Board Responsibilities

The Wastewater Financing Board was originally created pursuant to Public Chapter 299 of 1987, later codified in Tennessee Code Annotated Sections 68-221-1007 et seq. The Board’s jurisdiction was broadened to include water systems, and the Board was renamed the Water and Wastewater Financing Board. The Board is created for the purpose of “furthering the legislative objective of self-supporting water systems and wastewater facilities in this state” and “to determine and ensure the financial integrity of certain water systems and wastewater facilities” under its jurisdiction. The Board is responsible for determining the financial, technical and managerial capacity of the systems to comply with the requirements of federal and state laws and has authority to require appropriate action by those systems to correct deficiencies found.

Board Characteristics

Nine members: seven appointed by the Governor for three year terms and two ex officio. Composed of one member representing municipalities; one member representing utility districts; one member representing municipal water utilities; one member representing water utility districts: one member representing environmental interests; one member representing manufacturing interests; and one member representing minority citizens of the state, who shall have experience in governmental finance and shall not otherwise be a state employee. One member shall be the Comptroller of the Treasury or his designee, who shall serve as board chairman, and one member shall be the Commissioner of Environment and Conservation or his designee.

New Water Loss Information

At a joint meeting of the Water and Wastewater Financing Board and the Utility Management Review Board on June 6, 2012, the Boards decided to reaffirm the October 7, 2010, decision to adopt the American Water Works Association (AWWA) water loss methodology for inclusion in any audited financial statements received by the Comptroller of the Treasury on or after January 1, 2013.  The water loss methodology can be obtained from www.AWWA.org

At the June 6, 2012, meeting the following was adopted by the Boards:

1. Require that the AWWA Excel Spreadsheet (in the specific format created by utilizing the AWWA Free Water Audit Software) be submitted electronically in an Excel format.  It is the intention of the Boards that the AWWA Excel spreadsheet be filed by the contracted auditor in Excel format at the same time the annual audited financial statements are filed.    The Excel spreadsheet is not considered audited information, but only submitted simultaneously. This requirement should not be confused with and does not replace the supplemental schedule (i.e., the single “Reporting Worksheet”) included as part of the annual audited financial statements as required by Tennessee Code Annotated.
2. In accordance with TCA 68-221-1010(d)(1) and TCA 7-82-401(h)(1), failure to include the required schedule constitutes excessive water loss and…referral to the appropriate board.  THEREFORE, failure to include the AWWA schedule in audited financial statements received by the Comptroller of the Treasury on or after January 1, 2013, will result in the System being referred to the appropriate Board.
3. Further, utilities will be referred to the Boards based on:
1. Incomplete AWWA water audit submitted anytime on or after January 1, 2013;
2. For audits received  by the Comptroller of the Treasury from 1/1/2013 to 12/31/2014 -Validity score of 65 or less or non-revenue water as a percent by cost of operating system of 30% or greater;
3. For audits received by the Comptroller of the Treasury from 1/1/2015  to 12/31/2016 -Validity score of 70 or less or non-revenue water as a percent by cost of operating system of 25% or greater;
4. For audits received by the Comptroller of the Treasury from 1/1/2017 to 12/31/2018 - Validity score of 75 or less or non-revenue water as a percent by cost of operating system of 20% or greater;
5. For audits received by the Comptroller of the Treasury from 1/1/2019 to 12/31/2020 Validity score of 80 or less or non-revenue water as a percent by cost of operating system of 20% or greater.

“Total annual cost of operating the water system” as used in the AWWA Free Water Audit Software is defined to include all costs for operation, maintenance, debt service (principal and interest) and depreciation. Remember this number is to include only expenses related to the WATER system – not the sewer system. The number can be obtained from the annual audited financial statements.

Failure to achieve the designated levels will result in a referral to the Board(s).

The requirements will be reviewed by the Boards annually to ensure the desired results are being achieved.    The levels are subject to change by approval of the Board(s).

All correspondence relating to the Water and Wastewater Financing Board should be directed to: