The Proposed 2018 Budget Cuts Require Water Systems to Practice Capital Efficiency

In recent years, water systems have been faced with challenges that are unique to modern times. Our nation’s buried infrastructure is reaching a critical juncture in that it is nearing or has reached the end of its useful life, or is in dire need of replacement due to the presence of lead. At the same time, climate change is affecting supplies, while a burgeoning population is creating a larger demand. And as we increase our knowledge about the dangers of additional contaminants in our drinking water, utilities are saddled with increased regulations that require strict compliance by specific deadlines. Obtaining compliance often requires extensive upgrades or completely new infrastructure, all of which come with a high price tag.

And therein lies the problem. While water systems are facing such a complex set of challenges that require significant expenditure, available capital is quickly drying up. Water systems are seeing their budgets slashed while operations and maintenance costs soar. In addition, funding sources have been dwindling, and President Trump’s 2018 budget aims to slash them even further. In fact, Trump’s proposed 2018 budget completely eliminates the United States Department of Agriculture (USDA) Rural Development Water and Waste Disposal Loan and Grant Program. This program “provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and stormwater drainage to households and businesses in rural areas who are not otherwise able to obtain commercial credit on reasonable terms.”1 In other words, lower income rural communities who fully rely on USDA Rural Development grants to fund their water system improvements will no longer have a source of federal funding.

The proposed 2018 budget also budget cuts the Environmental Protection Agency (EPA) by 31%, or $5.7 billion. The EPA provides funding to water systems through its Drinking Water State Revolving Fund (DWSRF) and Clean Water State Revolving Fund (CWSRF) programs, both of which “provide communities a permanent, independent source of low-cost financing for a wide range of water quality infrastructure projects.”2 Considering that almost all spending on critical infrastructure such as drinking water, wastewater, and transportation is provided by the public sector, these cuts are expected to make a huge impact on available funding for critical water infrastructure projects.

Because working capital is becoming so scarce, it is critical that water systems manage their assets with an eye on efficiency and systematic planning. Asset management is arguably one of the most important strategies for effectively maintaining utilities today and critical to the health and maintenance of water systems. Key components of a utility asset management plan include performing an inventory and condition assessment of the system’s assets, defining level of service goals, identifying critical assets, establishing life cycle costs, and developing a long-term funding strategy. In other words, a successful asset management plan requires a thoughtful, systematic approach that provides for the rehabilitation and replacement of assets over time, while also maintaining an acceptable level of service for existing assets.

Advanced condition assessment for pipeline rehabilitation provides insight into the quality and reliability of a water distribution system.

Today’s stringent budgets demand precise efficiency and cost-effectiveness, and determining which assets should be prioritized can be a challenge. It is no longer economically feasible to create an asset replacement schedule based solely on life cycle and critical components; rather, utilities today must pinpoint assets that are most in need of repair or replacement in order to stretch existing capital and justify new budget requests.

Capital efficiency planning helps to do just that.  Our proprietary Capital Efficiency Plan™ (CEP) methodology combines the concepts of asset management, hydraulic modeling, and system criticality into a customized, comprehensive report that provides utilities with a roadmap for future repair and replacement. The report includes database and GIS representation for each pipe segment within their underground piping system, prioritizes water distribution system piping improvements, and provides estimated costs for water main replacement and rehabilitation. Because each water system has unique characteristics and challenges, our CEP includes a workshop with knowledgeable field staff and managers for each project that helps to fill in data gaps, correct incorrect records, and identify specific issues and critical components that are custom to the system. The results of the workshop provide significant value by improving the quality of the asset data and the accuracy of the hydraulic model. Because the CEP utilizes a highly structured, detailed, and targeted approach, utilities can confidently justify the costs of repairing or replacing those assets most in need of repair or replacement when preparing annual budgets. Our CEPs have assisted numerous utilities throughout New England by providing a practical and easily understandable plan to critical asset repair and replacement, as well as an advantage when it comes to procuring funding.  The same approach can be applied to above ground assets as well as wastewater and stormwater systems.

Land that was once covered by water from the lake is now exposed.

Increasing regulations, climate change, shrinking budgets, dwindling supply, and population growth — these are all challenges that affect the financial capacity of today’s utilities. And with the proposed budget cuts under the Trump administration, water systems will feel even greater fiscal pressure. Competition for SRF funding will intensify, and utilities will be required to definitively justify the reason for their funding request. By combining asset management with hydraulic modeling and system criticality, our Capital Efficiency Plans™ can help utilities to maintain the health and viability of their water systems today so that they can continue to provide safe, clean drinking water tomorrow, and well into the future.

1 rd.usda.gov
2 epa.gov

 

Why Water and Wastewater Utilities Must Practice Operational Efficiency

Efficiency-300x209Water and wastewater utilities across the country face common challenges. These include rising costs, aging infrastructure, increasingly stringent regulatory requirements, population changes, and a rapidly changing workforce. While many utilities find themselves turning from one urgent priority to the next, others have implemented effective operational efficiency initiatives that have helped them enhance the stewardship of their infrastructure, improve performance in many critical areas, and respond to current and future demands. Improved efficiency is not just beneficial to a utility’s bottom line – it benefits everyone in a community.

Infrastructure Stability

Utilities who implement operational efficiency understand the condition of and costs associated with critical infrastructure assets. This allows them to maintain and enhance the condition of their infrastructure over the long-term at the lowest possible life-cycle cost consistent with customer, community, anticipated growth, and system reliability goals. Efficient utility management assures infrastructure repair, rehabilitation, and replacement projects are coordinated in order to minimize disruptions in service or other negative consequences.

Enhanced Employee Leadership Development

teamwork-300x181A common problem facing many utilities today is a retiring work force. By implementing operational efficiency now, utilities can recruit and retain a workforce that is competent, adaptive, and correctly trained to take on leadership roles of their own. Through communication and effective training, utility owners and operators can create an organization focused on continual learning and improvement. This ensures employee knowledge is retained and improved upon. Over time, senior knowledge and best practices will be passed along to promote a well-coordinated senior leadership team who understands their system and the needs of its customers.

When employees or operators of water and wastewater systems are knowledgeable enough to solve problems themselves, it allows managers to focus more on the entire utility versus consistently fixing small problems. Managers are then free to focus on internal operations, better management practices, improving water and effluent quality, and other areas of priority.

Managing Reliable Data through Operational Efficiency

Coupled with excellent communication throughout utility staff, data collection is an area of operational efficiency that helps utilities meet demand and plan for the future. With the collection of accurate, reliable data and the tools to analyze the information, utilities can prioritize actions and capitalize on their efforts. This allows them to understand the demands of their service areas and ensure sufficient supply is available. By more efficiently identifying contributors to non-revenue water, such as system leaks, aging assets, and unauthorized usage, utilities can reduce operational expenses and uncover new revenue streams. They can also provide their customers with access to that same set of information, making it possible for them to understand and manage their consumption. This delivers benefits to the entire organization, including billing, customer service, operations, engineering, and distribution, and empowers utilities to address conservation and revenue opportunities.

Reduced Vulnerability to Climate Changes

solution-chalkboard-concept-300x200Some practices that utilities are implementing greatly help to improve resiliency and reduce vulnerability to an ever changing climate. Internal practices and initiatives such as energy conservation, solar energy, and utilizing heat transformed into energy from sewage and digestion have helped utilities rely less on the grid and more on their own operations. This is especially beneficial considering the ever-increasing price of energy. Reducing energy use significantly lowers operational costs for utilities – freeing up dollars for future initiatives or infrastructure improvements. Utilities who practice operational efficiency understand that making internal practices more efficient results in the entire distribution system becoming more efficient.

All Around Flexibility for Utilities

Practicing operational efficiency can greatly improve all around flexibility for water and wastewater systems. Knowing your distribution system and operating it to your specific community’s needs is a huge advantage in dealing with costly dilemmas that occur with infrastructure. In places that see seasonal spikes in water usage, operational efficiency allows a utility to adjust and operate more effectively during peak times as well as during the “off-season.” Practicing operational efficiency also allows a utility to better deal with issues in their distribution system without disrupting service to customers.

In Conclusion

To meet continually increasing challenges, utilities must become more efficient in the way they manage their resources, address demands on their infrastructure, and monitor data throughout their systems. The implementation of improved operational efficiency helps utilities ensure ongoing, timely, cost-effective, reliable, and sustainable performance improvements in all facets of its operations.Subscribe-to-our-newsletter1

 

Meeting Wastewater Utilities' Needs Through Capital Efficiency

restrooms-300x200Wastewater. It’s something that will always exist, and will always require collection and treatment. Just like improved water, improved sanitation is one of the key contributing factors to a developed nation, significantly improving public health, educational opportunity, and workforce viability. And while the United States boasts nearly 100% improved water and sanitation, there is still cause for concern.

In the American Society of Civil Engineers (ASCE) 2013 Report Card, wastewater received a “D” grade. Why? Because our existing infrastructure is in desperate need of repair and replacement, and a significant funding gap exists. This gap can be attributed to the fact that funding has been declining while regulations continue to increase.

Pic1-TotalPublicSpending-300x200In March of 2015, the Congressional Budget Office (CBO) published a report on annual government expenditures on infrastructure, titled Public Spending on Transportation and Water Infrastructure, 1956 to 2014. The data, collected from the Office of Management and Budget (OMB) for federal expenditures and from the Census Bureau for state and local government expenditures, indicates that federal, state, and local governments in the United States have been investing LESS in water and wastewater infrastructure than ever before. From 1956 to the late 1980s, total government spending increased in real dollars by approximately 3%-4% per year, and then from 1%-2% through 2009. These expenditures include both capital and operations and maintenance (O&M) costs. However, from 2010 until present, total government spending has actually decreased by 8%.
Pic3-OMvsCapital-300x200To further complicate matters, capital expenditure has decreased at a faster rate than O&M expenditure. From 1956 to 1980, public spending was basically split between capital expenditures — to build or replace water and wastewater systems —  and O&M of the systems. However, since 1980, O&M spending continued to grow at an annual rate of 4%-6% to the 1990s, and then at an annual rate of 1%-3% through 2009, since when it has remained flat. In contrast, capital spending grew at an annual rate of only about 1%-2% since 1980, and has declined at an average annual rate of 4% since 2009. Governments now spend twice as much on O&M of their existing systems than on capital expenditures to repair, rehabilitate, or replace existing assets or for the installation of new infrastructure. In addition, state and local government is now saddled with nearly the full burden of capital expenditure, as federal spending has been steadily on the decline since 1976.
Clearly, municipalities are faced with the almost insurmountable task of staying up to date with all current regulations while also improving outdated and failing systems. Because wastewater collection and treatment is such a crucial aspect of modern day society, it has become paramount that municipalities find cost-effective and efficient ways of maintaining and updating critical infrastructure.
Dollar sign sink in clear blue water
One of the most effective ways in which municipalities can intelligently allocate their limited infrastructure dollars is by implementing a clear and systematic plan of action for capital improvement projects. Typically, asset management is considered to be the standard by which wastewater utilities address capital assets. Defined by the EPA as managing infrastructure capital assets to minimize the total cost of owning and operating them, while delivering the service levels customers desire, asset management certainly plays a key role in smart capital planning. However, asset management should only be part of the equation. Hydraulic modeling and system criticality are two equally important aspects which should be examined when planning long-term capital expenditure.
Tata & Howard’s Wastewater Capital Efficiency Plans™ identify those areas of your wastewater systems needing rehabilitation, repair, or replacement that make the most efficient use of your limited infrastructure dollars by combining the concepts of hydraulic modeling, system criticality, and asset management into a single comprehensive report. Each report is tailored to the individual utility distribution system and provides utilities with a database and Geographic Information System (GIS) representation for each pipe segment within their underground piping system. The CEP report then prioritizes system piping improvements and provides estimated costs for replacement and rehabilitation.
Our three circle approach includes the following:
Three Circles WASTEWATER 515-finalHydraulic modeling

  • Model verification if available
  • Compare flows with design carrying capacity
  • Hydraulic deficiencies
  • History of SSOs
  • High infiltration/inflow rates

Critical Components

  • Interceptors
  • Trunk sewers and force mains
  • Residential sewer mains

Asset Management

  • Establish score for each pipe segment based on blockages/collapses, I/I rates, installation year, soil corrosivity, PACP structural and maintenance ratings, and other criteria.

A comprehensive CEP provides a utility with not only a prioritized list of logically thought out infrastructure projects, but also a justifiable and defendable plan of action to present to town administrators when planning budgets.
Manhole_cover_sewer_closeup-300x200To continue as a leading industrialized nation, our wastewater utilities must not only remain safe and functional, but also progressive and up to date with current and future regulations. Because funding is declining while costs and population are increasing, it is more important than ever for wastewater utilities to methodically prioritize and plan all repairs and improvements. Only through the implementation of a well-researched and systematic course of action will utilities be prepared to provide safe and dependable wastewater services both now and in the future.
Subscribe-to-our-newsletter1

Meeting Wastewater Utilities’ Needs Through Capital Efficiency

restrooms-300x200Wastewater. It’s something that will always exist, and will always require collection and treatment. Just like improved water, improved sanitation is one of the key contributing factors to a developed nation, significantly improving public health, educational opportunity, and workforce viability. And while the United States boasts nearly 100% improved water and sanitation, there is still cause for concern.

In the American Society of Civil Engineers (ASCE) 2013 Report Card, wastewater received a “D” grade. Why? Because our existing infrastructure is in desperate need of repair and replacement, and a significant funding gap exists. This gap can be attributed to the fact that funding has been declining while regulations continue to increase.

Pic1-TotalPublicSpending-300x200In March of 2015, the Congressional Budget Office (CBO) published a report on annual government expenditures on infrastructure, titled Public Spending on Transportation and Water Infrastructure, 1956 to 2014. The data, collected from the Office of Management and Budget (OMB) for federal expenditures and from the Census Bureau for state and local government expenditures, indicates that federal, state, and local governments in the United States have been investing LESS in water and wastewater infrastructure than ever before. From 1956 to the late 1980s, total government spending increased in real dollars by approximately 3%-4% per year, and then from 1%-2% through 2009. These expenditures include both capital and operations and maintenance (O&M) costs. However, from 2010 until present, total government spending has actually decreased by 8%.

Pic3-OMvsCapital-300x200To further complicate matters, capital expenditure has decreased at a faster rate than O&M expenditure. From 1956 to 1980, public spending was basically split between capital expenditures — to build or replace water and wastewater systems —  and O&M of the systems. However, since 1980, O&M spending continued to grow at an annual rate of 4%-6% to the 1990s, and then at an annual rate of 1%-3% through 2009, since when it has remained flat. In contrast, capital spending grew at an annual rate of only about 1%-2% since 1980, and has declined at an average annual rate of 4% since 2009. Governments now spend twice as much on O&M of their existing systems than on capital expenditures to repair, rehabilitate, or replace existing assets or for the installation of new infrastructure. In addition, state and local government is now saddled with nearly the full burden of capital expenditure, as federal spending has been steadily on the decline since 1976.

Clearly, municipalities are faced with the almost insurmountable task of staying up to date with all current regulations while also improving outdated and failing systems. Because wastewater collection and treatment is such a crucial aspect of modern day society, it has become paramount that municipalities find cost-effective and efficient ways of maintaining and updating critical infrastructure.

Dollar sign sink in clear blue water

One of the most effective ways in which municipalities can intelligently allocate their limited infrastructure dollars is by implementing a clear and systematic plan of action for capital improvement projects. Typically, asset management is considered to be the standard by which wastewater utilities address capital assets. Defined by the EPA as managing infrastructure capital assets to minimize the total cost of owning and operating them, while delivering the service levels customers desire, asset management certainly plays a key role in smart capital planning. However, asset management should only be part of the equation. Hydraulic modeling and system criticality are two equally important aspects which should be examined when planning long-term capital expenditure.

Tata & Howard’s Wastewater Capital Efficiency Plans™ identify those areas of your wastewater systems needing rehabilitation, repair, or replacement that make the most efficient use of your limited infrastructure dollars by combining the concepts of hydraulic modeling, system criticality, and asset management into a single comprehensive report. Each report is tailored to the individual utility distribution system and provides utilities with a database and Geographic Information System (GIS) representation for each pipe segment within their underground piping system. The CEP report then prioritizes system piping improvements and provides estimated costs for replacement and rehabilitation.

Our three circle approach includes the following:

Three Circles WASTEWATER 515-finalHydraulic modeling

  • Model verification if available
  • Compare flows with design carrying capacity
  • Hydraulic deficiencies
  • History of SSOs
  • High infiltration/inflow rates

Critical Components

  • Interceptors
  • Trunk sewers and force mains
  • Residential sewer mains

Asset Management

  • Establish score for each pipe segment based on blockages/collapses, I/I rates, installation year, soil corrosivity, PACP structural and maintenance ratings, and other criteria.

A comprehensive CEP provides a utility with not only a prioritized list of logically thought out infrastructure projects, but also a justifiable and defendable plan of action to present to town administrators when planning budgets.

Manhole_cover_sewer_closeup-300x200To continue as a leading industrialized nation, our wastewater utilities must not only remain safe and functional, but also progressive and up to date with current and future regulations. Because funding is declining while costs and population are increasing, it is more important than ever for wastewater utilities to methodically prioritize and plan all repairs and improvements. Only through the implementation of a well-researched and systematic course of action will utilities be prepared to provide safe and dependable wastewater services both now and in the future.

Subscribe-to-our-newsletter1