Archive for the ‘ Uncategorized ’ Category



Is George Hawkins Making the Case for Public Water and Sewer?

Posted on: February 10th, 2020 by Peggy Gallos

You might want to check out George Hawkins, former manager of D.C. Water, on the Water Values podcast (thewatervalues.com).

Hawkins is interested in helping older systems with a declining rate base through the nonprofit arm of a new venture he has dubbed Moonshot Missions. (It also has a for-profit side offering services Hawkins says relate to “change management.”) He spoke about this venture at the Jersey Water Works conference on Dec. 13.

On the 20-or-so-minute podcast, Hawkins says, “The question has been on my mind, how to help these resource-constrained communities. Really good people working hard, but hard-pressed to adopt strategies that can save on existing operating and capital expenditures while improving performance to try to get into a virtual—virtuous!—cycle of performance.”

Moonshot Missions will provide free consulting services to struggling systems located in struggling communities. While Hawkins does not speak directly in terms of public versus private on the podcast, his optimism about the ability to turn the systems around seems to reflect a broader optimism that public systems have the capacity to manage their own problems and when warranted, change course. It is an alternative narrative to the one that our friends in the investor-owned community like to offer. Their narrative implies that the era of government ownership and operation of water and sewer systems has run its course and that only private Big Water (such as American Water Works subsidiary, New Jersey American Water or Aqua or Suez) can solve the problems and deliver good service. The president of the National Association of Water Companies, Robert Powelson, has been making the rounds of New Jersey op ed pages lately, pushing that narrative.

Hawkins also challenges another assumption, one that is widely repeated across the water/sewer sector by all kinds of people and that Big Water loves to refer to. Hawkins questions oft-noted statistics, mainly from the American Society of Civil Engineers “report card,” about the enormous costs required to fix aging infrastructure. “It is one of my fervent beliefs that the numbers that we hear about ‘oh, it’s a trillion dollars needed for the improvements to water and infrastructure’ are wrong. Because all of them are premised on how money used to be spent.” Hawkins concedes that when he managed D.C. Water, he spent money the way it “used to be spent.”

But, he told Water Values host Dave McGimpsey, he has come to believe a different approach, one that could make managing infrastructure costs more manageable for struggling communities, is in order now. “If the water main on 18th street needed to be replaced, we’d replace the whole main. Those are incredibly expensive projects and the water main is the cheapest part of it,” he said. He enumerated “non-pipe” expenses, including traffic control, permitting, and resurfacing. Hawkins says the “new” approach he now endorses involves doing a condition assessment of the existing pipe, “surgically” repairing it, and then cleaning and lining it.

“You can save 75 percent of that cost!” said Hawkins.

In calling out the idea of wholesale line replacements, whether he means to or not, Hawkins is challenging another investor-owned utility talking point. Their narrative includes direct and indirect references to the ASCE and similar assessments as a justification for why they are the answer to the Future-of-Water/Sewer.” They often emphasize pipe age as the most significant metric for determining capital priorities. If a mile of pipe is old, it must need replacing, they say. Coincidentally (or not so coincidentally?), investor-owned utilities collect profit on (ROI) capital projects. While they may have a strong incentive to keep operating costs down, the incentive to keep capital costs down would seem to run counter to their own best interests. For them, replacing that whole old line on 18th street makes sense, doesn’t it?

Governor Calls for 2020 Referendum on Lead Removal

Posted on: January 22nd, 2020 by eric

In his 2020 State of the State speech in January, Gov. Phil Murphy outlined plans to unveil New Jersey’s new Energy Master Plan, and hand-in-hand with that, discussed ongoing efforts to eliminate lead from water and sewer pipes throughout New Jersey.

“We’re working to protect every school and home in New Jersey from the dangers of lead,” Murphy said. “I applaud Mayor Ras Baraka, Essex County Executive Joe DiVincenzo, Freeholder President Brendan Gill, and many legislators, for their partnership to fast-track the elimination of lead service lines in the City of Newark.

“But, we all know this is a statewide problem. It extends far beyond just lead in old water lines — lead paint is a much bigger problem — and it extends to our suburban and rural communities.”

Murphy said the effort would require a “significant investment” that will involve funding to replace ol lead lines, as well as “a veritable army of union workers — plumbers and pipefitters, remediation experts, carpenters and laborers, among so many other tradespeople.”

Plans call for a proposal to be put together to go before voters in a November 2020 referendum.

Senate President Steve Sweeney echoed his sentiments, saying the senate should prioritize a clean water plan that would include drinking water protections for lakes, streams and aquifers.

“Clean water is a basic necessity and any formula for success must include quality education and a fully functioning transportation system,” Sweeney said. “These are major challenges that will require a major commitment of resources but we cannot afford to be intimidated. We have to be willing to invest political willpower if we are to make real and lasting progress.”

Come exhibit at our spring Utility Management Conference and reach your audience

Posted on: December 18th, 2019 by eric

Plans are underway for our 2020 spring conference, which includes Wave award presentations and distribution of certificates to the EPDA Cohort. Registration information will be available the beginning of the year. The conference is set foe March 10-11, 2020 at Caesars in Atlantic City, NJ.

Do you want to reach your audience? Then sign up as an exhibitor!

Reach executive directors, commissioners, & other
key decision makers and thought leaders by exhibiting at the conference.

AEA focuses on effective management and long-term planning for public clean water and solid waste utilities in NJ. Our attendees are the people you want to reach– decision-makers at utilities that serve 8 million people!

For more information and/or to apply to exhibit, download this form.

The exhibit fee ($950) includes:

  • Sign
  • 8-foot draped table & chairs
  • 60-amp power
  • 100-word summary for program
  • Two exhibitor badges
  • Tickets for all meals and functions
  • Secure exhibit area

For further information contact Karen Burris at (609) 584-1877 or by email: [email protected]. No cancellations or refunds after March 2, 2020

Final Details for Our Annual Conference, Nov. 19-20

Posted on: October 28th, 2019 by eric

2019 AEA Annual Conference

November 19 – 20, Bally’s Atlantic City

Morning Session 9am – 12pm      
Course # 13-111906-30
3tch w/ww

Afternoon Session 1:30pm – 4:30pm   
Course # 13-111907-30
3tch w/ww

The theme of the conference is “The Next Decade.” Speakers already confirmed include The Honorable Vin Gopal, Senator-District 11, Melanie Walter, Director of the Department of Community Affairs Division of Local Government Services and Dan Kennedy, Director, Environmental & Utility Operations for the Utility & Transportation Contractors Association and former assistant commissioner at the NJ Department of Environmental Protection.

Conference Schedule
Agenda
Registration Form

Online Registration
Ballys Reservation procedure (Cut-off date is Nov. 1)

Sponsorship Opportunities  

AEA Opposes Proposed Bill That Places Corporate Interests Ahead of Public Good

Posted on: June 17th, 2019 by Peggy Gallos

The following is based on written comments AEA submitted to the Senate Economic Growth committee regarding S3870.

The Association of Environmental Authorities (AEA) strongly opposes S3870 because it places corporate interests ahead of the public good, and it will hurt most the people who can least afford it. We are a trade association representing 85 public agencies, primarily authorities, which provide water, wastewater and solid waste utility service to millions of New Jerseyans. More than 40 private sector firms that provide professional services to the public sector also belong to AEA.

S3870 puts the ratepayer last because it favors a sales process focused on attaining a high price rather than securing the most efficient, cost-effective quality sewer service and getting the best deal for the people paying the sewer bills. These deals often are portrayed as great for the ratepayer, but what is left unsaid is that the corporate buyer can recover all or most of the purchase price in the rates paid by the ratepayers of the system. These deals are actually disguised loans—and expensive ones at that. The governing body gets to look great because they have secured a supposed “windfall.” What they have really done is ceded control of the town’s “circulatory” system and saddled the people who pay the sewer bills with the cost. 

              

AEA believes preserving public ownership and operation of public systems in New Jersey is worthwhile. Among the many things wrong with this bill is that it will help promote sales and undermine public ownership. Pennsylvania has similar legislation already in place, and the result has been what one article referred to as a “feeding frenzy”[1] of acquisitions at inflated prices.

Because S3870 permits methods of appraisal that will result in inflated prices, S3870 favors investor-owned utility shareholders over the people who have been paying the sewer bills for years. This bill will hurt ratepayers with lower incomes. It also hurts contractors and construction workers: dollars that go to shareholders can’t be spent to employ them on capital projects.

The bill allows so-called “fair market value” approaches to be used to determine the “value” of the system. These three approaches (cost, income, market) are borrowed from the real estate industry and are based on the assumption that a utility is sold on a competitive market. They do not apply well to the monopolistic nature of utilities. Fair market value approaches give the buyer AND the seller incentives to negotiate the HIGHEST, not the lowest, prices. By requiring the lower of two fair market value-based valuations, the bill appears to protect the ratepayers and get them the best price. But it doesn’t because those two prices are both likely to be inflated.

A June 7, 2019 blog — “Here’s what’s happening in State X: State law lets investor-owned acquirers and municipal system owners negotiate their own prices, subject to deferential state commission review….” The blog goes on to say, “The state regulator approves the rising acquisition prices, as long as they don’t exceed some standard borrowed from the real estate industry… that has no relevance to the acquired system’s real value.”[2]

The valuation provisions in S3870 rob current ratepayers of the benefit of billions of dollars in savings from the federal and state grants that built the systems. Soon after our organization was founded, nearly 50 years ago, the federal Clean Water Act became law. It was a golden age of sorts when it came to clean water funding. The Federal Construction Grants Program provided financial assistance to public bodies to upgrade and expand sewerage infrastructure. By 1983, the program had given $6.3 billion in grants in New Jersey. Our state created its own supplemental matching/supplemental grant program and gave regional sewerage facilities funding priority. Those grants helped introduce advanced wastewater treatment to our State — an enormous environmental achievement. S3870 says that when a sewer system is being appraised, “the original source of funding for any part of the sewerage system shall not be considered in determining the value of the sewerage system.” That means that those billions in dollars in grants are, for the purposes of the valuation, treated as if sewer system users had actually spent them. This is yet another way to inflate value.

AEA believes that every sales transaction deserves public scrutiny and should go to referendum. By eliminating public referendum as currently required, S3870 cloaks and obscures utility system transactions from public view and discourages public involvement. S3870 allows governing bodies to sidestep a full and vibrant public discourse about a vital community asset. Instead of going to the voters, under this bill, a handful people on a governing body could post a couple of routine meeting notices and agendas to initiate discussions that take place over one, two or maybe three poorly attended public meetings. Within a few months or less, this handful of people could decide to take the momentous and irretrievable step of selling the community’s wastewater system asset without making certain the people who pay the bills understand what is happening. Then, under this bill, the sale would be reviewed by a state-level board comprised of five gubernatorial appointees who deliberate in Trenton, in most cases miles away from where the ratepayers live, and they do so via a complex, quasi-judicial proceeding that is virtually opaque to the uninitiated or the lay person. In a recent report touting how great water/wastewater is for investors, Aqua America said legislation like S3870 represents a “favorable” regulatory trend. This of course begs the question: favorable for whom?

Utility finance expert Janice A. Beecher, Ph.D. of the Michigan State University Institute of Public Utilities, has referred to these investor-owned utility/municipal deals as having “potential for distorted incentives” that can leverage “public problems as private opportunity” in a way that can be seen as “unfair or even predatory.” The bill promotes shortsighted decision-making – what one expert calls “today’s proceeds rather than tomorrow’s performance.”[3]

Public servants in governing bodies need to understand that they do not need to mortgage the ratepayers’ future by selling or entering into lease/concession deals highly favorable to the concessionaire. They can decide not to raid wastewater funds, they can dedicate appropriate levels of funding to the system, they can apply for principal-forgiveness loans from the New Jersey I-Bank, and they can exercise oversight by hiring knowledgeable and dedicated managers. There are thousands of them out there.

AEA respectfully asks the Senate Economic Growth Committee to think of ratepayers, especially those with fewer resources, and to vote against releasing this bill.

 

 

[1] https://www.inquirer.com/philly/business/new-pennsylvania-law-private-water-sewer-acquisitions-aqua-pennsylvania-american-20180905.html

[2] Hempling, Scott. “Water Mergers: Are They Making Economic Sense?” June 7, 2019. www.scotthemplinglaw.com.

[3] See footnote #2

Watershed Ambassadors Program a Win-Win for AEA Member Organizations

Posted on: April 1st, 2019 by eric

Several AEA member organizations get a boost for their community outreach and education efforts and great prospects for hiring via participation in the AmeriCorps New Jersey Watershed Ambassadors Program, which was first developed and initiated by the New Jersey Department of Environmental Protection (NJDEP) in 2000.

Sussex County MUA (SCMUA), Atlantic County Utilities Authority (ACUA) and Cape May County MUA (CMCMUA) host and supervise AmeriCorps Watershed Ambassadors for their state-designated watershed management area, as part of a unique cooperative partnership arrangement with NJDEP. Their ambassadors are selected and hired by the NJDEP Division of Water Monitoring and Standards and charged with the mission of promoting watershed stewardship. Another AEA member organization, the Hamilton Township (Mercer) Department of Water Pollution Control (HTDWPC), recently hired a former watershed ambassador, Julia Galayda, whom they came to know through the Mercer County Park Commission Tulpehaking Nature Center, which had hosted her. Galayda completed her ambassador’s term in July and is now an environmental health aide at HTDWPC.

The current ambassador for SCMUA is John Ragsdale. ACUA hosted Kristina Koreivo as a watershed ambassador. She has since moved into a position at the NJDEP Division of Water Quality. ACUA temporarily hosted Kristen Andrada. Cape May County MUA is now hosting her.

In return for a modest stipend, watershed ambassadors like Galayda, Koreivo, Andrada, and Ragsdale complete a proscribed number of hours over the year of their ambassadorship and submit carefully kept records of their attendance and work record. They are required to do environmental community service and raise awareness by way of watershed stewardship projects. The ambassadors are assigned by NJDEP to a lead agency in each of New Jersey’s 20 designated watershed management areas.

Koreivo took water samples, participated in shore/bay cleanup events, and helped run rain barrel workshops. The ACUA watershed ambassador typically helps deliver that authority’s popular and multi-dimensional annual Earth Day observance. At SCMUA the ambassador has the opportunity to work side-by-side with the Wallkill River Watershed Management Group (WRWMG), providing them assistance with their day-to-day efforts to coordinate and implement watershed outreach, restoration, and stewardship projects. Galayda did stream clean-ups, rain barrel workshops, and presentations, and she completed 20 stream assessments with the DEP.

Nathaniel Sajdak, the SCMUA-WRWMG’s Watershed Director, actually served in the very first class of the Watershed Ambassador Program, and was hosted at the SCMUA in 2000-2001. NJDEP interviewed and subsequently chose Sajdak for the program right after he graduated college with a biology and environmental science degree.

“Being a watershed ambassador was a natural fit at that point in my life, where I was looking to begin a career in the environmental field,” says Sajdak. Upon completing his AmeriCorps term of service, Sajdak was officially hired by the SCMUA to be the Watershed Coordinater for the WRWMG.

Now in his 18th year as watershed director for the SCMUA, Sajdak leads a team of three who work in a variety of ways throughout the community to directly improve water quality in the watersheds of Sussex County. Ultimately, watershed management and stewardship has become one of three environmental services the SCMUA delivers, supplementing the primary mission of solid waste management and recycling and wastewater treatment. The WRWMG prides itself on facilitating three overall programs: agricultural outreach and assistance, stormwater management, and riparian enhancement. Through these programs, the WRWMG works directly with farmers to implement best management practices on farms such as manure collection and storage systems, with community members to build green infrastructure projects like rain gardens, and local landowners to reforest floodplains.

As AEA-member watershed ambassador host agencies have discovered, watershed ambassadors can be great additions to the staff, and this is a very important consideration in industry with a “graying” workforce. In addition to Sajdak, Kristine Rogers, who was the SCMUA’s watershed ambassador from 2014 to 2015, is now employed by the SCMUA to be one of three team members of the WRWMG, serving as the education and outreach specialist. Gary Conover, who is the program supervisor at ACUA, says his authority has hired several former ambassadors during the 13 years of ACUA’s participation.

Galayda works in the HTDWPC lab, preparing and testing samples. She came across the watershed ambassador program announcement through an Internet search in 2017. She had a bachelor’s degree in marine science and environmental science, but wasn’t entirely sure what path her career should take. She did not know whether she wanted to work in the field, in an office or in a classroom.

“The ambassadors program helped me see what I wanted to do,” she said.

More information: https://www.nj.gov/dep/wms