from Claude Smith (IWS) =>
--------------------------------------------------------------------------------
Subdivision Wastewater Treatment - The Promise, The Myth, The Reality - a Different Perspective
As the Developer spars with the county with the engineering designs of its latest subdivision, preparing for ultimate approval by the State’s Department of Environmental Control, it becomes intriguing to analyze the process and what is really happening. It is a unique combination of business entrepreneurship, highly-trained licensed contractors, hard-working government officials, and a host of tangential participants making the approval process one of the more interesting aspects of economic growth in this or any country. Let’s look at what this process is really about.
The Promise:
The process begins with the Developer, whether a local real estate person, attempting his first soiree into the community development arena, or an established company with just another business opportunity facing him. Each, whether small or large, identifies a “business value” for the project. The future is bright, the opportunities great.
The Developer begins organizing his team, putting people in charge of particular aspects of the project. For larger projects, there are many people and companies involved. For smaller projects, the Developer takes many of the interface responsibilities, but in both cases, a team is built. A proper Civil Engineering firm or individually licensed civil engineer becomes part of the team, and the process of providing the background to prove site and project worthiness begins. The promise that is inherent in any development project, begins
The Myth:
The myth is that the schedule originally drawn up, will be met, on time and within budget and will meet all the promises made by the participants.
The Reality:
It would take much more space than this article practically permits, to describe this myth fully. But let’s take a shot at the major reasons. And from the person paying the bills, the Developer, it isn’t pretty.
1) The Process has liabilities like a corporation. In a corporation, the legal process in the country is designed to protect the shareholder. In the Development process, the participants to the process protect the new homeowners. In the corporate world, if the corporation willingly disregards the shareholders, the corporation and its officers and directors can be punished severely.
In a project that goes wrong, everyone involved in the process is investigated, therefore the penalties for messing up your portion is severe. So, just as in corporate life, at least well established corporate life, extra time is required to analyze and make sure that no mistakes are made. And that is the keyword, no “MISTAKES” can be made. And PREVENTING MISTAKES takes time.
2) The process is not built for performance. This relates strictly to how people are compensated for contributing. When the Developer accepts that responsibility, he pays. It is his role to pay. He is the risk-taker. Almost everyone else is paid regardless of what happens. The Civil Engineer firms bill on an hourly basis, and even if they have a fixed price contract, it is front-loaded so they don’t absorb governmental approval delays.
The Governmental agencies reviewing the project have “standards of performance” within their organizations, but they are standards that are defined by them and, understandably, very protective of them. With Government agencies notoriously understaffed, the standards are “employee-friendly” and the incentive to work harder or faster, may seem like a possibility, but, in reality, doesn’t motivate the government employee to act in any way that recognizes that the Developer is paying bank interest every day on land he can do nothing with until wastewater approval is reached. Don’t blame the Government employee, blame the process.
3) The process is highly regulated and licensed. Only licensed people can work in this process - specifically civil engineers and licensed contractors. Thus, in states where development hasn’t previously occurred, it is unlikely that we will have the technical manpower readily available to do a project. With less money, the Developer may pay for inferior, but licensed, help, however the approval process will be delayed by this inexperience. Similar to the world of teaching, tenure and credentials rule - so new, bright and forward-looking talent, can be stifled in the system.
4) All levels of government are involved. That means local, state and federal. Thus, each government bureaucracy has its fair shot at looking at and evaluating the project from it own perspective, perspectives, by the way, that can be at various odds with each other.
The developer and his team, has to satisfy them all before he can do something, and the process of just getting into the first meeting at the lowest level of approval, can be very costly indeed, just for early engineering and site work. And to get into that first meeting and be turned down is devastating to the Developer. So each presentation must be well thought out, completely conforming to all laws, administrative rules, and desires of each governmental agency, and presented in such a way that there will be a minimum of delays in passing approval. It is quite an effort, indeed.
5) Wastewater treatment responsibility is, by default, given to the engineering firms. The engineering firm has its own ideas of what might be best, and plugs in its own wastewater solution, either working with local equipment distributors, or friends they have worked with in the past. It tends to be local, and it tends to be based on movement of hardware to solve a problem, instead of providing a true wastewater treatment interface for the developer.
Remember, the wastewater treatment provider has no way to make money until his equipment is ordered. And, in such a highly complex and regulated process, it is unlikely that an equipment distributor has the knowledge or time to put into the proper sizing and planning for the project. Thus, whether the approved equipment manufacture has the best interest of the Developer at heart, the weakest link, the local sales rep can, without too much effort, make a mess of the wastewater treatment design and installation, promising things he can’t do, and not understanding how he must interact to make the process the best and most cost-effective for the Developer. And, I won’t even mention the unscrupulous reps who gauge the Developer, price-wise, and never really deliver.
6) Intentions are not understood. Each party has his own job in the process. And, these parties are a unique combination of public and private personalities, with different lifestyles, visions, and responsibilities. What is good for the engineering firm is not necessarily good for the County Commission, etc. And there are valid and honest reasons why they may differ.
For example, a county that does not wish to grow may have the greatest project in front of it, but it will change the heart and soul of that environment. So the commissioner will seemingly fight progress, even though, he is truly representing the view of his or her constituents. These types of philosophical disagreements can result in endless delays, more bank interest for the Developer, and emotional frenzies that only work to exacerbate the process and delay it further.
Well, there are many other reasons to beware before entering into the development process, but these are a few. The above listed realities exist in our commercial world and are imbedded in our system. Not all projects exactly fit the profile, and not all projects have each of the characteristics as part of their delays, but most projects are late and over budget because the realities, as listed above, are never quantified properly, especially for new entrepreneurs on their first development project. As I add future comments, I will try to look at each of the above, and others, and come up with recommendations that can be debated and better understood. I hope, that as an outcome, each person’s positions are better understood, and projects move through the cycle much more quickly.
My company has its place in this equation, and you will see that bias in my discussions. But I do believe that projects that can help the community’s economic future, and can make the environment better for having them implemented, should be the cornerstone of our building and development process. And, with the scarcity of water and other major resources, it is time for us to evaluate how we’ve been doing business and see if there is a better way for all of us - the wastewater professionals, the new homeowners, existing residents, taxpayers, legislators, etc.
Claude Smith
CEO/International Wastewater Systems
President/RCC Holdings Corp.
AI
