For American water and wastewater utilities, change is inevitable and unrelenting. Although their fundamental responsibility remains to provide safe, reliable, affordable, and secure systems that protect public health, the environment, and quality of life, changes in society and the global business community powerfully influence how modern utilities function.
In an effort to envision what issues these utilities will face in the coming decade, Malcolm Pirnie surveyed an expert panel of 71 national leaders from water and wastewater utilities, regulatory agencies, academic institutions, and elected and appointed officials. Using e-mailed questionnaires, the survey asked for perspectives on significant issues and future trends in five specific areas: environmental, water utilities, wastewater utilities, water resources, and sustainability.
Interestingly, the experts did not identify dramatically new issues, but noted issues similar to those of today. Utilities will need to achieve multiple goals—meet regulations, respond to customer needs, control costs, operate efficiently, and maintain the integrity of facilities—but these will be impacted by financial constraints.
One unexpected finding was that leadership and management of the utility, its assets, and the work force will be their greatest challenges over the next decade. A more consumer-demanding environment will make “a more business-like approach” essential. By managing utility assets like a business instead of a local government, utilities can develop strategies for financing and implementation designed to minimize annual operations and maintenance costs and rates while making economically prudent long-term decisions.
Businesslike management of assets need not be complicated or expensive, but rather is the stewardship of resources, “finding ways to think smarter about what to do and how best to do it.” This may mean “shifting from reactive to proactive maintenance to preserve existing assets,” and establishing an asset management program.
Other concerns cited were the changing nature of today's workforce, the need to shift from a technical-based knowledge to a financial focus, and the importance of involving numerous stakeholders in the decision-making process. Leaders will be increasingly challenged to provide the level of service customers expect.
Maintaining outstanding leadership and management will require both developing existing leaders and planning for leadership recruitment and succession. Enhancing the skills of existing staff and recruiting the best personnel possible are essential to having the right mix of people and skills to address future challenges. As many utility leaders will be retiring within the next decade, utilities must begin developing succession plans to ensure that management can address challenges ahead.
How to assure adequate financial resources was a major concern that affected virtually all other issues. A combination of federal funding and rate increases may be needed as part of the solution, according to the experts, but funding through privatization is not the way to go for most utilities. To gain support for increased rates, more emphasis is needed on communicating the value of water to the public, customers, rate regulators, and local officials. Tomorrow's successful utility will have to become the main source of water quality information with a well-defined value of its product and service to build trust and alignment to a common mission. While there will be a continual effort to control costs, utilities will need to be vigilant in ensuring that such measures do not diminish the success of their mission to protect public health, the environment, and quality of life.
As infrastructure ages and quality and quantity demands change, systems—especially underground infrastructure—will need to be adequately maintained, rehabilitated, and/or replaced. Utilities will have to make tough decisions, and many may be reluctant to make the significant rate hikes necessary to keep systems up-to-date without significant federal funding. Developing integrated approaches will be essential, including outstanding leadership, thoughtful long-term planning and financing strategy, businesslike management of assets, and stakeholder alignment. And long-term strategic planning is mission critical.
— Gary Westerhoff, P.E., DEE, is chairman emeritus of Red Oak Consulting, a division of Malcolm Pirnie, White Plains, N.Y.