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Business vs Public Models

August 19, 2016
asset management, civil engineering, economy, Education, engineering, finance, infrastructure, innovation, Leadership, local government, management, Marketing water, planning, politics, public relations, Responsibility, sustainability, Water Funding, water sewer management
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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…

 

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Asset Management with Limited Data

July 20, 2016
asset management, engineering, infrastructure, Leadership, management, planning, Risk Management, sustainability, Water Funding, water sewer management
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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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Getting to the Assets

July 16, 2016
asset management, civil engineering, engineering, finance, infrastructure, Leadership, management, planning, Responsibility, sustainability, utilities, Water Funding, water sewer management
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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

Asset management on Campus with map

July 13, 2016
asset management, civil engineering, Education, engineering, funding, infrastructure, Leadership, management, Responsibility, Transportation, water sewer management
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Public infrastructure has been poorly rated by the American Society of Civil Engineers and most public officials acknowledge the deterioration of the infrastructure we rely on daily.  However, many jurisdictions have limited information about their systems, and little data to use to justify spending.  The resistance to impose fees or taxes to upgrade infrastructure also remains high.  Hence the infrastructure tends to deteriorate further each year.  At present the United States spends about 1.6% of its GNP of infrastructure, as compared to 3.1 % prior to 1980.  Half as much money, and a large portion of that was for growth as opposed to repair and replacement.  Hence the need for better tools for asset management.

Utilities that utilize asset management programs experience prolonged asset life by aiding in rehabilitation and repair decisions while meeting customer demands, service expectation and regulatory requirements. The general framework of asset management programs involves collecting and organizing the physical components of a system and evaluating the condition of these components. The importance and the potential consequences associated with the failure of the individual assets are determined by this evaluation. Managers and operators can then prioritize which infrastructure are most critical to the operation of the system and furthermore which infrastructure to consider for repair, rehabilitation or replacement. It is a continuously reviewed and revised strategy that implements the acquisition, use and disposal of assets to optimize service and minimize costs over the life of the assets. An asset management plan (AMP) considers financial, economic and engineering goals in an effort to balance risk and benefits as they relate to potential improvement to the overall operation of the system.

Over the last 2 years, we have been working to develop a means to quickly, effectively and in a cost efficient manner to collect data and assess public infrastructure using simple, readily available means, without the need for significant training and expertise.  The idea was to use student efforts to coalesce a common evaluation without the need for destructive testing.  There are three successive projects used to improve the collection of data for ultimate use in an asset management program.   Students were provided with Leica and Trimble units to gather data.  For the first project, an app was created by FAU students that included photographic tools and entries to document the asset condition and location and permit offsite QA/QC from the cloud.  This app was initially developed for stormwater, but was updated to include all public assets for the second community. Data retrieval was created to be able to log data directly onto a smart phone or tablet in the field to save time and the information is instantly downloaded to the internet for quality assurance. The collection system also was programmed with a condition index to help with organization A session was held in the field with student groups to normalize the assessment process.  The approach began with an inventory and location of each asset. The assets were field inspected and assessed for condition.  A numbering system and photographic tools was used to document the asset condition.  This was accomplished by physically locating each asset in the field and marking it with a global position system (GPS) coordinate which allowed the data to be populated in a geographic information system (GIS) and organized with the other assets of the system

The results include this senior design project by our geomatics students. It is a 3-dimensional map of all infrastructure from the ground down on FAU’s Boca Raton campus. 800 acres and over 5000 points, many of which must be stitched together.  They also created building extrusions for a future project.  Very cool and useful from a tablet.  So the question is – do you have a 3D map of your utility?

Geomatics Engineering Senior Design Project 2016 (2)

2008 Economic impact on Utilities

May 15, 2016
economy, infrastructure, Leadership, local government, management, politics, Risk, Risk Management, social vunerability, sustainability, water sewer management
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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……

The Flaw with Per Capita Water Use

April 25, 2016
decision-making, direct potable reuse, economy, engineering, finance, florida, groundwater, Holistic Water Planning, indirect potable reuse, innovation, Leadership, management, planning, population growth, Responsibility, sustainability, unsustainable, USGS, water sewer management, What could possibly go wrong?
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DSCF0032Curtailed water use and conservation are common topics of conversation in areas with water supplies limitations.  As drought conditions worsen, the need for action increases, so when creating a regulatory framework, or when trying to measure water use efficiency, water supply managers often look for easily applied metrics to determine where water use can be curtailed.  Unfortunately, the one-size-fits-all mentality comes with a potential price of failing to fully grasp the consequences decision-making based on such metrics.

One of the issues that water supply regulator like to use is per capita water use.  Per capital water use is often used to show where there is “wasted” water use, such as excessive irrigation.  However such a metric may not be truly applicable depending on other economic factors, and may even penalize successful communities with diverse economic bases.  A heavy industrial area or dense downtown commercial center may add to apparent per capita use, but is actually the result of vibrant economic activity. Large employment centers tend to have higher per capital use than their neighbors as a result of attracting employees to downtown, which are not included in the population.

In south Florida, a recent project I was involved with with one of my students showed that while there was significant variability among utilities, but the general trend of increased economic activity was related to increased per capita use.  Among the significant actors were health care, retail trade, food service and scientific and technical services.  It appears to be these sectors that drive water use upward.  As a result when evaluating the efficiency of a utility, an analysis should be conducted on the economic sectors to insure that water regulations do not stifle economic growth and jobs in a community.   And conversely if you do not have these sectors, you water use should be lower.  Something to think about when projecting or regulating water use.  Limited water use may in fact be limiting economic activity in the area. Of course if you are water limited, limited new withdrawals may be perfectly acceptable if you want to encourage other options, like direct or indirect potable reuse, irrigation, etc.  

It would be interesting to expand this study across the country to see what the national trends look like and how different tourism oriented South Florida might actually be.

The Real Lesson in FLint

April 6, 2016
decision-making, Detroit, economy, finance, Flint, health risks, income disparity, infrastructure, Lead in water, Leadership, local government, management, Michigan, politics, Responsibility, sustainability, utilities, water quality, water sewer management, water supplies, Water treatment, What could possibly go wrong?
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I was at a recent AWWA technical and Education Council meeting in Denver. One of the major discussions was the issues with lead service lines as highlighted by the current problem in Flint, and how many utilities are now fielding questions about and dealing with lead in their services lines, research that will come for lead, and regulatory requirements for upgrades. One issue that remains unanswered is what happens on the customer’s side of the meter, which may also be lead piping. So removing the utility’s lead service would not solve the lead issue completely, but it will help. But why has lead not been an issue in 25 years? Did it suddenly arise?
While the lead has arisen again as a public health topic, the lead and copper rule has been in effect for nearly 30 years and much of the lead and copper testing was conducted in the early 1990s. Most utilities made water treatment upgrades based the findings from the testing, and utilities have been required to continue to monitor their system ever since. Normally lead levels, even when present, were not a health issue because the zinc orthophosphates and other treatment methods kept the pipe
encapsulated. Others like Cincinnati, Lansing, Madison, Boston and others had ongoing programs to replace lead pipes. 30 years ago in North Carolina we changed out lead goosenecks and galvanized lines rather than replace them – it was just easier.
Most of the folks in the room agreed most utilities have or have such programs and that the number of lead service lines and lead goosenecks on the utility side is
limited. So I suggested that maybe the lesson we should learn from Flint is not about lead service lines, but instead the risks we incur with decision-makers who only look at money when making decisions. Flint’s decision to change water sources was driven by money, not public health.
In fact the report just published indicates that public health was not a real consideration at all. But decisions based on money impacted not only Flint, but Alamosa, CO in 2008, where disinfection was not practiced, and Walkerton,
ONT in 2001 where a Flint like set of decisions cascaded into contamination that killed people. There are utiity systems who contract operations and their contract operator makes decisions based on money, and now there is a distribution system problem. This is a repetitive pattern that has less to do with personnel operating these systems, than decision-makers, who tend to look more at the business case or money as opposed to public health. The lesson we need to learn is that money cannot be the
deciding factor when operating public water and sewer system. And to reduce the chance it happens in the future, perhaps there should be penalties if it does.

On Taxes and Fees – Is starving Government the Answer?

October 6, 2015
Banking industry, borrowing for infrastructure, engineering, ethics, finance, Leadership, local government, management, Reserve Funding, reserves, Responsibility, Revenues, Risk, Road Repair, sanitary sewer, Uncategorized, Water Funding, What could possibly go wrong?
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Most states were doing pretty well before the 2008 recession hit, but that ended in 2009. Most states had to make extremely difficult cuts or raise taxes, which was politically unacceptable. Of course invested pension systems received a lot of attention as their value dropped and long term sufficiency deteriorated, which was fodder for many changes in pensions, albeit not how they were invested. The good news is a lot of them came back in the ensuing 5 years, but 2015 may be different. A number of states have reported low earnings in 2015 and whether this may be the start of another recession. The U.S. economy has averaged a recession every six years since WWII and it has been almost seven years since the last contraction. With China devaluing their currency, this may upset the economic engine. At present there are analysts on Wall Street who suggest that some stocks may be overvalued, just like in 1999. If so, that does not bode well states like Illinois, Kansas, New Jersey, Louisiana, Alaska and Pennsylvania that are dealing with significant imbalances between their expenses and incomes. Alaska has most of its revenue tied to oil, so when oil prices go down (good for most of us), it is a huge problem for Alaska that gives $2200 to every citizen in the state. An economic downturn portends poorly for the no tax, pro-business experiment in Kansas that has been unsuccessful in attracting the large influx of new businesses, or even expansion of current ones. California and next door Missouri, often chided by Kansas lawmakers as how not to do business, outperform Kansas.

Ultimately the issue that lawmakers must face at the state and as a result the local level is that tax rates may not be high enough to generate the funds needed to operate government and protect the states against economic down turns. There is a “sweet spot” where funds are enough, to deal with short and long term needs, but starving government come back to haunt these same policy makers when the economy dips.   It would be a difficult day for a state to declare bankruptcy because lawmakers refuse to raise taxes and fees.

Don’t Put this in the sewer!

August 28, 2015
funding, inflow to sanitary sewer, sanitary sewer, water sewer management
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The other thing we learned was that we need to be far more careful about what goes in the sewer system.  Paper towels, baby wipes and hand towels do not deteriorate in the sewers.  No matter what manufacturers claim, you find them everywhere and they look just like they did when flushed.  They clog lift station pumps and pipelines.  Do not put these down the toilet for any reason?  Likewise there are no feminine hygiene products that should be flushed, ever!  Again regardless what the manufacturers claim, you can find there ubiquitously in the sewer system and they look, well just like they did when flushed.  No biodegradation.  I have included some figures.  They show up in pump clogging and at plants as well.  They are not biodegradable.  Again do not put these down the toilet!  Put all these products in the trashcan in the bathroom.

Worse, do not put grease down the drain.  One photo is a greaseball in a manhole.  It fills the whole manhole up!  Of course the feminine hygiene products, towels, wipes, etc. plus grease make almost impenetrable obstacles that block the sewer system.  So we need to remove the inflow and we need to keep grease and the reset of these products out to reduce the costs of operating the wastewater utility.  We all contribute, and we all can help.  We want systems to operate properly and dependably, so let’s do our part.

photo 3 photo 1 GREASE

Inflow success stories

August 24, 2015
inflow to sanitary sewer, Leadership, sanitary sewer, Water Funding, water sewer management
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Wastewater utilities and water utilities are intrinsically linked.  Wastewater utilities often discharge to water bodies that are water supplies for downstream water plants.  In other cases, wastewater plants provide additional supply options to reduce water demands in the form of reclaimed water.  However as a wastewater utility, costs are often associated with power- pumping and aeration, which can be 30% or more of the utility’s costs in the worst cases.  However, substantial savings in operations can be achieved by reducing the amount of wastewater that must be pumped and treated and in some cases that reduction also is associated with water quality benefits for the reuse of reclaimed water.  Utilities have long dealt with the infiltration and inflow (I and I) issues in their system by televising their pipes and identifying leak points, but this primarily addresses only the infiltration part of I and I.  Inflow and infiltration are not the same thing – they are very different and must be addressed differently.  Inflow causes hydraulic issues during rain events – like sanitary sewer overflows and basement flooding.  Both subject the utility liability from lawsuits and/or regulatory fines.  Inflow is the risk issue that must be addressed to protect the utility.  A cost effective solution to inflow involves low tech, low cost methods can identify the problems that can corrected easily.  Removing the inflow portion from I and I, often leads to a more focused plan for infiltration correction.  What are those tools?  Smoke testing, cleanout repairs, sealing manholes and manhole dishes.  But each of these needs to be carefully selected.  Because these solutions, pipe that leak can be seen through another low tech solution – a midnight monitoring event.  Recent efforts here in south Florida indicate that only 15-20% of the pipes in a sewer system need to be televised and within those, about half the leaky pipes are actually not leaking – they are broke laterals.  Laterals are one of the most ignored parts of the sewer system – often they are small pipes and much of the piping is on private property so the utility does not address those pipes.  And in many utilities these are the pipes in the worst condition.

Other things that our efforts have shown are that new pipe can leak, just like old pipe, clay is not the only pipe that leaks and that the inflow solutions can be very helpful.  Figures 1-4  show how the solutions affected three lift stations and one community.  The graphs show rainfall vs flow.  Before these efforts, the flows increased with rainfall events.  After, they did not.  Hence this utility was able to resolve its risk for overflows at a cost of under $500/manhole.  That is relatively inexpensive.

LS 52 db LS 54 LS 53

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