The Grades Are In: Recapping the ASCE 2021 Report Card for America’s Infrastructure

Every four years, the American Society of Civil Engineers (ASCE) releases a Report Card for America’s Infrastructure.  The Report Card not only contains problems and challenges our infrastructure systems are facing (in 17 categories), but also proposes solutions for improving the grades.  The grades are in for 2021 – here’s the state of our nation’s infrastructure:


To learn more about the challenges facing our nation’s infrastructure and proposed solutions for raising the grades, you can access the full Report Card here or the Executive Summary here.

Project Spotlight | Watford City 2040 Infrastructure Master Plan

Nestled in western North Dakota in the heart of the Bakken Oil Shale Basin and roughly 15 miles from the captivating North Unit of the Theodore Roosevelt National Park lies the City of Watford City.  Watford City is a progressive and dynamic community that has experienced rapid population growth over the past decade, climbing from 1,800 in 2010 to over 7,000 today, primarily due to increased oil activity in the region during the recent Bakken Oil Boom.  The City relies heavily on gross production tax (GPT) revenues, sales tax revenues, property tax revenues, along with other general funding sources to fund critical capital and renewal infrastructure projects in their community.  With the recent oil and economic activity slowdown in western North Dakota, the City was concerned with how they were going to overcome not having the historically abundant GPT and sales tax revenue streams to support the funding of new and existing infrastructure improvements, operation and maintenance (O&M) activities, and existing and future debt commitments.

Through a competitive selection process, the City selected the Burian & Associates project team (comprised of Burian & Associates, SRF Consulting, ICON Architectural Group, and Raftelis), to develop the Watford City 2040 Infrastructure Master Plan.  The Master Plan will help the City plan and strategically implement operational and capital improvements over the next 20 years.  Specifically, this project includes the following:

  • Thorough assessments of the City’s existing wet infrastructure (water system, wastewater system, and stormwater system) and transportation networks;
  • A review of multiple City facilities, including high-level visual inspections and review of O&M processes;
  • Establishing plans for future infrastructure investments;
  • Development of a robust and integrated financial model to promote financial resiliencies;
  • And creation of a capital improvements plan and a resiliency plan to help the City improve their infrastructure systems in a methodical and cost-effective manner.

The project also includes a community engagement town hall meeting to gather public input on how improvements are funded, prioritized, and ultimately implemented.  The Master Plan will be developed over the course of 2021, with key deliverables and documents being produced at critical milestones to ensure the City can utilize the information when budgeting for 2022.

Our team is extremely appreciative of the opportunity to work alongside the City, and we are excited to support the City through a collaborative planning process to ensure a sustainable and resilient future is in store for Watford City.

The COVID-19 Financial Impact on Drinking Water Utilities

A recent report prepared by Raftelis for the American Water Works Association (AWWA) and the Association of Metropolitan Water Agencies estimated the financial impact of the coronavirus pandemic on U.S. water utilities. The report estimates drinking water utilities will suffer a loss in revenue of $13.9 billion; this equates to approximately 17% of the 2018 U.S. drinking water sector revenue total.

The financial impact on the drinking water sector will translate to further impacts on the entire U.S. economy. According to the report, the financial impacts will result in drinking water utilities across the U.S. to delay and reduce capital expenditures to help manage cash during and after the pandemic. The delay in capital expenditures will have a negative effect on economic activity in communities across the U.S., including but not limited to loss of jobs and increased infrastructure failures. It is estimated that communities will experience a reduction in economic activity by as much as $32.7 billion (annualized).

The estimated financial losses are based on data obtained from utility survey respondents of current and anticipated financial impacts, as well as general drinking water sector and U.S. census information.

Analysis Components

The analysis consisted of the following components to estimate the financial impact on the US drinking water industry (estimated financial impact bolded):

  1. Financial Losses due to Changes in Utility Policies
    Includes considerations for not shutting off water service to customers with delinquent accounts and providing forgiveness of late penalty fees. Net loss of $5.49B
  2. Revenue Loss due to Reduced Consumption
    Includes considerations for loss in revenue from non-residential customers (i.e. commercial, industrial, institutional, etc.) and increase in revenue from residential customers caused by stay at home orders for non-essential workers. Net loss of $4.74B
  3. Financial Impact of Operational Policy Changes
    Includes considerations for new operational policies such as new or additional operating hours for essential water utility staff, isolating operations staff, and providing increased compensation for essential employees (i.e. hazard pay). Net loss of $0.63B
  4. Financial Loss Due to Slower Development and Growth
    Includes considerations for a slowdown in growth and new development, which further negatively impacts the revenues of drinking water utilities. Net loss of $3.01B
  5. Economic Impact from Reduced and Delayed Capital Expenditures
    Includes considerations for reducing and/or delaying capital expenditures in order to manage cash. This component estimated total economic loss but specific loss to water utilities was not quantified

Conclusion

The total estimated financial impact on U.S. drinking water utilities is shown in the table below.

Description

Annualized Financial Impact

Marginal Cost of Non-Shut Offs $0.57 B
Revenue Loss Due to Increased Delinquencies $4.92 B
Reduction in Commercial Revenues $7.38 B
Increase in Residential Revenues ($2.64) B
Increase in Personnel Expenses $0.63 B
Reduction in System Development Charges $2.60 B
Reduction in Revenues from Reduced Customer Growth $0.41 B
Aggregate Financial Impact $13.87 B

 

Water utilities may suffer additional future revenue losses estimated at approximately $1.6 billion as a result of delaying once planned rate increases. These numbers do not include projected financial losses for wastewater utilities, which has been estimated at $12.5 billion according to the report, bringing the combined water sector and wastewater sector estimated financial impact to over $27 billion.

The information, data, and analysis used to prepare this article was obtained from the report – “The Financial Impact of the COVID-19 Crisis on Drinking Water Utilities,” prepared by Raftelis for the American Water Works Association and the Association of Metropolitan Water Agencies.