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DIRECTOR’S REPORTUNDER PRESSUREBRIAN STEGLITZ, DIRECTORThe Poisoning of an AmericanCity”, “Beleaguered ResidentsScrounge for Water”, “AQuestion of EnvironmentalRacism in Flint” have I got yourattention? These are just a sample ofthe headlines in January 2016 frommajor news outlets such as TimeMagazine, the Wall Street Journal andthe New York Times. Our State andour industry are at the forefront of thenational media. When, in our history,has the water industry garneredso much media attention? It haseven been a topic discussed in thepresidential campaigns.The bad news is that the coveragehas been primarily negative and hasput our industry on the defensive.The good news is that this providesus an opportunity to take controlof the conversation and talk aboutthose issues that are most importantto us. The situation in Flint, MI hashighlighted several issues that are ofcritical importance to our industry:reinvestment in infrastructure,affordability, and the protection ofpublic health. AWWA’s Buried NoLonger Report on infrastructureindicates that the cost to repair andexpand drinking water systems willtop 1 trillion over the next 25 years.Means for funding these projects is achallenge for communities and utilitiesaround the nation. The passing andeventual implementation of the WaterInfrastructure Finance and InnovationAct (WIFIA) is a small step towardaddressing this significant need.Developing sustainable water rates8 WATER WORKS NEWS Spring 2016that support infrastructure needsis paramount. While this seemsobvious, the majority of utilitiesthrough the country are not fundingdepreciation of their assets andtherefore do not have the financialresources to reinvest in the agingand failing infrastructure. But, howdo you raise rates in communitieswhere a significant percentage ofthe population lives below thepoverty level? In concert withdeveloping sustainable rates, utilitiesmust be developing affordabilityplans for those customers in need.AWWA’s publication “ThinkingOutside the Bill” provides guidancefor utilities on assisting low incomewater customers.The third item of criticalimportance, which really is at thetop of the list, is protection of publichealth. Water utilities around thecountry produce over 400 billiongallons of treated water each day ofexceptional quality. Community watersupplies serve approximately 200million people in the United Statesand in the last recorded year of datafrom the Center for Disease Control,there were approximately 400 casesof waterborne illness. This rate is at arecord low and sets the standard forthe world. Lead poisoning is a serioushealth issue that deserves attention.While the overwhelming majority oflead poisoning comes from lead paintand dust, primarily in residentialhomes, lead in water surely shouldbe part of the conversation. Theseare the challenges that we faceas professionals in the waterprofession. It is our role to steer theconversation. I encourage you, asleaders, to spread these messages,for the benefit of our future.The situation in Flint is tragic.Without exception, people acrossthe State and Country supportFlint in their quest for safe drinkingwater. AWWA has tried to be at theforefront of the support for Flint byfunneling members interested inproviding aid to the well-organizedrelief efforts put in place. TheMichigan Section of AWWA hashosted a Water Utility Summit inJanuary, which was attended by 48people representing 21 utilities fromaround the State to talk about mediachallenges, technical challenges,and sampling procedures, and toreceive an update of the revisionof the Lead and Copper Rule byAWWA’s regulatory expert Steve Viafrom Washington, DC. The MichiganSection plans on hosting additionalevents in the Spring/Summer of2016 in response to members’requests on how to develop a leadservice line replacement programand alternatives for funding andimplementing such a program. Thesituation in Flint is dynamic, with newissues arising almost daily. The focusof AWWA has been, and will continueto be, helping to pave the way fora sustainable, reliable, and qualityfocused future for the water industry.We will get through this crisis, as wehave others, and the water industrywill be the better for it.RETURN TO TABLE OF CONTENTS

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EXECUTIVE DIRECTOR’S MESSAGECOLLABORATING TOSIGNIFICANTLY IMPROVEBONNIFER BALLARD, EXECUTIVE DIRECTORIhave come to love the waterindustry. I feel privileged to be apart of this community. Part ofmy learning about the industrywas the role that water professionalsplay in safeguarding public health. (Ifyou haven’t watched the video on thehistory of AWWA, I highly recommendit – very inspirational. http://www.awwa.org/about-us/history.aspx) So formonths, I have watched the situationin Flint unfold with a sense of surrealdisbelief. I would bet that most of youknow that our industry will never bequite the same.Rest assured, the Section and theAssociation have been busy on yourbehalf. You’ll read from the Directorand Chair about some of the actionsAWWA has taken. Our focus hasbeen and will remain laser focusedon advancing water knowledge tohelp water professionals protectpublic health. There are a numberof trainings being offered throughout2016 to help enhance all of ourunderstanding of corrosion controland the rules around lead andcopper. But another function ofAWWA, one of the more remarkableaspects I think, is the powerof collaboration.Being a part of AWWA provideswater professionals access to avast about of resources includingpublications, standards, trainings,and research. What I find mostcompelling though is the comingBadger meters and reading systems.Orion AMAE-Series M-Series .and everything else for water distribution.Pipe, Hydrants, Valves, Brass, Repair Clamps, Horns, Curb BoxesPh: 800-433-4332 Email: sales@slcmeter.comFax: 248-625-8650 www.slcmeter.com10 WATER WORKS NEWS Spring 2016together of water professionalsto learn from each other,to share their experiences,and to collaborate to create anenvironment most conducive toproviding clean, safedrinking water.In January and again in March,the Section held Water Summitsrevolving around the LCR andlead line replacement. These werehalf-day forums that used provenbest practices in adult learning:providing some delivery of contentwith facilitated discussions to helpparticipants learn from each other.(These Summits were in directresponse to the lead in drinkingwater issue, and resulted in theWorkshop scheduled for May 6.)We’re still working out the kinks,but it was inspiring to hear thediscussions onsite and to read thefeedback from these sessions. Youwill definitely be seeing more WaterSummits in the future.These are turbulent times.As communities across thecountry grapple with how bestto address infrastructure needs,customer concerns, and a lack ofconfidence in their water supply,we as water professionalscome together to supportone another through livelydiscussion, pointed challenging,and collaborative sharing.This collaboration throughour existing and growingprofessional networks is whatleads to significant improvement.RETURN TO TABLE OF CONTENTS

COUNCIL NEWSMEMBER RECRUITMENT & ENGAGEMENTBy Tina Pawlak, Vice-Chair, Member Recruitment & Engagement CouncilOur group was invited to give apresentation in Berrien Springs tothe Berrien Regional Education ServiceAgency (RESA)’s joint meeting of itsCareer Technical Education Directorsand Counselor Academy on October 22,2015. Shane Peters, Superintendent ofBridgman Public Schools worked withthe task force (consisting of myself andGary Wozniak, MDEQ Kalamazoo DistrictEngineer) during the summer to developa PowerPoint presentation on careersas an operator at a water/ wastewaterplant. Gary volunteered to give thepresentation to the group, emphasizingthat a four year college degree is notrequired for the job. He pointed outthat it is the type of job that appealsto students who like to work with theirhands and not be tied to a desk. Manyof these jobs are municipal, offeringlong-term employment with goodbenefits. Also available to counselorswas a handout detailing the wide varietyof careers in the water industry, frompipe fitters to hydrologists! This groupseemed to be an ideal target audienceso the task force will attempt to setup a presentation to a similar groupin another area of the state. Gary hasgraciously made his presentationavailable to anyone in our organizationwho would like to modify it to presentto another group (anyone interestedcan email me at tpawlak@hollandbpw.com and I will send you a copy of thepresentation). Many students don’trealize the variety of careers availablein the water environment industry andour task force hopes to increase suchawareness in both high school andcollege students.MICHIGAN SECTION AWWA NEEDS YOU!Nominations Solicited for the Michigan Section Board of TrusteesThe Nominating Committee is seekingcandidates for terms beginning inSeptember 2016 (in conjunction withthe Annual Conference) for the followingpositions: Trustees – two each for three-year terms Trustees – one for one-year term Secretary Treasurer – three-year termSelf and peer nominations are both12 WATER WORKS NEWS Spring 2016encouraged. Please also note thebylaws of the Section indicate thatone of the Board members should befrom the Upper Peninsula of Michiganand one should be either from thearea of the Lower Peninsula north ofTown Line Fifteen or from any district,area, or community in the LowerPeninsula maintaining water serviceto a population under 10,000 personsat the most recent Federal Census. Therepresentation of the Board membersis intended to reflect the diversemembership of the Section, including,but not limited to, geographical locations,membership categories, utility size, gender,and ethnic origins.A nomination should include ashort statement of interest and a briefsummary of industry and AWWA activities.Interested members are encouraged tocontact any of the Nominating Committeemembers with any questions; committeemembers are Mark Coleman (chair),Brian Steglitz , John Willemin, threetrustees, and two at-large members tobe named by the Board.Nominations are due by May 1, 2016,and should be submitted to:Mark ColemanNominating Committee Chair, MI-AWWAc/o Wade Trim Associates Inc.500 Griswold St Ste 2500Detroit, MI 48226E-mail: mcoleman@wadetrim.comPhone: (313) 961-3650Those who have submitted nominationsin previous years are reminded toplease reconfirm their interest for thecoming year.RETURN TO TABLE OF CONTENTS

COUNCIL NEWSGOVERNMENT AFFAIRS COUNCIL UPDATENeed for volunteers has never been greaterBy Molly Maciejewski, Chair, Government Affairs CouncilAflurry of proposed legislation,the Flint water crisis and annualplanning and budgeting has kept theGovernment Affairs Council busythese last few months! To help achieveour mission, we have put together asummary spreadsheet of proposedlegislation. This is merely an overview ofrelevant proposed legislation; althoughthere is a column titled “primaryimpact”, the document is not meant tobe a detailed analysis of individual billsor a position paper. We’ll update this asneeded as a way to keep our membersinformed, and will develop positionpapers on issues if they gain traction.You can find the document athttp://www.mi-water.org/?page LegReg.Another goal of the Council isadvocacy at the state and federal level.We’ll send delegates to Washington inApril to participate in AWWA’s Nationallegislative “Fly-In”, where individualmeetings are held with members ofCongress to discuss draft legislationand challenges and opportunitiesfacing drinking water systems.Our goal in the coming year is tosolidify a list of members who arewilling to assist in making legislativevisits at the local level and to ourposition on legislative issues facingthe drinking water industry. At notime in recent history has our needRETURN TO TABLE OF CONTENTSfor volunteers been greater. Currentlythere are many drinking water issuesthat either have proposed legislation orwhere legislative action is anticipated inthe very near future, and we need to beprepared to speak with our legislatorsabout these issues.Please consider helping byvolunteering to meet with yourstate representative or statesenator. Training and talking pointswill be provided so little advancepreparation is needed. If you areinterested in helping out, pleasecontact Bob Veneklasen veneklasenr@wyomingmi.gov or Molly Maciejewskimmaciejewski@a2gov.orgWATER WORKS NEWS Spring 201613

COUNCIL NEWSREVENUE STRUCTURE IN ASSET MANAGEMENTBy Asset and Infrastructure Management Committee member, Tom Traciak, Umbaugh AssociatesThe Asset and InfrastructureManagement (AIM) Committee,a joint committee of MI-AWWA andthe Michigan Water EnvironmentAssociation (MWEA), has as one ofits goals to provide information andtraining related to the development14 WATER WORKS NEWS Spring 2016of Asset Management programs. Inaccordance with MDEQ guidancedocuments, asset management iscomprised of five core components:1) Asset inventory2) Level of service3) Critical assets4) Revenue structure5) Capital improvementproject planIn this series of articles we havebeen discussing the various stagesof asset management. In many casesa substantial amount of effort willbe invested in areas such as assetinventory, infrastructure evaluation,and project criticality. After thisinformation is fully developed, theintention is to produce an AssetManagement Financial Plan. In the longterm, this financial plan will be used toset rate and fund management policy.In the short term, it will be used tofulfill certain requirements of theSAW grant program including fundingthe “gap” in rates by identifying thepotential shortfall in revenue supportfor asset investment.Rate and fund management overa forecasted period of time is theobjective of the Financial Plan. TheAsset Management data developed bythe community’s staff and consultingengineers must be transformed intoa strategic business plan designed tosustain the utility in the most efficientand cost effective manner. One of theprimary results of the engineeringreview and compilation for the AssetManagement System will be identifyingthe estimated asset investment cost byyear. This becomes the key element ofthe Financial Plan. Other informationneeded to develop a Financial Planincludes financial reports, customerdata, current rate structure, andfund balances.Historical operating expensesare reviewed using audit and budgetinformation. A “Test Year” is developedthat reflects a baseline operating cost.The customer base must be reviewed,including the number of billablecustomers and volumetric sales.The accuracy of this data is verifiedby applying it to the current ratestructure and compared to “Test Year”revenue. In addition, there are otherRETURN TO TABLE OF CONTENTS

COUNCIL NEWSvarious revenues, which will be takeninto consideration.Assumptions must be maderegarding the customer base throughthe forecasted period. The operatingcost must be projected, in part basedon anticipated inflation by expensecategory. Existing annual debt serviceby debt issue is input. Finally, theannual asset investment cost identifiedby the Asset Management Systemis added to the forecast. The annualasset investment cost will need to beevaluated and scenarios developedfor cash funding and debt financing.Funding asset investment from cashbalances must be weighed againstpotential efficiency of grouping certaincost together for purposesof financing. A critical aspect of planningis solving, not just to user rates, but to atargeted cash and investment balance.Successful rate management canbe accomplished with more than oneapproach as to rate structuring and rateadjustment timing. The elements of arate structure, including the proportionof revenue generated from ready toserve and commodity charge may bedetermined by allocation of fixed andvariable cost, and other customer basecharacteristics. It will be necessary todevelop scenarios that meet policy goalsas well financial objectives.For many communities, this finalprocess of forecasting will meanmultiple meetings with policy makersdue to decision making as to the timing,degree, and type of funding over alengthy forecasted period. Unlikecapital improvement plans that usuallyproject 5 years, the Asset ManagementFinancial Plan may be as much as 20or 30 years or more. This forecasting isnot intended to give definitive rates forthat entire period, but rather it providesthe basis for policy making in relationto user rate, utility fund, debt issuance,and cash balance management inaddressing asset investment.The AIM Committee goal is to buildIf you are interested in joiningthe AIM Committee, please contactSally Duffy at sduffy@hrc-engr.com,Jennifer Drinan at jennifer.drinan@ohm-advisors.com, or Deann Falkowskiat defalkowski@ftch.com.upon the guidance of the MDEQ withtheir Asset Management Guidance forWater and Wastewater Systems, whichcan be found on their website at: http://www.michigan.gov/deq/0,4561,7-1353307 3515 4143-10784--,00.html.Worldwide research andcollaboration gives EJ theedge in creating the bestinfrastructure solutions—witha focus on safety, functionality,and ergonomics.Learn more at ejco.com or 800 626 4653RETURN TO TABLE OF CONTENTSWATER WORKS NEWS Spring 201615

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The Michigan Water Works News is a quarterly publication of the Michigan Section, American Water Works Association. The deadline for submitting articles for the Summer 2016 issue is May 13, 2016. Material may be submitted to: Randall Roost, Lansing Board of Water & Light 730 E. Hazel P.O. Box 13007 Lansing, Michigan 48901-3007 Editor: