Infrastructure is the driving force of an economy. Without means to move goods and services, and without facilities to provide clean and safe water, a city simply cannot compete. Yet sometimes these critical infrastructure systems are overlooked, particularly in difficult economic times when budget decisions have to be made.
Our elected leaders are tasked as being caretakers for our communities, now and in the future. And that means making strategic choices that will allow future generations to be afforded the same opportunities we do. Sometimes spending money on seemingly invisible choices can be fraught with political pitfalls, which makes long-term planning all the more difficult.
To get a gauge on how elected officials at some of the larger cities in the United States are handling their water and sewer infrastructure, we polled a sampling of mayors from across the country. This is a follow up poll from a small-city mayors roundtable published in the January-February 2011 issue of UIM.
The mayors polled are: Greg Ballard, Indianapolis, Ind.; Terry Bellamy, Asheville, N.C.; Sly James, Kansas City, Mo.; Stephanie Rawlings-Blake, Baltimore, Md.; and Jim Suttle, Omaha, Neb.
Greg Ballard, Indianapolis, Ind.
On Nov. 6, 2007, Greg Ballard was elected as the 48th Mayor of Indianapolis. A native Hoosier, Mayor Ballard was raised on the east side of Indianapolis and a proud graduate of Cathedral High School. After earning his undergraduate degree in Economics from Indiana University, Mayor Ballard entered the United States Marine Corps. During his time in the Marines, he served in the Persian Gulf War and upon his retirement, was awarded the Legion of Merit. He retired as a Lieutenant Colonel after 23 years service. After leaving the Marine Corps, Mayor Ballard successfully transitioned to the corporate world. He worked for several years as North American Operations Manager for Bayer in Indianapolis.
Terry Bellamy, Asheville, N.C.
Asheville citizens elected Terry M. Bellamy to serve as Mayor in November 2005. Since her election, she has made continuous efforts to improve city programs through lobbying state and federal legislators. Through these efforts, she successfully spearheaded an effort along with citizens to receive the U.S. Department of Justice?s Weed and Seed site designation for the West Riverside Neighborhood. Mayor Bellamy was also principal in implementing a $40 million in revenue bonds to refurbish the water line system for the long term enhancement of our community waterlines. This bond project provides upgraded material and better service to our citizens.
Sly James, Kansas City, Mo.
Sly James was elected mayor of Kansas City on March 22, 2011, and sworn in on May 1, 2011. Born and raised in Kansas City, Mayor James attended Bishop Hogan High School in Kansas City, graduating in 1969. He went on to serve as a military police officer for four years and received an honorable discharge in 1975. When his service ended, Mayor James returned home to Kansas City and graduated cum laude from Rockhurst College before earning his law degree, also cum laude, from the University of Minnesota in 1983.
Stephanie Rawlings-Blake, Baltimore, Md.
Stephanie Rawlings-Blake was sworn in as Baltimore?s 49th mayor on Feb. 4, 2010. She had served as city council president since November 2007. Rawlings-Blake was first elected to the Baltimore City Council in 1995 at age 25, the youngest person ever elected to the City Council. She represented the Council?s 5th District from 1995 to 2004 and the 6th District from 2004 to 2007. She currently serves as co-chair of the U.S. Conference of Mayors? Water Council.
Jim Suttle, Omaha, Neb.
Jim Suttle was sworn in as Omaha?s 50th mayor on June 8, 2009. He previously served on the Omaha City Council from District 1 from 2005-2009. Jim is former vice chairman of the Board of Directors for the Omaha-based engineering and design firm HDR, Inc. Suttle served as executive vice president and director of corporate development for HDR, which is the nation?s 17th largest architecture – engineering firm. Suttle is the former Public Works Director for the City of Omaha and has a record of distinguished service to the Omaha community.
As a public official, how do you view the importance of water and sewer system as it relates to economic prosperity and quality of life?
BALLARD ? Safe and reliable water for drinking and other uses are vital to the eventual growth and stability of any community or city. Without an adequate supply of clean and abundant water, a city?s growth potential, including business growth, will be severely hampered. The availability of water has a direct and relevant relationship to how successfully a city can grow. In conjunction with clean potable water, having a properly run wastewater system is also vital and relevant to a communities growth potential. If a city cannot properly address the wastewater needs of its residential and business communities, that city cannot attract growth. Additionally, having a proper wastewater utility can also work very synergistically with a properly run water utility that can help in coordinating water supply, use and reuse and can help keep costs lower for both utilities.
BELLAMY ? Available water is an essential ingredient for economic growth and prosperity. One of the first questions asked by the business community when looking for suitable locations concerns the availability of water. Our citizens understand the importance of safe water and its contribution to their quality of life.
JAMES ? Access to a high-quality, dependable water and sewer system is vital for a healthy community. Kansas City?s existence is due in large part to its location on the banks of the mighty Missouri River. Having developed the capacity to utilize this great resource and translate it into sustained economic development for over 150 years is directly relatable to the development of the City?s most basic infrastructure systems. So, finding ways to increase our investment in these systems is a tremendous responsibility and critical to our ability to attract and retain future growth and development. Citizens deserve a water and sewer system that works. I know that Kansas Citians don?t have time to think about the water and sewer system. They just want it to function properly so that they can get along with their busy lives. However, our water and sewer system is an integral component to the overall culture of efficiency that I was elected to instill throughout our City?s government.
RAWLINGS-BLAKE ? In Baltimore our water and sewer system is vitally important to the health and prosperity of our communities. The service and quality of our system is very important to my constituents. We have excellent and abundant raw water sources and the quality of our finished drinking water is highly rated. Our water and wastewater systems are not only important to the health and environment of Baltimore, but also to the greater metropolitan region that we serve.
SUTTLE ? As a progressive city, our water and sewer systems are of top quality, professionally done, and current with the latest standards in technology. The problems we face, as the 40th largest city in the country, is with the Environmental Protection Agency?s (EPA) mandates, which may or may not coincide with our local needs and this is creating an enormous affordability issue for us.
What are the major issues affecting your water/wastewater system (aging infrastructure, water supply, finance/funding, etc.)? What problems are unique to your situation?
BALLARD ? The major challenges facing Indianapolis as well as most cities across this nation is that a bulk of the infrastructure was built over a half century ago, some over 100 years ago. Accordingly, the age of the infrastructure, and the opportunities for growth are two large challenges/opportunities facing Indianapolis and many other communities. Additionally, federal and state regulations on water quality aspects of potable, wastewater, and stormwater are creating very large financial burdens for communities. Finally, evaluating how best to afford and address these issues becomes critical to the vitality of a city. We must balance regulatory needs
BELLAMY ? Much like other areas across the country, we are faced with the problems created by aging infrastructure. Also we are located in the mountains of Western North Carolina and have high water loss percentages due to high pressures and an old system. We are looking for creative ways to operate our water system more efficiently to reduce operating costs (or the increase in operating costs) so more resources can be devoted to infrastructure repair and replacement. Finding revenue sources to fund these initiatives is always a challenge.
JAMES ? Kansas City is unique in having to maintain an old and large water and sewer infrastructure system, and adhere to regulatory requirements addressing overflows from a combined sewer system covering 58 square miles of the City. As is the case with many communities that have finite resources but many pressing needs, Kansas City has been challenged when it comes to investing in our water and wastewater assets. So, we are facing significant challenges to reinvest and rebuild those basic systems without burdening those residents who can least afford it.
RAWLINGS-BLAKE ? Aging infrastructure is a big issue for Baltimore. We?re proud of our city?s rich history and in many cases our pipes and mains can be classified as ?historic.? While we are pleased that we have been able to utilize our systems to their fullest extent, the early years of ?out-of-sight, out-of-mind? approach to our underground infrastructure has put a heavy burden on our ratepayers of today. On top of our need to reinvest and rehabilitate our infrastructure are the growing environmental mandates that carry their own big price tag. Finding the dollars to meet all of these needs is an ongoing challenge.
We are blessed by the many rivers that flow through our city and drain to the nearby Chesapeake Bay. Our proximity to these water bodies means that we must truly be environmental stewards and take all possible measures to ensure the health of this vibrant ecosystem. And because we are an ultra-urban environment located so close to the Bay, the EPA and the State are looking to us to make significant investments in our water, wastewater and stormwater systems.
SUTTLE ? The key water and wastewater system issues impacting Omaha involve an aging infrastructure and a lack of resources to fund upgrades to those systems. The federal government requires our community to follow regulations that may be in sync with a national agenda, but don?t necessarily relate, or are in step, with our local needs and services. The problem we face is that our local priorities are beginning to take a backseat to federal priorities.
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Is your city spending more, less or the same on water and sewer infrastructure compared to recent years? If more, what financing strategies are you employing? How have your water/sewer rates been impacted?
BALLARD ? Starting in 2008 [when Mayor Ballard took office], we observed a lack of adequate infrastructure investments since 2000. We also were concerned over the long-term predictions on sewer and water rates increases. Accordingly, we directed and challenged the city?s Departments of Public Works and Waterworks to come up with plan(s) for increased environmental stewardship, increased infrastructure investment to address failing and inadequate infrastructure, green solutions, and affordability. Those new investment levels have increased over seven fold over recent historical investments.
BELLAMY ? By necessity we are spending more on our water system. We recently issued bonds to cover a major infrastructure project, and will probably have to borrow money in the future. Currently we are trying to pay as we go to cover operating costs and infrastructure maintenance. After a period of fixed rates, our water rates have increased in recent years.
JAMES ? Kansas City is preparing to substantially increase spending on its water and sewer infrastructure. A Consent Decree driven program addressing combined sewer overflows is expected to reach $4.5 billion over the next 25 years, making it the single largest infrastructure investment in the history of the Kansas City region. In addition to wastewater, our water system needs more than $1 billion to upgrade and extend the life of the system for future generations.
RAWLINGS-BLAKE ? We are spending more now than ever before, due in large part to unfunded mandates handed down by the federal government. Our debt doubled between fiscal years 2004 and 2011. While we are eager to do our part for environmental protection, the financial cost is great. And while the federal government has many recommended solutions to environmental problems, they perceive water infrastructure to be a local funding problem, unlike their investments in infrastructure such as transportation.
We have competed for State Revolving Loan funds, sought out grant funding and principal forgiveness opportunities, sold water and wastewater revenue bonds, issued General Obligation bonds, and pursued public-private partnerships.
Unfortunately, our rate payers saw a 9 percent increase this year as they did last year, and have seen increases every year over the past decade. Even with these increases, we are still carrying a current capital improvement funding gap of $1.8 billion.
SUTTLE ? City spending on water and sewer infrastructure continues to increase in our municipality, and that expense is being passed on to users of the service. By law, water rates for users are based on ?cost of service,? and unfortunately those rates are doubling for residents and growing four to eight times as much for industries in our area. We do what we can to watch costs, but we are forced to raise rates to match the cost of services in the end.
Infrastructure asset management, the energy-water nexus, water conservation/reuse and 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?
BALLARD ? As mentioned, in 2008 we took action with first-of-its-kind initiatives that are models for others cities to evaluate. One of those initiatives (the Enhancement Plan) renegotiated the City?s 2006 combined sewer overflow consent decree. The successful re-negotiation was the largest of its kind in the nation. The outcome of that negotiation resulted in an additional 3.5 billion gallons of sewage out through 2025; a greener CSO consent decree; and savings of over $740 million to the city?s customers, all while staying in complete compliance with the performance and schedule requirements of the original consent decree. Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, stated: ?Only under unique circumstances would we modify the terms of a settlement. The proposed modifications will benefit the environment and reduce costs for the city of Indianapolis. In my view, this is a classic ?win-win.? ?
Another key initiative in the summer of 2009 created an opportunity to capitalize on synergies of the city?s water and wastewater utilities; reduce the long-term predictions on sewer and water rates; and increase investments in needed infrastructure through a public Request for Expression of Interest (REI) issued by the Mayor?s office in 2008. After evaluating responses from over 20 firms/teams, this process is coming to fruition this summer and will allow for Citizens Energy Group, a private charitable trust and a department established through the City of Indianapolis (Department of Public Utilities) to acquire the water and wastewater utilities. The CEG transaction recognizes the significant synergies that can be maximized between the water and wastewater utilities, as well as CEG?s current three utilities. This transaction will reduce the long-term predictions on rates, as well as provide the City with more than $400 million in funding
for needed infrastructure investments and becomes a model nationally that other communities can look to.
BELLAMY ? We have investigated several green strategies. We have replaced pump motors with more energy efficient models and tried to ?right size? our pumps and motors where possible. We have a partnership with the regional Council of Governments (Land of Sky) to perform water audits at the request of large water users (schools, hospitals, manufacturers and others) to look for modifications that would save them money and reduce their water consumption. We are now in the second full year of a meter replacement project to improve our metering accuracy, help address our water loss problems and reduce our carbon footprint.
JAMES ? Making Kansas City a leader in sustainable community design is driving a need to rethink how we address traditional infrastructure design and construction. Water and sewer projects are now designed utilizing the latest techniques in energy conservation and sustainable design. For example, the Marlborough Neighborhood Green Infrastructure Project is a $40 million project that replaced two proposed underground storage tanks with above ground green infrastructure that in addition to controlling overflows, offers ancillary benefits to Kansas Citians, including cleaner air, cooler ambient temperatures, aesthetic amenities and economic opportunities.
RAWLINGS-BLAKE ? We are lowering our energy costs at one of our wastewater treatment plants by operating a public-private cogeneration facility that converts the methane produced as a byproduct into 3 MW of electricity, approximately 30 percent of the base electrical load for the treatment plant. Future plans are to install solar farms on large areas available at the treatment plants to generate even more electricity.
SUTTLE ?Unfortunately I see a lot of smoke and mirrors in the discussions of these partnerships, because the federal government is not a true partner in these ventures. They have the final say on the initiatives and local industry is left scrabbling to find the financing.
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? What has been the result?
BALLARD ? Enhanced technologies are allowing us to manage our sewer system with increased reliability. One example is the current project to interconnect the City?s 300-plus lift stations through a master control system. The City also has plans to increase investments in real-time control systems that allow elements such as gates and inflatable dams to be utilized and managed (remotely) within existing infrastructure. This allows the benefits of the existing pipes, while benefitting from new technologies. The ultimate results of these initiatives create reduced costs to properly manage our infrastructure while increasing the reliability and performance of our infrastructure.
BELLAMY ? We are installing automated meter reading equipment (AMR) from Mueller Systems to help improve our internal operation and revenue collection. At the same time we feel that this will help us address our water loss problems by giving a better measurement of the water going to our customers. Other technology includes an improved work order system, improved monitoring of our equipment and operations through an upgrade of our SCADA system, and we are now pursuing a cloud computing application for easier and faster citizen feedback using smart phone technology.
JAMES ? Technology initiatives under way include enhancements in GIS and asset management systems and the development of interactive dashboards capable of pulling data from multiple sources to supply our engineering, construction and maintenance staff with real-time access to issues. We hope to include more cutting edge technologies in future planning processes.
RAWLINGS-BLAKE ? We are proceeding with a multi-year initiative to upgrade our water meter reading technology (i.e. AMI/AMR) to improve accuracy and timeliness of our reads. Additionally, a new billing system is in the planning stages and will be implemented in the next few years. The new system will provide our consumers with on-line, real-time usage data and a billing format that will be more customer-friendly.
SUTTLE ? We are constantly bringing state-of-the-art technology into our utility systems and people outside of Omaha might be surprised to know how modernized our systems are at the present time. The challenge, I see for us and other cities in the country, is staying current and equipped with the latest technological advancements in a rapidly evolving industry during a rocky economy. In my opinion, however, the willingness to make this investment a priority may be worth the cost of failing to keep pace.
How are EPA mandates impacting your city/utility? What specific mandates affect your city? How are increased expenses, if any, being addressed?
BALLARD ? EPA?s mandates on clean water and drinking water standards are examples of two large financial liabilities that affect a city?s affordability. However, as we did in Indianapolis, we looked at options of how to address this rather than just passing those costs onto our customers. Again, one of the best examples of how communities can start to address these issues is with the City?s Enhancement Plan that EPA recently approved. As we mentioned above, the savings exceed over $740 million, while still being more beneficial to the environment.
BELLAMY ? Most of the EPA mandates on the water side are targeting safe water. We have been able to incorporate those measures into our operations and testing without significant impacts to our bottom line.
JAMES ? The uncertainty of EPA mandates is a significant source of concern for many communities. In September 2010, Kansas City committed to addressing overflows from its combined sewer system. This 25-year commitment is expected to cost rate payers nearly $4.5 billion to catch and treat more than 85 percent of flows from the combined sewer system in a typical year. While clean water mandates are on the forefront of EPA mandates that are significantly affecting our community, we see new regulatory initiatives, such as nutrient removal and non-point source treatment requirements, on the horizon. As a community, we understand the need to address these environmental issues; however, we will need to address the funding issues associated with compliance.
RAWLINGS-BLAKE ? EPA mandates are having a huge impact on our utility and thus our city. A few specific mandates are currently having the greatest effect. First, Baltimore falls under the TMDL or ?pollution diet? for the Chesapeake Bay. In order to reduce our nitrogen and phosphorus output as required, we are constructing enhanced nitrogen removal facilities at our wastewater treatment plants and changing the way we manage stormwater. Second, we are in the process of negotiating the level of protection we must provide under our wet weather consent decree and are facing costs of up to $1.2 billion. Finally, we have been required to cover our open finished water reservoirs also at great cost to the City and to the chagrin of many citizens who value the aesthetic created by these water bodies. As previously mentioned, our increased expenses are being addressed through rate increases, bond sales and seeking out grant funding.
SUTTLE ? At the present time we are struggling to finance our combined sewer overflow (CSO) project, which is a $1.7 billion mandate by EPA. We have residential and industrial users who cannot afford to shoulder the burden of this expense, but as a community we are left with no options. EPA has forgotten that its proposals need to be affordable. I have asked representatives of the EPA, through the U.S. Conference of Mayors, on behalf of all cities like Omaha facing this situation, to split the cost with municipalities 50-50.
How do you see water viewed within your city? Is it a high priority or an afterthought? How has this changed over time? What is the general response of the public to water and sewer issues?
BALLARD ? Water is literally the lifeblood of any city. Without an adequate supply, long-term stability and long-term growth will be curtailed. Indianapolis is one of the largest cities in the country with one of the smallest singular water supplies. Although water is obtained for Indianapolis through a series of reservoirs and wells it owns, long-term strategies on water supply are being developed that will address this issue, even while reducing the long-term predicted costs to address this issue. Typically customers grapple with the reality of water supply issues until it becomes a reality and customers are forced to implement conservation measures, or water rates increase dramatically. That is one of the key reasons that a robust outreach, education and communications program is vital.
BELLAMY ? Safe, clean water has always been a priority in Asheville. It is a building block of our quality of life and the growth of our economy. Most of our citizens recognize the City?s efforts to provide safe water, and support our efforts.
JAMES ? Kansas City?s abundant water resources are often taken for granted. That?s OK. We understand that when our water and sewer systems are functioning properly it is easy to forget about their importance in our everyday lives. We are, however, starting to see a shift in community perception related to the need for reinvestment in those systems and a new-found urgency to address funding needs for that reinvestment. Water is our most precious resource.
RAWLINGS-BLAKE ? Baltimore?s Inner Harbor is one of the areas that our citizens are most proud of and is where out-of-town visitors spend the most time. Many of our parks also contain streams and other water bodies that are highly valued by our citizens and are of great concern to our environmental activists. As a result, water quality is a very high visibility issue in our city. One of our challenges is to adequately explain to the public the system upgrades and environmental protection that their increased water and sewer bills will be paying for and the dividends they will see in their quality of life by investing in these systems.
SUTTLE ? Access to water, and the functionality of our sewers systems, is a high priority for the citizens of Omaha. They have grown accustom to high-quality service and expect high-quality service, but they also expect that service to be affordable.
How has the recent economy impacted your water/wastewater system operations? What have you done in response to the economy?
BALLARD ? As with all communities, affordability is always an issue. The most dramatic effect of the economic downturn is the concern over affordability when businesses are cutting back and customers can?t afford their utility bills. These coupled with reduced revenues have a cumulative toll that we have attempted to address. The CEG transaction is a shining example that will actually create more long-term jobs, created a funding source for needed infrastructure investments, while addressing rate predictions with reduced rate increases.
BELLAMY ? This economic climate has been hard for all sectors of municipal government. It is hard to face citizens and tell them that their water rate or their tax rate is going to increase. We are trying to streamline our operations to ?do more with the same or less.? We have had strategic early retirement offers, held vacancies where personnel can be spared, looked at the cost of operations to find savings, and initiated new technology projects to take advantage of future cost reductions. Our meter replacements and motor replacement projects are examples of this.
JAMES ? Customer usage has decreased during the economic downturn our community has experienced over the last few years. And, along with the growing use of water efficient appliances and conservation, a long-term reduction in water sales is expected. Kansas City?s strategies to reduce operating costs during this economic downturn includes reducing the Water Services Department workforce by more than 15 percent and driving increased efficiency in many aspects of department operations.
RAWLINGS-BLAKE ? The economic downturn has been tough on everyone, including our ratepayers. We have been investigating a move to automated meter reading in order to provide our customers with accurate, timely bills. We are finding innovative ways to lower our fixed costs, such as our efforts to lower our energy costs.
SUTTLE ? It has had a big impact, because we operate on ?cost of service? which must be recovered through monthly rates charged to users of our water and wastewater systems.
What area of your water/wastewater system are you most proud of? Why?
BELLAMY ? Asheville supports a professional staff dedicated to providing abundant, safe water to our citizens. This is an important component of Asheville?s quality as a community.
JAMES ? In today?s world, so much negative attention is directed at federal, state and local governments, it is easy to forget about the positive impact public utilities have made in developing our communities. The core mission of Kansas City?s Water Service Department is to deliver abundant and affordable, high-quality water to our citizens and to collect, treat and return clean water back to the environment. In delivering this mission, Kansas City routinely ranks as one of the nation?s top water quality suppliers while maintaining some of the lowest rates in the region. In addition, while regulatory reporting requirements draw negative attention to overflows from combined sewer systems, annually the City treats almost 40 billion gallons of sewage to the highest standards of effluent water quality before returning it to the environment.
RAWLINGS-BLAKE ? This year marks the 100th anniversary of our Back River Waste Water Treatment Plant. Back River is one of the largest treatment plants in the state and its use of the latest technology is vital in protecting our water resources and the Chesapeake Bay. Without these investments, the State of Maryland would not be able to meet its nutrient reduction goals for Bay protection.
What advice would you give to your successor regarding water and wastewater management?
BALLARD ? Status quo is not an option. If you want your city to succeed, challenge the ?system;? find innovative ways to fund infrastructure, reach out and engage the public at every step and stage of your plan, as we did with the REI process; and work collaboratively with federal and state regulators.
BELLAMY ? This community has definite expectations of the elected officials and City staff. It is important to continue to provide safe water to our citizens. This is possible by creativity, efficiency, and maintaining a professional staff. Leveraging new technologies will assist Asheville to control costs and meet citizen expectations.
JAMES ? While I hope to be around for a while, considering I was just elected this spring, I think sound advice regarding water and wastewater management for any leader would be to retain a stable management team and structure that, like any well run utility, has the capacity and capability to develop and maintain a system over decades of use, while keeping rates affordable.
RAWLINGS-BLAKE ? Pay attention to water infrastructure needs. What?s going on below the roads is just as important as what?s happening on top.
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