Customers, costs among water and sewer challenges

By Justin Wiedeman

The Atlanta Journal-Constitution

The scope, size and importance of the Watershed Management Department to the city’s future cannot be overstated.

The department’s revenue, anticipated at nearly $520 million in fiscal year 2010, is nearly equal to the general government fund.

The challenges facing the next administration include a massive debt load; some of the highest water and sewer rates in the United States; continuing with compliance obligations; and a high rate of customer dissatisfaction. The administration should:

1. Tackle retail customer service disputes and ratepayer dissatisfaction.

The April 2009 Watershed Audit by KMPG found 29,000 customers due a credit, while more than $50 million due the department had not been collected. The city recently executed a consent order addressing overbilling of customers.

a. Reallocate resources to comply with the order and resolve disputes largely involved with estimated billings.

b. Enhance collections efforts.

c. Overhaul the retail business of the watershed department by soliciting pro-bono assistance from our corporate stakeholders, such as Georgia Power.

2. Reduce operations and capital improvement costs.

The watershed department’s operating costs (excluding consultant and franchise fees) have ballooned 81 percent to nearly $207 million per year from fiscal year 2003 to FY 2008.

KPMG’s audit identified “water losses” of 10.2 billion gallons per year, equivalent to more than 100,000 residential swimming pools. And it included 83 recommendations, as well as the department’s projection of capital expenditures estimated at $2 billion over the next 10 years.

a. Allow Atlanta businesses to compete for contracts to operate and maintain facilities against city personnel (commonly referred to as marketization).

b. Determine the status of the 83 recommendations included in the April 2009 audit, and conduct regular external audits.

c. Conduct a water loss audit.

d. Establish a Technical Advisory Committee to review capital projects, basis of design, cost opinions, procurement and other information.

3. Storm water management and flood control.

Recent events illustrate the importance of protecting the public from flooding. The city recently invested about $500 million to expand the combined storm water and sewer overflow facilities for the exclusive purpose of water quality control.

a. Work with FEMA to update flood maps and seek federal funding for disaster cleanup and future mitigation efforts, such as land acquisition in flood plains.

b. Move forward with a storm water utility to provide a funding source for operations, maintenance and capital projects.

A focus on customers, reducing the burden on ratepayers and steps to address storm water flooding should be the foundation of the next administration’s plan to move forward.

Justin Wiedeman is senior vice president of Wiedeman and Singleton Inc.