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Sea Level Rise may Impact low lying areas faster than we think

February 23, 2013
Climate, communciations, Environment, groundwater, infrastructure, Leadership, Marketing water, planning, power demands, power-water nexus, sanitary sewer, sea level rise, stormwater, sustainability, Tidal flooding, Uncategorized, water sewer management
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One of the major issues involved with climate changes is sea level rise. Florida has experienced 9 inches of sea level rise since 1900. Projections are 2-3 feet by 2100, perhaps more. Modeling done by my students and I at FAU has demonstrated that in low lying areas, sea level rise will also impact groundwater levels, and accelerate inland flooding. The graphs above compare the traditional bathtub model used by most investigators and our adjusted for groundwater level model. You wee added inland areas of flooding which complicated storm water flooding issues much faster than sea level rise might indicate.

What do you believe are the three biggest water challenges in the U.S.?

February 15, 2013
Climate, communciations, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, Uncategorized, water sewer management, water supplies
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This question has been asked a couple times on on-line discussion groups.  It usually results in a short list of answers.  The number one answer is usually getting a handle on failing infrastructure.  The US built fantastic infrastructure systems that allowed our economy to grow and use to be productive, but like all tools and equipment, it degrades, or wears out with time.  In addition, newer infrastructure is more efficient and works better. In many ways we are victims of our own success. People have grown used to the fact that water is abundant, cheap, and safe. Open the tap and here it comes. Flush the toilet and there it goes, without a thought as to what is involved to produce, treat and distribute potable water as well as to collect, treat, and discharge wastewater. Looking to the future, we should take education as one of our challenges.  Our economy and out way of life requires access to high quality water and waste water. So this will continue to be critical.  But utilities have not been proactive in explaining the condition of buried infrastructure in particular, and need more data. The same goes for roadways and many buildings.

Cities are sitting on crumbling systems that have suffered from lack of adequate funding to consistently maintain and upgrade.  In part this is because some believe that clean drinking water is a right instead of a privilege to be paid for. We gladly pay hundreds of dollars per month for cable television and cell phones, but scream at the costs for water delivered to out tap. The discussion usually continues along the lines of utilities are funding at less than half the level needed to meet the 30 year demands while relying on the federal government, which is trying to get out of funding for infrastructure for local utilities. Utilities are a local issue which is some ways makes this easier. Our local leaders to send help with the education (after we educate them), send less money going to the general funds and more retained by utilities.

Perhaps where we have failed is in educating the public. Public agencies are almost always reactive, as opposed to pro-active, which is why we continuously end up in defensive positions and at the lower end of the spending priorities. So we keep deferring needed maintenance. The life cycle analysis concepts used in business would help. A 20 year old truck, pump, backhoe, etc just aren’t cost effective to operate and maintain. We are not very successful at getting this point across.

Money is an issue, and will always be, but the fact that local officials are not stressed about infrastructure is in part because utility personnel are very good at our jobs, minimizing disruptions and keeping the public safe. We are not “squeaky wheels” and we don’t market our product at all. Afterall, is cable or your phone really more valuable that water and sewer?

The Way of the Wolverine

January 30, 2013
Climate, communciations, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, water sewer management
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Last week, the headline in the morning newspaper and on-line news outlets report the most recent suggestions from the House of Representatives to cut the federal budget deficit involves major cuts to domestic programs.  No surprise there.  Among those that are proposed to be cut significantly is infrastructure investments.  Infrastructure is what allows our country to thrive.  Without water, sewer, roads, airports, ports, etc, the economy could not be as robust as it has been, and will not achieve its greatest output.  The fact that our elected leaders don’t see infrastructure investment as a high priority is problematic.  More problematic is that this appears to be an ongoing position of some in Congress, meaning there is likely more of this view at other levels of government.  But it ignores that facts.  This country has always grown after investments in infrastructure, not before.  The federal government has been involved in infrastructure since the beginning of the country, and actually accelerated its involvement after WWII, including water and wastewater upgrades starting immediately after WWII.  The monies to improve water and sewer systems increased after the passage of the Clean Water and Safe Drinking Water Acts.  Recall that President Nixon, a conservative republican, sponsored the new federalism concept that greatly expanded the amount of federal block grants to local governments. In part this was due to the perceived need to help local governments catch up with improvements needed in connection with new federal rules, like the Clean Water Act and Safe Drinking Water act.  The high point in federal aid for infrastructure.

The trend was reversed in mid-1980s, when most of the grant programs were converted to loan programs, with the idea that the federal government would wean the utility industry off federal entitlements within 30 years.  The current concern over budget deficits and taxes further weakens the prospects of large scale federal flow –throughs to assist local governments with infrastructure upgrades, water and sewer included.  Given that the current water and sewer needs exceed over $1 billion in the next 30 years, and current funding levels are expected to derive half that amount, the infrastructure needs gaps will continue to widen, with potentially more common failures in piping systems, and impacts to local economies.  It is a viscous circle that needs to end, and one that can only have negative long-term effects for us.   In part the issue is political will, but also the failure of non-elected executives to fully grasp the issue, and adopting the way of the wolverine – to fight and scrap, climb, scramble and investigate new means to defend what is their’s.  The analogy is that utility personnel, and the upper management they report to, need to take “ownership” of their utilities infrastructure, and urge the decision-makers to do the same.  We need to defend our infrastructure, and we have the means to do it.  The time may be right to push this issue locally.  The economy is looking up.  Property values are starting to climb, and commercial activity is slowly creeping back.  The result will be more tax money available to general funds, many of which have been living large off the utility system.  Seems like this would be a good time to reverse that trend.

The failure to do so creates difficulties, not unlike those faced by wolverines today.  The wolverine suffers from effects placed on it by others.  There are only 500-1000 in the United States as opposed to the many that were here before hunting, farming and other development.  A second “way of the wolverine” is decline because they cannot fix the problems caused by others.  Unlike the wolverine, we have the power to prevent our decline.  We need to do so.

Energy Leadership in the Water Industry

January 23, 2013
Climate, Environment, groundwater, infrastructure, Leadership, management, planning, power demands, power-water nexus, sustainability
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Water and energy systems constitute the foundation for modern civilization around the world.  Without water, societies never get started, and without power, it is difficult for economies to grow.  At the same time, modern power generating equipment needs water for cooling and processes, creating an interdependency between water and energy infrastructure and potential for conflict over water resources. As a result, the Energy-Water Nexus is a topic of great interest and discussion among federal policy-making and regulatory entities; private and public sector water and electric utilities; state and local governments, and many supporting technical, educational, professional associations. At the nexus of water and energy exists a host of societal issues, policy and regulatory debates, environmental concerns (local and global), technological challenges, and economic impacts that must be balanced or optimized to permit ongoing economic development for all (NETL, 2008).

Estimates indicate that from 1950 to 1980, demands for water increased steadily across all sectors, with 1980 being the peak water use year.  However, since 1980, withdrawals declined.  Despite the overall decline, the built environment demands continued increase. This of course ignore the natural environment demands, which may play a large part in the economic stability of some regions.  Unlike water demands, the total US power consumption continues to climb as a result of population increases.  The US Census Bureau (2004) projects that the national population will increase from 282 million people in 2000 to 420 million by 2050.  The Energy Information Administration (EIA) project, assuming the latest Census Bureau projections in its reference case, the U.S. population to grow by about 70 million in the next 25 years and electricity demand to grow by approximately 50 percent (EIA, 2006). More people, means more power.  More power means more water for cooling unless all new power is solar or wind, something highly unlikely.  On the current track, which suggests and expansion of fossil fuel plants, the power sector may be highly vulnerable to changes in water resources, especially those that are already occurring, and are likely to intensify, as result of climatic changes (Vorosmarty et al 2000, Bates et al 2008, Dai 2010, NETL 2010d).

Adding to the challenge is that planning by drinking water, wastewater, and electric utilities occurs separately and is not integrated. In the US, the energy sector uses 39% of the water withdrawals on an annual basis for cooling, immediately behind the 40% used by agriculture (Lisk et al, 2012; GAO, 2012).  Urban demands (12.6% of water use – Sanders and Webber, 2012) require clean water supplies to protect public health.  Both sectors need to manage supplies for changes in demands throughout the year, but because they are planned for and managed separately, their production and use are often at the expense of the environment (NREL, 2011). This separate planning occurs for a multitude of reasons, including tradition, regulatory limitations, ease, location, limited organizational resources, governance structure, and mandated requirements. However, as demands for limited water resources continue to grow among all sectors, and as pressures on financial resources increase, there are benefits and synergies that can be realized from integrated planning for both water and electric utilities and for their respective stakeholders and communities. The link between energy and water is important – water efficiency can provide a large savings for consumers and the utility.  Reduced energy consumptions benefits the consumer – but should always be considered as one of the first steps (Gould, 2011).  As a result, there is a need to move toward long-term, integrated processes, in which these resources are recognized as all being interconnected (NREL, 2011).  Only then can the challenges to fully to optimize management of water resources for all purposes be identified (Scanlon et al 2005).

The lack of planning creates the situation where competition for water between agriculture, power and urban uses will reach a tipping point (or beyond in many basins) as an expected increase in thermoelectric capacity by electric utilities, and an increasing prevalence of droughts could induce possible water shortages.  By 2025, Ciferno (2009) suggests the most vulnerable areas for water shortages are fast growing areas:  Charlotte, NC, Chicago, IL, Queens, NY, Atlanta, GA, Dallas, TX; Houston, TX, San Antonio, TX, and San Francisco.  Immediately behind these areas are Denver, CO; Las Vegas, NV; St Paul MN, and Portland OR (Ciferno,2009). Hightower (2009) notes that virtually all the states west of the Mississippi and many southeastern states will experience regional or statewide water shortages in the coming decade (2010-2020).  The South and the Southwest are particularly vulnerable (Glassman, et al, 2011) because they rely on air conditioning to provide a comfortable environment, which requires more power for a growing population, requiring more water for cooling power plants.

These projections come with recent experience that is likely to foretell the future.  The south, Texas and parts of the west have had repeated drought periods in recent history.  During the summer and fall of 2007, a serious drought affected the southeastern United States.  River flows decreased, and water levels in lakes and reservoirs dropped. In some cases, water levels were so low that power production at some power plants had to be stopped or reduced (Kimmel and Veil, 2009). The Tennessee Valley Authority (TVA) Gallatin Fossil Plant is not permitted to discharge water used for cooling back into the Cumberland River due to thermal pollution (water > 90 F) (WSMV Nashville 2007; Kimmel and Veil, 2009; NETL 2009c).  Nuclear and coal-fired plants within the TVA system were forced to shut down some reactors (e.g., the Browns Ferry facility in August 2007) and curtail operations at others. This problem has not been limited to the 2007 drought in the southeastern United States. A similar situation occurred in August 2006 along the Mississippi River (Exelon Quad Cities Illinois plant).  Other plants in Illinois and some in Minnesota were also affected (Union of Concerned Scientists 2007). The production of gas from oil shale and biofuels has exacerbated the issues in the Plains states (Kansas, Oklahoma, Texas), Upper Rocky Mountains, and the Ohio River Valley (Hightower, 2009; Kimmel and Veil, 2009).  DOE (2006) specifically identifies where new power plants have been opposed because of potential negative impacts on water supplies (Tucson Citizen, 2002; Reno-Gazette Journal, 2005; U.S. Water News Online, 2002 and 2003; Curlee, 2003). Recent droughts and emerging limitations of water resources have many states, including Texas, South Dakota, Wisconsin, and Tennessee, scrambling to develop water use priorities for different water use sectors (Clean Air Task Force, 2004a; Milwaukee Journal Sentinel, 2005; GAO, 2003; Curlee, 2003; Hoffman, 2004; U.S. Water News Online, 2003)

So what is currently happening?  Current legislation  is mostly silent on the power-water nexus.  This is not to say that little is being done. A number of federal agencies are actively involved with the power-water nexus, including DOE, via NETL, and NREL, NOAA, USEPA via water Wise and Energy Star, BLM though management of land and water resources in the west, USDA and Department of the Interior/USGS which inventories water supplies.  However, DOE (2006) noted that collaboration on energy and water resource planning is needed among federal, regional, and state agencies as well as with industry and other stakeholders.  GAO (2012a) notes that the growth in water and energy demands is occurring at a time when the nation’s supplies are stressed by a growing population, a variety of new and changing uses, and environmental challenges such as climate change, but none of the involved agencies consistently or strategically collaborate on to ensure a harmonized approach to energy and water resource planning.

Effective integrated energy and water policy planning will require identifying the individual and cumulative impacts that power plants have on water resources and the vulnerabilities of specific power plants to changes in water resources (Wilkinson 2007, Scott and Pasqualetti 2010;Stillwell et al 2011; Kenney and Wilkinson 2012). From a systems perspective, a sustainable society is one that has in place the institutional, social and informational mechanisms to keep in check the feedback loops that cause exponential population growth and natural capital depletion.  A sustainable world is not a rigid one, where population or productivity is held constant.  Yet sustainability does require rules, laws and social constraints that are recognized and adhered to by all (Meadows, 2005).   Integrated planning implies removing silos, working collaboratively, and using resources wisely. It implies using the combined intelligence of multiple parties in the planning and fulfillment of goals. It implies linking a vision, priorities, people, and institutions into a flexible system of evaluation and decision-making.  In other words, leadership.

Details on refrences available

Outlook for Utilities is Up, but Leadership needed for Infrastructure Investments

January 13, 2013
communciations, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, water sewer management, water supplies
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The magazine Utility Contractor suggests that 2013 may be much better than 2012 from a utility construction perspective.  In Fact they suggest a 13% increase in utility construction, although the bulk of that is in the power industry, not the water industry.  Their projections are for water utility infrastructure spending to remain roughly constant from 2012, a slight uptick from the recession years.  At the same time, the US water infrastructure bill was suggested by Public Works magazine to exceed $1 trillion over the next 30 years, requiring over $30 billion to be spend annually on upgrades.  This is more than double their estimates of current funding..  Many of these upgrades are pipe.  Much of the piping infrastructure in America is over 50 years old, and the condition may be unclear (unless you dig it up, you don’t know much).  But piping projects are hard to fund, because no one sees the pipe, only the failures.  As time goes on, the condition continues to deteriorate.

Much of the reason that water utility infrastructure is not expected to increase is that revenues are not expected to climb significantly to allow for the expansion of capital funding despite historically low borrowing rates and lowered costs of construction.  The reason:  many public sector utilities, which accounts for many of the larger systems, have been caught in one or more of several traps:  deferring capital to pay current expenses without raising rates, revenue losses from defaults on housing, use of utility fees to overcome ad valorem tax losses in the general fund, or political pressure to reduce rates.  All four cases can be crippling to the utility because it not only removes revenues today, but likely will result in a continuing practice in the future.

The good news in the revenues are rising, and that unemployment is down nationally despite the loss of 276,000 state and local jobs in 2011.  But since governments tend to lag the private sector in recovery, and we now have 34 straight months the private sector adding jobs, governments should start to see improved conditions in 2013.  Salaries are up, revenues are up a little and jobs are being filled, but what does this mean to infrastructure? The question is why the projections are for no increase in spending.  Water and sewer utilities owned by governments, are caught in the middle of the political process which lacks leadership.  These utilities are set up as enterprise funds, whereby revenues are gained from provision of a measurable service.  As a result they are designed to be operated more like a business, than a government.  But if your utility funds are altered through the political process, this can frustrate the efforts to run an efficient and effective business-like organization, which may mean the status quo, which is not investments in infrastructure beyond absolutely essential and emergency measures.  The question is where is the leadership to reverse this trend?  Unfortunately the political leadership focus is on elections, 2 to 4 years out, not the 20 or 30 year life of the utility’s assets.  As a result, short term benefits sacrifice long-term needs.

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If you are a person who wants to be a leader, you also need to think about the long-term impacts of your plans/policies and actions.  How will they be perceived 10 or 20 years out?  How will your decisions impact the course of the organization?  For utilities how has your tenure added value to the utility, whether that value is treatment capacity, public health protection or reliability of the system.  And how is it measure, since monetary value is not the only means to add value. Keep in mind no one remembers the guy who did not raise rates, only the person who did not plan to replace the infrastructure that failed. That’s a legacy leadership issue.  One thing many people do not understand is that while we live in the moment, it is how people view our actions afterwards.  It is why it is so easy to see leadership after the fact, but sometimes very difficult during the event.  The question is, how to we overcome the restrictions caused by the 2008 recession?  That’s where leadership comes to play.

SUSTAINABILITY THROUGHOUT TIME – BUT NOW WHAT?

January 10, 2013
communciations, Environment, finance, groundwater, infrastructure, Leadership, management, Marketing water, planning, sustainability, Uncategorized, water supplies
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I was cruising through Glacier Bay National Park when I wrote this blog.  It was just one of those inspirational momentsl  If you have never seen it, you should, especially as a water professional.  The entire park is a testament to the power of water and the result of changes in climate cycles that affect the hydrologic cycle.  I will post video of the journey separately, but suffice it to say that the inherent beauty of the place is difficult to describe.  Needless to say with a large concentration of glaciers in the area (most retreating), there is copious amounts of water (for now).  The Pacific Glacier has retreated 65 miles, yes MILES, in 300 years in part because of changes in oceanic moisture and evaporation.  The native people, Tlingets, moved and survived based on glacier flows end ebbs.  But that’s not my point.  Seeing this much water leads to an entirely different perspective, one that is helped by Brian Fagan’s book, Elixir which outlines the history of civilizations as they were affected by harnessing of water, or the lack of ability to do so.  Same thing applies to the Tlingets here.

Historically the key was to rely on surface waters where they were consistent, to manage water locally and carefully for the benefit of all, and when surface waters were not consistent enough to be reliable year after year, quanats, shallow wells and other mechanisms were used to extract water from glacial till or adjacent to rivers (riverbank filtration or infiltration galleries in today’s vernacular).  Or people moved or died out. The ancient people did not have the ability to dig too deep, but were creative in means to manage available supplies.

Contrast this to today where over the last 50 years we have been able to extract water from ever expanding, generally deeper sources, but to what end?  Certainly we have “managed “ surface waters, by building dams, diversions and offstream reservoirs.  These supply half the potable water use in the United States and Canada as well as a lot of irrigation.  But groundwater has been an increasing component.  Fagan makes the point that deep groundwater sources are rarely sustainable for any period of time, and that many in the past have recognized this limitation.  But have we?

Maybe not so much.  A couple years ago I was at a conference out west.  The session I was speaking at involved sustainable groundwater, a major issue for AWWA, ASCE, NGWA and the utilities and agricultural folks around the world.  One of the speakers was a geologist with the State of Utah.  Her paper concerned the issues with decreasing groundwater levels in the St. George and Cedar City, areas in southwestern Utah, where population growth is a major issue.  Her point was that despite the State efforts, they had significant drawdowns across the area.  Keep in mind that the USGS (Reilly, et al, 2009) had identified southwestern Utah as one of many areas across the US where long term decreasing groundwater levels.  My paper was a similar issue for Florida, so I stopped partway into my paper and asked her a question:  has any hydrogeologist or engineer trying to permit water in the area ever said the water supply was not sustainable?”  The room got really quiet.  She looked at me and said, “well, no.”  In fact the audience chimed in that they had never heard this from their consultants either.  The discussion was informative and interesting.  Not sure I really finished my presentation because of the discussion.

To be fair, consultants are paid to solve problems, and for water supplies, this means finding groundwater and surface water limited areas like Utah when their clients request it.  So you don’t expect to pay your consultant to find “no water.”  But where does that lead us?  The concept of sustainable yield from confined aquifer systems is based on step drawdown tests.  Ignoring the details, what this constitutes is a series of short term tests of the amount of drawdown that occurs at different pumping levels. AWWA’s manual on Groundwater can give you the details, but the results are short-term and modeling long-term results requires a series of assumptions based on the step drawdown test.  This is that had been submitted in support of permits in Utah (and many other places).  As discussed in the conference session, clearly there is something wrong with this method of modeling and calculation because, well, the results did not match the reality.  The drawdowns increased despite modeling and step drawdown tests showing the demands were sustainable.  Clearly wrong.  Competing interests, the need to cast a wider net, and many other issues are often not considered.  The results play out throughout the world.  Confined aquifers are often not sustainable, a potential problem for much of agriculture in the farm belt of the US.  Are we headed the same direction as ancient people?

The good news is that these same hydrogeologists and engineers have the ability to help solve the sustainability problem.  We need a new definition for “safe yield.”  We need a better means to estimate leakance in aquifers.  A project I did with injection wells indicated that leakance was overestimated by a factor of 1000 to 10,000, which would drastically alter the results of any model.  More work needs to be undertaken here.  The overdraw of confined groundwater is a potential long-term catastrophe waiting to happen.  And the consequences are significant.  The question is can we adapt?

But when we start to look at resource limitations, who stands up and says, this type of withdrawal is not the right answer.  We need another one.  Where is that leadership moment?

Leadership Part 3 Examples?

December 24, 2012
Climate, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, Uncategorized, water sewer management, water supplies
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Leadership Part 3

One of the themes in the prior two posts on leadership was that leaders are defined by a vision, the people who follow the leader and the ability to market the vision.  We often fail on the marketing end, especially in dealing with water and sewer infrastructure issues.  We know the infrastructure is in poor condition and that billions, perhaps trillions are needed to upgrade the system to serve our needs.  But pipes are hidden and parks are far more glamorous, so guess what gets funded?  At least until a failure occurs.

I teach an elected officials class for water/wastewater issues.  The all acknowledge that a failure o f the utility system is a huge issue and the electorate and elected officials are often looking for “the cause” or someone who is responsible.  In other words, someone to fire.  It is every utility director’s nightmare, and a nightmare for many elected officials as well.  Yet a 4 hour outage in a year is a 99.96% success rate.  My students would be raising hell with the dean and president if I failed them for only 99.96% correct answers.  And rightly so.  Why are utilities any different?  Public health sure, but the systems can fail, and the condition that many are in warrants far more attention to potential to fail unless we can market to the public the need to invest.  Yet how many city managers, elected officials and finance director acknowledge any accountability for failures?  The investigation into the Walkerton Ontario failure indicated that the employees who falsified records, the governing body, the water advisory body and other officials all the way to the province had culpability in the failure of the system that made half the town sick and killed a number of residents.  Utility folks need to market the need to protect public health better, to make the public understand.

Marketing is a difficult skill set.  I can tell you sales in not one of my skills.  Common among engineers who tend to be more technical in nature, letting the data guide us.  Even so, we have successes.  Think about the City of Los Angeles.  The only reason large numbers of people can live in LA is the aqueducts that were started back in 1900s by William Mulholland under the guidance of Mayor Fred Eaton.  The vision was to grow LA but the limitation was water supplies.  The aqueducts sparked water wars (think Chinatown, the movie), and developed through the 1930s.  Hetch Hetchy, over 100 miles east, was established as San Francisco’s water supply back in 1913 as well.  The reservoir system continues to supply San Francisco today.  Denver Water acquired and/or constructed reservoirs and tunnels to the west side of the Rockies for water supplies prior to 1940, realizing that sustained growth in the Denver area was not available east of the Rockies. .  Pinellas County and Orange County California started projects to reuse treated wastewater for irrigation of private yards, and aquifer recharge in the 1970s to sustain their supplies.  Sustainability of water supplies, management of water sources including wastewater and stormwater as a part of an integrated program and sustaining the financial and infrastructure condition of the utility are the long-term priorities.  We need to find those visionary projects and people today.

So here’s the assignment.  Let’s find where those leaders are today, and identify what makes them a leader.

Leadership Part 2

December 20, 2012
Climate, communciations, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sea level rise, stormwater, sustainability, Uncategorized, water sewer management, water supplies
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Among the many things I do is work with college seniors as they get ready to graduate and hit the job market.  The changes you use in many of these students over that last year in school is often significant, and in some cases remarkable.  Different students grow differently and the potential starts to appear.  Some gain confidence in their skills and begin to grow into the profession.  Some of these students are likely to make good leaders in the field in the future.  But trying to guess which ones and why it is often a challenge.  However I want them all to have some concept of what leadership is all about.  For many of them, they will end up in the water/wastewater/stormwater field.  They are going to have to deal with tough issues like rebuilding deteriorating infrastructure, sea level rise, climate changes, stressed water supplies, energy demands and a more demanding electorate.  They will recommend increasing water and wastewater fees.  But will they have the skills to encourage decision-makers to move forward with the needs of the system.  You see, that’s where leadership comes into play.  Often it is little things that set things into motion.  Our engineers go into the world with a technical skills et, that ability to learn to solve problems with solutions.  We try to encourage them to be creative.  An assigned reading is “The Cult of the Mouse” by Henry Caroselli, who urges creativity above profits in the workplace.  Mr. Caroselli is right in that it is creativity that allows us to come up with innovative solutions, the ones that change how we live.  It is also where the patents and economic opportunities exist.  America rose to greatness in the 20th century in large part because of automobiles – we figured that out and it made some many things possible.  Computers became common place in the latter part of the century.  We use the technology for both in the water/wastewater/stormwater industry.  In fact they have made us so much more efficient that costs have not climbed as fast as they might have, which is why cable tv is normally more expensive than your water bill.  Which one do you need to live?  My hope is that today’s students figure out energy solutions that will carry us forward as a world leader in the 21st century.  Those alternative energy options, greater efficiency of current technology.  Each will allow the utility industry to improve it’s efficiency further.  The City of Dania Beach built the world’s first LEED Gold water plant.  That took a little vision on the part of the utility director Dominic Orlando.  And a cooperative team of consultants and students.  When we give these projects to young people we can be surprised because they often don’t know that “that’s not the way we do it.”  Well that’s exactly what Mr. Caroselli said.

So we look for leadership.  Creativity, innovation and the “Can-do” mentality are part of leadership, but not all.  There is that ability to set a vision, like Mr. Orlando did in Dania.  There is the ability to convince decision-makers of the wisdom of an idea, as opposed to doing like we always did to make the shareholder happy as Mr. Caroselli noted.   Selling innovation is often the hard part because that’s were the costs are.  But there is more.  Often the selling of a good idea is difficult.  You can be ridicules by the status quo.  Many ideas are just lost in the shuffle because they never receive a voice.

Leadership is often not understood at the time it is occurring.  Ok, maybe we figured this out when Lincoln was President, but if you read accounts of his Presidency, the early years are marked with indecision and backtracking before he got it right.  Most of that is forgotten in lieu of the ultimate results.  Many of the issues we face today need real leadership to create a long-term solution.  The “fiscal cliff” issue is a prime example, as it the long-term need for solutions for social security, Medicare and medical costs in general.  The need to fix the infrastructure that made our economy strong should be among those priorities also.  Remember, we don’t remember the councilman, mayor, legislator. manager, director or President who did not raise taxes or water bills.  They do remember those who solved problems

How to Keep Federal and State Economic Issues from Trickling Down to Local Funding

December 8, 2012
communciations, funding, infrastructure, Leadership, management, Marketing water, planning, water sewer management
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One of the ongoing discussions at all levels of government is the lack of funding for many programs as a result of economic difficulties in 2008.  Economic difficulties are nothing new.  We had economic downturns in late 1970s/early 1980s, 1991-1992, 1999-2000, and 2008-2009 as examples, and we have often incurred the same issues.  Unfortunately it appears to the general public that we make many of the same mistakes over and over.  From a federal level we hear the argument about the need for tax cuts to spur spending in the private sector, while Keynesian economists who suggest greater expenditures by government to pull us out of economic difficulty.  Both arguments have their points, but how opposites can solve the same problem is difficult for the public to see.  Perhaps a little understanding of the economic sector and analogies to our personal lives and the water industry would help us.

From the perspective of an ongoing growing economy, the goal would be to have the consistently increased gross product, growing at a reasonable rate, just as it seems reasonable for our salaries to rise at or above inflation rates and our ability to “bank” water for those growth spurts are common pursuits.  From a national perspective, you know you are doing well when your economy grows just over the rate of population growth.  When it grows a lot faster, economists worry about overheating.  These high growth rates have occurred as recently as 1996-1999 and 2002-2007, but are often associated with economic “bubbles” which means that a specific sector seems to be growing really faster, creating a demand for investments that further drive up the perceived value.  The benefit to utilities and governments for these growth spurts was that revenues generally grew faster than the costs.

 

Of course bubbles are speculative, and at some point investors realize the value is not there and stop investing.  The sector collapses wreaking havoc on the economy, resulting in the economy not growing at a rate exceeding the population growth.  In these cases, the revenues to fund those services people expect, grow slower than population or may even decline as they did in 2008-2009.  Government has not been able to deal with these changes well, but from a personal perspective, these ups and downs are common in peoples’ lives, and we try to deal with them by putting money away in the proverbial “savings for a rainy day.”  Businesses have historically tried to do this as well and utilities try to secure water sources for the same reasons.  However, many governments have not, and it is worth trying to understand why not, the impact it has today and how to resolve the issue going forward.

Two things appear to drive the issue, and they are related to the two schools of thoughts on economics.  First there is a tendency to spend at the level of your revenues.  People, companies and governments all do this.  So in good times, our expenses often rise to match revenues, partly for catch-up purposes, but partly simply because there is more disposable income.  When revenues greatly exceed expenditures, there can be a tendency by utilities and governments to reduce their revenues by cutting rates reducing taxes and the proverbial thought that “people can better manage money than government.” We saw this in 2001 after the federal government finally balanced the budget and started creating surpluses (that could have been used to pay off some of the accumulated debt, but that’s an entirely different story).  Many states saw the same phenomenon (Florida is an excellent example).  However this thought process is akin to a person who goes to his or her boss and asks them to reduce their salary because they are accumulating too much money.  No person ever does this.  Instead we bank that money for the “rainy” day.   So does it make sense for government to cut their revenues in the surplus times?

Consider that down times follow surplus times.  If revenues are reduced during times of plenty, there is no savings for that “rainy” day.  As a result the current path leads to a tendency to suggest cuts in expenses in down times, but this actually exacerbates the economic problem.  Income decreases and because demand is down, prices fall (basic supply and demand).  As expenses decrease, the economy contracts, which means even more people are affected – it can be a vicious circle.  Economic disruption creates a negative impact on government revenues, sometimes disproportionately.  So by reducing revenues in the surplus times, actually compounds the impact of economic downturns, by eliminating the potential for expenditures from savings, requiring spending from borrowing.

At the federal level, we hear the tax cuts versus more spending argument, but neither addresses what individuals have long known – we need to bank surpluses, not ask for pay cuts or extensively borrow in lean times.  The concept of Keynesians is that government should make up the difference between the private and public sector spending to maintain the level of spending in the total economy, but Keynes did not say that is should all come from borrowing.  There is an implicit assumption that some of this should come from savings, just like it does for individuals.  Heavy borrowing can complicate future revenues by increasing future revenues needs, the other side of the argument.  Trying to make up for revenue shortfalls increasing rates and fees when the funds of people and corporations are limited, compounds their problem.  The economy may grow to make up for those cuts, but that is a speculative argument.  The results of austerity is evident in Spain, Greece, Italy and Ireland where their economies continue to contract, not improve.  That solution clearly does not work.  That’s like asking for a pay cut and reducing your expenses significantly – you don’t live better and those depending on you  don’t either. Cutting revenues while increasing expenses creates the worst of both worlds and makes future concerns even more of a problem.  The federal conundrum is, well, a conundrum.  Not sure what the solutions are there, but there are no easy choices and few of us have much control of input.

But locally ourselves and our utility systems, are completely under our control.  A modification to the paradigm of economic needs or our utilities for the future of our system is needed.  We should rethink our economic vision for the next cycle to mimic what many people attempt to do.  We need to figure out what our revenues need to be, and plan long-term for maintaining a given revenue flow.  There will be up and down times, but we can plan for these.  We should create policies that denote that revenues in excess of expenditures should be banked for that “rainy day.”  We should control the urge to expand expenses in the good times.  We should then use those banked revenues for the future.  Then when the next economic downturn hits, we have banked revenues that can be used to maintain the level of service to our customers.  We should have a policy on this as well.   The benefit to utilities is that the investment in lean times often comes at a reduced cost (demand is down so prices fall), while providing an economic stimulus locally (more jobs).  The City of Dania Beach’s nanofiltration plant had this benefit – 70 cents on the dollar costs, plus a grant.  100 jobs created.  Policies on generating surpluses and spending them in lean times on projects like this would seem to make things easier for everyone in the future, but to follow such a trek requires leadership, policies, and self control within the organization.

The question is where is that leadership coming from to make these decisions and to resist political expediency?

Creating Expectations

November 7, 2012
communciations, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, water sewer management, water supplies
2 Comments

We hear the moniker about getting the most out of your employees and staff.  Business books will talk about accountability, as will politicians, but creating accountability requires a first step on the art of management.  In any organization there needs to be a vision of where the organization wants to be in 5, 10 or 20 years.  Then there needs to be  a team of managers who buy into the vision, and implement it by securing employees who can implement it.  But it does not stop there.  You need to set  expectations.  Sounds, easy, but it is one of the issues professional employees especially complain about.  Assigning work tasks and saying “get it done” is not an expectation.  That’s a command.  Commands work in the military, but not so much in private practice.  The command and control types are notoriously difficult to work with, especially in professional and/or creative environments.  Micro-managers fall into this same mode.  The creative/professionals are intelligent and are looking for freedom to solve problems, usually more effectively that they can be told.  Instead, what needs to be done is to create a set of expectations of what will be accomplished and timelines.  Let the creative types and professionals figure out how. Provide them with the resources they need.  If employees understand the expectations, and are given the ability to accomplish the goals, accomplishing them becomes an end in itself – that becomes the goal and their satisfaction.  But does it work?  Well, yes.  I have been in organizations where the stars aligned to have a small group of manager who created and bought into a vision. We set expectations and let people accomplish them.  Always faster, always less cost, and always effectively.  A degree of recognition follows them. The group was easy to spot because they were accomplishing things (I should note that this does come with the price of jealousy among those who prefer to sit on the sidelines and can create some degree of subterfuge there which requires a strong leader to deal with that problem).  Students work the same way – set expectations of the delivery and allow them to develop the methods to solve the problem.  It is easy to see who the good engineers are, and who perhaps will be less successful.

Even easier are city and county managers, general managers and the like.  New officials come into office and six month later they are complaining that the staff and manager don’t communicate with them.  First response is to give them more information, which compounds the problem.  Still not communicating.  Every manager has one of these stories. The problem is that the new folks never revised the expectations from the past.  As a result everyone operates on the last set of expectations, until new ones are established.  If that never happens, well, the conflict escalates.  Someone has to take the leadership role, which creates a quandary with governing boards like the ones utilities commonly deal with because these folks are generally not educated in the intricacies of the operation of the utility, and rarely have any management experience.  They simply do not understand how to set reasonable expectations, to identify what is important to them and what is not, how to delegate, etc.  Until a sitdown discussion of expectations of both manager and the board is developed, the potential for friction will exist.  Some managers are good at recognizing and making adaptation, but most governing bodies are not.  This is why it is important to develop education programs that will encourage the community, which often has better connections to the governing members than staff.  So as utilities, our infrastructure is vital to the long-term development of our communities and to the public health and productivity of our residents.  So how do we make governing bodies understand the need to invest in utility infrastructure when emergencies are not happening?  Realizing we are all busy, we need to keep in mind that outreach is a key to creating that coalition of leadership in the community to advance the utility agenda.  Again a leadership issue and the need to engage the community, something we all too often forget to do.