North Carolina Department of Environmental Quality (DEQ)’s Division of Water Resource’s Public Water Supply Section implements the federal Safe Drinking Water Act and is responsible for regulating public water systems. There are nearly 6,000 regulated public water systems in the state. Around 75% of the state’s population lives in areas served by community water systems. The mission of the Section is, “To promote public health by ensuring that safe, potable water is available in adequate quantities to the residents and visitors of North Carolina served by public water systems by assuring that such systems are properly located, constructed, operated, and maintained.” The North Carolina Division of Water Infrastructure was created in 2013 and provides financial assistance for projects that improve water quality.
The Authority was created as an independent body made of nine members within the Department of Environment and Natural Resources. The main responsibility of the Authority is to award funding for water and wastewater infrastructure projects. The authority is also responsible for developing a state water infrastructure master plan, recommending ways to maximize the use of available loan and grant funding resources, examining best and emerging practices, and assessing the need for a troubled system protocol. The authority must meet at least four times per year. The Division of Water Infrastructure staff provides all support for the authority.
The General Assembly enacted House Bill 97 which established Merger/Regionalization Feasibility Grants to “broaden the use of grant funds to encourage water and wastewater utilities to become more viable and proactive in the management and financing of their systems. The North Carolina Department of Environmental Quality uses these grants to provide funding for studies to evaluate the potential consolidation of two or more water or wastewater systems into one system and the potential physical interconnection with another system for regional wastewater treatment or regional water supply. As of 2018, 18 grants totaling $875,000 have been awarded to localities around the state.” (p. 180 of the Bill).
According to US Water Alliance, “The State Water Infrastructure Authority worked with the legislature to define affordability in statute. The Authority then developed a set of indicators and benchmarks… intended to better distinguish between utilities that can least afford a critical infrastructure project, and those that can afford to incur some amount of debt or obligate some amount of funding toward it. The Authority developed an approach to prioritize communities that: 1) have smaller populations; 2) are comparatively worse than state benchmarks for five key economic indicators: population change, poverty rate, median household income (MHI), unemployment rate, and property valuation per capita; 3) have current monthly utility rates (independent of MHI) that are higher than the state median; and 4) will demonstrate a project cost per connection that is higher than the state median. This restructured approach enables state funding resources to benefit more communities by combining loans and grants based on affordability while acknowledging that full grant funding of projects is, in some cases, still the most appropriate approach when rates are the most extreme in the state.”
This plan was developed by the State Water Infrastructure Authority. The Authority was created by the General Assembly in 2013 to assess the state’s water and wastewater infrastructure needs, the role of the state in funding needed infrastructure, and the funding programs currently available to local governments and utilities. The Plan was created for owners and operators of water and wastewater utilities and systems that serve the public, focused on organizational management, infrastructure management, and financial management.
This Act requires certain distressed water and wastewater systems to undergo review of infrastructure, organizational, and financial management, and provides funding for the Viable Utility Reserve to provide grant money for local government units. The Viable Utility Reserve is an account within the Water Infrastructure Fund and is fully funded by State appropriated funds. It also provides a statutory process for merger and dissolution of water and wastewater systems and provides funds for the Southern Regional Area Health Education Center and for water resources projects, including flood storage capacity enhancement projects. The bill included a $9 million appropriation.