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Economy of Scale?

June 17, 2015
economy, Education, management, Marketing water, Water Funding
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I am in the initial stages of a project to look at economy of scale, utility bench-markings, asset management and impacts of economic disruption on utility systems. I should note that I am looking for volunteers, so let me know. But an initial question is whether economy of scale still applies. We think it should but given the disparities across the US, does it. As a quick survey, I enlisted several volunteer utilities to provide me with some basic information that I sued to create some ratios. And then we discussed them. The baselines were accounts and cost per millions of gallons produced.  The graphics are shown below. Economy –of-scale is alive and well. That means if you have a small utility, you cannot expect to have the same costs/gallon, or the same rates, as your larger neighbors. If you do, you are probably shoring your maintenance or capital programs. That leads to bigger costs later. Instead of comparing yourself to your larger neighbors, see what happens when you compare yourself to cable and cellphones in your area. You may be surprised.

economy of scale MGY economy of scale cost per MGY

Marketing and the Utility

June 9, 2015
local government, Marketing water, politics, public relations, Responsibility, sanitary sewer, Uncategorized
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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?

Part 2 Financing Infrastructure

May 19, 2015
borrowing for infrastructure, debt funding, Detroit, Economic Bubbles, engineering, finance, funding, Water Funding
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The true risk to the community of pipe damage is underestimated and the potential for economic disruption increases.  The question is how do we lead our customers to investing in their/our future?  That is the question as the next 20 years play out. Making useful assumptions about increases in demands, prices, inflation rates etc. are key to useful projections and long-term sustainability. Building too much or too little capacity for example can have disastrous consequences (to the ratepayers on the former, to the local economy for the latter).

Getting funding relies on economic strength, a problem of you are in a depressed area (Detroit) or a boom that could crash at any time (North Dakota).  P3 opportunities are available for cash strapped communities but they come with a cost.  Risk must be allocated fairly – the private community will not take on too much risk without increasing costs significantly. Loss of control is one of those risk conversion issues.  Extensive planning and feasibility analyses should be expected – far more scrutiny than most utilities are used to.  The economic strength of the community is important to private investors.

In a prior blog we talked about the boom towns of North Dakota.  Things were booming in 2013 but the downturn in oil prices may get ugly.  The need for more fracking wells may have decreased (at least temporarily) and the decrease in the oil and gas costs has cut into local revenues, so is this is the time to keep planning for the boom?  South Florida did this in the early 2000s – and well, that real estate boom put quite a dent in the economy and population estimates for 2020 and 2030.  The balloon popped and so did the economy.  South Florida had the resiliency to bounce back because of weather and proximity to South America.  We have seen the result to an industrial economy – where a community relies on industry, well industry can be fickle.  Ask Detroit.  Or Cleveland.  Or any number of other Rust Belt cities.  Now they have infrastructure, but much of it is underused.
So while the Plains states plan for the boom, the boom has settled in some places. Already the oil and gas industry has shed 100,000 jobs (many high salary).  Texas, Kansas, North Dakota and Oklahoma are facing financial challenges in 2015 due to funding losses.  Alaska is dipping into reserves.  But that doesn’t mean the results of the 2010-2014 boom are not continuing, or at least portions of them.  Frack water continues to be discharged to local wastewater systems, but the revenues to pay for the needed upgrades is lacking.  Effluent limits for nitrogen and TOC for some rivers have decreased as a result of constant increased loading to the streams (more flow increases total loads, so if flows remain the same, the concentrations must decrease to maintain total loading).  The costs to reduce ammonia, for example from 10 mg/l to 2 or 3 mg/L can be $1-2/1000 gallon – over 50% or more of the current cost for treatment.

So is it a surprise that some communities fight the boom times?  Booms create disruption and uncertainly, and a need for technology (and costs).  Maybe stability does matter, as it can contain costs and treatment requirements.  However the boom can help communities in financial distress.  Detroit and Flint would love a boom – both have the infrastructure in place to support it as opposed to rural communities in the Plains.  But that’s is a key – they already HAVE the infrastructure in place.  The Plains, well, do not.

There is a lot of older, underutilized infrastructure out there.  Detroit, Flint, Cleveland, Akron, Toledo and Philadelphia are among the older industrial cities that have stable populations – people that live there most of their lives, have a trained and educated workforce, and normally have lots of water and infrastructure, and lots of potential employees, all of which are underutilized and at risk due to economic losses. But the booms rarely go to older cities. How that is?  Is this a leadership issue?  Convenience?  Quick profits?  And how long will the boom last?  Is it a matter of lack of understanding or regulations that creates the boom?  A combination of factors?  A better PR program?

Remember we all play defense.  Industry does not.  Industry plays offense all the time.  The private sector mode is play offense.  Get the message out.  Frame the message.  Win the game.  Is winning the game at any cost the right answer?  For boomers it is.  What about the rest of us?

Infrastructure Funding Options

May 15, 2015
American Water Works Association, finance, funding, Leadership, Marketing water, Risk, Risk Management, Water Funding
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The US EPA estimates that there is a $500 billion need for infrastructure investment by 2025.  The American Water Works Association estimate $1 trillion.  Congress recently passes the Water infrastructure Finance and Innovation Act (WIFIA) at $40 million/year, rising to $100 million in 5 years, which is a drop in the bucket.  Peanuts.  We have so many issues with infrastructure in the US and Congress tosses a few scheckles at the problem and thinks it is solved.  The reality is that the federal government wants to get out of the water infrastructure funding business and shift all water infrastructure to the local level.  This is a long-standing trend, going back to the conversion of the federal water and sewer grant programs to loan programs.

The reality is that local officials need to make their utility system self-sustaining and operating like a utility business whereby revenues are generated to cover needed maintenance and long-term system reliability.  The adage that “we can’t afford it” simply ignores the fact that most communities cannot afford NOT to maintain their utility system since the economic and social health of the community relies on safe potable water and wastewater systems operating 24/7.  Too often decision are made by elected officials who’s vision is limited by future elections as opposed to long-term viability and reliability of the utility system and community.  This is why boom communities fall precipitously, often never recovering – the boom is simply not sustainable.  Long-term planning is a minimum of 20 years, well beyond the next election and often beyond the reign of current managers.  Decisions today absolutely affect tomorrow’s operators.  Dependency on water rates may be a barrier, but this ignores the fact that power, telephone, cable television, gas, and internet access are generally more expensive hat either water or sewer in virtually all communities.  We need water. Not so sure about cable tv or he internet.  Great to have, but needed to survive?

The growth in costs can lead to mergers where a utility cannot afford to go it alone – as the economy of scale of larger operations continues to play out in communities.  Several small plants cannot operate at the same cost as one larger plant.  As a result larger projects will increase – from 87 to over 336 between 2005 and 2014.

But these costs are generally plant costs – treatment and storage, not piping.  Distribution pipelines remain the least recognized issue for water utilities (collection pipelines for sewer are similarly situated).  The initial Clean Water Act and Safe Drinking Water acts did not focus on piping systems – only treatment and supply.  The national Council on Public Works concluded their first assessment grade for infrastructure in the 1980s – but piping was not discussed.  ACSCE’s first report card in 1998 did not express concern about piping system.  Yet piping continues to age, and expose communities to risk.  In many communities greater than 50% of their assets are buried pipes.  Tools for assessing the condition of buried pipes especially water distribution pipes is limited to breaks and taps.  As a result the true risk to the community of pipe damage is underestimated and the potential for economic disruption increases.  The question is how do we lead our customers to investing in their/our future?  That is the question as the next 20 years play out.  Many risk issues will be exposed.  The fact that there are not more issues is completely related to the excellent work done by the utility employees.  More to come….

Indirect potable reuse in our future?

May 11, 2015
communciations, direct potable reuse, Education, engineering, Holistic Water Planning, indirect potable reuse, Marketing water, Monitoring Water, rivers, surface waters, Water Funding, water quality, water sewer management, water supplies, Water treatment
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A past project I was involved  with involved a look at the feasibility of using wastewater to recharge the Biscayne aquifer In the vicinity of a utility’s potable water supply wells.  The utility was feeling the effects of restrictions on added water supplies, while their wastewater basically unused.  So they wanted a test to see if the wastewater could be cleaned up enough to pump it in the ground for recovery downstream, with the intent of getting added allocations of raw water.  Assuming the water quality issues could be resolved, the increased recovery would solve a number of water resource issues for them, and the cost was not nearly as high as some thought.

So we tested and using sand filters, microfiltration, reverse osmosis, peroxide and ultraviolet light, we were successful in meeting all regulatory criteria for water quality.  The water produced was basically pure water – not constituents in it, and therefore it exceeded all drinking water standards.  We demonstrated that technologically the water CAN be cleaned up.  The only issue is insurance that the treatment will always work – hence multiple barriers and the ground.  This was an indirect potable reuse project and ended because of the 2008 recession and the inability to of current water supply rules to deal with the in/out recovery issues.

The indirect reuse part was the pumping of the water into the ground for later withdrawal as raw water to feed a water treatment plant, as opposed to piping it directly to the head of their water plant.   But recovery of the water can be a challenge and there is a risk that a portion of the injected water is lost.  In severely water limited environments, loss of the supply may not be an acceptable outcome.  Places like Wichita Falls, Texas have instead pursued more aggressive projects that skip the pumping to the ground and go straight into the water plant as raw water.  Technologically the water CAN be treated so it is safe to drink.  The water plant is simply more treatment (added barriers).  So, with direct potable projects, monitoring water quality on a continuous basis maybe the greatest operational challenge, but technologically there is no problem as we demonstrated in our project.

The problem is the public.  You can hear it already – we are drinking “pee” or “poop water” or “drinking toilet water.”  The public relations tasks is a much bigger challenge because those opposed to indirect and direct potable projects can easily make scary public statements.   Overcoming the public relations issue is a problem, but what utilities often fail to convey is that many surface waters are a consolidations of a series of waste flows – agriculture, wastewater plants, etc. by the time they reach the downstream water intake.  Upstream wastewater plants discharge to downstream users.   But the public does not see the connection between upstream discharges and downstream intakes even where laws are in effect that actually require the return of wastewater to support streamflow.  So are rivers not also indirect reuse projects? In truth we have been doing indirect potable reuse for, well ever.

We have relied on conventional water plants for 100+ years to treat surface waters to make the water drinkable.  The problem is we have never educated the public on what the raw waters sources were, and how effective treatment is.  Rather we let the political pundits and others discuss concerns with chemicals like fluoride and chlorine being added to the water as opposed the change in water quality created by treatment plants and the benefits gained by disinfectants.  That message is lost today.  We also ignore the fact that the number one greatest health improvement practice in the 20th century was the introduction of chlorine to water.  Greater than all other medical and vaccine advances (although penicillin and polio vaccines might be a distant second and third above others).   Somehow that fact gets lost in the clutter.

Already the Water Reuse Association and Water Research Foundations have funded 26 projects on direct potable reuse.  Communicating risk is one of the projects.  The reason is to get in front of the issues.  You see, playing defense in football is great and you can sometimes win championships with a good defense (maybe a historically great one, but even they gamble).  Defense does not work that way in public relations.  Offense usually wins. Defenses often crumble or take years to grab hold.

The failure of utilities to play offense, and the failure of elected officials particularly support playing offense is part of the reason we struggle for funds to make upgrades in infrastructure, to perform enough maintenance or to gather sufficient reserves to protect the enterprise today.  And it remains a barrier to tomorrow.   Leadership is what is missing.  It struck me that when looking at leaders, what made them leaders was their ability to facilitate change.  Hence President Obama’s campaign slogan.  But talking about change and making real changes are a little more challenging (as he has seen).  You cannot lead without a good offense, one that conveys the message to the public and one that gets buy-in.  With direct and indirect potable reuse, the water industry has not changed the perception of “toilet water.”  That needs to change.  We need to be frank with our customers.  Their water IS SAFE to drink.  They do not need filters, RO systems, softeners, etc., or buy bottled water, when connected to potable water supplies (private wells, maybe).  We CAN treat wastewater to make it safe, and the technology tis available to make it potable.  . The value they pay for water is low.  Yet in all cases, others, have made in-roads to counter to the industry.  That happened because we play defense.

Ability to pay?

April 28, 2015
finance, Leadership, management, Revenues, Water Funding, water sewer management
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So what does ability to pay really mean?  We hear this discussed by political pundits and local officials but few really understand what this means.  Likewise the “I’m on a fixed” budget argument pops up a lot, and it is hard to understand what this really means.

The ability to pay concept was developed many years ago by political scientists and economists looking at the allocation of costs to consumers for government services.  Property taxes are a logical place to start – higher value homes have more potential for loss, so their taxes were more (the percent was the same but because of their value the amount was higher).  For income taxes, those with higher incomes we deemed to have more disposable income and again more to lose, so the rates increased as income rose (we forget that until 1963 the highest income tax rate was 90%, and the economy was growing quickly!).  People with lower incomes had little disposable income because all their money went to food and housing.  Today the issue of affordability arises with water, sewer, taxes and storm water fees, as well as federal and state taxes.  The SRF and bonding agencies often look at 3.5% or 4.5% and the maximum water or water/wastewater cost as a percent of income, but few  utilities charge this much.  Few water and sewer utilities (combined) approach the cost for power per household, let along the cost of cable or cell phone use for all but the cheapest carriers.  Certainly water, sewer and storm water are essential service, but not so much cable, although there are those who will argue the point.  So somehow the ability to pay issue does not apply to private sector services, but does to essential services, especially when we all know we do not collect enough money to cover significant infrastructure needs on those public works systems?  That just does not make logical sense except in the political world.

Likewise the “fixed income” argument is often applied in tandem.  Fixed income is generally applied to retirees, but let’s not forget that 10% of those in poverty are retirees, but 18% of millionaires are over 65.  But don’t most people have a fixed income – their income is fixed by their employer.  They can change jobs but the argument that younger folks should change jobs if they want to earn more is like telling retirees to go back to work.  There is only so much we can do and only so much income to be earned because few control their income.

So on both counts, the ability to pay argument seems like an argument created to keep public service costs down and prevent the full cost application to many.  The squeaky wheel gets coddled, at the expense of society.  Somehow that is not fairness, and subjects us all to unnecessary risks.  The question is who is going to be the person/group to stand up and say enough?

Climate and Health

April 24, 2015
Climate, health risks, Risk, social vunerability, stormwater, water sewer management, water supplies
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A project I am currently involved with looks at the impacts of climate change on public health in southeast Florida.  The initial grant focused on looking at socially vulnerable populations and the impact on chronic diseases these groups from climate change.  The question was whether climate change, which in southeast Florida is basically sea level rise, would have an impact on health issues.  On the face of it, the correlation between chronic health conditions and climate seems tenuous although the statistics support the link between chronic health impacts and socially vulnerable populations.  But what is interesting is that in general, the climate vulnerable topography and the socially vulnerable people do not correlate.  This may be a southeast Florida issue, but it is the less socially vulnerable who live in the climate vulnerable topography.

Those familiar with the history of southeast Florida know that makes sense because of the beaches.  The beaches are topographically vulnerable but eh wealthy want to live there anyway. But the problem is more pervasive.  The data actually can be mined further to reveal that the older homes (1940s-1960s), generally smaller and of lower value, were traditionally built on the high ground.  Turns out our ancestors were a little smarter than we thought – they actually thought this out.  Aside from Henry Flagler building the railroad on the high ground, most of the cities were located similarly – on the coastal ridge.  Drainage of the Everglades permitted the western migration of residences – newer and larger, but at lower elevation and mostly reliant on drainage across the ridge to the ocean via canals.  But as sea level rises, the water moves more slowly.

The question that must be asked then is what happens as this housing stock ages?  We already see some newer communities, primarily built for retirees, moving to relieve themselves of the 55+ designations to allow the housing stock to be sold – the children of the retirees don’t want the property and desire to sell it – often quickly.  To increase speed of sales (and ultimately retaining some value), eliminating the 55+ opens younger families to move in.  However the lower value of the properties makes them conducive to migration of people who are social vulnerability, so migration may be toward social vulnerable people moving to topographically challenged property.  That portends poorly for the link between climate and health in the future.

Two issues arise from the research.  First future health vulnerability from climate may be more related to vectors and waterborne disease than chronic health effects.  That expands the health vulnerability to all populations.  The second issue is that storm water, sewer roadway and water infrastructure may relieve some pressure on these topographically vulnerable properties, but the people who are moving to then will have significantly less ability to pay for those improvements, creating a political conundrum that will that a significant amount  of leadership to overcome.  That means that resiliency must be built into infrastructure and redevelopment projects now, to address future conditions.  Building in resiliency is not currently being considered by local planners and engineers because the situation is not well understood and a 50 year planning horizon is not the norm.  Also, it would likely create a firestorm of fuss from developers who would pay the costs, which discourages good planning.

Finally, if things accelerate, wealthier parties may begin to see a retreat from vulnerable eastern beaches to higher ground as being a reasonable concept.  However the high ground is currently occupied by socially vulnerable people, creating a potential area of conflict over the fate of displaced residents who’s social status may force them toward the vacant, topographically vulnerable properties.  This is a future problem for planners, developers and officials approving new development with an eye to displacement a concept not in the current thought process.  Thinking about vulnerability means a lot of infrastructure must not only be constructed, but maintained meaning local public works and utility budgets will need to increase in kind.  That means higher rates and charges to populations that may have limits to their ability to pay   Stay tuned…..

Infrastructure is Broken

March 2, 2015
Economic Bubbles, economy, engineering, infrastructure, innovation, JObs, Leadership, local government, management, planning, politics, Responsibility, sustainability, utilities, Water Funding, What could possibly go wrong?
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ASCE came out with more bad news about infrastructure.  60 Minutes did a piece about deterioration of bridges. The magazine American City and County has published a couple articles about the risks of aging infrastructure.  Asset management is practiced by few governments, and even fewer small ones.  The public doesn’t want to foot the bill and lobbyists want taxes cut further.  Where does it end?

The infrastructure crisis is a political and business leadership crisis.  Or vacuum.  The economy of America and much of the developed world was built on advanced (for their time) infrastructure systems constructed by governments with a vision to the future.  Some of this infrastructure was repurposed (federal interstate system for example), but much of it has addressed critical issues that hampered our development.  For example, the lack of water severely inhibits many third world nations.  Even when they have water, it is unsafe to drink or use.  In America, at the turn of the 20th century 1:100,000 people DIED each summer from typhoid.  Just typhoid, not all the other waterborne disease options.  Many more were sick.  And the population was much smaller.  Talk about reduced productivity.  Now we have advanced water systems, disinfection practices that protect people and pipes, and few event get sick from contaminated water.  Those that do, become headlines.  You don’t want to be a headline.  Productivity is up.  But we expect good water and can’t see the pipes.

Sewer is an even better example.  People just don’t want to know.  Flush and it’s gone.  But the equipment, treatment and materials may be even more complex than the water system.  But few people get sick from sewage because of the systems we have built.  Now think about third world examples.  Or conditions you have seen in documentaries, the news or movies.  Being in sewage is not a great place to be.  Even the manhole thriving cockroaches agree..

Stormwater is probably the laggard here, in part because changes in development patterns have overwhelmed the old systems.  Miami Beach experienced this when redevelopment replaced small houses on permeable lots with large housed with mostly impermeable property.  Oops.  Meanwhile road and bridges have received a lot of funding – with much to do (see bridge that collapsed on I-75 in Cincinnati a few weeks back).  Most states fund transportation at a magnitude more than water and sewer.

What is the problem?  Local officials do not convey an understanding of these complex system to the public very well.  In part this may be because understanding the maintenance needs is difficult and highly variable.  And many do not fully comprehend the assets they have, their condition, life expectancy or technological needs.  No one knows when things will fails, so maintenance or replacement of some equipment or pipeline is always the thing cut in the budget, with no real understanding of the consequences.

The public does not see the asset, assumes it will have a long life, so is unconcerned until they are affected.  Then it is personal.  The public does not understood the impact or value that these assets have to society – they tend to be personal focused, not societal.  That is a leadership issue.  That leadership starts with vision and communication from those that understand the issue to the elected officials that need to advocate for their infrastructure.  Elected officials need to take ownership of infrastructure.  It is like your house – you need to upgrade and protect it constantly.  You do not let that roof leak keep leaking!  Elected officials that do not invest in infrastructure, are letting the roof leak.  Making is someone else’s problem for political expediency is not leadership.

Despite the infrastructure crisis, the good news is that construction of piping is increasing – both new and replacement.  Every so many months, the magazine Utility Contractor will note current trends and pipe seems to be going up.  That’s good but there is a long way to go.  Better news – the construction of buildings is increasing.  That could lead to more revenues.  In Florida, all of a sudden finding experienced construction workers is a problem.  Things are definitely better economically, but are we taking advantage to improve the local infrastructure, or is you economy simply an infrastructure disruption away from another fault?

Indirect and Potable Reuse Future?

December 15, 2014
Aquifer storage and recovery, Colorado, direct potable reuse, economy, Environment, groundwater, Holistic Water Planning, indirect potable reuse, infrastructure, innovation, Leadership, local government, resource depletion, sustainability
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2014 is almost over.  Hard to believe.  I have been attending or annual Florida Section AWWA conference, meeting up with old friends, making new ones and learning new things.  Conferences and connections allow us to do our jobs more efficiently because as we learn how to solve problems or where we can find a means to solve whatever problem we encounter.  It is a valuable experience that I encourage everyone to get involved with, especially young people who need to make connections to improve their careers.  The technical sessions seemed to be well received and popular.  That means that there are issues that people want to hear about.  Things we focused on were alternative water supplies, water distribution piping issues, disinfection byproducts, ASR and reuse projects.

The reuse projects focused on Florida efforts to deal with 40 years of reuse practice and a movement toward indirect potable reuse. This is the concept where we treat wastewater to a standard whereby it can be put into a waterway upstream of a water supply intake or into the aquifer upstream of wells.  The discussion was extended to a number of discussions about water shortages and solutions for water limited areas.  Florida averages 50-60 inches of rain per year as opposed to the 6-10 inches in areas of the southwest or even 15-20 inches in the Rockies which makes the concept of water limitations seem a bit ludicrous for many, but we rely on groundwater that is recharged by this rainfall for most of our supplies, a lack of topography for storage and definitive wet and dry seasons that do not coincide with use.

The situation is distinctly different in much of the US that relies on surface waters or is just plain water limited.  We have a severe multi-year drought going on in California and huge amounts of groundwater being used for irrigation in many rain-challenged areas.  That is what all those crop-circles are as you fly over the Plains states and the wet.  Where you see crop circles, think unsustainable water supplies.  They are unsustainable because there is no surface water and the recharge for these aquifers is very limited.  Most leakance factors in aquifers is over estimated and hence water levels decline year after year.   Water limited places need answers because agriculture often out-competes water utilities, so in the worst of those areas, there are discussions about direct potable reuse (which occurs in Texas).

Direct and indirect potable reuse are offered as answers which is why this topic was popular at our conference.  A recent 60 Minutes presentation included a tour and discussion of the Orange County Groundwater Replenishment program, where wastewater is treated and injected into the ground for recovery by wells nearer to the coast.  They discussed the process (reverse osmosis, ultraviolet light and peroxide) and they took a drink.  “Tastes like water” was Leslie Stahl’s comment – not sure what she expected it to taste like, but it provides a glimpse into the challenge faced by water utilities in expanding water supplies.   Orange County has been injecting water for many years into this indirect potable reuse project.  The West Coast Basin Barrier Project and several others in California have similar projects.  South Florida has tested this concept 5 times, including one by my university, but no projects have yet been installed.

But until recently, there were no direct potable reuse projects where wastewater is directly connected to the water plant.  But now we have two – both in Texas with a number of potential new projects in the pipeline.  Drought, growth, water competition have all aligned to verify that there many are areas that really do not have water, and what water they do have is over allocated.  A 50 year plan to manage an aquifer (i.e.. to drain it) is not a sustainable plan because there may not be other options.  But Texas is not alone.  Arizona, Nevada, New Mexico, Utah, Colorado, The Dakotas, Kansas Oklahoma and I am sure others have verified water limitations and realize that sustainable economic activity is intrinsically linked to sustainable water supplies.  Conservation only goes so far and in many of these places, conservation may be hitting its limits.  Where your rainfall is limited and/or your aquifer is deep, replenishable resource is not always in the quantities necessary for economic sustainability.  Water supplies and economic activity are clearly linked.

So the unimaginable, has become the imaginable, and we now have direct potable reuse of wastewater.  Fortunately we have the technology – it is not cheap, but we have demonstrated that the reverse osmosis/ultraviolet light/advanced oxidation (RO/UV/AOP) process will resolve the critical contaminant issues (for more information we have a paper we published on this). From an operational perspective, RO membranes, UV and chemical feeds for AOP are easy to operate, but there are questions about how we insure that the quality is maintained.  The technical issues for treatment are well established.  Monitoring is a bit more challenging – the question is what to monitor and how often, but even this can be overcome with redundancy and overdosing UV.

But drinking poop-water? The sell to the public is much more difficult.  It is far easier to sell communities without water on the idea, but the reality we need to plan ahead.  There are no rules.  There are no monitoring requirements, but we MUST insure the public that the DPR water they are drinking is safe.  WE are gaining data in Texas.  California and Texas are talking about regulations.  The University of Miami has been working of a project where they have created a portion of a dorm that makes its own water from wastewater.  Results to come, but the endeavor shows promise.

Post Recession Good News

September 29, 2014
finance, funding, Leadership, local government, management, planning, politics, Responsibility, Revenues, sanitary sewer, Uncategorized, utilities, Water Funding
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The National League of Cities reports that nearly ¾ of municipalities are better off in2013 than they were in 2012.  In Broward County, over half the cities actually have more revenue in 2013 than they did in 2006.  Property values are up in 72% of Counties, and real estate activity was high in 2012 and 2013, although it has slowed in 2014.   Nearly 60% of the municipalities were not projected deferral of capital improvements, although 1/3 expect to reduce maintenance and 40% to defer capital.  The biggest challenge cities identified was street condition (23%, followed by sewer, stormwater and water although these were all under 16% which is a bit disappointing given the condition of much of this infrastructure).  Money remained their biggest challenge.  Total local government budgets are $3 trillion, and the bond market Is a robust $3.7 trillion.  New construction for local water, sewer and stormwater infrastructure is expected to reach $750 billion in 2014, with 3.2 and 4.8 billion respectively for water and sanitary sewer.

Pensions are the biggest liability and one that is critical for many local entities with their own pension plans (like Detroit).  Many others have or will migrate to a state plan, or were already part of a state plan.  Having a large pool off employees decreases risk to the pension plan and increased revenues (and future outlays).  Pension plans or Ponzi schemes?  Now that is the question….