A planned complementary improvement program to address the San Francisco sewer system's flooding and odor problems may be a tougher sell, however.
“We're currently assessing the scope and cost of improvements and how much ratepayers will be able to handle,” Kelly says. “While the water program was programmed to be completed as soon as possible, the wastewater work may last as long as 30 years in order to minimize rate increases.”
Though the future of federal support for water and wastewater programs is in doubt, many utilities say grants and state revolving loan programs are taking a backseat to revenue from individual and wholesale customers.
For example, the Central Weber Sewer Improvement District in Ogden, Utah, is using bonds for 95% of a five-year, $160-million upgrade of its regional wastewater system to better meet discharge requirements.
“Our needs are best served on the open bond market,” observes district General Manger Lance Wood, adding that the prospect of federal funding can be dimmed by the accompanying cost of fulfilling the programs' labor and procurement requirements.
“The timing has been good [because] we have received excellent rates for our bonds,” Wood adds.
Reasons To Be Cheerful
Another silver lining to the gloomy economy are lower materials and labor costs, which are helping offset reduced revenue streams.
“Because of the market, costs are down as much as 20% to 30%—and in some cases 50%—from the engineer's estimate,” says Steve Nielsen, director of wet distribution engineering for Citizens Energy Group, a public charitable trust that assumed operation of Indianapolis' water and wastewater treatment systems in early September.
Nielsen adds that many contractors involved in Citizens Energy's septic-tank elimination program are providing services at or near cost in order to remain in business. “That's made for an interesting project management challenge to ensure they don't cut corners,” Nielsen says. “But it has also helped us take more projects off the shelf.”