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Responsibility

Marketing and the Utility

June 9, 2015
local government, Marketing water, politics, public relations, Responsibility, sanitary sewer, Uncategorized
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So I am training a group of public officials about utilities. Many have limited experience; others much more so. The interesting question that came up is how these officials should communicate with their customers. Interesting question and one that often receives little thoughts. So I thought their thoughts might be enlightening, keeping in mind that I have abbreviated some of them, and this was a discussion. Here are the thoughts they provided, in no particular order:

“Not the newspaper, most residents do not receive the newspaper anymore”

“Who are our customers and how do they communicate? Until you can answer that, you will not reach them. Ask them.”

“If 37% percent of your customers are direct deposit – should we send them direct mailings?” Response: “Yes! They will not think it is a bill and they might read it.”

“Most people discard bill stuffers without reading them . That wastes a lot of time and money.”

“We have a Facebook page, but we don’t just talk utilities. We talk about things that might interst them like strawberry shortcake recipes and current community events.”

“We use twitter and Facebook”

“We have a website, but we found the website was useless if we did not keep it current constantly. It takes effort and someone with that responsibility to accomplish that.”

“We use Facebook to get people interested, then use it to direct them to our website.”

“Every utility should have a public relations person that deals with media, and can brand your utility to the public.”

“Understand your demographics and then figure out how they communicate – phone, twitter, Facebook, on line, etc. Maybe all of these, interconnected. You can find local people who will do this for your professionally. The results are worth the investment.”

“Radio is useless, just like the paper. Avoid the television because they really only want to report the bad stuff.”

“Blogs tied to websites and Facebook are helpful.”

“Many venues are needed – make the message the same.”

“Ask the young people in your community – they will know how the reach the residents.”

“Don’t focus just on utility issues, add content on topics they might be interested in.”

“Public relations is as important as providing good service.   It is part of your job.”

“worth every dollar spent.”

Interesting isn’t it. I wonder if the mainstream media will take note? And I wonder how many utilities do not have these things and will consider it as a part of the coming budget cycle?

Infrastructure is Broken

March 2, 2015
Economic Bubbles, economy, engineering, infrastructure, innovation, JObs, Leadership, local government, management, planning, politics, Responsibility, sustainability, utilities, Water Funding, What could possibly go wrong?
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ASCE came out with more bad news about infrastructure.  60 Minutes did a piece about deterioration of bridges. The magazine American City and County has published a couple articles about the risks of aging infrastructure.  Asset management is practiced by few governments, and even fewer small ones.  The public doesn’t want to foot the bill and lobbyists want taxes cut further.  Where does it end?

The infrastructure crisis is a political and business leadership crisis.  Or vacuum.  The economy of America and much of the developed world was built on advanced (for their time) infrastructure systems constructed by governments with a vision to the future.  Some of this infrastructure was repurposed (federal interstate system for example), but much of it has addressed critical issues that hampered our development.  For example, the lack of water severely inhibits many third world nations.  Even when they have water, it is unsafe to drink or use.  In America, at the turn of the 20th century 1:100,000 people DIED each summer from typhoid.  Just typhoid, not all the other waterborne disease options.  Many more were sick.  And the population was much smaller.  Talk about reduced productivity.  Now we have advanced water systems, disinfection practices that protect people and pipes, and few event get sick from contaminated water.  Those that do, become headlines.  You don’t want to be a headline.  Productivity is up.  But we expect good water and can’t see the pipes.

Sewer is an even better example.  People just don’t want to know.  Flush and it’s gone.  But the equipment, treatment and materials may be even more complex than the water system.  But few people get sick from sewage because of the systems we have built.  Now think about third world examples.  Or conditions you have seen in documentaries, the news or movies.  Being in sewage is not a great place to be.  Even the manhole thriving cockroaches agree..

Stormwater is probably the laggard here, in part because changes in development patterns have overwhelmed the old systems.  Miami Beach experienced this when redevelopment replaced small houses on permeable lots with large housed with mostly impermeable property.  Oops.  Meanwhile road and bridges have received a lot of funding – with much to do (see bridge that collapsed on I-75 in Cincinnati a few weeks back).  Most states fund transportation at a magnitude more than water and sewer.

What is the problem?  Local officials do not convey an understanding of these complex system to the public very well.  In part this may be because understanding the maintenance needs is difficult and highly variable.  And many do not fully comprehend the assets they have, their condition, life expectancy or technological needs.  No one knows when things will fails, so maintenance or replacement of some equipment or pipeline is always the thing cut in the budget, with no real understanding of the consequences.

The public does not see the asset, assumes it will have a long life, so is unconcerned until they are affected.  Then it is personal.  The public does not understood the impact or value that these assets have to society – they tend to be personal focused, not societal.  That is a leadership issue.  That leadership starts with vision and communication from those that understand the issue to the elected officials that need to advocate for their infrastructure.  Elected officials need to take ownership of infrastructure.  It is like your house – you need to upgrade and protect it constantly.  You do not let that roof leak keep leaking!  Elected officials that do not invest in infrastructure, are letting the roof leak.  Making is someone else’s problem for political expediency is not leadership.

Despite the infrastructure crisis, the good news is that construction of piping is increasing – both new and replacement.  Every so many months, the magazine Utility Contractor will note current trends and pipe seems to be going up.  That’s good but there is a long way to go.  Better news – the construction of buildings is increasing.  That could lead to more revenues.  In Florida, all of a sudden finding experienced construction workers is a problem.  Things are definitely better economically, but are we taking advantage to improve the local infrastructure, or is you economy simply an infrastructure disruption away from another fault?

Remembering Heros

February 19, 2015
Heros, Leadership, Responsibility, WW2
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Every winter, the Collings Foundation flies into southeast Florida with a restored B-17 Flying Fortress and a B-24 Liberator. These vintage airplanes are a major part of why the Allies won World War 2 and it is fantastic that people have an opportunity to see a flying 70 year old airplane.  I took a ride on this B17 several years back.  My Dad was on one for 25 missions in 1943.  I couldn’t get him on with me.  He figured that was enough even when I offered to pay the $350 for the 45 minute ride (well worth it!!).  Even reminding him that there would be no flak and no bullets streaming through the plane was not enough. But when I got on, there were 11 more guys my Dad’s age taking yet another ride in the B17.  Interesting if you flew in a B17, that’s what you wanted to ride – and I am sure vice versa with the B24.  The stories were great.  My Dad’s tour of the plane (on the ground) was enlightening.  Too bad these guys are leaving us.  I encouraged my students to take a look when the planes were next to campus.  I took a few hours before class to wander about.  Another year I will jump back on the B17.  If you get the opportunity, I encourage you all to do the same.

In the meantime, the question that we need to think about as we remember these men and women is where are these folks today?  Millions of men and women worked hard, fought and many died trying to benefit society, not themselves.  They were looking out for the world, their friends and families.  They were looking out for a way of life for the future.  Leadership requires a prospective view, a vision for tomorrow and a willingness to sacrifice and do what is needed to achieve that vision with the intent of providing betterment for all.  So as we look forward in 2015, this seems to be an obvious issue to explore.  I look forward to your views.

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B17 Flying Fortress

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B24 LIberator

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Mustang Fighter – this plane flies as well.  very cool to see.

Musings to Start February

February 15, 2015
communciations, engineering, Environment, groundwater, infrastructure, Leadership, Responsibility
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It’s February already!  Where has the year gone?  My apologies for a January without posts.  Things have been busy here and well, blogging got put on the back burner for me with the new semester starting and a new class to design.  But interesting kernels from January:

The World is Trying to Kill You – Dr. Neil deGrasse Tyson

If you have a 20% failure rate, does that make a speculative technology a waste of time?  Conversely if your success is 20% is it successful?   I think no and no.

Have you noticed that February is the month we have been getting the worst winter weather in the Midwest and northeast? Not December or January?  I used to shovel snow all January and wait for the February respite.

Killer whales are now a protected species.  What does that say about the killer whales as SeaWorld?

There is a honeybee crisis.  No really, a real one.  Not the Jerry Seinfeld movie.  But the lesson is the same.  No bees, no food.  We need to figure out how we are killing them.  No doubt when we find out it will come back on pesticides, herbicides, monocultures, some combination of the above.  Not a good thing for farming.

The bison are under attack again in Montana.  Maybe Mother Nature is trying to tell us something – buffalo want to roam to their winter grazing fields.   And no brucelliosis, the issue rancher bring up as to why the bison are bad, has still NEVER been transmitted from bison to cattle.  Bison are way better on the land since there hooves are much large and they do not compact the ground as much.  But they are not as stupid as cattle.  They know they can walk thought a barbed wire fence.  They are bison afterall!

A Utah rancher shot and killed Echo, the female wolf that made it to the Grand Canyon last summer and became a national story.  He thought she was a coyote.  Um, I think wolves are a little bit bigger than coyotes.  We have a man with a gun who can’t tell what he’s shooting.  What could possibly go wrong with that?

Then there is the bear hunt in Florida because people move closer to the woods and cannot figure out how to secure their garbage of close their garage doors.  Bears get killed.  People…..

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Miami Beach installed $40 million dollars in pumps last summer, with an expected $300 million for.  The nearshore nutrient concentrations increased dramatically (a factor of six), which could adversely impact beach quality, fishing and reefs.  Unintended consequences, but an issue was brought up as a potential concern.

Education Problem of our own Making?

December 29, 2014
economy, Education, engineering, graduation, growth, Leadership, politics, Responsibility, Student Achievement, Students, sustainability, What could possibly go wrong?
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Orange County, FL has become the second school district I know of that has decide that giving students a zero on a assignment causes the kids to lose hope of passing so they just quit.  To address this problem, the worst grade you can give them is a 50 instead of a zero.  That way they can recover from one missed assignment.  Huh?!?!  No, you read this right.  The school superintendent was quoted in the SunSentinel as saying that only 43 percent of the students who received a 50 actually recovered to pass the class with a D.  I have several questions.  First, how does this policy teach these kids any responsibility?  For the kids that do their work, how is that fair?  What message does this policy send to the kids?  Be a lazy dumbass and do nothing and you can still pass?  That reinforces the concept of entitlement which we all agree is a problem in society that we need to overcome.  Finally, if one missed assignment causes the kids to fail, why are there not more assignments so missing one is not fatal?  That is what happens with my students (who still get a zero for not doing an assignment).

It would seem that such a policy is not based on an educational goal but more like a political one to improve school perception.  That is as bad an idea as having kids beg for money for uniforms and class trips etc.  Kids do not sell anything they just beg for money.  So are we teaching them that begging and panhandling is an acceptable career?  Seriously what impression does that provide to these young minds?  How does either experience prepare kids for the real world where doing nothing gets you fired, not rewarded, and begging for money vs actually work is also not rewarded.

Once upon a time, education was the purview of the wealthy.  American businesses argued that a basic education was needed to train a workforce for industrial jobs.    The American public education system was created with this in mind- to train the next generation of workers.  With education came great social and economic advancement.  We clearly are deviating from that goal.  Students need a good foundation in math, writing and reading (in English!), civics and science so they understand social responsibility, can communicate, understand how things work the world and can solve complex problems.  They do not need pseudo-science or politicized science, but real science.  Business understands this.  But where is the business community on job training in schools?  It would seem the business community has abdicated their responsibility to local districts who are trying to meet political goals, not economic goals.  Why are we not using all the extensive testing to figure out the strengths of students and encourage them to play to those strengths? Not every kid can go to college, or should, but that does not mean they cannot achieve or be successful.  They may need different training to hone their strengths.

Back in the day my Dad told me that as the education system was developed in his hometown of Detroit, students were given aptitude tests.  I was also.  The kids were divided up based on skills and aptitude.  Students were even sent to different schools as they got older that tailored programs to their interests and skills set.  Kids that the schools system felt had the aptitude to succeed in college had different courses than students that were less academically included but perhaps more mechanical, more artisan, more labor, clerical, etc.  Different kids go training to help them succeed with their skills.  Less academic did not mean less inclined to succeed or be successful. just differently.  And they had a better chance to be successful.  We seem to miss that today.

Today we have parents insisting that everyone be treated the same, and that no kid gets left behind.  But putting kids with different aptitudes, maturity, and academic inclinations in one class is destined to either fail for all, or fail for everyone but the average.  Such a protocol begets policies like Orange (and Broward) County that direct teachers to adjust grades so “Little Johnny” doesn’t feel bad.  Extensive college prep testing and disconnected learning discourage the less academic kids, leading to dropping out, or other behaviors.  Such policies and expectations by parent and political leaders are not helpful for building an educated society.  Instead we need to search further into the root causes.  Are there too few assignments?  Are they too disconnected for students to appreciate?  Should we sort out strengths and treat different students differently to discourage disinterest?  How do we assess their strengths and design programs to help students succeed.   And who takes responsibility for these kids?  And perhaps we should revisit some of the lessons learned from the early years of the industrial development (1930s) to figure out what they did well, and see how policies today frustrate those goals.  Maybe the way forward is rooted in the past.

A GRIM FISCAL FAIRY TALE

October 17, 2014
Banking industry, Congress, debt funding, Economic Bubbles, economy, finance, funding, income disparity, Insurance, Leadership, planning, politics, Responsibility, retirement, Revenues, Risk, sustainability, Uncategorized
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Once upon a time, people worked until they died.  But the longer people lived, the more infirmities impacted older people, and the concept of stopping work came into play.  So these folks labored all their lives, put some money away in a safe place, like a bank, where someone else would watch over an manage their money until they needed it.  Then one day, they found out that the banks have gambled and lost on real estate, and their money was gone.  There was no government to bail anyone out.  So the people had to try to go back to work, became beggars and destitute or died.  The government thought this was unfair to those older folks who had worked so hard, but through absolutely no fault of their own, had lost everything.  So the government decided that it would “tax” people a portion of their income, and put it into a retirement system.  People could retire at 65, and of course they were only expected to live another r3 or 4 years.  There were 16 people laying in for every person taking out.  And the government told the banks that they could not gamble with people’s hard earned savings, passed legislation and created an insurance pool to backstop losses by criminal or unethical activity.  All was good and the people were happy.

As time went on some things changed.  For one, people lived more than 3 or 4 years.  The population retirees increased, and the ratio dropped to 1:10 and then to 1:6 ration of retirees:workers, but the “tax” did not go up, but investments were made that increased the pool.  It was called good management.  The government also encouraged people to save money by deferring taxes, which they did, and the banks used it to make money.  All good as long as the investors gambled well.  They gambled so well, they were able to talk the government into undoing the anti-gambling rules from the past, so their pool to invest was twice as much.  And the markets grew and the portfolios grew and the people were happy.

And then it came to pass that the banks again gambled on real estates, and created complicated investment tools to hide the risk, but the risk was exposed and half the money was gone overnight.  And the retired were wondering about jobs again.  But there were no jobs.  And the employed now had fewer jobs.  So less people paid into the system.  And the people were sad.  And mad because they thought they were being protected from the gambling of the past.  They did not understand.

And the government could supply no answers because they had changed the rules and they knew the people would be unhappy, so the government felt there was no choice, so they borrowed money, and bailed out the banks.  And some people were happy.  And some people were concerned about all that debt.  And some people wondered why it was that history could repeat itself and put society at risk.  And some people asked why people who did bad things were not punished.

And none of these questions has been answered.  Good thing that these fairy tales don’t depict anything real right?

Random Thoughts on Income from the newspaper.

October 8, 2014
Banking industry, Detroit, economy, Education, finance, income disparity, infrastructure, JObs, Leadership, local government, management, politics, Responsibility, Uncategorized, Wages
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Since 2010, the Federal Reserve Bank indicates that the wealthiest 10 percent of American have seen their income rise by 2%.  The Bottom 20% have seen their income DECLINE by 4 percent and the average for all families DECLINED 5%.  That tells me that the majority in the middle income brackets, decreased at a rate greater than the bottom 20%.  In other words more of us are moving down in economic standing, not up.  To make matters worse, the Federal Reserve Bank indicates that the top 3% actually had their incomes increase by 27.7% since 2010, meaning that the upper middle class people are falling back with the rest of us.  Quite the opposite of what our parents had hope for us.

Wages have not rebounded as many people had to take pay cuts or find new a career at lesser pay, which places all kinds of issues at risk – retirement age, retirement goals, college for the kids, investments, home ownership, etc.  All play a role in the economy of the country.  People spend less on eating out, new clothes and other things – generally more frugal, which means less demand for goods and services, and therefore less employment.  A vicious cycle that doesn’t help the economy.  We have already started to see real estate cool off as wages have not rebounded and people figure it is time to defer or get out.  Places like Miami and Las Vegas may remain warmer than say Cleveland or Detroit, but the Miami market has cooled in the past year.

Real losses in purchasing power goes back to the 1980s form the lower half of earners in the US.  And we argue about the minimum wage – which is the very bottom of the pile.  The failed concept of the Great Society was to try to get enough money in everyone’s pocket that the total purchasing power of the population would increase.  Did not work out that way, but the concept of increasing purchasing power of all has appeal.  Inflation goes up.  Purchasing power goes down.  The economy will stagnate if wages for the bottom 90% do not increase.  That makes official less likely to raise water and sewer rates to pay for those needed infrastructure upgrades.  Which will put more assets at risk of failure and stress operations budgets further.

Pyramid Schemes and Pension Plans

October 4, 2014
borrowing for infrastructure, debt funding, economy, innovation, Leadership, local government, planning, politics, Responsibility, Revenues, sanitary sewer, sustainability, Uncategorized, utilities, Water Funding
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A Ponzi scheme is an illegal program whereby investors are promised big return son investments in a short period of time, and where the underlying basis for this return is deliberately mis-stated.  We continually find people who perpetrate Ponzi schemes and when they are finally caught, they get put in jail.  For those unsure, a Ponzi scheme is defined as a scheme where the scheme operator says they will pay a high return to its investors from their original investment, but instead uses money from new capital paid to the operator by new investors rather than from profit earned by the operator.  Hence it is a flow through of money from people putting money in to people who are getting out.  To get returns on the investments for the earlier investors, the pool of new people must increase with time, so that there are always more people paying in that there were previously.  It that does not occur, then we have a problem.

What is a retirement system?  A retirement system is a form of deferred compensation used to attract and keep workers, by deferring a portion of their pay 10, 20 30 or 40 years from now.  It is part of the compensation to the employee.  With a retirement system, people pay into a program, where their money is invested.  A retirement system tends to rely on the fact that the number of people paying in increases exponentially so that the actual invested dollars are never touched, instead the new proceeds exceed the monies paid out.  For a pension, plan it assumes your invested dollars remain invested and profitable, and that the revenues from the new people in the system, exceed the monies paid to retirees.  What is the difference?  Well, the retirement system actually supposedly has assets while Ponzi scheme does not.  Otherwise, the systems work similarly – dollars paid in generally go out to others, and there is an assumption that the number or payees increases exponentially (a percentage every year).

So what happens to a pension plan when the number of employees decreases from 6.7 million to 4.4 million over 40 years?  Would you expect there to be a pension plan problem?  And if so why?  And who is at fault?  That is exactly what has happened to federal government employees since 1967.  And many states have seen reductions in the last 20 years as well.  So it is any wonder why these pension systems might be at risk?  The push to privatize services ensures that the basic assumption that the number of payees in a pension plan increases exponentially will be violated, which makes the pension plan vulnerable.  And ho is at fault.  I would suggest the people pushing privatization, who look only at short term consequences as opposed to long-term impacts.  Perhaps this needs to be part of any such discussion going forward.  Just a thought…

Post Recession Good News

September 29, 2014
finance, funding, Leadership, local government, management, planning, politics, Responsibility, Revenues, sanitary sewer, Uncategorized, utilities, Water Funding
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The National League of Cities reports that nearly ¾ of municipalities are better off in2013 than they were in 2012.  In Broward County, over half the cities actually have more revenue in 2013 than they did in 2006.  Property values are up in 72% of Counties, and real estate activity was high in 2012 and 2013, although it has slowed in 2014.   Nearly 60% of the municipalities were not projected deferral of capital improvements, although 1/3 expect to reduce maintenance and 40% to defer capital.  The biggest challenge cities identified was street condition (23%, followed by sewer, stormwater and water although these were all under 16% which is a bit disappointing given the condition of much of this infrastructure).  Money remained their biggest challenge.  Total local government budgets are $3 trillion, and the bond market Is a robust $3.7 trillion.  New construction for local water, sewer and stormwater infrastructure is expected to reach $750 billion in 2014, with 3.2 and 4.8 billion respectively for water and sanitary sewer.

Pensions are the biggest liability and one that is critical for many local entities with their own pension plans (like Detroit).  Many others have or will migrate to a state plan, or were already part of a state plan.  Having a large pool off employees decreases risk to the pension plan and increased revenues (and future outlays).  Pension plans or Ponzi schemes?  Now that is the question….

Responsibility, Failure and the Lack of Funds

September 20, 2014
borrowing for infrastructure, Climate, communciations, Congress, debt funding, Economic Bubbles, economy, funding, growth, infrastructure, innovation, JObs, Leadership, local government, planning, politics, Responsibility, Revenues, Risk, Uncategorized, Water Funding, water sewer management
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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.