Editor's Log: Rise Of Rehab

November 2012, Vol. 67, No. 11

By the time this magazine is read, the national elections will be over and our course cast for the next four years for president, two years for House and Senate.

The last four years have seen the overall construction industry take a massive hit in employment and critical project cancellations. Let’s hope the next few years bode much better.

Of course, one has to remember that there are many complicated layers of construction and the underground market certainly exemplifies that point as some sectors have remained healthy while other areas have struggled mightily.

Well-documented is the massive funding crisis of municipalities. With record unemployment, cities must deal with the resulting drop in tax revenue ranging from decreased spending to falling property values. Add to that inflated spending habits from the national to local levels and the bottom line is quite simple: until the economy rebounds and revisits spending priorities, public entities are going to find themselves in a financial malaise.

As we all know, this situation means necessary, often critical, projects are delayed or even canceled as the funding to proceed is siphoned off to another struggling area within the budget or often funds simply can’t be found. Ironically, there appears to be a lot of available municipal funding sitting on the sidelines but cities don’t have the current tax base necessary to pay back the loans – essential, they are experiencing a severe lack of cash flow.

For many in the sewer and water industry, it has been a painful period of struggling through each month and hoping conditions improve quickly rather than slowly. However, there is a bit of a silver lining – enter the rehabilitation market.

Rehab has experienced dramatic and substantial growth for 30 years. It is an industry that has gone from a few, primary technologies to a plethora of affordable options. During the Great Recession, those options have proved their weight in gold for many municipalities and utilities challenged to address major problems but without the budget for a system approach.