Albert F. Appleton
Horizontal Integration of Infrastructure Services: The New York City Experience
Good afternoon. I have left outside two or three pieces of material that I will refer to during the course of this presentation that I thought might be helpful and be worth some of your review. In addressing the topic, “The Challenge of Providing Future Infrastructure in an Environment of Limited Resources, New Technologies, and Changing Social Paradigms,” I am going to focus on limited resources and changes necessary to deal with those issues in the future. My talk will mostly draw on my experience with the New York City Department of Environmental Protection between 1990 and 1993.
Now the name of the department is somewhat of a misnomer, because it is actually the water and sewer utility for the city of New York, plus its environmental protection agency, which, to my knowledge, is a combination matched nowhere else in the country. In fact, you would generally run anywhere from three to five institutions in the country to duplicate New York City DEP. It is an agency with a $1 billion-plus budget, 6,300 employees, and a whole series of programs.
When I took office in 1990, the water rates were rising at a rate of 14 percent annually. They were actually rising higher, but I have taken out the subsidization factor in that rate rise. The construction budget was averaging about $500 million a year. I am pleased to be able to say
that when I left DEP 4 years later, the water rates were in the middle of a 2-year rate freeze, and at a 4-and 10-year financial projection of a growth rate below inflation over the next 10 years. We have, in fact, been able to commit to a cap at that.
In addition, we have provided capped and subsidy rates for affordable housing, increased our construction budget by 50 percent to about $750 million, (this in a period of lower unit cost) and added over 500 people and to make a major dent in, although not completely eliminating, the department's backlog of preventive and deferred maintenance. So I would like to suggest that we had a good deal of success in providing infrastructure and environmental services under the paradigm of changing social conditions and limited resources.
Now how were we successful in being able to do that? The concept that I want to talk about today does not really lend itself to a good buzzword. We can call it integrated structure. We could call it smart infrastructure, horizontal infrastructure, integrated systems planning, or a whole series of names; but I will just refer to integrated infrastructure.
Let me start off by asking, integrated with what? It is integrated with the environment, integrated with the economy, integrated with the community, integrated with the financial realities–integrated, in short, with all those goals, policies, and benefits–integrated, linked, whatever. Why? The short answer as to why we did this integration was to be able to do more, for less, and faster. Very simply, this change in infrastructure orientation was designed to do those three things, to do more, for less, and to do it faster.
How did we accomplish doing more for less and doing it faster? Generically –and then we will talk about some case examples–the first element was by combining the hard strategy of building something with what are sometimes referred to as the soft strategies of conserving, protecting, restoring, maintaining, enforcing, providing incentives, inventing new things, researching new things, educating things, and partnering things. I want to stress this is not an either/or choice. This is often debated. It is a choice of selection in combination. That is, we will always need sewage treatment plants. We will always need water filtration plants. But there are many different ways we put these together with new environmental techniques, technologies, and strategies.
The second thing I want to suggest is to move from comprehensive to what we like to call adaptive planning. Although I know this sounds like heresy, I would like to suggest that comprehensive planning, particularly in the public sector, has become a very stultifying and action-obstacle process. Because it is so long, so extensive, so unwieldy, and so unrealistic in terms of the incomplete information that is available in reality, the way comprehensive planning is specified to be done simply cannot be done in the real world. I want to suggest that what we call adaptive planning, or we sometimes call action research–and I will talk about this a little more later–is really a very critical step to take for the future.
Another step I think is very important is to move from expertise and mandated criteria to goal-driven criteria; that is, to use an example that is very much debated today, the increasing rigidity of environmental mandates. We believe that the problem is not the mandate itself, or the environmental goal itself, but that the technology or the process to get there is specified. This has been talked about a lot, but we actually tried, with some success, moving to goal-driven environmental and infrastructure planning.
The fourth thing that I think is very critical, and in a similar family, is to move from vertical to horizontal perspectives. The way we are institutionally organized in the public sector is to have a Department of Transportation, a Department of Water, a Department of Sewers, a Department of Waste, a Department of Housing. These have institutional missions that are very much tied into, again, vertical definitions of professional expertise. To just use a very simple example, we tried a number of times in New York to have the Department of Transportation, when it repaved streets, do street treatments to fix the curbs, to replant the trees, to deal with the lighting, to look at the signage. The department, though, was in the business of repaving streets. Even though it was cost-effective to do this other work, they lost a certain amount of money that lowered their paving mileage. Paving mileage was the way this type of vertical department kept score. So instead of thinking from a community perspective or a cost-effective perspective of how to leverage the infrastructure dollar, they had this limited vertical definition.
We need to think in terms of horizontal missions, because ultimately the business we are in is building the public good. That is, infrastructure, whether it is about development, is also
about the public good and about the public welfare. At a time when the business community is thinking in much different, flatter, more horizontal ways, the way we do institutional investment has to follow accordingly.
I also believe that we need to move from open-ended processes, particularly open-ended regulatory and participatory processes where the default decision is no action, to closed-ended processes where we assume we are going to act, and therefore make the best kind of decision on available information. A very good example of this is the deadlock the country is facing in dealing with the issue of mini-estuaries and dredge material disposal. The regulatory process defaults to no action if all of its standards are not met. There is no way of coming up with a best-possible action decision in a close ended process in a period of time.
The next generic point I want to make is that infrastructure is about large amounts of money. The result is that quite small percentage savings in efficiency will generate what are quite enormous sums of money for investing in some of these related goals–economic development, community revitalization, and public health.
For example–worldwide, the environment is perhaps a $500 billion business, maybe more. Worldwide, the minimum demand for housing, at just $10,000 a unit in terms of third-world country standards, is also a minimum of say $500 billion. If we were to make those two needs work more closely together, and save just 5 percent in terms of efficiency, we have now generated $50 billion worth of added investment value available to put towards these problems.
You can do this equation in virtually any large infrastructure environment, and come up with the same value-added scenario. That's because infrastructure remains, after the welfare system, the largest single source of domestic investment. Quite small gains in efficiency lead, in terms of the amounts of money we are spending elsewhere, to very large incremental investment resources. If we are looking at a horizontal perspective, that then gives us all sorts of additional leverage, some of which I think you saw in the previous presentation, that we were able to pursue.
Lastly, I would like to suggest that the way we tie all of this together is by being determinedly least-cost. By determinedly least-cost, I do not necessarily mean lowest out-of-pocket dollars, but rather determinedly looking at what is the least-cost way to get the largest
benefits. Though I think we would all hope and pray that our analytic processes are designed to generate that, as a matter of practical experience, much of what passes as analysis does not generate least-cost solutions. I would just like to flag three areas which I think are important to look at.
First, we as a culture have an enormous bias for capital versus labor solutions. However, many times in the DEP water utility experience, we found that spending money to add head count–that is why we added 500 people at a time when the city was downsizing very dramatically –saved us the necessity of doing major capital projects by changing our ability to maintain and operate the system.
Secondly, I would submit we as a culture prefer macro solutions to a collection of micro solutions, even though the collection of micro solutions may in fact be significantly lower in cost. We seem to have a bias in favor of large, sweeping macro solutions.
Lastly, our costing systems misallocate a lot of costs in that they do not even flag them qualitatively. I was fascinated by the previous discussion of the debate of development density size. What was missing in that forum was a debate on the regional costs and gains of having a certain density in the Alexandria freight yards. I would suggest had that been factored in, in terms of the dispersion costs to the larger region, it would have made for a very interesting exercise in economic analysis.
Look, for example, at the tradeoff between point-source pollution control, which is heavily facility-oriented in construction, and non-point-source storm water control, which is heavily oriented toward land use, prevention, and labor intensity. There is an enormous cost bias because of the way we are set up institutionally–the forums we debate this in–toward point-source facility construction, even though EPA now tells us that 70 percent of the pollution source in this country is non-point-source pollution. A combination of culture and the way our forums are set up leads us time and again to misallocate and misidentify the costs of these investments. And much of this is not rigorously analytic; much of this is just essentially intuitive common sense. Who is to do this integration? I think the integration is going to need a different kind of government manager. It is going to need more creative policy entrepreneurship. It is going to
need less of the kind of professional expertise that we have relied on in the past. We are going to need more application of expert judgment –of trained and disciplined expert judgment–because the current institutional models we work with often essentially prejudge the expert judgment of our trained professionals. That is, time and again, we would have people with 20 years of engineering or scientific expertise, and they would have to put their expert judgment into predetermined responses–predetermined procurement responses, predetermined regulatory responses, predetermined financial responses. In moving to a more entrepreneurial form of setting infrastructure policy on an integrated basis, we also need to see the flip side, and it is not the way it sounds when first described. It is almost counterintuitive, but by doing so, it is meant to liberate. More application of expert judgment rather than the kind of managing to the mean, managing to the reliable that is incorporated now in so many of our institutional norms and cultures.
Lastly, in terms of the generic list, how are we going to finance this integration up-front? I would suggest that there are four sources that we should look to in this limited-resource future. Taking that as a given–it would be an other interesting topic to discuss whether we should–but taking it as a given, I would submit there are four sources.
The first is recycled cost savings. That is, by doing these horizontal plans, of mixed hard-soft packages, and putting the cost savings into these other programs. A very good example of that is in the New York City watershed, where by investing $500- 700 million over the next 10 years, in watershed protection we are essentially locking out forever the prospect of building a major filtration works whose cost and operating capital would be many billions of dollars. That is a relatively easy and dramatic example, but it makes the point.
Secondly, I think we need to look to cross-area benefits. One of the reasons we wanted to go, and did go, to horizontal packages is to try to capture benefits that traditionally are not available for infrastructure financing, or if they are available, are dealt with only in the legislative arena. For example,–a benefit, I might add in passing, we did not succeed in capturing–is the saving in terms of health care costs from lead-impacted children when you invest money in rehabilitating inner-city, lead-contaminated housing. That is, there are a series of cross-area cost-
benefits that we do not have institutional forums for, but we can sometimes cobble together ways of capturing this money.
The third area, and one which we used very effectively at DEP, is to monetize long-term gains. The fact that we had dedicated revenue sources, and that we did water rates on the basis of multiyear financial planning, enabled us to do this with more ease than some others might have. The standard debate on an infrastructure project is, if we spend money over time, we are going to get this series of softer benefits. I would submit that if we could monetize more of those benefits than is generally seen, we could create either a cash flow (or a comfort level) for financial decision makers to be able to fund these projects.
Lastly–and this is very definitely responding to a social paradigm, not a financial paradigm–I believe that as long as the current public cynicism about government lasts, we are going to need to do much more with dedicated funds. That is, self-contained funding where the public very definitely gets a sense that what it is paying for. Clearly, much of the antagonism toward government is less antagonism in general, than a belief that people feel they are not getting their money's worth. So to restore confidence, I believe, and I would predict, that we are going to see more and more use of dedicated funding. If you think about privatization, at one level that is what privatization is: It is a way of introducing dedicated funding into systems that have traditionally not had it.
Let me talk about some examples from New York City that illustrate some of this. More generically, the problem that we needed to solve. We start really with the financial story. I left some copies of the Department of Environmental Protection's 1993 Strategic Plan Summary, which ties together a great deal of this. The financial planning problem we needed to solve is based on 1992 numbers, which break the department's revenue use into three areas–debt service, nonpersonnel operating expense, and personnel. Debt service is already close to half of the entire revenue stream of the department; 60 percent of the remainder is nonpersonnel costs, and 20 percent of the budget is personnel service.
The main reason that the water rates were escalating in the late 1980s and the early 1990s is the capital program, driven by environmental mandates and a political decision to avoid
personnel costs, was going up very rapidly, while the things that would save us capital expenditures–essentially maintenance and operations –were being starved by a policy of holding down public headcount.
Not only was our existing capital budget projected by the year 2000 to put the Department of Environmental Protection's debt service at 70 percent of total revenue–if there is anyone here from Wall Street, they will understand what the practical implications of that number are, as I am sure the rest of you do–but the City of New York faced a whole series of environmental mandates as the result of its neglect of basic infrastructure policies. It faced a threat that it would have to filter its watersheds. It faced a threat that it would have to build a new sewage treatment plant, because so many of its existing plants were at or over capacity. It faced a threat it would have to go into the Hudson River, because water use was accelerating at the rate of about 1.5 percent a year. It was well over sustainable yield.
So it faced a threat that it would have to build massive new works for denitrification and combined storm and sewer overflow because of the impacts of these problems on the harbor. In fact, it was very easy to project, over 15 years, additions to the capital budget of anywhere between $12 and $43 billion, so that it was imperative that the city lower its construction costs and avoid these new mandates. Essentially what we did was change the department's policy from one of building new facilities as needed and managing the existing system within the resources the budget bureau gave us, to a much more proactive, integrated financial-environmental infrastructure strategy.
There are a number of examples. Over 20 years, the trends in coliform levels in the New York City Harbor show two drops after massive investments in capital facilities construction. A last drop, in 1992, comes from, in effect, just pushing the management of the existing sewage treatment plants. That is, tightening up the management of the sewage system, putting in pretreatment programs throughout the city, tightening up the operations within the sewage plant system itself, doing some very minor, small scale technology stuff. We got a very large spike in terms of water quality improvement without spending a dollar on capital construction.
What we also did at the same time was to make an enormous move, from a 10-year struggle to go into the Hudson River and use it as a water source, to a comprehensive program
What we also did at the same time was to make an enormous move, from a 10-year struggle to go into the Hudson River and use it as a water source, to a comprehensive program of water conservation that enabled us to ride out the worst rain period in the city's history, 1991, without going to a drought emergency. It has dramatically lowered our water use and essentially eliminated the need for both new sewage treatment plant construction and going into the Hudson River on a day-to-day basis. So we were able to take billions upon billions of dollars out of the capital budget, both from the planning sides of it and the projected future operating expenses.
The next thing we did was to look at that approach in a more structured series of examples. Watershed management has been talked about a lot as a concept. We decided to take the experience we had had and apply it to Jamaica Bay, where we were facing over $2 billion in water quality facility construction for combined sewer overflow (CSO) plants and for denitrification facilities. Instead, we developed a Jamaica Bay comprehensive watershed plan, which came up with four management ecosystem restoration elements.
The first is, by combining water conservation with running the storm sewage treatment system better, we were able to drop two of the four CSO plants needed in the system for an enormous savings.
Second, we identified a series of areas where we could use wetland restoration to improve specific conditions at boundary points, which are very difficult to achieve with baywide measures. By using boundary-point targeting of wetland restoration, we were able to deal with those water quality conditions.
Third, much of Brooklyn and Queens is underlain by the Brooklyn-Queens aquifer, which, as it has ceased to be used as a water supply, has been returning to its historic levels. Those of you who grew up on Long Island know that all streams on Long Island are essentially groundwater-fed, which means the historic level is at the surface. Consequently there are enormous flooding problems in communities, many of which are the poorer communities of Brooklyn and Queens. We came up with a system to pump the ground-water to flush the tributaries after the worst storm events, which also enabled us to both solve the community flooding problem and, again, cut down on the amount of capital construction needed.
But the pièce de résistance of this is, that we discovered after pushing the envelope in a couple of places, that if we did an environmental restoration of the bay by restoring its depth levels to their historic contours –that is, much of the bay has been deepened over time by dredging; it has been narrowed and deepened so that the tidal period has been greatly extended–we could shorten the tidal period from 35 to 11 days. By shortening the tidal period that much, we essentially used the ocean to both reoxygenate the bay and flush out the nitrogen loading. So that when it all added up, we were able to get a bay that had far better ecological characteristics and far better clean water characteristics for $1.2 billion instead of $2.3 billion, a savings of over $1 billion, and that is using very conservative assumptions on the good side of the tradeoff.
Now obviously we did not exclude, as I said, the hard engineering side. There will still be two CSO facilities built. There are a number of other measures that need to be taken. But by combining these, instead of doing essentially the environmentally traditional solution of just using clean-water facilities, we were able to serve an enormous series of goals–community goals, ecological goals, financial goals.
Let me further elaborate on this story by just talking about one of the two CSO facilities we were going to build. In South Brooklyn, there is an inlet that the Army Corps of Engineers dredged out many years ago called Perdigate Basin. Perdigate Basin is 1.25 miles from the bay into South Brooklyn. The Perdigate Basin in the early 1950s was filled in as a dump for nontoxic, essentially household, solid waste at a time before the kinds of household cleaners we now see today were there. So that the testing showed that it was relatively clean.
The traditional plan for Perdigate Basin was just to build a CSO facility and to stop. That facility would have cost about $300 million. We added to that plan a restoration of the entire undeveloped portion of both sides of the basin, a wetland restoration at the mouth of the basin, and the creation of a nonmotorized boating area, which does not exist elsewhere in New York City, in the mile above the marinas at the head of the basin. We put community facilities into the headworks for the CSO, and we had a restoration plan for the businesses affected by the construction at the basin. These steps, if taken independently, would have cost about $40 million. But because they are being bid as part of a $350 million contract, we were able to use
the desire of the contractors to get this huge piece, plus the savings in overhead, to get them for a number we estimated between $15 and 18 million extra. By combining these facilities, we first of all saved a significant amount of money. By also involving the community in the planning of these facilities, we turned what could have been a very ugly fight over a “sewage treatment plant in our neighborhood ” into a desire by the community to make sure that this area, which they wanted preserved, was locked up. That is, they saw the CSO facility as the way to get something they had wanted for 15 years; preservation of the whole rest of the basin.
By looking at the entire universe of interests–the community interest, the social interest, the financial interest, the environmental interest–we were able to get this project through essentially without disruption. Even though construction prices have been very static in New York,-so we probably did not save as much as we would have in a different construction environment, at 5 percent a year construction-cost escalation just saving one year on the project paid for the entire amenity package, as well as making the entire project much more welcome. Again, I think this illustrates some of the ways these programs can be planned and structured to achieve multiple objectives and real cost savings.
Now I would like to give some other examples;–two more examples–two fast and one a little more detailed. Air pollution: for 20 years the air pollution debate in New York had been at a stalemate over traffic control measures into Manhattan. We came up with the extremely unwelcome conclusion that we could get air pollution control faster and more easily by technology: by a combination of reformulated fuel, new emissions controls on cars, and switching the buses to alternative-fuel vehicles. I saw this was unwelcome, because there are many people who do not like cars in Manhattan, whether or not they pollute, and wanted to use the environmental issue as a way of trying to force cars out of Manhattan. We felt very proud of ourselves that we had solved an environmental problem, and essentially resolved a bitter and unresolvable social debate. There was a little bit of a downside because this was a pure technology solution. I want to emphasize this, because having talked about the Jamaica Bay program that had so many soft elements, I want to say that here is a solution that rejected soft elements in favor of a pure technology solution because it was faster and more reliable.
Southern Staten Island is the last area that is undeveloped in the City of New York and much of it is wetlands. Many of the wetlands have been invaded and developed, producing both septic contamination and flooding. Instead of the regulatory attempts that have been made over the years to control wetlands, and have just produced bitter and useless controversy, we went in and our sewage engineers, that is our sewage planners, working with some environmentalists, redesigned all the stream corridors as essentially natural storm water drainage.
We then used the saving from that program to buy all the stream corridors and we netted a savings of at least $50 million in terms of storm water construction. We resolved the long and bitter neighborhood dispute. Although you could argue, that because it was less-dense development, we lost property taxes, the value of the property adjacent to these environmental amenities is now much richer and much more important. No one ever did the cost analysis, because I wanted to give both sides of the argument, but clearly there was a major benefit there to be gained as well.
Lastly, going to the water conservation program, it is traditional water-use theory that the richer people are, the more water they use. The City had never metered its water system until finally into the late 1980s, under bitter pressure from the Hudson River lobby, which was trying to stop the City from going into the Hudson River, the city rather halfheartedly began to do so. I think the City might have still resisted it, except that Wall Street kind of said to them, “come on guys; this is the late twentieth century; meter your buildings, please, already.”
Unfortunately, when the City went to meter its buildings, it forgot to do two things. First, it forgot to put in a modern management information system, so that a system that was designed to bill once a year, on a fixed rate, had now to do multiple billings a year, which thousands of customers were going to contest. Secondly, it did not realize that in a vertical city, all the folklore about water use was wrong. That is, in a vertical city poor people have larger family sizes; they have more doubling up. They live in buildings with leakier plumbing, and they are home more often.
As a result of this, the water metering started to do a huge shift of cost from middle-class buildings to poor buildings and affordable-housing buildings. And the City, which had invested hundreds of millions of dollars in bringing the private sector back and to rehabilitating those
buildings, was now facing the fact that its water policy was driving the percentage of building operating expenses represented by water and sewer from 3 percent to 4 percent, 6 percent, 8 percent, sometimes as much as 10 percent. Which, in terms of the very narrow funding bands we were talking about, meant bankruptcy for these buildings.
We went through several iterations of how to deal with this, because the longer-term problem was that if we sacrificed water conservation, which is what the affordable-housing industry was pushing us to do, we would be back having to use the Hudson River, so that the long-term cost curve would hurt them even more. But we had to get them through the short-term cost curve. What we finally came up with was a rate system that again, to my knowledge, is unique in the United States. We offered every building that would retrofit its plumbing, put its building superintendent through our water manager's course, and agree to an annual water inspection, a rate cap at 50 percent more than the average per-unit cost.
The reason we were able to do this is that financial analysis showed us that we needed to reduce our water usage by about 20 percent to capture all our avoided costs. Sometimes, when we talk about water conservation or resource conservation, we talk about it in terms of the more we conserve, the better. But conservation is like anything else. There is a knee in the curve; there is a point of diminishing returns. We identified a 20-percent water reduction in the city at the point at which we got 90 percent of our avoided cost. The technology retrofit that the affordable buildings would go through would reduce their water use on the average 35-40 percent.
So what we did is we traded a price solution for a technology solution. And knowing that they did not have the up-front funding, we further put in a $300 million toilet-rebate program, which is privatized, to allow them to essentially do this kind of investment. The City is now very comfortably looking forward to its water use going below 1,200 million gallons a day by the end of the decade, which is essentially Nirvana. In fact, we can probably push it considerably below that.
By taking the cost savings from the avoided facilities and putting them into these maintenance, management, and environmental technology programs, we were able to not only
save an enormous amount of money for the infrastructure system; we were able to share that with some of the other systems, and therefore maintain our infrastructure goals.
What lessons would I offer to be learned from this in addition to those I have already described? One is, there is an awful lot of talk of ecosystem restoration, but I must say that our experience in New York is, in fact, that it works, and works big time. It does not work in every instance. It is not a panacea. But there are many situations we certainly found where it saved us enormous amounts of money. It was a golden bridge to the environmental community, a golden bridge to the communities, and gave us a much broader span of benefits. Restoration is definitely a strategy that makes a good deal of sense.
Now the second thing is that when we think of infrastructure, it is important to think not only of capital; it is very important to think of maintenance. Because we have to think of infrastructure not just as what we build, but what is in the natural environment, what we maintain, and how we operate it. That is, we have a piece of infrastructure that is sitting around, and we are operating at only 60 percent capacity; we have only 60 percent of our infrastructure. The biggest single piece of operating savings–I have talked about capital savings, but we did operating savings as well–came when our clean water bureau was able to push the rated capacity of our sludge dewatering units from 20 to 24 percent–which is our projection, our initial operating experienc–to 29 to 32 percent. Because we pay for sludge by the pound when we ship it out, we essentially saved ourselves $25 million a year not shipping water. That is about as good as you can get it–that we paid $25 million less not to ship water.
I gave you some of the numbers on sewage treatment plan maintenance. We talked about how tightening up the water system helped us in water conservation. It is very critical to think in terms of maintenance and operations. And one of the things we talked a good deal about in a strategic business plan is finding the right matrix point between capital, maintenance, and operations. What is the right point to balance all those three investments?
A third lesson I would just kind of highlight is that when we talk about technology, our mental picture is all this whiz-bang computer stuff. But do not overlook mundane technology. What was one of the two biggest things that made our water conservation technology work? First, people now have aerators that really give you the same sense of being in the shower for
30 percent less water. Instead of the stuff they had 10 years ago, that is, flow constrictors, they now have aerating showers. This has had a totally different impact on the public acceptance of water conservation.
After years and years, the city finally came up with a manufacturer of a hydrant lock that worked. It made it work using subtle differences in magnetic alloys. Locks on the fire hydrants may seem like a very mundane example of technological innovation, but on a bad day in the summer, this will save the City 500 million gallons of water, not to mention incredible chaos on the streets. These really do work. We have seen people fail to take them off with blow torches. And believe me, in New York they have tried. Mundane technology–small changes in what we have.
Watershed planning. Different scale than we are used to using. It works, too. It is important, I think, that we change the scale on which we are operating. But if we change the scale on which we're operating, we have to be conscious of two things. First, we have to be much more dynamic when we operate on a much larger scale. Secondly, many of the participation processes that are being designed in the name of watershed planning were obviously invented by the devil when he was having a bad day. The Jamaica Bay plan would have never gone forward if we had taken it to the standard model of having 30 people around the table and facilitating it; 18 people would have panicked, and 4 people would have not known what it meant for their own interests, and they would have frozen the process.
The way the Jamaica Bay plan worked presentationally was, we were able to identify key concerns for constituencies one at a time, to make sure they were dealt with, so that when people saw what would have seemed to be a radical departure, they also saw the benefits. That is, they got it in a package. They could see it as a package, whereas these participatory–kind of let us put everything on the table and hope, like spaghetti, we throw it against the wall and it works–can just freeze everyone in position. And everyone, as we all know, has gotten extremely skilled at freezing everyone else in position.
Two last observations. First, I think it is going to be very hard to get to some of this brave new world because it is not going to be a menu-driven world. That is, a great deal of what
people like about the current system is there are models, norms, laws, regulations, institutional statements that say this is what is right. Or I am doing what 82 other people are doing, therefore I am not subject to criticism. Integrated solutions are going to be much more site-specific, much more driven. Ecosystem restoration will make sense in one area; water conservation will make sense in another. We have to build the reservoir in the third place, put the freeway in in the fourth place, go to jitney service in the fifth place.
That is going to be a lot harder for people to keep score on. We are going to have to come up with something new to give people institutional comfort while taking the risks of innovation. That is going to be very, very difficult. I really want to stress what I think is going to be the importance of that as a critical issue. We cannot debate these issues in terms of soft is good, hard is bad, or hard is good, soft is silly. We have to look at this stuff from a least-cost, most-benefit basis. That is going to get a lot of people out of their comfort zone.
And secondly, it is going to mean that we are all going to have to accept leadership from different sorts of people. Infrastructure experts are going to have to let housing people tell them how to do some things. Housing people are going to have to let infrastructure people tell them how to do things. Environmentalists and economic developers are going to have to all do the same thing. That is, much of the current system is based on everyone kind of leading in their own sphere. We are going to have to come up with ways of much more dynamically sharing that leadership without paralyzing ourselves. I think that is going to be another very difficult institutional challenge.
Finally, I think, to go back to what I said at the beginning, this has all got to be very rigorously bottom-lined. If there is going to be a unifying principle, we have to develop better ways to identify costs and benefits, quantify them as much as possible, be fair about them when we do not quantify them, and try to follow the cost trail around. We will not always succeed. A lot of it will be common sense. But that is going to be, I believe, the only sure compass toward this new area, to really discipline ourselves to be fair to all the options on the table so that they work.
Let me close with a favorite story of mine about the old system. I went to a watershed planning conference once and I saw six of the most beautiful GIS presentations you would ever
see in your life. And the one that particularly fascinated me was about ground water nitrate pollution in Idaho. This was really fascinating stuff. And at the end of 30 minutes the person said, now that we have all this data, can we get down here and prioritize what we want to do next? And I am listening and saying, “wait a minute; if I really heard what they said correctly, 65 percent of the problem is fish farms, and 85 percent of the fish farm pollution comes from 4 out of 125 farms. What is to prioritize?”
We have processes in which really capable and intelligent people can seriously wrestle with that question. What we need are processes whereby six intelligent, responsible people can drive around the watershed or the town or the waste system or the housing development and say, here are the first two-thirds of things that anyone short of an absolute moron would do. So let us go do them. And then while we are doing them, let us gather the information to solve the boundary problems.
We were not always able to do that with success in New York. And sometimes we had to dress up the obvious in ways to make it more comfortable. But I do think part of the reason we succeeded with some of those hard numbers I gave you at the start is that we tried to apply that process in a fair, and as I say a horizontally linked, least-cost way.
QUESTION: One question. You mentioned about the shortened tidal queue. How do you do it?
ANSWER: Basically, much of Jamaica Bay has now been dredged out to a depth of 40 to 60 feet. Historically, there was no part of the bay that was deeper than 11 feet; 18 feet is actually the point at which you hit diminishing returns. Now by raising the entire floor of the bay to a depth of 18 feet, you essentially shallow the bay, lower the volume of water, so it has to move faster to get through. And therefore you essentially restore close to the historical tidal period, with all the benefits I described.
QUESTION: In discussing at length a project, you referred to an alternative to participatory involvement of the affected community. And instead you said just package solutions. I am trying to paraphrase it, but I think I am not doing it accurately. What I am
asking you is whether you can just go over the way that you did work with the community in lieu of the time-consuming participatory solution.
ANSWER: Well I do not want to say we had no participation. We had an ongoing relationship with the community in other issues, so that we knew the people and we knew who the players were. What we did not do was convene a process that said here is the process and everything that happens goes through and gets ratified by this process.
What we did is we first created internally–having this information based on these ongoing relationships–a package we thought would, if not work, at least force a constructive debate. And then when that package was ready, rather than go through the developmental process, then we took it into the normal participatory processes we had with the community.
But what we wanted to avoid is the situation like in the estuary programs, for example, where sometimes in conflict resolution we say we are going to get together, and first we are going to talk about goals. Then we are going to talk about strategies. Then we are going to talk about alternatives. Then we are going to talk about what data we need. Then we are going to talk about if we all believe the data.
Because we felt essentially, knowing what we did with the community, and having established both the relationships and the working style, that we could come to an alternative that could focus the debate. And I believe that what government should try to do is not ram an alternative down, but get the issue far enough along based on, hopefully, what is an ongoing relationship, to focus a debate on choices.
The other advantage of what we did, although I do not think it works in every situation, is by having a focused alternative that we clearly liked, we made it clear to the people that if they did not come to the table constructively, they would be penalized. That is, we had not committed to wait until the process was over and use whatever came out of it. We had committed to have a process basically which was bounded. We were going to do something. We were going to do a watershed plan. There is our best version of the watershed plan. We are open to better ideas, as we have demonstrated in the past. But if you do not like the plan, that is a separate discussion and we will see you in court.
So it is just kind of what I would sometimes refer to somewhat simplistically as the Lieberman detail model of public participation, to the Polish parliament where every person got a veto vote. I think we have to figure out ways in the future of disciplining people in the public participation process so they have some responsibility for its success. Too many of these processes are designed in ways that people can make the process fail with no penalty.
That is, just as government or a private developer for different reasons are disciplined when they go through the process, other people who want to come to the table have got to put something on the table that says, here is why we will participate fairly. And it was my experience that when processes were allowed to deteriorate, where people could come in and out of them without penalty, they tended to fail. Where people were committed to do something, and knew that something was going to happen, then they tended to make it work, because they had a stake.
QUESTION: Did you choose the participants?
ANSWER: No, basically–well there were a couple of crazies we did what we could to exclude. But basically the nice thing about a public process, once people see it is real, is two or three people step forward and take some leadership.
We did not talk here about the agricultural program we developed in the watershed, which is really a nifty model program that the farmers themselves run. Now the compromise that was cut is, the farmers said, we want to help you. We want to be pollution preventive. We want the program to be voluntary to an individual farmer. We finally said, okay, deal, if you get 85 percent of the total farmers to buy in within 5 years, or else we are back to regulation except for the people we hold harmless. That turned out to be a very good deal for everybody, because you did not have to get the renegade or you did not have to get the total obstructionist. But we got a critical mass of people guaranteed that would come in of their own volition.
But that deal was cooked, because two or three of the farmers came forward and said look, we cannot fight the city forever. If we get this kind of money, it may actually help us stay in business. Let us make this program work. And they were very tough with us about how they
wanted the program to run. I think there is an obligation for us in government, if you want to complain about the public process when it is destructive, to support it when it is constructive.
QUESTION: I was wondering how you reconcile your dedicated and self-contained tie-in with your horizontal perspective, because they seem to be contradictory.
ANSWER: Basically we said it is ridiculous to say I have to spend $200 million in building a CSO, and I cannot spend $15 million in the community if it keeps me from having to do it. That is nuts, that obviously I cannot spend money on the skating rink. There is a point at which this linkage becomes too tenuous. But it is the same thing with the toilet rebate program. We had a big argument, which we ultimately won with the help of Wall Street, that what do you mean we can spend $2 billion in the capital budget in building a waterworks on the Hudson, but we cannot spend $200 million on making sure we never have to build it? That is silly. So we showed that the preventive linkage ought to be there.
What RPA is trying to do in its plan for the region is to talk about how we as a region generate the money to do all the infrastructure things we need to do. And we are applying these kinds of horizontal planning across a series of other problems. For example, two of our biggest problems in the region are a lack of rail freight and of solid waste disposal. We are running out of space. What we are looking at is a system of rail freight export to descend, as we did for sludge export in the city, that would then provide the cash flow to justify reinvestment in rail freight infrastructure. So you solve both a rail problem and a waste problem. What we are looking at, for example, is a system where you would use transit-friendly communities as kind of a public version of what was discussed here, to throw out the money to pay for the improvements needed in mass transit. So again, it is not a menu; it is looking at opportunities, identifying them, and putting the packages together.
ABOUT THE SPEAKER
Albert F. Appleton, is a Senior Fellow at the Regional Plan Association in New York City. The Regional Plan Association is a civic group noted for metropolitan infrastructure and public investment planning and Mr. Appleton is currently evaluating “smart infrastructure” projects for RPA's Third Regional Plan. He was formerly Commissioner of the New York City Department of Environmental Protection where he reengineered the organization and finances and integrated its engineering and environmental programs as part of an overall strategic business plan. Prior to DEP, he served for many years as Executive Assistant and Special Assistant Attorney General for the New York State Medicaid Fraud Unit. He is a graduate of the Yale Law School and Gonzaga University where he received a B.A. in Political Science and Mathematics. He has held part-time teaching positions at the New School and St. Johns University.