WWEMA Window: A New Paradigm For Funding

By Bill Decker

Every four years, the American Society of Civil Engineers (ASCE) releases a new report card on the state of our nation’s infrastructure, and their 2013 grade for both water and wastewater was a “D”.  That report estimated that the infrastructure needed $3.6 trillion in investment by 2020.  I do not look for a significant movement in our current grade for either water or wastewater with the 2017 report when it is released this year, because the funding at the level required to significantly change our infrastructure has not been made except at a few local utilities.

While there are some municipalities that have passed rate increases to fund modernization, for the most part our water rates are among the cheapest in the developed world.  Albert Einstein said that “We cannot solve our problems with the same thinking we used when we created them.”  I submit that our problem in the industry is not purely a lack of public funding, but our mentality is that we cannot raise rates and must depend on more central funding to modernize and maintain the infrastructure that we already have.  This is a paradigm that we need to break through.

I believe that every municipality wants to modernize and maintain their infrastructure, but the truth is that federal, state, and local funding has not been adequate for decades.  Largely due to decisions in the past, every government entity has more demands for funding than can be met – and in today’s sharply polarized political landscape, even great ideas struggle to gain bipartisan support.  Because our water infrastructure is largely out of sight, it often lacks the public support for funding until a crisis brings it back into focus for both government officials and the public. But like the many water main breaks that occasional make the news, these crises soon fade due to the incessant political noise, tweets, and two-second sound bites.  The solution to our industry funding gap is unfortunately not going to come from the federal or state government until politicians resolve to work together for the common good rather than for the advancement of one party’s political agenda.  The solution needs to largely come from our local municipalities and the industry working together.

First, as an industry we need to become active locally to raise the awareness of the state of our infrastructure and the investment required.  As one congressman famously remarked, “You don’t get the funding because you don’t have the votes.”  Our industry supports every other industry and without water our entire economy would quickly grind to a halt.  In essence, every other industry should advocate for investment within the water industry.

But the solution is not purely dependent on public funding.  Manufacturers have products that they are trying to bring to the market to lower the operational cost of treating water and wastewater, as well as decreasing the lifecycle cost.  However, we collectively find the process to be overly long and unduly difficult due to the labyrinth of regulations that vary from state to state and the reluctance from virtually every utility to try a technology until someone within their state is already using it.  We have created technology clusters, forums, focus groups, as well as programs associated with numerous trade associations in an effort to break through this resistance to new technologies with limited but growing success.

An old maxim states “necessity is the mother of invention,” and in this regard the necessity for increased funding may have already been the mother of a new solution.  I believe that we are on the forefront of a new movement in the industry that is a type of public-private partnership in conjunction with the effort to become energy-neutral.

Reading various trade journals, I am encouraged by the work at Victor Valley Water Reclamation District.  General Manager Logan Olds champions the use of their state-of-the-art “biogas to energy program,” which they have developed through a novel pilot approach.  He stated that by 2016, the plant would produce 73 percent of its own energy.  Long term, they could supply energy back to the grid.  Imagine a world where every city became an energy exporter instead of an energy consumer through their water treatment facilities.  This would radically shift the landscape for both the water industry and the power industry.

Another case is DC Water, where general manager George Hawkins recently announced the creation of Blue Drop, a nonprofit organization with the “goal of marketing products and services that DC Water has already developed.”   Under this type of organization, utilities are able to expedite development of new technologies for water treatment in conjunction with manufacturers as well as possibly other agencies such as academic institutions.  They could then jointly own intellectual property that they could then license to other municipalities.  This type of peer-to-peer marketing is not completely new to our industry, but this could result in a partnership where manufacturers could test their equipment at a plant that had a vested interest in the mutual success.  This new way of thinking could unleash improvements in the plant in a quicker fashion which benefits both the plant and the manufacturer.  It also allows other utilities to learn from work at organizations like DC Water without investing in some of the research, again allowing them to save money on future piloting.

Neither of these programs alone will solve the shortage of funding in the industry, but they are a start to an alternative source of funding.  Programs like these that team the best talent from the manufacturing community along with engineers and utilities working together to develop energy-neutral plants and diversified revenue streams will change our dependence on public funding.  We all need to take an active role in our industry and I commend general managers Olds and Hawkins for their leadership in the industry.

Bill Decker is Vice President and General Manager, Equipment and Services Group, for Aqua-Aerobic Systems Inc. (a Metawater Company) in Loves Park, IL. He is a member of the Water and Wastewater Equipment Manufacturers Association’s Board of Directors and is Vice Chair of its Marketing and Member Services Committee. For more information about WWEMA, go to www.wwema.org.