What trends are you seeing in the water industry nationally and in the West?
Water utilities face the task of supplying clean, high-quality water to our customers all day, every day, without fail. The biggest challenge to accomplishing that mission is greater uncertainty in a rapidly changing world.
One uncertainty is in the area of financial stability. Water utilities are committed to conservation and efficient water use. However, whether resulting from the economy or our conservation efforts, declining use means declining revenues. At the same time, we face increasing needs to invest in and maintain our systems. Current economic conditions bring even greater political pressure to do more with less. The federal government and congress are struggling to address the federal deficit. Municipal utilities have historically used tax-free debt to finance our capital investments. The debates in Washington, D.C., around eliminating the tax deduction for municipal debt bring additional uncertainties about the ability of municipal utilities to finance capital investment.
Another uncertainty is in the area of water supply. The challenge of over-allocation of the water in the Colorado River brings uncertainty to municipal utilities, including Denver Water, that rely on that supply to serve 35 million people and support 25 percent of the gross domestic product of the nation. Even though those utilities use only a small fraction of the water in the basin, they would be among the first to be curtailed in the event of a severe sustained shortage in supply. We’ve got to find a way to put in place the tools necessary to assure secure water supplies for these utilities.
These uncertainties are exacerbated by climate change. We know the Earth is getting warmer, but we don’t know exactly what that will mean to our water supplies. One thing that worries me is the prospect of our regulatory requirements — laws like the Clean Water Act and the Endangered Species Act — remaining static while ecosystems change. It doesn’t make sense for regulators to require water utilities to keep the environment the same when it is changing due to forces outside our control.
The changing climate also is forcing utilities to pay more attention to our watersheds. At Denver Water, we’ve partnered with the U.S. Forest Service to treat the aftermath of devastating fires, and to mitigate the possibility of further damage to our ecosystem. Utilities throughout the nation are more aware of the need to protect the water systems that serve as their sources of supply. We can no longer think of our system as only our capital infrastructure. Our watersheds are vital to our system. We need to protect them.
Finally, the uncertainties in a post-9/11 world and the prospects of natural disasters are forcing utilities to invest in security for our infrastructure and business systems, in disaster recovery, in greater redundancy to our collection, treatment and delivery systems, and in greater diversity in our portfolio of supplies. Our need to stay on top of these issues drives water rates, which get passed on to our customers.
What are your top three priorities for 2012?
Part of our ability to meet the challenge of uncertainty and deliver on our mission is to be prepared. That means we need to be strategically driven, nimble and adaptable, and accountable and responsible. We have set a goal for Denver Water to be the best water utility in the nation.
To accomplish that goal, we adopted a new Strategic Plan for Denver Water based on four perspectives: our customers, our financial strength, our organization and our external relationships. In 2012, we will be carrying through with the implementation of that plan in a way that will create an organization capable of meeting future challenges. We are revamping our budget process to be more accountable, we are implementing a new pay structure that will emphasize performance, and we will be initiating a multi-year efficiency initiative.
Another top priority will be to adopt a new Integrated Resource Plan. This plan will take a long-term look at multiple potential future scenarios based on the uncertainties we face, and will chart a course for our water supply development and capital planning.
Finally, we will be finalizing and implementing our Colorado River Cooperative Agreement with the West Slope, initiating the Water, Infrastructure and Supply Efficiency (WISE) project with Aurora and South Metro, and completing the permitting process for our Gross Reservoir enlargement project.
When you were the lead negotiator on the Colorado River Compact for Colorado, what were the most interesting issues and how did you work through them?
I spent 10 years negotiating with the Department of the Interior, the seven basin states, and California water agencies toward a plan for California to reduce its dependency on using water in excess of its allocation from the Colorado River. As a result of those negotiations, in 2001, the California agencies adopted a plan to transfer 800,000 acre-feet of water from agricultural uses to municipal uses — the largest agricultural-to-urban transfer in history. Now, California is living within its allocation.
I then worked on the three-year negotiation process by which the Secretary of the Interior in 2007 adopted new operating guidelines for Lake Powell and Lake Mead. One of the most significant aspects of these guidelines was the new ability of water agencies in the lower basin states — Arizona, California and Nevada — to store conserved and imported water in Lake Mead for later use in the lower basin. This new flexibility for the lower basin states to solve their own water supply problems creates greater certainty for Colorado and the upper basin.
Working through these issues required a lot of face time, developing relationships and building trust. It also required some hard negotiations. Fortunately, the relationships among the leadership in the basin and with the federal government are such that we were able to achieve significant progress.
What’s something people might be surprised to know about your agency?
We are driven to be the best in everything we do, even when we’re having fun. Our water took second place in a national taste test. Our team placed first in the 2011 Dragon Boat Festival, and our runners consistently win team events at road races in the area.
What's one thing the federal government could do to help your agency?
It is critical that we are able to complete the implementation of our partnership with the West Slope through the implementation of the Colorado River Cooperative Agreement. The key to that will be the successful permitting of our Gross Reservoir enlargement project.
What’s the most significant project you’ve been involved with in your career?
I had the great fortune to be able to work with a wonderful group of people as executive director of the Colorado Department of Natural Resources. We negotiated the Platte River Recovery Agreement and the programmatic biological opinion for the Colorado River Recovery Program. We created the endangered species trust fund. We brought our use of the Arkansas River into compliance with the Supreme Court decree. We negotiated two historic agreements on the Colorado River. We protected large landscapes around the state through Great Outdoors Colorado. We passed a constitutional amendment that gave the State Land Board an enhanced long-term mission in its management of 3 million acres of state trust lands.
At Denver Water, I’m energized by that same sense of mission and purpose that I experienced at the Department of Natural Resources. We have hard work ahead, but exciting opportunities to sustain a vital service to a great metropolitan area.