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CONTENTSNOVEMBER/DECEMBER 2010COVER STORY22Seeing the UndergroundIn the past, there were technological barriers to achieving precise mappingof buried utilities. That is changing in North America, however, asGeospatial Corp. is offering its Smart Probe mapping and database solutionsfor a variety of industries that rely on underground pipelines.By Jim Rush2228FEATURES28Blue Gold RushMilwaukee’s connection to water, along with the industrial heritage it spawned, that maynow be writing the next chapter in the city’s history.By Jim Rush3030Energy-Saving Performance ContractsESPCs are now a very viable financial arrangement to keep the cash flowing to upgradeour water and wastewater infrastructure and reduce operational expenditures.By Lee E. Ferrell34Effective Utility ManagementEUM is proving to be an excellent organizational framework to help utility executives, governanceboards, policy-makers and regulators focus on ways to improve utility performanceacross the board.By Darin Thomas and Jim Horne4 Water Utility Infrastructure ManagementNovember/December 2010

3636Pipe Market OverviewUIM sits down with Tony Radoszewski, executive director of the Plastics Pipe Institute.By Jim Rush38The Aging Water Infrastructure DilemmaThe momentous task of addressing the aging infrastructure dilemma requires overcomingmany challenges especially during this extended economic crisis.By Gregory M. BairdDEPARTMENTS12 Publisher’s Message13 News18 Washington Report19 Finance Report20 Maxwell Report40 Calendar41 Advertising Index42 CommentaryWater Utility Infrastructure Management (ISSN 2150-1009) is published six times per year. Copyright2010, Benjamin Media Inc., P.O. Box 190, Peninsula, OH 44264. USA All rights reserved. No partof this publication may be reproduced or transmitted by any means without written permissionfrom the publisher. One year subscription rates: complimentary in the United States and Canada,and $79 in other foreign countries. Single copy rate: $10. Subscriptions and classified advertisingshould be addressed to the Peninsula office. POSTMASTER: send Changes of Address to WaterUtility Infrastructure Management, P.O. Box 190, Peninsula OH 44264 USA.Canadian Subscriptions: Canada Post Agreement Number 40040393. Send change addressinformation and blocks of undeliverable copies to Canada Express; 7686 Kimble Street, Units 21& 22, Mississauga, ON L5S 1E9 CanadaChairmanSandy RobinsonVice PresidentMalcolm PirnieSteve AllbeeDirector-Gap AnalysisU.S. EPAMichael DeaneExecutive DirectorNational Association of Water Cos.Scott HaskinsVice President-Water Business GroupCH2M HillBill HillmanExecutive DirectorNUCATom IseleyChairmanBAMI-IProfessor/Director CEMTIUPUIWATER UTILITY INFRASTRUCTURE MANAGEMENTThe Journal of Finance and Management for Water and Wastewater ProfessionalsEditorial Advisory BoardKen KirkExecutive DirectorNational Association of Clean WaterAgenciesSusan M. MaysCommunications Task Force ChairWater Partnership CouncilSteve MaxwellManaging DirectorTechKNOWLEDGEy Strategic GroupTroy NorrisSpecial AdvisorGene SchillerDeputy Executive DirectorSouthwest Florida WaterManagement DistrictDoug StewartPrincipal Asset Management ConsultantGHD6 Water Utility Infrastructure ManagementNovember/December 2010

CTAMCertification of Trainingin Asset ManagementExclusive asset managementonline training course for water& wastewater professionals.“This course will standardize the requirementsfor asset management certification. It providesvarious aspects of asset management that can beapplied to any utility.”– Muhammad Tak, Project ManagerEstablishing a Pathway forAchieving Water Utility InfrastructureManagement ExcellenceWhat is CTAM?CTAM or Certifi cation of Training in Asset Management is an online course developed by BAMI-I and industry leadersfrom four universities and administered by IUPUI through “Oncourse” – IUPUI’s online course management platform.The curriculum consists of 3 phases and includes all the resources to study and prepare for the exam, including a7-chapter manual, Guide to Water and Wastewater Asset Management. CTAM takes an average of 20 hours to complete,but you can easily fi t it into your schedule and advance at your own pace. Each course graduate will receive aCertifi cate of Training in Asset Management.Who should register for CTAM?All stakeholders in the water and wastewater industry! The course is for industry novices and experienced professionalsalike, and includes introductory and advanced material using technical but simple language.What are the benefi ts of CTAM?CTAM will provide the participant with knowledge and resources in asset management that qualify him/her to initiate,continue and/or improve an asset management program for their community.CTAM will:• Help in creating linkage to all utilities across the nation irrespective of utility size• Provide timeless access to asset management information and resources that will lead to more effi cient programs• Promote and provide training, education, research and outreach programs• Provide the public with a convenient tool to learn about municipal water and wastewater infrastructure system• Aid in the development of a national database that will help in developing tools, techniques, and models fordata analysisWhat are the fees for the course?CTAM online course registration fee is $345 USD, which includes your manual Guide to Water and WastewaterAsset Management (an $80 value), chapter exams, exercises, industry access and your certifi cate of completion.For further information and registration visit bami-i.com/index.html, call 330.467.7588 oremail vlosh@benjaminmedia.com.

Phase 1 – FundamentalsMastery of fundamental concepts, chapter exams and exercises, studying for the certification examand taking the online exam. This key reference manual immerses students in the subject matter.Guide to Water & Wastewater Asset ManagementChapter 1 - Introduction to Asset ManagementChapter 2 - Sharing Asset Management Knowledge on a Global ScaleChapter 3 - Asset Management TechnologiesChapter 4 - Risk ManagementChapter 5 - Government RegulationsChapter 6 - Case StudiesChapter 7 - Development of Center of Excellence for Municipal Asset ManagementPhase 2 – PracticalIntroduces virtual CEMAM (Center of Excellence for Municipal Asset Management). Learn how to utilize the virtual CEMAM withreal-world examples through actual data from existing utilities. Each participant must complete an evaluation during this phase.Phase 3 – Application to the IndustryYou will become familiar with organizations, institutions, fairs, events and many other activities and resources in the industry.Each participant must complete an evaluation during this phase.To view the full course outline and to register, visit bami-i.com/index.html.Developed by Hosted by In partnership withIn collaboration with:Louisiana Tech University, Virginia Tech, University of Texas at Arlington and Indiana University-Purdue University IndianapolisThe development of CTAM benefi ted in part from a cooperative agreement between USEPA and BAMI-I.Earn 1 CEU/10 PDHs uponcompletion

FROM THE PUBLISHER’S DESKMunicipal BondsThere has been increased reporting in the financial press about the condition of municipalbonds. Of course, this directly affects the ability to finance water infrastructure work.There is concern in the investment community about stale data coming from munibond issuers. States and municipalities are notoriously late when it comes to disclosingfinancial information. It is reported that government borrowers take an average of fivemonths to close out a fiscal year and get an audited financial statement. Then it takesanother month for all final approvals. Corporate borrowers, in contrast, must file theirannual reports within 60 to 90 days after a fiscal year end. The result is that bond ratersgenerally penalize government borrowers for tardy financial disclosure.Of course the financial downturn just makes things particularly difficult. Previously,many government bonds were insured and therefore were perceived as safe. Back in2006 about half of all new government bonds carried insurance. That number is nowdown to about 7 percent.It was usually the opinion that general obligation bonds could withstand difficult timesbecause the government authority would raise taxes to make good on its debt. Not sothese days! As noted recently in the Wall Street Journal, “Now, some investors are startingto view essential service revenue bonds which are backed by revenue stream from suchservices as sewer systems or water, as equally safe investments.” The opinion is that“income generated from essential services like water seem more reliable.”A positive factor in recent years has been “Build America Bonds.” These bonds initiatedby the Obama Administration offered a new kind of taxable bond that offered a 35 percentfederal subsidy on the interest rate. The idea was to appeal to investors such as pension fundsand overseas buyers who don’t traditionally buy municipal bonds because they cannot takeadvantage of the tax-free status. Congress authorized Build America Bonds though 2010 andis now considering extending the bonds with an interest rate subsidy of 28 percent.Also, consider that investors are getting extremely nervous about unfunded pensionliability. As again reported recently in the Wall Street Journal, “The 50 states unfundedpension bill is $3 trillion and the municipal tab for unfunded pensions could reach $500billion.” We had a situation recently where New Jersey was brought up on SEC chargesbecause it did not properly reflect unfunded pension liability. In that case, New Jerseysold $26 billion in municipal bonds between 2001-2007. It became the first state evercharged for violation of securities laws. New Jersey and the SEC have since settled withno fines levied and New Jersey has agreed to refrain from future violations.So while the muni bond market is going through some dramatic changes, our water infrastructureis reviewed favorably for bond issuance. But you must be timely in issuing financialstatements and be careful to completely report liabilities such as unfunded pension liability.Mystery PhotoIn my July/August Publisher’s Message, we presented aphoto and asked readers to identify who was in it and whatwas the event. This must have been a lot harder to do as wehad a short list of entries and just one correct — DavidPenrice, Aqua Capital Management. He wins the iPodTouch. Congrats, Dave!By the way, this photo was taken atthe world famous cycling race the Tourde France. In this photo is the wellknown devil, who keeps showing up atcycling races in Europe, and Steve Maxwell, who authors theMaxwell Report in every issue of UIM. Steve is an avid cyclist.Happy Holidays!PublisherBernard P. KrzysAssociate PublisherRobert D. KrzysEditorJames W. RushManaging EditorsSharon M. BuenoKeith GribbinsContributing EditorsBradley KramerJason MorganPam KleinekeCreative DirectorW. M. ConleyGraphic DesignersSarah E. HayesChris SlogarElizabeth StullDirector of MarketingKelly DadichRegional Sales ManagerDan SiskoCirculation ManagerAlexis R. WhiteWeb & Interactive ManagerMark GormanEditorial & Advertising Offices1770 Main St., P.O. Box 190Peninsula, OH 44264 USA(330) 467-7588Fax: (330) 468-2289www.uimonline.come-mail: info@benjaminmedia.comBernard P. KrzysPresident & PublisherFor Reprints, contact Wright’sReprints at 877.652.5295.12 Water Utility Infrastructure ManagementNovember/December 2010

eventsMayors Water Council Meets in CaliforniaThe U.S. Conference of Mayors Water Council met Oct.14-15 in Pleasanton, Calif. Pleasanton Mayor JenniferHosterman, Co-Chair of the council, hosted the meeting.There were over 70 registrants.The theme of themeeting was “WaterSupply, Public Healthand Infrastructure:Challenges Facing theNation’s Principal Citiesand the Bay Area DeltaCommunities.” Thefeatured speaker wasRobert F. Kennedy Jr.Kennedy is the sonof the late Sen. RobertF. Kennedy and nephewof former PresidentJohn F. Kennedy.Guest speaker Robert F. Kennedy Jr.(left) and UIM publisher Bernie Krzys.Kennedy is a well-known environment advocate who espousedthat good environmental policy equates to a good economicpolicy. “Protecting the environment is not about protectingthe fishes and the birds for their own sake, but rather, it’sabout recognizing that nature is the infrastructure of ourcommunities,” he said.Kennedy went on to discuss that the United States mustwean itself from energy sources like coal and oil because oftheir potential harmful effects and embrace the country’sabundance of renewable energy sources.The scarcity and shortage of water in California was coveredby many of the presentations. Illustrative of this were thefollowing presentations: “Does Existing Policy Add LegalInstability to the Natural Instability of Water Supply?,” JonRubin, Diepenbrock Harrison; “The Status of Water RecyclingPrograms in Southern California,” Mayor Mary Ann Lutz,Monrovia, Calif.; “Securing Community Water Supplies:Design-Build-Operate Cost Efficiencies in Clovis, Calif.,”Dennis Burrell, CH2M Hill; and “The Impact of WaterInstability at the City and County Level,” John Gioia, ContraCosta Counties.The meetingincluded a mayor’sroundtablehosted by MayorHosterman andher Co-Chair,Mayor BrianStratton ofSchenectady,N.Y. A networkingreceptionwas held at alocal winery.The MayorsNEWSMWH Global, the luncheon sponsor, was representedby John Buttz (left) and Bill Swanson.Water Council was formed to assist local governments inproviding high-quality water resources in a cost-effectivemanner. The council provides a forum for local governmentsto share information on water technology, managementmethods, operational experience and financingof infrastructure development.Mayors in attendance included (l-r): Jill Techel (Napa, Calif.),Sue Digre (Pacifica, Calif.), Mary Ann Lutz (Monrovia, Calif.),Jennifer Hosterman (Pleasanton, Calif.), Brian Stratton(Schenectady, N.Y.), and Susan Gorin (Santa Rosa, Calif.).ASCE Pipelines 2010 aMile High SuccessThe ASCE Pipelines 2010Conference held in Keystone, Colo.,from Aug. 28, to Sept. 1, 2010, was ahuge success. Planners had hoped toget 500 attendees, but their expectationswere exceeded as the conferencedrew more than 600 attendees,with 61 exhibitors and 20 sponsors.Student Days, a program to introducecivil engineering students topipeline professionals and careeropportunities, presented by theConstruction Institute of ASCE, washeld in conjunctionwith pipelines conference.More than 50students from 14 universitiesthroughoutthe United Statesparticipated in teambuilding, educationalNajafisessions and networkingwith industry professionals at theconference.Preconference Workshops werewell attended, with the PCCP User’sGroup meeting attracting over 100attendees. In addition to the 156papers presented insix different technicaltracks over thethree days, thePipeline Divisionawarded Dr.BarsoomMohammed Najafiits Award ofExcellence and presentedJoseph Barsoom the prestigiousStephen D. Bechtel PipelineEngineering Award.Next year’s conference will be heldin Seattle, Wash., from July 23-27,2011.November/December 2010Water Utility Infrastructure Management 13

NEWSWEFTEC 2010 Sets New ExhibitionRecord in New OrleansA total of 17,515 water professionals and 984 exhibitingcompanies occupying a record breaking 295,295 net squarefeet of exhibition booth space attended WEFTEC 2010 —the Water Environment Federation’s (WEF) 83rd annualtechnical exhibition and conference — held Oct. 2-6 at theNew Orleans Morial Convention Center in New Orleans,La. This year’s record-setting exhibition exceeded the previousrecord set at WEFTEC.08 in Chicago by more than5,700 net square feet.The conference provided attendees from around the worldwith a high-quality technical program of 112 technical sessions,33 workshops and several high profile events, includinga special session featuring Robert Perciasepe, DeputyAdministrator for the U.S. Environmental Protection Agency(EPA). Perciasepe updated attendees on the agency’s currentpolicies, priorities and programs, as well as announced theissuance of EPA’s new Clean Water and Drinking WaterInfrastructure Sustainability Policy. “Through cost-effective,resource-efficient techniques — like green water infrastructurealternatives — this policy aims to make our communitiesmore environmentally and economically sustainable,”explained Perciasepe during the Oct. 4 session. “These smartinvestments in our water infrastructure, along with increasedawareness of the importance of these investments, can keepour water cleaner and save Americans money.”Other popular events focused on global and local disasterrecovery, including a special session featuring award-winningjournalist and former CNN reporter Kathleen Koch,who shared highlights from her new book, “Rising fromKatrina,” and a well-attended community service projectorganized by WEF’s Students & Young ProfessionalsCommittee that constructed a bioswale in the city’s LowerNinth Ward. Workshops and technical sessions provided indepthexamination of topics such as private sewer systemmanagement, innovative applications of the small-scale useof reclaimed water, recent developments in membrane bioreactortechnology, and improved energy efficiency forwastewater treatment plants and processes.The well-attended Opening General Session featuredauthor Steven Solomon, who also shared insights from hisbook, “Water: The Epic Struggle for Wealth, Power, andCivilization.” Specifically, Solomon called for a new paradigmof sustainable water management and recognizedwater professionals as leaders in the effort to avert animpending water crisis. “[Water professionals] are the vanguarddrivers of this revolutionary business of inventing anew paradigm for the age of water scarcity,” he said. “Youalone possess the expertise and everyone is looking to youfor leadership and wise solutions.” Other opening sessionhighlights included remarks from 2009-2010 WEF PresidentPaul Freedman, recognition of WEF’s most prestigiousawards, and the introduction of the 2010 Stockholm JuniorWater Prize winners.On Oct. 5, Freedman ceremoniously “passed the gavel” ofFederation leadership to incoming President Jeanette Brownand inducted the 2010-2011 WEF Officers and Board ofTrustees. The ceremony culminated with the remainingawards presentations in recognition of the outstandingachievements of the most talented and dedicated profes-More than 17,500 water industry professionals descended onthe Morial Convention Center in New Orleans for the annualWEFTEC conference.sionals in the water quality community. In all, more than 25awards were presented at various events throughout theconference.Other key highlights included the 2010 WEF StudentDesign Competition, including the two first place winningteams from Southern Methodist University (WastewaterDivision) and the University of Florida (EnvironmentalDivision); WEF’s Global Center; the AEESP/WEF Scientists’Luncheon; and the 2010 Operations Challenge Competitionthat was won by Terminal Velocity from the Virginia WaterEnvironment Association.Planning for WEFTEC 2011 is already under way. Scheduledfor Oct. 15-19, 2011, in Los Angeles, the 2011 Call forAbstracts is now open. Visit www.weftec.org for details.Roundtable Discusses EconomicPressuresMore than 30 participants, journalists and observers fromaround the world took part in Black & Veatch’s second annualroundtable series Oct. 5 at WEFTEC in New Orleans.Fifteen global leaders in the water and wastewater industrymet to discuss how they are dealing with a wide range of economicpressures and how they are overcoming the hurdlesand capitalizing on the opportunities that this challengingglobal economy presents.14 Water Utility Infrastructure ManagementNovember/December 2010

NEWSDan McCarthy,President and CEOof Black & Veatch’sglobal water business,hosted thesession; and CindyWallis-Lage, SeniorVP and ExecutiveManaging Directorof Technical Solutions,moderatedthe “EconomicPressures” roundtablediscussionThe 15 roundtableparticipantscame from the United States, Australia and Singapore andrepresented a wide range of utility leaders, consultants, industryassociation representatives and technology specialistsNow is the time, participants said, to speak with one voiceacross the industry so that regulators, politicians, communitystakeholders and consumers all hear the same message,even if it is then tailored to the specific field of water, wastewateror storm water, among others.Panelists pointed out the benefits of strong partnershipsin these tough economic times and cited best-practiceexamples of the following types of collaboration:• Regional• Cross-utility• Intra-industry• Cross-industryThe roundtable hosted by Black & Veatchbrought together a cross section of industryleaders to discuss current market conditions.Some of the tried-and-proven ideas for overcoming thehurdles caused by economic pressures included concrete suggestionsabout how to increase revenues, how to save moneyon operations and how to save money by being “greener.”Utilities can leverage their increased revenue streams andcost reductions to attract private capital, participants pointedout. Presenting robust data and forward-thinking asset managementplans will help utility leaders build a clear businesscase to show consumers, regulators and investors the economicvalue of their investment in water infrastructure.Following the 90-minute luncheon session, journalists hadan opportunity to discuss these topics one-on-one with theleaders. Black & Veatch plans to hold five more dialogue sessionsglobally as part of its economic pressures roundtable.WASTEWATER TREATMENTJohnson County Plant ExpansionResults in Far-ReachingEnvironmental BenefitsJohnson County (Kan.) Wastewater (JCW) announced thatcompletion of its Black & Veatch-designed Douglas L. SmithMiddle Basin Treatment Plant expansion and upgrade will resultin water quality improvements that reach beyond local streams.“Removal of phosphorus and nitrogen will now carry benefitsall the way to the Gulf of Mexico, where government and environmentalagencies strive to reduce problems related to oxygendeficiency,” said John O’Neil, general manager of JCW.Transformation of the Middle Basin treatment plant intoa larger plant with improved wet-weather treatment andodor control as well as biological nutrient removal (BNR)capabilities was completed this summer. The expansionincreased plant capacity from 12 to 14.5 million gallons perday (mgd); the plant was previously running at a full capacityof 12 mgd through facilities originally designed to operateat 9 mgd. JCW was able to maintain operations throughoutconstruction, which was led by BRB Contractors Inc.The Middle Basin treatment plant is among the first inthe Kansas City, Mo., metropolitan area to incorporateBNR technology to reduce its discharge of phosphorusand nitrogen, with JCW’s Blue River Main WastewaterTreatment Plant (WWTP) credited as the first applicationof BNR in the area.Because the nature of the organic matter in municipalwastewater is not always ideal for biological nutrient removal,carbon augmentation is often used to improve biologicalnutrient removal performance. After considering such carbonaugmentation strategies as changing the nature of theorganic matter through fermentation or adding externalchemicals or organic waste products, JCW selected fermentationas the most cost-effective solution.Improvements to existing wet-weather storage facilitieswere designed to reduce odor potential and minimize wetweatherrelated excess flows from the plant’s equalizationbasins discharging into the receiving stream by 90 percent.Because the Middle Basin treatment plant is located nearcommercial and residential developments, all new andmodified treatment facilities have odor control systems.Existing odor containment, ventilation and treatment facilitieswere improved and expanded as part of the project.WATER SUPPLYAurora Water’s Sustainable WaterSupply System CompleteThe City of Aurora, Colo., recently celebrated the completionof the Prairie Waters Project, an innovative and environmentallyfriendly water system that was finished ahead ofschedule and more than $100 million under budget.A large Colorado crowd excited to see the completion ofthe $653 million project gathered Oct. 8 for the system’s formaldedication. Speakers included Aurora Mayor Ed Tauer,Interim City Manager Nancy Freed, Aurora Water DirectorMark Pifher, former Aurora Water Director Peter Binney andCH2M HILL Chairman and CEO Lee McIntire, whose companyprovided design and program management services.The recently completed Peter D. Binney Water Purification Facility treats50 million gallons of water per day for the Prairie Waters system.November/December 2010Water Utility Infrastructure Management 15

NEWSThe project is the fastest, most cost-effective and environmentallysustainable way to meet Aurora’s water needs andwent from design to completion in just five years. The systemincludes 34 miles of 60-inch diameter pipeline, threepump stations, a natural purification area and a new watertreatment facility.Designed to protect the city against drought, like the onein 2002 that left Aurora with only a nine-month supply ofwater, the system is a forward-looking project that uses asustainable water source by recapturing river water. Aurora,like many other cities in the state, gets most of its water frommountain runoff, but it’s difficult to predict how much waterwill be delivered from year to year. Prairie Waters providesthe solution.The project begins in Brighton, where water is pulledfrom the South Platte River. Riverbank wells pull the waterthrough sand and gravel to perform the initial cleaningprocess. Water is then pumped to Aurora where it is treatedwith multiple water purification steps at the Peter D. BinneyWater Purification Facility, including an advanced ultravioletoxidation process that is among the largest application ofUV oxidation in the world. The plant can treat 50 milliongallons of water each day.Binney, the former Aurora Water Director and the drivingforce in the development of Prairie Waters, said that thewater solutions from the 19th and 20th centuries would notaddress the needs of the Aurora community and many othersfacing water crisis. It took a creative, sustainable, environmentallyconscious approach, utilizing both naturaltreatment and cutting edge technologies, to deliver theneeded solution.Although Aurora Water utilized some traditional fundingmechanisms – $213 million in cash and net bond proceedsof $367 million – the department also sought, and received,funding from some unique sources. The environmentallyfriendly nature of the project allowed Aurora Water to createpartnerships with conservation agencies who applauded thecity’s efforts to design a sustainable project that protectedwildlife habitats during construction and use its waterresources responsibly. That helped the department secure alow interest $75 million loan from the Colorado WaterConservation Board.ASSOCIATIONSDaigger Assumes IWA PresidencyCH2M HILL, a global full-service consulting, design,construction and operations firm, announced that GlenDaigger, CH2M HILL Senior Vice President and ChiefTechnology Officer, transitioned from President-Elect toPresident of the International Water Association (IWA) duringthe 2010 IWA World Water Congress, held Sept. 19-24in Montreal. Daigger, who is recognized worldwide as anexpert in wastewater treatment technologies, officially tookoffice for a two-year term as President during the closingIWA Gala Dinner in the Palais de Congres de Montreal.IWA is the global network of water professionals, withmembers in more than 180 countries and from every continentexcept Antarctica. Daigger has been a member of IWAfor 36 years, and has served most recently as President-Elect, Senior Vice President and as a member of the Financeand Investment Committee.“I am deeply honored to become thePresident of the International WaterAssociation,” says Daigger. “While we havecollectively accomplished much in the pastseveral years, numerous challenges andopportunities lie ahead. We must work todevelop and deliver programs that servenot only the developed world, but also thatDaiggeraggressively work to serve the needs in thedeveloping world so that all of our efforts are equally relevantand impactful no matter where you live.”With so much to do in such a short time, Daigger willfocus on four initiatives during his time in office:• Continue to build strength, both in participation and financiallyto allow the organization to expand its programs• Expand the family, by including a broader range of professionalsthan ever before• Reinforce the culture of a “bottom-up” organization• Dare to be great, addressing an increasingly “water constrained”global situation by helping to transform watermanagement policies and practices to see that the needsof all citizens of the planet are met well into the futureThornburg Assumes NAWC Presidencyat Annual ConferenceAmid a stunning scenery of canyons and cacti, NAWChosted its 113th annual conference at the Loews VentanaCanyon Hotel in Tucson, Ariz., from Oct. 10-13. With over400 officials, distinguished guests, environmentalists andwater professionals representing all aspects of private waterservice in attendance, the exchange of ideas during thethree-day conference focused on water issues, funding needsand the innovative solutions being employed to addressthese challenges across the country.The conference also provided an opportunity for industryleaders to recognize the good work of fellow colleaguesthrough NAWC’s Annual Management Innovation Awardsprogram, and to challenge the industry to do more as responsiblewater stewards, learn regulatory as well as public-privatepartnership best practices, and honor extraordinary membersshaping the future of water management by way of active associationleadership. In particular, the conference set the stagefor the outgoing president of NAWC, Chuck Firlotte, CEO ofAquarion Water, to welcome the newly elected president, EricThornburg, President and CEO of Connecticut Water.Thornburg leads all aspects of Connecticut Water, whichserves over 300,000 customers in 55 towns across the state.Headquartered in Clinton, Conn.TRAININGBAMI-I ExpandsCTAM ProgramThe Certification of Trainingin Asset Management ProgramCTAMCertification of Trainingin Asset Managementoffered by the Buried AssetManagement Institute-International (BAMI-I) hasbeen a solid success. The program,commonly referred to as CTAM, is an online courseand corresponding textbook that introduces enrollees to thebasic principles of asset management.16 Water Utility Infrastructure ManagementNovember/December 2010

To date, nearly 100 people have completedCTAM since it was introduced inJanuary 2010. More than 90 percent ofthe enrollees have come from municipaland utility sectors, indicating the value ofthis training course.To expand on the program, BAMI-Iannounced that it is launching CTAM+,an expanded program that delves furtherinto the five key areas of asset managementintroduced in CTAM. CTAM+is geared to municipal and utility managersseeking to take their asset managementto the next level.The five key areas of asset managementas identified in CTAM, and formthe five modules for CTAM+, are:Module 1 — Asset Inventory andCondition Assessment (1st Quarter 2011)— topics include: Accurate Evaluation ofExisting Assets; Field Asset ManagementTechnologies; Data Management.Module 2 — Required Service Levels (3rdQuarter 2011) — Government Regulations;Customer Expectations; PerformanceMeasurements.Module 3 — Critical Assets to SustainPerformance (1st Quarter 2012) — RiskAssessment; Prioritization Methods;Evaluation Technologies; Asset LifeEstimation Methods; Depreciation Models.Module 4 — Best O&M and CIP Strategies(3rd Quarter 2012) -- CIP Planning Models;O&M Estimation; Government Regulations:CMOM and GASB 34; RenewalTechnologies; Repair Technologies.Module 5 — Best Funding Strategies (1stQuarter 2013) — Economic Analysis;Planning Concepts: Screening Projects;Planning for Uncertainty and Risk; FinancialAnalysis: Time Value of Money; Conceptsand Applications for Economic Analysis;Environmental and Social ImpactAssessment; Public Environment; Legal andInstitutional Aspects; Funding Methods.BAMI-I will be rolling out these fivemodules over the next two and a halfyears. Each module will be supported bya manual. CTAM enrollees report anaverage of 20 to 30 hours of time to completethe course.Development of CTAM+ is being carriedout in conjunction with TheUniversity of Texas-Arlington, IndianaUniversity-Purdue University atIndianapolis, BAMI-I, and BenjaminMedia. CTAM+ was recently introducedat the UIM Asset Management Conferenceheld in Cleveland Dec. 6-7. For information,visit www.bami-i.com.November/December 2010Water Utility Infrastructure Management 17

W A S H I N G T O N R E P O R TWater Supplies at Risk:New Study Reveals Full Extent of Global Water StressHuge areas of land mass within Australia, India, Chinaand the United States are highlighted as sufferingextreme pressure on their renewable water supplies by anew index and map that evaluate water stress.The Water Stress Index is developed by global risksadvisory firm Maplecroft to identify the risks to governments,populations and business. The index is calculatedby evaluating the ratio of a country’s total water use,from domestic, industrial and agricultural use, againstthe renewable supply of water from precipitation, streams,rivers and groundwater. The index is accompanied by asub-national map, which uses GIS technology to pinpointglobal water stress down to 50 sq km.At a national level, the Water Stress Index identifiesthe Middle East and North African countries of Egypt(1), Kuwait (2), UAE (3), Libya (4) and Saudi Arabia (5)as exposed to the most overall risk. Water stress in thisregion is not surprising as it only receives 1 percent ofthe world’s precipitation, of which 85 percent is lost, forexample through evaporation. However, the key economiesof Australia (19), India (29), China (40) and theUnited States (51) have all been rated as ‘high risk’ dueto massive ‘extreme risk’ areas of water stress, wheredemand is exceeding 80 percent of total renewablewater resources.According to Maplecroft, expanding populations,such as India’s, which grew 1.3 percent in 2009, togetherwith rising global temperatures, indicate that waterstress will continue to be a challenge for governments,business and society. Access to water is crucial to alllivelihoods, but shortages are often felt most quickly bythe poor due to their heavy dependence on agriculture.Business, on the other hand, depends more directly onwater for processing, energy, cooling and cleaning, andthese needs can directly compete with those of localcommunities. Both governments and business thereforehave a responsibility to explore and develop new efficienciesto save water, prevent diversion away from localpopulations and their livelihoods and to ensure thatprices do not rise.Maplecroft’s water stress map identifies vast swathesof Australia as ‘extreme risk.’ The issue has particularresonance in the south, as it is subject to increasingclimate variability characterized by declining rainfall.South Australia has nearly 1 million sq km at ‘extremerisk’ of water stress, which represents 12.8 percent ofthe total land area. Poor water governance in the pastcompounded the situation by over-allocating surfaceand ground water, which has negatively impacted manyrivers and watersheds. Subsequently, there is competinguser demand from the agricultural, domestic, industrialand mining sectors.Across the United States there is a wide range ofwater stress diversity with the Great Plains and thesouthwest areas of the country suffering severely due tointensive farming and low precipitation, while thenorthwest and northeast states have high precipitationrates and low levels of water stress. In Texas, 690,438 sqkm are subject to extreme water stress, equal to 7.27percent of the state’s land mass. In western parts of theUnited States groundwater is being consumed fasterthan it is being replenished, and groundwater tables aresteadily falling. The Colorado River in the westernUnited States often runs dry before reaching the sea.The river now serves 30 million people in seven U.S.states and Mexico, with 70 percent or more of its watersiphoned off for irrigation.Nov. 2 Elections Shake Up CongressThe Nov. 2 mid-term elections saw Republicans makemajor gains in the 112th Congress. Republicans pickedup 60 seats in the House of Representatives, turningtheir minority in the 111th Congress into a 239-188majority. In the Senate, Democrats, despite losing sixseats, maintained a majority with 51 seats. That givesDemocrats 53 seats when counting the two independentswho organize with Democrats.The most notable change will be the Speaker of theHouse as John Boehner (R-Ohio) will replace NancyPelosi (D-Calif.), who served as in that role sinceJanuary 2007. Pelosi becomes House Minority leader.Another major change will occur in the HouseTransportation and Infrastructure Committee, whichoversees the Clean Water Act, where longtime chairmanJames Oberstar (D-Minn.) was defeated after serving 36years in Congress. The National Utility ContractorsAssociation reports that John Mica (R-Fla.) is expectedto become the T&I Committee chair.In the Senate, Harry Reid (D-Nev.) is expected toremain as Majority Leader with Mitch McConnell(D-Ky.) staying as Minority Leader. Barbara Boxer(D-Calif.) is expected to remain as chair of the SenateCommittee on Environment and Public Works, whichoversees EPA. James Inhoff (R-Okla.) is expected toremain as Ranking Member..18 Water Utility Infrastructure ManagementNovember/December 2010

FINANCIAL REPORTConstruction Spending Inches Forward in OctoberTotal construction spending increased by 0.7 percentin October, driven largely by growing demand forpower projects and public construction, the AssociatedGeneral Contractors of America noted Dec. 1 in ananalysis of new Census Bureau data. The new data,however, indicated continued weakness in many constructioncategories, including private nonresidentialand single family construction, association officialsobserved.“Without any upward trend in key private-sector constructioncomponents like homes and office buildings,it is hard to feel optimistic about the near future,” saidKen Simonson, the association’s chief economist. “Withpublic construction at risk of cutbacks, it is prematureto conclude that construction has awakened from itslong nightmare.”Simonson commented that power constructionincreased by 8.8 percent between September andOctober at a seasonally adjusted rate, although thetotal remained 3.9 percent below the year-ago level.Public construction, aided by federal spending onstimulus, military base realignment and Gulf Coasthurricane-control projects, edged up 0.4 percent forthe month and 2.2 percent year-over-year.Private nonresidential construction, however, slumped0.7 percent in October, leaving the total 20.7 percentbelow the October 2009 figure. All 11 of the CensusBureau’s private nonresidential categories were belowyear-ago levels, Simonson added, with only privatepower and transportation showing gains fromSeptember.Private residential investment jumped 2.5 percent forthe month. However, Simonson cautioned that theapparent leap is attributable to a 3.2 percent advancein new multi-family construction and a 6.2 percent risein improvements to existing properties, whereas singlefamilyconstruction sank 1.2 percent for the month.Association officials said that a proposal released bythe Deficit Commission to increase investments inhighways, bridges and transit system construction providedsome room for optimism. They urged Congressto embrace the transportation proposal, noting itwould help the economy over the long run while givinga much-needed boost to short term constructiondemand.“The best way to reduce the deficit and simultaneouslysupport a strong and expanding economy is toinvest in our aging network of highways, bridges andtransit systems,” said Stephen E. Sandherr. “Even asthe broader report calls for dramatic reductions in federalspending, it is clear that our country can’t affordto neglect its infrastructure.”Growth Opportunities Seen inPipe SectorImpending growth and multiple key market developmentswere among high notes providing positive benchmarksfor the Plastics Pipe Institute Inc. (PPI) at thetrade association’s semi-annual meeting held Oct.24-27. Members received upbeat news including plansto add staff and extend programs in 2011. During sessions,reporting of highest ever web traffic, expandedmedia presence and newer industry applications highlighteda clear forward direction for the association.Attention also focused on ongoing research projects andkey findings which were recently announced.“Our members are feeling a new sense of optimismabout business advancing that had been muted by thestagnation of the economy,” stated Tony Radoszewski,executive director of the PPI. “They are voicing theiropinions and seeing strong indicators that slow progressionis being made; and their approval of PPI initiativesis helping to boost awareness about the sustainabilityand economical advantages of the use of plastic pipe inall its various applications.”Donna Stoughton of Charter Plastics Inc. who servesas the chairman of the board of directors for the PPIadded, “The PPI committees, technical task forces andeach of our individual members work to educate theindustry and serve our cities and towns by informingthem about smart, cost-effective and environmentallyconscioussolutions for rehabilitating our nation’s deterioratingunderground infrastructure.“We’ve heard time and time again,” she continued,“that more and more projects are embracing plasticpipe as the material of choice. Our PPI meetings providea great opportunity for our members to networkwith each other, share success stories and look to thefuture for better times ahead. Especially during therecent times of trial, businesses have had it very rough.But, collectively, there is definitely great confidencethat our products supply greener, smarter and betterinfrastructure options — and there is no doubt that aninfrastructure crisis is under way.”Radoszewski said that while the general economicclimate is still sluggish and must be carefully watched,the perspective for growth in various markets is predictableand sensible. “There was significant discussionover the four days of our meetings about how to preparefor anticipated growth. Our divisions are increasinginvestments in staff support, aligning resources to managenew opportunities, and continuing educationalendeavors to inform individuals about plastic pipe andits real long-term benefits of use.”“PPI’s 2011 devotion to these goals will prove to be atremendous resource for the pipe industry,” Stoughtonsaid. “We’re continuing to drive the development ofPPI’s technical resources; expand PPI’s outreach andpromotion of plastic pipe; and facilitate our association’sgrowth through programs that serve the needs ofmany, not just of our member companies, but for allend users.”November/December 2010Water Utility Infrastructure Management 19

M A X W E L L R E P O R T By Steve MaxwellFactors for Success in the Acquisition GameIn the last issue, we reviewed the current status of mergerand acquisition activity in the broader water industry. Aspromised, this time we’ll take a quick look at what it takes tobe successful in employing an acquisition-based growth planin this industry.Many firms have tried the acquisition game — in fact, virtuallyall the companies in this business will tell you they areinterested in making acquisitions. There’s a certain excitementinvolved in mergers and acquisitions — the “thrill ofthe chase” that often seems to consume CEOs and investmentbankers in the pursuit of a deal.But the truth is many acquisitions are not successful in thelong-term. Academic studies have shown that over time asmany as half or two-thirds of transactions are ultimatelyjudged to be failures. Too often the focus is on chasing andclosing the deal, rather than on the less glamorous and morelaborious process of successfully integrating the new acquisitionin to the existing business. Nonetheless, there are clearlya few companies that have mastered the process, and whichhave continuously and successfully grown through acquisitions.Among the companies that we follow in the accompanyingtable, a few names come to mind. Danaher, Tetra Techand ITT have certainly been active, and generally successful,acquirers in the water industry for many years.Why do firms undertake acquisitionbasedgrowth plans? In American business,there is an inexorable appetitefor growth — that mantra has alwaysbeen that “if you’re not growing, you’redying.” Few companies are content tosimply maintain the status quo. And ifyou want to grow, there is always the“buy vs. build” decision — should you undertake a faster andperhaps riskier plan of growth via acquisition, or should yougo the more conservative and probably slower route of internal“grassroots” or organic growth? That is a key questionthat faced by CEOs every day, and many opt for the formerapproach.The key reasons for or primary drivers behind acquisitionbasedgrowth programs typically include the following:• A means of strategic growth or expansion: this is themost often-cited reason for an acquisition — the ability toquickly grow or strategically transform a business. But thiscan be a little bit too vague. CEOs often cite this as thedriver or justification for a deal, but they’d better have apretty specific and defined plan in mind.• The ability and desire to consolidate capacity in a fragmentedindustry: this type of thinking has driven a lot of theWATER DOLLARSCompany Price % of52-wk hiRevenue EBITDA Market Cap. Enterprise Val/(000,000)EBITDAEBITDA/RevenueROEPerformanceTSG IndexAmeron (AMN) $66.84 92% $516 $64 $622 7.5 12.4% 6.5% 9.8Badger Meter (BMI) 41.99 94% 253 47 630 13.4 18.6% 18.0% 16.9Calgon Carbon (CCC) 15.5 84% 445 88 868 9.6 19.8% 14.0% 15.6Danaher (DHR) 43.18 99% 12290 2390 28,197 12.5 19.4% 11.0% 15.7Dionex (DNEX) 89.89 99% 420 101 1,569 14.9 24.0% 25.0% 21.5Energy Recovery (ERII) 3.89 53% 51 6.2 202 24.4 12.2% 1.7% 13.7Federal Signal (FSS) 5.72 56% 734 50 355 11.5 6.8% 3.3% 7.5Franklin Electric (FELE) 36.13 94% 661 96 831 9.3 14.5% 9.0% 11.8Gorman-Rupp (GRC) 28.84 92% 264 39 490 11.6 14.8% 11.0% 13.1Insituform (INSU) 26.18 92% 845 106 995 9.5 12.5% 9.0% 10.9ITT Corporation (ITT) 48.51 84% 11000 1590 8,877 6.0 14.5% 17.0% 12.4Layne Christensen (LAYN) 28.14 92% 929 92 563 5.9 9.9% 5.0% 7.7Lindsay Manufacturing (LNN) 58.3 98% 345 42 700 15.0 12.2% 10.0% 12.6Mueller Water (MWA) 3.05 51% 1370 102 473 10.8 7.4% -13.0% 4.4Nalco (NLC) 26.5 91% 4010 748 3,657 8.6 18.7% 32.0% 18.3Northwest Pipe (NWPX) 19.34 55% 390 48 174 5.3 12.3% 8.0% 9.4Pentair (PNR) 34.39 87% 2870 405 3,405 10.2 14.1% 8.0% 11.7Tetra Tech (TTEK) 21.33 76% 1410 152 1,322 8.0 10.8% 11.0% 10.0URS Corporation (URS) 39.32 74% 8890 515 3,185 6.2 5.8% 7.0% 6.2Watts Water Tech. (WTS) 35.4 96% 1270 181 1,310 7.9 14.3% 7.0% 10.9Total 48963Financial data as of October 22, 2010TSG Index: November, 2010 12.0920 Water Utility Infrastructure ManagementNovember/December 2010

deals in the water industry, from the U.S. Filter era, right up to the present. Thegeneral idea here is that by combining organizations, one cannot only reducecompetition, but also accomplish cost-cutting and improve productivity viagreater economies of scale.• A quick and inexpensive way of growing the business: a lot of deals aresimply ways of growing the revenues and market share of the acquirer morequickly. When you cut through all the rhetoric and PR, there may not really beany big strategic premise. A lot of deals occur simply because interest rates arelower and credit is cheap, because the target company has a lot of cash to helppay for the deal, because currency exchange rates are favorable, or because thetarget company’s stock price took a short-term dip.• The ability to improve a target company’s performance: this approach isdriven by the acquirer’s belief that it can grow the revenues, reduce the costs,and generally improve the performance of the target company. Many times alarger company may be able to help a smaller or start-up business in terms oftechnological expertise and know-how, research and development budgets, orenhanced marketing and distribution channels.Clearly, every acquisition is different, and there may not be any iron-cladrules for ensuring the success, but there are a lot of important guidelines. Thosecompanies that have been successful in evaluating, implementing and thenintegrating acquisitions typically adhere closely to a number of general rules orcriteria, such as the following:• A detailed plan and timetable for integration of the new company — thismay not be the exciting part of the process, but it’s the part that’s likely todetermine success or failure. It should include the establishment of teams,schedules and specific responsibilities to make sure that the projected synergiesare actually accomplished. Sometimes this can include detailed post-dealinterviews with various parties, on-line “deal rooms” and regular review meetings— activities which may go on for years. Many successful acquirers will tellyou that the real work of an acquisition begins the day after the closing. Lotsof deal-hungry companies, however, forget this critical fact and go straight onto the next deal.• Careful and thorough communication plans — one of the biggest risksin any acquisition is that key people get disillusioned and leave, not only inthe acquiree, but sometimes also in the acquirer. People don’t like uncertainty;it’s better to tell people the news — even if it’s bad — than to keepthem in the dark.• Systematic attempts to learn from past acquisition successes and failures.“Serial” acquirers have a formal process and review effort to make sure that theylearn from their mistakes, as well as their successes.• Attention to cultural and human resource issues — transactions are not donebetween faceless bureaucracies — companies comprise living and breathinghuman beings and if the people aren’t happy, or if the two teams aren’t a goodcultural or personality fit, then the deal is probably not going to work very well.This is obviously only a very brief overview of what is an extremely complex anddetailed process — a process that often takes years to fully implement. Every dealis a little bit different and a strict cookie-cutter approach doesn’t work. But, at thesame time, there must be a rigid set of guidelines that are followed — success israrely achieved by simply throwing two companies together and hoping for thebest. And of course even the most careful and detailed planning and implementationwill not guarantee success if you overpaid to begin with.Steve Maxwell is Managing Director of TechKNOWLEDGEy Strategic Group (TSG), aBoulder, Colo.-based management consultancy specializing in merger and acquisitionadvisory services, and strategic planning for the commercial water and environmentalindustries. Maxwell is author of the annual Water Market Review, and is alsothe editor of a recent book entitled “The Business of Water.” He has advised dozensof water firms on strategy and transactional issues, and can be reached at (303) 442-4800 or maxwell@tech-strategy.com.[EDITOR’S NOTE: This regular column tracks and evaluates the performance andfuture potential of 20 key publicly traded water companies. In each issue, Maxwellpresents key investment data, and summarize major investment opportunities andstrategic trends in the broader water industry.]November/December 2010Water Utility Infrastructure Management 21

Seeing theUndergroundNew Technology Provides 3D View of the Final FrontierBy Jim RushFor many years, the need to accurately map undergroundutilities was not a priority for cities andutilities. But as the underground space has becomeincreasingly congested and development hasencroached on what had been open land, knowing theprecise location of pipelines is becoming more and morecritical.In the past, there were technological barriers to achievingprecise mapping of buried utilities. That is changingin North America, however, as Geospatial Corp. is offeringits Smart Probe mapping and database solutions for avariety of industries that rely on underground pipelines.Geospatial Corp. is a Pittsburgh-based company foundedin 2007 by Mark Smith, a veteran of the municipalwater and sewer market who recognized the need formapping data and found the technology that could getthe job done.The Smart Probe technology used by Geospatialemerged from Europe where it was pioneered during thetelecom boom of the 1990s. Similar to the United States,Europe was experiencing rapid construction of buriedfiber-optic conduit and the need to accurately map thelocation of these new pipelines arose.“Mark Smith has extensive experience in the undergroundmarket and municipal pipe rehab market,” saidTodd Porter, Geospatial executive vice president. “Heunderstood the industry, and when he saw the technology,he immediately saw the opportunity.”22 Water Utility Infrastructure ManagementNovember/December 2010

Geospatial has performed projects for owners involved in a range of utilities,from municipal clients to companies including Sunoco, Comcast and Qwest.Design firms and subsurface utility engineering companies have also turned toGeospatial’s technology.Smart Probe TechnologyThe Smart Probe technology can be used for centerline 3D mapping of avariety of utility pipelines, municipal (water, sanitary, storm systems), electricaland power (transmission and distribution), telecom, facilities (government,military, shipping ports), and oil and gas (transmission, gathering,distribution).The Smart Probe technology consists of two main components. The firstis an array of data collection instruments, which include accelerometers,gyroscopes and odometers located within each of the probe bodies. Thesecond is a post-mission software package that extracts, computes andinterprets the collected data and allows for the seamless transfer of the collecteddata into various GIS databases.As the probe moves through the pipeline, it records all changes in inclination,heading and velocity at 800 Hz and stores the information internally on theprobe. Once inserted into the pipeline, the probe operates autonomously —there is no umbilical or surface communication required — at a speed of about6 feet per second.The Smart Probe operates in a relative coordinate frame, measuring a continuouscenterline 3D trajectory. Registering and correcting the probe isachieved by GPS survey (accuate to plus or minus 0.10 m) of entry, exit andintermediate points along the pipeline route for long sections. This provides theabsolute XYZ pipeline positions for horizontal and elevation points in anydatum or coordinate system worldwide. By transferring the complete pipe centerlineinto AutoCAD or a GIS database, accurate XYZ registration creates thebaseline or validation of the true location of the asset.A key goal in developing the smart probe technology was to design the instrumentationin such a way that it is capable of being used within a series of differentprobe body styles that would allow for the use of the technology within awide range of pipeline types, sizes and environments. Configuration can bescaled for 1.5-in. to 60-in. and bigger applications.New ApproachThe Town of Oak Island, N.C., is a community of 9,000 year-round residentssituated along the Atlantic Coast about halfway between Wilmington, N.C., andMyrtle Beach, S.C. In 2005, the Town made the decision to install a vacuumsewer system to treat its wastewater, eliminating the use of septic tanks. Withouta treatment plant of its own, the Town needed to install a sewer forcemain underthe Intercoastal Waterway to convey wastes to the West Brunswick RegionalReclamation Facility on the mainland.Smart Probe consists of an array of data collection instruments, which include accelerometers,gyroscopes and odometers.November/December 2010Water Utility Infrastructure Management 23

To install the new 20-in. diameter forcemain, the Towndecided to use directional drilling for the 1,500 ft crossing.However, the Town and its engineer, Black & Veatch, haddifficulty locating an existing water line that had beeninstalled in the 1990s as a secondary water supply source. Infact, as crews were drilling to install the new sewer forcemain,it was discovered that they had encountered the existingwater line.“We saw cuttings on the drill bit, and when we turned onthe water line we saw silt and mud, so we knew the line hadbeen breached,” said Troy Davis, the Town’s assistant publicservices director for construction. “Once we knew the linehad been damaged, we needed to find its location and assessits condition. We knew where the pipe started and where itended, but that was all we knew.”Oak Island turned to Geospatial’s Smart Probe to accuratelyidentify the location of the waterline. The companyinserted a protective pipe sleeve in which the probe wasinserted, and ran the probe until it could not go any further.The process was then repeated from the mainland side.“Once we had the informationfrom each side, wewere able to connect thedots to determine the locationof the pipe,” Davissaid. “As it turned out, thepipe was filled with debrisand we decided to abandonit because it was notfeasible to repair a line 20ft below the bottom of theIntercoastal Waterway.”Oak Island also usedthe technology to verifythe location of a 900-ftdirectional bore under amarshy area that wasrecently installed as partof the vacuum sewer systemthat is being built.After running the SmartProbe through the sectionof pipe, the Towndiscovered that the newsewer was 25 ft above itsplanned vertical alignment. As a result, the Town paid areduced price to the contractor, and, perhaps moreimportantly, is armed with information that could avoida potentially costly accident in the future — both from anenvironmental and financial standpoint.Pipeline ProjectsSunoco is an energy provider with roots dating back morethan 100 years. Not surprisingly, Sunoco owns an extensivearray of underground oil and gas pipelines built at varioustimes throughout its history. This pipe network requiresnumerous repair, replacement and relocation, and the companyhas turned to 3D mapping to ensure that projects —and future projects — go smoothly.In a recent project in Tyler, Texas, Sunoco was relocatinga 12-in. line under a Texas Department of Transportationhighway. Texas’ Highway 49 was being widened and drainageinstalled, so Sunoco decided to relocate its line to adeeper location using horizontal directional drilling. ByTexas DOT requirement, Sunoco needed to provide accurateas-builts of its facilities on DOT rights of way, so itturned to Geospatial.By using the Smart Probe technology, Sunoco was able toprovide accurate GPS coordinates to Texas DOT, as well asverify its pipeline was free of deformations that may haveoccurred as a result of drilling operations. Sunoco can thenuse the data to maintain an accurate inventory of its facilitiesgoing forward.Upon successful completion of the mapping project inTexas, Sunoco used it for two similar projects in Oklahoma.“In these instances, the owner entities did not require us toprovide as-builts, but we were interested in achieving thesame level of information,” said William Chaparro, Sunocoproject manager for pipeline relocations. “The process issimple and fast, and we have the precise locations of ournew lines.”The Smart Probe technology can be used for centerline 3D mapping of a variety of utility pipelines.Work Process and DeliverablesThe complete mapping operation can take as long asa few hours to possibly a full day. The most involved stepof the process is to string the pipeline. In some cases,the survey has been completed in less than one hour.The steps needed to map the pipelines are:• GPS survey the entry and exit points on the pipeline.This generally is done before reconnect andbackfill.• Complete cleaning and/or dewatering.• Open entry and exit ends of pipeline.• String the pipeline with forced air or compressor.• Complete the Smart Probe mapping; pull the toolforward and backward (complete round trip) twice(for quality control purposes).• Download data, perform quality control inspections.24 Water Utility Infrastructure ManagementNovember/December 2010

The probe’s post-mission software package extracts, computes and interprets the collecteddata and allows for the seamless transfer of the collected data into various GIS databases.But the process is only the beginning. Information isthe heart of the process. The Smart Probe survey reportdeliverables include:• AutoCAD plan and profile as-built (3D referenced tothe provided survey coordinates)• PDF version of the AutoCAD depiction• Comma Separated Value (CSV) file documenting thehorizontal coordinates (X, Y) and elevation (Z) in1-ft intervals along the length of the conduit bore• Google Earth image (KMZ) file referencing the planview of the conduit• GeoUnderground , a web-based portal that allowscustomers to access subscription-based informationfrom any computer.mapping technologies andGeoUnderground web-basedsecure 3D geographic informationsystem database with Pace’senergy expertise and RidgeGlobal’s expertise in preparedness,security and resiliency tomeet the growing challengesthat businesses and governmentsface today.In September, Geospatialagreed to license its Smart Probetechnology for Florida-basedengineering firm George F.Young Inc., which will have nonexclusiveuse of the Smart Probeand GeoUnderground in theSoutheast and Caribbean.Porter said that as the technologyspreads, even more opportunitieswill arise. “The reactionwe have had from our clients hasbeen really positive,” he said.“Once they see the results, theycan begin to see what they cando with the information.”Jim Rush is editor of UIM.Looking AheadAs long as the population continues to increase, the needfor utilities will continue to grow. Additionally, aging infrastructurecontinues to be a driver in the underground pipelinerepair and replacement market. That means opportunitiesfor technology like Geospatial’s Smart Probe. “There areutilities out there tripping over each other, and it’s gettingworse by the day,” Porter said. “There is a great need tointegrate data between disparate agencies, and we are wellpositionedas a third party to be able to do that. It is a phenomenalgrowth opportunity.”Additionally, having accurate information allows betterdesigns and fewer surprises during construction. “Withgood accuracy you are able design and execute an engineeringplan and efficiency,” Porter said. “It is also fundamentalto tracking your assets and managing risk and exposure.”Geospatial this year announced a strategic partnershipwith Ridge Global, headed by former Pennsylvania Governorand Homeland Security Secretary Tom Ridge, and PaceEnergy that combines Geospatial’s Smart Probe pipelineNovember/December 2010Water Utility Infrastructure Management 25

Blue Gold RushMilwaukee Turns to Its Greatest Resource – Water – as an Economic EngineBy Jim RushMilwaukee is inextricably linked to water. The citylies on the shore of Lake Michigan and near theconfluence of the Menomonee, Milwaukee andKinnickinnic rivers. In fact, the name itself is aNative American term often translated as “gathering placeby the water.” It is this connection to water that helped driveMilwaukee into a leader in manufacturing and, perhapsmore notably, brewing.But like much of the Midwest and along the so-called RustBelt, the Milwaukee area has seen a decline as industrieshave moved south or overseas. Even the mighty brewingindustry that made Milwaukee famous has been in decline.But it is Milwaukee’s connection to water, along with theindustrial heritage it spawned, that now may be writing thenext chapter in the city’s history.Milwaukee is home to a diverse community of businesses,many of which have connections to or depend on cleanwater. MillerCoors, GE, Siemens, Veolia, ITT, JohnsonControls and IBM are but a few examples of companiesrelated to water that are headquartered or have a majorpresence in Milwaukee. And these companies, along withlocal government agencies and academia, are bandingtogether to promote Milwaukee as the “freshwater hub ofthe world.”These companies, local water/wastewater utilities and academiahave coalesced with the help of the Milwaukee WaterCouncil to foster information sharing, collaboration and acommon pathway forward. The Milwaukee Water Councilstarted as part of the “Milwaukee 7” regional economicdevelopment organization comprising seven counties in themetropolitan area. The Milwaukee Water Council came intobeing as planners began to realize the abundance of waterrelatedcompanies and academic institutions based in thearea, while at the same time executives at two of the watercompanies made the same discovery.The Milwaukee Water Council was officially launched in2007 with the mission to align the freshwater research communityand water-related industries to promote theMilwaukee region as a worldwide leader.Our Most Vital ResourceThe need for fresh water is evident; there is no substitute.Not only is it a basic necessity for life, but also for transportation,power generation, agriculture and manufacturing. Itis the foundation upon which everything else relies. Or, asthe Milwaukee Water Council puts it: “Fresh water is criticalfor health – and wealth.”This critical need is increasingly being recognized acrossthe country. In the United States, cities in the arid Southwestare turning to stringent conservation methods, water reuseand desalination to ensure a sustainable supply of water. Butthat’s not all. Cities throughout the East and Midwest areunder mandates to stop combined and sanitary sewer overflows,and in the Southeast legal wrangling is afoot overwater rights in this growing region.Worldwide, 1.2 billion people are at risk from a lack ofclean, available water, while 2.6 billion people lack access toadequate sanitation. The importance of clean water is illustratedby the sobering fact that 35 percent of people indeveloping countries die from water-related problems.In Milwaukee, the nexus of abundant freshwater, privateindustry, academia and government have led to the realizationthat becoming the worldwide hub for all things watercan position the city for future growth.At the same time the Milwaukee 7 economic developmentcouncil was exploring the connection of water-related industriesin the region, executives Rich Meeusen of Badger Meterand Paul Jones of water heating equipment maker A. O.Smith made their own discovery. Each company had its owntesting lab – Badger Meter for cold-water testing and A. O.Smith for hot-water testing – they immediately recognizedthe potential for collaboration. Meeusen and Jones were26 Water Utility Infrastructure ManagementNovember/December 2010

then introduced to the work that the Milwaukee 7 wasdoing, giving further impetus to the freshwater movement.Meeusen and Jones now serve as Co-Chairs of the MilwaukeeWater Council.“All of these companies were involved somehow in thewater cycle, which involves finding water, cleaning it, deliveringit, using it wisely, cleaning it and returning it tonature,” Meeusen said. “And because none of the companieswere direct competitors, they realized the value ofworking together to develop talent and improve technology.It’s been a huge win-win for everyone.”According to Executive Director Dean Amhaus, theMilwaukee Water Council serves as an economic developmentgroup with three primary goals: economic development,talent development and water quality solutions.EducationEducation is a key component in achieving the goals ofthe Water Council, both in terms of developing technologyand in developing a talented pool of professionals. TheMilwaukee region is fortunate to have educational andresearch institutions that can aid in the overall goals.These resources include the University of Wisconsin-Milwaukee, University of Wisconsin-Whitewater, Universityof Wisconsin-Parkside and Marquette University, as well asthe Great Lakes WATER Institute, part of UW-Milwaukeeand the largest academic freshwater research facility onthe Great Lakes. The Great Lakes WATER Institute(WATER being an acronym for the Wisconsin AquaticTechnology and Environmental Research) has origins datingback 40 years. It has the only research vessel operatingon the Great Lakes year-round, and conducts research onhow freshwater systems operate, including human impactson the systems.UW-Milwaukee and the WATER Institute this falllaunched a School for Freshwater Sciences – the first in theUnited States – that offers post-graduate courses. Theschool has nine students this fall, and Val Klump, directorof the WATER Institute and an adjunct professor atUW-Milwaukee, envisions as many as 50 to 60 students inthe future. “In forming the new school, one of the thingswe have done is broaden the scope beyond the traditionalsystem dynamics,” Klump said. “We are looking at thingslike how humans impact fresh water systems and how youmake them sustainable.“We have to engage technology because these systems aremanaged – whether deliberately or inadvertently. Naturecannot simply heal itself, so we need to employ technologyto make them sustainable.”Research conducted by the institute has included thestudy of microbial contamination and the effects of seweroverflows and stormwater runoff. Researchers have developeda molecular technique to determine the source ofcontamination, i.e. whether it is human. Oftentimes, Klumpsays, pollution was blamed on overflows from the treatmentplant, which may not have been the case. This source identificationcan also help identify cross connections, evidentwhen human signals are found in stormwater.As evidence of the emerging interest in the water sector,the institute has plans to build a $50 million addition toits harbor-front facility. In addition, a second facility willbe constructed to serve as a business incubator for waterbusinesses working with both UW-Milwaukee andMarquette University.November/December 2010Water Utility Infrastructure Management 27

The Backbone of Clean WaterInfrastructure is at the heart of clean water in an urbanarea, and as such the Milwaukee Metropolitan SewerageDistrict (MMSD) plays a vital role for the region. MMSD is aregional government agency that provides wastewater treatmentand flood management services for 28 communities inthe Milwaukee area, serving 1.1 million people in a420-square mile service area. It was originally founded in1913 as the Sewerage Commission of the City of Milwaukeeto design and build a complete sewage disposal system.Like much of the water-related industries around theregion, MMSD has been a driving force and an example forother areas. MMSD has invested some $4 billion to improveits infrastructure over the last two decades, and has beensuccessful in reducing the average number of combinedsewer overflows from 50 to 60 per year in 1993 before thefirst of its deep storage tunnels came online to 2.5 overflowsper year today.“We are continually trying to reduce the number andimpact of combined sewer overflows and we have seen asignificant improvement in the water quality,” said KevinShafer, MMSD executive director. “We have fish migratingin our rivers now, and we have restaurants opening up withriver frontage; we are seeing a real economic benefit beyondthe water quality improvement.”MMSD entered into an O&M contract with Veolia Waterin 2008, and was a key component of Veolia’s Water ImpactIndex, a new metric developed in 2010 that was designedto track the water and energy impacts of a particular business,product or community. The Water Impact Index issimilar to a Carbon Footprint Calculator in that it tracksthe total volume of water and energy used for a particularprocess. However, the Water Impact Index factors in theeffects on water quality as well as its strain on water availability,i.e. a water intensive process would have a greaterimpact in an arid region vs. a water rich region. Accordingto Veolia, “In terms of sheer water usage, the production ofpeanut candies requires 6 times more water than the productionof tomato sauce.” However, using its Water ImpactIndex, Veolia found that “tomato sauce impact is 10 timeshigher when factoring in water stress.”Veolia developed the Water Impact Index using MMSDoperations as its first case study. The idea behind the indexis to aid in identifying business locations that, combinedwith a carbon and economic analysis, increase environmentalefficiency.Milwaukee Water CouncilThe Milwaukee Water Council was formed in 2007 with the missionof aligning the regional freshwater research community and waterrelatedindustries to further establish the Milwaukee region as a worldhub for water-related research and economic development.Co-Chaired by Rich Meeusen, Chairman/President/CEO of BadgerMeter and Paul Jones, Chairman/CEO of A.O. Smith, the Water Councilhas established itself as an aggressive group dedicated to its mission.The Council has developed four standing committees: University/Corporate Linkages, Education/Talent, Global Communication andReal Estate.Below is a list of the Water Council members as of Dec. 1.Water Council MembersA. O. Smith CorporationAdvanced Chemical SystemsAdvanced Waste Services, Inc.Aero-stream LLC/Engineered Solutions, Inc.Alverno CollegeApplied Spectrometry Associates, Inc.Argosy FoundationAquarius SystemsAT&T WisconsinAssociation of Equipment ManufacturersBadger MeterBadger Meter FoundationBaker Manufacturing Company LLCCanned Water 4 Kids.orgCG Schmidt, Inc.City of MilwaukeeDavid and Julia Uihlein FoundationExede CorporationFelker Brothers CorporationFirst SupplyFoley & Lardner, LLPGannett Fleming, Inc.Gathering Waters ConservancyGeorge Williams CollegeGRAEFGreat Lakes WATER InstituteGrucon GroupHeartland Advisors, Inc.Helen Bader FoundationHGA Architects and EngineersIBMInflection Point SolutionsInSinkEratorITT Corporation - Sanitaire DivisionJohnson Controls, Inc.Kahler SlaterKenosha Area Business AllianceLynde & Harry Bradley FoundationMarquette UniversityMetropolitan Milwaukee Sewerage DistrictMillerCoorsMilwaukee Area Technical CollegeMortgage Guaranty Insurance Corporation (MGIC)Nicolet Natural Water, Inc.North Shore Water CommissionNorthern Lake Service/Water Quality Testing ServicesOberlin Filter CompanyPentair Residential FiltrationReinhart Boerner Van Deuren, s.c.Red Flint Sand & Gravel, LLCRexnordRichard and Ethel Herzfeld FoundationRockwell AutomationS-F Analytical LaboratoriesSiemensThe Nature ConservancyUniversity of Wisconsin-ParksideUniversity of Wisconsin-WhitewaterURS CorporationUWM Research FoundationVeolia North AmericaVision Search Partners, LLCVISIT MilwaukeeWaukesha Water UtilityWIPFLiWisconsin Environmental Education FoundationWisconsin Ground Water AssociationWorld Trade Center of Wisconsin28 Water Utility Infrastructure ManagementNovember/December 2010

“The Water Impact Index allows me asa manager of a major utility to haveanother tool in the decision-making processfor how we move forward, both froma programmatic standpoint and an individualproject standpoint,” Shafer said.“It allows us to see the entire picture ofour impact.”MMSD has been a pioneer in greeninfrastructure, which involves using rooftopgardens, riparian buffers and othermethods to mimic natural systems andreduce the amount of stormwater runoff,as well as the resultant non-point pollution.Milwaukee has more than 6 acres ofgreen roofs and has purchased more than2,500 acres of land along rivers that serveas a natural barrier to runoff enteringwaterways. “We are continuing to improveour traditional pipe and plant infrastructure,but we are seeing the benefits ofusing alternative methods of reducingstormwater runoff,” Shafer said.Forging AheadMilwaukee’s goal of becoming the“Silicon Valley of Water” is taking hold inother areas. Milwaukee has been namedas the North American hub for theAlliance for Water Stewardship, which is aglobal effort to develop water standardssimilar to the U.S. Green BuildingCouncil’s LEED standards, which ratebuildings on environmental factors including energy andwater efficiency.Additionally, Milwaukee is involved with the UN GlobalCompact Cities Programme, making it one of 14 cities inthe world that are tackling a wide range of issues. TheGlobal Compact cities initiative focuses on collaborationamong government, businesses and civil groups addressingurban challenges. Milwaukee was selected on the basisof its efforts to maintain and improve water quality.The city is working to create a National Center for WaterTechnology and Policy, and has been expanding relationshipswith international cities to exchange knowledge andresources.“The Water Council has raised the awareness of ourorganization and the water industry in general here locallyand regionally,” Klump said. “It has been great in gettingthe word out and generating support for our new School ofFreshwater Sciences and the building addition to theWATER Institute.“The Water Council serves to get the right peopletogether in the same room, and then they start makingconnections. The results have been really positive.”Added Shafer, “We have seen a lot of energy among theprivate side and public side, as well as individuals, inpromoting clean water. We see people focused on protectingLake Michigan, making wise investments andbuilding the economy. It has been exciting to be part ofthe metamorphosis and I am hoping for many greatthings in the future.”Jim Rush is editor of UIM.BridgesNONDESTRUCTIVEINFRASTRUCTURETESTING SERVICESWater &Waste WaterPipesCorporationTunnelsTel: 508-754-0417Email: Paul.Fisk@NDTCorporation.comWWW.NDTCORPORATION.COMNovember/December 2010Water Utility Infrastructure Management 29

Energy SavingsPerformanceContractsCash Flows for Water SustainabilityBy Lee E. FerrellSustainable infrastructure provides the quantityand quality of water necessary to meet presentneeds without affecting the needs of future generations.More than ever, the water needs forfuture generations are in peril. Cash flow to sustainwater and wastewater infrastructure has dwindled to atrickle as financial woes grip local, state and federal governmentagencies. The need for unemployment, educational,public safety, and other services has left preciousfew funds for water and wastewater infrastructure maintenanceand upgrades. Changing weather patterns,unsustainable rate structures and fluctuating industryand residential populations are trends also negativelyimpacting our nation’s water and wastewater infrastructure.The complexity and gravity of the situation is furtherenhanced by aged infrastructure, more stringentenvironmental regulations and increased demand fortreated water.A conservative 2002 infrastructure gap analysis conductedby the Environmental Protection Agency (EPA)for clean and drinking water found a respective shortfallof $122 and $102 billion dollars for each up to the year2022. Other independent organizations have estimatedthe gap for infrastructure upgrades to be even wider. Foryears local, state and federal government agencies havebeen using alternative finance arrangements such asEnergy Savings Performance Contracts (ESPCs) to reduceoperational expenditures while gaining capital expendituresfor infrastructure upgrades for education, officebuildings, courthouses and others. The governmentagencies partner with an Energy Services Company(ESCO) to fund the infrastructure upgrades with energysavings. For example, the U.S. Department of Energy(DOE) reports that more than 550 ESPC projects worth$3.6 billion have been awarded as of March 2010. Thisequates to an estimated $1.4 billion dollars savings inoperational expenditures. Because of present conditions,better technologies and processes for the treatmentof water and wastewater, ESPCs are now a veryviable financial arrangement to keep the cash flowing toupgrade our water and wastewater infrastructure andreduce operational expenditures. Our heirs are dependingon us for a sustainable water and wastewater infrastructureto support their needs for the future.ESCO and ESPC ExplanationBefore an explanation of an ESPC, ESCOs must bedefined. The EPA defines an ESCO as a company thatprovides energy efficiency related services with energysavings performance contracting as a central part of itsbusiness. ESCOs can offer other services beyond energyefficiency offerings such as engineering, design, constructionor manufacturing. However, they are only consideredan ESCO if they offer energy efficiency as amajor service offering and implement projects whileassuming some performance risk during the economiclife of the project. In addition, the EPA excludes companiesin the ESCO definition that only provide on site orrenewable energy services without including energy efficiencyservices.Traditionally, ESCOs have been very successful in theexisting buildings market segment to include K through12 schools, institutions for higher education, hospitals,municipal buildings and others. The success for ESPCswith ESCOs in the building market segment is well documented.Attention now needs to focus on the energyintensive industrial market segment for energy efficiencyand sustainability programs, none being more importantthan the water and wastewater market. The water andwastewater market is an industrial market segment thatcan consume up to and greater than a third of a municipality’soperating budget for energy alone. The waterand wastewater market energy use is 3 to 4 percent of theenergy usage in the United States and according to theEPA is 56 billion kWh equating to $4 billion annually inoperational expenditures. The success for the buildings30 Water Utility Infrastructure ManagementNovember/December 2010

segment with ESPCs can be applied to an industrial marketsuch as water and wastewater and result in a sustainablemunicipality.An ESPC is a turnkey service that incorporates systemdesign, construction and commissioning that providescomprehensive energy conservation measures to includeenergy efficiency, renewable energy and distributed generationopportunities that result in a guaranteed energysavings. The resulting savings for energy ultimately fundsthe improvements with guaranteed performance. In theevent the savings are not achieved, the ESCO will pay thedifference. In addition, the ESCO arranges the financingand finds the most flexible options for the customer. Atypical ESCO portfolio of services will usually include thefollowing:• Capital needs assessments• Energy / utility auditing and master planning• Comprehensive energy management strategy• Conversion to renewable energy sources• Project design/development/construction• Financing through guaranteed savings• Performance guarantees• Staff training• Monitoring and Verification of SavingsTo understand a customer’s needs and how to define asuccessful partnership with an ESCO, a workshop for thedecision-makers and stakeholders should be conductedwith the ESCO to understand how the ESPC will work andthe value it will bring. After the foundation of the ESPC isbuilt with a workshop, a preliminary energy audit is conductedby the ESCO to identify potential savings andenergy conservation measures (ECMs). The ESCO will thensubmit a proposal for an ESPC tailored to address specificneeds for the customer.Because of present conditions, bettertechnologies and processes forthe treatment of water and wastewater,ESPCs are now a very viablefinancial arrangement to keep thecash flowing to upgrade our waterand wastewater infrastructure andreduce operational expenditures.For municipalities, specific procurement steps will have toqualify the ESCO to move to the next step of the ESPC.After the procurement step is accomplished, an investmentgrade audit is conducted. This is a very detailed audit thatwill provide a scope of work statement along with the project’scost and the guaranteed energy savings. Once theESPC is drafted and approved by all parties, the installationperiod begins. After installation of an ESPC, monitoring2011 EducationalWebinar SeriesWatch these educational webinars from thecomfort of your own office. It’s simple and FREEfor all attendees. Go to www.uimonline.com/index/webinars to register and to view archivedwebinar sessions.FebruaryConditionAssessmentsponsored byMarchLow PressureSewerssponsored byAprilAssetManagementsponsored byMayFlow Monitoringsponsored byJuneSmart MeteringAugustEnergy Action PlanOctoberLeak DetectionDecemberPublic-Private-PartnershipsFor more information about these sessionsand to view archived sessions, please visit:www.uimonline.com/index/webinarsCall 330-467-7588 if you have any questionsregarding the UIM Webinar Series.It is free to attend a UIM webinar. If you would like a CEUcertificate for attending there will be a $10 administrative fee.It is the responsibility of attendees to contact their state approvalboards to verify whether they accept webinars for credit.November/December 2010Water Utility Infrastructure Management 31

and verification is accomplished with a complete analysisand reporting of the project’s performance, energy use andsavings. The monitoring and verification phase is conductedby the ESPC or a third party over the life of the contract orwhen terminated by the customer.Exhibit 1 is a block diagram of an Energy SavingsPerformance Contract for a municipality. Energy is used bythe wastewater treatment plant and in turn, money is paidto the Electric Utility for their services. The ESCO findsenergy conservation measures and assists the municipalitywith finance arrangements. The up-front costs for theenergy conservation measures are paid to the ESCO and theECMs are implemented. The resulting savings then fundsthe payments for the loan. The ESCO guarantees the savingsfor the life of the contract.Exhibit 1: Block Diagram of an Energy Savings PerformanceContract for a Municipality.Choosing the Right ESCOThe first step in executing a successful ESPC is choosingthe right ESCO for a mutually synergistic partnership. AnESPC is often a 10- to 20-year relationship from contractdevelopment to monitoring and verification of guaranteedsavings, as well as performance throughout the contract lifecycle. Because of the long-term relationship with ESCOs foran ESPC, financial strength and viability are a critical attributeof the ESCO. Ideally, ESCOs should have a history offinancial sustainability and strengths in the water and wastewatermarket. History of ESPC experience in all marketsegments is a key indicator of diverse financial strength andexperience. For example, industrial experience will give theESCO a wide variety of ECMs for processes that could beapplied in water and wastewater. Boiler technology, complexprocesses and combined heat and power applications(cogeneration) are just a few.Experience in the buildings market will demonstrate anESCO’s ability to implement HVAC and lighting energyreduction techniques. Further, the buildings market requiressubstantial experience in cogeneration, emergency generatorand renewable energy applications. The buildings marketwill also give ESCOs experience in obtaining LEEDBuilding Certification. LEED Building Certification hasbeen utilized in water and wastewater and will be in greaterdemand for future energy reduction projects.The ESCO should be technically competent for recognition,development and implementation of conservationmeasures for water and wastewater. Typically, water andwastewater treatment plants need a substantial amount ofelectrical energy to conduct unit processes and operations.Aeration and pumping for wastewater treatmentand pumping for water treatment are the main electricalenergy users. Because water and wastewater are motorrichenvironments, energy usage is not only a substantialoperational cost; it also must be managed properly foruse with complex motor control and monitoring for processesand pumping.ESCOs must be well versed and have experience in power,automation, power monitoring and Supervisory Controland Data Acquisition (SCADA) systems. In addition, experiencein security and other advanced software systems suchas Manufacturing Execution Systems (MESs), EnterpriseResource Planning (ERP), advanced process control, optimizationand reporting programs is essential. These systemsare critical in obtaining substantial success and savings for awater and wastewater ESPC.Trusted environmental engineering consultants should bepart of the ESCO partnership for any ESPC for water andwastewater. Consultants are actively involved in processdesigns, master plans, capacity ratings and water quality formunicipalities. ESCO/Consultant partnerships activelyenhance the success of ESPCs in water and wastewater.Choosing ESCOs with strong Environmental Consultantrelationships and partnerships should be a consideration. Inaddition, ESCOs with environmental engineers on staff willunderstand the complexity of water and wastewater morethoroughly. ESCO environmental experience will allow for abetter liaison and coordination with EnvironmentalConsultation Firms.An ESPC for water and wastewater will require a substantialamount of retrofit and expansion experience for existinginfrastructure. ESCOs with the ability to expand orretrofit multiple manufacturer’s process, electrical andautomation equipment is very desirable. ECMs involving aconfined space and the heavy investment in existing equipmentmay only be of a value in a retrofit in lieu of replacementopportunity.Water and wastewater market national as well as globalexperience is also an attribute of a qualified ESCO for waterand wastewater. The ability to pass best practices from onecountry, state or local municipality to another is instrumentalin expanding energy savings information and measuresover the water and wastewater market. Global and nationalexperience can also be used as a barometer to measurefinancial stability and viability.The Energy Efficiency Life CycleESCOs implementing ESPCs in the water/wastewater marketmust understand electric utility rates and structures.Maximizing off-peak demand, as well as load monitoringand shifting opportunities, could provide needed funds foradditional ECMs. Investigating utility rebates, as well asfederal and state grants for energy-efficient operations,could secure additional funds. At the same time, it is crucialto establish an energy usage baseline. This is accomplishedthrough an energy audit.With that baseline established, the four-step energyefficiency life cycle begins. The next two steps are imple-32 Water Utility Infrastructure ManagementNovember/December 2010

mentation of passive and active energy efficiency measures.Passive energy efficiency measures are those thatare easy to implement without automation. Conversely,active energy efficiency measures require automation andoptimization of processes. The final step is metering andmonitoring to establish future efficiency goals and keyperformance indicators, thus making energy efficiency anongoing process. Exhibit 2 is a diagram of the EnergyEfficiency Life Cycle.ConclusionEnergy Savings Performance Contracts for the water andwastewater market is complex. Energy Services Companiesmust be experienced and financially strong to execute a successfulproject. Experience in environmental engineeringand working with environmental consultant firms is a must.Further, the ability to cross national and global markets isbeneficial in understanding the complete market and allowsESCOs to understand the global and national water sustainabilityissues. To keep the cash flowing for water sustainability,implementing ESPCs with the right ESCO is critical for waterneeds for future generations.EDITOR’S NOTE: This is the first in a two-part series. Part II —“Energy Savings Performance Contracts — Cash Flows for WaterSustainability” will explain the ESCO ESPC process in detail.Exhibit 2: Energy Efficiency Life Cycle diagram outlining thefour-step process.In addition, ECMs that can be utilized in the water and wastewatermarket will be explained. Detailed discussions of renewableenergy opportunities and specialized situations for water andwastewater versus other markets will be discussed.Lee E. Ferrell, P.E., is a water and wastewater energy and processconsultant for Schneider Electric.New!Private Partnerships forPublic NeedsThis CD-ROM explains the ways in which public works agencies canpotentially benefit from these partnerships and what resources areavailable. PPP’s can accelerate project delivery, improve service quality,facilitate project finance, and transfer project risks, where appropriate,to the private sector. After completing this program, participants will bebetter able to:•Describe some of the basic PPP modelsused for transportation and otherpublic works projects•Explain what an AvailabilityPayment Program is and how itcould be utilized•Recognize the potential advantagesand limitations of PPP’sPublisher: APWAFormat: CD-ROMSystem Requirements: Windows 98,NT 4.0, Adobe Flash Player 8.0, MicrosoftInternet Explorer 5.0 or higherPrice: $69.00**Shipping and handling not included. Selling price subject to change without noticeOrder Online atwww.benjaminmedia.com/book-storeor Call 330-467-7588November/December 2010Water Utility Infrastructure Management 33

The Effective Utility Management Initiative:Past, Present & FutureCharting a Course for the Future of Water Sector Utilities in Today’s Rapidly ChangingEconomic ClimateBy Darin Thomas and Jim HorneThe intense economic realities of the “new normal” oftoday’s business environment are driving both privateandpublic-sector entities to make significant changesto their organizations and to enhance their focus onefficiently meeting their current and future challenges. Fortoday’s utility leaders, the pressure has intensified to minimizecosts and maintain high performance while simultaneouslyaddressing a long list of challenges that confront their organizations.The emerging management framework of “effectiveutility management” — or EUM — is gaining momentum andacceptance by the water utility industry as a pathway to respondto the need of continuously improving organizational performance.For utilities, the ongoing need to address industry challengesand enhance performance is not new, but what is new isthe acceleration of changes and challenges being exacerbatedby the slowdown of the U.S. economy.Conceived by the industry, for the industry, EUM is provingto be an excellent organizational framework to help utilityexecutives, governance boards, policy-makers and regulatorsfocus on ways to improve utility performance across theboard. EUM has become an effective framework to assess,plan, and implement utility change management initiativesrequired to address the needs of tomorrow’s utilities. EUM isan organizing framework that provides utility organizations amethod to plan, implement, measure and monitor organizationalperformance enhancements against 10 specific attributesof effectively managed utilities. These 10 Attributes,which were developed by a group of leading utility managersand endorsed by the U.S. Environmental Protection Agency(EPA) and six major industry associations in 2007, describe aseries of outcomes that all water-sector utilities, regardless ofsize, should strive to achieve. They include:• Product Quality;• Customer Satisfaction;• Employee and Leadership Development;• Operational Optimization (efficiency);• Financial Viability;• Infrastructure Stability (management of assets);• Operational Resiliency (safety and security);• Community Sustainability (environmental sensitivity);• Water Resource Adequacy; and• Stakeholder Understanding and Support.In addition to the 10 Attributes, the EUM framework alsodefines “The 5 Keys to Management Success” that impact theoverall performance of a utility organization. These are:• Leadership;• Strategic Business Planning;• Organizational Approaches;• Measurement; and• Continual Improvement Management Framework.EUM’s focus is to develop a strategy which combines performancearound the 10 Attributes and 5 Keys in such a wayas to establish a high performance organization.The Past: How EUM Came to BeThe origin of the EUM program can be traced back to ameeting hosted by the EPA, which took place in July 2005in Washington, D.C. The original intent of the meeting wasto convene a cross-section of utility leaders and the industry’sleading organizations to discuss perspectives, observationsand the critical needs of the utility industry as it facesa growing list of key challenges. These challenges includeaddressing aging infrastructure, rising costs, evolving regulatoryrequirements, rapidly changing workforces and populationsshifts, just to name a few. During this meeting, whichlasted a day and a half, it became apparent that the challengesfacing our country’s utilities were all very similar andthere were common themes that transcended all utilitiesregardless of geographic location or size. As the discussionsunfolded, the group began to focus on the idea that ourindustry would benefit from the development of a strategicmanagement framework that would focus on providingguidance and resources to utilities as they work to addressthe key challenges facing their organizations. More importantly,the group realized that a coalition of leading industryassociations, with support from EPA, was needed to developa common utility management framework that could helputilities of all sizes address their management and performancechallenges.In May 2006, based on discussions following this meeting,the Association of Metropolitan Water Agencies, the AmericanPublic Works Association, the American Water WorksAssociation, the National Association of Clean Water Agencies,the National Association of Water Companies, the WaterEnvironment Federation and EPA entered into a Statement ofIntent to “formalize a collaborative effort among the signatoryorganizations in order to promote effective utility management.”These collaborating organizations chartered theEffective Utility Management Steering Committee to advisethem on a proposed joint water utility sector managementstrategy that would be applicable to water-sector utilitiesacross the country. Members of the steering committee werenominated by these associations and represented a widerange of utilities. The charter of the steering committee wasto establish a framework that would allow for industry collaborationfor the advancement of the principles and practicesof effective utility management, and to encourage andpromote their wide application.In March 2007, the steering committee released its findingsand recommendations, which became the basis for continueddevelopment of the EUM initiative and guided furtherdevelopment of a sector management strategy. The steeringcommittee’s findings and recommendations included:1.2.Establishing and adopting 10 Attributes that wouldbest frame the industry’s key focus areas for managementattention for improved performance;Adopting “The 5 Keys to Management Success” that wouldprovide utility leaders with a management approach that34 Water Utility Infrastructure ManagementNovember/December 2010

has proven to be an effective way to lead organizations;3. Promoting and advocating performance measurement.The steering committee believed strongly thateffectiveness and improved performance happensmost successfully when organizations monitor andmeasure their performance over time;4. Providing the industry with a resource tool kit whichwould include both immediately useful tools and guidanceof where management related resources couldeasily be located. The steering committee believes thatproviding the industry with useful resources will helpsupport management needs; and5. Ensuring sector promotion and advocacy of the programand available resources by the collaboratingorganizations and other stakeholders. The steeringcommittee indicated that to help create incentives formanagement focus on improved performance, theindustry’s leading organizations would need to lead inthe advocacy of the EUM program through active promotion,community outreach, recognition of commitmentto management excellence, and promotion offinancial incentives from sector financial sources.Since the release of the above findings and recommendations,considerable development work has gone into therefinement and enhancement of the EUM program. Whatstarted as a meeting to discuss industry trends and share perspectives,turned into an initiative that today is changing howutilities prepare themselves to meet the needs of tomorrow’sutility customers.The Present: What Is the CurrentState of EUM?In June 2008, the collaborating organizations released theEUM Primer, which contains the majority of the EUM frameworkresources and serves as EUM’s unifying document. It wasprepared by a 16-person utility advisory group appointed by thecollaborating organizations that comprises existing or formerutility managers representing different types of utilities from differentgeographic areas of the United States. The utility advisorygroup and representatives from each of the collaborating organizationsworked in partnership to develop the EUM Primerand used the steering committee’s findings and recommendationsreport as a guide. Additionally, the establishment of theEUM website (www.watereum.org) was completed.For the past three years numerous utility organizations haveutilized the EUM Primer to help guide them to assess, audit,plan, and implement sustained organizational improvementacross the 10 Attributes and The 5 Keys to Management Successin their utilities. A number of successful case studies now existthat serve to demonstrate the benefits of EUM assessment andthe adoption of elements of the EUM framework (we willdescribe some of these case studies in more detail in Part 2 of thisarticle in the January/February 2011 issue of UIM).The collaborating organizations continue to administer andpromote this sector strategy for improved industry performance,and an ongoing effort exists to enhance and improve the EUMinitiative to ensure that its utilization results in sustained performanceimprovements for the industry, for example:• Conferences and industry awards are now using theEUM framework as a way to organize technical programsand make achievement awards that recognizemanagement excellence;• Regulatory guidelines for utility management performanceare being released that advocate the use of theEUM framework as best practice strategies;• Bond rating agencies are starting to consider EUMconcepts as a mechanism to assess the strength of autility’s management team to arrive at bond ratings;• Management audits of utilities are being organizedaround the EUM framework;• Individual utility strategic plans are being developedto address the 10 Attributes; and• Utility managers are being trained in EUM.All of the above are resulting in a growing sector interestin the EUM initiative.The Future: Where Is EUM heading?It is difficult to predict if the EUM framework will become themanagement “standard” of the utility sector in our country. It is,by design, a simple, replicable approach that allows individualutilities to assess their strengths and opportunities for improvement,and chart a measurable course for improvement. Interestin developing more sophisticated tools associated with theAttributes is growing. Building on the EUM Primer, the WaterResearch Foundation (WRF) is now leading an effort to developa benchmarking tool based on the Attributes and associated bestpractices. Once completed, this tool will allow a utility to benchmarkits own performance and gauge its efforts with other similarutilities. Only time will tell if the benefits associated with theadoption of the 10 Attributes and the 5 Keys to ManagementSuccess will truly serve to create the standard of excellence thatwill be required from tomorrow’s utility leaders. One thing isvery clear however, the pressures associated with the “new normal”of today’s economy require a departure from the status quoof yesterday. Many of the key pieces are now in place within theEUM framework that can be used today to help our industryenhance overall utility performance.Darin Thomas serves as the director of Raftelis Financial ConsultantsInc.’s management consulting division, SUNESIS. He is a recognizedauthority within the water and sewer utility industry, and formore than 25 years he has been a significant contributor to manyof the industry’s emerging technologies and services.Jim Horne has been with the Office of Water at EPA since 1988,during which he has concentrated on educating and assistingpublic entities, including water and wastewater utilities, on variousapproaches for successfully managing their operations andreducing environmental impacts.November/December 2010Water Utility Infrastructure Management 35

Making the Right ChoiceCareful Consideration Should Be Given to Choosingthe Best Pipe Material for Your SystemPipe is often overlooked but nonetheless is a critical componentof any water and sewer system. In fact, underground transmissionand distribution systems comprise a majority of thereplacement costs facing drinking water utilities today. Naturally,carefully choosing the pipe material that best fits a particularutility is not a decision to be taken lightly.To get a better perspective, UIM talked with Tony Radoszewskiof the Plastics Pipe Institute (PPI). Radoszewski has professionalexperience within virtually every aspect of the plastic pipeindustry, from development and research to literally being inthe trenches. Today, he uses his background and knowledge tolead The Plastics Pipe Institute (PPI) as Executive Director.Having graduated from St. Mary’s University in San Antonio,Texas, with a degree in chemistry, he spent his early career inthe petrochemical industry with various sections of the PhillipsChemical Co., including the polyolefin resins and pipe manufacturingdivisions. His assignments ranged from territorialsales and national sales management to director of businessdevelopment.Combining his knowledge of polymer chemistry with salesand marketing skills, Radoszewski was called on to create themarketing department for what was to become the world’s largestproducer of high-density polyethylene (HDPE) pipe. He hasalso served as president of an international marketing consultingfirm from which he was recruited to lead the PPI in 2006.metal and concrete pipe. In the case of the newer highperformancematerials such as PE4710, increased toughnessand ductility properties allow the engineer to design a systemcloser to the pipe’s ductile limits, taking full advantageof these performance improvements. In practical terms,flow capacity is increased due to thinner walls without compromisinglong-term performance. Polyamides (PA-11) arenow being approved in gas distribution systems as well.How would you rate the acceptance of plastic pipeamong consultants and end-users?The acceptance of plastic pipe is exceptionally good.Polyethylene pipe is approved and used in virtually every undergroundutility including natural gas distribution, municipalwater and sewer, storm water and electrical and fiber-optic conduitsystems. Of the 1.2 million miles of gas distribution pipecurrently in the ground, just over 50 percent is polyethylene. Fornew installations, that number is closer to 95 percent. Combined,polyethylene and PVC pipes have roughly a 70 percent marketshare of potable water systems and 85 percent market share ofsanitary sewer systems. Introduced in the late 1980s, corrugatedpolyethylene pipe has a 15 to 20 percent share of the stormwater market and continues to grow as designers and specifierslearn about its economic and performance benefits.What is the Plastics Pipe Institute? Who are itsmembers? What is its mission?Founded in 1950, the mission of the PPI is to promote plasticsas the material of choice for piping applications. As a nonprofitorganization, we act as an advocate for our members toincrease the awareness, approval and acceptance of plastic pipe.We provide a forum for our member companies to work in acooperative effort to broaden the market for plastic pipe andrelated products. Sixty years of collaboration with nationallyrecognized organizations have created worldwide standards andguidelines so that today, our members’ products serve virtuallyevery underground utility and application where pipe is used.While the majority of our member companies have highdensitypolyethylene (HDPE) interests, our organization alsoincludes a number of producers of other plastic resins and pipeincluding polyvinylchloride (PVC), chlorinated polyvinylchloride(CPVC), polyamide (PA) polypropylene (PP), and crosslinkedpolyethylene (PEX).How has plastic pipe evolved over the years? What arethe latest innovations?A primary characteristic of the petrochemical industry,of which plastics is a key faction, is the continuing developmentof new and highly engineered materials. Advancementsin molecular chemistry and catalyst technology in the basicpolymers like polyethylene and polypropylene haveimproved important design properties as well as processingrates that keep plastic pipe a competitive alternative toHow have asset management principles and the movetoward sustainability affected the plastic pipe market? Whatis the role of plastic pipe in achieving sustainability forwater/wastewater systems?Perhaps no other issue in recent times has brought greaterattention to plastic pipe than that of sustainability. Starting withjoints, typically the weakest link in any pipe system, traditionalbell and spigot system joins 10- or 20-foot lengths of pipe creatingan opportunity for leaks at every joint. PE pressure pipesystems have a zero-leak rate since the heat fusion process producesa monolithic pipeline, including fittings. This preventsloss of treated potable water and wastewater while also eliminatingsoil, groundwater and root infiltration as well.Plastic pipe also demonstrates a lower carbon footprint. Lessenergy is required to manufacture PE pipe since it melts at 270degrees Fahrenheit whereas iron melts at 2,700 degrees. Froma transportation standpoint, lighter weight plastic pipe allowsmore feet of pipe per truckload. Most states limit 40-foot trailerloads to 72,000 lbs. Forty-eight-inch diameter reinforced concretepipe used in storm water systems weighs approximately1,100 lbs per foot. Made in 8-foot lengths, this weight restrictionwould limit the load to 64 feet of concrete pipe. The same40-foot trailer would carry 120 feet of 48-inch corrugated PEpipe, cutting the number of delivery loads practically in half.Furthermore, the total weight of the load would be 3,700 lbs,thus requiring less fuel and less stress to the road. And duringinstallation, PE pipe’s flexibility and durability make it the preferredmaterial for trenchless installations including horizontaldirectional drilling, pipe bursting and sliplining. With less dis-36 Water Utility Infrastructure ManagementNovember/December 2010

uption to streets, pedestrians and traffic installation costs tendto be less expensive and at a lower energy price as well.The long-term service life of plastic pipe systems alsoenhances its sustainability. Since polyethylene pipe does notrust, it s resistant to tuberculation in water pipes. Thesetubercles are small mounds of ferric compounds that form onthe inside of steel or iron pipes. As these tubercles grow, theyroughen the inside of the iron pipe, increasing its resistanceto water flow and decreasing pipe capacity and its projectedservice life. Storm water systems are also subjected to harshchemicals and aggressive flow conditions. Polyethylene isunaffected by roadway salts, brackish water and other roadwaypollutants. It also demonstrates better resistance to abrasionthan concrete or metal, making it not only an acceptablechoice for storm water systems but also a preferred materialfor use in aggressive drainage applications.PE pressure pipe and storm sewer pipe have calculatedservice lives of well over 100 years and at the end of its servicelife, PE pipe can be recycled or used as a fuel source forwaste to energy systems.What is the most common misconception about plasticpipe? How do you seek to educate end-users about them?Because of plastic pipe’s light weight and flexibility thereis a belief it is not strong enough to handle the application.This is contradictory to fact when one considers the marketof share plastic pipe. Those designers and specifiers whohave already used plastic pipe have recognized its significantfeatures and benefits. For others, we continue to presentrelative data and case studies, either in person, at tradeshows or through media outlets to create a better awarenessof plastic pipe and how it has been used successfully in theUnited States and around the globe.What decision-making criteria should an end-userconsider when making a purchasing decision regardingpipe materials?In all candor, the first criterion is to have an open mind whenconsidering pipe materials. Familiarity brings contentment butnot necessarily the best product for the job. Advances in materials,especially plastics, are quite dynamic and provide solutionsto recurrent and vexing problems. The second criterion is anhonest and in-depth assessment of performance life. Thisrequires a full understanding (or projection) of the lifetime operatingrequirements and conditions of the pipe system along withawareness of other environmental or extraneous conditions. Forexample, what are the required hydraulic demands for the systemand will the system still meet those requirements throughoutits lifetime? What effect will corrosion, tuberculation androot infiltration have? What is the potential for leaks or soil/groundwater infiltration? How does the water chemistry or effluentaffect long-term performance? What are the soil conditionsand is the area prone to ground shift or earthquakes? The thirdcriterion is cost. Like performance life, there are many variablesthat need to be evaluated. Short-term considerations includecost of the pipe and fittings and the cost of installation.Depending on the type of pipe used, there are different optionsavailable, including open-cut and trenchless, that must be evaluated.Are there other installation requirements needed such asthrust blocks for water systems or fusion equipment to join thepipe? Long-term costs relate mostly to maintenance. If the pipeis prone to chemical attack, brittleness or infiltration, what arethe associated costs for repair and cleaning of the lines? TheNovember/December 2010fourth and last criterion must be consideration of the followingquestion: “Without compromising performance of the pipe system,which has the best impact on the environment?” Today’sowners and specifiers have a keener interest in the environmentthan ever before and designers need to be sensitive to this issue.Plastic pipe is often the best solution.How is the current economy affecting the pipe market?What are the short- and long-term prospects?Housing starts plays a key role in the demand for pipe.As an early economic indicator, our industry started seeingthe effects of the slowdown in 2006. Site development forutility installations including water, sewer, storm and gas wasdramatically hit in 2007 and of course 2008 when the wheelsfell off of the entire economy. Fortunately we serve manyother industries including oil and gas gathering and geothermalsystems that have been exceptionally strong overthe last few years. Like many other industries, we have seena rebound in 2010 and are cautiously optimistic that theongoing economic recovery will continue to increase demandfor pipe. Longer term we see the replacement market forwater, sewer and storm water systems as a significant growthopportunity. Trenchless installation, specifically pipe bursting,will be significant in the demand for PE pipe.What effect, if any, has the American Recovery andReinvestment Act (ARRA) had on the pipe market? Whatabout the water/wastewater market in general?Unfortunately from our standpoint, ARRA has a negligibleeffect for plastic pipe. It seems underground infrastructure hastaken a back seat to the more visible road work and other aboveground construction projects. Our research indicates that asignificant amount of this money has yet to be spent but we arestill not counting on any significant impact. We see moreopportunity in Clean Water State Revolving Funds andDrinking Water State Revolving Funds (SRFs). These SRFshave proven to be some of the most successful federal programsfor providing financial assistance combined with stateand local control of spending priorities. Administered throughEPA, these federally supported programs provided approximately$6 billion for wastewater and $1.4 billion for drinkingwater in fiscal year 2010. In light of the projected $540 billiongap estimated by the EPA, this is a mere drop in the bucket forwhat is truly needed. If Congress would increase the amount ofthese low interest, flexible loans we would see a tremendousincrease in demand for plastic pipe.Plastic pipe, particularly HDPE, is commonly used intrenchless installations. What trends have you seen regardingthe use of trenchless? What impact do these trendshave on the pipe market?As the awareness and acceptance of trenchless installationincreases, so does the confidence in this technique and the useof PE pipe. Starting with smaller diameter pipe (4-inch andunder) we are now seeing larger diameter pipe systems employingthis installation process. Gas utilities have been using trenchlessfor quite some time and many of the gas utility contractorsare now bidding more and more for municipal water projects.We are also seeing some assimilation between gas and waterutilities, which further brings trenchless awareness to the watermarket. As this trend continues, we anticipate increasing demandfor trenchless and for PE pipe.Water Utility Infrastructure Management 37

Challenges of the 21 st CenturyThe Aging Water Infrastructure DilemmaBy Gregory M. BairdAmerica’s economic growth in the last few decadeswas possible because of the historical investment inthe planning and the construction of our water andwastewater systems. Today’s generation, however, isnow faced with the responsibility of managing the remaininglife of these assets and selecting the appropriate maintenance,monitoring, rehabilitation, renewal and replacementstrategies for these vital underground networks.This momentous task of addressing the aging infrastructuredilemma requires overcoming many challenges especially duringthis extended economic crisis. Affordability is at the heartof the challenge. In seeking innovative ways to manage thesechallenges, utility managers are becoming asset-centric in theirdecision-making process. The asset-centric approach directlyaddresses the affordability issues by understanding the importanceand size of the infrastructure, leveraging GIS and CMMSsoftware and applying asset management practices.Understanding the Size of the IssueMost of our nation’s water and wastewater systems areunderground and had been hidden out of the public view,in many cases for over a century. This reality has not helpedthe situation or supported the admonition from waterindustry professionals and the Environmental ProtectionAgency (EPA) to start managing the increasing risks of waterloss and pipe failure. The United States installed a largenumber of pipes in three main time periods based on populationgrowth in the 1800s, 1900 to 1945, and post 1945.Due to a number of reasons including age, materials,inadequate design, capacity changes, poor installation,damage, corrosive soil and flow contents, these three eras ofpipe are starting to fail now and will continue to do so overthe next couple of decades. Cities across the nation are startingto experience the effects of water service loss and seweroverflow events. The potential hot spots include areas thathave experienced high growth. As an example, countypopulations over 50,000 had a significant amount of undergroundinfrastructure in the 1960s, but now the pipes are 50years old and experiencing significant problems.Today, the number of assets in the national network is overwhelming.There are approximately 155,000 public drinkingwater systems in the nation. Only 52,000 community watersystems and another 21,400 non-community water systems arethe main providers for the majority of Americans. There is atremendous amount of costs associated with the renewal andreplacement of our water and wastewater systems. Undergroundtransmission and distribution systems (pipes) make up themajority (57 percent) of the replacement costs. Communitywater systems include over 1.8 million miles of network pipes.The nationwide system of wastewater infrastructure includes16,000 publicly owned wastewater treatment plants, 100,000major pumping stations, 600,000 miles of sanitary sewers, and200,000 miles of storm sewers. Although there is not an actualinventory of the total amount of sewer pipe associated withwastewater collection systems in the United States, the AmericanSociety of Civil Engineers (ASCE) has developed an estimate of21 ft of sewer pipe per capita.Communities must realize the increasing costs to replacetheir infrastructure and embrace proper maintenance andcondition monitoring that will reduce the overall costs insteadof ignoring the problem and running the assets to failure.Replacing the Crisis ManagementApproach with the Asset-CentricApproachMany utility managers are striving to increase operational andcapital planning efficiencies through investing in their core processesand systems but face governing board obstacles. Eightyfivepercent of U.S. water systems are owned or controlled bymunicipalities. These elected officials with little experience withlong-term planning have initial reactions to defer projects andneeded maintenance because of their involvement of generalfund budget woes and single-year appropriations.If a major water main breaks creating a large sink hole, themedia reports the incident and the elected officials demanda response from the utility manager. This type of crisis managementcosts the utility politically and monetarily. In fact,the replacement costs have just increased three-fold as theadditional costs of the emergency mobilization of work crewsand property damage are included. As city councils are educatedon asset-centric business practices, they begin to comprehendthat the water and wastewater utilities are the mostcapital intensive industries and in order to attain cost savings,operational efficiencies and lower future risks a return toproperly maintaining our assets and extending an asset’s usefullife in a cost-effective manner is required.One of the best and most simple strategies requires leveragingthe full power of GIS. About 90 percent of U.S. water and wastewaterutilities use a geographic information system (GIS). Everyutility is actually on an asset-centric path using GIS for mapping,then tapping into the power and functionality of the geo-database,next expanding with additional GIS applications andfinally achieving an enterprise-wide operation. When the investmentin GIS is the focus and the whole enterprise is the vision,the full power of GIS tools and functionality can be employed forlong-term cost savings.A dynamic and growing trend is when the GIS geo-databasebecomes the asset inventory or registry as the starting point foran asset management program. This GIS-centric strategy combinesthe critical computer maintenance management system(CMMS) with the GIS geo-database for a comprehensive customerrequest, asset inventory and work management system.An asset registry (geo-database) combined with a CMMS createsthe foundation for an enterprise asset management system(EAMS) as promoted by the EPA. This simple and powerfulcombination captures asset data, work history and conditionassessments necessary to produce cost-effective, conditionedbasedand predictive maintenance programs.Many public works departments expand these efficienciesfrom the water and wastewater enterprises into streets, traf-38 Water Utility Infrastructure ManagementNovember/December 2010

fic, highways, signs, parks, recreation equipment, airports,marinas, fleet, electric networks and other municipal functions.Not only has this produced a considerable return oninvestment and improved financial decision-making throughapplying financial metrics to planned and unplanned maintenanceactivities, but also tracking and reporting regulatoryrequirements, tests, inspections, customer requests, projectcosts and performance. This GIS-centric strategy has beenvery successful in tracking and reporting strict complianceissues as found in California and expediting federal fundingafter disasters like Hurricane Katrina.The GIS-centric strategy when applied to asset managementprovides a reduced level of frustration and complexityfrom redundant database costs and difficulties with integratingsystems. The work history alone offers a low-cost wealthof data that provides insight on when and where to applyrenewal and replacement techniques. A GIS-centric strategyalso allows for land planning activities such as permitting,licensing, general and specific plan updates, and hydraulicmodel development. Additional asset management analysiscan be performed through a simple spreadsheet downloadfrom the CMMS to more sophisticated and advanced analyticaltools requiring interfaces and integration protocols.Capital plan projection tools should not be aged-based only,but take into consideration the condition of the asset. Assetmanagement analytical tools should avoid short cuts such asapplying original cost depreciation curves; it may work foraccountants, but managing and financing assets requiresknowing the replacement costs and a likely decay curve.Understanding the Costs ofReplacementUnder the 1996 amendments to the Safe Drinking Water Act,EPA is required to conduct an infrastructure needs assessmentevery four years. These estimates will only increase each year. In2001, the Water Infrastructure Network (WIN), a consortium ofindustry, municipal and non-profit associations, estimated up to$1 trillion over a 20-year period was needed for water and wastewatersystems, when both capital investment needs and the costof financing were considered. In the last 10 years, the requiredinvestments have not been made. In 2009, ASCE gave America’sdrinking water infrastructure a D-minus.In 2001, the American Water Works Association (AWWA)studied the replacement costs for 20 large utilities across thenation. Over the next 20 years, utilities will experience a significantincrease in renewal and replacement costs, which inturn will add additional pressure to increase rates significantly.The test for rate approving authorities will be whether they willallow a slow, gradual annual increase or face a serious rateshock scenario to play catch-up to prevent impending failuresor fund expensive repairs after the fact. As the graph suggests,one-time fixes will not work. A sustainable, long-term strategyto effectively manage our assets is required. This strategy in allof its various forms is generally called asset management.Asset Management Is a LocalResponsibilityUtilities need know the location and condition of their assets.GIS is the best place for gathering data for all kinds of assets tobe shared system-wide. Utilities need to have a proven CMMSthat leverages GIS capabilities in order to achieve an optimizedlevel of maintenance efficiencies — the optimum solution beingGIS-centric. Many times utilities may not know all of the historicalinvestments they have made in their underground infrastructure.However, the public still maintains the expectationthat the utility or municipality understands the potential risksof system failure and has a cost-effective replacement plan.Rate-payers do not assume the price they are paying for theirwater service is for an interruptible supply. As the initial cost ofa capital replacement plan is calculated, alternative green/sustainabilityprojects and trenchless technology methods need tobe explored. Specific installation, renewal and rehabilitationtechniques like microtunneling, sliplining, static pipe burstingand horizontal directional drilling (HDD) help reduce traditionalopen-trench repair and replacement costs especially inurbanized or environmentally sensitive areas.Predictive maintenance, work history analysis, conditionassessment, and renewal and replacement programs need to beestablished as part of the operating and maintenance and capitalbudget processes as a means to set performance benchmarksto extend the life of the existing assets. Typically, municipalitiesspend a majority of the time discussing the “operational” budgetswhile not separating operating costs from maintenancecosts. Very little time is spent understanding the capital budgetsand infrastructure needs. The budget focus needs to shift to along-term, asset-centric approach in order to address the aginginfrastructure issue.A robust CMMS is the key component of developing a maintenancebudget strategy that can demonstrate the importanceof properly funding a preventative and predictive conditionedbasedmaintenance program. Providing critical maintenancebudget data shows how a utility extends the life of its assets andtherefore how it controls costs. This also helps managers toprotect their budgets from arbitrary cuts even during an economiccrisis. Traditionally, managers have not had the documentedsupport to back up the statements, “If you cut this now,you will pay more later.” Transparency in utility managementpractices, if developed in the right way, can support the costefficiencies of asset management practices being producedbehind the scenes and contained within the CMMS.Meeting the ChallengeThis era of sustainability deliberation and economic downturnis not for the weak of heart. Confident and bold new leadersneed to press forward in the wake of declining public trust,political double-talk and bureaucratic red tape. Rates will needto increase, and if affordability is truly a core concern then theremust be a change from the crisis management approach of waitingfor the next sink hole and fixing it to a predictive methodologyto avoid even higher rate increases. To make this change, themunicipal and public education of the aging infrastructure issueand the required remedies and solutions need to be systematicallyand consistently brought to their attention.The asset-centric approach with full deployment of enterprise-wideGIS functionality will help policy-makers begin toconnect the dots between water and wastewater operationswith energy, land use and ecosystem planning. This holistic,GIS-centric view of managing water resources will not onlyaddress the individual parts of aging infrastructure, but alsothe complexities of other 21st century water challenges likeclimate change, water quality and ecosystem degradation andpopulation growth. As water industry professionals, we havethe accountability and stewardship to address the issues ofthis century while balancing both cost and risk.Gregory M. Baird is Managing Director/CFO of AWI ConsultingLLC. He served as the chief financial officer of Colorado’s thirdlargest utility and finance officer of California’s 17th largest city.November/December 2010Water Utility Infrastructure Management 39

CALENDAR2011January 18-21 Utility Construction EXPO ’11Las Croabas, Puerto RicoThe National Utility Contractors Association annual meeting isthemed “The Executive Experience” and is geared toward executivelevel management of utility construction firms. The event willbe held at El Conquistador Resort. Web: www.nuca.com.January 19-21U.S. Conference of MayorsWinter MeetingWashington, D.C.The annual winter meeting of the U.S. Conference of Mayors willconvene in Washington, D.C. Web: www.usmayors.org.February 1-4NACWA Winter MeetingFt. Lauderdale, Fla.The National Association of Clean Water Agencies’ WinterMeeting will be held at the Hyatt Regency Pier Sixty-Six. Thetheme of the meeting is “Understanding the New Paradigm forWet Weather & Collection System Management.” Web: www.nacwa.org.March 28-30Design-Build forWater/WastewaterKansas City, Mo.The Design-Build Institute of America’s annual conference forwater and wastewater professionals is being held in Kansas City.Web: www.dbia.org.March 27-April 1No-Dig ShowWashington, D.C.The North American Society for Trenchless Technology’s annualNo-Dig Show will be held at the Gaylord National Resort andConvention Center. The No-Dig Show is the largest event of itskind exclusively devoted to trenchless construction and repair.Web: www.nodigshow.com.May 3-4Trenchless Technologyroad ShowSeattleThe classroom seminar, live demonstration and exhibitionseries visits the Pacific Northwest. Web: www.trenchlessroadshow.com.May 4UIM ConferenceSeattleThe UIM Conference is headed to Seattle with the theme of “AHolistic Approach to Water Management.” Web: www.uimonline.com.May 8-11National EnvironmentalPolicy ForumWashington, D.C.The annual Policy Forum brings together professionals for anupdate on the legislative initiatives impacting the water andwastewater sector. It will be held at the Westin Washington,D.C., City Center. Web: www.nacwa.org.May 18-20National Pretreatment &Pollution Prevention WorkshopSt. LouisThe National Association of Clean Water Agencies will host theworkshop at the St. Louis Union Station Marriott. Web: www.nacwa.org.June 12-16ACE11Washington, D.C.Be an integral part of the future of safe water by coming toACE11 — AWWA’s Annual Conference and Exposition, the mostcomprehensive and diverse water conference in the world. Thefuture demands that the water profession be more innovative,more efficient and more prepared than ever before. At ACE11,you will gain the knowledge and vision that are essential to yourjob and to your industry. ACE11 is your connection to your professionand to the future. Contact: ph: 800-926-7337; fax: 303-347-0804; Web: www.awwa.org/July 19-22NACWA Summer Conference& 41st Annual MeetingChicagoThe National Association of Clean Water Agencies’ annual conferenceand meeting is being held at the Westin Chicago RiverNorth. The theme is “Engineered for Success ... Creating a FirstClass Public Utility.” Web: www.nacwa.org.SEPTEMBER 18-21ICMA Annual ConferenceMilwaukeeThe International City/County Management Association willhead to the Midwest for its annual conference, which has beenheld since 1914 to enable local government managers and theirstaffs to network, discuss key management issues, reviewmajor local government developments, adopt policy statementsand conduct association business. Web: www.icma.org.October 2-5NAWC ConferenceTorrey Pines, Calif.The National Association of Water Companies’ annual conferenceheads to the Hilton La Jolla. Web: www.nawc.com.October 15-19WEFTECLos AngelesWEFTEC 2011The 84th annual technical exhibition and conference of the WaterEnvironment Federation, heads to the Los Angeles ConventionCenter in Southern California. Web: www.weftec.org.October 26-29Trenchless Technologyand Pipelines InternationalConferencebeijingThe Trenchless Technology and Pipelines International Conferencewill highlight pipelines and the evolution of trenchless products,trenchless processes and trenchless projects, with emphasis onthe associated design, permitting, and construction considerations.It will be held at the China National Convention Center.Web: www.icptt.org.2012June 10-14ACE12Washington, D.C.Be an integral part of the future of safe water by coming toACE12 — AWWA’s Annual Conference and Exposition, the mostcomprehensive and diverse water conference in the world. Thefuture demands that the water profession be more innovative,more efficient and more prepared than ever before. At ACE12,you will gain the knowledge and vision that are essential to yourjob and to your industry. ACE12 is your connection to your professionand to the future. Contact: ph: 800-926-7337; fax: 303-347-0804; Web: www.awwa.org.40 Water Utility Infrastructure ManagementNovember/December 2010

PROFESSIONAL INDEXCompany Website PageBenjamin Media Resource Center www.benjaminmedia.com/book-store 33Benjamin Media Resource Center www.benjaminmedia.com/book-store 43BMI Online Buyer’s Guides www.bmi-buyersguide.com 25ConShield Technologies Inc. www.conshield.com 21CTAM www.bami-i.com/index.html 10 & 11Geospatial Corporation www.geospatialcorporation.com 2Griffin Pump www.griffindewatering.com 23Insituform Technologies Inc. www.insituform.com/water 17IPBA www.nassco.org/about_nassco/an_div_ipba.html 33Malcolm Pirnie www.pirnie.com Back coverNASTT’s 2011 No-Dig Show www.nodigshow.com 9National Clay Pipe Institute www.ncpi.org 5NDT Corporation www.ndtcorporation.com 29POSM www.posm.us 27RootX www.rootx.com 3UIM 2011 Webinar Series www.uimonline.com/index/webinars 31UIM Conference www.uimonline.com 7Renew your subscription todayFree* SubscriptionFax: 330.657.2855 | online: www.uimonline.com1. WHat is your organization’sPrimary Function(Check only one)A. Municipal Water/WastewaterSystems; Water/Wastewater UtilityB. Private Water CompanyC. Regional Sewer/Water DistrictAuthorityD. Municipal/City/County GovernmentE. State/Federal GovernmentF. Engineering FirmG. Financial InstitutionH. Legal Counsel/FirmI. Other______________________3. Are you a Government electedofficial? YES NO2. Which Title Group BestDescribes Your Job Title?(Check Only ONe)A. MayorB. CommissionerC. Council Member/ChairpersonD. City/County ManagerE. Owner/President/CEO/COO/Partner/PrincipleF. Executive/VP/Senior VPG. Director/General Manager/Superintendent/ForemanH. CFO/Treasurer/Comptroller/FinanceDirectorI. Engineer (ALL Types)J. Other_______________________PLEASE PRINT CLEARLYName:______________________________________________________________Job Title:_ ___________________________________________________________Company_ __________________________________________________________Address:_ ___________________________________________________________City:_____________________________State/Province:_______________________Zip/Postal Code:___________________Country: ____________________________Phone:______________________________________________________________Fax:_ _______________________________________________________________I want to renew/subscribe to Water Utility Infrastructure Management FREE* YES NO4.Which Underground Infrastructure Activities are you involved in(check all that apply)Signature: _________________________________________Date: _______________A. Consulting, Design & EngineeringServicesB. Drinking Water DistributionC. Financial PlanningD. Infrastructure Security SystemsE. Sewer/Wastewater Collection SystemsF. Storm Water CollectionG. Trenchless Rehabilitation &ConstructionH. Underground Utility ConstructionI. Other; Please Specify_________________________ YES, I want the UIM bi-monthly E-NewsletterE-mail:_____________________________________________________________Please allow 4 - 6 weeks for processing *This offer is free in USA & Canada. UIM1210November/December 2010Water Utility Infrastructure Management 41

COMMENTARYDesign-Build-OperateAlternative Project Delivery Method Increasing in PopularityBy Mark StraussInvestment for infrastructure has become a hot topic in theUnited States — it is widely acknowledged among opinionleaders, pundits, journalists and government and utility industryexperts. Municipalities are scrambling for funding to supportmuch-needed projects and chief among these issues, butoften less discussed, is water. Although the concern is receivingincreased attention at the federal, state and municipal levels,funding in this sector pales in comparison to the actual need.Communities across America face huge obstacles as theystruggle to provide reliable water in the face of aging infrastructure,growing demand and increasing complexity of water management.Indeed, the Obama administration has noted the criticalneed for increased investments in U.S. infrastructure, of whichwater is expected to play an essential role.While there are many public-private partnerships used in awide variety of programs and projects, including the designbuild-operate(DBO) approach.Explaining DBOThe DBO model is one solution expected to gain significanttraction over the next few years, whereby private-sector water companiesassist in the design, construction and operation of publiclyowned water facilities with the goal of creating efficiencies — namely,faster and more cost-efficient project delivery.DBOs are increasing in popularity because in comparison totraditional project delivery methods, the process of integratingthree functions into one project allows more to be accomplished.The DBO approach also creates the simplicity of the city dealingwith one entity throughout the life of the project, thereby removingthe complexities of dealing with multiple entities.In the typical DBO approach, a private-sector company competesfor an integrated single contract of a facility. Title to thefacility remains with the public sector unless the project is adesign-build-operate-transfer or design-build-own-operateproject. The DBO method of contracting is contrary to theseparated and sequential approach ordinarily used in theUnited States by both the public and private sectors.A simple design-build approach creates a single point ofresponsibility for design and construction and can speed projectcompletion by facilitating the overlap of the design andconstruction phases of the project. However, combining allthree phases into a DBO approach maintains the continuity ofprivate-sector involvement and can facilitate private-sectorfinancing of public projects supported by user fees generatedduring the operations phase.When financing is added to the project, it is secured by eitherthe public entity, in which case it becomes a DBO with publicfinancing, or the private-sector company, when the arrangementthen becomes a design-build-finance-operate (DBFO). Nomatter how the project is financed, the public entity retainsownership and ultimate control. Once completed, the DBO orDBFO contractor guarantees performance and assumes theresponsibilities of operations and maintenance.The benefits DBOs offer public-sector owners of water systemsmake for very compelling reasons to consider adoptingthis efficient, flexible and integrated approach to projectdelivery — whether building a new facility or upgrading anexisting one:Lower Costs: When design, construction and operation arehandled together from the outset, there are more opportunitiesfor efficiency. Research shows DBO projectsare delivered at or below the owner’sbudget almost twice as often as traditionaldesign-bid-build (DBB) delivery methods.And cost savings don’t end when the Straussconstruction phase is complete — decisions made during theplanning process continue to gather rewards during operation.Faster Schedules: Time is money, and both can be saved whenmany aspects of project planning, design, construction and procurementare done at the same time by the same team. All teammembers collaborate to help ensure an “operator-friendly”design and efficient construction process. The project timeframecan be shorter because all team members are involved from thestart, with no “down time” usually associated with the transitionof a project from one phase to the next in a more traditional DBBarrangement.Lower Risks: In DBOs, control of the facility remains in thehands of the owner while responsibility for performance andcompliance are with the DBO partner. Both the owner and DBOpartner can manage risk and liability through performance guarantees,insurance, the development of maximum total projectcost guarantees early on, and the implementation of qualityassurance and control processes. And with the DBO partner servingas the single point of contact, management of the project bythe owner is made easier.Need for DBOsCommunities are faced with investing vast amounts ofmoney, resources and expertise to renew their water systems.Even with the willingness to spend the money and access tocapital, many communities lack the in-depth experience todesign and/or implement such a plan on their own. The needfor partnerships in providing safe, dependable water toAmerican communities is increasing.From a business standpoint, public-private partnerships area promising area for stable growth in the water utility sector:over 90 percent of partnership contracts are renewed annually.A source at the National Association of Water Companies isquoted in Water Policy Report: “There are clear signs thatmunicipal leaders are enormously satisfied with the results ofthese contracts.”For example, in Fillmore, Calif., building upon its currentsuccessful partnership with the private sector to operate andmaintain the city’s existing wastewater treatment facility, thecity decided to partner again and on a much broader scalewith the private sector to design, build and operate the city’snew wastewater recycling facility.The U.S. Environmental Protection Agency estimates thatreplacing and repairing our nation’s aging water infrastructurewill cost about $335 billion over the next 20 years.Another $300 billion to $400 billion is needed for wastewaterinfrastructure. With 85 percent of the nation’s water andwastewater infrastructure serviced by the public sector, municipalitiesas well as state and local governments will bear thebrunt of these costs. The solution is clear: Innovation, efficiencyand value must define water and wastewater projects intoday’s economy to help ensure this critical work is done.Mark Strauss is Senior Vice President of Corporate Strategy andBusiness Development for American Water.42 Water Utility Infrastructure ManagementNovember/December 2010

Handbook of Water and Wastewater Treatment Plant OperationsThis in demand handbook is a comprehensive operator’s resource manual providing state-of-the-artinformation in an easy-to-understand format.Some topics include:• Water/Wastewater treatment information, data and new trends• Operational material and safety and health information• Process control procedures and problem-solving techniques• Numerous sample problem-solving practice sets & more!Author: Frank R. Spellman | 752 pages/softbound | Price: $132.00*Municipal Stormwater Management 2nd EditionThis best-selling resource, known as the “stormwater bible,” has been expanded and is a standalone desktop resource for the stormwater manager, designer, or planner.Some updates include:• New material on complying with the NPDES program for Phase II and in stormwater quality programs• Metric versions of many of the equations, charts and design monographs• The latest information on Best Management Practices (BMPs)• New concepts in stormwater utilities and master planningThe APWA recommends this resource to help with preparation for the Certified StormwaterManager examination.Author: Thomas N. Dedo & Andrew J. Reese | 1141 pages/hardbound | Price: $216.00*Private Partnerships for Public NeedsThis CD-ROM explains the ways in which public works agencies can potentially benefit from thesepartnerships and what resources are available.After completing this program, participants will be better able to:• Describe some of the basic PPP models used for transportation and other public works projects• Explain what an Availability Payment Program is and how it could be utilized• Recognize the potential advantages and limitations of PPPsPublisher: APWA | CD-ROM | Price: $69.00*Municipal Stormwater Self Audit: A How-to GuideTo ensure compliance with their municipal stormwater permit requirements, EPA and somestates have been conducting audits. How can you prepare? Conduct your own audit.This How-to Guide addresses:• Why EPA conducts municipal stormwater audits and what they look for• Lessons learned from past EPA audits• How and why you should conduct a self-audit• Tools to use during your self auditPublisher: APWA | CD-ROM | Price: $69.00**Shipping and handling not included.Selling price subject to change without notice.

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