Rate Optimism From Municipalities

February is always a landmark issue of Underground Construction. We always print plenty of extra copies, yet we always run out. We’re bombarded by requests as to when the issue will be posted online and/or can they get a PDF of a particular article.

That article is the annual Municipal Survey, unique to this industry for several reasons. It is typically the only detailed research study concentrating on just the underground sewer, water and storm water piping infrastructure systems. We don’t include information on residuals, biosolids management, TMDLs, climate change, membrane technology, nutrient removal and microconstituents – those areas of concentration dominate the Water Environment Federation and the American Water Works Association and that’s best left to them. We focus on what we do – and understand – best: the installation, replacement and rehabilitation of underground pipes.

The Muni Survey is utilized as a benchmark by numerous state and Federal agencies as well as world-wide consultants and market research analysts. And that’s great. But the real value, for those willing to read and comprehend with an open mind, are the perspectives being provided by sewer and water project owners across the United States. For smart contractors, vendors and consulting engineers, this is valuable data that should be processed and reacted to in a positive manner for those wanting to push their business to another level and better serve their industry.

This year’s survey offered standard data sprinkled with a few surprises. For example, ultra-violet cured-in-place pipe didn’t register well in some of the benchmarks, including use or experience with the product. But that’s understandable as the product is still fairly new to the market. UV CIPP started out with gusto but has faded since. While interest levels are high, confidence levels remain low until more market penetration and experience is gained.

One surprise was the sharp drop in confidence levels that cities have with their consulting engineer and contractor partners. That should send out an immediate warning for those in these professions. The Great Recession brought money shortages unseen for decades among cities and a perception developed that their partners were shaving corners and sacrificing quality when the money was tight. Of course, it’s hard to blame contractors and consultants who were struggling to survive. But the unfortunate perception of job performance – right or wrong – is something that all should strive to immediately address.

Speaking of money, while obtaining adequate funding strongly remains the No. 1 concern for municipalities, they also believe that better times are ahead beginning in 2014. Many prognosticators expect a flat year for sewer/water/storm water construction, but survey results indicated that municipal officials representing cities small to large, actually expect significant boost in their 2014 spending. It’s been many years since that scenario was in place.

There are many reasons for the anticipated spending increase. Perhaps the most evident is that cities have been holding back dollars out of fear that the continuity of their funding base could be maintained. Now, as economic stability has finally taken hold for many areas, city officials are becoming more confident while the state of their infrastructure systems has decayed even further. Desperation and fear of the EPA are powerful motivators.

In all fairness, some of that confidence could quickly slip away if our congressional impasse continues. Much of the blame has to lie with intransigent leadership from both Congress and the President. After six years of a new administration, you can’t shift the blame for economic woes any longer. By now, people don’t care who is to blame. All they know is that elected officials in place have become more of an obstruction than a solution. The slow crawl back to a healthy economy is years overdue. Too many personal agendas at play from all parties involved and too little motivation to truly work in the best interests of the people that elected you runs rampant throughout our national, even state, officials.

Another interesting twist for the economy of the sewer and water infrastructure industry involves the courts allowing the city of Detroit to file for bankruptcy. Interested parties are wondering how that situation is going to be resolved and who is going to be left holding the bag for the city’s debts, many of which include infrastructure? How will essential services be covered and will pension funds remain solvent at current levels? There are many questions and not very many answers right now, especially with other cash-strapped cities also considering bankruptcy as an option.

But for now it is a new year with new hope unseen for some time. My New Year’s toast is that the new-found optimism is justified and sustainable.

Related Articles