Funding, Regulations, Water Resources Top Issues Facing Municipal Water Industry

Infrastructure funding, new regulations, and water resource management are top issues of concern for drinking water and wastewater utilities across the country, according to a recent interview with the presidents of the American Water Works Association and the Water Environment Federation.

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Infrastructure funding, new regulations, and water resource management are top issues of concern for drinking water and wastewater utilities across the country, according to a recent interview with the presidents of the American Water Works Association and the Water Environment Federation.

While the needs vary by region − with growth a concern in the West and infrastructure rehabilitation more of a concern in the Northeast - the universal concern is funding. Most people in the water industry have come to recognize that a significant increase in federal funding isn’t likely to happen soon, and utilities need to raise rates to match their cost of service.

“It is widely recognized that there is an infrastructure funding gap for water and wastewater. The numbers vary, but they range from somewhere between a $10-12 billion annual shortfall for funding,” said WEF President Michael Read. “At one time there was optimism about federal money to help fill the gap, but those days are long gone now. WEF has begun focusing on educating citizens and local leaders about the value of water infrastructure and the importance of investing in long term stability.”

AWWA has a similar outlook, said AWWA President Andrew Richardson.

“AWWA’s position has always been full cost recovery and the importance of getting into a dialog with customers about the true value of water,” Richardson said. “We don’t perceive a crisis right now, but being prudent planners we know if we don’t put into place funding for total cost recovery and start maintaining a general public awareness about the importance of water infrastructure, then we could have a crisis.

“As an industry, we can no longer be a silent servant,” he said.

It is important that local decision makers - mayors, city councils, etc. − be part of the educational process, since they will have to implement the rate increases needed to fund maintenance and improvements, Richardson said.

“We need to ask decision makers to move toward a form of custodial leadership - to put service above self interest,” he said. “We don’t want to pass along the bill - we want to pass on assets that are as good or better than we found them.”

Although most communities have the ability to support full cost of service, there will be a continued need for support from the federal government, Read said.

“I think we all recognize that some communities can afford the investment and some can’t,” Read said. “For those that can’t, we have to look to the federal government to take the lead. We don’t expect to see grants, but we are looking to the federal government and the SRF program to leverage the resources from wealthier communities to help those truly in need.”

The key to any such program, however, is development of a “means test” to accurately identify a community’s ability to meet its funding needs, Read said.

Regulations

While the pace of new regulations and enforcement actions by EPA have slowed somewhat in recent years, a variety of new regulations are working their way through the regulatory process.

“An example is the bundling of the disinfection byproducts rule and the Long Term II enhanced water treatment rule, which EPA hopes to have out by the beginning of next year,” Richardson said. “The release date for the Groundwater rule is less definitive, but it’s coming.”

One of the challenges for the industry is dealing with increasingly complex regulations, both on the treatment side and understanding the over-all financial impact of the rules, Richardson said.

An example is the Stage 2 Disinfection Byproducts Rule. Utilities have to not only determine what disinfectant to use, but then also determine what impact it might have on their distribution system, he said.

On the wastewater side of the industry, “I don’t see a slow down on regulation,” Read said. “The nation continues on the deployment process. The current administration has not made a high priority of establishing new higher standards or taking extreme enforcement actions under environmental rules, but things are moving forward. For example, in Oregon they are well on their way to having TMDLs and waste loads established, with goal of getting them off the 303d list.

“While there are no strong, new regulatory issues facing the industry, there are range of issues waiting in the wings. In some cases, waiting for the science to develop. For example, we’re just beginning to understand the risks of endocrine disruptors and pharmaceuticals. Crypto and its relationship to wastewater treatment plant discharges is also being examined,” he said.

Watersheds

Another major issue for the wastewater industry is EPA’s focus on watershed management.

“Watershed based permitting is endorsed by WEF and we are certainly interested in working with EPA in developing watershed based permitting as the standard,” Read said. “There are difficulties related to the structure of the regulatory environment. EPA has 10 regions that have somewhat different structures and are not under the direct authority of headquarters. Some of the regions haven’t fully adopted watershed based permitting as their goal.

“Most states are delegated and watershed permitting has to be implemented through the various state regulatory agencies, at a time when state agencies have seen decreases in budgets for the past several years,” he said. “That’s very true in Oregon. They (states) don’t have the financial resources to make a wholesale changeover to watershed permitting. They might agree technically that it makes more sense, but they just don’t have resources to implement it.”

Watershed permitting also requires getting all parities to the table and having extended contributor discussions, Read said.

“To date there have been a number of successful permits, but none in which agriculture was a partner. Agriculture is the strongest partner that needs to come to the table and they’re not there yet.”

Watershed protection is also important for the drinking water industry as utilities strive to protect - and in many cases expand − their water supplies.

“AWWA recently conducted a survey of water systems and one of the biggest concerns that came to light was supply issues,” Richardson said. “Utility managers are beginning to worry about their next incremental source of supply - where additional water resources are coming from.

“Trends that we will see include integrated water resource management and source water protection − I see this happening across North America now,” Richardson said. “People are really beginning to think about water reuse, desal, resource management − what utilities should be doing in a holistic management perspective.”

Business climate

Along with being presidents of the two major water industry associations, both Read and Richardson are consulting engineers. When asked about the business climate in the water industry, Read said business has been accelerating in the last year.

“We had a couple years of recession in the consulting industry where a lot of communities were not issuing requests for proposals,” he said. “There was a lot of pent up need where communities had projects planned or in the planning stage. Now we’re seeing quite a bit of work out there in the industry.”

The action is regional, with some areas of the country seeing growth while other areas are more focused on rehabilitating existing infrastructure, he said.

“We’re seeing tremendous growth in the West. In fact, we’re struggling to keep up,” Read said.

“The number one and two most important things for community development is water and water quality systems,” he said. “Communities need to have adequate water systems to feed growth.”

Richardson also sees a robust industry.

“The type of business depends on where you are, but capital improvement programs are being developed,” he said. “In some cases they could be supporting growth and new regulations. In other cases they are supporting rehab and regulations.

“Municipalities are becoming more wise in how to fund their projects, and they are developing strategies for full cost recovery. They’re becoming more sophisticated. We’re seeing strategies being developed on doing more with less - instead of just throwing concrete and steel at a problem.

“Clearly people are looking at new technologies. Industry is embracing innovation where economics dictate. Who would have thought membranes would be the way to go to treat Great Lakes water? Yet, they have been embraced because of the cost of land and the smaller footprint they offer.”

Other Issues

When asked about other issues of concern, Read focused on the global water challenge. He noted that today, 1.2 billion people don’t have access to safe drinking water - and in the developing world, 90% of all wastewater is discharged without treatment.

“We have to ask ourselves, how do we in the Western world take leadership in helping insure the future for those who don’t have the resources or ability to take care of their basic needs,” Read said. “We need to work on the transfer of technology, experience and education to help that process along.”

Richardson focused on the graying of the water industry and the lack of younger engineers and operators coming into the industry.

“A huge percentage of utility employees are eligible to retire. Unfortunately in many cases we have not identified their replacements,” he said. “Utilities really need to think about succession planning − who’s going to replace those retiring employees.”

Part of the problem is the water industry’s image, he said. People don’t understand what a “rich and rewarding career” the industry offers. WW

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Andy W. Richardson

Andy W. Richardson, a principal and director of the Phoenix and Las Vegas offices of the consulting firm Greeley and Hansen, is President of the American Water Works Association. An AWWA member for almost 20 years, Richardson has been a long-time leader in the Association and the water community. He chairs the AWWA Strategic Planning Committee and has served on other Board committees, as well as committees on water reuse and international issues. He holds a bachelor’s degree in civil engineering from the University of Illinois and masters degrees in civil engineering and business administration. His father, William H. Richardson, was AWWA president from 1984-85.

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J. Michael Read

J. Michael Read of Oregon City, OR, is President of the Water Environment Federation (WEF), a technical, scientific, and educational water quality organization. A wastewater professional with over 30 years of experience, Read is currently a Vice President with HDR Engineering. Prior to that, he was the Director of Water Environment Services (WES), a department of Clackamas County Oregon. From 1989 through 1997, Read was the Director of Wastewater Management for the City of Portland’s Bureau of Environmental Services. A Federation member since 1980, Read served on the Executive Committee from 2000-2002 and has been active on numerous Federation committees.

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