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FY 2011 Budget Request Act and Budget Support Act of 2010
Testimony as prepared for delivery on Apr. 30, 2010.
Introduction
Good afternoon, Chairperson Graham and members of the Committee on Public Works and Transportation. My name is George Hawkins, and I have the pleasure of serving as the second permanent general manager of the District of Columbia Water and Sewer Authority — commonly known by our acronym as DC WASA.
Mr. Chairperson, you know from my days of appearing before you as director of the District Department of the Environment that I take every job I do very seriously. Yet until I assumed this role last October, I had never been in a position so inspiring and humbling at the same time. Simply put, I am part of a team responsible for delivering a service to a group of people that numbers in the millions. And it is a service without which those millions of people cannot live.
My staff says I am fond of using the phrase "water is life." I do so because no three words can more simply or eloquently explain the importance of our work.
Who We Are
Since the days of its inception in 1996, DC WASA has existed as an independent instrumentality of the District Government. We are governed by a Board of Directors with 11 principal members and 11 alternates. The entire board, including the chairman, is appointed by the Mayor of the District of Columbia. The suburban board members, 5 principals and 5 alternates, are appointed based on the recommendation of the chief executives of the jurisdictions they serve. These suburban members also do not vote on issues that exclusively affect the District.
Operations and Infrastructure
DC WASA purchases treated drinking water at wholesale from our federal partner, the Washington Aqueduct, which is a unit of the U.S. Army Corps of Engineers. We then deliver this water through our pumping stations and pipes to our retail customers in the District of Columbia. We also operate the world's largest advanced wastewater treatment plant, at Blue Plains, for the benefit of our customers in the District and several suburban jurisdictions.
Blue Plains occupies 153 acres at the southern tip of the District of Columbia, on the shores of the Potomac River. The job of this facility is to take an RFK Stadium-sized volume of wastewater on an average day; treat it; and return it to the Potomac River just one disinfection step short of being clean enough to drink.
In addition to Blue Plains, DC WASA water infrastructure encompasses
- more than 1,300 miles of water pipes;
- 36,000 valves;
- five pump stations;
- five reservoirs;
- four storage tanks;
- and more than 9,000 public fire hydrants.
- 1,800 miles of sewer lines,
- nine wastewater
- and 16 stormwater pumping stations.
Finances
DC WASA's proposed operating budget for Fiscal Year 2011, which begins in October, is $398.1 million. This represents a $25-million increase over Fiscal Year 2010, fully half of which comes from increased costs in debt service.
Our capital improvement plan calls for spending of $3.8 billion over the next 10 years, the bulk to projects covered under environmental mandates or designed to avert disaster. These include the Long-Term Control Plan, which will reduce by 96 percent the number of combined-sewer overflows into the Anacostia and Potomac Rivers and Rock Creek. We also plan to build a biosolids digester at Blue Plains that will turn waste into fuel, making DC WASA the largest generator of renewable electricity in the metropolitan area. This project will generate enough energy to power 26,000 homes.
The remaining $650 million in capital spending goes to water infrastructure. This will allow us to replace our water mains — the average age of which is 76 years old — at a rate twice the national average. I implemented this relatively aggressive schedule, which triples the current replacement speed. But it's important to note that this timetable will still take 100 years to replace the entire system — something that needs to be improved upon in order to ensure the system's integrity for current and future generations. Absent more investment in both wastewater and water infrastructure, DC WASA will rely on ratepayers to fund these projects.
Which brings me to the difficult decision recently made by our Board of Directors to propose a rate increase for FY'11. If implemented, the average residential user's bill will go up less than nine dollars a month, based on the use of about 5,000 gallons of water. While we are sensitive to the needs of our customers in hard economic times and have two growing programs to provide aid to those who need it most, we all need to ask a key question: What is a fair price for a life-giving resource, a resource that is largely invisible unless a problem occurs?
Our proposed 2011 rates still leave the average water bill at a quarter of an electricity bill, a third of a cell phone bill, and half a cable bill. An interruption in these other services is generally inconvenient, but an interruption in water supply could be catastrophic.
The Board proposed this budget in February. Following a lengthy public input process that ends with a public hearing June 9, the Board will vote on our rates in September, and they will become effective in October.
I am pleased to report as well that I preside over an agency whose bond ratings keep climbing year after year, and whose cash balance is adequate for our day-to-day expenses. I would like to offer a public word of thanks to my predecessor, Jerry N. Johnson, without whom none of DC WASA's financial stability would be possible.
Criticism
The Washington Examiner had this to say about DC WASA just last week:
The agency has a long history of problems. As recently as 2004, it was accused by federal environmental officials of breaking laws regarding the reporting of lead levels in the water. The agency has also been blasted for not being able to get water into the city's hydrants.
To this day, it is rare that I have a conversation with a customer or an elected official about DC WASA that doesn't touch on the lead-in-water crisis of 2004. Our agency's failure to adequately communicate with stakeholders during that crisis has left a legacy of mistrust we are still working hard to overcome. This, despite the lessons we've learned about our relationship with the Aqueduct — which actually treats the drinking water we sell — and about the relationship between water chemistry and the pipes we have in our homes and businesses. This, despite the fact that our water has met and exceeded federal standards for lead for the past five years.
We have also received a fair amount of criticism in recent years over the state of the District's fire hydrants. With more than 9,000 hydrants in public space, DC WASA has replaced, upgraded, or committed to replace or upgrade all of them, at a cost of nearly $60 million. I need to point out that our fire hydrants are subject to a complete inventory inspection annually. As a result, at any given moment, fewer than three percent of hydrants are out of service. Our goal is one percent. But the age of a hydrant and its inspection schedule don't make a bit of difference if the fire department doesn't know where to find it in an emergency. This is why we are using state-of-the-art technology, including handhelds and laptop computers with geographic information systems, to help firefighters find the resources they need. The public can also visit our website and download a Google Earth application that lists the location and status of every fire hydrant in the District of Columbia.
A New Approach to Customer Service and Accountability
Aside from the safe, cost-effective delivery of water and wastewater services to our District and suburban customers, my number one priority as general manager of DC WASA is to restore public confidence in our agency and our product. I would hold our drinking water up to that of any major city. District residents have every reason to be as proud of DC water as residents of San Francisco or New York are of theirs. I know this will not be an easy task, but I believe it is possible.
The first step in this process has been to increase our level of communication with our customers. The District of Columbia, with its high concentration of renters and multi-unit condominiums and co-ops, presents a special challenge in this area. Many, if not most, of the people we serve do not receive a bill from us, so we lose one of the most effective means of reaching them right off the bat.
Nonetheless, we are expanding our efforts in other areas to compensate. Two recent water-quality events that necessitated caution, but not alarm, help illustrate my point. The first was last winter's boil-water advisory in Shepherd Park. To avoid even the slightest risk to the public, we advised our customers in a specific neighborhood to boil their water before drinking or cooking with it. We did this by using the mass media and listservs, but also by going door-to-door, repeating the process when we lifted the advisory. A boil-water advisory is the second-most troubling piece of news a water utility can deliver to a customer, which might explain why DC WASA had never used one prior to my tenure. Still, we thought our customers had the right to know the risk.
The most troubling piece of news a water utility can deliver to a customer is a do-not-use advisory, which is exactly what we did last week after a chlorine spike in our Fort Reno pumping facility. Working closely with Region III of the United States Environmental Protection Agency, we notified customers in Upper Northwest out of an abundance of caution. We anticipated no public health impacts, but decided to provide as much precautionary information as we could, as quickly as possible. Again using mass media, listservs, the District Government alert system and going door-to-door, we spread word of the advisory to the public. We shrank the affected area through testing of water quality until we were able to lift the advisory entirely. The process took just a few hours. To date, we have yet to receive news of a customer whose health was affected by the chlorine spike. Yet we put out the notice because it was the right thing to do.
For our customers to trust us, they need to hear from us, but they also need to be able to reach us. Our 24-hour call center answers more than 10,000 calls a month — the majority in 45 seconds or less. We have inaugurated our Facebook and Twitter services for customers to give us feedback online, and we plan soon to launch a feature where a different DC WASA staffer will be online to answer public questions once every week.
We will also be answering public questions about our rates, water quality, infrastructure, customer bills, and how to get a job at DC WASA at our series of town hall meetings in every ward. These meetings began last night in Ward 8. In many cases, the ward councilmember has agreed to co-host the meeting with us. We have also met with the DC Building Industries Association, the Apartment and Office Building Association, the Federation of Civic Associations, and several business improvement districts. An aggressive, proactive public outreach process like this one has never been attempted in the history of our organization. And it's just the beginning.
Conclusion
It has been six months and 11 days since I took the helm of the District of Columbia Water and Sewer Authority. Not a day goes by that I don't learn something new. With a system as large, complex and old as ours, it is a given that things will go wrong. To expect otherwise is to be disappointed — almost like expecting it never to rain. That's why a true measure of our success will be how we structure our repairs and replacement to avoid unplanned service outages; how quickly and effectively we respond when beset by a system breakdown; and how well we keep our customers informed of what is happening.
My favorite part of the job so far — aside from learning and seeing the various pieces of the massive infrastructure we own — has been getting to know, supporting, and representing the people of the enterprise.
My team and I have conducted what I call the Team Blue Project in the last few months, visiting every department of DC WASA and meeting with nearly half of our employees — without their managers. Re-establishing lines of communication with our front-line and implementing their suggestions is a process that will likely take years, but I mention it here because I want you to know that a great agency cannot be great without great people. The folks who turn the valves, operate the plants and keep the books are among the best I've encountered in the world. They serve all of us, as DC WASA's customers, and it is my pleasure to serve them as their leader.
This concludes my prepared remarks. I want to thank you for the opportunity to testify, I have submitted written responses to your list of questions, and I look forward to answering any additional questions you or the other committee members may have.