By Manny Teodoro

Golden State Waterers

A California surprise, Part I

Drought porn

Something unexpected happened when California ordered its utilities to save water: the state’s investor-owned private utilities out-conserved local governments.

California’s long-term drought began as early as 2007, but intensified to crisis conditions by 2012. Conditions worsened, and in response 2015 Governor Jerry Brown and the California State Water Resources Control Board imposed restrictions on 408 drinking water utilities designed to reduce urban water usage by 25% statewide. The order required utilities to cut water use, but left individual utilities to choose the means by which to achieve conservation. The mandate assigned each utility its own conservation target, with standards ranging from 4-36% reductions relative to 2013 levels. These standards were formulaic, and varied based on utilities’ historical water consumption.

It was pretty bad

These conservation rules were in place for twelve months—June 2015 through May 2016—and applied to both local government utilities and private, investor-owned utilities. Conservation rules were assigned based on historical demand patterns and supply considerations only, not on ownership or governance.

Happily, the State of California has shared utility-level conservation data lavishly—a boon to water policy researchers! Over the past year, I’ve been sifting through that mountain of data with Youlang Zhang and David Switzer to see how California’s conservation efforts have fared. We’re discovering some fascinating things. The first of our studies is now forthcoming in Policy Studies Journal.

Restricting the flow

Faced with water scarcity, communities frequently restrict residential outdoor water use, such as car washing and especially lawn/garden irrigation. These water restrictions are effective in driving immediate reductions in water consumption. In California those restrictions typically take the form of limiting the number of days when outdoor irrigation is allowed each week. The graph below shows how public and private utilities regulated outdoor irrigation during the drought.

Eyeballing that graph, there doesn’t appear to be much difference between public and private utilities. But after adjusting statistically for a host of factors like utility size, demographic composition, and hydrological conditions, it turns out that private, profit-seeking, investor-owned utilities restricted irrigation about 4% more than public, local government utilities. That may not seem like much, as we’ll see it’s actually huge.

Meeting the mandate

We were also interested in what made utilities more or less likely to comply with the state’s conservation rules. Overall compliance was about 53%–that is, on average 53% of utilities reached their conservation targets each month. We modeled compliance statistically, and found a number of interesting correlates of success and failure. But most notable was a yawning gap between public and private sector: after adjusting for other factors, private utilities were nearly twice as likely as similar public utilities to meet the state’s conservation standards.

Conservation achievements

Finally, we analyzed overall conservation during the mandatory conservation period. And again, we found that, after accounting for other factors, private utilities conserved an average of 3% more water each month than their public counterparts during the mandatory restriction period. Although this difference is small in percentage terms, it reflects an enormous difference in absolute volume of water. This plot presents the distributions of conservation results from June 2015-May 2016 for local government utilities (green), and what it would have been if each utility had saved 3% more:

Monthly conservation relative to same month in 2013

The areas within the white bars on the right side of the distribution represent the conservation that didn’t happen due to differences in ownership. Three percent greater conservation would have boosted public utilities’ restriction compliance rate from 51 to 62 percent.

In substantive terms, three percent greater conservation by California’s local government utilities during the mandate period would have reduced the state’s water consumption by 54.6 billion gallons—enough to supply the City of San Francisco for more than two years.

Well that was unexpected

So what happened?

California is once again in the midst of a hot, dry summer; other parts of the world are, too. So it’s worth trying to figure out what’s behind the public-private disparity in drought response. Although it’s surprising at first blush, it’s actually a logical result of the institutions that govern water in America generally and California specifically.  My next post will explain why.*

 

 

 

*Spoiler: as usual, it’s about money and politics. If you can’t wait for the next post, you can read the forthcoming article.

 

Public Administration & the Border Crisis

Public Administration Professionalism at the Flashpoint

Presidents issue orders, Congress passes laws, and courts make judgments, but immigration policy really succeeds or fails when bureaucrats interact with people seeking entry to the United States. Immigration policy is what happens when an ICE agent detains an individual (or doesn’t), separates children from parents (or doesn’t), and puts kids in cages (or doesn’t). Immigration policy is what happens when a DHS contractor attends to a wailing toddler, or leaves frightened children to their own devices in adherence to administrative guidelines. In the end, human rights are protected or violated not by politicians, but by the men and women who put regulations into action.

What drives bureaucratic behavior?

Although public attention tends to fixate on laws and rules when trying to understand public policy, decades of public administration research indicates that organizational norms and values determine what public servants do. Public employees from soldiers to teachers to police officers look to their peers for informal guidance on what is honorable, acceptable, or forbidden. Monitoring systems and the threat of disciplinary action turn out to be lousy predictors of public administrators’ actions. When bureaucrats enforce (or refuse to enforce) rules, it’s because their fellow bureaucrats sanction that behavior. Smart public agency leaders do not rely solely on orders, but rather seek to instill systems of ethics and build a sense of mission in their organizations.

Professionalization in public administration is an effort to enhance this kind of peer accountability by building loyalty to principles of public service. America’s military academies are excellent examples: they seek to build within officers not only respect for chain-of-command, but also a system of ethics that defines military professionalism. In the ideal, professions provide an “inner-check,” enforced by social approbation or disdain by fellow professionals, that guides individuals to uphold shared norms and resist unethical orders.

Administration at the border

The agencies at the flashpoint of America’s current immigration crisis give plenty of reason to worry. The main bureau charged with implementation of immigration laws is the Immigration and Customs Enforcement (ICE) agency, which was formed fifteen years ago when the US Customs Service (part of the Treasury Department) and Immigration and Naturalization Service (Justice Department) were consolidated within the new Department of Homeland Security as part of the post-9/11 reforms. Organizational culture and professionalization take time to develop, but this young agency has been charged with implementing some of the country’s most vexing and incendiary policies, even as its nascent culture is still forming. In early 2017 the Trump Administration ordered the hiring of 10,000 new ICE agents. Simply hiring and training that many people quickly is a daunting task; professionalizing and building a sense of mission in each new agent even more so. The Federal Bureau of Investigation (FBI) provides a useful contrast. ICE and FBI agents each receive 20 weeks of training upon entry into their agencies. But new FBI agents must also be accomplished college graduates, and upon appointment they enter a highly-professionalized agency with thousands of experienced agents, a storied history, and deep sense of organizational identity. It is not surprising that FBI officials have been more defiant, and ICE officials more acquiescent, in their relationships with the Trump White House.

DHS also relies heavily on private contractors to operate detention facilities, and some of the most troubling accounts of child migrant treatment emerge from these privately-operated facilities. If public administration professionalism implies loyalty to professional norms and ethics, then private contracting does just the opposite. A contractor’s livelihood depends upon satisfying a client (in this case, DHS executives), adhering to regulations, and fulfilling contracts. A contractor whose personnel refuse to treat migrant children as specified in a contract is likely to find that contract terminated.

Administrative evil and public professionalism

Governments can do great good and evil because bureaucratic agencies provide the capacity to put policy into action, as Guy Adams has observed. Administrative evil is not a consequence of inefficiency (the usual bureaucratic lament), but rather a result of a technical rationality that is the very hallmark of bureaucracy. Without professionalism, bureaucrats pass accountability for their actions to political superiors. Indeed, a naïve view of democratic accountability would demand dutiful compliance by ICE agents to orders (or tweets?) issued from above. Public service professionalism implies that a federal employee’s primary duty is to the public good, not to the whims of the person at the top of the organizational chart. Without a foundation of professional ethics and systems of accountability to professional peers, the rational administrator can find himself or herself participating in destructive acts.

So long as the United States has borders, it will need an agency to make those borders meaningful. But building a sense of professionalism and peer-accountability to ethical principles is crucial to ICE’s or any other border enforcement agency’s role in a democratic state. In 1952, political scientist Norton Long reflected on the lessons of the Second World War for American public administration:

It is a fortunate fact of our working constitution that it is complemented by a bureaucracy indoctrinated with the fundamental ideals of constitutionalism… In a real and important sense, it provides a constitutional check on both legislature and executive. It is no neutral instrument like the German bureaucracy, available to Nazi and democrat alike, pleading its orders from ‘die hohe Tiere’ as an excuse for criminal acts.

The decency of the agents charged with implementing public policy is a crucial check against government abuse. Professional public servants are the first line of defense and the last best hope for protecting human dignity in times of political turmoil.

Zombie Metrics

This guy measures water affordability as (Avg bill ÷ MHI)<2.0%

Terrible, horrible, no good, very bad measurement, part 4

My criticism of average bill ÷ Median Household Income (MHI) as a measure of household-level water affordability isn’t especially new. Lots of other people have pointed out the problems with this conventional methodology, and I’ve been presenting and publishing these arguments for more than twelve(!) years. But golden numbers are stubborn, and bad habits are hard to break—even when people know better.

The remarkable persistence of a bad idea

Over the years I’ve presented to hundreds of utility professionals and spoken personally with scores of managers, analysts, and rate consultants about the pathologies of %MHI and the virtues of alternative approaches. The reception is universally warm and agreeable, as most water professionals genuinely care about affordability and immediately recognize the fundamental flaws of the conventional approach.

And yet.

Alas, there’s an and yet.

Even well-informed specialists continue to use and promote the tried-and-false conventional methodology. Researchers who recognize that average-bill-as-%MHI is deeply flawed employ it anyway because it’s easy and widely recognized (for example). Managers who know that %MHI is a misleading statistic continue to put it in front of their elected officials because it’s familiar and they feel that they have to use this metric because everyone else does, and because they believe it’s an EPA standard (it isn’t). Advocates, analysts, and rate consultants who I like and respect persist with the conventional approach in their studies, even when they know these metrics are fundamentally flawed (many have told me as much!).

Examples abound. The Alliance for Water Efficiency has a nice tool that’s designed to help water utilities model the financial impacts of various rate structures. Sensibly enough, their model includes an assessment of affordability. Unfortunately, it uses the familiar flawed metric:

C’mon man

UNC’s Environmental Finance Center continues to feature average-bill-as-%MHI as the sole affordability indicator on its rates dashboards. Folks at EFC know about the problems with this metric (they blogged about it here), but continue to display it prominently nonetheless.

Et tu, EFC?

 

Easy metrics die hard, it seems.

Breaking habits

Water and sewer ratemaking is a niche specialty (to put it mildly). That’s good news, because if the community of specialists who analyze and design rates for a living get affordability metrics right, there’s a good chance that the utilities they serve will get affordability right, too.

I’ve developed better ways to measure affordability; others are working on this issue, too. At this stage there’s no consensus over the best metrics (naturally, I think mine are great). But abandoning the flawed measurement convention is an important first step.