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Selling a project to your council or board - v.11

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A survey of some of the tools that can help communicate the need for prudent investment in a community's local infrastructure. Focused primarily on the water/wastewater utility sector, but applicable to a broad range of investment categories.

Published in: Engineering
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Selling a project to your council or board - v.11

  1. 1. SELLING A PROJECT TO YOUR COUNCIL OR BOARD Brian Gongol DJ Gongol & Associates, Inc. November 8, 2017 Nebraska AWWA Fall Conference Kearney, Nebraska
  2. 2. A preview  Funding considerations  Getting the board...on board  Helping the board win over the public  Funding strategies  Funding sources
  3. 3. FUNDING CONSIDERATIONS
  4. 4. Three elements of fnancial success  Recognize value  Think long-term  Recognize what's extraordinary about your own times
  5. 5. Today's interest rates are at long-term lows
  6. 6. Costs after infation
  7. 7. Borrowing for 30 years around 1975
  8. 8. QE/tapering -- what it all means
  9. 9. Setting your rates for water services
  10. 10. Slow, predictable increases
  11. 11. Not big jumps every 5-10 years
  12. 12. Buy right, not just cheap
  13. 13. Borrow when you don't need the money
  14. 14. Match costs and payments to the life cycle
  15. 15. How to get what you really need Sometimes there's an "or equal"... sometimes there's not
  16. 16. Continuous improvement  Lean operations  Life-cycle costs
  17. 17. GETTING THE BOARD ON BOARD
  18. 18. Show how your problem is their problem Or how they have a problem and you can help them steer clear
  19. 19. The illusion of choice: Two options
  20. 20. The illusion of choice: Three options
  21. 21. What's the worst that could happen?
  22. 22. Make them feel the real hazards of inaction
  23. 23. Actual liability
  24. 24. Insurance costs
  25. 25. Headline risk
  26. 26. Help them take credit for successes
  27. 27. Demonstrate payofs
  28. 28. Nothing works as well as hands-on exposure
  29. 29. Host a lunch or a party
  30. 30. If there's resistance, ask why Make them prove your point: Do they think your workplace is unpleasant? If so, all the more reason to fi it.
  31. 31. A challenge to us all Brightwater WWTF (King County, Washington) hosts parties and wedding receptions
  32. 32. Small commitments: Get them in the door
  33. 33. Why car dealers ofer test drives A trial implies commitment, and commitment cries out for consistency
  34. 34. Everyone falls for "multiplier efects" Since 1997, the average NFL stadium has been 56% public-funded
  35. 35. Skip the word "environment" Talk about public health
  36. 36. Open with a big request  No exaggeration required  Then retreat to what's really necessary
  37. 37. Acknowledge real limitations they face
  38. 38. Cultivate a fduciary mentality
  39. 39. Benchmark against your neighbors Peer groups of comparable communities
  40. 40. Explain like you're designing a billboard
  41. 41. TO THE PUBLIC AT LARGE
  42. 42. Tailor your message to community values
  43. 43. College towns  Environment  Climate change  Ecosystems
  44. 44. Major metro areas  Levees  Recovery  Backups  Urban improvement  Tax base
  45. 45. Conservative small towns  Heritage of service  Obligations  Independence
  46. 46. Put spending in context How many dollars is a 10% increase, really?
  47. 47. Be sensitive to fxed-income households
  48. 48. Don't let a "water is free" mentality take root
  49. 49. The default opt-in trick Look carefully at your neit hotel bill
  50. 50. Context, context, context "Be fearful when others are greedy, and greedy when others are fearful." - Warren Bufett
  51. 51. Water vs. other costs per gallon
  52. 52. Water towers vs. cost of fre protection
  53. 53. Sewers vs. time cost of septic systems
  54. 54. How old is it? Put it in context!
  55. 55. Are your pumps from the Cold War?
  56. 56. Are your valves as old as disco?
  57. 57. Are your mains from before WWII?
  58. 58. Visibility Any idiot can recognize a broken bridge
  59. 59. Visibility Any dunce can see and feel a pothole
  60. 60. Visibility But by design, nobody sees underground utilities
  61. 61. Like submarines, water is a "silent service"
  62. 62. People don't vote for water  Don't ask people to vote for water  Ask them to vote for fre protection, public health, and jobs
  63. 63. Cultivate a sense of ownership
  64. 64. Take pride and tell the community
  65. 65. Don't let bottled water win the perception war
  66. 66. Once you develop pride of ownership...
  67. 67. ...it gets easier to ask for incremental growth
  68. 68. We compete with indiference
  69. 69. FUNDING STRATEGIES
  70. 70. Buy from cash
  71. 71. Buy with debt
  72. 72. Buy with grants
  73. 73. Rent (short-term)
  74. 74. Lease (long-term)
  75. 75. Don't fear the leaser (er...lessor)  A third of all airliners are leased worldwide  Railroad cars are also heavily leased  Most ofce space is leased
  76. 76. Leasing algebra Cost of management/depreciation/upkeep + proft < Customer's cost to learn and do same
  77. 77. Lease to own
  78. 78. Shared ownership / buying clubs
  79. 79. 28E / Joint Use / Interagency Agreements The purpose of this chapter is to permit state and local governments in Iowa to make efcient use of their powers by enabling them to provide joint services and facilities with other agencies and to cooperate in other ways of mutual advantage. This chapter shall be liberally construed to that end.
  80. 80. Privatization
  81. 81. FUNDING SOURCES
  82. 82. For each source, consider your constraints
  83. 83. Maximum amount available
  84. 84. Minimum commitment required
  85. 85. Time horizon
  86. 86. Looking for money in all the right places
  87. 87. Debt
  88. 88. Grants
  89. 89. Green funding
  90. 90. Emergency/disaster-preparedness funding
  91. 91. SRF
  92. 92. USDA
  93. 93. CDBG
  94. 94. WIFIA
  95. 95. Rainy-day fund
  96. 96. Capital improvements fund
  97. 97. Municipal bonds
  98. 98. To recap  Know what's extraordinary about your times  Think ahead and make it easy to agree with you  Get people on board as automatically as possible  Consider all of your available strategies  Consider all potential funding sources
  99. 99. Thank you for your attention!  Contact us anytime with questions  Brian Gongol  DJ Gongol & Associates  515-223-4144  info@djgongol.com  @djgongol on Facebook and Twitter
  100. 100. References:  Municipal bonds  http://research.stlouisfed.org/fred2/graph/?g=IpZ  http://research.stlouisfed.org/fred2/graph/?g=Iq3  Money velocity  http://research.stlouisfed.org/fred2/graph/?g=Iq5  WWTF as wedding venue  http://www.kirotv.com/news/news/sewage-treatment-plant-advertises-wedding-venue/nfW7K/  http://www.kingcounty.gov/environment/wtd/Construction/North/Brightwater.aspx  Airliner leases:  http://www.economist.com/node/21543195  Public fnancing of stadiums:  http://cbsminnesota.fles.wordpress.com/2011/12/nf-funding-summary-12-2-11.pdf  Jimmy Carter photograph:  http://www.loc.gov/pictures/item/96522672/  Harry Truman photograph:  http://www.trumanlibrary.org/photographs/view.php?id=2267  Margaret Thatcher photograph:  http://www.loc.gov/pictures/item/2005696424/  Bill Gates photograph:  http://www.microsoft.com/en-us/news/exec/billg/images.aspx  All other photos are original work by and copyright reserved to Brian Gongol

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