Post on 14-Apr-2018
• Macro Market Metrics
• The Plus and the Minus
• Fiscal Factors
• Doins’ in DC
• Global Glimpse
• They Did What?
• Futurecast
PEACEFUL EASY FEELING (Today’s Subject Matter)
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GOOD DAY IN HELL (Market Performance)
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16
14
12
10
8
6
4
2
2005 2006 2007 2008 2009 2010
% M
ark
et
Gro
wth
2011 2012
2013
The Glory Years
Bad Moon A Risin’ Stimulated
Lag and Slow
Recovery
2014
Flat
GOOD DAY IN HELL (Market Performance)
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16
14
12
10
8
6
4
2
2005 2006 2007 2008 2009 2010
% M
ark
et
Gro
wth
2011 2012
2013
The Glory Years
Bad Moon A Risin’ Stimulated
Lag and Slow
Recovery
2014
Flat
2015
thru
May (Construction)
FRAIL GRASP ON THE BIG PICTURE (Size and Proportion)
• $100 B+
• WW ~ 65%
• W~ 35%
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• $500 B+
• WW ~ 40%-45%
• W ~ 55%-60%
ENR CCI – Water/Wastewater
3-6 Month Outlook
2014 2015
Decline 13% 4%
Stable 51% 46%
Improve 35% 50%
FUNKY NEW YEAR (CCI and Confindex)
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CFMA Confindex – All Construction
2014 – 129
2015 - 131
• R+R of aging infrastructure
• Financing capital improvements
• Long term supply availability
• Public understanding of the value of water systems and services
AFTER THE THRILL IS GONE (AWWA SOTWI “Final Four”)
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Today
• 7B people
• 60% in cities
YOU BELONG TO THE CITY (Population Migration)
2050
• 9.5B people
• 70%+ in cities
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• Supply/Drought/ OneWater
• Sheer Need
• Utility Adaptability
• Available Financing
• Enforcement
• Energy
• Housing Starts
• Florida
• Public Support
BEST OF MY LOVE (The Positive Forces)
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• Conservation
• Lower Revenue
• No Regulatory Game-Changer
• Competing Causes
• Green Infrastructure
• Construction Labor Shortfall
• Public Apathy
HEARTACHE TONIGHT (The Negative Forces)
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LIFE IN THE FAST LANE (Supply/Drought/One Water)
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Restrictions
Bay Delta Plan
Bond Issue
Aquifer Depletion
Desal & Reuse
California Drought Over?!?
Water Plan
Desal & Reuse
Texas
Yampa Pump Back
Chatfield Reservoir
Colorado
Lake Mead Still Dropping
Declining Hydropower
Third Straw
Las Vegas
Wichita
Tampa
Graywater
All Water is Reused Water
THE LAST RESORT (Reuse Today and Tomorrow)
• Reuse in U.S. Today
• 60% - 70% growth over next 10 years
• DPR
• PureWater Program
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3
2.5
2
1.5
1
0.5
Florida California Texas Arizona Colorado Nevada
m³/
da
y (m
illi
on
)
Rest of US
Bluefield Research
HOTEL CALIFORNIA (Desal)
ALSO:
• 200 plants in U.S. now (150 in Florida)
• SAWS
• Growth in capacity
• Cost still a hindrance
• Double digits outside U.S.
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Santa Barbara
Huntington Beach
Carlsbad
16 plants in
approval process
TAKE IT TO THE LIMIT (Sheer Need – R&R)
• ASCE = D for W/WW
• 240,000 breaks per year
• Water Loss
• Atlanta – 31.4%
• Philadelphia – 26.5%
• NYC – 14.2%
• Etc
• AWWA - > $1 T in next 25 years
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DO SOMETHING (Enforcement)
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EPA Remains
Active
Miami-Dade •$13.5B
•15-20 years
Major WW Driver
ALCOSAN and others
coming
168 gpcpd - 1990
410 BGD - 2005
141 gpcpd – 2010
355 BGD - 2010
ALREADY GONE (Conservation)
ALSO:
• 43%- water sales declining in last decade
• 29%- water sales flat in last decade
• Consumption based rate structure -> reduced revenue
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Then to Now
LAST GOOD TIME IN TOWN (Green Infrastructure)
• Find the valves and the pumps
• Many utilities going “green”
• Integrated planning
• Community betterment
• Potential cost savings
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• During recession,
construction
unemployment >20%
• Many left, retired, won’t
come back
• Unemployment now
8.3%
• 87% - Hiring difficulty
• Skilled labor
THE GIRL FROM YESTERDAY (Labor Shortage)
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CENTER OF THE UNIVERSE (Fiscal Factors)
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- Up 6%/year since 2010 - Projection = Same
RATES
Municipal pension spending – 10%
- Construction – 2.1% - Labor – 2.5% - Materials – 1.7%
Minimal inflation
- $1.8B for FY16 - $2.36B now
SRF
- 3% of infrastructure - 54% of institutional investors have infrastructure funds - PABs
Private
Utilities breaking even
Muni bond default = 0.4%
WIFIA - Larger projects
- No money, honey
- No tax exempt funding
DESPERADO (Doins’ in DC)
4Bs - Bridge
- Bernie
- Bonds in Budget
Fracking - EPA – No negative impact
- NY - No
Suits - Chesapeake Bay
- Chicago
- Des Moines
WOTUS - Better and more clearly defined
- Power grab
- Headed to court
• Growth, but skewed
• World Bank funding
steady
• P3s common
• Activity
• Middle East
• China
• Some Europe
• Some Latin America
HOLE IN THE WORLD (Global Glimpse)
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• ENVISION
• Nuke It
• Going to the Dogs
• It ain’t Rocky Mountain Spring Water
• Climate Change Co-Conspirator
• Record Setting Bus
LYIN’ EYES (They Did What?)
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2015
SEER ENV + PW W WW
Dodge +4.0% -- --
PCA -- +2.5% +1.1%
FMI __ +2.0% +2.0%
THE LONG RUN (Futurecast)
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$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Millio
ns o
f C
urr
en
t D
olla
rs
Water
THE LONG RUN (Futurecast)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Millio
ns o
f C
urr
en
t D
olla
rs
Wastewater
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FMI Construction Forecast