Water Online Radio: Effective Water Utility Management ExplainedSource: CH2M HILL
Mike Matichich, Global Technology Leader for CH2M Hill’s Financial Services Group, talks about a developing framework for best practices in managing a water utility.
The following is an excerpt from a Q&A with Water Online Radio. Click on the Radio Player above to hear the full interview.
Water Online Radio: You were up on stage giving a presentation earlier this week. Tell us about what you talked about.
Mike: We had a half day session about the bench marking of the elements of effective utility management. In 2008 the EPA and six associations developed effective utility management which helps point the way for utilities to address better management in 10 areas that cut across the whole spectrum of utility management; everything from operational efficiency to sustainability and understanding and support.
What was realized after the primer in 2008 was it didn’t dig deep enough or wasn’t specific enough for utilities to be able to really figure out where they are and where they need to be for each of these elements of management.
The Water Research Foundation sponsored a study that we are in the final stages of right now that was the feature of this half day session. CH2M Hill worked with the associations and more than 25 utilities to create a more specific framework that utilities can use to see where they are at and where they want to go in all of those areas of management.
Water Online Radio: With the challenges that we have in the industry and the financial struggles that we have with aging infrastructure, it sounds like utilities are thirsting for some knowledge in how to be more efficient and more knowledgeable.
Mike: Absolutely. When you look at what happened starting with the crash of the financial markets at the end of 2008 many utilities assumed that they could go to the municipal bond market and just borrow money to pay for their capital projects.
They woke up and found that they couldn’t go to market anymore and that they had to reinvent the way that they thought about financial planning for financial viability. This is one of the attributes that was addressed at the primer and that we have now created this framework for.
When we went through this testing project we made sure that we had a geographic distribution and a size distribution. Utilities ranged from the Covington Water District in the state of Washington that has about 17,000 connections to the New York City DEP that serves 9 million customers. Each of these utilities after going through this process and have learned something about how to improve their management processes.
Water Online Radio: Let’s take a closer look at financing. We hear hundreds of millions to a trillion dollars’ worth of infrastructure projects need to get funded and going to the municipal bond market as you mentioned just a few minutes ago is no longer going to cut it. How are we going to do this?
Mike: Well cities, states and other entities are looking for new and creative approaches to address those challenges. I worked on a project last year with the three west coast states plus British Columbia that formed a collaborative called The West Coast Infrastructure Exchange.
From the Governor’s office on down the states realized that there is a need to look beyond the municipal bond market and so they created this exchange that was intended to look for speed, the investment of private equity capital, pension fund capital and other sources of money to address the huge backlog in infrastructure.
Water Online Radio: What are some other options available to these utilities?
Mike: Part of it is really being more specific to what the needs are, particularly on the water utility side. Many utilities are seeing declines in water usage because of conservation, declining population or household size. Industrial customers are getting more efficient in their usage of water...
Click on the Radio Player above to hear the full interview.