Inflation Red Flags

by | Jun 15, 2022 | Financial Shock, ServLine

Inflation has and will continue to increase operational cost for water and wastewater utilities. These challenges, seeded by the COVID pandemic, require business and utilities to undertake planning to address these immediate challenges. These challenges require planning and actions associated with, but not limited to, staffing, inflation, and technology all based on the financial bottom line.

In addition to increased operational expenses, utilities should expect an increase in delinquencies as inflation hits the ratepayer wallet. Utility governing bodies and management should see red flags flying at the front door. It behooves every utility to be proactive and make plans to lower these red flag challenges. Rate reviews are a must but should be considered with a focus on education of the ratepayer and gaining their support for the utility.  With increased inflation and resulting cost, a service line leak will result in greater financial impact on the ratepayer and increased revenue loss to the utility. In planning for the future, utilities should consider innovative programs and services such as ServLine, an affinity partner of the National Rural Water Association, which ensures the utility will not lose revenue and prevent a financial burden on the ratepayer.

There are other innovative programs and services to support these efforts through associations and agencies.  For example, the Rural Water Association’s Apprenticeship is available and designed to ensure a qualified workforce for the future. As utilities face these red flag challenges, there is extensive network of training and on-site technical assistance, at no cost, to boards and staff in all areas of governance, finance and operations. Utilities should also be aware of the multiple sources of grants and loans available through the USDA Rural Utilities Service and State Revolving Loan Programs.

The reality is that water and wastewater is a business that requires in-depth planning and customer support to ensure a safe quality water supply and wastewater services for the future.

About Sam Wade

Mr. Wade began his career in rural water in 1972 as a water and wastewater systems operator and city manager in Minnesota before becoming the manager of the Minnesota Rural Water Association in 1982.

In 1985 Mr. Wade joined the National Rural Water Association (NRWA) as the Training Director and became the Deputy CEO and Chief Operating Officer two years later. For more than 30 years Mr. Wade helped provide the leadership needed for the NRWA to train, support, and promote water and wastewater professionals that serve rural America. Mr. Wade retired from the NRWA in 2019 and now works as an industry consultant.