The State of Water and Wastewater Utility Debt in North Carolina

Over the next 20 years, North Carolina water and wastewater systems will require up to $26 billion in capital costs to improve degrading infrastructure. Debt financing is a popular option to raise capital to fund these projects, as revenues from water sales alone are not usually sufficient to finance large projects. This study seeks to understand the current state of water and wastewater debt in North Carolina and quantify future financial capacity for issuing debt. Data on all local government debt issuances from 1951 to 2017 was obtained from the North Carolina Department of State Treasurer Local Government Commission. Analyses find that as of the end of fiscal year 2017, local government utilities in North Carolina have a total of $8.3 billion in outstanding water and wastewater debt. Additional analyses of debt per capita and debt service payments are performed to provide insight into the future capacity of utilities to issue debt.