Latest / Make Water Work Podcast / Lia Clark: Engineers With Empathy: Rethinking Water Leadership and Finance | Make Water Work 027

Transcript

Lia Clark: Engineers With Empathy: Rethinking Water Leadership and Finance | Make Water Work 027 · Make Water Work Podcast

0:00
I agree. Water is a human right. The
0:02
water infrastructure is very expensive
0:05
though and that needs to be paid for
0:08
somehow and it can't come from grants.
0:12
We've talked a lot with city councils
0:15
and nonprofit utility boards about water
0:19
rates and how loans work and how you as
0:23
a system can be taking in revenue like a
0:26
business, you know, rather than being
0:28
taken for granted as a service.
0:31
>> Welcome to the Make Water Work podcast
0:33
where we dive into the people, ideas,
0:35
and innovation shaping the future of
0:38
water. I'm your host, Isaac Pellerin,
0:41
and alongside my co-host, Megan Glover,
0:43
the founder of 120 Water, we bring you
0:46
insights from hundreds of incredible
0:48
conversations we've had over the past 9
0:51
years with inspiring and energizing
0:53
leaders in the water industry. Each
0:56
week, we share those stories and
0:58
conversations with entrepreneurs,
1:00
community champions, and innovators who
1:02
are making water work for everyone.
1:05
Whether you're a water professional, a
1:07
curious innovator, or simply passionate
1:09
about our most precious resource, this
1:12
podcast is for you. Let's get started.
1:16
>> Well, hello everyone and welcome to
1:18
today's Make Water Work podcast where
1:20
Isaac and I talk to water professionals
1:22
who are innovating and serving the water
1:24
industry. Isaac, who do we have today?
1:27
>> Today we are going to speak with Leah
1:30
Clark. Now, um th this is kind of a a
1:33
first for our for our water make water
1:37
work podcast. Um
1:39
>> I was introduced to Leah because um she
1:43
has um an entity called Engineer with
1:46
Empathy.
1:47
>> Sure.
1:48
>> And um shared one of our previous guests
1:50
um posts or podcasts a couple weeks ago
1:53
on LinkedIn. Who was it?
1:54
>> Um it was Nicole Brown and um was
1:57
sharing that and
1:59
>> um tagged us. I started seeing a lot of
2:01
conversation and I was like, "Wow,
2:02
there's a lot of engagement in this
2:03
community of engineers with empathy."
2:05
And so I reached out and I was like,
2:07
"Leah, tell me a little bit more." The
2:09
conversation started to get really good.
2:11
So I was like, "How if we just pump the
2:12
brakes and let's just have you on the
2:14
podcast because I can tell it's going to
2:16
be a good conversation
2:17
>> and I hate it when all the good
2:20
conversation happens
2:22
>> on the phone and not where everyone else
2:24
can listen." So
2:26
>> Oh, that's a great story,
2:27
>> Leah. Um, welcome. Welcome to the Make
2:29
Water Work podcast and um first of all,
2:32
thank you so much for um for engaging
2:35
and sharing um that episode. Nicole
2:38
Brown is phenomenal.
2:40
>> Um and so um loved that conversation
2:44
with her and then as we started talking
2:45
I just really um became interested in
2:48
the way that you were um your career,
2:51
water finance, um everything you do that
2:54
plus this angle of engineer with
2:56
empathy. So, I want to get into all of
2:57
that today. Um, so welcome to the
3:00
podcast.
3:02
>> Yeah, thank you so much for having me
3:03
and thanks for continuing to share good
3:05
water messaging out there.
3:07
>> Yeah, absolutely. Um, well, we will get
3:11
into the conversation before we do that.
3:13
We've never heard um or never
3:15
encountered someone who didn't have a
3:17
story about how water found them. So,
3:19
let's just start there. How did water
3:20
find you?
3:22
Typically, people assume because I'm
3:24
from Colorado that water found me
3:26
because I was spending a lot of time in
3:28
the mountains, which is true. I was and
3:31
I do care a lot about the environment
3:33
and I go to a lot of state and national
3:35
parks, but um a career in the water
3:38
industry kind of found me when I was in
3:41
high school and I'm adopted from China.
3:44
So, I went on an orphan service trip
3:47
back to China. It was called Adopes
3:49
Giving Back Orphan Service Trip in 2014
3:53
and it was my first real run-in with um
3:56
like real water challenges and disparity
3:59
because I was working um at an orphanage
4:02
in the same town that I was adopted from
4:04
and all the nannies had to boil water
4:06
before they would give a bottle and put
4:08
formula in it for the babies. And it was
4:11
just kind of like, oh, this is my first
4:13
real contact with water challenges.
4:17
Wow.
4:19
>> And then um I decided then that I wanted
4:22
to work in in water in international
4:25
water development at first and I kind of
4:28
address those um water access challenges
4:31
head on. So that's where I started. That
4:33
is yeah that's that is incredible
4:36
basically uh to kind of devote then the
4:39
your next chapter to to that and then
4:41
and then so then how did um you're at
4:44
the water finance exchange is kind of
4:46
your full time. So then how did you how
4:48
did you kind of make that pivot from um
4:51
kind of that to then an equally
4:53
important um issue which is financing
4:56
all of the critical water infrastructure
4:58
needs that we have. Yeah, walk us
5:00
through that. Yeah, it's a it's a bit of
5:02
a meandering story, but it's okay.
5:05
>> That's what we're here for.
5:06
>> That's what we're here for. Um, so I
5:09
started with international development
5:11
and I did work with Engineers Without
5:14
Borders. Oh, sure. Which is the, you
5:16
know, the global agency for engineers
5:19
wanting to do international development.
5:21
So, um, during my undergraduate degree,
5:25
I was working with them on water supply
5:27
projects in El Salvador mostly, but also
5:30
on the Pineriidge Reservation, um, in
5:33
what's known today as South Dakota. So,
5:35
I was doing domestic work and
5:37
international work. Um and then I uh I
5:43
started doing consulting work after um
5:46
after getting my degree in engineering
5:49
in undergrad and I was working for a
5:51
small consulting firm and still
5:53
volunteering for Engineers Without
5:54
Borders on the side but um not really
5:57
feeling as fulfilled as I was you know
5:59
maybe doing international development
6:00
full-time. So I ended up going to grad
6:03
school in a development program called
6:06
development engineering. It's at the
6:08
University of California, Berkeley, and
6:10
it's uh it's an interdisciplinary
6:12
engineering program hosted at the Blum
6:14
Center for Developing Economies. So, it
6:17
was kind of like mixing together policy
6:20
and social entrepreneurship and
6:22
engineering and community development
6:25
and all of these different pieces that
6:27
all fit together
6:28
>> that all involve like water. My
6:30
concentration was environ the water and
6:33
the environment. So, I did that master's
6:37
work and I interned at the United States
6:40
Agency for International Development
6:42
back when it was still a thing.
6:44
>> Um, and during that time I had a lot of
6:48
opportunity to reflect through my
6:50
graduate coursework and through my
6:52
internship work on whether or not I
6:54
wanted to do international work still.
6:57
um just because there's, you know, some
6:59
painful history that comes with
7:01
international development and coming
7:02
from the US and the global north. Um and
7:06
so I did some soularching and decided
7:09
that I would domestic work um in the US
7:12
and focused my time on underserved
7:13
communities in the US. So, I was doing
7:16
pro bono engineering consulting work
7:18
after my um master's degree and found
7:23
that there's not really that much of a
7:24
gap for consulting engineering for
7:27
communities that you can usually find a
7:29
consulting engineer to help them. But
7:32
what the typical gap is is the funding
7:34
and the financing for implementing the
7:37
infrastructure projects. Um, so I met
7:40
water some folks from Water Finance
7:41
Exchange through my proono consulting
7:44
work and um they they pulled me over to
7:47
their team and now I do municipal
7:50
finance and and work with a lot of state
7:52
and federal and private funders.
7:54
>> That's amazing. That is amazing. Now
7:55
tell us and our our listeners too um a
7:59
little bit more about what our finance
8:01
exchange um Yeah. kind of Yeah. what it
8:05
is, the role it serves. Um
8:07
>> yeah. Yeah.
8:09
>> Yeah. It's a little bit of a funny
8:11
company name. So, we get that question a
8:14
lot.
8:14
>> What do you do? What is WFX?
8:17
>> Um, we are a 501c3
8:21
nonprofit based in Washington DC. So,
8:24
we're a national organization and we're
8:27
primarily a technical assistance
8:29
provider. So, there's a lot of TA
8:31
providers out there. I think one of the
8:33
most acclaimed is RCAP or the Rural
8:35
Commotions Assistance Partnership and
8:37
all of their affiliates.
8:39
>> Um, we were started in 2020, so we're
8:42
fairly new to the technical assistance
8:44
scene. Um, and what sets us apart from
8:47
other technical assistance providers is
8:49
the focus on finance. So, um, you know,
8:53
in addition to working with communities
8:55
on some of their rate studies and the
8:58
state and federal funding schemes that a
9:01
lot of other TA providers work with, we
9:03
also manage our own grant and loan
9:05
programs for communities. And then we
9:07
work a lot with green banks and private
9:10
funders to do like credit enhancement
9:12
deals and and make financing more
9:15
affordable for communities. M and what
9:18
um what are some of the ways that you
9:21
work with communities? So you you
9:23
mentioned underserved communities. Um
9:26
let's paint a little bit of a picture of
9:28
um what that what uh I want to say day
9:31
in the life of but maybe it's like a um
9:34
uh
9:34
>> your most common
9:35
>> year in the life of like how how does a
9:38
project come about and um and what are
9:40
some of the financing challenges that um
9:43
that you're helping them solve?
9:45
Yeah, typically I describe kind of my
9:49
job and and the role that I fill at
9:52
Water Finance Exchange. I'm the
9:53
community support director for Texas.
9:55
So, my job is based in Austin, Texas,
9:58
but I spend most of my time on the road
10:01
driving to communities to rural and
10:03
underserved communities throughout the
10:04
state. It's quite a large state. Austin
10:07
was kind of south central, but I've
10:10
driven, you know, the 8 hours to El Paso
10:12
and then down south to the Rio Grand
10:14
Valley is like 6 hours one way. So, we
10:17
get a lot of miles on our cars at Water
10:20
Finance Exchange. And it's it's honestly
10:22
um a lot of relationship building and
10:24
trust building at first because a lot of
10:27
rural communities aren't used to people
10:29
coming from miles and miles away and
10:31
saying they want to help and and
10:33
following through with that help. And so
10:36
we do a lot of relationship building and
10:38
then understanding kind of the
10:40
historical context and then um getting
10:44
into the more like technical and
10:45
financial pieces for a solution for
10:48
them. So it's a lot of um you know
10:51
meeting people where they're at,
10:53
figuring out what the problem is and
10:55
then peeling back the layers for what
10:57
really the problem is cuz it's often not
10:58
just that you need new pipes. It's often
11:02
we haven't invested in our
11:03
infrastructure for 20 years and we don't
11:07
have a rate study and half of our
11:10
council probably doesn't really want a
11:12
rate study. All of those pieces together
11:15
um understanding all of that and then um
11:18
coming up with a long-term plan for
11:20
them.
11:21
>> Yeah. Yeah. And for those that um may
11:24
not be as familiar kind of with uh the
11:28
industry and the breakdown, Isaac, you
11:30
you are always so good about saying that
11:32
it's what 85%
11:35
of utilities uh have five or fewer
11:38
employees,
11:39
>> three or fewer employees.
11:40
>> Three or fewer employees and serve uh
11:42
towns, you know, populations of 10,000
11:44
and under, right? So, you know, Texas is
11:48
a big state, but you know, by and large,
11:50
most of our water communities are small
11:54
rural, you know, smaller communities.
11:57
without
11:59
the workforce
12:02
>> um
12:03
>> if they have one
12:05
at best
12:07
>> um folks who
12:08
>> total
12:09
>> full like if they can even have that
12:11
many full-time folks
12:13
>> then they're doing the work of running
12:14
the water utility and not necessarily
12:17
capital improvement planning finding the
12:21
>> the
12:22
>> like we were talking about this um on
12:25
the phone before I said hey let's let's
12:27
just take this to the podcast. But it
12:29
was more of a um you know, we see the
12:31
headlines, which is good, of hey, here's
12:35
infrastructure funding and Congress has
12:37
$55 billion and that's going to flow,
12:40
but
12:42
>> practically the amount of time, effort,
12:45
and energy of the process, it could take
12:48
80 hours to fill out a SRF application.
12:51
And so that's that's all of a sudden
12:52
going to be a barrier to access. Um and
12:56
so would would love some of the
12:58
commentary that you might have on how
13:00
you've seen that play out and um kind of
13:02
the impact of the work that you get to
13:04
do. About 80 communities throughout the
13:07
state and all of them or most of them
13:10
are under that 10,000 population, right?
13:13
They're typically around like even under
13:15
the 1,000 population. They're classified
13:18
as very small systems. They're often um
13:21
as you were commenting on have not even
13:24
a one full-time staff. They usually have
13:26
like a part-time staff member that works
13:28
on um multiple water systems in the
13:31
area. So, I know a couple folks that are
13:33
office managers for like two or three
13:35
different water systems in their area
13:37
and if I catch them on the wrong day,
13:39
then they have their different hat on
13:40
for a different water system. Um, so
13:44
yeah, it's it's quite an administrative
13:46
burden for water systems to track all of
13:49
the different funding mechanisms that
13:51
are out there. Um, and many of them
13:54
struggle to even procure the
13:56
documentation that's required for just
13:59
like an entrylevel funding application
14:01
regardless of who the funder is. So all
14:03
the funding agencies have different
14:05
requirements, different timelines.
14:08
um and tracking all of that has kind of
14:11
become some of what the technical
14:13
assistance providers take on. A lot of
14:15
the um technical assistance providers
14:18
talk with a lot of the funders in Texas.
14:20
We have what's called the Texas Water
14:22
Infrastructure Coordination Committee in
14:24
Texas. So, um, USDA and EPA and then the
14:29
Texas, um, regulatory agencies and
14:32
funding agencies all get together with
14:35
four or five technical assistance
14:37
providers every other month and we all
14:40
discuss like, you know, uh, trends, what
14:43
new opportunities are coming up, what
14:45
the issues have been, and then we also
14:48
talk about specific projects that we're
14:50
working on together and kind of relay
14:52
back and forth what some issues are. But
14:54
many states don't have that and so I was
14:56
very collaborative.
14:58
>> Yeah.
15:00
>> Uh the burden then ends up being the
15:04
individual communities to then reach out
15:06
to all of these different agencies
15:08
separately and as we noted before
15:11
they're they're part-time and they're
15:12
trying to make sure that the water that
15:13
the taps are turned on for people. So
15:15
it's it's a lot. Yeah. Yeah. Yeah. Or or
15:18
I'm never going to get access to any of
15:20
that not only because of paperwork. It's
15:22
because so and so is going to take it.
15:23
like the bigger systems are going to
15:25
know how to get the money and so there's
15:27
not going to be any left for me so I'm
15:28
not even going to try. Right. So it's um
15:32
whether that's correct or not. I feel
15:34
like we've heard that before.
15:35
>> Yeah. And then the challenge becomes
15:37
kind of as you were talking about
15:39
earlier is that
15:41
>> um then you're a technical assistance
15:43
provider where the first step isn't
15:46
necessarily saying hey I'm here to fix
15:48
everything. It's building the trust with
15:51
the community to say, "Hey, I am here to
15:55
understand the needs, not just to be,
15:59
um, come in as the smartest person in
16:01
the room because you can't figure it
16:03
out." And so, um, which kind of I think
16:05
leads into the, um,
16:09
um, I would love for you to talk about
16:10
kind of the the drive and motivating
16:12
force behind engineer with empathy, um,
16:16
and kind of what your vision is is with
16:18
that and the community that you're
16:19
creating.
16:21
>> Yeah. No, you're spot on there. is the
16:23
the clear connection for me is the
16:25
humility in my work and the way that um
16:28
you you come to a community and you just
16:31
want to hear from them first and
16:33
understand what they're the experts
16:35
really right and you're just here
16:36
because you know how to work the system
16:38
for them but they're the ones who know
16:40
what's going to work best for them um
16:42
engineer with empathy started when I was
16:45
still in grad school um and we were like
16:48
I said doing a lot of introspection on
16:50
what are your motivations for doing
16:52
develop velment work especially as
16:54
somebody who was privileged enough to
16:56
grow up in you know like a upper middle
17:00
class family in the US you know by uh
17:05
chance cuz I was adopted and you could
17:07
be adopted into any family in any
17:08
circumstance. Um so I reflected a lot on
17:13
what I wanted to do with that privilege
17:15
and how I wanted to serve um and what
17:18
system I wanted to serve in and if I had
17:21
the tools and resources um what I would
17:24
do with them. and engineer with empathy
17:27
was uh one of the ideas I had because I
17:30
had worked and done a lot of research on
17:34
engineering especially in international
17:36
context but typically just with
17:39
vulnerable context there's a lot of uh
17:42
kind of millennium water challenges and
17:45
sustainable development goals that
17:46
engineers keep tabs on and they want to
17:48
contribute to social good but I also
17:51
know having been schooled in engineering
17:54
that there's spent a lot of time to
17:55
actually learn about social justice work
17:58
or what social good means or how to
18:00
navigate like complex social, political,
18:03
economic dynamics because to stay AED
18:07
accredited as an engineering university,
18:09
you have to hit all of the technical
18:11
things. You just don't have enough time
18:13
to to take a 20-year-old through all of
18:17
that. And so I saw a real gap when I was
18:20
talking to engineers who had really good
18:22
intentions but hadn't had any of the
18:25
like soft skills training on working
18:28
with specifically vulnerable populations
18:31
and understanding that especially when
18:33
you come into the room as an engineer.
18:35
People are hesitant to question anything
18:37
you say. You know you're elevated as a
18:40
technical expert even as an undergrad.
18:42
If I told people I was studying
18:44
engineering, they were like, "Oh my
18:46
gosh, you must be so smart." And I was
18:47
like, "I'm 19.
18:50
I don't know anything really, but um you
18:53
know, that's kind of the um the way that
18:55
the engineering industry is viewed." And
18:57
so engineer with empathy is a way of
19:01
practice for folks. And I I do
19:04
one-on-one consulting and workshops with
19:06
different firms that want to elevate the
19:09
way that they work with vulnerable
19:10
populations because there are many, like
19:12
I said, many engineers, especially like
19:14
those that are involved in Engineers
19:17
Without Borders or their local AWA or
19:20
ASCE chapters that they want to give
19:22
back. um they just um I think it's it's
19:26
best for them to also learn the history
19:29
of the communities that they want to
19:31
work in and understand that their
19:33
knowledge and expertise isn't the only
19:35
or the most valuable knowledge or
19:37
expertise for the landscape.
19:39
that yeah that is I think that is so so
19:42
profound and I and I think um thank you
19:45
thank you first and foremost for seeing
19:47
that and doing something about it
19:49
because I think that takes a lot of uh
19:50
guts and uh and time and energy to do
19:53
that. So thank you for uh willing that
19:56
into existence. And then I I guess how
19:58
is the um reception towards that? Do you
20:02
do you find um are every you know is it
20:06
primarily I can't wait to get involved
20:08
or um uh or do you ever get any
20:11
resistance to why do I why should I have
20:14
to learn this part of the job? I'm just
20:17
curious what's the what's the sentiment
20:19
out there?
20:21
>> Yeah. Um typically the like baseline
20:24
assumption that engineer with empathy
20:27
has is that engineers want to do a good
20:29
job. And so there's a commonality that I
20:33
set with a lot of the folks I talk to of
20:35
like what what are your motivations for
20:36
doing this work that you feel is like
20:39
valuable? What are you taking away from
20:42
it? Um and so it's it's fairly easy to
20:45
get buy in from folks who already see
20:48
the value of doing um like social
20:51
justice work I guess we can call it, but
20:52
the typical like ESG giving back sort of
20:57
work. Um, so those are typically the
21:00
folks that find me, the folks at the fir
21:02
want the firm to be doing those things.
21:05
I think that the um maybe like push back
21:08
or uh kind of the the folks that ask why
21:12
are typically then the business heads
21:15
for that company on why should we invest
21:18
in softsklls training over you know like
21:21
another software license or I don't know
21:24
whatever else that the business folks
21:26
are considering for investing in in
21:29
resources. Um it's it's pretty clear uh
21:33
clearly documented that like
21:36
empathetic communication can yield
21:38
really good results in project
21:40
implementation.
21:42
But it's still extremely difficult to
21:44
then like put your money where your
21:46
mouth is and say, "Okay, we'll invest in
21:49
softsklls training, take folks out of
21:51
the field for a day and really do like a
21:54
a workshop that doesn't yield really
21:57
like quantitative results immediately.
22:00
It's a long haul, right, to do trust
22:03
building and change the way that you
22:06
like communicate in practice. There's a
22:09
lot of folks that um I think would
22:12
prefer to see more immediate results
22:14
that can you know like projects
22:17
implemented.
22:19
>> Yeah.
22:19
>> Yeah. Yeah. It doesn't help you win more
22:21
things or do these kind of things, but
22:23
it does from a trust building
22:25
standpoint, you're you're always
22:29
working on a balance of trust with any
22:33
anyone you're working with internally or
22:35
communities. Um, it's how much trust
22:38
equity do we have
22:40
>> to move things forward? If we don't have
22:43
trust, it's going to stall. If we don't
22:45
have trust, it's going to fail.
22:47
>> Yeah.
22:47
>> Um,
22:48
>> yeah. And it's just amazing to me. I
22:50
guess I shouldn't say it's amazing to
22:51
me. I mean, it doesn't surprise me,
22:53
right, understanding like how business
22:55
works. Um, all of that. But I just, you
22:59
know, to your point, I just think
23:00
there's enough um research and there's
23:04
just enough uh cir like just facts out
23:07
there to show that people buy from
23:09
people that they trust, right? And you
23:12
know, if you can lead with empathy and
23:14
earn the trust of the customer, the
23:17
customer will give you more business day
23:19
in and day out, right? And I I I don't
23:22
know why we think that's a soft skill. I
23:24
think that is probably the most powerful
23:27
skill that a a seller or relationship
23:30
manager can have and possess is that is
23:33
the trust skill. So I I I hear you and
23:36
it does not surprise me that we don't
23:37
invest in it, but I just I don't know
23:40
why because I just think it is such the
23:42
um the the superpower um that successful
23:45
people possess.
23:46
>> Yeah.
23:47
>> I don't know. I'll get off my soap box
23:48
now, but it's served me well in my
23:50
career. Now you have to deliver. I think
23:53
I think trust is earned. I I do believe
23:55
that. I think trust is is earned, right?
23:58
It's not it's not a given. And I think
24:00
maybe to get back on my soap box with
24:02
engineers, I think I do think sometimes
24:05
people use the the degrees and the
24:07
pedigree and assume that's trust, right?
24:10
Well, I possess these very tactical
24:12
skills and qualifications and therefore
24:15
you need to inherently give me my give
24:17
you my or give me your trust.
24:19
>> Yeah.
24:20
>> And it's like, well, what have you done
24:21
for me lately? Yeah,
24:25
>> I don't know.
24:26
>> I would say the uh a lot of times in the
24:28
technical assistance provider space, we
24:30
talk about moving at this
24:33
and often having to like reset
24:36
expectations with our funders to say,
24:38
"Hey, I know you're you're probably
24:40
pretty used to like giving money to an
24:43
organization and then then turning
24:45
around and having projects ready for you
24:46
in the next year." And while we would
24:49
love to like have impact to share, some
24:52
of the impact is just that now we're the
24:55
go-to person that this mayor calls and
24:57
eventually they will get their council
24:59
on board. But it just takes that time.
25:02
>> It does. It does. But it will come
25:03
around and it will come around. I think
25:05
it's finding those partners that are are
25:07
patient and and trusting you to, you
25:09
know, to to do that. But but you're
25:12
right. It's amazing um how many times we
25:14
will make a connection with a community
25:16
and it'll be months, even years, and
25:19
eventually they'll come back and be
25:20
like, "Okay, we're ready now."
25:22
>> Yeah.
25:22
>> We're we're ready. We're ready now to do
25:24
this project. And it's like, "Well, I
25:26
didn't you ghosted me. I didn't hear
25:28
from you."
25:29
>> Yeah. Or some of it was done like you
25:31
don't realize how much of the groundwork
25:33
is laid because you showed up 18 months
25:36
ago and then showed up again.
25:38
>> They were like, "I know that when I'm
25:40
ready, I can rely on you." Yeah.
25:42
>> Yep.
25:43
>> Um
25:44
>> Yeah, you'll be here. Yeah, that's
25:46
great.
25:46
>> Yeah.
25:47
>> Um so what I I guess as we think about
25:51
um our our industry locally, right, and
25:55
and the needs of um what we have here in
25:58
the United States?
26:00
Can you talk a little bit about like
26:02
funding and the importance of that and
26:06
and just your like how how are we going
26:08
to fund all of these needs? What are the
26:10
needs? And then what's your philosophy
26:12
on how we're actually going to fund and
26:14
resource this to actually bring our
26:15
communities into a point where they can,
26:18
you know, operate resiliently?
26:20
>> Yeah. Well, there's h that's such a big
26:23
question. There's a lot of different
26:24
moving pieces for it. Uh on the state
26:28
and federal funding side of things, you
26:30
know, about state revolving funds, Texas
26:34
received the third biggest pot of the
26:37
state revolving fund money and still the
26:41
state revolving fund program in Texas is
26:44
10 times overs subscribed. So even
26:47
though Texas is getting a huge chunk of
26:49
it, there's still billions of dollars
26:51
that communities are asking for from the
26:53
state revolving fund pot of money um and
26:57
they're not going to be able to get
26:59
their projects funded through that
27:01
program just because there of the sheer
27:04
volume that's needed. And and Texas is
27:06
the example I pull from, right? Because
27:07
I'm based in Texas, but I know there are
27:10
other states that also have much less
27:13
funding than Texas. And also the state
27:15
revolving fund, the state revolving fund
27:18
programs in those states are less
27:20
tapped. There's some states that only
27:22
have $5 million in state revolving fund.
27:24
And what I know about water
27:26
infrastructure is that is not enough for
27:28
for really any of the projects I'm
27:30
looking at. So, um I don't think that
27:34
federal funding will be able to solve
27:36
the answer fully, but a lot of folks
27:38
look to federal funding for the answer
27:41
because that's historically where our
27:43
infrastructure has been funded from. You
27:45
know, like in the 80s there was a lot of
27:47
grant funding and a lot of water systems
27:51
relied on that and that was kind of the
27:53
last time that their systems were
27:55
upgraded was maybe 40 years ago. And so
27:59
now we're at a point where there's, you
28:02
know, thousands and thousands of water
28:04
systems that are looking for
28:05
improvements for their um for their
28:08
infrastructure and there's not enough
28:11
federal or even state funding available.
28:14
So part of what I've learned at Water
28:16
Finance Exchange is the availability of
28:19
private funding and going to banks. And
28:23
um there's a lot of metaphors that my
28:26
boss has used on like personal finance
28:29
for water utility finance. Talk a lot
28:32
about creditment which is the the
28:35
metaphor there is like when you're 19
28:37
and trying to get a car loan and your
28:39
parent you know co-signs the loan with
28:41
you. Credit enhancement helps do that
28:44
for water systems that can't get you
28:46
know like a AAA credit rating so they
28:48
can't get the lower interest rate. Um so
28:51
we work with our partners to um set up a
28:55
credit enhancement program and by
28:56
partnering with us and the philanthropic
28:58
funders that we partner with systems can
29:01
get better deals. That still requires a
29:04
loan though, right? So there's al this
29:07
um psych psychology around water
29:09
affordability that it should be free
29:11
because water is a human right. I agree
29:14
water is a human right. The water
29:16
infrastructure is very expensive though
29:19
and that needs to be paid for somehow
29:22
and it can't come from grants and so
29:26
we've talked a lot with city councils
29:29
and nonprofit utility boards about you
29:33
know water rates and how loans work and
29:36
how you as a system can be taking in
29:40
revenue like a business you know rather
29:42
than being taken for granted as a
29:45
service. Treat your, you know, water
29:47
system like a business so that you can
29:49
get the revenue you need to pay people
29:52
to keep staff, valuable staff on board
29:54
and also to improve the infrastructure
29:57
so that you're not stuck waiting for the
29:59
government to release another grant fund
30:01
that might not come.
30:02
>> Yeah.
30:02
>> So that long-term affordability and um
30:06
financial um literacy is a lot of what
30:10
we teach to the the communities we work
30:12
with. But, you know, even if every water
30:16
system out there has that level of
30:18
literacy, there's still just so many
30:20
water systems that are going out for all
30:23
of this different funding. So, we also
30:25
talk a lot about regional
30:26
collaborations. Regionalization has, you
30:29
know, somewhat of a negative undertone
30:31
for folks. So regional collaboration is
30:34
what we talk about at Water Finance
30:36
Exchange and it's more of a sliding
30:39
scale based on your needs and the
30:41
neighborhoods and communities around
30:43
you. Um, and it could be anywhere from
30:46
like a handshake of, yeah, if I need a
30:49
generator and you're not using your
30:50
generator, maybe we have a mutual aid
30:53
agreement all the way up to right like
30:55
um centralized management of a system or
30:59
in the case of Texas, we have public
31:01
utility agencies that are formal
31:05
um groups that that you can pull from
31:08
cities and nonprofit utility boards and
31:10
they can work together to go after just
31:13
one funding project that helps the
31:15
entire region.
31:16
>> Yeah. Yeah. Yeah. I I mean, you said
31:19
something that that we say a lot. Um and
31:22
I think we can all agree that there
31:24
aren't enough systems out there that are
31:25
run like a business,
31:27
>> you know, and and really understanding
31:29
you have you theoretically have a a rate
31:33
base and that's what you get to run your
31:36
business, right? And then you have
31:38
capital needs to keep that business
31:41
operating, right? Because this is not
31:43
evergreen infrastructure. Infrastructure
31:45
breaks. Infrastructure needs repairs.
31:47
Infrastructure has needs. And just
31:50
understanding like the what are the
31:52
business components to producing a
31:55
product which is yes a human right but
31:57
at the end of the day you're producing a
31:59
product and it's a very valuable product
32:01
and a necessary product. But um I'm just
32:03
so glad that you all are there to kind
32:06
of educate these communities on these
32:08
components of no you're actually in
32:10
business to run a business and here are
32:12
all the things you need to be thinking
32:13
about right um and then connecting those
32:16
those funding dots because I could not
32:18
agree more like you know the federal
32:20
government isn't going to solve this
32:22
problem like they're not going to
32:24
there's no way that they can pump even
32:26
if they could enough money into um into
32:29
the industry to solve the problem. So,
32:31
we've got to seek alternative and
32:33
creative funding mechanisms. Um, and I'm
32:36
just so glad that you are um here to do
32:39
that.
32:39
>> Yeah. Yeah. Yeah. This has been such a
32:42
good conversation and um really
32:45
appreciate you joining us um for this. I
32:47
want to ask just one last question just
32:49
in terms of like, you know, when you
32:50
look at the future um 5 years from now,
32:52
what do you think water leaders should
32:54
be thinking about now when it comes to
32:56
finance and infrastructure planning?
32:59
Yeah, that's that's a really good
33:01
question. Honestly,
33:03
because we don't know what's, you know,
33:06
going to happen with IJA and all of the
33:08
federal funding, my hope is that 5 years
33:11
from now, water managers, water system
33:14
managers can be thinking about their um
33:18
like their financial plan for the next 5
33:20
years, 10 years. that they have the
33:22
ability and the financial literacy or
33:25
even the resources to ask for help to to
33:28
understand like what are our projections
33:31
looking like for this year? Can we even
33:33
cover our revenues now? Our expenses now
33:36
with the revenues we have and what does
33:38
it look like 5 years from now? I know a
33:41
lot of the folks I'm talking to,
33:42
especially in Texas with the growth that
33:44
we're seeing. Um, and especially with
33:47
the tech industry coming to Texas,
33:49
there's a lot of folks that have
33:50
questions on if their water systems can
33:53
supply what's needed. And part of that
33:56
question is, do we have the resources to
33:58
build up the infrastructure to be able
34:00
to deliver on those needs?
34:03
>> Yeah. Yeah.
34:05
>> That's Yeah. Well, thank you so much for
34:07
this conversation. and thank you for the
34:10
work you do. Um I'm inspired by
34:12
engineers with empathy and um and then
34:16
learning more about the water finance
34:18
exchange. And so um thank you for being
34:20
part of this community and um thank you
34:22
to all of you who tuned in and listened.
34:25
Um we love getting to have these
34:26
conversations with water leaders um who
34:29
inspire us. And so please if you enjoyed
34:32
this, please like, share, follow, reach
34:35
out to us. Let us know who else who else
34:37
you would love to hear from who makes
34:38
water work and we'll see you next time.
34:41
Thanks for listening to the Make Water
34:43
Work podcast. If you enjoyed today's
34:45
episode, please take a moment to like,
34:48
share, and subscribe so you never miss a
34:50
conversation. We'd love to hear your
34:53
thoughts and questions. Connect with us
34:55
on LinkedIn or send us a message.
34:57
Together, we can make water work for
34:59
everyone.