Public water and sewer systems have the responsibility to protect the health, safety and welfare of the public they serve, just as engineers do.  This is includes not just complying with regulatory mandates (they are minimum standards), but enacting such precautions as are needed to address things not included in the regs.  Unfortunately we continue to pay too much attention on regulatory compliance and evaluate the condition of the system using unaccounted for water losses or leaks fixed in the system as a measure of condition.  That may be an incorrect assumption.  The problem is that unless we understand how the system operates, including how it deteriorates with time, the data from the past may well be at odds with the reality of the future.  For example, that leak in your roof can be a simple irritation for a long time if you ignore it.  But ignoring it creates considerable potential for damage, including roof failure if too much of the structure underneath is damaged.  With a water system, pipes will provide good service for many years will minimal indication of deterioration.  Then things will happen, but there is little data to indicate a pattern.  But like your roof leak, the damage has been done and the leaks are an indication of the potential for failure.  Bacteria, color, pressure problems and flow volumes are all indicators of potential problems, but long-term tracking is needed to determine develop statistical tools that can help with identifying end of life events.  Basic tools like graphs will not help here.

Construction to repair and replace local water, sewer and stormwater infrastructure is expected to reach $3.2 and $4.8 billion respectively for water and sanitary sewer. The federal SRF programs are only $1.7 Billion in SRF loans, 24% below 2012 and well below the levels identified by the federal government to sustain infrastructure condition.  The only reason for the decrease seems to be a demand by Congress to reduce budgets, especially EPA’s budget where this money resides.  But the 2008 recession and its lingering effects to date have deferred a significant amount of infrastructure investments, and the forecast does not rectify the past deficits, and likely does not address the current needs either.  Few water and sewer systems are flush with funds to update infrastructure and borrowing has become a difficult sell for many public officials.  Lake Worth, FL just had a $60 million bond issue for infrastructure redevelopment defeated by voters two weeks ago.  The officials know they need this infrastructure, but the public is unconvinced because few serious problems have occurred.  We have to get the public past this view so we can improve reliability and public safety.  Those are the arguments we need to demonstrate.  The question is how.

 


The first month of the fall semester has slammed me, which accounts for a little less blog activity on my part.  But as fall rolls in many local governments are dealing with final budgets, new projects and dealing with taxes and fees.  Students are back to school and industries are looking to the end of the year and 2015.  How fast time flies.  Our students that graduated last spring all have jobs and half of our seniors that will graduate in December do as well.  With engineers or contractors.

The good news is that the economy continues to tick up, construction and construction jobs are back to 2005 levels (which if you recall was a lot), and the stock markets are making money for somebody because they are up as well.  Alan Greenspan can complain that housing maybe lagging, but that is more a lack of people having funds or being able to move.  Meanwhile construction of projects that were deferred might be addressed?  Time will tell but it raises an interesting question –  can we plan on growth forever?  We assume a continuous growth rate (like 1 or 2% per year), but is that reasonable since it means more people come to an area each year than they did the year before?  Works for bacteria, maybe not so much for people.  Ask Detroit.  Or Cleveland.  And does this type of growth create unintended consequences for us?  I think this is a  good question for a future blog and of course a question that economists and politicians do not want to answer.  It would be highly disruptive to our plans.   So since it is election season again, we all need to be prepared for the inundation of campaign sales pitches that try to convince us to vote for someone, or more likely to vote against someone.  That’s probably not the way it was intended to go, but it’s what politics has degenerated to in so many places.  Ideology and adherence to it under any circumstances often prevents us from looking objectively at issues and reaching real solutions, some of which may have winners and losers, but may be necessary to improve long-range forecasts.  Listen to the political patter and decide where the plan is.

For example, ignoring the evidence that the climate is changing, places constituents in perilous positions…..in the future.  Not now and few climate impacts need drastic immediate action.  But longer term, storm sewer will be inadequate, there will be less water stored in glaciers, less rainfall in places (like the southwestern US), more frequent flooding in coastal areas, etc.  The problem may be 50 years from now, but wholesale infrastructure programs take that long.  It took the US 50 years to build the interstate system.  Nearly 40 years to dig canals in south Florida, 20 year to acquire property for a reservoir in North Carolina, etc.  Things take time and meanwhile if we need to alter current practice, such as elevating roadways and building to avoid flooding, the time to start is now, not in 50 years when solving that problem is overwhelming.  Find those water sources now, so development and competitors can be controlled.  Finding water that may take 20 years to secure and construct is an unmanageable issue the year before you need it.  You need a plan.  Where do you hear that planning?

What about that failing infrastructure?  We tend to ignore it until it fails.  But if it fails, that can be catastrophic.  Engineers and operations personnel know deterioration occurs, and know that it will take time to plan, design and refurbish of replace infrastructure.  But projects continue to get deferred for lack of funds.  Aggressively planning repair and replacement may actually save money in the long-run, but our planning tends only to be short-term.  So how do we change that?  Perhaps the state agencies that require local planning to be submitted and approved will push for better evaluation of infrastructure.  GASB 34 clearly did not go far enough.  Too many communities do not track their work and even fewer document the conditions when they make repairs.  Too little data is collected on what fails, when and why.  WE can collect huge amounts of data with work orders that track work.  Perhaps a regulatory frontier.  Or maybe, just maybe, some enlightened managers will decide tracking information is actually fairly easy.  The question is the platform.  Stay tuned… we are working on that…


In my last blog I outlined the 10 states with the greatest losses since 2006.  Florida was not among them, yet given our legislature’s on-going discussion and hand-wringing with the state run Citizen’s insurance, you would  think we have a major ongoing crisis with insurance here.  Maybe we do, but I will provide some facts.  Citizens,averaged between 1 and 1.5 million policies over the last 8 years.  according the the South Florida SunSentinel, the average person pays $2500 per year for windstorm coverage.  Somehow I think I want that bill because my insurance is about $6000 through my private insurer and when I had Citizens it was $5700/yr.  But I digress.

Let’s assume there is 1.2 million policies over that time paying the #2500/yr. That totals.$3 billion a year in premiums.  That means Citizens should have reserves of $24 billion because they have not paid-out since 2006.  They have $11 billion according to the SunSentinel sources.  So wher eis the rest of the money?  We can assume there are operating expenses.  They pay their executives very well for a government organization.  I am sure they pay the agents as well.  I asked a couple friends in the industry and they indicate that for private companies, about half your premium goes the the agent who writes the policy.  That’s only Citizens.

Let’s assume there are conservatively another 8 million policies in Florida and since many of those are inland, let’s day they average $1500/yr.  If you have it for less, check out your policy!.  That means there is another $12 billion collected each year for a total of $15 billion per year.

Now let’s look at storms.  According to Malmstadt, et al 2010, the ten largest storms 1900–2007, corrected for 2005 dollars are as follows:.

Rank   Storm                         Year        Loss($bn)

1 Great Miami                        1926       129.0

2 Andrew                               1992        52.3

3 Storm                                  1944       35.6

4 Lake Okeechobee               1928       31.8

5 Donna                                1960       28.9

6 Wilma                                  2005       20.6

7 Charlie                                2004        16.3

8 Ivan                                     2004        15.5

9 Storm # 2                            1949        13.5

10 Storm # 4                          1947       11.6

So for all bu the top 9 storms in a 107 year history,the annual receipts exceed the losses for a storm.   The total over the period is $450 billion (adjusted to 2005 dollars)  That means an average of $4 billion per year.  So what is the issue?  Sure a big storm could wipe out the trust fund, but that is what Lloyd;’son London, re-insurers and the ability to borrow funds is all about.

I suggest that the fuzz is really about is this.  Most people do not understand the concept of an insurance pool.  That includes many public officials.  The idea of insurance is to pool resources is to collect huge sums of money so that if something bad occurs, there is the ability to compensate people for their losses.  Insurance is a good thing but individually we hope it is never us that needs to be compensated because that means something bad happened.  But we expect our premiums to pay into that pool, build large pools of money, and have money when you need it. The more people that pay in, the more the  risk is split and lower the likelihood that any individual suffers a loss.  Hence the lower risk should lower premiums.  And people who live in high risk area should pay more than those who don’t.  Flood plains, dry forests, coastal areas, high wind areas, tornado alley, etc are all high risk.  Florida is one, but clearly there are many others,

So Citizens has a pile of money. Most private insurance companies should also, although their money is invested and they expect most of that will not be paid out.  I suspect the concern is a fear that the pile of cash will create a public furor, but that shows a lack of communication and education.  Cash is good.  Lots of it is better.  It’s like running surpluses in government or in your personal savings account. The idea is to have money when you need it.  Running at a point where you never have surpluses guarantees you will have deficits that require cuts in services,and possibly losses of jobs when the economy tanks again.   For insurance, those losses occur when big event hit.  Fortunately those are infrequent, but they have and will happen.  We need the cash pools on hand to protect our citizens just in case.    In the meantime we need some leadership and education of the public.


As those of you who follow this blog know, we periodically touch on climate issues.  Sea level rise is a particularly acute issue here at ground zero – southeast Florida.  But as I have said for some time, this is not an immediate crisis, but a slow steady creep that gives us time to adapt to the changes related to sea level rise.  I am optimistic that while we will spend a lot more money to engineer water management so we will need more engineers, there are solutions that will allow us to thrive here for a long time – probably a lot longer than we have been here, which is just over 100 years.

Our bigger, current challenge is the temporal but catastrophic impact of tropical storm activity that can create immediate consequences that last for years, much as Hurricane Andrew did in 1992 and Hurricane Wilma almost ten years ago.  Of course there have been others, like Donna in 1960 which were worse.  I mention this because the peak of hurricane season in Sept 10 – only two weeks away.  We have been lucky for years now, and of course we are all hoping it remains that way.

But I found another interesting article this weekend hat talked about the states with the most weather losses since 2006 (and in a subsequent blog I will look back further for comparison). is New Jersey.  OK, no huge surprise given the recent experience of Sandy.  But who is number 2?  Or for that matter 2-10?  Would you believe that Florida is not on the list at all.  Neither is California despite the fires.  Or North Carolina another hurricane prone state.

No, according to the Tribune, the states  (in order:after  New Jersey) are: Texas, Tennessee, Missouri, Alabama, Oklahoma, Mississippi, Louisiana, Colorado and Arizona.  The most common causes: thunderstorms, heavy rain, flash flood and tornados.  And the impacts range from $24 billion in New Jersey to $3.5 billion in Arizona.  An interesting factoid as we approach the peak of hurricane season.  May Florida stay off the list.


So what would a vacation be without Chihuly glass, dinosaur tracks, trains, moose (and babies) and some chilly weather?  Gotta love the time you can spend in other places and take in as much of what is there to offer as you can.  So maybe my vacations are as frantic as the rest of life?  Not really.  Gotta relax to enjoy.

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Summer vacation is over down here in sunny, hot south Florida. School has started. Yet two weeks ago I was in Colorado, waking up to moose and 27 degrees. Ice on my windshield. How time flies. SO we are off on a new semester, with lots of classes and lots of hope for the future. Good luck to everyone! Back to blogging shortly as I have 3 books I am trying desperately to finish and one new class to finish notes for.

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