Engineering Inc - May/June 2018 - 6

MARKETWATCH

More Than Water Infrastructure Design
By Gerry Donohue

T

he water utility market is remarkably bifurcated. Of
the more than 51,000 community water
systems in the United States, 17 percent serve 92
percent of the population, according to industry
data. These systems are in urban and suburban
areas, boast diverse and growing rate-paying bases
and have the size and expertise to access both public
and private funds to invest in their infrastructure.
The remaining 43,000 systems sit at the opposite end of the
spectrum. They tend to serve small communities-fewer than
10,000 customers-face a shrinking rate structure, struggle to
comply with myriad federal regulations and have difficulty pursuing outside funding opportunities.
"When I meet with the utility general managers, I ask what
keeps them up at night," says Craig Close, national director of
HDR's Utility Management
Services Business Unit. "The
bottom line is they have
so many needs. They don't
know what to prioritize."
The challenges the utilities
face are an opportunity for
engineering firms. In addition to providing traditional
design services, Close believes
engineering firms can act as a
public works department of
sorts, providing a broad spectrum of services to the small
community water systems.
"We wear many different
hats," says John McCarthy, president of water for Arcadis North America. "We provide
financial consulting services, long-range planning, bond finance
strategies, rate hike planning, regulatory compliance and asset
management."

Of the more
than 51,000
community
water
systems
in the United
States, 17
percent serve
92 percent of
the population

water still does not resonate with most citizens and stakeholders,"
says McCarthy. "They see water as a product, rather than an asset
that underpins the social, environmental and economic pillars of
society."
Second, America's smaller cities, towns and rural areas have
been losing population for decades, so they have fewer customers
to cover the cost of their existing infrastructure, let alone make
new investments.
Third, while urban systems tend to be densely packed, small
town and rural systems have far fewer customers per mile of pipe,
making maintenance and repairs more expensive.
Finally, the 2008 economic crisis hit municipal water systems
hard. Between 2009 and 2014, capital spending fell by 22 percent, statistics show. It has since rebounded-in fact, municipal
bond offerings are at an all-time high-but they dug themselves a
deep hole.
BRIDGING THE FUNDING GAP

Municipal water systems face a lot of rate-rise resistance-going
back to the failure to articulate the value of water-but Close says
they have no option. "Rates will have to go up to afford what they
Estimated Construction Put in Place
1st Quarter 2018 Forecast
Change from prior year-current dollar basis
Water Supply

6

ENGINEERING INC.

MAY / JUNE 2018

3%
-2%

2015

-2%

2016

-5%

2017

-9%

2018

-3%

2019

2%

2020

3%

2021

3%

2022

2%

Sewage and Waste Disposal

ROCK AND A HARD PLACE

According to a recent Rand Corp. report, local utilities fund the
design and construction of more than 95 percent of the nation's
water infrastructure, primarily through municipal bonds. State
governments pick up most of the rest. To cover the maintenance
and operations costs, as well as to service the debt, the systems rely
on customers.
For many small community utilities, however, the numbers
don't add up.
First, rates in the vast majority of systems don't cover the maintenance and operations and debt costs, and there appears to be
no path to reach that equilibrium. "Unfortunately, the value of

2013
2014

2013

Source: FMI

1%

2014

3%

2015

5%

2016

-7%

2017

-13%

2018

-1%

2019

2%

2020

3%

2021

3%

2022

4%



Table of Contents for the Digital Edition of Engineering Inc - May/June 2018

Engineering Inc - May/june 2018
Contents
From Acec to You
Market Watch
Legislative Action
2018 Annual Convention Recap
Acec 2018 Engineering Excellence Awards
Smart City Solutions
Mastering Business Communications
Powering Up Puerto Rico
Personal Philanthropy
Mergers and Acquisitions
Members in the News
Business Insights
Engineering Inc - May/June 2018 - Intro
Engineering Inc - May/June 2018 - Engineering Inc - May/june 2018
Engineering Inc - May/June 2018 - Cover2
Engineering Inc - May/June 2018 - Contents
Engineering Inc - May/June 2018 - 2
Engineering Inc - May/June 2018 - 3
Engineering Inc - May/June 2018 - From Acec to You
Engineering Inc - May/June 2018 - 5
Engineering Inc - May/June 2018 - Market Watch
Engineering Inc - May/June 2018 - 7
Engineering Inc - May/June 2018 - Legislative Action
Engineering Inc - May/June 2018 - 9
Engineering Inc - May/June 2018 - 2018 Annual Convention Recap
Engineering Inc - May/June 2018 - 11
Engineering Inc - May/June 2018 - 12
Engineering Inc - May/June 2018 - 13
Engineering Inc - May/June 2018 - 14
Engineering Inc - May/June 2018 - 15
Engineering Inc - May/June 2018 - Acec 2018 Engineering Excellence Awards
Engineering Inc - May/June 2018 - 17
Engineering Inc - May/June 2018 - 18
Engineering Inc - May/June 2018 - 19
Engineering Inc - May/June 2018 - 20
Engineering Inc - May/June 2018 - 21
Engineering Inc - May/June 2018 - 22
Engineering Inc - May/June 2018 - 23
Engineering Inc - May/June 2018 - 24
Engineering Inc - May/June 2018 - 25
Engineering Inc - May/June 2018 - 26
Engineering Inc - May/June 2018 - 27
Engineering Inc - May/June 2018 - 28
Engineering Inc - May/June 2018 - 29
Engineering Inc - May/June 2018 - 30
Engineering Inc - May/June 2018 - 31
Engineering Inc - May/June 2018 - 32
Engineering Inc - May/June 2018 - 33
Engineering Inc - May/June 2018 - 34
Engineering Inc - May/June 2018 - 35
Engineering Inc - May/June 2018 - 36
Engineering Inc - May/June 2018 - 37
Engineering Inc - May/June 2018 - 38
Engineering Inc - May/June 2018 - 39
Engineering Inc - May/June 2018 - 40
Engineering Inc - May/June 2018 - 41
Engineering Inc - May/June 2018 - 42
Engineering Inc - May/June 2018 - 43
Engineering Inc - May/June 2018 - 44
Engineering Inc - May/June 2018 - 45
Engineering Inc - May/June 2018 - 46
Engineering Inc - May/June 2018 - 47
Engineering Inc - May/June 2018 - 48
Engineering Inc - May/June 2018 - 49
Engineering Inc - May/June 2018 - Smart City Solutions
Engineering Inc - May/June 2018 - 51
Engineering Inc - May/June 2018 - 52
Engineering Inc - May/June 2018 - 53
Engineering Inc - May/June 2018 - 54
Engineering Inc - May/June 2018 - 55
Engineering Inc - May/June 2018 - Mastering Business Communications
Engineering Inc - May/June 2018 - 57
Engineering Inc - May/June 2018 - 58
Engineering Inc - May/June 2018 - 59
Engineering Inc - May/June 2018 - 60
Engineering Inc - May/June 2018 - 61
Engineering Inc - May/June 2018 - Powering Up Puerto Rico
Engineering Inc - May/June 2018 - 63
Engineering Inc - May/June 2018 - 64
Engineering Inc - May/June 2018 - 65
Engineering Inc - May/June 2018 - Personal Philanthropy
Engineering Inc - May/June 2018 - 67
Engineering Inc - May/June 2018 - 68
Engineering Inc - May/June 2018 - 69
Engineering Inc - May/June 2018 - Mergers and Acquisitions
Engineering Inc - May/June 2018 - 71
Engineering Inc - May/June 2018 - 72
Engineering Inc - May/June 2018 - Members in the News
Engineering Inc - May/June 2018 - 74
Engineering Inc - May/June 2018 - 75
Engineering Inc - May/June 2018 - Business Insights
Engineering Inc - May/June 2018 - Cover3
Engineering Inc - May/June 2018 - Cover4
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0919
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0719
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0519
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0319
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0119
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1118
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0918
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0718
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0518
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0318
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0118
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1117
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0917
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0717
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0517
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0317
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0117
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1116
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0916
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0716
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0516
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0316
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0116
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1115
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0915
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0715
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0515
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0315
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0115
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1114
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0914
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0714
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0514
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0314
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0114
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1113
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0913
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0713
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0513
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0313
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0113
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1112
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0912
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0712
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0512
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0312
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0112
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1111
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0911
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0711
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0511
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0311
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0111
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1110
http://www.nxtbook.com/nxtbooks/acec/engineeringincSeptOct
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0910
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0710
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0510
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0310
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0110
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1109
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0909
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0709
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0309
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0109_v2
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0109
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1108
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0908
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0708
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0508
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0308
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0108
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1107
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0907
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0707
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0507
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0307
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0107
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0505
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0305
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1105
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0306
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0105
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1103
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0906
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0903
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0703
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0106
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0506
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0503
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0303
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0904
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1104
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0704
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0504
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0304
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0905
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0705
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0104
http://www.nxtbook.com/nxtbooks/acec/engineeringinc1106
http://www.nxtbook.com/nxtbooks/acec/engineeringinc0706
http://www.nxtbookMEDIA.com