NSPE Gateway to Government Spring 2014
In This Issue of PEG e-News...

2014 FEYA Winner Announced

Captain Timothy Callahan, P.E., an instructor and course director at the Air Force Institute of Technology's Civil Engineer School at Wright Patterson Air Force Base in Ohio, has been named the National Society of Professional Engineers’ 2014 Federal Engineer of the Year. Callahan received the honor during the 35th Annual FEYA Banquet at the National Press Club in Washington, DC, on February 20, 2014.

As director of the Air Force Civil Engineer Basic Course, Callahan leads 30 civil engineering school faculty and 28 guest instructors. This role has integrated 176 officers into the career field’s first “total force” initial skills courses, while simultaneously orchestrating the development of distance learning content for future editions of the course. One of his most notable courses was the Air Force Institute of Technology’s first provincial reconstruction team project management course. He developed the course that taught 77 engineers across the US Air Force, Navy, and Army how best to execute a $400 million commander emergency response program mission in Afghanistan. He has also revamped how the school’s students provide feedback, reducing costs by 90%.

Callahan excels as the school’s subject matter expert in sustainable construction and project management, and has taught over 1,300 airmen in 47 courses during his two-plus years as an instructor. He leads the school’s commitment to online education, developing the first online cost estimation course and the first Civil PE exam review course, an online-accessible tool for US Air Force engineers worldwide.

As a result of his exemplary service and contributions to his profession, Callahan has received much prestigious recognition and numerous awards, including the Lance P. Sijan USAF Leadership Award from the Air Force Institute of Technology, Company Grade Officer of the Year by the Department of Engineering Management at The Civil Engineer School, and both Air Force and Army Commendation Medals. He holds a bachelor’s and a master’s in civil engineering, both earned from the University of Southern California, and he is a member of numerous organizations including NSPE, the Society of American Military Engineers, the American Society of Civil Engineers, and the United States Green Building Council. Callahan is active in his local community through Habitat for Humanity, the STEM Education Coalition, and his church.  

For more information on the FEYA program and to watch highlights from this year's event, visit www.nspe.org/FEYA

Water, Sewerage Infrastructure in the Hunt for Funding Dollars

Steve Storts

There should be little debate that funding the maintenance and improvement of the nation’s transportation infrastructure is vital to sustaining standards of living. And it can be argued, too, that outdated water and sewerage infrastructures in many regions of the United States are equally deserving of viable funding strategies. After all, water is a necessity of life itself, first and foremost, and a continuing challenge for public utilities.

As of 2008, the United States had about 14,780 wastewater treatment facilities and 19,739 wastewater pipe systems, according to the American Society of Civil Engineers. In its 2013 Report Card for America’s Infrastructure, ASCE notes that the capital investment needs for the nation’s wastewater and stormwater systems are estimated to total $298 billion over the next 20 years. Much of that capital need will be necessary for addressing sewer overflows, combined sewer overflows (CSOs), and other pipe-related issues. Although access to centralized treatment systems is widespread, the condition of many of these systems is also poor, with aging pipes and inadequate capacity leading to the discharge of an estimated 900 billion gallons of untreated sewage each year.

In recent years, the capital needs for treatment plants have comprised about 15% to 20% of total water and sewerage demands, but that will likely increase due to new regulatory requirements, ASCE adds. For instance, the US Environmental Protection Agency (EPA) and Department of Justice have made eliminating CSOs a national priority. Since 2007, these agencies have signed consent decrees under the Clean Water Act requiring cities operating publicly owned treatment works to invest more than $15 billion in new pipes, treatment plants, and equipment to eliminate CSOs. ASCE points out, though, that some municipalities are using nonstructural solutions to address CSO issues at lower overall costs and with good results for the environment.

Addressing one element for municipal funding, the National Association of Clean Water Agencies recently urged President Obama in his deliberations of the fiscal year 2015 budget to ensure that the tax-exempt status for municipal bond investments remains intact, with no limitations placed on interest received from these investments. NACWA contends that any policy to alter the tax-exempt status of these bonds will prevent many projects from going forward, while significantly increasing rates for customers and slowing the momentum of the U.S. economic recovery.

“For more than a century, tax-exempt municipal bonds have been the most important source of funding for water and wastewater infrastructure projects in the United States,” NACWA explains. “In 2012, 48 of the 50 states utilized tax-exempt financing to fund water and wastewater projects, and since 2003, municipalities have issued $258 billion worth of tax-exempt municipal bonds to fund water and wastewater infrastructure — comprising approximately 16 percent of all municipal bond issuance for all infrastructure projects over this period.”

Last year, NACWA and the Association of Metropolitan Water Agencies released a report titled The Impacts of Altering Tax-Exempt Municipal Bond Financing on Public Drinking Water & Wastewater Systems, which discussed the ramifications for utilities if the exempt status of municipal bonds is limited. The report states that more than $39 billion in state and local tax-exempt water and sewerage bonds were issued in 2012. Imposing a 28% benefit cap on tax-exempt municipal bond interest would have increased water and wastewater project financing costs by about $6 billion. Similar proposals to make municipal bond interest fully taxable would have increased municipalities’ water and wastewater infrastructure financing costs by roughly $9 billion, the report adds. “With clean water infrastructure needs well above $180 billion, we cannot afford to make these upgrades any more expensive,” the organizations emphasize.

Without sufficient cash reserves or replacement funds for maintenance and operation, smaller municipalities with water and sewerage systems serving populations less than 100,000 often rely on EPA-administered State Revolving Funds programs. These are separated under two major SRF programs — the Clean Water SRF, dedicated to stormwater and wastewater systems, and the Safe Drinking Water SRF, earmarked for drinking water systems. It is not uncommon, either, for communities with populations between 10,000 and 100,000 to combine SRF and municipal bond approaches. Rural communities with populations of 10,000 or less can and often do access various grants and loans programs through the US Department of Agriculture.

American Rivers, an environmental advocacy group that focuses heavily on water conservation practices, points out that how federal loans and grants are distributed through an application process depends on individual state policies and can vary among the state fund managers. In its report Drinking Water Infrastructure: Who Pays and How (And for What), the organization says infrastructure loans can be structured to have deferred principal payments, even possibly as 0% loans that accrue no interest. Also, they may include a portion of principal forgiveness, effectively serving as a partial grant.

Of course, financing costs vary considerably with the type of financing used and the creditworthiness of the water system, American Rivers emphasizes. “Ultimately, the cost of financing, in the form of interest payments and other transaction costs, is passed through to ratepayers or taxpayers depending on what the water system has pledged to secure repayment,” the report explains. “This is why water systems are highly motivated to protect their credit rating, if they are large enough to have rated debt. As a general rule, the higher the credit rating is, the lower the cost of borrowing.” However, what is often overlooked by public policymakers is that even when the financing rate is low on infrastructure projects, the total financing cost can be significant, sometimes doubling the total cost of a project.

The water resources organization further notes that although public-private partnerships have the potential to expand the sources of capital available to water systems, at present they have been only minor participants in water infrastructure projects. Still, PPPs do afford viable financing alternatives, American Rivers contends. For example, private investors might assume an ownership or equity position in an asset and use private equity or bonds to pay for a portion of the construction cost. In the case of an ownership stake, the investor could secure a pledged revenue return through a long-term water purchase agreement with a public entity, or perhaps be granted marketing rights for the water produced by the asset.

A shorter-term alternative would simply be for private investors to help finance water project construction in exchange for marketing rights for a limited period of time. Also, a private investor could help finance the optimization of a water system and generate revenue returns by splitting the savings in operating costs resulting from that optimization, such as in the form of reduced energy or chemical costs. [ return to top ]

ACEC & NSPE Seeking Applications for QBS Award

Every year, ACEC and NSPE partner to administer the QBS Awards. The purpose of the QBS Awards is to recognize public and private entities that make exemplary use of the qualifications-based selection process at the federal, state, and local levels. In turn, QBS Award winners serve as examples of how well the QBS process works, and they help ACEC and NSPE promote the practice of QBS in jurisdictions that do not use, or underuse, QBS to procure engineering services.

ACEC and NSPE are now seeking nominations for the 2014 QBS Awards, honoring entities that retain design professionals using qualifications-based selection. The deadline for nominations is Friday, June 6, 2014.

Please visit the NSPE website for a nomination form. 
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Engineering a Stronger Profession

Since July 2012, NSPE and its members have been engaged in an open process aimed at building a Society dedicated to organizational innovation and development. The foundation of that effort has been the association management book Race for Relevance, which outlines the challenges faced by today’s associations and provides a plan for change. 

Informed by data collected through extensive surveying and the active engagement of about 100 members from 41 states involved in seven task forces, the NSPE Board of Directors has committed itself to reinvigorating an organization that has been serving professional engineers for 80 years. By following the changes outlined in Race for Relevance, NSPE will be renewing its unique and vital role in promoting and protecting the value of the licensed professional engineer. 

The NSPE Board is committed to integrating the values, strategies, objectives, and action plan outlined in its new Statement of Strategic Direction (approved January 29, 2014) into the very fabric of NSPE’s ongoing governance and operations. 

Read more:

Staying Strategic (March 2014 PE)
By Executive Director Mark Golden

Change or Be Changed (April 2014 PE)
By President Robert Green, P.E., F.NSPE

Background on NSPE’s Race for Relevance initiative.  [ return to top ]

Save the Date!

Join professional engineers from around the country for networking, continuing education, and a fantastic Fourth of July celebration in the nation's capital!                        

Conveniently located in the heart of Washington, DC, with easy access to museums, the National Mall, and all Independence Day festivities, the NSPE 2014 Annual Meeting is one you and your family won't want to miss.                        

Registration is now open! Click here for all the details.
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NSPE Legislative Affairs News

NSPE Expresses Serious Concerns With the FUELS Act

On March 19, the National Society of Professional Engineers urged Senator Mark Pryor (D-AR) to reconsider his bill S. 496, the Farmers Undertake Environmental Land Stewardship (FUELS) Act. The FUELS Act would substantially weaken the current EPA Spill, Prevention, Control, and Countermeasure (SPCC) rule, placing the public and the farmers it seeks to protect at increased risk of devastating oil spills. NSPE understands that some members of the agricultural community have concerns with the current SPCC rule. NSPE would like to underscore two important points, though: first, the protection of the public health, safety, and welfare must be of paramount importance; and second, the Congressional Budget Office (CBO) estimates that most farms would be exempt from the rule. Read the press release.

NSPE Members Visit with Members of Congress to Advocate for the Professional Engineering Community

On March 6, NSPE members and staff participated in the 2014 Society of Women Engineers Capitol Hill Day to discuss issues of importance to professional engineers, including STEM education, investment in national infrastructure, and qualifications-based selection. NSPE Treasurer Julia Harrod, P.E., F.NSPE, and NSPE Legislative and Government Affairs Committee STEM Task Force Chair Karen Moran, P.E., F.NSPE, lead the delegation and met with several champions of engineering. Visits with Representatives Donna Edwards (D-MD), Michael McCaul (R-TX), Daniel Lipinski (D-IL), Paul Tonko (D-NY), and NSPE's very own PE in Congress, David McKinley, P.E. (R-WV), were extremely productive. There is growing interest and commitment to NSPE's issues and these visits served to bring these matters to the forefront. 

For all the latest NSPE legislative activities visit the 
NSPE website [ return to top ]

NSPE Spring Webinar Series

NSPE's spring webinar series features a session on April 17 titled A Conversation about Conflicts of Interest, Confidentiality and the Public Health, Safety, and Welfare, hosted by Arthur Schwartz, NSPE's deputy executive director and general counsel, who will be joined by other ethics experts. Schwartz will also facilitate A Conversation on Employment and Professional Practice on May 14. 

Get a group of your colleagues together in the conference room and all of you can participate and receive credit for the low member price of $99 for most of the webinars. Each webinar is held from 12:30–1:30 p.m. EST.

Access the entire webinar schedule on the NSPE website. Don't miss out! Registeronline today.  [ return to top ]

201314 PEG Executive Board Contact Information

For a complete list of PEG Executive Board Officers, please visit the PEG website. [ return to top ]

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