Consolidation is a real option for many small systems–if it’s their decision

This blog post, by NRWA Deputy CEO Matt Holmes, was part of an announcement on the Guiding Principles and Briefing Paper for the Strengthening of Utilities through Consolidation by US Water Alliance on February 25, 2019.

Last summer, I was fortunate to be able to participate in a dialogue examining Utility Strengthening Through Consolidation. The US Water Alliance brought together industry leaders for an important discussion in a historic setting at the base of the Golden Gate Bridge outside of San Francisco, California.

I’ve written before that it’s a difficult time to be responsible for managing a small water system. A combination of high-profile events and the public’s immediate access to information (sometimes accurate, sometimes not) has put a spotlight on longstanding challenges. The rhetoric tends to hit small communities the hardest. After all, they represent the largest percentage in the overall number of community water systems. Language like fractured, siloed, struggling, unsustainable, and distressed is an unproductive way to approach the issues we all need to tackle. In the past, some advocates have portrayed small and rural systems as dangerous violators that need to be assisted by larger utilities to survive.

Identifying anyone as “the problem” is counterproductive. Any narrative that says “everyone like this is bad, everyone like this is good” creates more separation. Ostracizing communities based on size, economics, or disadvantaged status is against the stated intentions of many advocates for consolidation as a solution. In order to be successful, utility consolidation must be about creating unity. All parties need an equal place at the table if we want to make durable, forward thinking solutions.

Two small water system managers attended the dialogue and conveyed their views. Clarence Aragon manages the Mora Mutual Water and Sewer Works Association in the mountains of northern New Mexico. Mora is an unincorporated community, partially served by Clarence’s system through 375 connections. The area has long been considered economically distressed . It also has a proud history of Hispanic settlement since 1835 and is the county seat. Clarence related his experience with consolidation over the past decade, as Mora has grappled with the costs, benefits, and consequences of a more regional approach.

“The responsibility of complying with the Safe Drinking Water Act and the Clean Water Act rests here,” Clarence explained as the manager and sole operator. “No excuses. What is missed sometimes in these conversations is the complexity in these small systems – treatment technology, overlapping regulatory requirements, economics, and political reality.” Clarence’s perspective on the challenges facing small systems is far-reaching and impossible to relate in a short article. I believe the other water sector leaders really heard and acknowledged his contribution to the dialogue. Clarence drove home the point that small systems serve the communities they and their families live in. They are the most invested in solving the challenges they face; and any solution must have this local support.

Bud Gillin also attended the dialogue as the manager of water and sewer operations for the Confederated Salish and Kootenai Tribes, located on the beautiful Flathead Indian Reservation in Montana. Bud brought a different perspective on the importance of local determination through tribal sovereignty. He underscored how water management is culturally important to many small and rural communities. For the Salish and Kootenai Tribes, these ways of life have been developed over generations of observation, experimentation, and spiritual interaction with the natural world.

Bud pointed out that large and small systems have very different problems. “The national news has highlighted systems that serve many more thousands of people than our rural systems,” Bud said. “Their focus should be on solving big-picture problems that require millions of dollars to fix. They in turn should allow the professionals like Clarence and myself the opportunity to obtain funding in an affordable scenario geared to our ability to repay for our rural systems. Together, large and small, we can solve all the clean water issues.”

The main thing I learned from the leadership dialogue was that many of the players expected the three of us to be uniformly opposed to consolidation. On the contrary, I believe today’s water utility professionals are open to considering consolidation if they feel it will benefit their customers. Our main goal in participating in the dialogue was to convey that local decision-makers are in the best position to determine what is best for their communities – a sentiment firmly conveyed in the Alliance’s latest report, Utility Consolidation: Briefing Paper. Many State and National Rural Water Association members serve as national models in creating mutually beneficial partnerships. All options should be on the table, including consolidation.

The value of these discussions is bringing people together to understand each other’s viewpoints and create conversations that otherwise would not take place. With the pendulum swinging right now towards highlighting differences, I’m grateful to the US Water Alliance in providing leadership that brings the industry closer together in pursuit of real solutions. America – large and small, rural and urban – is not fractured. Just look at the response in Florida to Hurricane Michael for the most recent example of utilities helping utilities. Rural Water will continue to embrace practical solutions in a responsible manner, while striving to be the best.