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Mar 26, 2024

CFPUA’s Infrastructure Investments Have Outsized Impacts on Local Economy

Sponsored Content provided by Jennifer Adams - Chairwoman, Cape Fear Public Utility Authority

Every year around this time, the Cape Fear Public Utility Authority (CFPUA) Board begins considering capital improvement projects planned for the upcoming fiscal year and for the next 10 years.

The first drafts of capital improvement plans for Fiscal Year 2025 (FY25) and the 10 years from FY25 through FY34 debuted in February at the Board’s Long Range Planning Committee and was presented to the full Board at its March 13 meeting.

Totaling $326.7 million, the draft FY25 Capital Improvement Plan (CIP) is the largest ever in CFPUA’s more than 15 years of operation and includes CFPUA’s largest-ever single capital project, the replacement and expansion of the Southside Wastewater Treatment Plant, estimated to cost $239 million. The proposed 10-year CIP totals $711.4 million.

The expenditures listed in these capital plans are investments in the drinking water and wastewater systems on which the families, businesses, and institutions in our community depend, rehabilitating or replacing aging infrastructure like the 50-year-old Southside WWTP and adding planned enhancements and expansions to keep up with growth.

While these funds pay for things like pipes, pump stations, and treatment plants, spending by CFPUA on capital projects and operations also has knock-on effects for the economies of New Hanover County and our region. A contractor hired to replace a sewer main that has reached the end of its useful life hires crews and purchases materials. These crews spend their salaries, and materials suppliers spend a portion of their receipts. The sum of this direct, indirect, and induced spending and hiring is CFPUA’s economic impact. How much is it?

We recently sought to answer this question, hiring an economic consultant to analyze CFPUA’s past and planned spending and to calculate the impact this spending has on the economies of New Hanover County and the three-county region that includes Brunswick and Pender counties. We also know businesses rely to varying degrees on access to reliable water services, so we asked the consultant to quantify the share of employment and economic output comprised by water-dependent industries, ranging from hospitals and schools to breweries and restaurants.

The resulting report, titled “Economic Impacts of Cape Fear Public Utility Authority’s Water and Wastewater Services and Infrastructure Investments,” was presented to the CFPUA Board at its February meeting. The full report is available online, and I encourage you to review it. Here are a few highlights to pique your interest:

  • Every $1 million spent by CFPUA from 2013 to 2022 created an average of 10.7 jobs per year in the local economy. 
  • Every $1 spent by CFPUA during this period generated a total of $1.66 in economic output in the local economy as that spending rippled through various sectors.
  • Water-dependent industries generate approximately 37 percent of total direct economic output and 40 percent of total employment in New Hanover County. 
  • In the three-county region, water-dependent industries support almost 65,500 jobs and contribute more than $11.1 billion in economic output.
A large share of the capital investments I touched on at the beginning are aimed at reducing the risk of infrastructure failures that could disrupt CFPUA’s services. For example, more than 60 percent of the $326.7 million in the proposed FY25 CIP is for projects to rehabilitate or repair aging infrastructure.

The economic impact report illustrates the importance of such investments by modeling the economic impacts of an extended water service disruption. The report showed that each day of water service disruption would reduce New Hanover County’s economic output by $42.1 million to $55.3 million and cost each household between $650 and $860, depending on the length of the overall outage.

Reading through the economic impact report and the proposed FY25 and 10-year CIPs, I am struck by how much is reflective of CFPUA’s Strategic Plan, whose core tenets include infrastructure reliability and product quality, environmental stewardship and protection, and financial viability.
Initiatives resulting from the Strategic Plan improve CFPUA as an organization and the services we provide to our customers. As the economic impact report illustrates, these initiatives also strengthen a vital pillar supporting so much of our local economy.

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