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Economics – Are things Really Better?

February 3, 2016
debt funding, decision-making, economy, engineering, finance, infrastructure, Krugman, Leadership, local government, management, planning, politics, public relations, Reserve Funding, reserves, Responsibility, Revenues, sanitary sewer, social vunerability, sustainability, Uncategorized, utilities, Wages
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My cousin  once asked me what I thought about deciding on who to vote for for President might be best done when evaluating how well your 401K or investments did.  Kind of an amusing thought.  In that vein the decisions might be very different than they were.  Clearly your 401k did with with Clinton.  The economy was flat for George W. Bush, and the end of his term was the Great Recession.  Reagan’s first term was flat.  We all know about George H.W. Bush.  Interesting thoughts.  Not so good.  So what about the last 8 years?   But is raises a more interesting issue.  So don’t get me wrong, this blog is not intended to lobby for any candidate (and Obama can’t run), but it is interesting to look at the last 8 years.  They have been difficult.   The economy responded slowly.  Wages did not rebound quickly.  But in comparison to 2008 are we better off?

The question has relevance for utilities because if our customers are better off, that gives us more latitude to do the things we need – build reserves (so we have funds for the next recession), repair/replace infrastructure (because unlike fine wine, it is not improving with age), improve technology (the 1990s are long gone), etc., all things that politicians have suppressed to comport with the challenges faced by constituents who have been un- or under-employed since 2008.

Economist Paul Krugman makes an interesting case in a recent op-ed in the New York times:  (http://krugman.blogs.nytimes.com/2016/01/13/yes-he-did/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body).  Basically he summarizes the figure below which shows that unemployment is back to pre-2008 levels, and income is back to that point.  Some income increase would have been good, but this basically tracks with the Bush and Reagan years for income growth – flat.  So the question now is in comparison to 2008 are we worse off that we were?  And if not, can we convince leaders to move forward to meet our needs?  Can we start funding some of the infrastructure backlog?  Can we modernize?  Can we create “smarter networks?”  Can we adjust incomes to prevent more losses of good employees?  Can we improve/update equipment?  All issues we should contemplate in the coming budget.

Krugman Income percent

 

B17 At Boca Airport

February 1, 2016
B17, Students, Uncategorized, WW2, WWII Bombers
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For those who have never seen WW2 bombers, you should not miss the opportunity. There are very few you can see, and only a couple that fly.  A few vets that flew in them show up as well to tell their stories.  The Collings Foundation flies a B17 and a B24 to 110 cities every year to display the planes.  I go every year – actually flew on the B17 on year.  My Dad flew 25 missions on a B17.  Started in the ball turret.  Got a Purple Heart as a tail gunner.  I encouraged our students to take a look (for a little extra credit).  Ten took me up on it.  One brought her kids and said it was fantastic.  The faculty for our design class (me and Dr. Meeroff also went.  So we are all included below.  Thanks to everyone that went.  Thanks to the Collings Foundation for this opportunity.  See  you new year!

The B17 is back

January 31, 2016
B17, Dad, Heros, Uncategorized, WW2, WWII Bombers
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DSCF0013 (2015_03_08 17_53_48 UTC)

I had the annual pleasure to tour a flying B17, B24 and mustang fighter jet today.  It is absolutely fantastic to see these plane fly.  I took a trip in this B17 about 10 years ago – well worth it.  On the plane were 10 other guys, all 80, all who had flown in a B17 during WWII, just like may Dad.  Their stories were harrowing but great – memories that flooded back like they happened yesterday.  If you have the chance to see these planes that tour the nation courtesy of the Collings Foundation, please make the effort to go see them.  Take the kids – they will love the experience.  It is a great opportunity to tell them about grampa or great grampa flying in one of these planes.  Some of those guys did not come back., which is even more important to remember.  There are always guys out there who flew on these planes – ask them about it.  It is a great learning experience.  And a great lesson to us all.

New Website= New Orientation of Services

January 27, 2016
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My revised website will be up, completed shortly.  The focus is changed a little.  It is more focused on asset management and financial sustainability, two issues that small systems struggle with.  Rate studies, financial planning, asset management tools, are part of the portfolio.  The first two are things I have done for many years, but we have been doing asset tools of late.  We have project ongoing in Dania Beach and on Florida Atlantic University’s campus. The following are what the preliminary results look like for Dania Beach’s downtown.  You can see the assets and the type.  And in the second map – those needing maintenance.  Very cool stuff.  Lots of fertile ground here.

Daina Beach_Condition

Daina Beach_Complete

Limited Groundwater

January 23, 2016
agriculture, Aquifer storage and recovery, California, Colorado, decision-making, direct potable reuse, engineering, Environment, groundwater, infrastructure, innovation, Leadership, management, planning, politics, population growth, resource depletion, respect, Responsibility, Rural Utilities, sustainability, Uncategorized, utilities
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photo 2Over the holidays there were a couple articles that came out about groundwater issues in the US, mostly from the declining water level perspective.  I also read a paper that suggested that rising sea level had a contribution from groundwater extraction, and of course USGS has maps of areas where the aquifer have collapsed as a result of overpumping.  In 2009 USGS published a report that showed a large areas across the country with this issue.  The problem is that of the 50,000 community water systems in the US, 500 serve over 50% of the population, and most of them are surface water plants.  There are over 40,000 groundwater systems, but most are under 500 customers.  Hence, groundwater is under represented at with the larger water associations because the large utilities are primarily surface water, while the small systems are groundwater. AWWA has difficulty reaching the small systems while RWA and NGWA reach out to them specifically.  But the small utility seems more oriented to finding and producing water and operating/maintaining/drilling wells than the bigger impact of groundwater use.  It is simply a matter of resources.  I ran a system like that in North Carolina, and just getting things done is a huge issue.  A couple of my medium size utility clients have the same problem.

The bigger picture may contain the largest risk.  Changing water supplies is a high cost item.  We have seen a couple examples (surface water) as a result of drought.  We saw Wichita Falls and Big Springs TX go the potable reuse route due to drought.  California is looking at lots of options. Both have had rain lately (Wichita Falls discontinued the potable reuse when the reservoir got to 4% of capacity).  Great, but someone is next.  Droughts come and go, and the questions is how to deal with them.

Groundwater supposedly is a drought-proof problem, but is it?  Groundwater has been a small utility solution, as it has been for agriculture.  But aquifer require recharge and water limited areas do not have recharge.  The result is a bigger problem – overpumping.  Throughout the west/southwest, Plains states, upper Midwest (WI, MN, IA), southeast (SC, NC), we see this issue.  Most of these areas have limited surface water so never developed much historically.  Rural electrification changes that because it made is easy to put in an electric pump to pull water out of the ground in areas that never had a lot of water on the surface, and hence were not farmed much. Pumps made is easier to farm productively, which led to towns. However, our means to assess recharge are not very good, especially for confined aquifers. The lowering water levels USGS and state agencies see is an indication that recharge is normally over estimated giving a false picture of water availability.  If your aquifer declines year after year, it is not drought – it is mining of the aquifer. You are sucking it dry like the eastern Carolinas did.  But, like many negative things, there is a lack of willingness to confront the overpumping issue in many areas. There are many states with a lack of regulations on groundwater pumping.  And I still think groundwater modeling use is limited to larger utilities, when smaller, rural systems may be most in need of it due to competing interests.

Concurrently, I think there is a tendency to oversell groundwater solutions (ASR, recharge), groundwater quality and the amount of available water (St George, UT).  Easy, cheap, limited treatment should not be the only selling point.  That leads to some curious decisions like some areas of California north of LA the utilities do not treat hard groundwater – then tell residents they cannot use softeners because of the salt in the wastewater prevents it from being used for reuse.  The reason they do not treat – cost, but it makes things difficult for residents.  The fact is we do not wish to confront is the realization that for many places, groundwater should probably be the backup plan only, not the primary source.

That leads to the question – what do we do about it when every politician’s goal is for their community to grow?  For every farmer to grow more crops?  But can they really grow sustainably?  DO we not reach a point where there are no more resources to use?  Or that the costs are too high?  Or that competition become unruly?  The growth and groundwater use ship is sailing, but in to many cases they do not see the rocks ahead.

Ethics of Lobbying?

January 19, 2016
engineering, ethics, florida, Leadership, local government, public relations, respect, Responsibility, service, sustainability, Uncategorized, unsustainable, utilities
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Fred+Bloetscher+Senate+Committee+Holds+Hearing+cQCSwINqgm3l

In my last blog I introduced our ethics project we hope to make progress on.  But here is one of the interesting questions, especially in Florida.  I could not find any actual laws or rules issues here, but it is increasingly common for big engineering contracts to have lawyers, lobbyists, etc. get involved in what is intended to be a qualifications based selection process? There is an interesting issue raised in 287.055 FS (CCNA) where the legal intent is that governmental agencies “shall negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable.” Most states use credentials and qualifications for selection as opposed to cost, because the lowest cost may not get you the best job.  You want people doing engineering that have experience with the type of project you are doing.  This has come up to me with storage tanks, membrane plans, deep wells, etc.  You want someone that has done it before, not someone who is cheaper but hasn’t. There is too much at risk.

In addition the statute is fairly specific about contingent fees (as are most states):

Ch 287.055  (6) PROHIBITION AGAINST CONTINGENT FEES.—

(a) Each contract entered into by the agency for professional services must contain a prohibition against contingent fees as follows: “The architect (or registered surveyor and mapper or professional engineer, as applicable) warrants that he or she has not employed or retained any company or person, other than a bona fide employee working solely for the architect (or registered surveyor and mapper, or professional engineer, as applicable) to solicit or secure this agreement and that he or she has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee working solely for the architect (or registered surveyor and mapper or professional engineer, as applicable) any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this agreement.” For the breach or violation of this provision, the agency shall have the right to terminate the agreement without liability and, at its discretion, to deduct from the contract price, or otherwise recover, the full amount of such fee, commission, percentage, gift, or consideration.

So here is the question:  As the public becomes more aware of these types of political lobbying activities, does it move the perception of engineers away from a profession and more towards profession toward developers, lawyers and others who are often seen as less ethical than perhaps engineer, doctors, educators, and scientists?  And if so, is this good for either the engineering profession or the local governments (and their utilities) involved in the selection process?  The comment that “that’s how business get done” is not an acceptable argument when the priority purpose of engineers, and utility operators is the protection of the HEALTH, SAFETY AND WELFARE OF THE PUBLIC.  Somehow I think the politicizing of engineering contracts does not help our profession.  Looking forward to your thoughts.

 

Projects for 2016 – Project 1 Ethics for Engineers

January 16, 2016
engineering, Environment, ethics, growth, innovation, public relations, respect, Responsibility, Uncategorized, utilities
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IMG_8055So as 2016 starts, it is time to look at goals for the coming year.  I have several project in mind that I would like to make progress on this year. The first is interesting.  We have embarked on a project that looks at engineering ethics.  The study have several parts:

  1. Historical context
  2. Engineering societies
  3. Laws and rules by the state
  4. Perceptions
  5. Future directions

One of my reference points is an old publication from ASCE by Murray Mantell, who I got to know about 15 years ago.  He wrote such a book in 1964 when he was char of the University of Miami’s Department of Civil Engineering.  I believe he has since passed on, but I have used his book in some of my courses.

Other references come from contact with the Board of Professional Engineers in each state and various society’s code of ethics, and historical versions of same. However a “hole” in our project is the perceptions piece.  Views change with time and with technology.  Things like competition, lobbying, risk and costs create added pressures on engineers and a need to react to those pressures.  So what we would like to do is create a survey monkey survey for engineers, professional and not to respond to as a means to evaluate perceptions.

I do not have ready access to a database for this purpose.  Gathering data form many states would be difficult as well and duplicative as many engineers have multiple licenses.  However, your organization does not have this constraint.  So I am reaching out to several societies to see if there is a means to collaborate on this endeavor.  The program is as follows:

  1. Complete the questionnaire (I have a draft but if anyone has thoughts on what we should ask, I would love to hear them)
  2. Make any final changes and launch it
  3. Send notices to members.

I am hoping that some of these organizations will find benefit and will agree to participate by emailing the survey link to their members.  I will compile the data and we expect to publish it.  Most of the work so far is being done via email, and thanks to some prior students for gathering information on it.  I have a ways to go here though.  So what are your thoughts?  If anyone can help with ASCE, NSPE, ACEC, etc, I would appreciate it.  And if you get that email with a link, I would appreciate your input and comments.

10 Questions for 2016

January 2, 2016
Climate, Colorado, direct potable reuse, Economic Bubbles, economy, ecosystem, engineering, Environment, finance, innovation, Insurance, local government, management, Marketing water, Uncategorized, Water Funding, water quality, water sewer management, water supplies, Water treatment, wildlife
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So everyone is doing their Top 10 questions for 2016 (although with David Letterman off the air, perhaps less so), I figured why not?  So it the vein of looking forward to 2016, let’s ponder these issues that could affect utilities and local governments:

  1. How wild, or weird will the Presidential election get? And part b, what will that do to America’s status in the world?  Thinking it won’t help us.  Probably won’t help local governments either.
  2. Will the economic recovery keep chugging along? Last time we had an election the economy tanked.  Thinking a major change in direction might create economic uncertainty.  Uncertainty (or panic) would trickle down.  Status quo, probably keeps things moving along.  .
  3. What will the “big” issue be in the election cycle and who will it trickle down to local governments and utilities? In 2008 it was the lack of health care for millions of Americans and the need for a solution. Right after the election we got the Great Recession so most people forgot about the health care crisis until the Affordable are Act was signed into law.  And then ISIS arose from a broken Iraq and Arab summer.  None helped local governments.
  4. What are we going to hear about the 20 richest Americans having more assets than the bottom 150 million residents? 20 vs 150,000,000.  And while we are at it, the top 0.1% have more assets than the bottom 90%, the biggest disparity since the 1920s.  While we will decide that that while hard work should be rewarded, the disparity is in part helped by tax laws, tax shelters, lobbying of politicians, etc. as Warren Buffett points out, indicate a discussion about tax laws will be heard.  Part b – if we do adjust the tax laws, how will we measure how much this helps the bottom 99.9%?
  5. What will be the new technology that changes the way we live? Computers will get faster and smaller.  Phones are getting larger.  Great, but what is the next “Facebook”?  By the way the insurance folks are wondering how the self driving car will affect the insurance industry.  So reportedly is Warren Buffett.  Watch Mr. Buffett’s moves.
  6. Along a similar vein, will the insurance industry start rethinking their current risk policies to look at longer term as opposed to annual risk? If so what does that mean for areas where sea levels are rising?  The North Carolina coast, where sea level rise acceleration is not permitted as a discussion item could get tricky.
  7. Will unemployment (now 5%) continue to fall with associated increases in wages? Will that help our constituents/customers?  Will people use more water as a result?
  8. Where is the next drought? Or flood?  And will the extremes keep on coming?  Already we have record flooding in the Mississippi River in December – not March/April?  Expect February to be a cold, snowy month. IT is upper 80s here.  Snowing in the Colorado Rockies.
  9. Will we continue to break down the silos between water “types” for a more holistic view of water resources? We have heard a bunch on potable reuse systems.  More to come there, especially with sensors and regulations.  But in the same vein, will we develop a better understanding of the link between ecosystems and good water supplies, and encourage lawmakers to protect the wild areas that will keep drinking water cleaner?
  10. Will we get water, sewer, storm water, etc. customers to better understand the true value of water, and therefore get their elected official on board with funding infrastructure neglect? And will that come as a result of better education, a better economy, breaking down those silos, drought (or floods), more extreme event, more breaks or something else?

Happy New Year everyone.  Best to all my friends and followers in 2016!

Merry Christmas/Happy Holidays

December 25, 2015
Happy holidays, Uncategorized, water sewer management
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It is the end of the year and we should all reflect back on the year.  Many of us have so much in our lives and so much potential for fulfillment.  Few of us want for much.  Look around the world – it could be way worse.

Going back many years, the short season has been viewed as the start of the new year.  The ancient Druids and many early religions looked at it as the Sun-god being reborn.  The Christians has Christmas.  The Jews have Hanukkah.  I am sure others have other holidays that are a celebration and itime for reflection.  There is much to do in our lives.  There are challenges ahead.  We should plan for 2016.  What do we want to accomplish?

I have had have 60 undergrads over the last 3 semesters, plus 8 grad students, so things are moving along with FAU – my world is in semesters….  Research projects are coming to an end, and I am searching for more.  One is embarking on a study of utility impacts from 2005-2015 Asset management for utilities continues to develop.  On-line rate-modeling is coming – that and asset management will be a bigger focus for PUMPS in 2016 and going forward.

But 2015 has been good.  New kitchen, projects done.  Lots of travel.  90 miles of hiking.  Awards.  Papers.  Two books.  A nice house. Good health. A fantastic woman who agreed to marry me.  Yes, 2015 was good.  I hope is was good for you.  And I hope 2016 will be even better for all of us.