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Water Funding


The Flint saga continues.  The latest is that they continue to use Detroit water, but will convert to the new Lake Huron supply in 2018. The argument now is who’s water plant will be used. The County is building a plant.   John Young notes that the Mayor of Flint wants to use their own plant.  I think we know how that worked out last time. All the non-elected officials overseeing the City say buy from Genessee County.  Should be interesting to see how that plays out.

Meanwhile Midwest regional EPA officials appear are being criticized for failing to deal with the problem in a timely fashion.  EPA delayed their emergency declaration for 7 months, but EPA says the state action prevented EPA from acting.  This is exactly what the states asked for when they persuaded Reagan to delegate authority from EPA to the states.  Then the finger pointing starts when state officials do not react quickly because the state legislature cut their budget and no one is asking about that like they did in Walkerton in 2001.  It could have been predicted especially when too many states have legislatures that want to starve the bureaucracy.  But they forget why the bureaucracy was there to begin with – because something bad happened and government reacted to it by passing laws and creating oversight.  Delete the oversight and bad things happen.  It is human nature.

That will play out, but there still is the problem of the people who made the decisions in the first place.  As the elected officials in the class I taught this summer noted, it was a political decision to save money that created this problem to start with, not an operation issue.  The operational issue came up after the elected officials decided to start up a 50 year old plant that had not been run more than 18 months in 50 years, and after improvements were quickly made to the plant, but never tested.  Not sure how the engineers (sorry) let that happen, but why is it that no elected officials have been scrutinized for their bad decisions?  It makes us all look bad and sends a poor message to the residents of the country, not just Flint.

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The reliability of the assets within the area of interest starts with the design process in the asset management plan. Decision-making dictates how the assets will be maintained and effective means to assure the maximum return on investments. Through condition assessment, the probability of failure can be estimated. Assets can also fail due to a growing area that may contribute to exceeding its maximum capacity. Operation and maintenance of the assets are important in reassuring a longer life span as well as getting the most out of the money to be spent. Prioritizing the assets by a defined system will allow for the community to see what areas are most susceptible to vulnerability/failure, which assets need the most attention due to their condition, and where the critical assets are located in relation to major public areas (hospitals, schools, etc.) with a high population.

So what happens when conditions change?  Let’s say sea levels are rising and your land is low.  What would the potential costs be to address this?  Better yet, what happens if it rains? We looked at one south Florida community and the flood stage for each based on 3 storm events: the 1:10 used by FDOT (Assumes 2.75 inches in 24 hours), the Florida Building Code event that includes a 5 in in one hour event (7 in in 24 hrs), and the 3 day 25 year event (9.5-11 inches).

Of no surprise is that the flooding increases as rainfall increases.  Subsequent runs assumed revisions based on sea level rise. The current condition, 1, 2 and 3 ft sea level rise scenarios were run at the 99 percentile groundwater and tidal dates and levels.  Tables 2-5 depict the flood stage results for each scenarios.  The final task was designed to involve the development of scenarios whereby a toolbox options are utilized to address flooding in the community.  Scenarios were to be developed to identify vulnerabilities and cost effectiveness as discussed previously.

The modeling results were then evaluated based of the accompanying infrastructure that is typically associated with same.  A summary of the timelines and expected risk reductions were noted in the tables associated with storm and SLR scenarios.  This task was to create the costs for the recommended improvements and a schedule for upgrading infrastructure will be developed in conjunction with staff.  Two issues arise.  First, the community needs to define which event they are planning to address and the timelines as the costs vary form an initial need of $30 million to over $300 million long-term.  Figure 1 shows how these costs rise with respect to time.  The long-term needs of $5 million per 100 acres matches with a prior effort in Palm Beach County.

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Figure 1  Summary of Costs over the 3 ft of potential sea level Rise by 2011, under the 3 storm planning concepts.


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“Or is running a local government like s business killing it?”

I had an interesting conversation at a conference recently.  The people I was talking to were advanced in their careers and the discussion moved toward the outlook on management in public settings. Once upon a time, most public works and utility managers were civil engineers, but often they were criticized because they were focused on the engineering aspects as opposed to the people aspects of the community.  Their focus was public health and making sure things operated correctly.  Most did whatever was needed to accomplish that.

This led to schools of public administration, which actually started educating some of those same engineers about management of large public organizations, organizational theory, human resource, accounting and planning  I did all that myself at UNC-Chapel Hill.  The goal was to understand finances, people, community outreach, the need to engage citizens and as well as public service.  The outcomes were providing good service.  That however tends to cost a little more than operations although there are opportunities to be a bit entrepreneurial.

So back to the people in the conversation.  They noted that sometime in the 1980s or early 1990s the MPAs were being replaced by MBAs as politicians were focusing on operating “like a business.”  Looking at the MBAs out there, the comment was that business schools do not focus on service, but profits to shareholders, and the training is to cut unproductive pieces that detract from the bottom line.   Hence investments do not get made if the payback is not immediate.  Service is not a priority unless it helps the bottom line.  In a monopoly (like a local government), there are no other option, so service becomes a lessor priority.

So it brought up an interesting, but unanswerable question for now: has the move to more business trained people in government created some of the ills we see?  The discussion included the following questions/observations (summarized here):

  1. Many water and sewer utilities are putting a lot of time and effort into customer service and outreach now after years of criticism for failing to communicate with customers. That appears symptomatic of the monopoly business model.
  2. Our investments in infrastructure decreased significantly after 1980, and many business people focus on payback – so if the investment does not payback quickly, they do not pursue them. How does that impact infrastructure investments which rarely pay back quickly (Note that I have heard this argument from several utility directors with business backgrounds in very recent years, so the comments are not unfounded).  It does beg the questions of whether the business focus compounds our current infrastructure problems.
  3. Likewise maintenance often gets cut as budgets are matched to revenues as opposed to revenues matched to costs, another business principle. Run to failure is a business model, not a public sector model. Utilities can increase rates and we note that phones, cable television, and computer access have all increased in costs at a far faster rate that water and sewer utilities.

Interestingly though was the one business piece that was missing:  Marketing the value of the product (which is different than customer service).  Marketing water seems foreign to the business manager in the public sector.  The question arising there is whether that is a political pressure as opposed to a forgotten part of the education.

I would love to hear some thoughts…

 


An asset management program should be developed accordingly to the client’s goals and objectives. It consists of determining the selected area of study, type of system and the quality of data used for evaluation. Before a condition assessment can be determined, an inventory of assets needs to be established – maps, etc. are helpful.  So now you have a map of your water and sewer system and you want to develop a useful system for asset management.  Depending on the accuracy wanted, the data can be gathered in many ways ranging from onsite field investigation which could take a lot of time, to using existing maps, using maps while verifying the structures using aerial photography and video, or field investigations. But most local governments still lack data.  You cannot dig up pipe, or do a lot of destructive testing on buried infrastructure.  So what to do?

The reality is that you have a lot more data than one thinks.  For one thing, most utilities have a pretty good idea about the pipe materials.  Worker memory can be very useful, even if not completely accurate.  In most cases the depth of pipe is fairly similar – the deviations may be known. Soil conditions may be useful – there is an indication that that aggressive soil causes more corrosion in ductile iron pipe, and most soil information is readily available.  Likewise tree roots will wrap around water and sewer pipes, so their presence is detrimental.  Trees are easily noted from aerials.  Likewise road with truck traffic create more vibrations on roads, causing rocks to move toward the pipe and joints to flex.  So with a little research there are at least 5 variables known.  If the break history or sewer pipe condition is known, the impact of these factors can be developed via a linear regression program.  That can then be used as a predictive tool to help identify assets that are mostly likely to become a problem.   We are working on such an example now, but suspect that it will be slightly different for each utility.  Also, in smaller communities, many variables (ductile iron pipe, pvc pipe, soil condition…) may be so similar that differentiating would be unproductive.  That also remains to be seen, which brings up another possible variable- the field perception – what do the field crews recall about breaks?  Are there work orders?  If so do they contain the data needed to piece together missing variables that would be useful to add to the puzzle?

After all we want to avoid this before it happens….

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Asset management plays a vital role to help minimize unnecessary or misplaced spending while meeting the health and environmental needs of a community. The goal is to provide strategic continuous maintenance to the infrastructure before total failure occurs.  Costs should be well distributed over the life of the asset to help avoid emergency repairs. Emergency repairs can cost up to multiple times the cost of a planned repair. Therefore the ultimate goal of asset management is to provide quality, economical infrastructure by identifying the system’s needs and addressing the needs appropriately.  At some point repairs cost more than replacement, or technology may make repairs obsolete.

An asset management program should be developed accordingly to the client’s goals and objectives. It consists of determining the selected area of study, type of system and the quality of data used for evaluation (see Figure 1).  Before a condition assessment can be determined, an inventory of assets needs to be established. Depending on the accuracy wanted, the data can be gathered in many ways ranging from onsite field investigation which could take a lot of time, to using existing maps, using maps while verifying the structures using aerial photography and video, or field investigations. Not doing destructive testing is important to reduce costs.  The question is how you do it.  One project we did was the downtown area of Dania Beach.  You can see the areas that are a problem.

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Figure 1

Asset Dania

FIgure 2


June was a tough month and looking back I realize I really didn’t post.  I was in Chicago, spent 2 weeks with middle schoolers, prepared my promotion package, god the doors completed on the house, etc. and suddenly it was the 4th of July.  Yikes time flies.  But it was interesting.  Here I want to talk a little about Chicago.

I went to Chicago to do a 3 day, 12 hour class with elected officials.  Most are board members for their local utility, but they went from a small South Carolina system to San Antonio and St. Paul.  A huge variety.  And we learned a lot.  Obviously the Flint crisis was on their minds.  But I thought the most interesting thing was that these folks understood what happened.  I asked what they thought the real issue was in Flint and the resounding answer was – politics.  Bad decision-making.  Poor preparation.  Notably, not lead service lines.  These people got it.  They read behind the headlines.  Of course these are the officials that wanted to learn more about their water and sewer systems, as opposed to the many that do not take the time to, but interesting nonetheless.

Another issue was talked about was finances.  I ask them to bring their budget, water use, pipelines, etc.  The goal is to do a quick comparison between systems and then discuss what it means (if anything).  I have started doing the exercise each year and we find the same thing – smaller systems cost more per thousand gallons to run than larger systems, so hence their rates must be higher or they are not doing repairs and replacements on a timely basis. This group got that as well and understood that comparisons of their system to others needed to be carefully vetted.  No two system are alike, but size, treatment, terrain can all affect costs to the customer.

We also talked about leadership.  I am applying for an AWWA project on leadership, but when asked, these folks had some great answers. They see leadership as a personal trait (inspiration, vision) as well as being driven by event (negotiating crisis or change), and having the ability to bring people along through the rough patches.  Leadership is an issue that needs more exploration, but I thought this was a good start to preface the larger survey I hope to do for AWWA’s members.

In the meantime, I learned a lot about the Chicago River bridges, enjoyed the planetarium, a Cubs night game, Millenium Park and a walk along the waterfront.  Very cool.

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