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.

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. A preview
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Funding considerations
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Getting the board...on board
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Helping the board win over the public
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Funding strategies
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Funding sources

3. FUNDING CONSIDERATIONS

4. Three elements of fnancial success
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Recognize value
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Think long-term
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Recognize what's extraordinary about your own times

5. Today's interest rates are at long-term lows

6. Costs after infation

7. Borrowing for 30 years around 1975

8. QE/tapering -- what it all means

9. Setting your rates for water services

10. Slow, predictable increases

11. Not big jumps every 5-10 years

12. Buy right, not just cheap

13. Borrow when you don't need the money

14. Match costs and payments to the life cycle

15. How to get what you really need
Sometimes there's an "or equal"...
sometimes there's not

16. Continuous improvement
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Lean operations
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Life-cycle costs

17. GETTING THE BOARD ON BOARD

18. Show how your problem is their problem
Or how they have a problem
and you can help them steer clear

19. The illusion of choice: Two options

20. The illusion of choice: Three options

21. What's the worst that could happen?

22. Make them feel the real hazards of inaction

23. Actual liability

24. Insurance costs

25. Headline risk

26. Help them take credit for successes

27. Demonstrate payofs

28. Nothing works as well as hands-on exposure

29. Host a lunch or a party

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. A challenge to us all
Brightwater WWTF (King County, Washington)
hosts parties and wedding receptions

32. Small commitments: Get them in the door

33. Why car dealers ofer test drives
A trial implies commitment, and
commitment cries out for consistency

34. Everyone falls for "multiplier efects"
Since 1997, the average NFL stadium
has been 56% public-funded

35. Skip the word "environment"
Talk about public health

36. Open with a big request
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No exaggeration required
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Then retreat to what's really necessary

37. Acknowledge real limitations they face

38. Cultivate a fduciary mentality

39. Benchmark against your neighbors
Peer groups of comparable communities

40. Explain like you're designing a billboard

41. TO THE PUBLIC AT LARGE

42. Tailor your message to community values

43. College towns
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Environment
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Climate change
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Ecosystems

44. Major metro areas
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Levees
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Recovery
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Backups
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Urban improvement
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Tax base

45. Conservative small towns
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Heritage of service
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Obligations
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Independence

46. Put spending in context
How many dollars is a 10% increase, really?

47. Be sensitive to fxed-income households

48. Don't let a "water is free" mentality take root

49. The default opt-in trick
Look carefully at your neit hotel bill

50. Context, context, context
"Be fearful when others are greedy,
and greedy when others are fearful."
- Warren Bufett

51. Water vs. other costs per gallon

52. Water towers vs. cost of fre protection

53. Sewers vs. time cost of septic systems

54. How old is it? Put it in context!

55. Are your pumps from the Cold War?

56. Are your valves as old as disco?

57. Are your mains from before WWII?

58. Visibility
Any idiot can recognize a broken bridge

59. Visibility
Any dunce can see
and feel a pothole

60. Visibility
But by design, nobody sees underground utilities

61. Like submarines, water is a "silent service"

62. People don't vote for water
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Don't ask people to vote for water
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Ask them to vote for fre protection, public health, and jobs

63. Cultivate a sense of ownership

64. Take pride and tell the community

65. Don't let bottled water win the perception war

66. Once you develop pride of ownership...

67. ...it gets easier to ask for incremental growth

68. We compete with indiference

69. FUNDING STRATEGIES

70. Buy from cash

71. Buy with debt

72. Buy with grants

73. Rent (short-term)

74. Lease (long-term)

75. Don't fear the leaser (er...lessor)
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A third of all airliners are leased worldwide
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Railroad cars are also heavily leased
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Most ofce space is leased

76. Leasing algebra
Cost of management/depreciation/upkeep + proft
<
Customer's cost to learn and do same

77. Lease to own

78. Shared ownership / buying clubs

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. Privatization

81. FUNDING SOURCES

82. For each source, consider your constraints

83. Maximum amount available

84. Minimum commitment required

85. Time horizon

86. Looking for money in all the right places

87. Debt

88. Grants

89. Green funding

90. Emergency/disaster-preparedness funding

91. SRF

92. USDA

93. CDBG

94. WIFIA

95. Rainy-day fund

96. Capital improvements fund

97. Municipal bonds

98. To recap
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Know what's extraordinary about your times
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Think ahead and make it easy to agree with you
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Get people on board as automatically as possible
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Consider all of your available strategies
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Consider all potential funding sources

99. Thank you for your attention!
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Contact us anytime with
questions

Brian Gongol

DJ Gongol & Associates
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515-223-4144
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info@djgongol.com
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@djgongol on Facebook
and Twitter

100. References:
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Municipal bonds
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http://research.stlouisfed.org/fred2/graph/?g=IpZ
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http://research.stlouisfed.org/fred2/graph/?g=Iq3
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Money velocity
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http://research.stlouisfed.org/fred2/graph/?g=Iq5
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WWTF as wedding venue
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http://www.kirotv.com/news/news/sewage-treatment-plant-advertises-wedding-venue/nfW7K/
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http://www.kingcounty.gov/environment/wtd/Construction/North/Brightwater.aspx
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Airliner leases:
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http://www.economist.com/node/21543195
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Public fnancing of stadiums:
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http://cbsminnesota.fles.wordpress.com/2011/12/nf-funding-summary-12-2-11.pdf
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Jimmy Carter photograph:
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http://www.loc.gov/pictures/item/96522672/
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Harry Truman photograph:
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http://www.trumanlibrary.org/photographs/view.php?id=2267
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Margaret Thatcher photograph:
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http://www.loc.gov/pictures/item/2005696424/
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Bill Gates photograph:
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http://www.microsoft.com/en-us/news/exec/billg/images.aspx
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All other photos are original work by and copyright reserved to Brian Gongol