Water Online

May 2016

Water Innovations gives Water and Wastewater Engineers and end-users a venue to find project solutions and source valuable product information. We aim to educate the engineering and operations community on important issues and trends.

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Page 36 of 38

future proposed changes in water and/or wastewater rates would be subject to extensive governmental review and approval. Bigger Can Be Better Public systems serving a small population have little bargaining power when it comes to paying for equipment, tools, chemicals, and a host of other requirements needed to support high-quality, reliable systems. Despite their tax base, they still must provide the same basic services such as billing, customer service, and water testing as a larger utility, meaning water and wastewater service management and maintenance comes at a much higher price. As operations become increasingly complex and costly, many small systems could find it difficult to meet performance standards and sustain operations. By operating on a larger scope and serving multiple communities, investor-owned water utilities can take advantage of economies of scale and bargain to keep down construction and operation costs. Investor-owned utilities are able to procure materials such as pipe, hydrants, and fleet vehicles for less than smaller systems and also manage systems more effectively. Even with the willingness to spend the money, many communities lack the in-depth experience to design and/or implement infrastructure upgrades on their own or to operate and maintain systems that are becoming more complex due to increasing water quality requirements. With deep water industry experience, investor-owned water utilities can provide tailored, innovative solutions to meet a community's specific needs. For American Water, this includes local pipe maintenance, leak detection, water reuse technology, and much more. Along with managing and operating systems, because a primary aspect of a larger water company business is upgrading infrastructure, they accumulate skills based on operating multiple water and wastewater systems in a variety of geographic settings. In terms of resources, these water utilities maintain highly specialized staffs of scientific experts and engineers who can be made available to communities as needed. Through partnerships, municipalities gain affordable access to such expertise. Real-World Value For example, the San Clemente Dam Removal & Carmel River Reroute Project is the largest dam-removal project ever to occur in California and one of the largest to occur on the West Coast. An agreement with California American Water (CAW) and federal, state, and local agencies provides a framework to cooperatively remove the dam. It enables CAW to resolve dam safety concerns through the lowest-cost solution for ratepayers. Public agencies, led by the California State Coastal Conservancy and NOAA's (National Oceanic Atmospheric Administration's) National Marine Fisheries Service, will secure additional funds to pay for the dam- removal project. This project demonstrates that when public and private interests work together, benefits are realized far beyond what either could achieve alone. By overcoming numerous political and procedural challenges, the San Clemente Dam Removal Project can be a model for other public-private cooperative efforts. Whether regulated or market-based, acquisitions or partnerships are about providing water and wastewater solutions. American Water consistently achieves water quality results that are 13 times better than the industry average for meeting all drinking water requirements and has invested almost $1.2 billion in 2015 to improve water and wastewater systems. In May 2015, Missouri American Water announced the closing of the company's acquisition of the city of Arnold's sanitary sewer system, which added 8,800 sewer customers to Missouri American Water's operations in St. Louis County. Like many municipalities around the country, Arnold was not charging residents what it needed to keep the system up to date, especially with increasingly stringent U.S. EPA and Clean Water Act requirements coming into force. Over the next four years, Missouri American Water will invest approximately $5 million to upgrade and improve the infrastructure of the Arnold sanitary sewer system. The residents are now benefitting from outstanding customer service, stable rates (which are overseen by the Missouri Public Service Commission), infrastructure investment, and service to the community. In addition, sewer employees, formerly employed by the city of Arnold, continue to provide system operation and field services now as Missouri American Water employees. Conclusion Working with investor-owned water providers is a viable solution to a number of serious water industry problems. Investor-owned water companies can help address these challenges by offering access to capital for investment, identifying more cost-effective ways to deliver service, and providing industry expertise and experience. In working together with municipalities, investor- owned utilities can offer clear benefits to communities and remain fully committed to helping communities meet their local water and wastewater needs. n Economies of scale brought by larger entities like American Water can benefit communities. Mark Strauss is senior vice president of Corporate Strategy and Business Development for American Water, the largest and most geographically diverse publicly traded U.S. water and wastewater utility company. With more than 20 years experience in senior leadership roles for the company, Mr. Strauss oversees strategy and major growth efforts for American Water's regulated and competitive operations. About The Author 34 wateronline.com n Water Innovations INFRASTRUCTUREFUNDING

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