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WHY ARE HEALTH CARE COSTS SO HIGH?

September 8, 2013
communciations, Congress, economy, finance, funding, infrastructure, innovation, Insurance, Leadership, management, politics, Revenues, Uncategorized, Water Funding, water sewer management, water supplies
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Why are health care costs increasing so fast?  Did you ever wonder about that?  We keep hearing about how health care costs, Medicare, Medicare, Obamacare are going to bankrupt us, but why is that?  Why are the cots going up so fast?  It is an important challenge for local officials and utilities who generally pay the health insurance costs for their workers.  There is more to the story that we are not being told.

One problem that get identified quickly is that only 80% of the population is included in the health care system.  Many who are not are “healthy” young people who don’t demand the services.  The concept of the health care bill was to solve this problem by spreading the costs of health care across the entire population using private and public providers.  First, I think there are way more unhealthy  people included in the 20% than we realize because the political dialogue keeps focusing on the few that want to live off the grid – I feel great so I don’t need insurance.  That guy is part of the problem.  That guy gets into a car accident, gets taken to a public hospital, gets treated, gets a bill for $26,000 to fix his broken leg, refuses to pay anything, and the taxpayers get stuck with the bill.  My solution to that guy is if you don’t want to pay for health insurance, bring cash.  Otherwise, “no soup for you!” to paraphrase a famous Seinfeld episode.  Of course my doctor, nurse and therapy friends think that’s a little cold hearted. 

The next argument is the cost of doctors, therapists and nurses.  Okay, I know a bunch of them, and that’s not where the money goes.  These people have lost money in the past 10 years.  Many are going form full-time to part-time employments as Medicare, Medicaid and health insurance bureaucrats decide services are no longer needed.  They will tell you the major change in their lives is paperwork….hold that thought for a moment.

The cost of drugs comes up.  Medicare and Medicare are the largest purchasers of pharmaceuticals in the world.  So in other works, they set the lowest price by supposedly bidding the “contracts” for services. Only there is often only one provider, so exactly how does that work?   Sounds like we don’t get a good deal there, which is why the arguments for importing Canadian drugs or drugs from Mexico keeps popping up.  They get a better deal than we do and most of these are supposedly AMERICAN companies.  No home town discount (I guess I know where free agent baseball players get the idea).   And my medical friends confirm this as an issue.  Check out the comments from Mr. Falloon at Life Extension (www.lef.org) for discussion. 

So let’s go back to the paperwork discussion.  Once upon a time doctors simply sent a little paperwork to the health insurance company or the federal government and said you needed some service.  And the insurance company processed the bill for the services.  The cost was paid by insurance premiums collected by the insurance company.  Everyone was happy.  But then someone at an insurance company said, “wait we could make more money if we asked more questions and paid less for these services.  It would help our bottom line.”  So you hear the complaint that the folks at the insurance companies are deciding whether you need that procedure or not.  And contractors decide if someone needs Medicare or Medicaid services, not the government, not your doctor, your nurse or your therapist.  Not any person that knows you, but some unseen, private sector bureaucrat who’s goal is to minimize the amount of your premium spent on services so they can enhance their bottom line.  And apparently they are very effective because the health insurance industry is very lucrative.  So maybe we have stumbled onto something here.  Maybe the cost of medical coverage is more related to drugs and bureaucracy (and it is not government bureaucracy!!) than the actual cost of services.  Maybe the old system, even if there was some fraud in it, wasn’t nearly as bad as it was made out to be.  It reminds me of one of the 4 laws of City management I developed years ago:  Never give elected officials a bad alternative – it becomes a magnet.  It always worked (hence a law).  I didn’t learn why until years later when I realized, that the worst option was the one all the lobbyists lobbied for even at the local level.  It was the option where they could make the most money “fixing

LOCAL REVENUES BLEAK? Part 2

August 30, 2013
economy, finance, funding, infrastructure, innovation, Leadership, management, politics, Uncategorized, Water Funding
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A new GAO report suggests that the short and long-term future for state and local revenues may be more difficult that currently anticipated, despite the economy recovering in many places.  My last blog outlined a number of the problems including that many public entities chose to reduce tax rates to balance the budget as opposed to restocking reserve funds.  When property values plummented and tourism and consumer buying diminished, the taxes related to all three plummented as well.  None have yet returned to their pre-2008 levels.  The failure to stockpile reserves caused many governments to spend down what limited reserves they had in the past 5 years as a means to avoid the hard and unpopular decision – raising taxes to collect the same revenues as before the mid-2000s cuts.  Now the lack of reserves creates an issue going forward – as costs increase faster than revenues, there are no reserves to tap into.  It is a problem that just keeps on giving. –

As I noted, I never like Chicken Little, because he never had a solution for the problem. There are solutions for local governments, some good and some bad.  Clearly local governments need to revisit the revenue production tools.  Taxes and fees will go up.  Taking more money from the utility, an all too popular decision in the past 5 or more years IS NOT THE ANSWER!  That just transfers the problem to the utility system and we already know that there are huge amounts of deferred maintenance and capital projects with utilities – $300 billion and counting at last count. The utility should be run as an enterprise, not as a cash cow to avoid hard political decisions.  Solutions for replacing those ARRA funds and federal grants for police are needed.  Just saying “We ran out of money so lay those people off” is not a solution.  What that is, is poor leadership and planning – a failure to develop the investment made by the feds to better the fiscal position of the community.  A lost opportunity.

There are many options.  And we can lay blame at the feet of elected officials, but it does not all belong there.  The citizens who elect those officials, are to blame.  Most elected officials react to citizenry, not the other way around.  And don’t forget the managers who bring bottom line business practice to local government management who recommend options. We’ve lost a generation of good government managers who understood the service aspect of government who have been banished in favor of the bottom line approach.  We need to change this as well. 

A more entrepreneurial spirit is needed.  I recall a prior entity I worked for where we proposed doing lab work in our certified water lab for other utilities.  That got shot down because it was “unfair to compete with the private sector for this work.”  Really?  That sounds like a private sector red herring.  They know they will lose business, and they can’t compete.  How is that in the spirit of capitalism? It cost less for other entities to have us do it?  A huge missed opportunity.  There are many.  If we want government to operate more like a business, we need accept the opportunities that come with it, not quash them. 

We need to market the community.  Not just give money away hoping to attract businesses that will locate for a short while.  That certainly has been a fiasco in Florida.  Other places as well I am sure.  No, we need to “sell ourselves.”  We need to marketing program to distinguish the community, its assets, its water and sewer reliability and quality, its people, education and opportunities.  It means spending money to invest in the community, not just spending money to fix a few roads and install some pavers, although they are good.  It’s also not just fixing up the distressed neighborhoods, but investing in the better ones as well. The most distressed City in America is quietly encouraging new artists and startup businesses to relocate to Detroit to take advantage of the availability of warehouses, cheap rents and a talented workforce.

We need to avoid the pitfalls of falling victim to reinforcing the past.  Florida’s economy is based on tourism, agriculture and building housing to attract retirees.  Weird business model.  Two of the three are highly susceptible to economic disruptions.  We are still recovering from 2008.  The economy also produces mostly minimum wage jobs, not the way to build a better tax base of encourage investment in education.  The state manufactures nothing, yet fails to take full advantage of what assets it might have to create industry.  As Sun-Sentinel writer Stephen Goldstein noted recently, why is it that south Florida has yet to take advantage of the private sector interest in investing in understanding age –related diseases?  Much of the local economy and the two local public universities are not positioned to take a leadership role?  Yet it is an easily marketed issue given the current population, assuming funds can be secured.  Public investment is needed, and of course that’s the rub.

We can market ourselves.  May communities have.  And most deserve better than their current lot in life.  Alexis de Tocqueville,” you get the government you deserve.”  I think we deserve better, and I think we can do better.  I think we can develop a better future and I think we can overcome challenges.  So maybe it is time for to us to change the perspective!

LOCAL REVENUES BLEAK? Part 1

August 27, 2013
economy, finance, funding, infrastructure, Leadership, management, Revenues, sustainability, Uncategorized, Water Funding
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A new GAO report suggests that the short and long-term future for state and local revenues may be more difficult that currently anticipated, despite the economy recovering in many places.  For most of the 1990s and the mid 2000s, many states and local governments operated with surpluses, or could have.  Many elected officials, like those in Florida (or Congress in 2001), chose to reduce tax rates to balance the budget as opposed to restocking reserve funds.  When property values plummented and tourism and consumer buying diminished, the taxes related to all three plummented as well.  None have yet returned to their pre-2008 levels.  In fact, the property values lag so badly, it may be 10-20 years in many jurisdictions before they return to their former selves.  In South Florida’s suddenly “hot” real estate market, local officials are raving about the 28% increase in property values in 2012/2013.  Sounds great until you realize that they need to increase 100% to return to pre-2008 levels.  Even in a hot market it may be over 5 years to recover.  So property values are not a short-term problem.  Some communities may never recover.  So much for saving for that rainy day.

It should be plain to all of us that the failure of those in power to stockpile reserves caused many governments to spend down what limited reserves they had in the past 5 years as a means to avoid the hard and unpopular decision – raising taxes to collect the same revenues as before the mid-2000s cuts.  Now the lack of reserves creates an issue going forward – as costs increase faster than revenues, there are no reserves to tap into.  It is a problem that just keeps on giving.  The failure to address the root cause – the failure to set revenues collections at an appropriate level and accumulate surpluses when you are lucky enough to get them.  Unfortunately the political discussion keeps going back to keeping costs down, but cuts in costs means cuts in services.  Sounds great to cut the Plantation trolley because of budget needs, but what about those citizens that rely on the trolley?  Or the businesses it serves.  Cutting Meals on Wheels which primarily serves shut-ins is a great idea in Broward County with a hue population of elderly that find it difficult to get out of the condo?  And does it really make much impact on the overall budget?  Not really.  There are cosmetic issues.  There a more symptomatic issue here?

GAO points to health care as a cost increasing faster than the rate of increase in revenues, but the latest data seems to indicate that the rate of growth may be less than projected by those opposed to the new Health Care laws.  Underfunded pensions are also a potential area of concern, but cutting employees is not the solution for that as outlined in a prior blog.  Cutting employees cuts the funding for pensions which guarantees future problems.  So that idea actually works against the goal of shoring up the problem.  So, no that is not the answer.  We are clearly paying for the sins of 15 years ago when we were awash with funds, but decided to cut or public “income.”  Who does that anyway?!?!

I never like Chicken Little, because he never had a solution for the problem.  Part 2 will outline some thoughts…

Increase Revenues without Raising Rates

July 27, 2013
finance, Leadership, management, Meter Reading, Revenues, Uncategorized, Water Funding
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It surprises me how many utilities ignore their meter stock.  Water meters are the “cash registers” of the utility – they are how we bill our customers.  Many utilities allow their meters to age without checking how much loss their may be.  I have a client who regularly has issues with high unaccounted for water, which is a permit condition.  Every time the issue arises, they ask me what to do.  Each time I ask the Finance Department, which is responsible to for meter reading and billing, to check the number of meters with 90 days of zero readings.  The past two times I had them do this the number of meters was about 10% of the system! Both times I have had them replace all 10% immediately.  The result each time was to decrease the unaccounted for water amount in half (15 to 7%).  In essence they received a 7% rate increase without raising rates.  Yet, the Finance department NEVER runs the zero read report unless I ask them to. 

 

This situation is all too common.  Meters lose accuracy with time.  Small meters lose accuracy slower than big meters, which may lose 50% of their accuracy (for low flows) within 2 years, but the small meters may not last the 15 to 20 years they are typically installed.  The easy way to monitor this is to run a zero read report monthly, and to run a report to compare the water billed 12 months apart to see if the billing amount decreases significantly from year to year.  Water utilities need regular meter maintenance to insure they are receiving the revenues for services delivered.  But it is often too easy, or too politically difficult to spend the dollars to insure meters run accurately and to bill people appropriately.  But we should ask if it is fair to bill others disproportionately to avoid fixing the meter problem?

 

Similarly utilities need to insure that everyone is being billed.  Some cities do not charge themselves for water, which means they cannot track it adequately.  Other potential users that are not metered or charged include churches, parks, and schools.  There is a fairness issues associated with not billing everyone.  Likewise, large losses that cannot be accounted for may be indicative of water theft.  A water audit program can help identify potential water theft.  Theft is an affront to all customers.

 

Utilities should also look at fees for services.  Sometimes these have not been adjusted for years.  Utilities should determine exactly what it costs to provide services like meter turn-ons, turn-offs and call outs.  A couple utility clients of mine have contracted to perform services for other utilities as a mean to raise revenues without big rate increases. 

 

Keep in mind though that rates need to increase because power, chemicals and capital needs are constantly increasing.  Power, cable, telephone and other utilities increase to insure they recoup their costs.  Water and sewer utilities should incorporate CPI-type increases in their rate structures to insure they can sustain ongoing operations and capital replacement programs.  Insuring everyone is billed properly and the meter inventory is up-to-date insures that rate increases are limited to what is actually needed.

 

 

Sustainability and Risk Managers as Future Water Manager Obligations?

June 27, 2013
Climate, communciations, Environment, finance, funding, groundwater, Holistic Water Planning, infrastructure, innovation, Leadership, management, Marketing water, planning, Risk, Risk Management, sustainability, water sewer management
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In the past week I have had the opportunity to experience the extremes with water – heavy rains/tropical weather in SE Florida, and dry weather in Denver at America Water Works Association’s Annual Conferences and Exposition. Two months ago with was snowing in Denver and there had been limited rain in SE Florida. Six months ago we were both dry and there was significant concern about drought in both places. How quickly fortunes change and the associated attitudes as well. It is part of a perception problem – looking at the near term – instant gratification, as opposed the long-term consequences. In truth neither set of conditions is historically different or should have created major panic or much shift in attitudes, but it is the potential to predict conditions that require the water manager’s scrutiny. We have all become risk managers.

Managing risk is not in the job description of most water and sewer personnel (risk managers aside, and they are focused on liability risks from incidents caused by or incurred by the utility like accidents, not water supply risks). We spend a lot of effort on the engineering, operation and business side, but less on planning or risk/vulnerability assessments. EPA has required vulnerability assessments in the past, but having seen some of those exercises, most are fairly superficial and many put on a shelf and forgotten. I have had clients ask me if I still had copies because they did not. Clearly we need a renewed commitment to vulnerability assessment.

Vulnerability starts with water supplies. Groundwater is particularly tricky. A new USGS study reports significant decreases in water levels in many aquifers across the US, especially confined aquifers in the west. That situation is not improving, and the situation will not correct itself. Loss of your water supply is a huge vulnerability for a community. Finding a new supply is not nearly as simple as it sounds or as many are led to believe. Confined aquifers do not recharge quickly and therefore have finite amounts of water in them. Remove too much water and all too often land subsidence occurs, which means the aquifer collapses and will never hold the same amount of water. USGS has mapped this and it matches up well with the drawn down aquifers. More data needs to be collected, but Congress is looking to cut USGS funds for such purposes, just when conditions suggest the data is needed most.

Many watershed basins and many aquifers are over allocated and overdrawn, and not just in the west. New England and the Carolinas have examples. Overallocation means competition for water will increase with time and it will be utilities that everyone will look at to solve the problem. Afterall the utilities have money as opposed to agriculture and other users, right? To protect themselves, water utility managers will need to look beyond their “slice of the pie” to start discussions on the holistic benefits to water users throughout the watershed, which will extend to understanding economic and social impacts of water use decisions. It is not just about us, and paradigm shift that is coming and one that we as an industry need to be the leading edge for. Our use impacts others and vice versa. Every basin wants to grow and prosper, but decisions today may reduce our future potential. Klamath River is a great example of misallocated water priorities. The biggest potential economy in the basin is Salmon ($5B/yr), followed by tourism ($750 M and growing), which relies on fishing and hiking. But agriculture ($0.2 B/yr) get the water first. Then power, which warms the water (salmon like cold water). Then a few people (a few 100,000 at the most in the basin). The result, the salmon industry gets reduced to $50 M/yr. Now how could we create more jobs, which would result in more income and a bigger economy? The easy answer is encourage the salmon industry, but that doesn’t sit well with the other, smaller users that will become more vulnerable to losses.

I suggest that to harden our water future in any given basin, we need to start looking a little more holistically at the future. This type of analysis is clearly not in the job description of the utility or its managers, utility managers may have the best access to technical expertise and information. As a result to protect their interests and manage risk, we may need to shift that paradigm and become holistic water managers.

PAY YOUR BILL

June 24, 2013
communciations, Development loans, economy, finance, funding, Leadership, management, Marketing water, sustainability
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A recent Wall Street Journal article noted that 50 % or people have paid their utility (water, sewer, electric) bills late, but only 24.8% have paid the internet late, 39.5% the cable late and 44% the phone bill. Really? We are willing to pay water, sewer and electric late, but not the internet bill? This should be a wake-up call to water and sewer utility leaders nation-wide that we have a problem. Combined water and sewer bills across the United States average something around $50. True they are often higher in California, SE Florida, and some other areas, but they are also lower in many areas. Most of the time even in those high cost areas, the bill is under $100.

I have done a number of rate studies and I find that the cable bill, and the cell phone bills are almost always higher than the water+sewer bill locally, so why are people willing to pay our bill late, but not the others? Is it the perceived benevolence of local utilities, most of which are public entities? Is it a perception that water should be free so it is not important to pay the bill? Or is it the lack of marketing of an essential product by waterutilities? I have heard all these arguments, but I am thinking the latter may be more important. Most people know they need to pay the bill, and I don’t really know anyone who thinks water should be free in the US. People are used to cheap water, and costs are going up. Complaining to local elected officials often keeps rates artificially low, which means maintenance and replacement programs get deferred. That makes the utility more at risk to failure. EPA, GAO and others report regularly that we have been keeping rates low and deferring capital and maintenance for years to the tune of hundreds of billions of dollars. So what is wrong?

I suggest that as an industry, we have failed in marketing water. Treatment plants, piping and pump stations are out of the way, pipes are buried. No one sees them and people assume these faciliaites will work, but rarely ask how they work or how long they will work. They do not understand the complexity or the regulatory stringency of operating a utility. They do not understand that the number one priority is public health, and protecting the public health costs money. We have not made people understand this because we do not market our product. I have taught elected official classes where the elected officials tell me public dollars should not be spent on marketing, but they never say why when pressed. Rarely is marketing included in a budget. But if water and sewer is a business, isn’t marketing an important strategy to maintain that business?

Meanwhile we have a host of celebrities marketing cellphones, which are not required to survive. We have a host of glitzy cool advertisements for cable service options, but we don’t need cable to survive. The power companies send out glitzy stuffers in their bills that no one reads, but they do end up in the papers regularly. And power really helps us survive, but we could do without it (although it would be unpleasant). Our forefathers did. But no one ever survived without water. Maybe it is just too obvious. But maybe because it is so obvious, people are less conscious of it. We need to market better. As a private sector marketing manager would say – we have lost our market share!! We need to get it back.

Social Security Not Nearly So Bad…

June 11, 2013
economy, finance, funding, management
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Previously I blogged about retirement systems since they were getting a lot of negative attention in the Florida Legislature and in Congress. One of my tenets was that the economy is more of an issue in dealing with the sustainability of retirement systems than most other factors. Specifically I outlined the current Social Security issues, noting that the long-term borrowing rate and number of people paying into the system affected the apparent long-term viability at any given point in time. I also suggested that as a result, trying to opine about the viability of any retirement system at a specific point in time is a futile exercise, unless there is some underlying political agenda. The economics changes constantly, so the long-term trends are far better means to view the viability of pension programs. After the 2008 economic collapse, few retirement systems looked like they were in good shape, yet a few years earlier, they appeared much better, much like Florida’s did..

Fast forward to 2013. After all the hoopla in Congress about the fate of Social Security and scary Congressional statements that Social Security will not be remain for future retirees unless drastic changes are made, guess what? The annual trustees’s report on Social Security (and you though Congress managed it!) reported that as a result of the economic uptick in the past couple years, the outlook for Social Security in the short term is good, and the long-term is far better than it has been in years. Surprised? Only if you don’t understand how pension systems work. The economy has improved, so the investments made by Social Security likely are getting a better return. The jobless rate has dropped, and more people are paying into the system, precisely the two things that improve the long-term sustainability of any pension system. But we don’t hear Congress talking about that because that doesn’t address the political agenda.

Worse for certain Congressional leaders, the report suggests that Social Security is positioned better than many 401K programs, the type of system some in Congress suggest should be the future of Social Security, because the risk are far lower with Social Security’s investment strategy than any 401k invested in the marketplace. They noted that most 401k programs lost half their value in the 2008 financial collapse, while Social Security’s portfolio, invested in far more conservatively, did not see near the same type of drop in investment value. The report outlined that the lower and middle class retirees were hit less severely buy the 2008 downturn than upper middle class pensioners who relied more on 401K returns. That should be no surprise either.

The findings are particularly important for lower and middle class families that receive 2/3 of their retirement income from Social Security as private pension systems become a thing of the past. Those private pension programs suffered from investments in private companies that can have shifting stock values and outsourcing of jobs to other countries – more risk and fewer payees equals unsustainable pension program. No surprise the private sector has shed many of those programs, but precisely why Social Security becomes more relevant for most Americans. The private pension systems are precisely the opposite of the Social Security model.

So why the push to try to change retirement programs? Some are in difficulty, especially where there are generous benefits, and fewer people paying in due to cuts in government employees, and at risk investments strategies that have performed poorly. All three are management issues, and the second is a political issue. Bash public employee pensioners, because fewer private entities offer them, seems to be politically popular, but it is a political means to pit people with pensions against those who do not to hide the real issue which is simply money. The investment value of Social Security’s portfolio is huge. Wall Street would love to see that portfolio in the stock market. More investment dollars will drive up stock prices. That seems good, but recall that the repeal of the 1930s vintage banking rules that prohibited banks from investing YOUR savings in the stock market, drove stock prices up fast in the 1990s, but it didn’t turn out so well in 2008. Investing Social Security’s portfolio similarly can be expected to have a similar result. And then, Social Security will really be in trouble and someone in Congress will tell you – I told you so. Maybe the better argument is that all these politicians should keep their fingers out of pension plans.

How Long should the Leadership vision be?

April 29, 2013
Climate, Environment, finance, groundwater, infrastructure, Leadership, management, planning, sustainability, Uncategorized, water sewer management, water supplies
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We do 5, 10 and 20 year plans for infrastructure.  But how long do we expect to this infrastructure to last?  For example, how many roads only last 10 or 20 years?  Most roads only seem to grow with time.  Ancient Roman roads are the basis for many current roads.  We keep adding roads – few are ever abandoned. They simply do not go away.   So a 5, 10 or 20 year planning period makes little sense.

Roads are not the only limit.  The WPA-era water mains are approaching 80 years old, and still providing good service, and our Clean Water Act-era sewer improvements are approaching 40.  Sewer lines are similarly situated.  Many water plants are over 70; we celebrate 100 years on many.  Again, planning for only 20 years makes little sense in the context of the larger length of time.

More interesting, we rarely borrow money to pay for these projects for less than 20, 30 or 40 years.  So our infrastructure outlives our plans and our borrowing.  Often permits are less that the borrowing for infrastructure, which can cause stranded capacity in plants that may never be used.  Miami-Dade County has such a situation – they are not alone.

Let’s look at this in the context of groundwater withdrawals.  There are areas across the US where groundwater levels have fallen. They have fallen because of human activity to pump them for crops and water use.  Colorado has a 100 year management plan in the Denver basin which is basically make the water last 100 years.  Then what?  Texas has shorter plans.  The eastern Carolina drained parts of the Black Creek already, so this is not a theoretical western state issue only.  How do we address this?

Or let’s go back to Miami-Dade County the outer banks of North Carolina, historical downtown Charleston, SC, and many other venues where sea level rise could impact water, sewer, storm water and roadway infrastructure. As we redevelop those area, should plans look at the true life of those assets (100 years) vs. the 20 year plan?

Both issues involve the sustainability of infrastructure systems, which means the ability to adapt them to changing future conditions.  We have known for 10-15 years that stationarity is no longer accepted for future projections.  But we need leadership to move the infrastructure planning to the future changing conditions.

Barriers to Public Sector Leaders? Part 3

April 11, 2013
communciations, finance, infrastructure, Leadership, management, planning, sustainability, Uncategorized, water sewer management
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In the last two blogs we discussed the three issues were associated with risk tolerance in the public sector which stifles innovation, application of business principles to public sector efforts, and the lack of vision and understanding of consequences.  In this blog we will explore the third issue – the lack of vision.  This is perhaps the hardest of the three parameters discussed.  One would think that applying private sector business principles would help with the vision process, but it does not because the terms for elected officials are comparatively short term.  In addition, our demands on the private sector are short term profits which has hurt the long-term vision of both public and private sectors.

What is a vision?  It is supposed to be a concept of where you want your organization to be in a longer-term future.  It is an agent for change and those developing the vision are outlining the change they want in the organization.  What services are to be provided, what water sources are to be used, energy self sufficiency, wastewater reuse opportunities, incorporation of storm water to sources waters, etc.? All possible ideas, but they only scratch the surface of the universe of opportunities that might exist.  The key is change, which normally requires thinking outside the proverbial box.  Change rarely comes from doing the same thing over and over.  Change requires innovation. So by its very nature, the status quo is not leadership because no change is required.  Managers who “don’t rock the boat” may be excellent managers, but they are not leaders.  Elected officials who’s mantra is not to raise rates, are not leaders either.

Your customers often are a great source for defining vision.  They will tell you what services they want.  I recall a meeting went to where I was talking about leadership to some elected officials.  The public was present in force.  I brought up the concept of developing a vision.  The public was encouraged.   They spoke out about ideas.  All very good.  Then one of the Board members informed everyone that vision statements were the job of the attorney and he would just write one up.  That did not go over nearly as well as that Board member had hoped.  He was abdicating his roles in overseeing the utility as well as any leadership role he might have hoped to have.  The public knew what they wanted, and it was clearly change, something the Board member clearly did not want.

So the question is “are we that afraid of change that we cannot tolerate leadership?” Are managers and elected officials so concerned about change that they actively suppress it despite public outcry?  I often raise the following question when talking to elected officials – how many statues have been raised for politicians who did not raise rates?  We’ll talk about that next time…