In New London, Conn., a coastal community with aging water and wastewater assets, capital planning is about managing risk within ratepayer limits. Water Daily sat down with Joe Lanzafame, public utilities director for New London, to discuss how he balances water system maintenance with long-term budgeting.
Water Daily: How do you approach budgeting for water system maintenance and capital improvements?
Joe Lanzafame: In the past, we were pretty light on the amount of funding we had for capital. In the more recent years, we've made some rate adjustments, and now we include more money in our operating budget to do what I consider “light capital projects” or things that come up that we have to find money for.
In addition, we've been taking advantage of some drinking water State Revolving Fund (SRF) loans and clean water SRF loans as of late. We have about four or five projects planned over the next five years that are all using low-interest loans with subsidies because we are a distressed community.
How do you balance near-term repairs with long-term infrastructure needs?
It's mostly a question of urgency. If it's something we know needs to get done but doesn’t need attention today, we spend more time planning that. But the way we have operated for the last 16 years is proactively reactive, if you will, because we know things are coming up, but we don't quite know what they are yet. And as they come up, we're ready to deal with them.
We're not the kind of utility that’s going to say “OK, this pump is 10 years old, it's past its useful life, so we're going to replace it now if it's still working.” And that brings challenges of running either to the left or the right of the risk line. We want to stay on the risk line and stay safe, then you can meander from that a bit depending on your budgets.
Are there specific regulatory or permit requirements that influence your capital priorities?
I would say yes, because we're always trying to target an effluent value. Take our nitrogen removal at the wastewater plant, for example. We have an entire process that focuses on removing nitrogen to levels that are required by the state.
What is one infrastructure improvement project you’re particularly excited about?
What we're doing right now is probably one of the biggest improvement and health projects the city's ever undertaken, which is the lead service line replacement program. We're replacing all the lead service lines in the city of New London.
But more importantly, we're doing a huge verification process to see where we have lead, because that's something that older cities struggle with—knowing where lead actually is. It was originally slated as a $35-million project—it's now been reduced by about $22 million because we have found less lead than we expected. The project is funded at 75% subsidy through the state of Connecticut drinking water SRF and some other funds.
The whole project to remove and identify the lead will cost the city much less than we thought it was going to be.
What is one piece of advice that you would give to other utility directors in smaller-sized cities who are facing infrastructure pressure?
Don't ignore it. Even though you might be told there's no money for it, I think people need to be made aware of the fact that infrastructure pressure is a real problem. More developed countries like ours think water is an entitlement, and it's not. Clean water is not free, it's not cheap, and it takes a lot of planning to get there.
Our water infrastructure has been neglected for decades. Since water is so accessible, people don’t use it responsibly. So I think it's really important that the real cost of clean water gets captured. My main piece of advice would be to not ignore it and identify it. The problem needs to be brought up or else we'll never get out of this cycle.
What belief about water or wastewater operations did you hold earlier on in your career that you no longer agree with?
I started my career as a consultant, and I had a very different perspective on wastewater operations then. I was always focusing on the most logical way to get to the endpoint. Now, I’ve come to terms with the fact that sometimes you have to go around the wall rather than trying to go through it. I find that I'm more open-minded to alternative solutions even though they're maybe not the most efficient.
Editor’s note: This interview was edited for clarity and length.
