1. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water CITIES FOR A STRONG AMERICA SUMMIT AND 2005 URBAN WATER SUMMIT Hyatt Hotel Albuquerque, New Mexico September 30 – October 1, 2005

2. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  The value of water is situational.  It can have no value, a negative value or a high value.  Your water utility is expected to provide reliability and quality

3. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Why communicate at all? After all, you have a monopoly?  Research indicates that informed consumers are: Less likely to complain about perceived billing errors Less likely to complain about taste & odor problems More likely to be satisfied with utility performance

4. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Your customers do not need to be educated about the value of water per se.  As their water rates increase – and they will – your customers need to understand what they are paying for:  Greater reliability  Improved safety  Improved taste  Meeting or besting all health standards  Responsible fiscal management

5. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  How much are customers willing to pay?  One pint of bottled water at a baseball game, a local airport or a county fair sells for as much as $4* within spitting distance of a drinking fountain. People are paying for peace of mind.  *Believe it or not, that is $10 million per acre-foot.

6. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Where are the costs in providing bottled water?  Acquisition  Treatment  Storage  Transportation 80% or more of consumers In the West, Southwest and Southeast regularly drink either bottled water or home filtered water.

7. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  These are the same costs incurred by your own utility. Acquisition – Treatment – Storage – Transportation.  We just haven’t done as good a job as the bottled water industry has in convincing people of value added to water.  Why not? Because they have one additional huge cost – Marketing – that few cities incur.  Communicating is marketing.

8. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  The vast majority of the costs of producing and selling a bottle of water are marketing and packaging. Example: The “sports tip” on small bottles of water costs about 10 cents purchased in bulk. The water inside the bottle costs much less than one penny to acquire, treat and fill. The lesson is an old advertising maxim – sell the sizzle and not the bacon.

9. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Case Study: Long Beach, California Long Beach has embarked on a long-term project to produce commercial quantities of desalted seawater for public consumption. This project will be costly, but is supported by the community because they believe it will lead to greater reliability and better quality.

10. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Long Beach Water Supply Groundwater 38% Conservation 14% Recycled 6% MWD 42% Groundwater 33% Conservation 15% Recycled 12% MWD 30% Desalination 10% 20042010 Conjunctive Use

11. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 Inglewoood Manhatten Beach Carson Palos Verdes Redondo Beach Los Angeles Torrence Long Beach California Avg. Los Angeles Co. Avg. Comparison of Monthly Water Bills for Single Family Residences in South Bay Region Among Lowest Water Rates in South Bay Region

12. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS -10% -5% 0% 5% 10% 15% 20% 19972004 Consumer Price Index Average Water Bill Water Rate AffordabilityIndicator Long Beach has also done a good job marketing the affordability of desalinated water.

13. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Phase 3: Phase 3: Full-scale Demonstration Plant Phase 2: Phase 2: Prototype (Haynes) 300,000 g/d Jan ‘96 -Jan ‘97 -Jan ‘98 -Jan ‘99 -Jan ‘00 - Jan ‘01 -Jan ‘02 - Jan ‘03 - Jan ‘04 -Jan ‘05 - Jan ‘06 - Jan ‘08 -Jan ‘09 -Jan ‘10 -Jan ‘07 - 9,000 g/d Phase 1: Phase 1: Pilot-scale Research Authorization Current Appropriations Funding Agreement 9.4 mg/d ConstructionPre-constructionStart-up Federal Partnership Long Beach Water Department Three-phase Project Schedule

14. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS  Long Beach’s Goal?:  Diversify their water portfolio to minimize risk  Improve Water Quality  Benchmark the cost of “new” water against other sources Communicating the Value of Water

15. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  What are your goals for improved communication? (The “why,” not the “how”)  Fewer customer complaints  Less resistance to required rate hikes  Use of utility as profit center  Greater cooperation to conserve  Fill in the blank _________________

16. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  What is the first thing that comes to mind to communicate with your customers ?

17. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Did you think bill stuffers or web pages ?

18. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Quality communications enlist a host of activities and some professional help.  People want real people to answer the telephone at the agency  People generally do not read bill stuffers  More than 85 percent of the information people know about your agency or city came from the media. The media generally does not report that your agency met all water demands last month.

19. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  The media will report that you did not meet all demands last month or that you were cited by a local or state health department.  Result: When people do hear of your agency from someone other than you or the agency, it is usually negative information. You cannot combat that with bill stuffers and web pages.

20. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Quality communications means:  Identifying an audience and keying your message to that audience  Diversifying the mediums used for your message  Being consistent  Having emergency communications plans in place  The customer comes first

21. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Quality communications also means:  Communicating the bad with the good  Maintain political awareness  The customer comes first  Providing educational opportunities for those who want to take advantage  Educating members of the media  Training agency spokespeople.  The customer comes first.

22. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  And finally, a cliché worth remembering: We never know the value of water until the well runs dry!

23. INDEPENDENT ENVIRONMENTAL ENGINEERS, SCIENTISTS AND CONSULTANTS Communicating the Value of Water  Final Thoughts:  AWWARF Project  Controlling your brand  Remember that Evian spelled backwards is naïve!