Archive

Tag Archives: decision making


WTPspiractorI have a question – what was the impact of the 2008 economic crisis on water and sewer infrastructure funding?  I have a hypothesis – the amount of monies transferred to non-water and sewer operations increased.  Is the hypothesis true?

The next question to answer is that if transfer monies increased, did they decrease once property values started to come back?  My hypothesis is no.

Finally what impact does this have on water and sewer infrastructure going forward?  I suspect that the answer is that we underfund infrastructure or justify the lack of funding through actuarial means (I actually had a utility director tell me that his pipes were designed to last 250 years.  Seriously.  Of course that is nonsense, but it is a means to keep your need for replacement funding down).

I have a student and we are working on these issues now.  We are going to gather data from several hundred utilities over the next six months, crunch 11 years of data and let’s find out.  If you or your clients are interested in adding your data to the mix, please send it to me.  I need 2005 -2015 expenditure info.  Also some operational data like ADF, MDF, miles of pipe, customers, treatment type and CCR. We will be publishing the results.   Should be interesting……

Advertisements

Your grandma always told you to save money for a rainy day.  She wasn’t really talking about rainy days, but days when you had less or no income.  The press talks about the huge percentage of Americans that have little or no savings, and how compared to other countries, we are at a disadvantage during economic times.  A huge problem is that the same argument can be translated to governments, which must provide services, and often more services during economic downturns.  But if they have no savings, how are they to accomplish this?  They do not want to raise taxes and fees in down situations, so won’t the loss of services just make things worse?

A recent PEW reports suggests that states “had about half the reserves necessary to address budget gaps during the first year of the Great Recession.  The 50 states had about $60 billion set aside in the summer of 2008, but in fiscal 2009, budget gaps across the country totaled $117 billion, about twice what states had in reserve. The budget gaps continued to grow in 2010 and many states struggled with shortfalls for years afterward.  Bad news, but the news really does not improve.  They report that 37 states have legal caps that prevent them from saving enough to weather recessions or even enough to substantially offset revenue losses, and most of those are based on some percentage of the prior year’s revenues.  Why?  Short-term views?  Most governments figure on keeping enough cash on hand to pay bills during tax seasons. That accounts for 60-90 days of funds.  Far too little for dealing with economic impacts.  Far too few state governments recognize the importance of saving, figuring that cutting taxes during time of plenty and giving back to taxpayers is a better use of funds.  Then it is someone else’s issue when the next economic hiccup occurs – and it will.  Unless you raise your cap now as Minnesota and Virginia have recently done.

But the issue is not just a state issue.  It is a local and a utility issue as well.  Local governments are closer to the ground, have less leeway in their budgets and often have far too little funding as a result of resistance to raising property taxes, user fees and over-dependence on state shared sales tax, which often drops precipitously during a recession.  Same goes for sin and gas tax dependence.  When people slow smoking, or as oil prices drop, so do revenues.  Ask Alaska, Louisiana, Kansas, Texas, North Dakota and others that are oil rich states about their budget this past year.  The legislatures were begging Grover Norquist to let them out of their no tax increase pledges.  He said no of course, because he doesn’t want government to function properly.  So those legislators were stuck in the either “do the right thing” or “get whacked by Grover in the next election” conundrum.  You know what they did because they want to get re-elected  That doesn’t help the citizens of those states.  Standard & Poor’s revised its outlook on Alaska’s general obligation and appropriation-backed debt from stable to negative. That will cost them in the future. St. Louis, Moody’s downgraded the city’s credit rating one step to A1, citing “the city’s weak socioeconomic profile; reliance on earnings taxes which are due for voter reauthorization in 2016.”  Diversity in industry and taxes is beneficial.  Too often this gets lost in the desire to do more with less, but doing more means you need more funding!  And you need to collect those savings as grandma counselled!


In the vein of more growth is always better mentality, the following struck me as I was in Colorado last month.  Front Range politics are a big deal in Colorado because virtually all the people in the state live within 60 miles of Denver.  The following table outlines the populations of the Front Range counties and their growth trends over the past three years.  Big growth.  So the local politicians are happy.  Growth is good.

The Front Range Urban Corridor
County 2012 Estimate 2010 Census Change
Larimer County 310,487 299,630 +3.62%
Weld County 263,691 252,825 +4.30%
Boulder County 305,318 294,567 +3.65%
City and County of Denver 634,265 600,158 +5.68%
Arapahoe County 595,546 572,003 +4.12%
Jefferson County 545,358 534,543 +2.02%
Adams County 459,598 441,603 +4.07%
Douglas County 298,215 285,465 +4.47%
City and County of Broomfield 58,298 55,889 +4.31%
Elbert County 23,383 23,086 +1.29%
Park County 16,029 16,206 −1.09%
Clear Creek County 9,026 9,088 −0.68%
Gilpin County 5,491 5,441 +0.92%
El Paso County 644,964 622,263 +3.65%
Teller County 23,389 23,350 +0.17%

Then I read an article by Bruce Finley of the The Denver Post entitled “Colorado shies from big fix as proliferating people seek more water.’  The concept is to continue the state’s tradition of moving water from the wetter west side of the Rockies to the drier east side.  The current fix is to build a huge reservoir by Dinosaur National Monument (in the middle of the west Colorado desert), then divert 97 billion gallons a year from the Yampa River through a 250-mile pipeline across the Continental Divide to the Front Range to defray Colorado’s projected 2050 water shortfall of 163 billion gallons.  The Yampa Pumpback would be the 31st cross divide diversion Colorado has built since the 1930s.

colorado water

Now the plan has hit a snag, whereby the EIS for the project indicates to meet needs, it would be the Front Range that bears the risks of not enough water in dry years as a part of negotiations for water entitlements under the interstate treaty that divvies the Colorado River.  Once that is resolved, the project would cost billions and take years to construct.  Ok, the Front Range is water limited. And we all know it.  The problem is people like Northern Water manager Eric Wilkinson who the article quotes as saying. “With the number of people coming here, we’re going to have to look at all alternatives. Conservation isn’t the silver bullet; it’s also going to take additional infrastructure…. These people need water, and they’re willing to pay for that water.”  In other words, we need more growth!  So in the meantime, development competes with agriculture or replaces agriculture on the semi-arid high plains.  The article suggests that cities and industries seeking more water would absorb hundreds of thousands of acres of agricultural land water rights if unable to divert more across mountains, something the governor is a little concerned about.  They would just buy them out.  So less agriculture when we probably will need that land later.

So in that vein, I noted the following at the airport.  One is a nice field of grain. Golden in the summer sun.  Across the street, the golden field is being converted to 300 houses.  You can see the pipe and the equipment.  And my question is – Is this really a good idea?

photo15b

photo15e


In an interesting twist of fate, USEPA caused a spill on the Animas River when a staffer accidently breached a dike holding back a solution of heavy metals at the Gold King mine because the misjudged the pressure behind the dike.  Pressure?  The spill flowed at 500 gpm (0.7 MGD), spilling yellow water spilled into the river.  Downstream, the plume has travelled through parts of Colorado, New Mexico and Utah, and will ultimately hit Lake Mead.  Officials, residents, and farmers are outraged.  People were told not to drink the water because the yellow water carried at least 200 times more arsenic and 3,500 times more lead than is considered safe for drinking. The conspiracy theorists are out.  The pictures are otherworldly.

colorado-mine-spillRayna Willhite holds a bottle of water she collected form the Animas River north of Durango Colo., on Thursday, August 6th, 2015. About a million gallons of toxic mine waste emptied out of the Gold King Mine north of Silverton that eventually made it into the Animas River. (Jerry McBride/Durango Herald via AP)

0807 colo spill epa-spill-

But they are all missing the point, and the problem.  This is one of hundreds of “legacy disasters” waiting to happen.  We are just surprised when they actually do.  A legacy disaster is one that is predicated on events that have happened in the past, that can impact the future.  In some cases the far past.  There are two big ones that linger over communities all over the west and the southeast – mines and coal.  Now don’t get me wrong, we have used coal and needed metals form mines.  That’s ok.  But the problem is no one has dealt with the effects of mining or coal ash for many years.  And then people are upset.  Why?  We can expect these issues to happen.

One major problem is that both are often located adjacent to or uphill from rivers.  That’s a disaster waiting to happen.  The King Gold mine is just the latest.  We had recent coal ash spills in Kingston, Tennessee (TVA, 2008) and the Dan River in 2014 (Duke Power). The Dan River spill was 30-40,000 tons.  Kingston cleanup has exceeded a billion dollars.  Coal ash is still stored at both places.  Next to rivers.  We had the federal government build ion exchange facilities in Leadville, CO and Idaho Springs, CO to deal with leaking water from mine tailings from the mountains. Examples are in the hundreds.  The photos are of the two coal spills, mine tailings that have been sitting the ground for 140 years in Leadville and one of the stormwater ponds – water is red in Leadville, not yellow.

kingston_coalash POLLUTE-master675 IMG_4803 IMG_6527 (2015_03_08 17_53_48 UTC)

When the disaster does occur, the federal government ends up fixing it, as opposed those responsible who are usually long gone or suddenly bankrupt, so it is no surprise that EPA and other regulatory folks are often very skeptical of mining operations, especially when large amounts of water are involved.  We can predict that a problem will happen, so expensive measures are often required to treat the waste and minimize the potential for damage from spills.  That costs money, but creates jobs.

For those long gone or bankrupt problems, Congress passed the Superfund legislation 40 years ago to provide cleanup funds.  But Congress deleted funding for the program in the early 2000s because they did not want to continue taxing the business community (mines, power plants, etc.).  So EPA uses ARRA funds from 2009.  And funding is down from historical levels, which makes some businesses and local communities happy.  The spectre of Superfund often impacts potential developers and buyers who are concerned about impacts to future residents.  We all remember Love Canals and Erin Brockovich.  Lack of development is “bad.”  They ignore the thousands or jobs and $31 billion in annual economic activity that cleanup creates, but it all about perception.

But squabbling about Superfund ignores the problem.  We continue to stockpile coal ash near rivers and have legacy mine problems.  Instead we should be asking different questions:

WHY are these sites permitted to store ash, tailings, and liquids near water bodies in the first place?  EPA would not be inspecting them if the wastes were not there.

WHY aren’t the current operators of these mines and power plants required to treat and remove the wastes immediately like wastewater operators do?  You cannot have millions of gallons of water, or tons of coal ash appear overnight on a site, which means these potential disasters are allowed to fester for long periods of time.  Coal ash is years.  Mine tailings… well, sometimes hundreds of years.

One resident on the news was reported to have said “Something should be done, something should be done to those who are responsible!”  Let’s start with not storing materials on site, next to rivers.  Let’s get the waste off site immediately and disposed of in a safe manner.  Let’s recover the metals.  Let’s start with Gold King mine.  Or Duke Power.  Or TVA.


Big week – water and otherwise.  Here are a couple discussion boards/blogs that might be of interest to follow as they evolve:

https://www.linkedin.com/grp/post/733277-6020246563895390212

http://onlinelibrary.wiley.com/doi/10.1002/2015WR017351/full?wol1URL=/doi/10.1002/2015WR017351/full&wol1URL=/doi/10.1002/2015WR017351/full&regionCode=US-FL&identityKey=58977fc5-ec07-41a1-b4d0-a91e903b5f5b&isReportingDone=true

And an ethical consideration to contemplate:

  • There is an interesting ethical issues that arises in this discussion also. Engineers are entrusted to protect the public health, safety and welfare. When there were few people, projects did not impact many so little thought was given to the “what could possible happen” question. We are still paying for that. Now that there are more people, conflicts become more likely and more frequent. Most times engineers are not asked to evaluate the unintended consequences of the projects they build. Only to build them to protect the public health safety and welfare while doing so, but from a specific vantage point. So if you know a project will create a long-term consequence, what action should you take? There are many water supply examples, where we have engineered solutions that have brought water or treated water to allow development. South Florida is a great example – we drained half a state. But no one asked if that development was good or appropriate – we drained off a lot of our water supply in the process and messed up the ecological system that provided a lot of the recharge. No one asked in the 1930 if this was a good idea. Designing/building cities in the desert, designing systems that pump groundwater that does not recharge, or design systems that cannot be paid for by the community – we know what will happen at some point. So the question is whether there is a conflict between engineers meeting their obligations to the public and economic interests in such cases?

    And finally, when considering the ethical issue:

    http://bizlifes.net/discovery/855-27-images-that-prove-that-we-are-in-danger-7-left-my-mouth-open.html


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?


check this out – http://www.laboratoryequipment.com/news/2015/05/home-range-new-wyoming-law-makes-science-open-land-illegal#.VVNg-x-tFlk.linkedin

This could be really serious.  For example, your water system gets contaminated by something.  People  get sick.  We figure out the problem is in the raw water.  Someone is responsible.   But exactly how does one figure out where and who is responsible for impacting the  water systems and downstream users?  How does one comply with Safe Drinking Water Act  provisions for watersheds, or better what does this mean for utilities?  And what could possibly occur on land that cannot be “tested?”

What could possible go wrong?!

%d bloggers like this: