might cause these
assumptions to break down over the long term.
Rates of return
Public systems looking for new financing streams
beyond the tax-exempt bond market should
recognize that equity investors will expect a higher
rate of return. Eventually that higher premium has to
be recovered, whether through rates, fees or taxes.
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Financing Sustainable Water Infrastructure
Source: Seattle Public Utilities
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
100%
Reactive
100%
Proactive
$ Regulatorynon-compliancecosts
SPU is here
SPU wants
to be here
Exponentially rising costs: Total backup
elimination cannot be achieved
Proactive
CCTV costs
Pipe rehab
costs
Grease
abatement costs
Chemical root
treatment costs
Environmental/
social costs
Claims costs
Labor and
equipment costs
An Example: Tying Together Service Levels, Lifecycle Costing,
and the Triple Bottom LineFigure 8
Monopolistic, essential service provider
While utilities largely operate in a non-competitive
environment, new technologies are emerging that
could disrupt their historic status as monopolies.
Onsite water filtration can allow water users to
obtain high quality water and wastewater without
any reliance on centralized water utilities. While this
is an emerging trend, most utilities do not factor this
variable into future demand projections. Even without
disruptive technologies, demand for municipal
water has dropped significantly over past decades.
Yet many systems tend to linearly extrapolate
historic demand to determine the necessary rate
adjustments to repay capital programs. As the cost
of utilities’ services increase, water behavior and
technologies are likely to adapt to force demand
downward. For overleveraged systems, this inward
demand shift can trigger a credit deterioration
spiral. Utilities and investors should recognize these
dynamic trends.
Risk aversion, dependable technology
One theme that was clear is that even though utility
managers are very risk averse, rate-setting bodies
may not be. Chronic deferred maintenance and
under-investment are hidden risks that may not
be reflected in the price paid for capital. Further,
the challenges facing the sector will require new
approaches, including decentralized and less
proven technologies. This will require new skills,
experimentation, and the acceptance that not
everything will succeed. Increased innovation will
need to become part of routine operations and
should be rewarded appropriately.
Data-poor market
Investors have typically valued the traditional
monopolistic, essential-service aspects of the water
infrastructure sector. Very little data is available
on the state of water systems or their sensitivities
to declining water demand, volatile supplies, and
variable costs of energy and other system inputs.
As a result, the market does not factor the risk or
resilience of the system into the prices. Instead,
investor biases (for example, biases against water
utilities in the Southwest or Great Lakes) trump the
actual performance of these utilities. Even rating
agencies are challenged to find material information
on system performance since so few utilities collect
that information. Consequently, the utilities that are
at the top of their class in terms of risk management
or system maintenance are unlikely to see more
competitive cost of capital. Better data would
help the market price more correctly and would
help utilities manage their risks by benchmarking
themselves against other systems.
Rate suppression
Americans pay around a dollar for ¾ ton of water
delivered to their homes each day12 and similarly
low rates for sewerage services. Some cities have
experienced significant rate increases in recent
years, yet resistance to bringing rates in line with the
real costs of services persists despite the relatively
low cost of service. That is due in part to the reality
that rate decisions tend to be short-term and
politically influenced. Lack of political will to evolve
our water systems and short political timelines can
have a tendency to reinforce status-quo decision-
making and put downward pressure on rates.
Going forward, meeting public health and system
performance needs while maintaining rates at
2 percent Area Median Household Income
(a threshold commonly used by the EPA) will be
increasingly difficult, especially if we continue to
build systems in the same way. In the meantime,
the negative impacts of suppressed rates are felt
in several ways.
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12
Denver Water, “2010 Comprehensive Annual Financial Report,” June 1, 2011, http://www.denverwater.org/docs/assets/ 6C28411A-E112-
FBD9-E5A84D8D42B9A128/2010_annual_report.pdf.
Short-term management decisions
and higher cost of capital
Ultimately, this resistance to higher water rates
often results in utilities exhibiting less-than-optimal
system maintenance and neglecting long-term needs
until a crisis forces them to act. At that point, a rate
increase can be justified as a response to pending
system failures. Ultimately the artificial suppression of
water rates can defeat the very intention of keeping
water affordable. Financing system improvements in
response to crisis can force systems to go to market
when their weak financial condition demands a
higher rate of return. Ratepayers then end up paying
more for system repairs in the form of higher interest
payments and may be paying for poorer services.
Perversely, this crisis-response mode can make
utilities eligible for emergency funding available from
state or federal government that is offered at a lower
cost than market, which perpetuates the problem
of reactive system management and persistent
underpricing.
Under-valued water
distorts consumer behavior
Historically, low rates for water services in many
instances have encouraged inefficient water use and
excessive water treatment demand by consumers. At
one ideological extreme, consumers see water as an
unlimited “right” and feel it should be free–without
regard for the cost of treatment and delivery.
Lack of public understanding and awareness
The general public, and ratepayers in particular,
often don’t have the right information to understand
the full costs of providing their clean drinking
water, sanitation, and stormwater services. In
addition, water utilities do not necessarily invest in
understanding what services their customers value
most. As a result, they have been resistant to rate
increases to cover more costs, and the expectation
remains that water should be as inexpensive as it
has been historically.
Limits of existing market instruments
to fund decentralized systems
As utilities look beyond their own system to the built
environment of the communities they serve, some are
seeing that decentralized approaches may actually
deliver higher value for their customers. For example,
Philadelphia decided that a centralized stormwater
system was less desirable for the city’s residents
than a network of green infrastructure that yielded
the multiple benefits of flood control, water quality
protection, temperature moderation, and recreational
amenities or aesthetic enjoyment. Yet the existing
markets for financing water systems are not adapted
to financing decentralized, customer-financed
interventions. In many ways the problem is similar
to the financing of energy efficiency or distributed
energy generation. The bond markets are traditionally
used to finance development of centralized systems
that are wholly owned by the issuing entity and
secured by the revenues and physical assets of the
system. When a utility wants to finance work with
its customer base to develop a citywide network of
green infrastructure on private land, the bond market
may no longer be a viable option.
Variability in the systems
While the majority of the utilities represented at
the conference served large urban municipalities
with growing customer bases, they recognized that
significant diversity exists in the industry. There is not
a consistent need among utilities that allows for a
one-size-fits-all approach to financing transitions to
sustainable systems. As a result, more work remains
to understand and address the unique financial
needs of big versus small systems, the related
challenge of urban versus rural systems,
and systems that serve growing, versus
declining populations.
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Financing Sustainable Water Infrastructure
Through presentations, plenary discussions,
and small group sessions, participants explored
incentives for funding sustainable water
infrastructure, innovative financing options and
mechanisms for transforming the industry. There was
a recognition that near-term modest steps needed
to be taken at the same time that the industry moves
toward more transformative change. Discussion
confirmed that utilities and resource planners across
the country are using a range of mechanisms for
financing capital investments in infrastructure and
ecosystem restoration. Yet there is no silver bullet.
No matter how water systems are financed, the
primary challenge will remain: ensuring sufficient
revenues to support repayment of the needed
financing for capital improvements and resource
intensive system upgrades.
This is the case with both traditional hard
infrastructure and natural system designs. And it is
especially true when considering the need to fund
the full life cycle of sustainable systems. Given
the tendency for systems to set rates and manage
reserves to meet only near-term operating needs, the
conference participants emphasized the imperative
to plan for long-term needs (including aging, in-place
systems) and begin to incorporate more resilient and
flexible natural infrastructure elements. This shift in
the culture of infrastructure planning must happen
rapidly, as municipalities throughout the country face
pressing needs.
Is there a way to harness the sense of acute
urgency to inspire action? The following steps were
identified as key elements of a roadmap toward
more sustainable decision making and more
resilient systems.
We need to change our expectations
of how we manage water
The conversation made clear the fact that no single
actor is going to catalyze change. Many players
need to work together to realize a more sustainable
vision for the future and design better alternatives,
including:
• System “owners,” whether they are shareholders,
or customers and ratepayers.
• Capital providers (the capital markets, investors,
state revolving funds)
• Sector leaders and norm setters (leading utilities
and trade associations)
• Interested “outsiders” (disruptive innovators,
consultants, service providers, and non-
governmental organizations)
Solutions will be locally-driven
While there is no single solution for the distinct
needs of communities, there are a growing set of
tools that can be adapted to the needs of particular
places. Participants agreed that the shift toward
a more sustainable and economically viable future
will not be driven by top-down mandates, but
by thousands of local infrastructure investment
decisions. These decisions will be forced by different
pressures. In some places, the need to comply with
strong water quality standards will spur innovation
in distributed systems. In other instances, disruptive
technologies like closed-loop water designs for
buildings may be such a threat to water utilities’
traditional business models that utilities will have
to change their approach to service provision.
Whatever the drivers, there are changes happening
in the water sector that demand new financing
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Opportunities and Solutions:
Sustainable Financing for Sustainable Infrastructure
tools and renewed attention by investors on how
well-prepared water systems are to face the sector’s
changing business environment.
A handful of cities were cited as models in
integrated water management, including Seattle,
Philadelphia, and San Francisco. In size and
socioeconomics, these cities face different realities
than many other water systems in the country. While
these leadership utilities can chart a path forward,
the solutions for smaller or less wealthy communities
may be different.
Customers needs and values drive
innovative and customized solutions
There is a difference between what people value
about water and what their water service providers
value. There is, however, agreement on what each
group thinks is being provided: gallons of water at
the lowest possible price. This shared definition of
the product is a key factor that drives permanent
under-investment in infrastructure. However, the
spread in values creates an opportunity to price
water based on its use—what the customer is willing
to pay for such uses—and can create a new way of
doing business for water service enterprises.
Nearly 200 gallons of water enters our houses each
day. Most of the water we use is for keeping our
lawns green, flushing, cleaning, and showering. Very
little of it is actually used for drinking, the use that
requires the highest standards for cleanliness. Users
value each of those applications differently, and
would probably pay different prices for each type of
use. That small fraction that we drink, however, is
what drives the cost of our water. Similarly most of
what goes into the sewers is not sewage. But the
cost of conveying and treating sanitary waste back
to near-potable standards is what drives our bills.
Water service providers have been very good at
delivering the most expensive goods (drinking
water and sewage treatment) at minimum costs.
Utilities strive to provide service (gallons of an
undifferentiated product) at the lowest cost. And
because water services have been provided relatively
inexpensively and in an undifferentiated fashion,
the infrastructure tends to be invisible to ratepayers
until there is a problem: service is interrupted,
basements get flooded, a boil order is issued,
sewers overflow, etc.
But we are being charged too little for a product that
is on average better than what we need. As long as
costs are low, we will use it without differentiating
or prioritizing among the various uses. When that
small fraction of what we use makes every other use
much more expensive, then different values might
start to matter.
There is an opportunity in this era of increasing costs
and infrastructure replacement needs to differentiate
what customers are offered. Some may not wish
to pay for irrigating lawns with drinking water, but
would be willing to use a different source for a
lower cost. Some may wish to pay a bit more for
filtered water provided at the tap. Others may wish
to secure insurance on their lateral connections so
that they do not suffer (or inflict) sewage backups.
Others might wish to invest in natural resource
health in the areas their water comes from as
insurance against future costs. Water “systems”
should explore how to move beyond “minimum
cost rates” to providing differentiated services
based on what their customers value. This can be
as straightforward as revisiting maintenance and
construction activity based on the level of service
customers want (as Seattle recently implemented),
or it might be as complex as marketing other
consumer goods. What is required, however, is that
in an era of increasing rates, customers have the
option to choose what they value and that providers
begin to move from engineering economics to
market economics.
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Recognizing the link between
financial strength and sustainability
Participants underscored that financing and good
management of water systems are inextricably linked
and should include these steps:
• Recognize the full cost of water services as
part of a solution for creating sufficient and
more stable revenues. Full life cycle pricing,
a term for setting rates to reflect the true cost
of current water services as well as future water
supply and treatment needs, is the backbone of
sustainable systems. Without stable and sufficient
revenues, systems cannot deliver high quality
services or environmental performance.
• Building support among ratepayers and
regulators to support financially viable
systems. Securing adequate rates or setting
higher prices takes political will. If ratepayers
are to willingly pay more for water, system
managers must better understand what services
their customers value and use that knowledge in
messaging to regulators, political decision makers,
and ratepayers. Ultimately, people will be more
willing to pay increased rates if they understand
the increased public benefits that will result.
• Incorporating value-added services into
revenue generation structures. Most water
systems still rely solely on volumetric pricing to
generate revenues. When the economy softens or
droughts persist, this business model puts systems
at financial risk. In good times, volumetric pricing
also encourages water systems to invest more
in hard infrastructure to deliver more water than
in tools to manage demand for water. By linking
revenue to the value-added services, the rates
will be based on an array of services provided
and better align the system costs with the values
customers are willing to pay for.
• Improving performance data. Both investors
and water managers need better information to
drive improved performance in the water sector.
Capturing performance data and measuring against
industry benchmarks (e.g., “non-revenue” water
from leaks) would create a competitive environment
critical to improving performance. Increased
data transparency helps internal management
decisions, public understanding of costs, and
investor evaluation of risk, which should be a key
driver for this data. Overall, better data would help
encourage the hard questions while also providing
better answers.
• Changing the utility business model to be
more resilient to the emerging business
environment. Historically, water utilities have
functioned as monopolies with no competition
in delivering water
resources or treating
wastewater. Additionally,
in many places drinking
water providers have
been distinct from
stormwater and
wastewater treatment
providers. But utilities’
business environment
is changing. Emerging
technologies like
closed-loop water
designs can enable
buildings, city blocks,
and neighborhoods
to be completely
“off the grid.” In the
coming decades, those
technologies may
undermine the monopolistic structure of the sector
and force utilities to approach their mission as
service providers instead of movers of water.
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Managing sustainable
water systems
Managing for sustainability requires
a more flexible, forward-thinking and
integrated approach that considers
the following factors:
• Adaptability
• Watershed scale
• Integration of natural systems
• Decentralized infrastructure
• Integration of drinking, waste and
stormwater as “one water”
• Resource efficiency
• Multiple benefits across sectors
• Full life cycle management and
pricing
• Asset management
• Good governance
• Consolidating systems to achieve better
economies of scale, better economies of
scope, and improved system management.
Increased pressures on water quantity and quality,
existing utility debt burdens, and significant capital
costs for replacing aging systems may create
greater efficiencies by consolidating water systems
that can take the form of consolidating among
multiple water utilities. Consolidation can also take
place in a single service area by pursuing “one
water” integration of drinking water, stormwater,
wastewater, and flood control needs. In that
environment, utilities that expand their mission
to focus beyond drinking water and sewage
services to watershed stewards can find new
cost efficiencies and discover even higher-quality
service by connecting with the range of values that
water systems (built and natural) provide to the
community. Integration of water utility services may
also be a more stable business model in light of
disruptive technologies on the horizon.
Innovative financing strategies
Transforming our water systems will require new
financing tools. Participants identified several
areas for focusing attention on developing more
transferrable models.
1. Expanding the pool
of water service funding
a. Water systems are more than pipes and
treatment plants. In many places, water utilities
are partnering with other city agencies to
coordinate infrastructure plans, recognizing that
roads, green spaces and buildings are all critical
to effective water management. This more
expansive definition of water systems expands
the funding pool. For example, permeable
roadways and alleys laid by departments of
transportation reduce stormwater runoff and
help stormwater agencies comply with water
quality standards.
b. Industrial customers can also be partners in
financing system improvements. For example,
Chevron Energy and multiple California utilities,
including East Bay Municipal Utility District,
supported the financing of wastewater treatment
system upgrades and developed innovative
water re-use systems to reduce the load on the
local wastewater service providers.
c. For many systems, water treatment and delivery
is their sole source of revenues. Yet water
and wastewater carry embedded energy and
nutrients that can be new sources of revenue
generation for water utilities. Developing systems
to enable waste or energy recovery can give
water utilities more diverse revenue sources.
2. Accounting and paying for
ecosystem services
a. Ecosystems provide clean drinking water, often
at a fraction of the cost of built infrastructure.
Yet today those ecosystem benefits are not
valued on utility balance sheets or reflected
on income statements. The accurate valuation
of the services those systems provide was
recognized by participants as a “game-changer.”
b. Watershed ecosystems provide highly cost-
effective storage, filtration, and temperature
regulation, and some utilities are considering
how to account for ecosystem services to
increase their balance sheet assets as a tool for
expanding debt capacity to take on other capital
improvements.
c. Watershed services are often physically
separated from the communities that benefit
most. Payment for watershed services is a
growing area of interest to link payments from
downstream beneficiaries to support natural
ecosystem protection and restoration throughout
a watershed. These approaches can cost
magnitudes less than treatment plants and new
supply development.
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3. Implementing distributed water services
a. On-site stormwater management through “green
infrastructure” and “low-impact development”
designs is growing rapidly in the United States.
Cities now realize that it’s cheaper to capture
and manage water where it falls than to pay
billions to build large underground sewer tunnels
to handle increasing runoff, and green roofs,
rain gardens, and street trees also provide many
other community benefits. Some developers
are also integrating non-potable rainwater and
on-site treated wastewater for building cooling,
toilet-flushing, and irrigation. This represents
a significant shift from centralized, publicly-
controlled water management and offers both
challenges and opportunities for financing.
b. At the same time, stormwater fees (e.g. based
on total imperviousness area of individual
properties) and credits for holding more
stormwater onsite are opening up opportunities
for private investment. In many cities, businesses
that install green infrastructure are rapidly
expanding, creating more need for capital.
Developing securities to aggregate customer-
financed projects—for example, removal of
impervious surfaces–is a present-day challenge
whose solution could lead to a secondary
market for investments that provide a clear
public value.
c. Similar private investments could also be
developed for water efficiency retrofits and
installation of closed loop water systems at
the building and even neighborhood scale.
Utilities have traditionally seen these as a
threat to revenues, but these strategies can
also be a powerful tool for sustainable system
management.
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Steps for Creating Change
While significant improvements can be made within
existing institutions, transformative change will
require intentional steps and practical tools that can
be shared and transferred. The group identified a
range of specific actions and tools that could help to
advance change:
Building support among ratepayers
and regulators to support financially
viable systems
• Develop marketing tools for water providers to
show the true value of water for their regulators
and customers.
• Frame for elected officials and regulators what
the “disruptive technology” future looks like and
how business models, rate-setting, and financial
strategies must change accordingly.
• Develop materials to help water utilities educate
their public utilities commissions (PUCs) and
city councils on full cost pricing and rate setting
structures for sustainable water systems.
• Develop a primer for utilities to help them to learn
more about how their customers value different
water services so that utilities can develop new
service models and market their services in a more
targeted way.
Improving performance data
• Create a rating scale that offers a consistent
standard for sustainability as it is applied to water
utilities (similar to the LEED standard applied to
buildings). Consider third-party accreditation to
ensure credibility and accountability.
• Give credit rating agencies guidance on the right
questions to ask utilities that drive toward financial,
management, and water system sustainability.
• Recruit a group of leadership utilities to model
“platinum” financial disclosure/reporting.
• Develop standard methods and metrics to value
natural capital and triple bottom line benefits and
to guide how to incorporate them into accounting
systems.
Changing the utility business model
to be more resilient to the emerging
business environment
• Put forward a vision for “the 21st Century Water
Utility” and promote this as the new standard for
the industry.
• Present a methodology for utilities to undertake
risk-based scenario planning for demand
forecasting.
• Work with academic institutions, especially
engineering schools, to align curriculum with latest
sustainability practices.
Consolidating systems to achieve
better economies of scale and system
management
• Develop tools for co-managing, co-budgeting, and
planning among water systems for “one water”
integration.
• Convene regulatory agencies to examine ways that
policy can help to remove impediments to “one
water” management, full-cost pricing, etc., and
better align regulatory tools.
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Expanding the pool of water
service funding
• Encourage a range of partnerships including public-
private alternatives to address case-specific needs.
• Convene financial players engaged in distributed
energy generation or energy efficiency finance to
assess market/product potential for similar projects
in the water sector.
Accounting and paying for
ecosystem services
• Convene a group of utilities, practitioners, and
academics to look at methodologies for valuing
natural capital and implementing projects.
• Engage FASB (Financial Accounting Standards
Board) and GASB (Government Accounting
Standards Board) in the discussion of accounting
practices and a process for putting natural capital
assets onto utility balance sheets.
• Build off of existing demonstration projects by
creating and supporting additional pilot ecosystem
services payments systems that capture and
compensate for a broader suite of ecosystem
services benefits such as downstream flood
protection, water storage upstream, water quality
improvements, etc.
Participants also recognized the need to share
success stories across the sector to enable
transformative change. In particular, sharing
experiences and successful innovations through
publications and other communication materials was
seen as an important role for trade associations and
NGOs.
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Financing Sustainable Water Infrastructure
Gary Breaux, Assistant General
Manager and CFO, Metropolitan Water
District of Southern California
Transfer the use of PPP to develop recycling
projects and waste-to-energy projects, and the
use of Joint Power Authority (JPA) structures to
manage watersheds, develop water supplies and
implement recycling projects. Share these learning
with other organizations such as the Association of
California Water Agencies (ACWA).
Lynn Broaddus, Environment Program
Director, The Johnson Foundation
at Wingspread
Work to disseminate the results of this conference
and to convene subsequent meetings to further
the recommendations in this report.
Helen Cregger, Senior Vice President,
Public Finance Investment Banking,
Piper Jaffray & Co.
Encourage best practices in full cost pricing,
capital planning and debt financing.
Chuck Clarke, Chief Executive Officer,
Cascade Water Alliance
Work on developing the financial tools to
determine ways to bring “alternative assets” on to
the books of water companies.
Chris Crockett, Deputy Commissioner,
Philadelphia Water Department
Planning and Environmental Services
Division
Work on issues related to stormwater marketing,
the development of a LEED/WEED program
and new financial disclosure metrics. I will also
explore integrating the “one water” approach into
academic curricula.
Janet Clements, Senior Economist,
Stratus Consulting
Use triple bottom line and ecosystem services
expertise to train others on how to integrate into
utility/organization management, and contribute to
efforts to explore valuing non-traditional assets.
Martha Davis, Executive Manager for
Policy Development, Inland Empire
Utilities Agency
Take the discussion from this convening and use
it to help inform the development of the 2013
California Water Plan Update and the development
of the southern California 5 County Regional
Stormwater Initiative and initiate a
water-wastewater-renewable energy initiative.
Commitments
Each of the participants demonstrated their commitment to advancing solutions to the most pressing issues
brought forth in the conference by committing to specific actions.
Disque Deane, Jr., Co-Founder and
Chief Investment Officer, Water Asset
Management, LLC
Determine ways to use WAM’s access to capital to
develop alternative water markets.
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Michael Deane, Executive Director,
National Association of Water
Companies
Work with the American Water Works Association
to investigate the feasibility and benefit of the
development of a LEED/WEEDs protocol for the
water industry.
Patty Healy, First Vice President,
Bayern LB
Make final report available to municipal bond
analyst community through national and local
industry functions. Provide auxiliary support to
peers’ work on issues discussed at convening
with GASB. Connect with banks regarding
energy sustainability financing ideas that may be
applicable to the water industry.
Bill Holman, Director of State Policy,
Nicholas Institute for Environmental
Policy Solutions, Duke University
Assist by matching knowledge resources to
discern barriers and opportunities for “one water”
integration with special attention focused to the
regulatory agencies (PUCs).
Kirsty Jenkinson, Director, Markets
and Enterprise Program, World
Resources Institute
Continue to participate in sustainable water
financing discussions with The Johnson
Foundation, American Rivers, Ceres and other
parties, and connect those discussions with WRI’s
work on global and U.S. water risk.
David LaFrance, Executive Director,
American Water Works Association
Work with the National Association of Water
Companies to investigate the feasibility and
benefit of the development of a LEED/WEEDs
protocol for the water industry.
Harriet Festing, Director of Natural
Resources, Center for Neighborhood
Technologies
Develop national partnerships with some of the
participants involved in the dialogue in order to
further specific initiatives. Test the concept of a
LEED/WEED program in Illinois.
Emily Gordon, Senior Associate,
State and Local Initiatives,
Green For All
Produce national report exploring the number and
types of jobs that would be created by a significant
investment in our stormwater infrastructure.
Disseminate report broadly and assist with the
development of strategies to help deepen public
understanding of the job and economic impact of
investing in our water infrastructure.
Ed Harrington, General Manager, San
Francisco Public Utilities Commission
Work with water utility and other interested parties
to further the discussion of Natural Resources
Accounting—that is having the value of natural
capital put into governmental financial reporting.
The initial focus will be discussions with the
Governmental Accounting Standards Board and
expanding the knowledge of the issue through the
Government Finance Officers Association.
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Convening Report
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Sharlene Leurig, Senior Manager,
Insurance Program, Ceres
Help utilities to engage GASB/FASB on natural
asset valuation and to develop a leadership
standard for performance-based disclosure in
bond financing. Continue to engage municipal
bond investors and credit rating agencies on credit
factors related to sustainable water management.
David Rankin, Vice President and
Director of Programs, Great Lakes
Protection Fund
Use the results of this convening to help shape
Protection Fund programming. I will share these
results with our project teams working in this
space, interested applicants, funders and other
key audiences working on freshwater issues. The
Fund is particularly interested in testing innovative
models for what water utilities will become.
Adam Rix, Managing Partner,
TurningPoint Capital Partners, LLC
I will contact my political network and inform civic
leaders of the outcomes from this convening.
Additionally, I plan to educate utilities on the value
of skunk working and will encourage corporations
and corporate investors to bolster the evolution of
the water infrastructure network.
Eric Sandler, Director of Finance/
Treasurer, San Diego County
Water Authority
Work with utility finance officers and other
relevant stakeholders regarding the valuation
and recognition of ecosystem assets. Knowledge
transfer regarding best practices for the
deployment of private capital to develop public
water infrastructure--specifically with respect to
a fair and efficient allocation of risk and return.
Work with interested parties to better characterize
potentially disruptive developments to the existing
landscape of public water utility management in
the U.S.
Peter Malik, Director, Center for
Market Innovation, Natural Resources
Defense Council
Promote the Philadelphia example of stormwater
pricing and management by blogging, writing a
piece for Environmental Finance, and through
additional speaking and writing engagements.
Scott Miller, Environmental
Sustainability Manager, The Russell
Family Foundation
Act as conveyor of intelligence gained from the
Johnson Foundation proceedings and to other
water funders and help them discuss next steps.
Betsy Otto, Vice President,
Conservation and Strategic
Partnership, American Rivers
Help convene a meeting on valuing and
accounting for the myriad water benefits and
services provided by natural ecosystems.
Provide support to EPA for including smart
financing strategies in updated stormwater
regulations. Continue to work with The Johnson
Foundation, Ceres, and groups represented at the
Wingspread conference to advance some of the
most promising ideas and strategies discussed
for driving toward more sustainable water
infrastructure management.
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The following background and concept document and excerpts from the materials below
were circulated to the group in preparation for the convening:
Regional Plan Association. America 2050: An Infrastructure Vision for 21st Century America.
2008. http://www.america2050.org/AM2050Infra08sm.pdf
Bolger, R., D. Monsma, R. Nelson. Sustainable Water Systems: Step One—Redefining the Nation’s
Infrastructure Challenge. A report of the Aspen Institute’s Dialogue on Sustainable Water
Infrastructure in the U.S. May, 2009. http://www.aspeninstitute.org/sites/default/files/content/docs/
pubs/water_infra_final.pdf
Additionally, the following optional readings are also available for further background.
Water Environment Research Federation—New Paradigm for Water
http://www.westcas.org/PDF/A_New_Paradigm_for_Sustainable_Water_Infrastructure.pdf
Baltimore Charter for Sustainable Water Management (2007)
http://sustainablewaterforum.org/baltimore.html
Sustainable Infrastructure Management by Dr. Valerie Nelson,
Coalition for Alternative Wastewater Treatment
http://sustainablewaterforum.org/new/white4.pdf
Charting New Waters
www.johnsonfdn.org/chartingnewwaters
Fitch Ratings Revenue Special Report—2011 Water and Wastewater Medians
http://www.stlmsd.com/aboutmsd/organization/rateproposal/Exhibit-MSD-67H-Fitch-
WaterWastewater-Medians-2011.pdf
National Federation of Municipal Analysts Recommended Best Practices
in Disclosure for Water and Sewer Transactions
http://data.memberclicks.com/site/nfma/DG.BP.rbp_water_sewer.doc.pdf
Attachment A: Background Materials
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Convening on Financing Sustainable
Water Infrastructure Systems
July – August, 2011
Purpose:
The Johnson Foundation, in collaboration with American Rivers and Ceres, will convene a group of
experts at Wingspread to discuss ways to leverage public funding and incentives as well as private
financing to drive innovation for more sustainable and integrated management of water resources in
the United States.
Background:
As the nation’s water infrastructure crumbles and populations grow beyond the capacity of existing
systems, we will need to deploy hundreds of billions of dollars to repair and expand drinking
water, wastewater, and stormwater infrastructure. Local governments currently fund 98 percent of
all water and wastewater infrastructure and will rely on the capital markets to finance this critical
infrastructure. Yet, as the debt capacity of cities and utilities declines, we will need to adapt our
mechanisms for assessing the financial resilience of water systems and deploy financing vehicles
that will bring new resources to the development of reliable systems. As capital markets are buffeted
by global economic and debt concerns, private financing may be constrained and increasingly
expensive.
This is not simply a funding crisis, however. As with transportation and energy, the nation is at
a critical juncture. We can either transition toward cost-effective, resilient, and environmentally
sustainable solutions or continue to sink investment in expensive, inflexible “siloed” water systems.
In other words, money for water infrastructure will be tight and what we spend it on will be more
important than ever.
Achieving more sustainable water systems in this century means reconsidering the designs we’ve
been using for the past 200 years. Ironically, a more sustainable approach means reinvesting in our
beleaguered natural infrastructure systems, whose damage and disrepair puts added strain on our
built infrastructure. We will need to restore damaged watersheds and boost the stock of urban green
spaces and green infrastructure that can serve as primary water supply and treatment and help
traditional gray infrastructure—dams, canals, pipes and treatment plants—perform optimally. Similarly,
we must capitalize on what more cities are learning, that restored floodplains offer far cheaper flood
storage and risk management.
Attachment B: Concept & Background
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The price we pay for water should reflect full life cycle infrastructure costs, the increasing marginal
cost of new supplies, and the way we account for the costs of our water infrastructure must
internalize rising energy costs. Finally, we must maximize the supply we gain from conservation,
efficiency and integrated water system designs to minimize the financial burden of new water storage
and diversion projects.
The shift toward a more sustainable and economically viable future will not be driven primarily by
legal mandates, but by thousands of local infrastructure investment decisions. If we are to build that
sustainable future, utilities building more resilient systems must be able to differentiate themselves in
the capital markets, and investors must price-in and reward resilience. We can rise to this enormous
challenge because this vision is in the mutual interest of utilities, cities, water users, investors and
the environment.
At Wingspread, our goal will be to explore and begin to chart the pathways toward markets and
innovative funding mechanisms that support and enable sustainable water systems. Admittedly, this
is an enormous topic with many complex elements—accounting for ecosystem services, pricing for
the true cost and value of water, and the interplay of municipal services with private capital markets—
and we will work to focus our discussion on the most promising and urgent opportunities. These
issues were highlighted frequently during the yearlong discussion that culminated in The Johnson
Foundation’s “Charting New Waters” report, and the Foundation is committed to continuing to move
the dialogue forward.
The Johnson Foundation at Wingspread approaches issues without preconceived ideas or fixed
agendas. A distinctive feature of the Foundation’s convening model is that it promotes candid, yet
collegial, conversation among those with divergent ideas and perspectives. This model fosters the
trust and collaboration needed for innovative solutions that can also be broadly supported.
A three-step process format
To address the issues proposed, we have designed three elements of a facilitated dialogue process.
Two webinars will be held in advance of the meeting to balance convenience with the value of face-
to-face conversation. The events are scheduled for summer 2011 as follows:
• Webinar 1, July 26, 2011
• Webinar 2, August 10, 2011
• In-person convening at The Johnson Foundation at Wingspread, Racine, Wisconsin,
August 16–18, 2011
Participants are asked to commit to all three companion events. The conversations will be
progressive—designed to build off of one another and the information previously presented.
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Guiding questions:
We seek to address this question during the course of this convening:
How can we drive funding toward the new infrastructure we need in the 21st Century? There are
two key elements to this question:
• What new financing techniques can communities use to pay for integrated and sustainable
infrastructure approaches?
• How can we direct private capital toward the right kinds of water management projects?
Outcomes
As a result of the series of events, we anticipate the following outcomes:
1. Create the opportunity for a diverse range of financial and policy experts to share expertise,
familiarizing each other with respective issues and concerns, build understanding of diverse
perspectives and build partnerships.
2. Explore sustainable water infrastructure financing alternatives.
3. Identify priority issues and possible solutions. Understand the range of perspectives and identify
where common ground, divergent views and strong agreement exist.
4. Catalyze action for future efforts by identifying leadership organizations and larger groups
dedicated to ongoing coordination and cooperation.
5. Agree on whether there is value in creating a body for ongoing policy coordination and
cooperation.
Key stakeholders
We are targeting a diverse range of perspectives for this conversation with a target toward
individuals and organizations that are in a position to design and affect change, including the
following groups:
• Investors—pension funds and advisors, socially-
responsible and faith-based investors, retail
funds, private equity
• Public policy groups
• Experts on sustainable water
• Experts on water infrastructure financing
• Municipal utilities
• Investor-owned utilities
• Utility regulators
• Financial advisors
• Credit rating agencies and assurance providers
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Day 1: August 16, 2011
12:00 p.m.
Buffet Luncheon
3:30 p.m.
Gathering and Orientation to Accommodations
Wendy S. Butler, Special Initiatives Coordinator
The Johnson Foundation at Wingspread
4:00 p.m. Plenary Session
Welcome to The Johnson Foundation at
Wingspread
Lynn E. Broaddus, Director, Environment Programs
The Johnson Foundation at Wingspread
Participant Introductions
4:45 p.m.
Agenda Review, Goals and Groundrules
Molly Mayo, Facilitator, Meridian Institute
4:50 p.m. Opening Presentation
Reframing the Water Infrastructure Issue
and Its Financing Dimensions
Betsy Otto, Vice President, Conservation and Strategic
Partnerships, American Rivers
Sharlene Leurig, Senior Manager, Insurance Program,
Ceres
Kick-off and overview proposed goals and outcomes
for our time together. Frame our priority challenges
and opportunities.
5:40 p.m. Plenary Discussion
Group discussion of the sustainable infrastructure
issue and its financing dimensions.
Outcomes: refine assumptions and definitions,
identify priorities for discussion.
6:45 p.m. Day 1 Wrap-up
Discussion of priorities for Day 2
6:50 p.m. Hospitality
7:15 p.m. Dinner
8:30 p.m. Evening Hospitality
Day 2: August 17, 2011
Breakfast will be available from 6:30 a.m. to 8:15 a.m.
in the Living Room of the Guest House.
8:30 a.m. Plenary Session
Welcome and Agenda Review
Facilitator
8:40 a.m. Reflections on Day 1
8:50 a.m. Presentations
Case Studies on Financing Sustainable
Water Infrastructure
What new mechanisms are water systems employing
to finance resilient water infrastructure?
• Financing Stormwater Controls
Chris Crockett, Deputy Commissioner, Planning and
Environmental Services Division, Philadelphia Water
Department and Peter Malik, Director, Center for
Market Innovation, NRDC
• Incentive Ratemaking for Investor-Owned
Utilities
Matt Diserio, Co-Founder and President of Water
Asset Management (possible joint presentation with
John Bohn, Former Commissioner, California Public
Utilities Commission)
• Discuss additional innovative case examples
10:15 a.m. Break
10:30 a.m. Plenary Discussion
Discuss lessons from case studies. Identify small
group topics to dig into options for directing capital to
“good” infrastructure investments.
Outcomes: identify priority obstacles and
opportunities that we want to explore further. Agree
on breakout group topics.
11:15 a.m. Introduce Breakout Session
Clarify guidance and desired outcomes for breakouts.
Break and move to small group discussions.
Attachment C: Wingspread Meeting Program
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11:30 a.m.
Small Group discussions to
identify obstacles & opportunities
12:30 p.m. Small Groups break for Luncheon
1:15 p.m. Continue Small Group discussions
2:15 p.m.
Presentations: Reports from Small Groups
3:15 p.m. Break
3:30 p.m. Plenary Discussion
Open discussion of opportunities identified in
breakout groups.
5:30 p.m.
Day 2 Wrap-up and planning for Day 3 Agenda
6:00 p.m. Leisure
6:30 p.m.
Hospitality and Tour of Wingspread (optional)
7:00 p.m. Cookout
8:30 p.m. Evening Hospitality
Day 3: August 18, 2011
Breakfast will be available from 6:30 a.m. to 8:15 a.m.
in the Living Room of the Guest House.
8:30 a.m. Plenary Session
Welcome, Agenda Review & Reflections on Day 2
Facilitator
9:00 a.m. Plenary Discussion
Identify the range of opinions in the group about what
is needed to catalyze change. How can the ideas
of this group help to inform other efforts? Discuss
how to best leverage the ideas and resources of the
group to create momentum toward more sustainable
infrastructure investments.
10:30 a.m. Break
10:45 a.m. Plenary Discussion
Who are the key players and partnerships needed for
leadership and action?
11:30 a.m. Plenary Discussion
Commitments and Next Steps
12:00 p.m. Wrap-up
12:30 p.m. Luncheon
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John Bohn
Former Commissioner
California Public Utilities Commission
220 Montgomery St., Penthouse 10
San Francisco, CA 94109
914-671-8475
jbohn@globalnetpartners.com
Gary Breaux
Director of Finance
East Bay Municipal Utility District
375 Eleventh St.
Oakland, CA 94607
925-708-4430
gbreaux@ebmud.com
www.ebmud.com
Chuck Clarke
Chief Executive Officer
Cascade Water Alliance
Suite 440
11400 SE 8th St.
Bellevue, WA 98004
425-453-1555
cclarke@cascadewater.org
www.cascadewater.org
Janet Clements
Senior Economist
Stratus Consulting
1881 Ninth St., Suite 201
Boulder, CO 80521
303-381-8000
jclements@stratusconsulting.com
www.stratusconsulting.com
Helen Cregger
Senior Vice President
Public Finance Investment Banking
Piper Jaffray & Co.
1200 17th St., Suite 1250
Denver, CO 80202
303-820-5856
helen.x.cregger@pjc.com
www.piperjaffray.com
Chris Crockett
Deputy Commissioner
Planning & Environmental Services Division
Philadelphia Water Department
1101 Market St.
Philadelphia, PA 19107
215-520-5058
Chris.Crockett@phila.gov
Martha Davis
Executive Manager for Policy Development
Inland Empire Utilities Agency
6075 Kimball Ave.
Chino, CA 91708
mdavis@ieua.org
www.ieua.org
Disque D. Deane, Jr.
Co-Founder and Chief Investment Officer
Water Asset Management, LLC
509 Madison Ave., Suite 804
New York, NY 10022
212-754-5132
d.deane@waterinv.com
www.waterinv.com
Michael Deane
Executive Director
National Association of Water Companies
Suite 850
2001 L St., NW
Washington, DC 20036
202-669-0641
michael@nawc.com
www.nawc.org
Matthew J. Diserio
Co-Founder and President
Water Asset Management, LLC
Suite 804
509 Madison Ave.
New York, NY 10022
212-754-5132
m.diserio@waterinv.com
www.waterinv.com
Attachment D: Meeting Participants
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Harriet Festing
Director of Natural Resources
Center for Neighborhood Technologies
2125 W. North Ave.
Chicago, IL 60647
773-269-4042
hfesting@cnt.org
Emily Gordon
Senior Associate, State and Local Initiatives
Green For All
Suite 600
1611 Telegraph Ave.
Oakland, CA 94612
510-271-9822
emily@greenforall.org
www.greenforall.org
Ed Harrington
General Manager
San Francisco Public Utilities Commission
1155 Market St., 11th Floor
San Francisco, CA 94103
eharrington@sfwater.org
Patty Healy
First Vice President
Bayern LB
560 Lexington Ave.
New York, NY 10022
917-843-6178
phealy@bayernlbny.com
www.bayernlb.com
Bill Holman
Director of State Policy
Nicholas Institute for
Environmental Policy Solutions
Duke University
Box 90335
Durham, NC 27708
bill.holman@duke.edu
Kirsty Jenkinson
Director, Markets and Enterprise Program
World Resources Institute
10 G St., NE
Washington, DC 20002
202-729-7748
kjenkinson@wri.org
www.wri.org
David LaFrance
Executive Director
American Water Works Association
6666 Quincy Ave.
Denver, CO 80235
dlafrance@awwa.org
Peter Malik
Director, Center for Market Innovation
Natural Resources Defense Council
40 W. 20th St.
New York, NY 10011
212-727-2700
pmalik@nrdc.org
Richard Metcalf
Director, Corporate Affairs
Laborers’ International Union of North America
(LiUNA)
905 16th St., NW
Washington, DC 20006
202-942-2249
rmetcalf@liuna.org
www.liuna.org
Scott Miller
Environmental Sustainability Manager
The Russell Family Foundation
PO Box 2567
Gig Harbor, WA 98335
scott@trff.org
David Rankin
Vice President and Director of Programs
Great Lakes Protection Fund
Suite 880
1560 Sherman Ave.
Evanston, IL 60201
847-425-8196
drankin@glpf.org
Adam Rix
Managing Partner
TurningPoint Capital Partners, LLC
Suite 113
1053 Grand Ave.
St. Paul, MN 55105
651-600-3477
arix@turncappartners.com
www.turncappartners.com
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Eric Sandler
Director of Finance/Treasurer
San Diego County Water Authority
4677 Overland Ave.
San Diego, CA 92123
858-522-6671
ESandler@sdcwa.org
www.sdcwa.org
Doug Scott
Managing Director, U.S. Public Finance Group
Fitch Ratings
Suite 2010
111 Congress Ave.
Austin, TX 78701
512-215-3725
douglas.scott@fitchratings.com
www.fitchratings.com
Facilitator
Molly Mayo
Senior Mediator
Meridian Institute
PO Box 773
Talkeetna, AK 99676
907-733-8340
mmayo@merid.org
www.merid.org
Planning Partners
Fay Augustyn
Conservation Associate
American Rivers
Suite 1400
1101 – 14th St. NW
Washington, DC 20005
faugustyn@americanrivers.org
David Gordon
Policy Associate
Nicholas Institute for Environmental Policy
Solutions, Duke University
P.O. Box 90335
Durham, NC 27708
973-801-9654
david.r.gordon@duke.edu
www.nicholasinstitute.duke.edu
Sharlene Leurig
Senior Manager, Insurance Program
Ceres
99 Chauncy St.
Boston, MA 02111
617-247-0700
leurig@ceres.org
Betsy Otto
Vice President, Conservation and
Strategic Partnerships
American Rivers
Suite 1400
1101 – 14th St., NW
Washington, DC 20005
202-243-7033
botto@americanrivers.org
www.americanrivers.org
The Johnson Foundation at Wingspread
Roger C. Dower
President
The Johnson Foundation at Wingspread
33 E. Four Mile Rd.
Racine, WI 53402
262-681-3331
rdower@johnsonfdn.org
www.johnsonfdn.org
Lynn Broaddus
Director, Environment Programs
The Johnson Foundation at Wingspread
33 E. Four Mile Rd.
Racine, WI 53402
262-681-3344
lbroaddus@johnsonfdn.org
www.johnsonfdn.org
Wendy Butler
Special Initiatives Coordinator
The Johnson Foundation at Wingspread
33 E. Four Mile Rd.
Racine, WI 53402
262-681-3321
wbutler@johnsonfdn.org
www.johnsonfdn.org
About The Johnson Foundation at Wingspread
The Johnson Foundation at Wingspread, based in Racine, Wisconsin, is dedicated to serving
as a catalyst for change by bringing together leading thinkers and inspiring new solutions on
major environmental and regional issues. Over the course of 50 years, The Johnson Foundation
at Wingspread has inspired consensus and action on a range of public policy issues. Several
organizations have roots at Wingspread, including the National Endowment for the Arts,
National Public Radio, the International Criminal Court and the Presidential Climate Action
Plan. Building on this legacy, The Johnson Foundation at
Wingspread has set a new, strategic mission designed
to achieve greater, more sustained impact on critical
environmental issues. Launched as part of this new direction
is Charting New Waters, an alliance of leading organizations
calling for action to avert the looming
U.S. freshwater crisis.
www.johnsonfdn.org/chartingnewwaters
