IAMU - cdn.ymaws.com...city or its agencies. This includes practices such as ... A utility must...

Vol. 4 No. 3 Fall 2019

In This Issue:Conducting Rate Studies ...............8Manganese Testing ......................10Spotlight: Harlan ...........................16 Ransomware ................................18De Soto’s Wastewater Upgrades...20High School Career Info ...............22

IAMUConnection

A Focus on Finance

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IAMUConnection IOWAASSOCIATION OF MUNICIPAL

UTILITIES

1735 NE 70th Ave., Ankeny, Iowa 50021515.289.1999 (p) | 515.289.2499 (f)

[email protected]

Fall 2019 u 3

Vol. 4, No. 3 Fall 2019

ContentsCalendar of Workshops..............................................4

Letter from Troy DeJoode, Executive Director..............5

Dollars & Sense:The Value of Municipal Utilities..................................6

Conducting Rate Studies...........................................8

Manganese Testing:What Water Utilities Need to Know...........................10

IAMU Safety Group Insurance Program ....................12

Iowa Municipal Gas Utilities Execute $614 Million Prepay Transaction................15

Member Spotlight: Harlan Municipal Utilities............16

Ransomeware: Is Your System Prepared for an Attack?...................18

De Soto’s Wastewater Plant Upgrades....................20

IAMU Offers Career Information Materialsto Iowa High Schools................................................22

Register Now for Earth EX III/19...............................23

Rate Setting & Fiscal Planning for Water Systems ...24

Meet the New IAMU Staff Members.........................29

IAMU Members Enjoy a Day Out on the Greens.......30

Welcome New Associate Members...........................31

Publisher: Jill Soenen – [email protected]: Jennifer Cronin – [email protected]

CirculationIAMU Connection is published four times a year – in March, June, September, and December.

IAMU Staff*All staff can be reached by phone at 515-289-1999 or 800-810-IAMU.

Executive Director: Troy DeJoode – [email protected] of Finance: Dawn Hyler – [email protected] Counsel: Tim Whipple – [email protected] of Member Services: Dave Hraha – [email protected] of Member Communications: Jill Soenen – [email protected] of Member Security & Critical Infrastructure Protection: Russell Saffell – [email protected] of Energy Services: Jeremy Caron – [email protected] Program Specialist: Bob Hiatt – [email protected] Training & Program Specialist: Dave Swanson – [email protected] Services Coordinator: Rod Parcel – [email protected] Services Compliance Specialist: Nick Vandegriff – [email protected] Services Specialist: Steve Marsh – [email protected] Improvement Representative: Dave Eaton – [email protected] Specialist: Steve McLaughlin – [email protected] Specialist: Paul Kittelson – [email protected] Specialist: Margret Meade – [email protected] Specialist: Justin Schoenrock – [email protected] Specialist: David Hiatt – [email protected] Specialist: Don Heck – [email protected] Coordinator: Nathan Berry – [email protected] Coordinator: Jim Silvers– [email protected] Safety Coordinator: Amanda Hickman – [email protected] Specialist: Jennifer Cronin – [email protected] Assistant: Chris Pham – [email protected] Accountant: Jamie Van Dusseldorp – [email protected] Services Specialist: Kathy Hoffman – [email protected] Assistant: Meredith Hibbs – [email protected] Services Assistant: Alyssa Taber-Steuhm – [email protected] Services Assistant: Shanna Bollwinkel – [email protected] Technology Specialist: Josh Trout – [email protected]

Advertising

For advertising information, contact Jen Cronin at 515.289.1999 (office), 616.610.2546 (cell), or [email protected].

Got a story idea? IAMU is always looking for topics of

interest to cover. Contact Jen Cronin at [email protected].

4 u IAMU Connection

2019 IAMU Calendar of Workshops*Month Workshop Date

October

Safety NCCER Mobile Crane Operator Certification Classes Oct. 7 - 11

Broadband Fall Broadband Meeting Oct. 10

Electric/Gas 7th Annual Energy Conference Oct. 23 - 25

All City & Utility Insurance 101 Webinar Series - General Liability, Public Official, Law Enforce & Umbrella

Oct. 28

November

All City & Utility Insurance 101 Webinar Series - Auto (Physical Damage & Liability) and Crime

Nov. 18

Water 25th Annual Water & Wastewater Operator’s Training Workshop Nov. 19 - 21

December

Safety NCCER Mobile Crane Operator Certification Classes Dec. 9 - 13

All City & Utility Insurance 101 Webinar Series - Cyber Dec. 16

*Dates subject to change. Check the Events section on the IAMU website (www.iamu.org) for up-to-date event specifics.

PresidentMike Litterer – Cedar [email protected], 319.268.5206

Past PresidentJack Hedgecock – Mount [email protected], 319.385.2121

First Vice PresidentTami Allison – [email protected], 563.785.6213

Second Vice PresidentJim Zeutenhorst – [email protected], 712.930.3842

Secretary/TreasurerScott Tonderum – [email protected], 641.743.2914

DirectorsDon Kom – [email protected], 515.239.5171

Chad Cleveland – [email protected], 712.841.4610

Josh Byrnes – [email protected], 641.832.3731

Steve Tjepkes – [email protected], 712.243.1395

Gage Huston – [email protected], 563.263.2631

Steve Pick – [email protected], 712.580.5800

IAMU Board of Directors

Upcoming Observancesu Public Power Week Oct. 6 - 12, For more information, go to www.publicpower.org > Education & Events > Public Power Week

u Public Natural Gas Week Oct. 6 - 12, For more information, go to www.apga.org > Events > Public Natural Gas Week

Fall 2019 u 5

The Financial Side of Utilities

Troy DeJoodeExecutive Director

Troy DeJoodeExecutive Director

The Iowa Association of Municipal Utilities exists to support and strengthen

all aspects of municipal utilities. Part of our mission includes providing assistance to help members to understand and navigate the financial aspects of municipally owned and run utilities.

There is a lot that goes into running a municipally owned business – considerations that private-sector organizations do not have to follow. Municipal

utilities must adhere to many – and often changing – processes, procedures, reporting requirements, thresholds, deadlines, and more. It can be tricky to keep on top of everything along with juggling the many, many other duties that municipal utility professionals are tasked with covering.

This summer, IAMU held a “Managing Your Utilities” Conference for city clerks, utility clerks, and city administrators. The two-day workshop covered a whole host of administrative topics, many of which focused on finances.

Here are just a few highlights taken from the “Managing Your Utilities” Conference. Read over the rest of this issue of IAMU Connection Magazine for other, more in-depth articles on utility finance-related topics.

General Municipal Law 101 - Troy DeJoode, IAMUu A city utility or a combined utility system may not pro-vide use or service at a discriminatory rate, except to the city or its agencies. This includes practices such as offering discounts to a subgroup (e.g., seniors). A utility must treat similar classes of people similarly.

Competitive Bidding Best Practices - Kristine Stone, Ahlers & Cooneyu You cannot split a project into separate projects to avoid the bidding requirements. u You do not have to bid out engineering design services for a project, but you should consider using the RFP or RFQ process.u If a project is funded with federal dollars, federal procurement procedures must be followed in addition to Iowa rules.

Open Meetings/Open Records - Brett Toresdahl, IPIBu If you’re in doubt, hold an open meeting. Always err on the side of an open meeting.u Retreats are public if a quorum is present and policy is discussed.

u Each body (councils, boards, committees, etc.) must designate a lawful custodian for its records and must publicly announce who holds that responsibility.

Disconnections, Liens, Offsets, & Payment Plans; Oh My! - Amy Kahler, Des Moines Water Works; Kari Woodard, Coon Rapids Municipal Utilitiesu If a property owner sells a property and has an unpaid utility bill on that property, the utility can place a lien on any other property that the individual/group owns in the state of Iowa.u Iowa’s Income Offset Program can be used to collect delinquent utility payments. The Iowa Code directs the Department of Administrative Services, State Accounting Enterprise (DAS-SAE) to establish and maintain a procedure to collect against any claim owed to a person by a state agency and then apply the money owed to the person against the debt owed by the person to the state agency (or a utility). Nearly all payments from the state of Iowa can be held and used – including lottery/casino winnings, vendor payments for goods and services, Great Treasure Hunt payments, tax refunds (only the Iowa portion), and Department of Human Services payments.

Disconnections/Payment Agreements/Service Area/Deposits - David Lynch, BrownWinicku A public utility furnishing gas or electricity cannot disconnect service to a residence if there is an inability to reconnect service the same day if the bill gets paid, if there is severe cold weather (20 degrees or colder), if it will impact the health of a resident, or when one of the heads of the household is a service member deployed for military service.

Landlord/Tenant Issues - Alex Kornya, Iowa Legal Aidu A public utility cannot turn off service to a rental property just because a landlord requests it, even if service is in the landlord’s name. A utility must verify an eviction order has been issued. A landlord should be able to provide a copy of the order.

These are just a few of the tidbits that conference attendees learned about during the two-day “Managing Your Utilities” Conference. If you or someone from your utility or city didn’t attend the event, you can always contact IAMU with your finance-related questions or issues. The IAMU team is here to assist you by answering your questions, helping you with your issues, or directing you to the source who can.

6 u IAMU Connection

“A utility that doesn’t have to maximize profits is free to prioritize reliable service and to develop least-cost business models. This in turn helps communities achieve long-term objectives such as quality of life, economic growth, and affordability.”

– Tim WhippleIAMU General Counsel

Dollars & Sense: The Value of Municipal UtilitiesBy Tim Whipple, IAMU General Counsel

Iowa’s municipal utilities provide great value to their communities and make

significant contributions to economic growth. IAMU’s 541 water utility members provide affordable, high-quality drinking water to millions of people daily across the state. IAMU’s 136 electric utilities deliver over 7 million kWh of electricity to almost a half million people annually, and they do so at some of the lowest average rates in Iowa.

Municipal utilities contribute millions of dollars to local school districts, city budgets, and community and economic development projects through payments in lieu of taxes, and they pay sales and use taxes like other businesses do.

Iowa’s municipal utilities are owned by the communities that they serve, operate on a nonprofit basis, and employ thousands of people in stable, well-paying jobs. They invest hundreds of millions of dollars annually in local infrastructure and public improvement projects. They contribute to economic growth not just by direct financial contributions, employment and job creation, and infrastructure investment, but also by helping our communities stay competitive in a global economy through high-quality services, low overhead costs, and affordable rates.

But municipal utilities don’t just make money for their communities, they also make sense. The mission of an investor-owned utility is ultimately to make a profit for its shareholders. By contrast, the mission of a municipal utility is to do what’s in the public interest by providing the best and lowest cost service possible to the residents and businesses of the community that owns it. A utility that doesn’t have to maximize profits is free to prioritize reliable service and to develop least-cost business models. This in turn helps communities achieve long-term objectives such as quality of life, economic growth, and affordability.

A municipal utility also allows a community to control its own destiny. Critical decisions such as increasing rates or investing in new capital projects can be made in City Hall instead of at a state agency in Des Moines or in a Wall Street board room. Citizens can debate and determine

whether to build a new treatment plant or create a new energy efficiency program, and all projects can be designed and built with community participation and stakeholder input.

Because a municipal utility’s council people, board members, managers, and employees live in the city that the utility serves, there is a local presence that ensures the kind of personal service that comes from a strong sense of community. Municipal utilities can truly focus on customer needs because the customers are themselves the owners, managers, and employees of the utility.

Moreover, if any citizen is unhappy with the way that their utility is being run, they have the opportunity not just to attend a public meeting about it, but to actually serve on the local utility’s governing body. The ability of customers to take a direct role in the utility’s management ensures that municipal utilities will always be responsive to customer needs.

In short, there are significant benefits to having a municipal utility in your community, not only monetary but also intangible, and when you add them all up, the bottom line looks really good.

Consider supporting MuniPACMuniPAC is a political action committee (PAC) that the Iowa Association of Municipal Utilities (IAMU) formed to help strengthen Iowa’s community-owned nonprofit electric, gas, water, and communications utilities and municipalities by making contributions to the campaigns of political candidates who want to help municipalities and their utilities prosper. To donate, go to www.iamu.org > Resources > Donate to MuniPAC

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8 u IAMU Connection

Conducting Rate StudiesBy Krista Wenzel, CPA, MBA, KDW Advisors, LLC

Rate discussions can become a convoluted mess when consultants and engineers start throwing around acronyms and using industry jargon. The

goal of this article is to provide you with a better understanding of cost-of-service studies and rate design for your utility, whether it is electric, gas, water, or telecommunications.

The first step in developing properly designed rates is through a cost-of-service study. This study is the reasonable allocation of expenses to identify how much it costs the utility to serve each class or type of customer. Once the costs have been allocated, the next step is to design the rate structure.

How to Start a StudyBefore starting a cost-of-service study, have a clear objective for the study that you can share with the rate consultant. This ensures that each party is on the same page prior to the study initiating. For example, if the utility wants to add a demand charge for the commercial and industrial classes, be sure to inform the consultant during your kick-off meeting. If you want to go from a flat rate to a block rate, this is another conversation to have during the initial meeting with your consultant. The objective may be as simple as not having had a study completed in the last five or 10 years so you want to know if your rates are still aligned correctly.

Once you have outlined the objective, contact a rate consultant with whom you are comfortable working. If you have not done a study recently, it may be a good idea to request quotes from several consultants to compare pricing. Under Iowa Code, consulting services do not require the RFP or RFQ process.

When outlining the project scope with your consultant, always request the consultant come to your council or board meeting to present their findings. This helps ensure accurate data is presented to your governing body and provides your council members or board members with the opportunity to ask questions.

When to Consider a Cost-of-Service StudyIf you are experiencing any situation listed below, a cost-of-service study may be an appropriate next step.

u A shortfall in profits or reserves

u Changes in debt service or bond covenants from issuing new debt or refinancing existing debtu Changes in power supply agreement, gas supply agreement, programming costs, or chemical costsu Changes in power or gas wholesale provideru Significant changes in load or number of customersu Major changes in O&M expensesu New technology (i.e. AMI, distributed generation, OTT, IP upgrade)u New infrastructure (i.e. water treatment plant, upgraded headend)u Addition of new rate class is neededu Last rate study was more than 10 years ago

The Study & Design ProcessA cost-of-service study and rate design are typically completed in a few steps.

u Step 1: Determining the utility’s revenue requirements. The revenue requirement is determined by comparing the utility’s operating revenues to the operating expenses. The main purpose in this step is to identify how much revenue the utility must earn to meet all its financial obligations including operating expenses, capital expenditures, and debt-service payments.

u Step 2: Allocate costs. The allocation process varies slightly for electric, gas, water, and telecommunication utilities; however, the main purpose remains the same: to identify the true cost to serve each customer type (i.e., residential, commercial, video, data, etc.). The most common form of allocation is called unbundling and classifying costs based upon how they were incurred.

For example, an electric utility’s costs may be unbundled into generation, transmission, distribution, and customer and then further classified into demand, energy, customer, revenue, or direct types of expenses. From here, the costs would be allocated based on the class of customer (i.e., residential, commercial, industrial, etc.)

For a telecommunications utility, costs would be divided into type of service (video, data, voice) before being classified into service costs or overhead costs to identify how much it costs to serve each type of subscriber.

u Step 3: Design rates based off the results from the revenue requirement study, allocation of costs, and conversations with utility staff.

Fall 2019 u 9

Data RequirementsAlthough the utility typically hires a rate consultant to per-form the study and necessary calculations, the rate consul-tant will need data from the utility. Common types of data requests are listed below. When providing data for a study, detail and accuracy are extremely important.

u Meter/Sub counts by customer class/typeu Sales by customer class or type (i.e., energy, demand, ccf, gallons, cable tier, data speeds, etc.)u Bill frequency data (i.e., if have block rates, number of customers billed within each block)u Operating and maintenance expensesu Programming cost projectionsu Capital project plans and budgetu Debt obligations – current and futureu Interfund loan datau PILOT amounts, calculations, or process for determining amountsu System lossesu Load forecast datau General overview of the utility’s business strategy and future objectives

Importance of Conducting a StudyEnsuring your utility has properly designed rates is extremely important to the utility’s profitability. Misaligned rates can lead to numerous challenges for the utility including: insufficient revenues, reduction in cash reserves,

eroding financial benchmarks, class subsidization, loss of customers, or an increase in distributed generation throughout your service territory.

If rates are not reviewed on a regular basis, the utility may face the need for a large rate increase causing public and political pressure. It is always a good idea to internally review rates during each budget cycle or at minimum every three years.

If you find that a rate increase may be needed, do not delay the rate adjustment. The need never goes away but rather compounds resulting in the need for a larger increase. Delaying rate adjustments can also negatively affect the utility’s cash levels and financial metrics that can affect the utility’s bond rating and possibly the bond rating of your joint action agency.

Bottom line, if you do not remember the last time you reviewed rates or you have noticed your financials starting to look bleak, start planning for a cost-of-service study.

“If rates are not reviewed on a regular basis, the utility may face the need for a large rate increase causing public and political pressure. It is always a good idea to internally review rates during each budget cycle or at minimum every three years.”

– Krista Wenzel, CPA, MBAKDW Advisors, LLC

[email protected]

October 6 - 12, 2019For resources related to Public Power Week, visit www.PublicPower.org > Education & Events > Public Power Week

10 u IAMU Connection

Manganese Testing: What Water Utilities Need to Know

Manganese is a naturally-occurring element in the earth’s geology and is found in Iowa’s surface and ground waters at various concentrations. Elevated

manganese levels have long been considered to be an aesthetic issue in drinking water, causing taste, odor, and staining problems. EPA has had an unenforceable, secondary standard of 0.05 mg/L (parts per million) for many years, below which adverse aesthetic effects are not expected to occur. Manganese is an essential nutrient in our diet, and too much or too little both have adverse human health effects. Newer studies indicate elevated manganese levels can cause adverse human health effects, so the U.S. Environmental Protection Agency (EPA) has included manganese in the testing required to determine if national regulation as a primary drinking water standard is needed.

This testing, called the Unregulated Contaminant Monitoring Rule #4 (UCMR4), is in its second of three years of national testing. All Iowa public water supply systems serving at least 10,000 people, and a selection of smaller systems, are required to monitor for the contaminants listed in the rule. Manganese is included and must be monitored in the finished drinking water. Once the data is collected and analyzed, the EPA will determine whether to regulate any of the listed contaminants as a primary drinking water standard. The data for each specific system required to monitor under UCMR is included in that year’s Consumer Confidence Report, available to customers by July 1 each year.

The EPA has developed health advisories for manganese, which includes both acute (immediate) and non-acute (chronic) levels. For bottle-fed infants six months of age and younger, the acute level is 0.3 mg/L, while the acute level for the rest of the population is 1 mg/L, both of which are 10-day advisories. Typically, manganese concentrations in the groundwater are fairly constant, so there isn’t much variation over time. For the entire population, the lifetime health advisory is 0.3 mg/L. Health advisories are not enforceable drinking water standards, but public notice can be required when levels exceed the health advisory.

For more information on the UCMR, adverse health effects of manganese, and other information, visit the Iowa Department of Natural Resources’ Drinking Water Health Advisories webpage, which includes links to DNR’s Fact Sheet and Frequently Asked Questions about Manganese in Drinking Water and other reference material: https://www.iowadnr.gov/Environmental-Protection/Water-Quality/Drinking-Water-Compliance/Drink-ing-Water-Health-Advisories

In Iowa, the groundwater aquifers are known to contain manganese, with those in the western half of the state testing at higher concentrations in the raw well water monitoring that has been done. Staff in the DNR’s water supply program have been working on developing a response to this emerging contaminant since the UCMR4 testing started and have been presenting the issues during operator training events. Although to date there have been no samples over the 0.3 mg/L health advisory level in the UCMR4 testing in Iowa, there have been other samples from Iowa public water supplies that have had elevated manganese levels. Some of these have been in response to colored water complaint investigations. Prior to UCMR4, there has been no required certified lab testing for manganese in finished drinking water, and there is very little data available about Iowa’s systems.

To obtain more data and get an accurate picture of manganese levels in Iowa’s more than 1,800 public water supply systems, a sampling effort has just begun. From July 1, 2019 – June 30, 2022, the DNR inspector will collect a water sample from each source/entry point at each public water supply system during the system’s next sanitary survey. The source/entry point is a point which is after any treatment and before entering the distribution system, and the sanitary survey is an on-site inspection of the public water supply system that happens at least every three years. For the smallest systems, where certain county sanitarians conduct an annual visit of those systems, the sampling project will start in July 2020.

The sample will be analyzed for manganese through a contract with the State Hygienic Laboratory. Depending upon the analytical result, the system may have:

u No further action.u Additional samples required on a quarterly or annual basis, and, if the health advisory levels are exceeded, will be required to conduct public notification.

On a national basis, 26 states and one territory have had systems with manganese levels over 0.3 mg/L in the first 18 months of the UCMR4 testing.

Due to the recent health studies and the consideration of manganese as an acute health concern, a committee was formed to update the Iowa Main Break and Depressurization Guidance. This committee included representatives from the Iowa Section of AWWA, Iowa Association of Water Agencies, Iowa Rural Water Association, Iowa Association

Continued on Page 27

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All utilities and municipalities need insurance coverage, but finding plans and programs that are flexible to meet the unique needs, challenges, and budgets

of a particular utility or city can be tricky. A utility or city doesn’t want to pay for coverage it doesn’t need or not get coverage that it does need.

IAMU gets it. That’s why the IAMU Safety Group Insurance Program was created years ago. Since 1980, IAMU, Jester Insurance Services, Inc., and EMC Insurance Companies have joined together to bring Iowa cities and utilities a comprehensive and competitive insurance program.Expansions and improvements to the program have been made continuously to meet the changing needs of Iowa’s cities and utilities.

Cost ReductionThe IAMU Safety Group Insurance Program offers members the possibility of an annual dividend, paid out for favorable group loss experience. This allows the maximum possible reduction in insurance costs. If a dividend is earned, all members will be paid on a pro-rata basis in proportion to the group. This way, you can benefit even though losses of an individual member may be higher than other group members.

Local, Responsive Service As a member of the safety group, you can continue to work with your own local agent. EMC will license the agent whom you select to handle your safety group insurance as a special agent for this purpose. You’ll also benefit from working with the expert underwriters, claims personnel, and loss control representatives in EMC’s Des Moines Branch who can provide on-site, face-to-face service in response to your needs.

Tailored Insurance Coverage This is not a one-size-fits-all safety group program. Your

agent and underwriter work together to provide you with tailored coverage and limits that best meet the needs of your municipality or municipal utility. They’ll also assist you with minimum coverage guidelines to make sure you’re adequately protected.

Comprehensive, Flexible Coverages Tailored to Your Needs The Safety Group Insurance Program policy forms were designed with the specific needs of municipalities and municipal utilities in mind. The program offers broad coverages and provides unique, expanded protections within standard policies that many insurance companies don’t include. The program also allows higher policy sublimits than many other insurance carriers.

Coverages

Property Included u Accounts receivable u Appurtenant buildings and structures u Business income and extra expense u Cost of taking inventory u Data processing equipment included with inland marine policy u Debris removal u Emergency services commandeered property u Exterior signs on premises u Fine arts u Fire department service charge u Fire extinguisher: Rechargeu Foundations of buildings and pilings u Glass: Unlimited u Inland marine coverage for construction equipment, radios, etc. u Lock replacement and rekeying u Money and securities u Newly acquired buildings, personal property, and

IAMU Safety Group Insurance Program Offers Affordable, Comprehensive Solutions for Utility & City Coverage Needs

Fall 2019 u 13

business income u Ordinance or law u Outdoor property u Personal effects and personal property of others u Personal property off premises and in transit u Personal property within 1,000 feet of premises u Pollutant cleanup and removal u Preservation of propertyu Sewer backupu Underground fiber optics u Unreported buildings and structures u Utility services: Time element and direct damage u Valuable papers and records: Cost of research

Optional u Agreed valueu Blanket coverage on all buildings and personal propertyu Equipment breakdownu Replacement cost coverage on buildings and personal property (Higher deductibles may provide additional savings)

General Liability Includedu Advertising injury liability u All premises and operations, including new premises, operations, and activities u Antiskid material application u Criminal defense attorney fee indemnificationu Employee benefit liability u Employees and volunteers as additional insureds u EMT liabilityu Fellow employee u Fire legal liability coverage, real property u Herbicide, pesticide, or fertilizer drift liability u Host liquor liabilityu Incidental medical malpractice u Non-owned watercraft liability u Operations by independent contractorsu Personal injury liabilityu Personal property of others on premisesu Premises medical payments u Products and completed operationsu Special events premises liability u Tort liability endorsement in compliance with Chapter 670 of the Iowa Codeu Worldwide policy territory

Program Highlightsu Designed specifically for municipalities and utilities in communities with populations of 25,000 or less.u Member premiums are not impacted by large cities, counties, transit authorities, waste management organizations, or county fairs.u EMC Insurance Companies is an A-rated, admitted insurance carrier, based in Iowa, and regulated by the Iowa Insurance Division.u There are no long-term contract or difficult withdrawal

provisions designed to prevent members from seeking alternative programs. u Includes a generous dividend program that has returned an average of nearly 10% of premium to members.u Back-to-back record dividends in 2017 and 2018, with more than $7 million returned to members.

Program Coverage Advantagesu Provides coverage for Abuse and Molestation, both in the General Liability policy and the optional Umbrella policy. (This coverage is often excluded under competing programs.)u Includes full policy limits for defense of public officials relating to Non-Monetary claims. (Many suits against public officials are seeking non-monetary action, and this coverage is commonly limited to $50,000 or less in competing programs.)u Provides a $1 million limit for Loss of Income and Extra Expense due to a Property claim. (Other programs provide a much lower limit of $250,000 or less.)u Includes Ordinance or Law coverage at the full blanket Property limit. (Increased rebuilding costs due to ordinances can be a significant issue for older buildings, and other carriers provide a limit of $250,000 or less.)u Provides a $250,000 limit for Property Off-Premises, eliminating the need to individually schedule most municipal owned equipment. This blanket limit is more efficient and cost-effective approach for cities and utilities.

AutoIncludedu Audio, visual, and data electronic equipment u Auto liability applies to any vehicle you use u Broad business auto insurance form u Commandeered autou Comprehensive and collision coverage: Owned vehicles u Deductible reimbursement for employees and volunteers responding to emergency scene with personal auto u Emergency vehicle custom equipment u Employers’ non-ownership and hired-car liability u Freezing coverage for fire and emergency vehicles u Hired auto physical damage sublimit u Individual liability of employees using their own cars for business u Medical payments coverage: Owned vehicles u Mutual aid expense reimbursement u Towing expense

Covers all owned vehicles u Deductible for glass repair or replacement waived u Fellow employee exclusion deletedu No territorial or radius limitations standard auto liability limit of $1 million


Optionalu Replacement cost coverage

Errors & Omissions Included u Claims-made policyu Defense for class-action-type claimsu Discriminationu Employment practices liability u The organization, the governing board of the organization, elected and appointed officials, employees, and volunteers are defined as insuredsu Deductibles available from $1,000 Defense costs are first-dollar coverage (after deductible); defense provided by insurance carrieru Limits available up to $1 million

Workers’ Compensation Included u Employers liabilityu Other states coverageu Statutory coverage under Iowa lawu Stop gap endorsementu Medical only deductible options available

Umbrella Liability u Optional coverage that applies as excess over primary liability insurance, including law enforcement liability and municipality errors and omissions u Limits available from $1 million. Includes abuse and molestation

Other Coverages Optional u Abuse and molestation liability u Blanket contractual liabilityu Blanket fidelityu Builders risk u Computer fraud/Electronic funds transfer u Crimeu CyberSolutions: Cyber liability and data compromiseu Foreign liabilityu Key person special expense u Law enforcement liability

Disclaimer: This is only a summary of coverage and is subject to policy conditions, limitations, and exclusions that may vary from state to state. Please read policies for specific terms and conditions or contact your local agent or managing agency for details.

Improve Safety, Control Losses

The IAMU Safety Group Insurance Program also includes access to EMC’s loss-control professionals who can pro-vide suggestions and solutions that can lessen your risks, including: u Ergonomic Evaluations to identify ergonomic issues before losses occur. There are also online resources to help you spot problems and educate your employees. u Slip and Fall Prevention to help develop a proactive approach to reducing these incidents in your facility. There are also many online resources to help prevent slips and falls — a leading cause of workplace injuries. u Hazard Control Assessments to identify hazards that pose the greatest potential safety risks to operations. EMC loss-control professionals then recommend viable solutions to control or reduce these risks. u Injury Management Programs to help reduce the impact of injuries at your facility, including select provider, return to work, prework screening, and work site wellness programs. u Online Safety Training to give employees convenient access to short training segments, complete with quizzes to check for understanding. You can register, assign training, and track employees’ training progress through an easy-to-use online training system.

Medical Management Services EMC offers a full range of free medical management services to help your employees receive appropriate, cost-effective medical care after an injury and return to work as quickly as possible. These services include:

u EMC OnCall Nurse to prevent unnecessary costs and time away from work by letting injured employees speak directly to a specially trained nurse 24/7. u Medical Bill Review to ensure billing is reasonable, accurate, appropriate, and in compliance with state laws, and to facilitate fair pricing of treatment related to employee injuries. u Pharmacy Benefits Management to facilitate fair pricing of medications related to employee injuries. u Utilization Review to monitor and maintain appropriate duration, setting, and intensity of medical treatments, such as chiropractic care and physical therapy. u Case Management to maintain ongoing communication between you, your employees, and medical providers. u Rehabilitation Services to help create a smooth transition for employees to return to work and to increase the potential for an early return to work.

For more information about the IAMU Safety Group Insurance Program,

contact:Heith Hockenberry at 515.243.2707 or

by email at [email protected]

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Iowa Municipal Gas Utilities Execute $614 Million Prepay Transaction

The old adage of “there is power in numbers,” holds true to utilities looking to save money. Just ask

the 41 Iowa gas utilities that signed on to the PEFA deal. Earlier this year, PEFA, Inc. issued $614 million in “Gas Project Revenue Bonds – Series 2019.”

The proceeds of the bonds will be used to prepay the costs of acquiring a fixed quantity of natural gas (purchased at a discount to Index) to be delivered over 30 years from the gas supplier. There was a total of 84 participating municipal gas utilities from seven states (41 from Iowa), which are expected to save approximately $2.2 million annually.

The gas supply will come from the Goldman Sachs Group, Inc., & Company LLC. The Gas Manager for the project is Clayton Energy Corporation. Ahlers & Cooney, P.C., served as the Bond Coun-sel for PEFA, Inc.

PEFA, Inc., the Issuer, is a separate legal entity and a nonprofit public benefit corporation organized and existing under the laws of the State of Iowa, was organized by the Public Energy Facilities Authority, an Iowa joint powers authority formed pursuant to Chapter 28E of the Iowa Code, to finance the Gas Project.

Iowa Participants:Alton Municipal Utilities, Bedford City Municipal Gas, City of Bloomfield, Brighton Municipal Gas System, Brooklyn Municipal Utilities, Cascade Municipal Utilities, Clearfield Natural Gas Company, Coon Rapids Municipal Utilities, Emmetsburg Municipal Utilities, Everly Municipal Utility, Fairbank Municipal Gas, City of Gilmore City, Town of Graettinger, City of Guthrie Center, City of Hartley, Hawarden Municipal Utilities, City of Lake Park, Lenox Gas System, Lineville Municipal Natural Gas System, Lorimor Municipal Gas, City of Manilla, Manning Municipal Natural Gas, City of Mapleton, Morning Sun Municipal Natural Gas System, City of Orange City, City of Preston, Remsen Municipal Utilities, City of Rock Rapids, Rolfe Municipal Gas, Sac City Municipal Gas Company, City of Sabula, Sanborn Municipal Gas Utility, Sioux Center Municipal Gas, City of Tipton, City of Wall Lake, Wayland Municipal Gas, Wellman Gas System, West Bend Municipal Gas, Whittemore Municipal Utilities, Winfield Municipal Gas and Woodbine Municipal Natural Gas

Pictured above are some of the PEFA, Inc.,Directors signing the closing documents. Left to right: Jim Zeutenhorst (Sanborn), John Bird (Emmetsburg) and Brad Honold (Coon Rapids). Not pictured: Bryan Gerritson (Orange City).

For resources, visit www.apga.org > Events > Public Natural Gas Week


Member Spotlight: Harlan Municipal Utilities

Harlan, Iowa is a friendly, progressive community of roughly 4,800 residents. The

county seat of Shelby County in southwest Iowa is situated along the West Nishnabotna River and has a rich history dating back to when it was incorporated in 1879.

Early on, Harlan went about establishing its municipal utility structure, adding services as the population and needs grew. Today, Harlan Municipal Utilities (HMU) includes electric, gas, water, and telecommunications services.

Electric Harlan established a municipal electric utility by public vote in 1891 that has served Harlan for 128 years.

HMU’s first electric plant was a direct current (DC) generating system. This system was replaced in 1929 by

an alternating current (AC) electric generating system consisting of six Fulton Diesel generators with a total output of 6.4 Megawatts (MW).

HMU began purchasing power for resale from the Department of Energy on December 21, 1956. Although still available for use, the generators were used less and less throughout the 1970s and 1980s and finally removed in the winter of 1988-1989.

In 2014, HMU became one of a few Public Power communities across the nation to receive the Reliable Power Provider (RP3) designation from the American Public Power Associa-tion (APPA). The RP3 designation recognizes public power utilities that demonstrate proficiency in the four key areas of reliability, safety, workforce development, and system improvement.

Today, most of Harlan’s electricity comes from the federally managed Western Area Power Administration (WAPA) hydro-electric generators on the Missouri River in South Dakota. HMU owns 5.6 MW of power produced by the Louisa Generating Station (LGS) in Muscatine, Iowa. HMU also owns two onsite diesel generators.

There are four substations supplied with transmission voltage of 69,000 volts in Harlan. The substations then reduce or “step down” the voltage to a distribution voltage of 12,470 volts. The distribution voltage is then stepped down to voltages commonly used by customers.

HMU supply residential and commercial voltages of: u 120-240 single phaseu 240 volt 3-phaseu 208 volt 3-phase

Fall 2019 u 17

u 480-volt deltau 480-volt wye

HMU is nearing completion on its overhead to underground electric conversion and expects to have it finished this fiscal year. Burying utility lines has been the subject of increas-ing attention in recent years both by engineers who see this as a means of increasing reliability at an acceptable incremental cost, and the general public who view it as a means of improving community appearance.

New developments in cables and construction methods have made modernizing electrical utilities possible. Further refinements will attest to the economics and desirability of placing facilities underground.

Outage time is reduced by having four interconnected substations. If a problem occurs in one part of Harlan, HMU’s highly trained employees can find the problem, isolate it, and re-route power to customers. Harlan has approximately 10 miles of fiber optics used to help monitor substation functions and power flow. Monitoring the distribution system allows HMU to quickly diagnose outages and to be more efficient in responding to outages.

HMU has also made a commitment to installing high efficiency LED lighting in all streetlights as a way to lower energy and maintenance costs.

WaterThe City of Harlan’s water is supplied by 23 shallow wells located along the Nishnabotna River. HMU provides water to more than 2,400 residential, rural, and industrial customers.

Its two water towers have a total storage capacity of 1 million gallons. Clear wells on the HMU campus provide another 750,000 gallons of storage.

The new water treatment plant came online in 2013. An average of more than 500,000 gallons of water flows through the HMU plant daily. HMU uses a reverse osmosis process to treat water. HMU provides soft water, which saves customers in detergent bills and hard water scale in boilers and heat exchangers.

As for the future of water, further exploration of potential wellfield expansion has been discussed at recent board meetings.

GasThe original gas system was built in 1954. Harlan now has 32 miles of gas main lines. Approximately 31 miles of system is coated steel, referred to as cathodically protected, and the rest is a specially designed plastic.

HMU contracts with two providers to help serve customers. HMU purchases gas from British Petroleum and contracts with Northern Natural Gas to deliver this gas via regional pipelines to the town border station. It is here that HMU meters how much gas is used for the town.

TelecommunicationsHMU began telecommunications services in 1996 with cable and internet services. Telephone service was added in 2001. Fiber to-the-Home (FTTH) service began in 2012. The all-digital network operations

center was installed in 2014. Con-struction phases during 2016/2017 and 2018/2019 expanded fiber to the entire city of Harlan. The Institute for Local Self-Reliance shows Harlan is one of seven communities in Iowa to offer citywide fiber to the home delivered by their municipal utility.

Although four voice and internet providers serve Harlan, HMU has been the dominant provider of telecom services since 1996. Completion of the citywide FTTH with additional and increased services will allow HMU to maintain that position.

By the NumbersCustomers: Approximately 2,400 electric, gas, and water customers

Employees: 33 total

u Electric: 5u Gas: 4u Water: 6u Telecommunications: 5u Administration:13


IS YOUR SYSTEM PREPARED FOR AN ATTACK?

In August, more than 20 entities in Texas reported a ransomware attack with the majority of these entities being smaller local governments. The evidence gathered

indicates the attacks came from one-single threat actor. If this happened in your community, are your prepared? Do you know how to respond?

If you are a member of the IAMU Safety Group Insurance Group, you can get coverage for such an event. Currently, only about 20% of all safety group members purchase the coverage. If your utility or municipality doesn’t currently have such coverage, be sure to ask your agent for more information.

According to the Department of Homeland Security (DHS) and its Cybersecurity and Infrastructure Security Agency (CISA), ransomware has rapidly emerged as the most visible cybersecurity risk playing out across the nation’s networks, locking up private-sector organizations and government agencies alike. That’s only what is seen – many more infections are going unreported, ransoms are being paid, and the vicious ransomware cycle continues.

Organizations should consider ransomware infections as destructive attacks, not an event where you can simply pay off the bad guys and regain control of your network.

According to CISA, ransomware is a type of malicious software, or malware, designed to deny access to a computer system or data until a ransom is paid. Ransomware typically spreads through phishing emails or by unknowingly visiting an infected website. Ransomware can be devastating to an individual or an organization. Anyone with important data stored on their computer or network is at risk, including government or law enforcement agencies and health-care systems or other critical infrastructure entities. Recovery can be a difficult process that may require the services of a reputable data recovery specialist, and some victims pay to recover their files. However, there is no guarantee that individuals will recover their files if they pay the ransom.

Helping organizations protect themselves from ransomware attacks is a chief priority for the CISA. The agency has assisted many ransomware response and recovery efforts, building an understanding of how ransomware attacks unfold, and what potential steps can be taken to better defend systems. But there is also a recognition that there’s no such thing as perfect cybersecurity, and ransomware infections can still happen. The agency has also developed recommendations to help organizations limit damage and recover smartly and effectively.

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Ransom Mitigations to Help You Defend Today and Secure Tomorrow

The CISA recommendations outline three sets of straight-forward steps any organization can take to manage their risk. These recommendations are written broadly for all levels within an organization. It is never as easy as it should be, so if your organization needs help, the agency urges you to reach out for assistance. IAMU can help. CISA is also available to help, as is the FBI, numerous private sector security firms, state authorities, and others. Risk preventive steps include:

1. Backing up your data, system images, and configurations and keeping the backups offline.2. Updating and patching systems.3. Making sure your security solutions are up to date.4. Reviewing and exercising your incident response plan.5. Paying attention to ransomware events and applying lessons learned.

Actions to Recover If Impacted – Don’t Let a Bad Day Get Worse

1. Ask for help. Contact IAMU immediately. You may reach Russ Saffell, Director of Member Security & Critical

Infrastructure Protection at 515.289.1999 or 515.988.8686 (cell). 2. Isolate the infected systems and phase your return to operations.3. Review the connections of any business relationships (customers, partners, vendors) that touch your network 4. Apply business impact assessment findings to prioritize recovery.

Actions to Secure Your Environment Going Forward – Don’t Let Yourself be an Easy Mark 1. Practice good cyber hygiene. Backup, update, whitelist apps, limit privilege, and use multifactor authentication. 2. Segment your networks. Make it hard for the bad guy to move around and infect multiple systems.3. Develop containment strategies. If bad guys get in, make it hard for them to get stuff out.4. Know your system’s baseline for recovery.5. Review disaster recovery procedures and validate goals with executives.

For more information on ransomware, visit the CISA Resource Page on Ransomware (www.us-cert.gov/Ran-somware). Victims of ransomware should report it immedi-ately to CISA at www.us-cert.gov/report, a local FBI Field Office, or Secret Service Field Office, as well as IAMU.


De Soto’s Wastewater Plant Upgrades

A few years ago, De Soto, Iowa, like so many other communities around the state, had come

to a point where it needed to address wastewater treatment issues. And like so many other small towns, the central Iowa city of 1,045 residents, had to figure out how to tackle the project in the most affordable way possible, given its limited financial resources.

Here is De Soto’s story – the lessons learned and the successes it can share.

The first order of business was to improve the lagoons situation through dredging, revamping the aeration system, and adding rip-wrap dikes. The project got off to a rocky start; but fortunately, the rest of the process went smoothly.

De Soto has three lagoon cells. An inspection before the project began revealed that all three cells had excessive biosolids – over 4 feet deep in some areas and an average depth of 2.8 feet. Collectively, the cells were more than 35% of capacity.

De Soto wanted the levels below 4 inches. The project was supposed to take three months. It didn’t. This was a lesson learned for De Soto’s Public Workers Dan Van Langen and one that he wants to pass along to others: Make sure to vet everyone involved in a project and retain control of certain aspects, particularly the testing (read on to find out why).

The subcontractor responsible for the sludge removal fell behind and didn’t get the sludge to the levels outlined in the contract. When the project was behind by more than eight months, the city decided to cut ties with the subcontractor. At that point, the city thought the sludge levels were getting closer to the targets than they actually were. When the city and the subcontractor performed the sludge judge testing, the city allowed the subcontractor to perform the actual measurements, which Van Langen, in hindsight, would not have done.

Some questionable levels became even more suspect a few months later when De Soto brought in Steve Harris, President of H&S

Environmental, to host a “Lagoons Do it Better” workshop.

“While teaching how to sludge judge properly in cell 3, we discovered an average sludge depth of over 3 feet,” Van Langen said. “Cell 3 had 2.8 feet average depth prior to starting the project.”

At this point, Van Langen got to thinking back on how the city and subcontractor parted ways.

“After the dredging was ‘complete,’ the stock pile of biosolids were left onsite,” Van Langen said. “Several calls were made to the subcontractor to remove the biosolids from the site. Over a couple weekends and in the evenings, the pile slowly disappeared... Where did that pile of sludge go? I have an idea.”

Although De Soto is still dealing with the drudging debacle with the initial subcontractor, the city was able to hire another company to come in and get the sludge levels closer to the original goal. Fortunately, the drudging aspect of the project was the only real

Fall 2019 u 21

problem that De Soto experienced.

Once the dredging was complete, it was time for the aeration system upgrades. By going with MARS Aeration units, DeSoto was able to reduce the number needed. Forty aeration heads in cell 1 became 12, and 22 aeration heads in cell 2 became 4. The units are mobile and individual, so employees don’t have to shut down the entire system to work on one head. The MARS system is saving 50% on operation and maintenance costs compared to the old aeration system.

Following the aeration system installation, rip rap was added to secure the lagoon banks to help with maintenance and weed control.

To improve the disinfection process, DeSoto retro-fitted an existing chlorine contact basin and added UV.

Making sure the system was reliable was also a key goal. A generator was added to the site with an automatic transfer switch. It is exercised once a week.

The biggest aspect of the wastewater plant upgrades involved how De Soto was going to reduce its ammonia levels.

“We wanted to look outside the box,” Van Langen said.

De Soto opted to go with the new MBBR Treatment. At the time that portion of the project started, MBBR was showing promise but was still relatively untested – at least in Iowa. The selling points were that MBBR provides good effluent quality, removes increased BOD loadings, and is easy to operate. The small “footprint” of the MBBR had a large influence on the decision as well compared to other options the city had to choose from. A pilot study site was needed in Iowa, so De Soto raised its hand. Being a “guinea pig” as Van Langen called it, meant that the city could save some money.

The first six months of data showed promise, but Iowa Department of Natural Resources officials wanted De Soto to gather another six months of numbers, just to be sure that the

results held. Those figures showed that the system was working the way it should and providing exceptional results. De Soto plans to experiment a little more with the new system this winter by making some temperature adjustments with the boiler and heat exchanger while still remaining in compliance with treatment practices. The temperature adjustments could save the city as much as $2,000 a month.

All eyes are on De Soto as it continues its journey with the MBBR Treatment System. Van Langen is taking calls from and giving tours to engineering firms and wastewater operators from all over the Midwest.

“I was the number one guy who said, ‘It wasn’t going to work,’” Van Langen said. “I was proven wrong.”

“Overall, the project was successful,” Van Langen said. “The plant operates above and beyond our expectations. With all projects, there are bumps in the road. Expect them and don’t panic. You have to break an egg to make an omelet.”

Above: The new De Soto MBBR Facility. Desoto served as a pilot study site in Iowa for the new treatment technology. Above right: De Soto’s three lagoons. Excessive bio-solids were discovered during an initial inspection. Over 4 feet deep in some areas. Right: Glasco UV Disinfection. De Soto retro-fitted an existing chlorine contact basin and added UV (Ultra Violet).Glasco was a manufacturer that could supply vertical application units, which was needed based on the retro-fit.


Real challenges require real solutions. We deliver.

There is no such thing as a one-size-fits-all solution. We recognize that every project and client are unique, and we treat them that way.

IAMU Offers Career Information Materials to Iowa High SchoolsIAMU has developed a series of materials for high school guidance counselors to provide their students. The materials focus on careers in utilities and are designed to expose high schoolers to the many opportunities in – and benefits of – utility careers.

The materials include:u A brochureu A posteru Four social medial posts

An email explaining the materials along with PDFs of the materials have been sent to all Iowa high school guidance counselors. The files are also available on the IAMU web-site on a new page dedicated to high schools. You can find the page by going to www.iamu.org > Resources > High School Career Info. The downloadable PDFs are available at the bottom of the page.

In addition to making these files available electronically, IAMU has offered to print and mail kits of materials to schools that request them. The offer was included in the email that went out to guidance counselors.

If you have any questions about this campaign, please feel free to contact Jen Cronin, IAMU Communications Specialist, at [email protected].

Water Members: Salary Survey Results Now AvailableMembers may access the report by going to: https://members.iamu.org/page/WaterWWSalarySurvey. You may also locate the survey report under the Resources tab on the IAMU website (www.iamu.org).

If you are not currently logged in to the IAMU website, you must first do so before you will be able to access the report or see the report listed at the bottom of the Resources tab.

Although no two systems are the same and there are other benefits to consider, the survey numbers will give you a starting point when evaluating wages.

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The current threats from all forms of severe weather are obvious and present the threat of a long duration power outage. Every state and community needs to be prepared and focused on the resilience of their organization and their neighbors.

EARTH EX (Emergency All-sector Response Transnational Hazard Exercise) is a unique web-enabled, video-driven exercise and training opportunity specifically designed to provide organizations and individuals with a rare chance to build resilience and achieve a higher level of collab-oration and preparedness to a whole new class of Black Sky threats.

Join hundreds of organizations around the world this year in developing critical levels of awareness, collaboration, and coordination while building and testing your own plans and policies.

This special invitation is for all Iowa elements critical partners. Also, protect your employees. Encourage them to register for the Individuals and Families lane.

For the first time, EARTH EX will be available in English, Spanish, and Hebrew.

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For resources, visit: www.imagineadaywithoutwater.org > Resources


Rate Setting & Fiscal Planning for Water Systems

Glenn Barnes, Director of Water Finance Assistance, will hold a series of free workshops

around Iowa, including two at the IAMU office, in October. He plans to discuss rate setting and fiscal planning for water systems, particularly smaller systems. IAMU was able to talk with Barnes to get background on what he plans to include in his workshop. Here is the Q&A from that conversation. Question: When it comes to rate setting and fiscal planning, what are the best practices that utilities should consider or should adopt?

Answer: The rates should really reflect the cost of providing drinking water today, but also into the future. In my experience of working with water systems for more than a dozen years around the country, most systems can cover the day-to-day costs of running the system but do not necessarily anticipate the long-term system needs. Ideally, there would be some type of long-term system plan like an asset management plan, or a capital improvements plan, or both so the system can understand when it will be necessary to replace assets. Be more proactive than reactive in terms of managing infrastructure.

A strategy of “We are going to keep the rates as low as possible, and we’ll barely cover the day-to-day costs; and if something breaks, we’ll then think about how to pay for fixing or replacing it,” is not really a great, attainable strategy. Ideally, there is some thought into anticipating when those changes are going to happen.

Long-term planning is in large part about assets that you own currently or those that you might need in the future if you’ve got new business or industry coming in, new population

coming in, or changes in regulation. You have to pay attention to your demographics because I would suspect that in small Iowa towns, much like small towns around the country, they’re seeing pretty significant demographic changes with populations getting older and smaller. In long-term water system planning, you must understand that you may need a different system in the future than you had in the past. That is another piece of this.

Question: When is the best time to tackle rate setting and fiscal planning?

Answer: Long-term planning and the asset management process should really be continual. You should look at and bring in information about assets on an ongoing basis. When it comes to rate setting, I really encourage water systems to at least review rates annually as part of their budget process. Systems may review rates and find that they will be sufficient for the upcoming year, that no chang-es are warranted, and that’s fine. Systems don’t have to change rates every year, but systems should really look at them every year and make changes when necessary.

Question: What new trends are we seeing when it comes to setting rates and fiscal planning?

Answer: Data-driven decision-making and community priority-driven decision-making are two things that are new or different considerations that water system can have that can make the process a little bit better. We’re seeing a trend and encouraging water systems to use data to help drive the decision-making process around rates and some utility policies. That could be measuring the financial

health of the water system by calculating key financial ratios. That could be asset management. That could be doing a non-revenue water audit, and using data to help make smarter decisions about the utility and what to expect going forward.

I think that’s again where the demographic changes are going to come into play to some extent. If you start with the mindset that the water system is there to serve the community, then you want to ask the question, “What does the water system need to do to best serve our particular community and beyond just having that appropriate level of revenue?” There may be other priorities that you have depending on demographics. For example, affordability may be a big concern for a community. “Are we setting rates for both the structure of the rate and the price of water in such a way that it meets the needs of that affordability priority for the community?”

It could be that economic development is a priority. “Is water being priced in such a way and the water system set up in such a way to support economic development goals?” The rate structure and levels and the system’s financial health can be ways to support broader community goals.

Question: Who should be involved in those rate-making and fiscal- planning processes?

Answer: It’s a big group. When you’re talking about this process, you should really involve the different people touching the various aspects of running the system. You have operators and system managers responsible for the day-to-day running of the system. They are going to have the best understanding of how the

Fall 2019 u 25

system is doing and what is needed on a day-to-day basis for the system to meet its goals.

Now, you’re also going to have municipal staff. This could include the town manager or clerk and budget or finance officers who must ensure the system’s financial health and how that system fits in with the overall town budget. Even with a system being an enterprise fund, that town manager or that top staff administrator is responsible for pulling together the budget, looking at what the rates should be, and making that proposal to the board. The board ultimately sets the rates and makes those final decisions. So, all of these folks need to be involved to some extent.

The other group that I want to mention is towns may want to look for outside help when considering their rates, financial health, and asset management. There is a universe of private consultants who do thorough rate studies. Then, you’ve got technical assistant providers like me to help, in particular smaller communities, through these processes. The technical assistance complements what the private consulting world does. These outside experts can be really helpful in giving a fresh perspective, bringing their expertise from working with other systems, and expressing the need for potential rate changes or increases to the board. These consultants are a disinterested third party coming in saying, “Well, we did this analysis and this is what it says.” Again, that ties back to that data-driven decision- making idea.

Question: Are there any new or different considerations that utilities should keep in mind when setting rates and/or engaging in fiscal planning?

Answer: One piece of asset management is what water system level of service to provide. Meeting

the Safe Drinking Water Act requirements and other regulations is the minimum level of service. That should be a given.

You can have water that tastes bad, smells bad, looks bad, doesn’t have good pressure, and stains your clothes in the washing machine, but is perfectly safe. It meets the Safe Drinking Water Act requirements; but aesthetically, it’s not very good. I’m somebody who if I get in the shower in the morning, I want good water pressure. That has nothing to do with how healthy the water is; but as a customer, that’s probably something that I would complain about in my town if I wasn’t getting it. The community needs to be able to express in some way what it’s really wants with some of these aesthetic water qualities.

On the flip side, the community also must understand that may impact price. If you want a higher quality water than you’re getting, that may be possible; but it may be more expensive. If you want leaks fixed faster than they are currently being fixed, that’s good feedback to have; but it may be more expensive to provide that extra service.

Question: How does a utility com-municate financial-related activi-ties and decisions to the general public, knowing that the average person doesn’t have a background in either finance or utilities?

Answer: A lot of people take for

granted turning on a faucet and water coming out on demand. They don’t really give it a second thought. The fact that you’re getting that water on demand, and that there is a very, very, very, very low chance that it will kill you is an incredible marvel that 150 years ago would have been mind boggling to people. People, for thou-sands of years, have had an amazing understanding of how to move water where it was needed, but getting that water to be safe to drink is relatively new in the last maybe 120 years. We have been so good at doing what we do in the utility field that modern-world people take it for granted. That’s why something like what happened in Flint is so shocking.

People who work on drinking water every day understand the enormous effort that goes into procuring, treating, and delivering water; and the amount of infrastructure that is needed. It’s easy to forget that the average person really doesn’t understand that at all. I always encourage people in the water sector to talk about what they do. When you go to a barbecue, tell people what you do, talk about how important it is. It’s great when utilities can give treatment plant tours. Start from the idea that most people take water for granted and don’t necessarily understand all the work that goes into it. Then, layered on top of that, it’s really hard to get people to want to pay for something if they really don’t understand what they’re paying for. Some of the work that I’ve done with communities – and some of the best practices that I’ve

“ A lot of people take for granted turning on a faucet and water coming out on demand. They don’t really give it a second thought. The fact that you’re getting that water on demand, and that there is a very, very, very, very low chance that it will kill you is an incredible marvel that 150 years ago would have been mind boggling to people.”

– Glenn BarnesDirector of Water Finance Assistance


seen – is just doing small things like getting an article in the local paper or using social media whenever a repair is happening. Talk about how you’re using residents’ money, how you’re fixing the infrastructure. Explain how users might be impacted while you’re doing the work. For example, you might alert residents that you must close a street for a day or two and what the eventual benefit will be. That isn’t the final answer to this commu-nication problem, but it’s a start. It’s important to talk about how the water system serves the community and how a community couldn’t exist without a functioning water system.

This is a little bit overly dramatic, but it’s something I recently heard: If the water system were to fail – and let’s assume the water system fails and there was no ability to get bottled water or to get outside water in any way – all of us would be three days away from dying. When you actually hear that, it’s shocking. Taking advantage of opportunities to talk about your water system through media, public events, or one-on-one communication is really helpful, but focus on how the water system

benefits the community at large and individual people. Making that connection is going to help customers and citizens to be more accepting of needed rate increases when they come.

People who work in drinking water have as much to do or more to do with public health than doctors and nurses do, but many people don’t think about drinking water operators as being public health officials. They are a largely crucial but underappreciated group in modern society. We need to change that. That awareness impacts the ability to charge appropriate amounts for water.

Question: Is there anything that you would like to add or think IAMU members should know about rate setting and fiscal planning?

Answer: There’s this idea among some communities that I’ve worked with to keep rates low for the sake of keeping rates low. Some communities will even brag about how long it has been since they’ve raised rates. Part of the rate-setting and fiscal-planning challenge is to have pride in having

a system that functions well, is well invested in, will be around for generations, and is serving a vital need in the community. It’s a different way of looking at things, but we’ve got to get away from this idea of being excited any time rates aren’t raised. We need a mindset of “I take pride in knowing that the rates are what they need to be to run the system today and into the future.” Citizens and voters will appreciate the fact that you are making smart decisions even if it means rates will have to go up. It’s easier for citizens to pay a small increase in their rates annually than to not have an increase for 10 years and then a 25 or 35 of larger percent increase in a single year. You have to be cognizant of that fact. Rates are going to have to go up at some point in the future – given inflation, given the changes and increases in regulation, and differences in treatment technologies. Ignoring that fact is only going to lead to a system putting itself in a bad position where it might be endangering people’s health because it’s not working very well or where it’s going to be in a bad financial position and is going to have to see a rather painful course correction in the future.

Iowa drinking water rate setting workshop seriesOctober 15-18 at locations across the state

Your water rates are the most important source of revenue for your water system. Are your rates sufficient to cover the cost of providing water service today and into the future? And are your rates structured in a way to best meet the priorities of your community?

This FREE workshop will explore several important aspects of water system finance. Anyone involved in the financial management of your water system is invited to attend, including board members, town managers, budget and finance staff, utility managers, and operators. The workshop is geared toward small water systems. We welcome multiple attendees from the same community.

The content will be the same at each workshop. Please choose the day and time that works best for you.

u Tuesday, October 15: North Liberty Water Treatment Facility, North Libertyu Wednesday, October 16: Newton Des Moines Area Community College, Newtonu Thursday, October 17: Iowa Association of Municipal Utilities, Ankenyu Friday, October 18: Iowa Association of Municipal Utilities, Ankeny

All workshops will run from 8:30 a.m. to 4:00 p.m. To register, go to https://www.waterfinanceassistance.com/iowa

Fall 2019 u 27

800-383-PUMPwww.electricpump.com

402-333-9660www.mc2h2o.com

You can count on us for all your fluid handling and process solutions! An Electric Pump Company

Manganese Testing, Continued from page 10

of Municipal Utilities, and Iowa DNR Water Supply Operations, Water Supply Engineering, and Field Offices.

Revisions to the guidance were completed in May 2019. The major revisions include the use of bottled- water rather than boil-water advisories for systems with elevated or unknown manganese levels, and advice for customers to not drink or cook with colored water. This approved document is being implemented. A copy of it is available on the Iowa DNR website at www.iowadnr.gov/ws-pn. Look for the “Main Break and Depressurization Guidance” section in the lower right- hand section.

To be prepared, systems are encouraged to collect a certified lab sample for manganese at their Source Entry Point(s) so they know their system’s manganese levels. If the manganese levels are unknown and the system has an incident needing an advisory, the advisory will be a bottled-water advisory. Systems with known low levels of manganese (less than 0.22 mg/L), nitrate (less than 7 mg/L as N), and nitrite (less than 0.7 mg/L as N) will issue a boil-water advisory. Operators should know the levels of these three contaminants in their systems when they call the DNR for assistance, especially if they call after hours.

The guidance includes specific information about the four categories of main breaks, guidance about repair of each, when boil- or bottled-water advisories are recommended or required, and specific information when bacterial sampling is recommended or required following depressurization events. Included in the guidance are templates for a main break log, a communication plan including boil- and bottled-water advisory templates, and a one-page summary of the procedures for each main break type.

Watch for training opportunities about the guidance. Contact your Iowa DNR Field Office with specific questions.

Comprehensive Health & Welfare Benefits Can Be

PUZZLING.

Without a doubt, a municipal utility’s most valuable assets are its people. After all, human capital has a direct and significant impact on any public entity’s

success. And, like anything of value, people need proper care and protection. Today, legislative and economic changes are continually altering the health and welfare benefits puzzle. It’s no wonder there’s often confusion, apprehension and no clear vision. Fortunately, there is a solution: MJBA, the endorsed health and welfare benefits consultant and employee benefit broker of the Iowa Association of Municipal Utilities.

MJBA brings together a comprehensive package of health and welfare strategies, processes, services and resources for municipalities and utilities of all sizes. This integrated approach brings together utilities and cities across Iowa – for lower costs, increased value, competitive benefits and

peerless support. Iowa municipal utilities need more than group health insurance. That’s why MJBA provides a complete

picture of health and welfare benefits – with no missing pieces. Talk to MJBA today using the contact information below!

MARK J. BECKER & ASSOCIATES IS THE SOLUTION FOR YOUR MUNICIPALITY.The IAMU Benefit Program Through

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MJBACONSULTING.COM | [email protected] | 855-334-0064 | 515-334-0069 FAXMARK J. BECKER & ASSOCIATES, LLC | 9105 NORTHPARK DRIVE | JOHNSTON, IA 50131Doing What’s Right. That’s Our Policy.

& Associates, LLC®

Fall 2019 u 29

Jim Silvers recently started as an IAMU Safety Coordinator. Jim has worked in the safety field for 32 years as a Safety Coordinator, Manager, and a Training Consultant at various high-profile companies, most recently as the Director of Program Development & Training with the Iowa Illinois Safety Council.

Jim has a vast safety knowledge base and is an approved instructor for OSHA-outreach classes. Jim will conduct trainings; perform OSHA walk-throughs, program reviews, and program customization for members; team teach the OSHA 10 & 30 classes; assist with employee scheduling and creating annual safety agreements; assist with special projects; and help to develop and organize more safety workshops.

Don Heck recently started as an IAMU Safety Specialist. Don has worked as a Director and Manager of Human Resources and other similar HR capacities. He has an extensive safety background, working on safety and loss prevention programs and training. Don also previously worked a number of years for a railroad company.

Don brings many years of leadership with strong administrative skills and creative abilities to his new position with IAMU. Don’s main duties will be to travel around the state, helping IAMU to deliver quality OSHA training classes to our membership.

Meet the new IAMU staff members

Electric Members: New Job Briefing Form Available for UseThe IAMU Electric Department has created a new customizable Job Briefing Form for members to use and/or modify for use.

The form can be found on the IAMU website.

You must be logged in as an IAMU member to access the form. Go to www.iamu.org > Services > Electric > Publications & Resources > Job Briefing – Electric Services.

Providing a Value-based, Total Solution for All Water Treatment, Wastewater Treatment,

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Jon Harger - (612) 805-6383 CellCory Sonner - (515) 509-0470 Cell

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IAMU

G fin’Fore Safety

IAMU members enjoy a day out on the greens

IAMU utility and associate members took part in this year’s Golfin’ Fore Safety event at the Bos Landen in Pella.

Here is a rundown of the winners:

Championship FlightFirst Place (with a 63 winning scorecard playoff): Brad Webb, Barrett Rogness, Brett Lippold, and Heather Bahnsen

Second Place (with a 63): Dale Anderson, Jeff Less, Mike Schrock, and Billy Blake

First FlightFirst Place (with a 69 winning scorecard playoff): Rod Vitzhum, John Bilsten, Eric Degen, and Steve Grandgenett

Second Place (with a 69): Taylor Schrader, Jeremy Barrens, Tysen Christensen, and Jake Tripp

Second Flight First Place (with a 74 winning scorecard playoff): Brandy Olson, Jerry Gowey, Doug White, and Jim Garrison

Second Place (with a 74): Wade Ten Naple, Randy Tilk, Steve Nadel, Joyce Pealer, and Vi Tilk

Last Place (winning the scorecard playoff with 77): Paul Reicks, Dan Bollig, Jeremy Caron, and Kristine Stone

Long Drive on No. 2 for women: Jean Jessen

Closest to the pin on No. 6: Wynette Froehner

Longest Putt on No. 9: Chuck Johnson

Longest Drive on No. 11 for Men: Jay Olson

Putting Contest: Jason Towne


Fall 2019 u 31

Welcome New Associate Membersu Premier Line ServicesIAMU Associate Members are businesses that support the association’s mission and its utility members. If you’re a utility or municipality and are meeting with vendors about products or services, you may want to ask whether the company or organization is an IAMU associate member. If they aren’t, you maysuggest that they consider becoming members. You can direct them to the IAMU website (www.iamu.org) or have them contact Jen Cronin at [email protected].

If you’re a utility member or municipality and need a product or service, consider using associate members to provide for your needs. You can find contact information for associate members by going to the IAMU online directory (www.iamu.org > Resources > Directory Search > IAMU Associate Members). You can search by Company/Employer or Product(s)/Service(s). Be sure to let the business know that you learned about them through IAMU.

Connect with IAMU on Social Media

@IAMUpage @IAMUTweets linkedin.com/company/iamu

CONFERENCE

7th ANNUAL2019

October 24 - 25, 2019(PreConference October 23, 2019)

Prairie Meadows Events & Conference CenterAltoona, Iowa

To Register, go to www.iamu.org > Events >Register For An Event > 7th Annual Energy Conference

u Soltage

When asked why Central Service Association and Professional Computer Systems united, the answer is simple:

We are better together. While each of us have products and unique services that the other’s customers could well findhelpful, one major trait is dominant: we are relationship people,

committed toexceptionalservice.

CSA, a member-owned cooperative, is celebrating 80 years serving the needs of utilities primarily in the Mid-South, while PCS has 40 years of history and clients in 22 states plus Bermuda.

Together we are over 175 employees strong. Together we are over 160 utilities united. Together we have over 120 years of service to public utilities. Together we are over 50 products and services designed solely for utilities.

Combining our vision, resources, services and products gives us even more to offer our clients – like the ideal solution you have been seeking but not found yet. We invite you to come see for yourself.

ProfessionalComputerSolutionspart of the CSA family of utility solutionsIntelligent design. Uncommon service.

BETTER TOGETHER

Central Service AssociationToll free 877.842.5962

www.csa1.com

Professional Computer Solutions, LLC

Toll free 888.843.3106www.pcsco.com

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