Perhaps the biggest story surrounding water systems in the United States is the current drought situation in California which has made national headlines throughout the year. At the time of this issue’s publication, the Los Angeles Times reported that the agricultural industry is facing $1 billion in lost revenue while the state could wind up paying an additional $500 million for groundwater pumping. Among the many questions the situation poses, one is, “How do city leaders cope with these challenges?”
Of course, the California drought is just one aspect of the many challenges utilities face every day. Aging infrastructure, for instance, feels like a never ending battle for many cities. Despite these challenges, there are still positive developments emerging in areas such as asset management and new technology. At the top of the decision-making pyramid are the elected officials tasked with making strategic choices regarding infrastructure policy. To examine some of the different ways cities are managing their water and wastewater infrastructure systems, we sat down with a group of mayors from across the country for our annual Water Finance & Management roundtable conversation.
The mayors polled in this year’s roundtable are: J. Richard Gray, Lancaster, Pa.; Michael Hancock, Denver, Colo.; Annise Parker, Houston, Texas; Don Plusquellic, Akron, Ohio; and Tom Tait, Anaheim, Calif.
J. Richard Gray, Lancaster, Pa.
Rick Gray was elected Mayor of Lancaster in 2005. Since that time, the city has been transformed into a regional arts and culture center that combines historic preservation efforts with investment in modern day amenities to create the ideal urban experience. Gray began his legal career as an attorney with Neighborhood Legal Services in Pittsburgh before moving to Lancaster with his wife Gail to serve as Director of Central Pennsylvania Legal Services. He entered private practice as a criminal defense lawyer in 1976. Mayor Gray is past Chair and currently serves on the Chesapeake Bay Alliance Local Government Advisory Committee. The Mayor’s commitment to environmental issues and sustainability is evidenced by the city’s nationally-recognized Green Infrastructure Plan.
Michael Hancock, Denver, Colo.
Michael B. Hancock became Denver’s 45th mayor in July 2011 and immediately launched Peak Performance efforts that will save the city $10 million a year annually. His strategy for making government more efficient, effective and customer-service oriented laid the ground work for his plan to transform Denver into a “Smart City” that is innovative and intentional, particularly with regard to jobs, kids and safety. Hancock attended Hastings College in Nebraska and obtained a B.A. in political science and minored in communications. He earned a master’s in public administration from the University of Colorado-Denver in 1995. Mayor Hancock is the proud father of three children, Alayna, Jordan and Janae, and he and his wife, Mary, have been married for 20 years.
Annise Parker, Houston, Texas
Mayor Annise Parker is a second generation native Houstonian. She obtained a B.A. from Rice University and spent 20 years in the private sector working in the oil and gas industry. Mayor Parker is serving her third term as mayor. She is Houston’s 61st mayor and one of only two women to hold the city’s highest elected office. She is responsible for all aspects of the general management of the city and for enforcement of all laws and ordinances. Parker has spent many years in service to the people of Houston, with six years as a city council member and six years as city controller. She is the only person in Houston history to hold the offices of council member, controller and mayor.
Don Plusquellic, Akron, Ohio
First sworn in as mayor in 1987, Don Plusquellic’s career in public service now spans five decades. He has worked at the invitation of President Barack Obama to assist in crafting an economic stimulus plan to aid the ailing national economy. The mayor has also worked with the Obama Transition Team and the U.S. Conference of Mayors to aid in the effort toward getting much-needed monies to American cities. Previously, Mayor Plusquellic had been called upon for national service by President George W. Bush and then-Homeland Security Secretary Tom Ridge as a member of a national task force following 9/11. He was credited with helping create the funding mechanism now used to ensure appropriate monies are allocated to communities.
Tom Tait, Anaheim, Calif.
Tom Tait was elected as Mayor of Anaheim in November 2010. Under Mayor Tait’s leadership, the city has implemented initiatives that support freedom and kindness. Mayor Tait led the creation of the Hi Neighbor program which encourages neighbors to get to know one another, ultimately leading to stronger, more resilient communities. In an effort to make doing business in Anaheim easier, Mayor Tait created a Regulatory Relief Task Force. The Task Force is charged with reviewing the regulatory burden on existing and prospective businesses in Anaheim and making recommendations that help foster more freedom for Anaheim’s business community.
As a public official, how do you view the importance of water and sewer systems as it relates to economic prosperity and quality of life?
GRAY: It goes without saying that our water and sewer infrastructure systems are essential to our operations and to our economic prosperity. Investing in this infrastructure is essential if we are to keep up with the growing demands that come with economic prosperity combined with the unique challenges brought about by climate change. Failure to invest in replacement, renewal and expansion of our water and sewer systems is a recipe for disaster. Deferred investment all too often brings consequences that are clearly detrimental to our quality of life and our economy: service disruptions that affect families as well as the livelihood of our local businesses; sinkholes that swallow entire blocks of roadway; collapsing sewers that can cause property damage and even condemnations. Simply stated, reliable water and sewer services are the building blocks of any thriving community.
HANCOCK: Water provides the foundation for a strong, vibrant economy and serves as a critical element of our community’s quality of life. Denver Water, the city’s water utility, provides a reliable and high-quality water source that allows for a thriving and diverse business community and a strong, healthy economy that sustain this world-class city and the surrounding area.
PARKER: Safe drinking water and effective wastewater treatment are vital for keeping our residents healthy and critical for sustainable development and our environment. I view the integrity and capacity of our water and sewer utilities as being a key component of our attractiveness to businesses considering economic investment in Houston and the region, as well as to families and new residents who choose Houston as their home. We have a strong legacy in this public responsibility, and I intend to sustain that for future generations of Houstonians.
PLUSQUELLIC: Water is essential for life and prosperity. The demand for clean, plentiful and reliable water supply and effective sewage collection and treatment will continue to grow as the economy improves. The ability to provide water and sewer service to our region is an economic driver. Akron’s Joint Economic Development District (JEDD) program is a model program, emulated by other communities, to leverage utility resources, freeze annexation, and provide growth for the region and our water and sewer systems are being leveraged to attract water related technology companies.
TAIT: As with most city facilities and infrastructure, reliable water and sewer systems are critical foundations for a strong local economy and quality of life for residents. Water is life, and communities can only grow and thrive to the extent that water and sewer systems provide these basic critical services, services that we all take for granted as long as they are reliable and cost-effective. In Orange County where our beautiful beaches are valued for recreation and tourism, effective treatment of sewage and urban runoff is vital for maintaining ocean water quality and public confidence.
What are the major issues affecting your water/wastewater system (aging infrastructure, water supply, water quality, finance/funding, etc.)? What problems are unique to your situation/location?
GRAY: Like many older cities, aging infrastructure is Lancaster’s major challenge. Much of our underground transmission and distribution system is close to a century old; some of the system is older. Prior to this Administration, infrastructure investment was minimal and we ended up with a system that suffered from decades of deferred maintenance. Initially, we faced an uphill battle that forced us into a reactive mode of fixing problems as they occurred. Today, we use bond funds to proactively address our infrastructure needs. Unique to Lancaster and other communities located in the Chesapeake Bay watershed is the problem of stormwater runoff. Our green infrastructure plan has been hailed by the U.S. EPA as a model for other cities dealing with this problem.
HANCOCK: The City and County of Denver exists in a semi-arid climate. We receive all of our water supply from mountain snowmelt, which is brought to the city through a complex system of tunnels, pipes, rivers and reservoirs. Our city’s water supply is impacted by the amount of moisture the Denver Water watersheds receive, so we are subject to prolonged droughts and the increasing impacts of climate change. The entire Denver area also has the potential to grow significantly in the next several decades. Along with the existing challenges already mentioned, Denver-area leaders must work together to manage growth and encourage thoughtful use in order to ensure a sustainable water supply for all our residents now and in the future.
PARKER: Like other systems, the age of our wastewater system infrastructure is a major challenge. The City of Houston operates and maintains a complex sewer collection system consisting of 7,000 miles of pipes, over 380 lift stations due to our flat coastal plain, and 40 separate wastewater treatment plants of various sizes. I am not aware of any other city with quite that extent of an aggregate challenge. Rising costs for chemicals and energy continue to pose challenges to our operations and budgets. The capital improvements needed to address these challenges impact utility rates for our citizens, a matter we take seriously.
PLUSQUELLIC: The City of Akron is under a federal consent decree (CD) to make extensive improvements to eliminate or reduce Combined Sewer Overflows (CSOs) in its sewer system. These improvements will be costly, requiring significant increases in sewer-user rates to fund the program. It is a difficult balance to fund this clean water program, yet make the community a desirable place to raise a family or operate a business with affordable sewer service with an unreasonable federal judge that has misused his authority to try to force us to do more than any other city.
TAIT: Keeping up with the need to rehabilitate and replace aging infrastructure so they remain reliable for future generations is challenging. Since raising rates to fund infrastructure improvements is particularly challenging for those customers that have struggled through the recession, we need to find innovative strategies to improve operational efficiencies with new technologies before we look to raise rates. In addition, although not unique only to Anaheim, California is dealing with a significant drought. An important issue is making the necessary investments to diversify our water supplies and reduce dependence on imported water while keeping rates affordable for our customers.
Asset management and alternative projects delivery methods for water/wastewater projects, such as design-build and the use of public-private partnerships, are increasingly being discussed. What new initiatives, if any, has your city started in these areas? What are the results to date?
GRAY: We have implemented a computerized maintenance/asset management system (CMMS). This tool is helping us make decisions more wisely on when and where to invest in replacement or repair of our infrastructure assets. We have also used P3s for three water booster pump station projects. Partnering on these projects with local developers gave them added value to their investment and, at the same time, helped stretch our limited financial resources.
HANCOCK: Asset management and alternative project delivery are being utilized at Denver Water, and both are adding value, particularly with the development of Denver Water’s Infrastructure Master Plan. Through this work, the utility identifies and prioritizes rehabilitation and replacement projects to upgrade its aging infrastructure. This improves the reliability of the Denver Water system. Denver Water also utilizes both Construction Manager at Risk (CMAR) and Construction Manager/General Contractor (CM/GC) alternative delivery methods to allow flexibility in bidding over the course of the project.
PARKER: We are very focused on an asset management approach to the maintenance and replacement of our infrastructure. Procurement laws have recently changed in Texas to allow alternative delivery methods to be used for municipal infrastructure projects when there is a need to add or replace capacity. We would see factors of cost, time, and risk for each project to frame what method of delivery might be best. For us, good engineering and design followed by competitively bid construction works well for most of our projects, certainly the smaller projects.
PLUSQUELLIC: The City of Akron recently rolled out its new high-solids anaerobic digestion (AD) system that processes biosolids from the Water Reclamation Facility to create 1.2 MW of power. The city has had a public-private partnership since 1989 to operate and market the end product from our composting facility. In converting from composting to AD, the city continued its partnership with KB BioEnergy to design-build-operate the new system, with KB also providing the up-front capital for construction. This unique partnership has provided stability for the city in spite of ever-changing economic pressures and regulatory requirements, all while using new technology to provide all of our energy needs at the plants.
TAIT: Anaheim has a strong culture of using public-private partnerships to provide the best and most cost-effective services to our residents. Anaheim partners with the private sector, especially in the area of capital projects, to keep staffing levels low. Private contractors and consultants are used to deal effectively with workload fluctuations and to supplement staff with specialized expertise as needed. Alternate approaches for project delivery, such as design-build, are available in our toolbox and considered depending on the complexity and schedule of individual projects.
Technology is changing the way utilities manage, plan and operate their systems. How has technology changed your utility? What new programs or technologies have you implemented and what has been the result (ex: AMI, Software/GIS, SCADA, etc.)?
GRAY: GIS has been our latest technology change. It is used in our CMMS as the base for all assets in our system. Our technicians and field crews can use their tablets to access all plans and details of our system right at their fingertips in the GIS system. “As-built” plans were scanned and linked to an asset, so they do not have to worry about not having the correct resources to help them make a decision when they need to expedite a repair and get customers back into service with a minimum amount of inconvenience. GIS has also allowed us to implement a new stormwater utility or stormwater management fee based on impervious area. This new revenue source is used to finance our green infrastructure program. But for our GIS database, this would not have been possible.
HANCOCK: Denver Water leverages contemporary technology to advance its business infrastructure. Information Technology is used to enable every major function within the utility including: Mobile workforce automation; Work and Asset Management systems managing the maintenance, rehabilitation and replacement planning of operational assets; GIS technologies; Business Intelligence technologies; Content management and workflow technologies; and Integration technologies to facilitate information flow among systems.
PARKER: Houston has implemented a unique advanced metering infrastructure (AMI) where we leveraged existing infrastructure and set a path to future advancements in the automated metering domain. Our Public Works and Engineering Department (PWE) has deployed a repeater network that, currently, delivers AMI functionality to more than 75 percent of our customer base, with a targeted increased to 95 percent by next July. Through a carefully designed database structure, information collected by the network is available to customers via multiple mediums, including web and smart phone applications, so that customers are better able to manage their water usage. Using this functionality, we, currently, send out more than 80,000 weekly usage summaries to customers who participate in our Consumption Awareness Program.
PLUSQUELLIC: Since its installation in the mid-1990s, the Water Reclamation Facility has leveraged its Distributed Control System (DCS) to realize significant reductions in energy usage (50 percent reduction) and staffing (65 percent reduction) necessary to operate the facility. The technology has also provided real-time control of a dynamic wastewater treatment process, maximizing treatment capabilities, and providing data for troubleshooting and process optimization. The Sewer Maintenance Division began using tablet computers in 2012 to document sewer system cleaning and inspection activities as part of its Capacity Management Operation & Maintenance (CMOM) program. The devices increase staff productivity through preloaded daily task assignments, prompting standardized responses, and makes underground records easier to retrieve.
TAIT: Anaheim has embraced new technologies that provide greater service reliability, better system control, and quicker response to customer outages with fewer staff. Anaheim is currently upgrading the water SCADA system to ensure reliable control of the city’s distribution system and treatment plant. A few years ago, field staff converted to hand-held devices for efficient uploading of preventative maintenance and system status information into GIS, avoiding the previous staff-intensive paper system.
How are EPA mandates impacting your city/utilities? Do any specific mandates affect your city? How are increased expenses, if any, being addressed?
GRAY: The Chesapeake Bay TMDL is the largest challenge we currently face. That, coupled with our combined sewer system and the new focus of eliminating these discharges for cities our size, is forcing some rate increases that may be unsustainable for our lower income residents.
HANCOCK: Denver Water is a proactive utility when it comes to EPA regulations. The utility performs additional monitoring so it can assess its system for future regulatory issues. Denver Water sets its rates based upon a cost of service analysis, and any mandates that incur additional operating expenses are factored into that process.
PLUSQUELLIC: The federal unfunded mandates for CSO remediation and control will probably be the single largest municipal infrastructure program in Akron?s history. A tremendous financial burden has been placed on the City of Akron and its customers for generations to come. We have begun to consider an integrated plan to optimize the long-term control plan (LTCP) with the available funding, keeping in mind water quality goals, ensuring compliance with the CD, and taking into account all clean-water initiatives. Sewer rates are now in excess of 2 percent of median household income.
TAIT: Anaheim is committed to providing high quality tap water to all customers, and helping to protect the environment and precious water supplies. Since California has some of the more stringent standards for drinking water quality, urban runoff, and sewage treatment in the nation, we are already implementing some of the U.S. EPA mandates that are on the horizon. Anaheim has its own certified water laboratory and conducts over 44,000 water quality tests each year to ensure we comply with federal and state requirements.
How has the recent economy impacted your water/wastewater system operations? What have you done in response?
GRAY: Although our community has felt the effects of the economic recession, we have not felt it nearly as much as some of Pennsylvania’s other small cities. The recession did provide an opportunity to borrow for capital investments at historically low interest rates. This borrowing allowed us to undertake projects that have likewise helped the local economy, and saved rate-payers millions of dollars over the life of the loans.
HANCOCK: Denver Water is separate from the City and County of Denver and therefore receives no money from the city’s general fund. All Denver Water funding comes from a separate Water Works fund. But clearly during a struggling economy, our citizens feel the impact of any demands on their income that city service providers require. The City and County of Denver and Denver Water have a close, collaborative working relationship throughout all aspects of the utility’s scope to ensure that our citizens have their needs met, in both good and bad economic times.
PARKER: Houston has done exceptionally well in comparison to other cities in the nation, and our economy is healthy and continues to grow. Early in my tenure, we undertook a substantial restructuring of the rates charged for water and sanitary sewer services. This was done out of necessity and with an ultimate goal of providing for the long-term health and safety of the system by ensuring rates cover the entire cost of these services and meet debt obligations. As a result, the utility system now benefits from a healthy revenue stream that enables the utility system to be operated and maintained adequately, and to even further improve our credit rating.
PLUSQUELLIC: The City of Akron is still recovering from the recession period a few years ago. It is not possible to reduce the level of treatment of water or wastewater, as both are regulated products. We did, however, scrutinize discretionary expenses, analyze the true need to fill vacancies, delay some capital equipment replacements, and modify work practices to improve efficiencies.
TAIT: The recent recession caused a significant reduction in general fund revenues, and also a significant reduction in water use and thus water utility revenue. Many city services had to be trimmed to avoid depleting reserves. With utility revenues down about 15 percent during the recession, capital projects were prioritized to address the most critical needs, and the balance was deferred. As water revenue returns with an improved economy, capital projects will be implemented accordingly.
If you are a member of the U.S. Conference of Mayors? Water Council, please describe why you joined and your experience.
GRAY: The Water Council allows me and my staff to stay informed and involved in efforts that the U.S. Conference of Mayors has untaken on behalf of cities. For example, Lancaster was under administrative orders from the EPA to build large storage tanks for our combined sewer system. As part of the Mayors’ Water Council, we were able to participate in discussions with U.S. EPA and the Department of Justice about incorporating green infrastructure into long term control plans. Ultimately, we were able to work with U.S. EPA to re-evaluate the use of storage tanks and instead employ a green infrastructure strategy.
PLUSQUELLIC: As a member for 28 years of the USCM, I was involved early in the process to encourage our members to get the private sector at the table to provide their input into our deliberations. Mayors need to know the latest technology advancements, as well as new, improved methods and procedures developed in the private sector. And when Mayors prepare policy statements, it is important that we understand the implications to businesses in our communities, and the USCM water counsel helps provide a place for those exchanges.
TAIT: I’m very supportive of the efforts of the U.S. Conference of Mayors’ Water Council to promote important water and wastewater initiatives. For example, as mayors, we should seek reasonable stormwater regulations that protect our environment without negatively impacting local communities and the many services we provide.
What area of your water/wastewater system are you most proud of? Why?
GRAY: That is a really tough one. We are very proud of the $80 million investment we have made in our new state of the art membrane filtrations plants. Really, the reason we had to make that investment was because of the poor water quality in the watershed north of the city and the associated health risks to our community. But our green infrastructure program has received so many awards and accolades nationally, that we would have to say we are most proud of that program.
HANCOCK: We live in a dry climate and rely on mountain snowpack for our water supply, so conservation is a key tool in ensuring sustainability. Denver Water has been a national leader in conservation for the past decade. Their programs have helped our city and many surrounding suburbs reduce water use by more than 20 percent compared with pre-2002 water use, despite a 10 percent population increase.
PARKER: Texas experienced one of the worst droughts in our history in 2011. Although this forced Stage 2 water shortage measures with mandatory restrictions, we fared much better than many other systems in the region and the state, providing a basis for confidence from our served public. The COH is a leader in implementing groundwater reduction measures to meet mandates of Harris-Galveston and Fort Bend Subsidence Districts. PWE was recently accredited by the American Public Works Association (APWA), and certainly the strength of our Public Utilities Division and supporting entities was a key contributor to that accomplishment.
PLUSQUELLIC: Our award-winning water and sewer systems are often recognized for their technological advancement, quality of service, and forward thinking. With that, the Akron Global Water Alliance (AGWA) was created in 2013 to leverage those capabilities to spur economic development. With partnerships across the globe, AGWA seeks to develop, test and commercialize new technologies with the capacity to improve water quality and treatment both in Akron and throughout the world. I am proud of the fact that we have positioned our water/wastewater utility in order to create this opportunity.
TAIT: I’m pleased with the efforts of our local utility to reduce regulatory barriers. Too often, governmental red tape gets in the way of customers achieving their dreams. We have been reviewing utility rules and our city council has approved some great enhancements such as waiving unnecessary fees, providing credit and deposit flexibility, and providing courtesy credits if there are billing mistakes or missed appointments.
What advice would you give to your successor regarding water and wastewater management?
GRAY: My suggestion is to treat our water and sewer systems as assets worthy of investment. These systems generate revenue; debt incurred for maintaining the systems is self-liquidating; and ownership of the systems allows us to control our own destiny with respect to preserving our natural resources. Proper management of these assets will reap benefits for generations to come.
HANCOCK: Despite the fact that the City and County of Denver does not directly oversee the operation of Denver Water, city officials and water utility staff members have established productive partnerships across the utility’s scope of influence. We share the same goals of having a growing, thriving city with a safe, reliable, sustainable water supply. I would encourage my successor to continue the productive partnership with Denver Water that was put in place by my predecessors many years ago.
PARKER: This is an area of public service that will have significant long term impacts and requires continuous stewardship. Here in Texas as well as in many other locales, it will mean making improvements to our water and sewer systems for long term sustainability, and bearing the costs for those improvements.
PLUSQUELLIC: New water and wastewater infrastructure may not garner the accolades as a new community center or a new playground, but it is the foundation for the city. It is easy to overlook the importance of the water distribution or sewage collection system because they are out of sight. We take access to clean water and sanitation for granted. Change that mindset — hold your utility in high regard as an asset to your community, as a driver for economic development and quality of life for your residents.
TAIT: The value of our local water and wastewater systems comes from having low rates and high reliability. Beyond that, it’s about how we treat people. As a city of kindness, Anaheim employees are encouraged to go the extra mile and lend a helping hand; this may be a simple strategy, but it’s so effective in showing residents and businesses that city employees are here to help them. With a focus on kindness, people will be more willing to help each other. That’s how communities are strengthened and become more resilient during emergencies.
Editor’s Note: Water Finance & Management would like to thank Mayors Rick Gray, Michael Hancock, Annise Parker, Don Plusquellic and Tom Tait for taking the time to participate in this year’s Mayors Roundtable issue.
