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views from the lunchroom conversations on environment finance infrastructure workforce and community

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with o ur gratitude first ­ to all the utility professionals who participated in the eleven sessions ­ thanks for sharing and exchanging and helping your fellow utilities second ­ to all the utilities that hosted our lunchtime sessions ­ we appreciate your willingness to share your ith ur ratitude facilities with us w o g first to the great supporting cast from malcolm pirnie and red oak consulting who helped coordinate third­­to all the utility professionals who participated in the eleven sessions ­ thanks for sharing and exchanging and helping your fellow utilities each location invite utilities prepare our materials and reports monitor and edit our posts on the blog site and otherwise keep things moving hosted our lunchtime sessions ­ we appreciate your willingness to share your second ­ to all the utilities that facilities with us third ­ to applegate · mr cast arhontes · mr and red oak · ms leah helped mr richard baier mr john the great supportingnick from malcolm pirnie aurel arndt consulting who ash · coordinate each location invite · mr prepare our · ms jennifer barrington · edit our posts on the mr tim bate ms emily baker utilities,mike baron materials and reports monitor andmr randy bartlett · blog site and otherwise keep things moving ms wendy batkin · ms heather beasley · mr richard bell · mr frank boaz · mr charles boepple ms cheryl braun · mr jeff brochtrup · mr dave brong · ms darcy burke · ms cathy caldwell mr paul carbary · mr matthew carpenter · mr mike caston · ms grace chan mr john applegate · mr nick arhontes · mr aurel arndt · ms leah ash · mr richard baier ms tammi clements · mr rodney collins · mr bill crisp · mr rick day · mr jeff diaz ms emily baker mr mike baron ms mr bob downing mr randy bartlett mr tim etris mr mike dickson ·· mr kenneth j ·dills · jennifer barrington· ·ms carol elliott · ·mr robert bate ms greg farmer · mr jeffheather ms kim fortner richard jim foxmr.mr tim friday · mr robert ghirelli wendy batkin · ms field · beasley · mr · mr bell · · frank boaz · mr charles boepple mr ms cheryl braun · mr jeff brochtrup · mr dave brong · ms darcy burke · ms cathy caldwell ms cindy goodburn · ms victoria greenfield · mr paul grundemann · mr keith haas · ms martha hahn mr dale hammes · ·mr mr matthew · carpenter hayes · ms susan hinman · · mr william horst ms grace chan mr paul carbary greg hanahan mr brad · mr mike caston ms tammi clements · mr jenkins · mr · mr bill mr · mr johnson mr jeff diaz mr kevin p hunt · mr jimmie rodney collinsjon johanson ·crisp howard rick day ·· ms diana leach mr mike dickson · mr mr frank leist · mr mr bob downing mr dan lynch · ms evelyn mahieu kenneth j dills · donald lichty · · ms carol elliott · mr robert etris mr marcus lehotay · mr greg farmer · · mr jim mcgrady · mr gregory merrill ms mr j friday · mr robert moore mr pete mccarthy mr jeff field · ms kim fortner · mr jim· fox ·traci tim minamide · ms bethghirelli ms cindy goodburn · charles murray · mr richard paul grundemann · mr keith haas · o shaughnessy mr cefe munoz · mr ms victoria greenfield · mr nagel · mr ray orvin · ms maureen ms martha hahn mr dale hammes · mr greg hanahan · mr brad hayes · ms susan mr ronnie pack · ms karen pallansch · mr robert pelham · mr tylerhinman · mr.mr brad russell richards · william horst mr kristiep.rutherford · ms karenjenkins mr jon schellpfeffer· · mr jodi schnalzer · ms · ms.g schneider kevin hunt · mr jimmie sands · · mr jon johanson ms howard johnson sue diana leach ms mr marcus lehotay · mr frank mr · seckel · mr lichty · mr mr lynch · ms evelyn simon ms rose schulz · mr steve schulze ·leist karlmr donald kevin shafer · dantom sigmund · mr mikemahieu mr ann sims · ms cheryl jimamant · mr.· lou stalsitz · mr bob ·steidel · mr.j minamide · mr dave taylor ms pete mccarthy · mr st mcgrady mr gregory merrill ms traci dennis stowe · ms beth moore mr cefe teaford mr joe thompson mr richard nagel · mr ray mr patrick maureen o shaughnessy ms bonniemunoz ·· mr charles murray ·· mr steve todd · mr ken tuck ·orvin · ms.turnbull · mr pieter van ry mr ronnie volkerding mr brad willett mr ronald pack · ms · karen craig west · · mr robert pelham · · ms tyler richards · · mr scott russell mr pallansch mr brian wheeler mr rick wilkey ms barbara wilson · mr.· steve witter · mr · mr jon schellpfeffer · ms.zaldivar kristie rutherford ms karen sands richard young · mr enrique jodi schnalzer · ms sue g schneider ms ms rose schulz · mr steve schulze · mr karl seckel · mr kevin shafer · mr tom sigmund · mr mike simon ms ann sims · ms cheryl st amant · mr lou stalsitz · mr bob steidel · mr dennis stowe · mr dave taylor ms bonnie teaford · mr joe thompson · mr steve todd · mr ken tuck · mr patrick turnbull · mr pieter van ry mr ronald volkerding · mr craig west · mr brian wheeler · mr rick wilkey · mr scott willett ms barbara wilson · mr steve witter · mr richard young · mr enrique zaldivar this document is printed in an ecologically responsible manner using vegetable based inks and 30 post-consumer waste paper stock total recycled content is 55 © 2010 red oak consulting

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views from the lunchroom table of contents executive summary 2 key takeaways 3 a five-part framework 4 why the lunchroom why now 5 methodology 6 findings 7 environment 8 water 8 sustainability 9 case study 9 finance 10 rates 10 case study 11 case study 12 workforce 13 case study 13 infrastructure 14 case study 15 community 16 case study 16 lessons learned 17 optimizing resources 18 case study 18 financial strategies 19 case study 19 messaging/public outreach 20 case study 21 utility collaboration 22 case study 23 what s next 24 sharing the views 24 more sessions in 2010 24 meet the facilitators 25 1

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views from the lunchroom executive summary throughout 2009 red oak consulting conducted a series of interactive lunchtime workshops with over 100 managers representing more than 50 utilities across the country during facilitated discussions utility managers identified the issues that water and wastewater utilities face talked about the impacts and challenges these issues present and exchanged ideas experiences and solutions to these challenges as you would expect there were common trends across the industry interspersed with regional service and organizational-specific characteristics one thing was obvious to all the challenges just keep on coming and all of us can use some extra help brainstorming the solutions the workshop discussions were structured around five pathways · environment regulatory impacts tmdls nutrients wet weather consistently lead to increased capital spending requirements and rate increases as well as occasional limits on growth and wastewater discharge finance reduced water demand as the result of the economy or drought-induced conservation impacted many utilities heavily through corresponding reduced revenues infrastructure utilities have been a victim of our own success ­ we ve done such an excellent job of operating below the radar that customers often don t understand the real cost of capital and operations required to provide consistent highquality reliable service workforce the impending brain drain will lead to a loss of significant institutional knowledge and it s getting harder to attract younger workers to the utility industry community today s challenges stretch beyond the boundaries of cities and utility district lines collaborative approaches are required to create solutions for the watershed workforce community and other stakeholders · · · · red oak s jim ginley discusses some of the solutions offered by utility leaders in the allentown pa session 2

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views from the lunchroom executive summary key takeaways · optimizing resources utilities need to optimize how they use resources in all areas ­ water energy finances and human ­ and every practice every process and every procedure is getting more attention than ever before why because the economy is tough the customers and governance and stakeholders are more demanding the world is moving at a brisk pace and concepts like business as usual and normal precipitation are as uncommon as pay phones and vcrs financial strategies finding the money to adequately finance a viable and sustainable infrastructure is one of the single biggest challenges facing utilities and the challenge within the challenge is gaining customer confidence and support people must have confidence in your business enterprise in order to support it with investments in rates they are willing to pay for services today and in bonds they are willing to buy for future improvements communicating value utilities need to get better at developing and communicating an effective message about the value of the services they provide this will help all stakeholders better understand the value of water and the investments that are necessary to provide this basic service utility collaboration collaboration between utilities is the most effective way for water utilities to learn best practices reduce operating and research costs address issues and create solutions making it possible to better serve the community · water and wastewater utilities have more in common than one would think so managing the full water cycle is a better solution as utility managers know decision-making today must consider the whole cloth one thing was obvious to all the pull on the thread of infrastructure and challenges just keep on coming it will unravel concerns about rates and and all of us can use some extra affordability public support regulations help brainstorming the solutions and asset management that interrelationship complicates the management of today s issues and requires a 360-degree look at the problems at hand at the same time solutions are also integrated and can address more than one challenge for example a good asset management program can help prioritize spending institutionalize system knowledge and provide a case for public support as a result of these workshops red oak consulting and the utility manager participants came away with an understanding that it is important to step back from the challenge in front of you and see the bigger picture how many organizational elements are tied to this one challenge are all the stakeholders and potential outcomes visible is there a solution that will not only address the core issue but benefit many other elements of the utility thinking holistically about the challenge will help to clarify the formula for success · · 3

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views from the lunchroom a five-part framework utility leaders at the kissimmee session wrestle with some of central florida s pressing issues a five -part framework the views from the lunchroom vfl framework has five categories of discussion which are shown here in figure 1 the pathway wheel these five areas ­ which capture the major issues or drivers of the day come originally from ed means a long-time utility manager-turned-consultant who has led a number of research projects for the water research foundation wrf formerly the american water works research foundation awwarf in a study he led that was published in winter 2005/2006 entitled a strategic assessment of the future of water utilities wrf project #3023 means identified ten developing trends facing the water industry the results of this research were also presented in a six-part series of articles in journal awwa the trends identified were · · · · · · · · · · population and demographic changes political environment complexity increasing regulations workforce issues technology improvements total water management changing customer expectations utility finance constraints energy cost and supply reliability increased risk profile figure 1 the views from the lunchroom series is structured around five key issues or water sector drivers onmen envir t commu nit y · supply · impacts · regulations · rates · bonds · plans ance fin · confidence · oversight · communication kf o rc e i n fra str 4 ct u u re · succession · training · performance · assets · energy · level of service wo r

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views from the lunchroom two years later means made a presentation as part of the closing session of the awwa/wef utility management conference in tampa february 2008 in an attempt to show how some of the trends he identified in his previous research were emerging as the most pressing drivers of the day and further how these drivers were linked to how/where utilities might behave more sustainably­ he boiled down the issues of the day into five key areas · · · · · environment/resources finance infrastructure workforce community a five-part framework why the lunchroom and why now the original idea behind the facilitated lunchtime discussions came out of a simple goal to help utility managers tackle the multitude of complex issues they face every day as utility management consultants we interact with utility directors and general managers who deal with everything that the water and wastewater sector can throw at them ­ from new and ever demanding regulations to shortages of water supply and uncertainties about things like climate change and changing demographics why now the need for prudent capital planning and system wide improvements in a lousy financial market and working with a public that can be both demanding and unaware of the complexities of the services provided by utilities indicated this was the perfect time to create a series of workshops to isolate the issues understand the resulting impacts and work collaboratively to uncover potential solutions so red oak assembled over 100 utility leaders and professionals in lunchrooms across north america in 2009 the diversity of participants ­ across utilities of varying type size and location as well as individuals from different functional roles ­ contributed richly to the discussion and allowed each individual to broaden their perspective and approach a utility s operations from a holistic perspective why the lunchroom so why then did we pick the utility lunchroom as our setting we felt that utility management comprises a unique community of professionals and would be most comfortable most open and most engaging on their own turf ­ and we really wanted them to air it out without any distractions we also had a hunch that was founded neither on keen scientific insight nor state-of-the-art marketing research but rather on some lessons we all learned as far back as junior high that is if you really want to learn what s going on in the world and really want to know the answers to the questions of life then you won t find them in the classroom you ll find them in the lunchroom his premise was that the key issues facing utility managers could be categorized in one of these five areas further means also suggested that the solutions to the problems facing utilities could be found within the same five-part framework importantly it was the integrated overlapping and even synergistic nature of the solutions that prove to be what utility managers need ­ and not a narrow established solution from a time-honored discipline or area of practice solutions means explained are becoming more and more personal ­ one size does not fit all and it takes extra time extra thinking and a spirit of integration and collaboration to tackle the challenges the end results · created a setting where utility managers could freely exchange ideas and begin to identify integrated holistic comprehensive utility management solutions provided a free but valuable interactive and educational event for dozens of utility managers ­ complete with professional development hours ­ during a difficult economic year that saw many cutbacks in travel to professional conferences and training sessions produced an output reports workshops presentations articles etc that shared the findings and recognized participating utilities for their thought leadership · · malcolm pirnie s president/ceo bill dee shares his vision of utility challenges now and into the future 5

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views from the lunchroom methodology methodology commu nit y to prime the pump we opened with a series of recent headlines addressing utility and infrastructure developments as collected in national news sources including the new york times cnn and the wall street journal we then asked utility managers to write their own headlines regarding the hot-button issues each of them faces sample headlines include · · · · · · · · economy takes toll on utility plans go out the window housing bust busts revenue rates rise customer satisfaction falls sustainability ­ property tax operators leadership and employee development half of the employee base is eligible to retire conservation implies reduced revenue we need to decouple the cost of service from volume where is the water going to come from health care is not the crisis long term water supply is the crisis resource plans · o&m optimization · sustainable · customer information practices · cost of service services · business plans · outreach · rate studies education · it solutions · conservation · succession planning · staff training · organizational assessment · cip priorities · asset management · geospatial analysis · energy audits · cmms ironm envintegrated ent · kf o rc e in tr fra s discussion of pathways and case studies with the discussion underway we started with the environment pathway and asked each participant to name issues his/her utility faces the impacts that each issue has on the utility s stakeholders and possible solutions by expressing the issues pertaining to each pathway participants found common ground through the exchange and collaborated on solutions that would be beneficial to the utilities and their stakeholders participants overwhelmingly indicated that the collaborative nature of the discussion allowed for utilities to talk with listen to and learn from one another ­ that we aren t the only one experiencing these issues similarly a sharing of proven or potential solutions ensured the discussion was constructive rather than complaint-based stakeholder 1 workforce infrastruct ure · integrated resource plans · o&m optimization · customer · sustainable information practices · cost of service services · business plans · outreach · rate studies education · it solutions · conservation · succession planning · staff training · organizational assessment · cip priorities · asset management · geospatial analysis · energy audits · cmms synthesis and closing following the discussion of the five pathways we demonstrated how many of the issues faced by utilities are not confined to just on pathway figure 2 at right illustrates how individual perspective can significantly change the view of an issue or a solution continually adjusting the pathways sessions were always closed with a few words of wisdom · · · there are no silver bullets ­ solutions don t come easily issues are global but the situations are personal solutions need to be personal and holistic na nc e n iro e nv stakeholder 2 figure 2 depending upon the viewpoint of any stakeholder the same issues can appear to have different solutions and impacts it is crucial to keep spinning the wheel to consider all issues and solutions from every viewpoint 6 en m t ct u u re ance fin wo r unity mm co fi

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views from the lunchroom findings what s on the road ahead at your utility more regulations and restrictions rising energy costs more public scrutiny to control costs findings the pathways framework imposed on the lunchroom conversation provided logic to organize the flow of discussion and keep it within the boundaries of the topic yet as utility managers know decision-making today must consider the whole cloth pull on the thread of infrastructure and it will unravel concerns about rates and affordability public support regulations and asset management that interrelationship complicates the management of today s issues and requires a 360-degree look at the problems at hand at the same time solutions are also integrated and can address more than one challenge thus a good asset management program can help prioritize spending institutionalize system knowledge and provide a case for public support while the conversations ranged across the geography of the country and engaged managers from utilities diverse in size and customer demographics there are striking similarities among the issues and impacts this enables the water and wastewater industry to focus on the major shared challenges through encouraging association activities sponsored research legislative action and collective messaging there is strength in numbers it is the integrated overlapping and even synergistic nature of the solutions that prove to be what utility managers need ­ and not a narrow established solution from a time-honored discipline or area of practice solutions are becoming more and more personal ­ meaning that one size does not fit all and it takes extra time extra thinking and a spirit of integration and collaboration to tackle the challenges 7

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views from the lunchroom findings many utility managers find themselves juggling issues such as growth and climate change asking where is the future supply going to come from environment issues raised under the rubric of environment ranged from water resources to regulatory mandates to energy by far the most common theme was the impact of regulations tmdls nutrients wet weather which consistently resulted in increased capital spending requirements and rate increases and occasional limits the changing nature of the on growth and wastewater overall regulatory process and its five-year permitting discharge beyond the operational and financial impacts scheme makes it difficult of specific regulations the to develop the long-range changing nature of the overall strategic plans required for regulatory process and its efficient use of resources five-year permitting scheme makes it difficult to develop the long-range strategic plans that are required for efficient use of resources the most-oft voiced solution to regulatory demands unfunded mandates is solidarity and a public campaign that educates stakeholders on the cost-benefit equation of continued reductions in point source limits transitioning to watershed-based water quality programs and approving a framework for water quality trading programs were also raised as solutions water supply as a result of seasonal droughts precipitation pattern changes caused by climate change or arid areas experiencing population growth such as the southwest water scarcity is an issue that requires utilities to evaluate customer usage and may require larger capital investment for new sources of supply restrictions on water use and resulting decreases in water sales revenue were the most common impacts the rising cost of water supplies and the difficulties of siting new sources frequently because of environmental concerns were also challenges facing multiple utilities the most common solution put forth is conservation a robust demand management program that includes a customer rate structure that encourages conservation the implementation of water reuse is also a solution creating another source of supply for non-potable water demands and deferring the costs of new supplies reuse is also a solution for decreasing discharges as wasteload allocations become stricter in both cases however the solutions have their own consequences reduced revenues from drinking water which must be considered through pricing policies to mitigate negative impacts while they may be a solution reduced flows also presented other challenges for some utilities water quality problems and odor and corrosion in sewer pipes must be considered when flows decrease through design or happenstance 8

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views from the lunchroom sustainability while the term sustainability buzzed as an industry trend the main issue for utilities is how to define it operationally and value it for customers it frequently expressed itself through energy optimization and renewable energy efforts in particular capturing digester gas and even enriching it through the collection of fats oils and grease in a larger sense sustainability is prompting several utilities to attempt to change the paradigm from wastewater disposal to resource provider energy bio-solids and reuse water products environmental sustainability and organizational sustainability are not the same thing but they can t be considered separately sustainability in the industry is viewed by many as those practices or conditions that best satisfy the triple bottom line environmental social and financial criteria this requires a holistic evaluation of management decisions for example while it may resolve an environmental problem to raise rates to pay for a large capital program the level of rates may be unaffordable unsustainable for a segment of customers this example in fact was raised numerous times throughout the year there are good examples of utilities that are being creative in finding sustainable solutions for example one wastewater authority faced with tighter nutrient limits on its permit that would have required significant capital spending instead is investing a lesser amount in a reuse project with the city that will allow the addition of a new industry that won t increase the wasteload to its local river but will add jobs an environmental-financial-social balance the balance among the three sustainable criteria can be a small sweet spot but it is the kind of creative integration needed findings environmental social financial another utility planning for the water supply that it will need decades into the future looked to expanded wastewater reuse and the implementation of a demand management program as a way to reduce the capital costs and rate increases that would be needed to develop new sources of water supply sustaining the utility optimizing resources reducing costs this balance among the three criteria can be a small sweet spot and can require some creative thinking to stay there but it is becoming increasingly the kind of integrated approach that is necessary to resolve the current challenges and to maintain the viability of water and wastewater utilities viable utilities must have adequate financial resources capable staff and public support to sustain their environmental and public health missions case study integrated water resources management plan gives 50 year view issue the beaufort-jasper water and sewer authority bjwsa provides water and wastewater service to a twocounty area a third county has requested services in anticipation of economic growth tied to the development of a new container ship port on the savannah river impacts current population projections indicate that water demand will triple by 2060 while major demand spikes already occur from irrigation use there are potential threats to the savannah river source from pollution the management of the river by the us corps of engineers for power use and upstream competition for capacity salt water intrusion from regional pumping threatens groundwater sources all of these factors pose threats to the future level of services and complicate decisions to assure the long-term viability of the utility onmen envir t commu nit y kf solution faced with this challenge bjwsa undertook an integrated water resources management plan iwrmp u o rc str e to integrate and balance all possible water resources to sustain its water demands for the next 50 years the iwrmp i n fra began by building scenarios from probable uncertainties such as threats to the river to test the efficacy of various options the plan considered the efficiency of a demand management program to reduce capacity and peak demands to establish a new demand projection diverse technical economic environmental and social criteria to evaluate options and a mix of resources and technologies to provide a reliable supply such as reclaimed water groundwater stormwater aquifer storage and recovery desalination and new surface water sources financial analysis of the resource mix options using an interactive model provides answers on the cost and rate impacts of the options taking a long-range and holistic view will create a robust long-term capital plan and enable bjwsa leadership to respond with a high level of service ct u re ance fin wo r 9

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views from the lunchroom findings finance as the national views conversation got underway at the same time as the wall street bailout and spanned the hard times on main street it is not surprising that financial issues focused heavily on the difficulty of funding projects this resulted from the upheaval in the financial markets as the year progressed the market for municipal bonds eased somewhat but sureties were still difficult to obtain and most certainly the underlying discussion to rates from the decline in customer revenues is as always the industry s inability the impacts were as expected capital to express to stakeholders the true and operating budgets were reduced value of clean water and the proper deferring maintenance and replacement sanitation in relation to the pricing projects while projects tied to growth and demands for services were pushed well into the future as the needs evaporated arra monies were a disappointment and few utilities received funds from the stimulus package those funds that were received helped utilities to support existing project work but did not spawn expanded capital spending conservation solutions have their own consequences that must be mitigated with financial strategies rates as revenues fell because of the decline in economic activity the ability to fund operations and repair and replacement activities was hampered in many utilities particularly those in the previously high growth areas of the country raising rates or changing the rate structure to increase revenue from a stagnant or diminished customer base collided with another issue public resistance to paying more for water services the solution was the same in each views session the need for outreach to convince the public of the value of water and to gain required support the refrain was the same water is more valuable than cable tv there are genuine issues of affordability among some rate payers particularly for rates which are raised dramatically to fund regulatory-driven projects for wet weather and water quality in those instances lifeline rate programs were suggested another oft-mentioned solution was optimization of operations this can reduce the cost of operations and also demonstrate efficiency to rate-payers and to bond issuers activities to increase bond ratings and reduce the cost of debt also included formal repair and replacement programs and rate design structures aligned with asset management reduced water demand as the result of the economy or drought-induced conservation impacted many utilities heavily through corresponding reduced revenues this was often reflected in budget cuts for maintenance of the system or investments in efficient technologies evaluation of the current rate design structure to make sure that it covers the cost of service including repair and replacement and is not just volumebased is suggested by many utility leaders the underlying discussion to rates is as always the industry s inability to express to stakeholders the true value of clean water and proper sanitation in relation to the pricing stakeholders and ratepayers often see only the percentage increase and don t boil down the human health and environmental benefits that cost fractions of pennies the need to effectively communicate value is a continuing trend in the water and wastewater industry raising rates may seem like the simple solution however getting the council and public to buy in is very difficult without thoughtful preparation to mitigate opposition 10

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views from the lunchroom findings case study assessment of operations and staffing levels leads to reduced operating costs and consistently low rates in longmont co issue in an environment of limited resources the city of longmont co department of public works and natural resources was faced with the need to fund capital projects the water utilities department provides water sewer and stormwater utility services to approximately 86,000 residents onmen envir t commu nit y ance fin u re impact funding the capital projects solely through rate increases would not have received acceptable public support solution the water utilities department evaluated operations and staffing levels throughout the organization and reduced staffing requirements 25 through · · cross-training of employees as positions became vacant via retirement and attrition investment in technologies to improve automation of operations o rc e i nfr ru ast ct wo kf r as a result the reduced operating costs 8m cumulative over several years have freed up financial resources to other appropriate uses and have reduced pressure on future rate revenue requirements the cumulative effect of these changes over the years has resulted in · · · · · reductions in operating costs currently $16m/year for water and wastewater operations dedication of the department s financial resources to other needs average spending in the five-year capital improvement plan is $10m/year lower rates than neighboring utilities improved productivity and flexibility of employees there are currently ~90 full-time equivalent employees no reduction of service levels provided to users service is provided to 26,500 taps 11

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views from the lunchroom findings asset management programs can help balance financial needs for short-term maintenance as well as future expansion case study lee county utilities fl asset management program and r&r model supports financial analysis and long term planning issue many utilities struggle with accurate long-term financial forecasting of capital needs including the significant funds required for rehabilitation and renewal r&r as critical infrastructure components and systems age balancing the financial requirements for r&r projects with requirements for new growth and regulatory compliance is an ongoing challenge for many in our industry impact financial issues are moving to the forefront at a time when utilities are facing funding constraints and increasing pressure from the public and stakeholders to reduce costs and hold rates steady the ability to borrow money is also becoming more difficult with credit rating agencies taking a closer look at long term system reinvestment policies and financial sustainability solution to address these challenges as part of an overall asset management philosophy lee county utilities lcu realized the need to integrate capital and financial analysis into their asset management program to ensure that to meet these objectives lcu developed a comprehensive framework and methodology for asset valuation useful life and financial forecasting as part of their initial asset management program planning lcu staff were trained in the common principles of accounting and asset management including alternative depreciation and valuation methods cost allocation and industry standards for effective useful life existing attribute data including installation date historic costs replacement cost and eul were reviewed for completeness and quality and detailed standards and methodologies were developed to ensure a consistent approach across departments and assets this information was also used to drive a comprehensive r&r modeling tool that was applied to a pilot area representative of the system including water mains sewers pumping stations and treatment plants the model has greatly improved lcu s forecasting of current and future r&r needs for both above and below-ground assets · · · · · a comprehensive asset valuation and effective useful life eul methodology is established to support long-term financial planning onmen envir t commu nit y financial planning is addressed in parallel with an inventory condition and criticality assessment strategy and incorporates risk and service levels comprehensive financial information and data is available to staff to support utility-wide capital and financial planning efforts the approach is rational and defensible and supports communication and discussions with stakeholders and public officials a long-term plan can be established to support stakeholder s desire for a forward-looking and stable rate structure kf o rc e i nfra str 12 ct u u re ance fin wo r

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views from the lunchroom workforce while the damage to the financial markets in 2009 deferred retirement plans for a number of boomer era employees the potential is still very real for what one utility manager called the workforce tsunami an improved economy will open the door for many senior employees to leave with a smaller demographic pool immediately behind them the impacts will be a loss of institutional knowledge and fewer managers available to bear the workload solutions being implemented now are focused on capturing knowledge with the use of software particularly cmms and gis technology using senior employees as mentors is also common but the related issue that complicates this situation is the competition for skilled workers to fill vacancies that have never been viewed as glamorous in response utilities are working with state labor agencies to develop apprenticeship programs and with local high schools and colleges for internships and for education and training programs also there is a greater effort to develop career paths with utilities it is time several leaders mentioned to take advantage of the green movement and position our agencies as providing green jobs how close is your workforce to retiring between 30 and 50 percent of today s workers will be retiring in the next 5-10 years case study one community trains future water workforce to solve brain-drain issue currently tough to make kids aware of our field and expose them to potential career options hard to find high schools that produce kids ready to hire as operators impact brain-drain of retiring baby boomers is creating a void in the utility workforce while technology is allowing utilities to run with a reduced workforce concerns continue that lack of interest in the field is going to stress resources in the near future solution in portland connecticut the town tech educational partnership program was originally conceived as a way to expose high school students to working in local government since its inception the concept has thrived not only is the town s website designed and maintained by kids from town tech www portlandct.org but a whole host of ongoing jobs in the town ­ including many related to data and information management are being worked on by local students students test water samples as a part of nationally recognized water and people course onmen envir t commu nit y ance fin u re the town tech program has extended its reach to the water industry in 2009 fifteen high school students completed a curriculum that includes a full spectrum of instruction demonstration and hands-on experiences this program was developed by dave kuzminski portland water department and a teacher at portland high school the program also has a supporting committee of representatives from the town the connecticut health department the connecticut section of awwa and gateway community college topics and activities in the course include filtering lab watershed impoundment sampling physical and bacteria water water properties and measurement alkalinity lab and a fire safety demonstration the kids are truly engaged and have had opportunities to industry exposure including visiting the vendor exhibits at a local awwa connecticut section conference all 15 students completed the semester course and in june 2009 they all took the state exam to earn their water operator-in-training certification for the state of connecticut during the summer of 2009 they participated in summer internships including the shooting of a workforce succession video for usepa s region 1 o rc e i nfra str ct wo kf u r 13

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