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Entries for the 'Blog Series: Small Water Biz' Category
Cassia Smith posted on May 04, 2012 07:22
X Marks the Spot
Good system maps are helpful for everything from routine maintenance and repair to emergency response. Unfortunately, many water and wastewater systems don’t have up-to-date maps, and for many small systems it’s up to the operator to develop his or her own. We’ve touched on this subject before, in our posts on using Google Maps and a GPS or the free Quantum GIS tool to create digital maps. In addition to these options, Esri is a leading company in the development of GIS (geographic information systems). Esri offers a number of different software systems and data services, including the popular ArcGIS, as well as support and training for their products. Esri is considered the leader in mapping software, and using their products requires a commitment of both time and finances. It's likely some of you are using these products.
A Wealth of Information
Esri's website features a number of resources useful for their users, some of which could be useful for other GIS users as well. For beginners, Esri has compiled a page of GIS glossary links. In addition, they have an extensive database with presentations, reports, and articles related to their software. This brief introduction to GIS gives a good overview of the company’s ArcGIS Server system features, while this longer Fundamentals of Cartography slideshow gives more in-depth information. (Follow the links to download the documents.) In addition, Esri provides a number of training opportunities, ranging from instructor-led introductions to their software to self-guided online courses on advanced features. If your organization uses Esri products, you’ll definitely want to check out their site for these resources and more, including a tech support page.
Other Options
Do you need an updated system map, but think Esri’s products probably aren’t for you? Check out our post on Mapping for Small Systems, which lists the benefits of accurate, up-to-date maps, and provides suggestions for creating inexpensive, simple maps.
j.brown99 posted on May 02, 2012 07:02
Funding is often a major impediment to establishing and improving water resources on Tribal lands, but it is not the only one. Addressing the infrastructure needs of underserved communities, rural areas, and tribal lands requires a great deal of technical expertise as well, which can be hard to come by with budgetary limitations.
One of the EPA’s programs is designed to help bridge this gap – The Smart Growth Implementation Assistance (SGIA) Program.
The program is distinctive from those that generally award funding. Instead, the SGIA program provides technical expertise and community outreach to entities that work towards economic growth and public health improvements. While a variety of initiatives and projects could certainly meet those criteria, Tribal water concerns and needs are well within the range of possible recipients of this assistance.
For 2012, the SGIA program chose 5 recipients for assistance, one of which was the Spokane Tribe of Indians in Washington State. With the technical assistance provided by this award, the Spokane Tribe will be developing a water infrastructure plan that seeks to address significant and recurring challenges to the water needs of the community.
An additional tool available from the EPA’s Smart Growth program is the Water Quality Scorecard. Developing and protecting water resources on Tribal lands means writing and implementing both short- and long-term policies that ensure the safety and availability of water for generations. The Water Quality Scorecard provides information that communities can use to create and revise policies in order to best protect available resources and access to them.
For more information about the types of projects that have been approved or completed already under the Smart Growth Implementation Assistance Program, you can review the project summaries page at the EPA’s Smart Growth site.
Steve Wilson posted on April 23, 2012 07:38
WIFIA stands for Water Infrastructure Finance and Innovation Authority. AWWA, WEF and AMWA are supporting a new bill to establish this Authority as a funding mechanism for large water and wastewater infrastructure projects. When you read the summary they have put together that explains what WIFIA will be able to do, it seems like a cost effective approach for helping systems deal with their infrastructure needs. You can read the summary here.
But, And There Is Always A But...
WIFIA could end up being a problem for the current DW and CW SRF programs. WIFIA is meant to be a more open access sort of loan program whereby large projects can get low interest loans that save the utility and their customers money. It doesn't specify that the loans go to the systems with the greatest needs or those that are out of compliance. Thus, in some cases the funding could go for expansion projects that benefit the utility, rather than the intended use of dealing with the massive infrastructure problems being predicted for this country. On the other hand, SRF funds are directed toward those projects with the greatest need, with the goal being to protect public health and maintain compliance with the SDWA and CWA. This difference is important, especially in some states that have many small, rural systems.
Another difference between WIFIA and SRF are the use of cross-cutter rules. SRF requires utilities receiving money to meet certain federal requirements that limit how the funds can be used and requires the utilities to meet certain standards. The framers of WIFIA would prefer that the program not require many of those rules, which would make it easier for the utilities to receive funding, but reduce the oversight to ensure that the funding is being used for its intended purpose.
Lastly, SRF programs include set-aside monies that provide funding for the states to administer their programs and provide for state-managed activities that include things like technical assistance to small systems. WIFIA doesn't provide for these state resources.
Some Possible Advantages
The WIFIA summary points to lower overall costs for consumers, based on current rates, as compared to the bond market. It also points out that there are 27 states that currently leverage their SRF funds on the bond market and this would allow them to borrow from WIFIA instead with potentially 16% savings long term. I've also heard that because private companies can't get SRF funds in some states, WIFIA would be an option over corporate bonds that would lower overall costs for customers at these systems.
Some Possible Disadvantages
The biggest concern with WIFIA is how it will affect the SRF programs. The SRFs are successful programs with a strong track record that provide funding for water and wastewater system projects. SRF programs are managed at the state level by the agencies that regulate the utilities, work with them to stay in compliance, and know them best. States use the SRF programs to increase compliance and to protect public and environmental health. WIFIA would be a national program, managed at the national level that has the intended purpose of reducing the overall cost for infrastructure projects. Will national rules affect loan approval? Will the states be involved in decisions or the process for the WIFIA program? What about the small struggling system that doesn't have the ability to raise capital for infrastructure projects and is too small for a WIFIA loan?
When you read the SRF example in the summary, you might ask yourself why even have SRFs if WIFIA funding is available. The example basically says that the state financing authority could apply for WIFIA funding instead to fund its program, and indicates the cost savings over leveraging bonds instead. SRF costs the federal government about $2 billion dollars each year. WIFIA is being promoted as potentially having no long term cost to the federal government, so why would Congress want to keep both programs? That's the unintended consequence that many are worried about, and the reality that we could soon be faced with if a WIFIA bill doesn't have provisions to maintain the SRF program.
Loans For Small Systems
AWWA just released an infrastructure report that says funding for small system projects is going to cost much more per capita compared to larger systems that have the customer base to spread out infrastructure upgrade costs. Because WIFIA funds are meant for large projects, small systems would often not be eligible for WIFIA funding themselves. Asking small systems to bundle their projects, or asking the state to bundle the projects for them, also creates some questions. What if a loan is bundled for 5 projects and one of the projects defaults? What does that mean for the other 4 systems and what does that mean for the state if they applied for the loan? Will the state have to cover the defaulted loan?
If WIFIA replaces SRF, will the states be provided funds for staff to help small systems develop applications? Small systems often lack the managerial capacity to develop applications and instead use engineering firms and planning grants to get that task accomplished. Will those options still be available? They must be or some small systems will be left coming up with those funds themselves. What about states with very few, if any, systems that would qualify for WIFIA funding? If SRF goes away, what will they do to find funding for projects? Could they be out of luck until enough projects could be bundled to meet the WIFIA requirements?
What Needs To Happen
WIFIA is a great concept for dealing with the huge anticipated costs we expect to see for infrastructure upgrades in the next 25 years. As currently proposed, it will make it easy for large systems to get cheaper funding, even though those systems currently have more options available to them already. However, it could potentially have the unintended consequence of reducing or eliminating the SRF programs that support compliance and help small systems that might not have other options. Losing SRF funding would also reduce a state's ability to manage their SDWA and CWA programs because the states rely on the SRF set-asides for part of their program implementation. The SRF's are necessary and must be maintained - and, we would hope, at least at current funding levels.
Recently, AWWA sent out an email asking its members to support WIFIA, encouraging utilities to contact their senators and representatives to seek their support in co-sponsoring the WIFIA bill. If you are so inclined to get involved, be sure to stress the importance and differences between the SRF programs and WIFIA, and that any reduction in SRF will lead to unintended consequences that include reduced compliance and public health protection for small systems, and could leave many small systems with no options for dealing with their infrastructure needs. Make it clear that you only support a WIFIA bill that leaves the SRF programs intact and fully supported.
Steve Wilson posted on March 24, 2012 19:26
These aren't new words. In fact, it seems like everyone is coming out with a bigger estimate of the future cost of infrastructure every few weeks and because the numbers are so big, they all seem irrelevant for small systems. Not so. This new report by AWWA definately puts some perspective on the issue for small systems.
Buried No Longer
AWWA has released a report entitled "Buried No Longer: Confronting America's Water Infrastructure Challenge". Recently, there have been snippets on the news about $1 trillion dollars over the next 25 years and other details that certainly catch your eye. But I encourage you to take a look at the report. AWWA has set up a website for the report here, where you can download the report and read more of the AWWA perspective.
What It Says
The report is short and to the point. It's only 16 pages and a good portion of that is made up of pictures and figures. But the information provided is sobering. It points out in Figures 7 and 8 that the estimated costs per household for infrastructure replacement are about $100 annually for large systems, but $400-$800+ per household for small systems.
Small systems are a widespread concern. According to AWWA, 84.5% of all public water supplies serve less than 3,300 people. The main findings are that for most systems, water bills will have to go up. More importantly, the time is now to start planning for future upgrades. The report also looks at geographic area and how populations are changing (going up in the south and west, no so much in the Northeast and Midwest). This has implications for how your town might grow in the future.
Pipe Matters
The report lists the estimated service life for all of the major kinds of pipe. You can find that on page 8 in Figure 5. Basically, you have ductile iron and PVC on the low end of about 60 years, and cast iron on the high end of about 120 years. The take home message is this, "...most of our buried drinking water infrastructure was built 50 or more years ago..." (p.4) and "Because pipe assets last a long time, water systems that were built in the latter part of the 19th century and throughout the 20th century have, for the most part, never experienced the need for pipe replacement on a large scale." (p.14) How long has your pipe been in the ground?
What It Means
Most people living in your small community have never seen the pipes that bring them their water daily. They have no understanding of the costs of replacement, nor are they willing to pay more for their water today to plan for infrastructure replacement in the future. It's time to educate your customers and begin putting money in the bank today. Failure to do so may result in even higher costs in the future, or worse, create an unsolvable situation in your community that can only be dealt with by consolidation or reduction in service. The days of government bailout for systems that can't sustain themselves are coming to an end, so you need to ask yourself, how important is your way of life today and how important is it for the future.
Next Steps
Becoming sustainable requires planning and financial management. Is your system putting money in the bank for future infrastructure needs? Do your rates reflect the true costs of providing water? Is there "extra" in your rates for replacement costs? Do you review your financial situation and consider rate changes on a regular basis? Does your community have a long-term plan for the sustainability of its water (and wastewater) system? All of these answers should be "Yes". If they aren't, its time to get some help from your TA providers on what you can do to start down this path.
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