DC Water head underscores outreach as revenues hold

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The utility in charge of the nation’s capital has stayed steady since the muni storm began, and DC Water general manager George S. Hawkins attributes that in part to a surprising source: strong public relations

Since taking over as general manager for DC Water, George S. Hawkins has made a reputation as an outspoken advocate for his city’s utility by regularly delivering impassioned public speeches and appearing in promotional YouTube videos. Beneath that effervescent exterior, however, is a manager who understands how public outreach and alternative procurement methods can affect the bottom line.

Unlike many other municipal utilities, DC Water has remained remarkably buoyant throughout the past few years. While other municipal actors inch toward insolvency, DC Water’s revenueto- debt ratio is holding steady – even as the utility embarks on billions of dollars worth of public works projects. Hawkins told AWI that one of DC Water’s secrets is a radically transparent brand of outreach that boosts customer and investor confidence.
 
“If our customers see us as negative or as bad actors or inefficient […] then all the rates don’t come, and the financials don’t come and investors don’t come. It comes back around to the financial issue,” Hawkins told AWI. “It circles back around to our customers to understand financially what we’re trying to do and what we need to do.”
 
DC Water (known as the District of Columbia Water and Sewer Authority, or DCWASA, before a rebranding effort in 2010) serves Washington, D.C., and large swaths of Virginia and Maryland. DC Water pumped 109MGD of water in FY2009, and the centralized Blue Plains Advanced Wastewater Treatment Plant has a capacity of 370MGD. When DC Water voted to bring Hawkins on in the fall of 2009, the utility had lingering public relations problems related to past controversies regarding lead in city tap water. The utility was also staring down a recession and mild weather that sliced usage rates and revenues in FY2009.
 
But things have been looking up. DC Water pushed through a successful bond issuance in March, issuing $277 million in new financing and refinancing $163 million of existing debt at lower interest rates. Standard & Poor’s upgraded DC Water’s bond rating to AA+ while Moody’s maintained its positive outlook. DC Water posted more than $408 million in operating revenues during FY2011, which for the utility ended last fall. The utility has had successful rate cases for several years running, Hawkins said. Hawkins attributes the financial stability of DC Water to several factors, but emphasized the long-term approach that the utility’s water board requires. Rate increases are mapped out in advance, and Hawkins’ emphasis on outreach means DC Water’s board isn’t surprised when it is asked for higher rates.
 
“Rather than skirt by, we have elevated our public relations effort in explaining the rate increases,” he said. ““We do have rate increases projected over every year for the 10 years that we’ve projected from today, but they’ve been hearing about it every year. We explain it every year.”
 
Since taking up his post, Hawkins has also embraced alternative procurement methods to save time and boost efficiency. DC Water is undertaking a massive tunnel project to combat combined sewer overflows and lower nutrient discharges, and the pieces of the $2.6 billion project, including a huge lift station and a combined storm/wastewater treatment plant, are being bid as design-build contracts. The plant and station could cost upwards of $200 million. DC Water is also open to designbuild- operate, Hawkins said, but that method will be reserved for non-water projects like the recently bid, $170 million biogas power plant at Blue Plains. Hawkins said there are a number of upcoming projects that will use design-build.
 
Hawkins shows no signs of changing his can-do attitude or altering his shrewdly effective approach to public relations. Perhaps that will be enough. After all, everyone needs what DC Water provides, Hawkins said. “Water is one of the easiest sells when you start actually talking about it. We’re not trying to sell snake oil. This is something they use every single day.”