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Barriers to Public Sector Leaders? Part 3

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

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

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

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

WHAT MAKES A GREAT LEADER?

March 25, 2013
communciations, infrastructure, innovation, Leadership, management, sustainability, Uncategorized, water sewer management
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WHAT MAKES A GREAT LEADER?

This a question that has puzzled researchers for some time.  Back in the 19th century we looked to enlightenment among people – mostly oriented to new ideas and processes that would move civilization forward.  That helped but did not provide full answers.  Of course we were still in the throes of the start of the industrial revolution.  We looked at psychology to show us how to find leaders at the turn of the 20th century, but that faded in favor of trying to determine traits that made good leaders in the 1920s.  The idea of traits faded as we started looking the style by which people managed (think all those tests out there), but soon found that management style, leadership perception and results were often not correlated.  In the 1990s we started looking at adaptation, but as Jim Collins points out the great companies seem to have leaders that are the opposite of the charismatic leadership many seek or seek to become.  It’s the plodders, who can adapt to changing facts or situations on the front lines, that seem to get results.  And we only tend to notice after the fact, or well into their leadership reign, not at the beginning.  In fact many of the best success stories received much criticism early on.

What this all seems to indicate is that leadership evolves, just as civilization evolves.  Those that can evolve and adapt to changing conditions appear to lead the most successful organizations, but are not often recognized as the best leaders.  No one set of characteristics in a person will fit each situation or challenge, but you need the ability to understand the context of the facts in order to chart a course and engage people in solutions.  Without buy-in, the problem will not be solved and most challenges require thought on the part of others who are committed to the same goals as the leader.  The leadership team concepts allows for the ability to delegate to those closest to the situation, or with the best skill set to resolve it, will achieve the best result and create personal accountability by creating a personal stake in the solution.

Engagement identifies another emerging hallmark of leadership which is that we all want to succeed and leaders tend to nudge their followers toward that success.  Good leaders always backstop their charges, and understand that not all situations will be resolved ideally and that there may be multiple means to resolve the problem.  That gives the followers the ability to “gamble” on innovative solutions without the fear of reprisals.  The fear of reprisals will eliminate innovation.  What you want is to lead your organization to be innovative.  Organizations that foster innovation can become more effective in their industry.  Isn’t that what we want?  Fostering innovation is how Google develops a lot of its applications.  They call it 20% time, where employees get to work on anything they want, with anyone they want, except their own projects.  Think GoogleEarth, gmail, and many others.  Dan Pink did an excellent discussion in his best seller “Drive.”  I recommend you check it out.  But then we need to ask, “When was the last time we tried something like 20% time in the utility industry?”

Should Coastal Utility Master Plans Include Sea Level Rise?

March 21, 2013
Climate, communciations, Environment, finance, funding, infiltration gallery, infrastructure, innovation, Insurance, Leadership, management, planning, riverbank filtrations, sea level rise, stormwater, sustainability, Uncategorized, water sewer management, water supplies
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Planning is a process utilized by utilities in order to reach a vision of the utility as defined by the customers or the governing board, or to meet certain demands for service projected to be required in the future.  Understanding and managing the utility’s assets provides important information related to the ongoing future direction of the utility system.  However, the only method to develop that future direction is through the planning process.  Planning should be undertaken on a regular basis by all enterprises in an effort to anticipate in to anticipate needs, clarify organizational goals, provide direction for the organization to pursue and to communicate each of these to the public.  With water and wastewater utility systems, it is imperative to have ongoing planning activities, as many necessary improvements and programs take months or years to implement and/or complete.  Without a short and long-term plan to accomplish future needs, the utility will suffer errors in direction, build unnecessary or inadequate infrastructure and pursue programs that later are found to provide the wrong information, level of service or type of treatment.

Planning can provide for a number of long-term benefits – improvements in ISO ratings to lower fire insurance rates, renewal of improvements as monies become available, rate stability and most importantly – a “vision” for the utility.  In creating any plan for a utility system, efforts to understand the operating environment in which the utility operates must be undertaken.  Second, the needs of the utility must be defined – generally from growth projections and analyses of current infrastructure condition from repair records or specific investigations.  By funneling this information into the planning process, the result of the effort should be a set of clear goals and objectives needs to be defined (Figure 8.1).  However, the types of goals and objectives may vary depending on the type of plan developed.  There are 4 types of plans that may result from the planning process.

  • Strategic Plans – action oriented for management level decision-making and direction
  • Integrated Resource Plans – Actions for utility management to tie all parts of the system together
  • Facilities Plans – for SRF loans support
  • Master Plans – to support capital improvement programs

Any utility planning effort should start with a description (and understanding) of the local environment (built and otherwise).  An understanding of the environment from which water is drawn or to be discharged is important.  Both water quality and available quantity, whether surface or ground water, are profoundly affected by demand.  A reduced demand for surface water helps prevent degradation of the quality of the resource in times of low precipitation.  Reduction in the pumping of ground water improves the aquifer’s ability to withstand salt water infiltration, potential surface contamination, upconing of poorer quality water, contamination by septic tank leachate, underground storage tank leakage, and leaching hazardous wastes and other pollutants from the surface.  Over-pumping ground water leads denuding the aquifer or to contamination of large sections of the aquifer.  Planning for is necessary for surface water systems.  Therefore, source water protection must be a part of any water planning efforts, including the appropriate application sites and treatment needs for reuse and residuals.

So let’s toss sea level rise into the mix.  What happens when sea level rise inundates coastal areas with saltwater and increase freshwater heads inland?  How do we fix that problem and should be plan for it.  Clearly master planning should include this threat (as applicable), just as any regulatory issue, water limitation, disposal limit or change in business practices should be considered.  One means to reduce the impact of sea level induced groundwater levels is infiltration galleries that may operate 24/7.  These systems are commonly used to dispose of storm water (french drains or exfiltration trenches) but what happens if the flow is reversed?  Water will flow easily into the system, just as it does for riverbank filtration. The water must be disposed of, with limited options, but let’s toss a crazy idea out there – could it be your new water supply?  Just asking, but such a system would not be unprecedented worldwide, only in the coastal communities of the US.

When do we get serious about sea level rise?

March 18, 2013
Banking industry, Climate, Development loans, Environment, finance, groundwater, infrastructure, Insurance, Leadership, management, planning, sanitary sewer, sea level rise, stormwater, sustainability, Tidal flooding, Uncategorized, water sewer management, water supplies
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Based on my last blog, his inquiry came to me.  And I think I actually have an answer:  when bakers and insurance companies decide there is real exposure.  Let’s see why it will take these agencies.  There is very little chance, regardless of good faith efforts, significant expertise, or conscientious bureaucrats to stop growth and development.  The lobby is simply too strong and local officials are looking for ways to raise more revenues.  Development is the easiest way to increase your tax base.  As long as there are no limits placed on develop-ability of properties (and I don’t mean like zoning or concurrency), development will continue.  But let’s see how this plays out.  Say you are in an area that is likely to have the street inundated permanently with water as a result of sea level rise (it could be inland groundwater, not just coastal saltwater).  For a time public works infrastructure can deal with the problem, but ultimately the roadways will not be able to be cleared.  Or say you are located on the coast, and repeated storm events have damaged property.  In both cases the insurance companies will do one of three things:  Refuse to insure the property, insure the property (existing) only for replacement value (i.e. you get the value to replace) but no ability to get replacement insurance, or the premiums will be ridiculous.  We partially have this issue in Florida right now.  Citizen’s is the major insurer.  It’s an insurance pool created by the state to deal with the fact that along the coast, you cannot get commercial insurance.  So Citizens steps in.  The state has limited premiums, and while able to meet its obligations, in a catastrophic storm would be underfunded (of course in theory is should have paid out very little since 2006 since no major hurricanes have hit the state, but that’s another story). 

As the risk increases, Citizens and FEMA, the federal insurer, have a decision to make.  Rebuilding where repeated impacts are likely to happen is a poor use of resources and unlikely to continue.  Beaches and barrier islands will be altered as a result.  The need will be to move people out of these areas, so the option above that will be selected will be to pay to replace (move inland or somewhere else).  Then the banks will sit up.  The banks will see that the value of these properties will not increase.  In fact they will decline almost immediately if the insurance agencies say we pay only to relocate.  That means that if the borrowers refuse to pay, the bank may not be able to get its money out of the deal on a resale.  We have seen the impact on banks from the loss of property values as a result of bad loans.  We are unlikely to see banks engage in similar risks in the future and unlikely to see the federal insurers (Fannie Mae, Freddie Mac) or commercial re-insurers like AIG be willing to underwrite these risks.   So where insurance is restricted, borrowing will be limited and borrowing time reduced.  That will have a drastic impact on development.  The question is what local officials will do about it?

There are options to adapt to sea level rise, and both banking and insurance industries will be paying close attention in future years.  Local agencies will need a sea level rise adaptation plan, including policies restricting development, a plan to adapt to changing sea and ground water levels including pumping systems to create soil storage capacity, moving water and sewer systems, abandoning roadways, and the like, and hardening vulnerable treatment plants.  Few local agencies have these plans in place.  Many local officials along the Gulf states refuse to acknowledge the risk.  What does that say about their prospects?  Those who plan ahead will benefit.  Southeast Florid a is one of those regions that is planning, but it is slow process and we are only in the early stages.

Groundwater Accelerates Sea Level Rise

March 14, 2013
Climate, communciations, Development loans, Environment, funding, groundwater, infrastructure, Insurance, Leadership, management, planning, sea level rise, stormwater, sustainability, Tidal flooding, Uncategorized
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Regardless of the causes, southeast Florida, with a population of 5.6 million (one-third of the State’s population), is among the most vulnerable areas in the world for climate change due its coastal proximity and low elevation (OECD, 2008; Murley et al. 2008), so assessing sea level rise (SLR) scenarios is needed to accurately project vulnerable infrastructure (Heimlich and Bloetscher, 2011). We know that sea level has been rising for over 100 years in Florida (Bloetscher, 2010, 2011; IPCC, 2007). Various studies (Bindoff et al., 2007; Domingues et al., 2008; Edwards, 2007; Gregory, 2008; Vermeer and Rahmstorf, 2009; Jevrejeva, Moore and Grinsted, 2010; Heimlich, et al. 2009) indicate large uncertainty in projections of sea level rise by 2100. Gregory et al. (2012) note the last two decades, the global rate of SLR has been larger than the 20th-century time-mean, and Church et al. (2011) suggested further that the cause was increased rates of thermal expansion, glacier mass loss, and ice discharge from both ice-sheets. Gregory et al. (2012) suggested that there may also be increasing contributions to global SLR from the effects of groundwater depletion, reservoir impoundment and loss of storage capacity in surface waters due to siltation. The loss of groundwater, mainly from confined aquifers, is troubling, and currently completely unknown. The contribution of carbon dioxide, commonly occurring in deep groundwater is also unknown. To gauge the risk to property in southeast Florida, Southeast Florida Regional Climate Compact and Florida Atlantic University reviewed twelve different projections of SLR and its timing. The consensus was 3” to 7” by 2030 and 9” to 24” by 2060. From the literature review and analysis, it was concluded that approximately 3 ft. of sea level rise by 2100 would a suitable scenario and time frame to illustrate the methodology presented in this article. To allow flexibility in the analysis due to the range of increases within the different time periods, an approach that uses incremental increases of 1, 2, and 3 feet of SLR was considered for risk scenarios. An issue normally ignored in sea level rise projections is groundwater. The importance of the groundwater table in the model is that it is responsible for determining the soil storage capacity. Soil is composed of solids, water, and air (voids). Soil storage capacity depends on physical and chemical properties, water content of the soil, and depth to the water table or confining unit (Gregory et al 1999). As the rain infiltrates the soil, unsaturated pores quickly fill up, effectively raising the water table (Gregory et al 1999). For example efforts, a groundwater surface elevation map was derived based well site information available from the USGS (http://groundwaterwatch.usgs.gov) that had a minimum of 35 years of continuous data. Using GIS, an inundation model was created in GIS by subtracting the groundwater surface model from the digital elevation model with the difference in elevation being the soil storage capacity. The photo shows the evolution of these features as applied to a section of northwestern Miami-Dade County. What this indicates it that the impact of sea level rise on low-lying inland areas may be far different that the projections using the bathtub models. It also means that wellfields, sewer mains, roadways and storm water systems will be affected far more quickly than projected from bathtub models. The method used here suggested that the estimated may be off by a factor of two of three.

Market or be Outmarketed

March 10, 2013
communciations, finance, funding, Leadership, Marketing water, sustainability, Uncategorized, water supplies
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Municipal drinking water is strictly regulated by the USEPA.  We spend a lot of time testing our water, producing reports, and providing our customers with information on our results.  The results show it works, because the number of incidents of contaminated water are few, and rarely affect larger utility systems.  We are so good at providing water that the public expects their water to be safe, yet the buy bottled water?  Wait, huh?  Bottled water? Bottled water is not regulated by the USEPA and is not subject to the same requirements as potable water.  There are less than three full time people at FDA inspecting bottled water facilities, versus thousands reviewing public water supplies.  Water utilities run millions of analyses per year and must publish the results.  So why do they buy bottled water when our water is safe?

Keep in mind that in many areas of the world, the bottled water industries move in and compete for the same supplies as we currently use.  North Florida is rife with arguments over flows to springs as are other areas.  Some of the water is simply repackaged tap water.  So in addition to competing for our customers, they are competing with the sustainability of our drinking water supplies.  Then there are the hundreds of thousands of bottles that end up in landfills.  More impact on sustainability.  At the same time, bottled water is more costly that gasoline, which everyone complains about, but that does not stop the purchases?  So what’s up?

Marketing that’s what.  We don’t market water.  I noted in an earlier blog that we simply don’t market our product, which has allowed others to compete for the same dollars.  Customers complain about rate hikes, (averaging about 5% per year for the past 10 years according to the new AWWA study), yet they happily pay over $4/gallons for many of the popular bottled waters, more and more cable channels, fancy phones, etc.  Not that any of these commercial products are per se bad, but none are required for survival like water.

Interestingly when we do market, it reaps positive results.  New York and San Francisco have seen the wisdom of marketing for year.  They ship New York tap water to Florida to make Brooklyn style bagel because Florida Water doesn’t taste the same.  DC Water changed its name, and began a marketing campaign that changed public perception of the utility and has allowed it to start dealing with its infrastructure backlog.  Some of their ideas include branding the water, and having restaurants serve it in marked glasses, paid for by the utility.  Signs on drinking fountains, in schools and even sales of tap water in stores are options some utilities have started.  But the key is started.  Marketing takes dollars, to reap benefits.  Who knows, maybe tap water is the next bottled water….

What do you believe are the three biggest water challenges in the U.S.? Part 2

February 20, 2013
Climate, Environment, finance, funding, groundwater, infrastructure, Leadership, management, Marketing water, sustainability, 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.  In the last post, I outlined the number one answer –  getting a handle on failing infrastructure.  The next issue has to do with water supplies.  You hear the argument that we need to get people to respect that drinking water as a limited resource, develop where water supplies are plentiful as opposed to arid regions that are water poor and protecting water sources instead of rendering it unusable in the process of using it. People (and their jobs) are moving to “more favorable” (read: warmer, more arid) climates, so people are now actually trying to grow rice and develop golf courses in the deserts of the Southwest US and complaining about “drought” conditions. The sustainability of groundwater supplies is often noted as a problem because much of the west relies on groundwater for agricultural irrigation. Having a 50 or 100 year management plan for an aquifer, which is how to insure there is water to last 50 or 100 years, is shortsighted, even though it doesn’t sound like it. Long term these areas could run out of water which will create significant economic impacts to these communities. More professionals should be involved in this discussion: regional growth planners; federal and state funders that offer ‘incentives’ to businesses to relocate their workers; city and county governments that accept these ‘incentives’ to beef up their budgets.

But just as cities market their community to developers and industry, it is interesting that marketing services is another issue.  I had a conversation where an elected official said it was inappropriate for government to market. Yet the bottled water industry does, power companies do, and cell phone companies do. Utilities ignore the people that put fliers on houses asking our residents to take a sample of their water, and then attacking the quality of our drinking water by explaining that having calcium and chlorine in the water is bad, should have been addressed long ago. Of course calcium and chlorine are in the water! Chlorine disinfects the water and then keeps the distribution system clean (especially an issue in warmer climates with TOC in the water). Our public is uneducated and we have been out-marketed for scare dollars for 40 years. That is an elected official, but also a water official problem.

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.

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.