Report: How Do Local Water Utilities Measure Up?

With the federal funding situation uncertain, water utilities are left in widely varying financial positions. Comparing local utilities across six metrics paints a grim picture.

1 minute read

January 19, 2017, 6:00 AM PST

By Philip Rojc @PhilipRojc

Water Main

Dan Holm / Shutterstock

The incoming Trump Administration has made vague promises around federal infrastructure spending. "However, much of the hard work continues to rest on the shoulders of individual cities and states, where more than 95 percent of public spending on operations and capital improvements takes place annually."

For Brookings, Joseph Kane writes that despite widespread support for upgrades, "only about 17 percent of utilities are confident that they can just cover the cost of existing service through rates and fees—let alone pursue needed upgrades."

In the report, Kane compares local water utilities across "three different measures of utility finances—operating ratios, debt-to-asset ratios, and rates—and three broad economic variables—changes in population, changes in median household income, and the share of lower-income households in the primary city served—to create a new barometer for city-level water infrastructure investment."

The results aren't exactly promising. "Only a handful of drinking water utilities in the largest cities nationally rank highly across six major categories of water finance and related economic indicators."

Wednesday, December 14, 2016 in Brookings Institution

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