Roundtable 2017
Editor’s Note — This issue marks the return of our popular Mayors Roundtable feature. Mayors are essential to a city’s water infrastructure agenda, involved in budgetary decisions and strategic planning, often in the face of financial challenges, economic uncertainty and regulatory constraints. They are held accountable when problems occur but seldom recognized when systems run efficiently.
Although infrastructure is a driving force of an economy, underground systems are often overlooked and can take a back seat to visible infrastructure like roads, bridges or transit. According to the American Society of Civil Engineers’ 2017 Report Card for America’s Infrastructure, financial needs in both the drinking water and wastewater sectors show a $105 billion investment shortfall between now and 2025.
With water and wastewater projects in the United States primarily funded at the municipal level, will more mayors now place a larger emphasis on maintaining these critical infrastructure assets? What are the toughest challenges? How is technology helping utility management? We reached out to a few mayors in different regions of the country to dive into these questions and more. Meet the city leaders polled in our 2017 Mayors Roundtable!
Mayor Bill Hennessy — City of O’Fallon, Missouri
Mayor Bill Hennessy — City of O’Fallon, MissouriWilliam “Bill” Hennessy, was first elected to public office in 1999 when he won the Ward 4 seat on the Board of Alderman. He continued to represent his ward for the next 10 years, serving five consecutive terms. In April 2009, he was elected as Mayor of O’Fallon, re-elected in April 2013 and re-elected for a third four-year term in April 2017. During this time, O’Fallon’s population has increased to more than 85,000 residents and 1,600 businesses. The city has become a staple of many nationally-recognized lists of “America’s Best Places to Live” and “America’s Safest Cities.”
Mayor Robert Rolison — City of Poughkeepsie, New York
Mayor Robert Rolison — City of Poughkeepsie, New YorkRobert G. Rolison was elected Mayor of Poughkeepsie in November 2015 and took office on Jan. 1, 2016. Prior to becoming mayor, Rolison was a member of the Dutchess County Legislature for 13 years, from 2003-2015, representing the Town and City of Poughkeepsie. In 2010, he was elected by his colleagues in the county legislature to serve as chairman, a position he held for six consecutive years. Prior to holding public office, he served 12 years in the Patrol Division of the Town of Poughkeepsie Police Department. He worked up the ranks and was promoted to detective, a post he held for 14 years. Rolison is a lifelong resident of Poughkeepsie.
Mayor Jill Techel — City of Napa, California
Mayor Jill Techel — City of Napa, CaliforniaJill Techel was elected Mayor of Napa in March 2005 and re-elected in 2008, 2012 and 2016. She serves as Program Coordinator for Leadership Napa Valley. Techel is Vice Chair of the Napa County Flood Control and Water Conservation District, Board member of the Napa Valley Transportation Authority (NVTA), Chairperson of the Napa Sanitation District, Board member of the Bay Area Conservation and Development Commission and Co-chair of the U.S. Conference of Mayors’ Water Council.
Water Finance & Management: 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?
Mayor Bill Hennessy, O’Fallon, Mo.: A clean, dependable water and sewer system is of the utmost importance for a city. Of course, as the stewards of this vital resource, we must provide clean water and a healthy living environment for our residents and their families. But, it also is important that we have the capacity to meet the needs of our business customers both today and in the future as this is crucial in business attraction and job creation. This means that by investing in our water and sewer infrastructure, we are not only protecting the health of our residents, but also the economic future of our community.
Mayor Robert Rolison, Poughkeepsie, N.Y.: This is one of those critical areas which has a tendency to hide in plain sight. The fact is that the City of Poughkeepsie is poised for development and private reinvestment that has been sluggish for the last decade. Our water plant has just undergone a multi-million dollar upgrade that has been well-publicized – we believe this is an important catalyst to some pretty good things happening in our city. Just yesterday, the city closed on an $8.4 million, zero-interest loan and was awarded a $2.4 million grant under Gov. Cuomo’s state-wide priority of managing the state’s water and sewer infrastructure.
Mayor Jill Techel, Napa, Calif.: Water and wastewater is a necessity. Economic prosperity is not possible without reliable water and wastewater systems. A sustainable water supply is critical to the function of every existing business and to attract new business and insure a vibrant economy.
WF&M: What are the major issues currently affecting your water/sewer system (aging infrastructure, water loss, water quality, funding, etc.)? Are any problems unique to your situation/location?
Hennessy: Much of O’Fallon’s water and sewer infrastructure was developed decades ago, when O’Fallon was a small rural town with a population hovering under 10,000 residents. Today, O’Fallon is a thriving suburban community, and with more than 85,000 residents, that growth has certainly led to challenges. In fact, over the past few years, we’ve invested heavily in upgrading our water and sewer plants and water mains to meet the needs of our growing community. This year, we are investing nearly $2 million in the full replacement of one of our most important mains. The main, which runs under a major thoroughfare, is more than 50 years old, is too small and breaks frequently causing major headaches for our residents and businesses.
Rolison: The City of Poughkeepsie and our neighbor, the Town of Poughkeepsie, jointly operate our water facilities under an inter-municipal agreement that dates back to the mid-nineties. We believe it to be one of the oldest examples of IMAs in the region. In a climate where shared services are so essential to fiscal responsibility and to cost-containment for our taxpayers and residents, I believe our experience signals how important it is to have strong and collaborative partnerships.
Techel: Reduced revenue due to drought. Although we have invested in our water supplies and have not had a water supply shortage, the California State-mandated drought has reduced revenue for the Water Fund by 20 percent each year for the last three years, and as a result, rates are currently in need of a substantial adjustment.
Also, continued reduced consumption – State advertising and policies are focused on continuing to suppress water demands. Customer habits have changed, requiring rate increases and rate structural changes to reflect a greater fixed price component.
Aging infrastructure is another. Meanwhile, with reduced funds identified above, there are increasingly urgent needs to invest in pipeline renewal and replacement as well as treatment plant improvements.
Finally, source water protection. We do not own or even control development in our watershed. Watershed lands are under increasing pressure of development for viticulture and rural development since the valley floor has been built-out with highly lucrative grape production, winery production facilities and tasting/visitor sites.
WF&M: 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: smart metering, asset management software, etc.)?
Hennessy: We have invested heavily in technology during my time in office, and that investment has paid off significantly. The use of remote cameras for monitoring our sewer system provides a safer work environment for our employees.
We implemented a smart meter system with full radio monitoring, which allowed us to reduce water loss, increase revenue and redeploy staff members who previously were reading meters to help with preventive maintenance. The system also allows us to better serve our customers by giving us constant analytics that residents can use to identify potential leaks.
Rolison: Smart metering has been a big step forward for us. Benefits from technology are always available, the issue is timing and cost. Careful planning and expert support is critical with any new implementation. We’re not intent on being at the cutting edge of new technologies, but our Joint Water Board has done an excellent job of keeping us towards the front of the pack.
Techel: The water system is in the process of implementing a work-order asset management program and is going live in April 2017 after three years of gathering GPS information and documenting assets. The program will provide consistent reporting of routine maintenance activities and identify work performed, work outstanding and work that needs to be performed on the important assets with the goal of extending useful life and appropriately identifying replacement needs prior to failure.
The water treatment plants are run by robust Supervisory Control and Data Acquisition (SCADA) systems that are necessary to insure water quality and compliance.
Both of these efforts require significant staff time and increase operating costs. The implementation of technology is necessary in today’s information age, but results in higher-skilled staff required to maintain and operate the computerized systems.
We have been installing electronic radio transmitters on meters and have completed installation throughout nearly 80 percent of the system. Funding constraints have required an additional year of delay for AMI fixed network implementation. AMI will allow customers to access their data in real time. The capital improvement is now planned for 2020.
Hennessy: I would also add that for us, even relatively minor investments have paid dividends. In 2015, we implemented the use of iPads with cellular connections for all of our monitoring staff. The iPads allow our employees to monitor all aspects of the system 24 hours a day without being tied to a landline internet connection. This has greatly increased employee satisfaction. Additionally, with the iPads, we can manage our valve exercising program, identify valves and lines while out in the field, remotely control our towers and wells and improve communication within our team.
WF&M: What is your primary means for funding water infrastructure projects (rate increases, bonds, SRFs, etc.)? Has your city or water/wastewater utility taken any unique or new financing approaches to fund projects (P3s, etc.)? If so, please describe.
Hennessy: Utilities of our size are hindered by a lack of funding. The water and sewer systems are funded as enterprise funds with user fees providing much of our revenue. Additionally, the city has utilized the Missouri State Revolving Fund (SRF) program in the past, but more recently the city, through its bonding company, issues Special Obligation Bonds to fund our water and sewer projects and can do so at a rate comparable to that of the SRF. We also actively seek out grants to assist with funding. For example, O’Fallon has utilized grants from the State of Missouri in the last few years to plug two abandoned well sites. Both of these projects were 100 percent reimbursed through State grants.
Rolison: Bonds and grants are our chief funding vehicles. Such borrowings are not included in the New York State Tax Cap calculation, but I believe City of Poughkeepsie residents expect and demand that we put downward pressure on rates, while maintaining the highest quality output. I’ve asked our finance team to review the price points that were in place when I took office last year as we begin work on our 2018 budget.
Techel: We have 30-year bonds originally issued in 2007 and were refinanced in January 2016. The one-time funds were used to help reduce the drought impacts and cover operating costs in 2016. Due to decreased revenue, debt service is now nearly 18 percent of the current budget.
WF&M: If applicable, how are federal or state mandates impacting your city/utilities? Do any specific mandates affect your city? How are increased expenses, if any, being addressed?
Hennessy: The Department of Natural Resources and the Environmental Protection Agency continuously tighten limits on the effluent flow from our plant to the Mississippi River. Because of this, they have just recently required the city, through the Waste Water Treatment Plant Operating Permit, to lower our ammonia numbers as a means of keeping the high concentration of ammonia out of our rivers. Unfortunately, the new regulations will require us to completely change the second half of our treatment process. We just completed a conceptual plan to address this, and it is going to cost the city in excess of $26 million. Because of this, sewer rates will have to increase. Although the estimates are still preliminary, this burden is inevitably going to have to be passed on to our customers in the form of rate increases. We are currently under a five-year compliance order with DNR to meet the new required limits.
Techel: As mentioned previously, the California state mandate has been devastating to the Water Fund. Rates must be adjusted to cover operating expenses and continue to invest in much-needed capital improvements.
WF&M: What advice would you give to your successor regarding water and wastewater management?
Hennessy: Invest in your water and sewer infrastructure through constant evaluation of the system. Due to the significant investment that comes along with many upgrades and improvements, it may sometimes be a difficult sell to your fellow elected officials and the community, but putting it off for the future will inevitably cost more.
Additionally, invest in your staff. Pay to hire the best people, pay to train them appropriately and put your trust in them. A loyal, invested staff will pay back your residents over and over again by keeping your systems running at optimal levels, staying up to date on the latest trends and ideas, and deliver exceptional customer service. And, ultimately, that is what we are all here to do, provide our customers, our residents, with the highest levels of service.
Rolison: Elected leaders have one overarching task to handle when they take over. Ensuring we have the best, most qualified people working in the right roles – that’s job one. When you’ve got those people, when you have the right plant administrator, experienced governance is in place – hang on tight. Nothing can hurt an operation more than turnover at key positions, so I would say take a little extra time to get to know your plant operator and all the staff at your treatment facility.
Techel: Make the tough decision and support consistent investment in your utilities. Deferring costs does not make the problem go away, it only creates a bigger cost and results in greater inefficiencies that are more expensive to your ratepayers later. 
Water Finance & Management would like to thank Mayors Bill Hennessy, Robert Rolison and Jill Techel for their participation in this year’s Mayors Roundtable.
