Strengthening Ohio’s Water Infrastructure: Financing and Policy
GOPC explores how state leadership can promote new ways of doing business in the water utility sector that can increase long-run financial sustainability.
Water and sewer utilities are faced with the need to invest billions of dollars to modernize infrastructure that was installed decades ago. Ohio has some of the largest revolving loan programs in the nation through the Ohio EPA and the Ohio Water Development Authority, but local utilities must navigate through multiple state and federal funding sources with different applications, funding criteria, and timelines.
Asset management will save costs through predictive maintenance and better targeting of resources, while allowing utilities to better justify their capital improvement plans to governing bodies and encouraging them to benchmark against their peers. Regionalization allows utilities to achieve economies of scale and increases their financial sustainability. Utilizing new technology to save energy costs in treatment systems can also help to change the financial equation. With the proper guidelines in place, public-private partnerships can add to the flexibility and timeliness of many infrastructure projects. Even with a new business model, however, it will be necessary to increase coordination among state and federal agencies to keep affordability within reasonable bounds.
The following actions will strengthen the long-run sustainability of water infrastructure:
- Increase incentives for regional coordination and consolidation of small drinking water and wastewater systems
- Increase financial incentives for Asset Management Programs by small systems
- Provide the OWDA or Ohio EPA with additional state funds to help keep affordability within acceptable bounds
- Couple asset management plans with improved statewide data collection on key utility performance benchmarking statistics
- Enact a public-private partnership (P3) statute for water sector projects that contains safeguards for accountability, transparency, and standardized procedures, including opportunities for public input
This report is made possible by the generous support of the Ohio Water Development Authority. The views and recommendations expressed herein are those of Greater Ohio Policy Center, and do not necessarily represent those of the OWDA.