Calculating Costs – Part II

In Part one of Calculating Costs, we visited a project in which a city is faced with updating the treatment plant. In the scenario, the city is faced with a deficit of $53,340 per year that it has to cover. The challenge now is to figure out how the city will cover the remainder of the cost. 

One option is to raise the rates enough to cover the cost. In most cities, this would be the most unpopular route to go. I would suggest that when using this option, the time is taken to educate the public in a responsible way about how this could impact the health, welfare and safety of the community. Also, take the time to show how this would impact the environment by reducing energy usage at the facility and providing better water treatment. Inform them that the city would also be leaving $2.7 million in grant money on the table that it will have to spend at some other time to upgrade the facility. If the grant money is no longer available, that burden will fall on the city to fund it at that time.

Another option is to look for alternative revenue, such as CDs or bonds that the city currently holds. If there are none available, then selling bonds at this time could be a way of covering the cost. Also, depending on the type of sludge that your facility generates and the way it is disposed of, the sludge could be marketed and sold as fertilizer with some adjustments to make it Class A waste that is suitable for land application.

Balancing the city budget and moving unappropriated funds to this project is another way to fund the deficit. Putting other projects on hold until other funding is available for them is also an option.

Even though a lot of these decisions will not be yours to make, sometimes your idea could be the one that gives your utility the advantage or means to get the project done. Sometimes, the little things and fine details could be the difference in a project being completed or not. As passionate and responsible as most operators are, having a well-structured, well-operated and well-maintained facility would be ideal. Encouraging city officials, engineers and others of the importance of up-to-date facilities, techniques and equipment is essential. I look forward to the days when finances and politics no longer drive the decision-making in this industry.

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