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By Robert E. Morency, Ph.D.

Editor’s note: This article is the second in a series of articles on “Five things you can do to improve your utility.” The author of this article provided five action items and an additional one for a complete package of ways to make general improvements. The first article, “Five things you can do to save on energy in your utility” (Rural Matters 2012 issue 2, page 13), is available at www.rcap.org/energyinutilities

Here are the first six steps that any small, rural utility – wastewater, drinking water, solid- waste management, etc. – should consider taking to improve its services. These linked steps can help with the general operations and management of the utility. The order in which they are listed is significant, although there might be some overlap in many cases.

1. Get the opinion of your state primacy agency.

Primacy agencies are the designated regulatory authority in each state and are charged with developing rules and regulations for the public’s health as well as for the safety-related functions of a utility. Primacy agency staff conduct periodic inspections and pass along to the utility the results and their suggestions on what the system needs to do to come up to modern-day standards.

Because the standards are continually evolving and changing, due mostly to actions taken by the primacy agency, representatives of the agency are the first source for advice on what your system needs to do to be in compliance (i.e., a modern utility, meeting the current standards, and capable of sustaining itself into the future).

While imposing and enforcing rules and regulations on utilities can be viewed as something adversarial, consider primacy agency staff your friends. They have the utility’s – and the public’s – best interest at heart. These governmental structures are an important way that our country has chosen to use to attain certain standards for utilities and to protect the health of its citizens.

2. Get technical assistance.

Your state’s primacy agency can point you in the direction of free or low-cost assistance. Technical assistance providers, such as the staff of the nationwide RCAP network, work in coordination with the primacy agencies as a way of helping to reduce the cases of non-compliance, thus working to protect the public’s health. So technical experts are a second piece of the puzzle that fits with the first piece – primacy agencies.

In many cases, technical assistance may solve the problem at hand and will point you in the direction of deeper and more permanent technical, managerial and financial solutions to the problems of running a small, public utility. 

3. Form a committee or strengthen an existing one.

If a single individual is operating your utility, you are running a great risk of being overwhelmed by new regulations. Besides, it’s just not a good business practice – and you should consider your utility a business – to have only a single person with all of the knowledge and skills to run the system.

Despite jokes about the products of committees, it is almost universally recognized that the more points of view that can bear down on a problem, the more likely that the best solution will be found. While many communities rely on a board or the town council to oversee the water system, the 1996 Amendments to the Safe Drinking Water Act introduced a new level of complexity to managing the affairs of a system. Appointing an advisory committee, made up of three to five interested citizens and working with a technical assistance provider, has proven to be an effective means of becoming informed about the issues facing utilities, and even rescuing troubled systems from the brink. 

There are many instances of community leaders beginning a career of public service after serving on such a committee. A committee’s work can have a significant, positive impact on the quality of life in the community.

4. Contract with professionals.

Free or low-cost technical assistance can take you only so far. Part of a technical assistance provider’s job is to let you know at what point you should seek and be prepared to pay for a professional – an engineer, hydrogeologist, lawyer, accountant, etc.

Initially, the fees for professional services will have to come from the utility’s operating budget. As a project proceeds, however, professional services can be rolled into the project’s cost and will then either be at no cost (if the funding is through a grant) or become part of the utility’s debt-service payments.

By attempting to do too much without competent professional help, you will certainly spend more over the long term.

5. Identify and prioritize areas of need.

Working with a technical assistance provider and a professional engineer, for example, the committee should take a hard look at the present state of the system’s infrastructure. Customer complaints may point you in the direction of which problem to address first. The results of a sanitary survey or a persistent compliance problem are also points to be aware of in the assessment. An attitude survey taken of your customers may give you an idea of the extent of a problem.

Planning for future compliance may point out what outlays will need to be made to meet new regulations. For example, maximum contaminant levels of uranium and arsenic were set at lower levels, and many systems fell out of compliance and were required to build new facilities. Getting technical assistance can help you become aware of any new regulations that may be coming out so that you can make plans as soon as possible to remain in compliance.

6. Explore funding options.

In any given state, there are usually very few choices for funding work on a utility. Among them are:

• community development block grants (CDBG)
• the U.S. Department of Agriculture Rural Utility Services Water and Waste Loan and Grant Program
• state revolving loan funds (SRF)
• bond banks
• private lenders (i.e., banks).

Your situation may make you eligible for one or more of these options. Eligibility is dependent on such factors as:

• the income level of the users
• the rates being charged
• the utility’s level of indebtedness
• the amount of money being sought
• the nature of the project.

It is worth taking the time to consult with the agencies providing funding in order to find creative ways of “leveraging” funds. For instance, using loans as matching funds to improve grant eligibility, or providing self-funding where it might do the most benefit in terms of eligibility (i.e., self-payment for the installation of water meters). Funding agencies are more than willing to work with systems to assist with application requirements and to provide specific information on what the terms of a loan are (payback schedules, reporting requirements, administrative matters, etc.).

Summary

These six steps can be thought of as belonging to three stages:

1. Information gathering: Asking your primacy agency for its opinion and getting technical assistance
2. Taking action to synthesize the information: forming a committee and contracting with professionals
3. Informed decision-making: Identifying and prioritizing needs and exploring funding options

Once the decisions have been made and a project or a strategy has been identified, there is still a lot of challenging work to be done. However, if you have been wise to get help and advice, you will be in a decision-making role and will have the guidance of regulators, technical assistance providers and consultants, all of which will make the job easier. In fact, there are many examples of communities that have been strengthened by such an undertaking.

Morency is a Water Resources Specialist for RCAP Solutions, the Northeast RCAP.