The bond market and investors are becoming increasingly aware of the rising costs of water and sewer services and the reluctance of elected officials to increase rates necessary to maintain adequate financial stability. As lenders, they want to know that utilities are pursuing sustainable water infrastructure options like open materials selections of non-corrosive pipes like PVC and other infrastructure asset management best practices.
A recent article by infrastructure expert and former utility CFO Greg Baird in The Bond Buyer: The Daily Newspaper of Public Finance discusses these points. In it Baird argues for better financial and operational management of water and wastewater utilities as a condition of public funding. Click here to read.
With pipe representing the largest component of a utility's assets, the life-cycle costs and performance of piping materials is critical.
Piping also significantly impacts operations and maintenance costs, which are spiraling out of control at 6 per cent above inflation because of the corrosion-prone metallic piping in the ground: "Prior to any new public-private or federal funding or bailouts, infrastructure asset management best practices should be employed with the goal of maintaining an asset at an acceptable level of service at the lowest life-cycle."
Municipalities need to consider PVC for all pipe replacement projects given its low cost, long-life and sustainable attributes.
The Bond Buyer is the premier publication for infrastructure investment in the United States. Readers include investors, financial institutions and advisors, credit agencies and every municipal bond issuer.
Greg Baird is an expert on infrastructure planning and funding issues and his research is published nationally and internationally.He served as CFO of Colorado's third-largest utility and as a California municipal finance officer. Baird is an active member of the American Water Works Association and also serves on the Economic Development and Planning Committee with the Government Finance Officers Association for the United States and Canada.
