By Rich Anderson
December 15, 2008

Albuquerque (NM) Mayor Martin J. Chávez, Co-Chair of the Mayors Water Council convened the Mayors Water Summit in Palm Beach (FL) on November 19-20. The meeting covered topics ranging from measuring and reducing carbon footprint at public wastewater treatment plants, to infrastructure financing and Public-Private Partnerships.

Pleasanton (CA) Mayor Jennifer Hosterman stated that the city's water supply comes from the nearby delta "that is crashing", (meaning it is running very low on water). One indicator of the health of the delta is the proliferation of smelt. In the recent past smelt could be counted in the thousands. This year the count was down to 13. Pleasanton has concern for the long-term water supply.

McKinney (TX) Mayor Bill Whitfield cited the dramatic tension between a rapidly growing population with increasing water demand, and a declining water supply subject to the natural fluctuations of severe drought conditions sporadically interrupted by short and intense precipitation. He said that what is certain is the tripling of population over the next decade in McKinney, but the water supply is not certain. Whitfield stated that this problem is exacerbated by the "take-or-pay" contractual arrangements the city has with the state water suppliers. The water conservation program initiated by Whitfield is decreasing demand, but the contract with the water provider requires the city to pay for water they do not consume. McKinney is looking for ways to alter the "take-or-pay" arrangement because it undermines water conservation efforts.

Village of Hawthorne Woods (IL) Mayor Keith Hunt said his Village has a population of 7,500, and is situated in the north-eastern reach of Illinois. Once an agrarian area, it developed into a bedroom community of single-family homes on one acre lots where residents use private wells for their water supply, with the exception of one small groundwater well system servicing a neighborhood of 200 homes. That was the situation until 4 years ago when a water supply plan to use a new source of water by a school district serving the area precipitated consideration resulted in a local decision to develop a new water supply infrastructure. The Village entered into a Public-Private Partnership arrangement to build a state-of-the-art water treatment system. The major challenges that the Village is currently facing includes planning to service rapid development in the northern part of the Village. Hunt envisions planned development and extending infrastructure using a comprehensive water supply approach. Meanwhile, the Village faces challenges in properly managing and preserving the existing aquifers that service homes with shallow wells for the next 20 years or more. He said that the Village is also increasing water conservation, focusing on landscape irrigation and plant selection Village of to achieve water use reduction.

North Olmstead (OH) Mayor Tom O'Grady said the city is making significant changes to the wastewater treatment plant. Currently, the plant requires 3 shifts to operate, and this is costing the city too much money. He is advancing plans to modernize the plant with automated systems so that the labor costs can be reduced to a single shift per day. He also stated that the city has a plentiful water supply from Lake Erie. The city is conducting a Phase I Feasibility Study to examine ways to team-up with neighboring communities to create a new water supply loop. The new supply loop (pump stations and pipes) could decrease the overall costs for supplying public water if the group of communities shares the financing costs.

Urbana (IL) Mayor Laurel Prussing stated that the city has been well served by the groundwater aquifer for many years, but there are concerns about draw-down. Urbana is investigating the long-term adequacy of the aquifer which serves many Illinois communities.

Albuquerque (NM) Mayor Martin Chávez stated that the city has relied on groundwater sources for decades. When he was elected he commissioned a study of the aquifer and learned that there might be less than a 25-year supply. This presented a major problem for the city because of the growing population. Mayor Chavez said that Albuquerque may soon reach a population of 500,000.

Chávez reported on his participation in Conference of Mayors President Manny Diaz's Infrastructure Action Forum held in New York City in August. He said the Forum was held to brief the Presidential candidate's campaign staff on the dire need for federal help in financing local water, wastewater and transportation infrastructure. Chávez pointed out that the Conference of Mayors 2005 National City Survey identified rehabilitation of the aging water infrastructure as the number one water resources priority of the nation's cities. Although lagging by 2 years, he stated that the latest official data indicates that FY2006 local government spending on water and sewer exceeded $85 billion, and that federal financial assistance via the State Revolving Fund loan programs (SRF) was less than $2 billion. He characterized the difference between the massive local spending and the flat (and proportionately declining) federal share as "the region of federal abandonment". Chávez stated that cities have a responsibility to spend on water and sewer, but the federal government and Congress should provide more funding to match the growing number of unfunded federal mandates in this area.

The mayor also reported that the USCM made a request to the Presidential candidates for $50 billion in additional aid over current federal spending spread out over the next 10 years to close some of the gap in needed investment. The $50 billion was broken down as follows: $3 billion in direct grants to cities facing costly wet weather (CSOs) overflow investment; an additional $1 billion over current allocations to the two SRF programs ($2 billion over the latest appropriation of $1.9 billion), and the additional spending should go to cities; and shoring up a $200 million dollar cost to the U.S. Treasury to eliminate state volume caps on Private Activity Bonds used for public purpose water and sewer investment.

Conference of Mayors (USCM) staff provided information on the 2007 and 2008 policy Resolutions on the Importance of Municipal Water. It was reported that a study commissioned by the USCM has been released and was used to help draft the water and wastewater portion of the Mainstreet Stimulus Plan (see usmayors.org/mainstreetstimulus). The study, prepared by The Cadmus Group (see usmayors.org/urbanwater), identified four major conclusions:

1) for every dollar of water and sewer infrastructure investment long-term Gross Domestic Product increases by $6.35;

2) for each additional dollar spent to operate and maintain public water and sewer economic output for all industries increases by $2.62;

3) every new public water and sewer job creates 3.68 new jobs in the national economy; and,

4) for every hectare (2.47 acres) of watershed protected by local government investment in source water protection (green infrastructure) yields over $4,000 in avoided treatment costs.

The report also indicates that of all public infrastructure investments water and sewer investments yield the highest gains to the economy.

Staff also reported on examples of bottled water policies in American cities following adoption of the 2007/2008 resolutions. Over 60 cities have adopted programs that encourage the use of city water and phase-out city purchase of bottled water because of the high cost of bottled water relative to the low cost of high quality public water. Staff also reported on S. 3475 – The Bottled Water Right To Know Act, filed by Senator Frank Lautenberg (NJ). The bill would require that commercial bottlers submit an annual report on source and treatment of the water; and they would be required to label each bottle including information in the annual report and the internet link where consumers can obtain a copy of the annual report. A Senate hearing was held on September 11, 2008. The legislation was referred to the Senate Environment and Public Works Committee.

Kelly Youngken, Director of State and Local Affairs at the American Beverage Association (ABA) reported on progress achieved by the beverage industry. She stated that "Plastic water bottles are 100 percent recyclable, making bottled water one of the few fully recyclable consumer goods." Youngken also said, "There's no other consumer products industry doing more to reduce its impact on the environment than the beverage industry."

Youngken noted the ABA is implementing a comprehensive program to reinvigorate recycling across the country by taking steps to make it easier for consumers to recycle containers and improve the environment by doing so. The goal of the beverage industry's "Full Circle" plan is to strengthen recycling in a practical and sustainable manner to make it more convenient for consumers to recycle as well as provide them motivation to do so. One part of this plan is to work with cities to improve their local recycling programs through the use of best practices. Youngken said, "By doing our part, we're making it easier and more enticing for consumers to recycle. We want to help make recycling more convenient for consumers and help them understand that they can make a real difference. The more we improve recycling together, the more we improve and protect the environment."

Hialeah (FL) Mayor Julio Robaina presented information on a water supply project that will involve a Public-Private Partnership approach. Like many south Florida communities, Hialeah is responding to a state policy to restore the Biscayne Aquifer- a major groundwater supply. In addition to a soon-to-be selected Private Partner, Hialeah will share 50 percent ownership of a new reverse osmosis plant with Miami-Dade County. The plant will produce 10 million gallons a day (MGD) from 14 wells with brackish water from the Floridan Aquifer (an alternative to the rapidly decreasing Biscayne Aquifer).. The plant can be later expanded to 17 MGD if needed.

The City of Hialeah will use bonds to finance the project and the County will provide half of the funds. The County will also provide 50 percent of the operating costs. The state has agreed to provide $6 million in grant money to aid the project.

Mayor Robaina explained that the project is moving forward rather quickly because the City assembled an experienced team of experts in: procurement; technology; finance; and permitting. Hawkins Delafield & Wood was selected as the legal entity to work out a service agreement with one of three short-listed private companies selected from an initial list of five companies. The Mayor emphasized that the project has been the subject of full public disclosure and has not been opposed. He stated that the Partner contractor will be selected in the Fall of 2009, construction is scheduled to begin in early 2010, and operations will commence in February 2011.

Eric Petersen, an attorney with Hawkins Delafield & Wood characterized the project as a Design-Build-Operate (or DBO). He said that the project relies extensively on private sector expertise. The project incorporates a "life-cycle" perspective, and is capable of achieving a 5 to 20 percent savings over the traditional development process often referred to as a Design-Bid-Build (DBB) where many parties take sequential responsibility for a project. Unlike the DBB, this DBO process substantially reduces the project time-line, and it vests responsibility in one lead entity who takes on the risk for budget and completion time, (this is often called Accelerated Project Delivery).

Petersen explained that Hialeah wants to take advantage of eliminating the competition to design and to operate the plant that is typical of a DBB approach. Also, the DBO approach benefits from choosing a Private Partner with demonstrated experience in merging and managing the designers, builders and operators. While the Private Partner takes on significant budget, project completion schedules, operation savings and environmental compliance, the city will retain those risks that are common to any project delivery method, such as changes in law, uncontrollable circumstances, unusual raw water quality, price inflation, and pre-existing site and environmental conditions.

Mayor Robaina emphasized that Hialeah will retain many of the "rights" of ownership that are important to any public authority. For example, the city and county will retain: ownership of all physical assets (plant and pipes); ownership of water revenues; water rights and grants and state subsidies. The city will also set user rates, determine capital planning amounts and schedules, and will use the police power to secure the site and rights-of-ways. According to Mayor Robaina, Hialeah will be able to secure many public benefits through this Public-Private Partnership approach.