Economies of Scale, Nonprofit Status, Lack of Political Ties Drive Innovative Service
ARWO Member Spotlight: EJ Water Cooperative, Inc.
Every regional water organization has a unique and interesting story about how it was founded, and many have unique operating models. No two stories are alike, and they demonstrate the many opportunities of partnering and/or merging to form a regional water organization.
This month, ARWO Regional Water Connection brings you the story of ARWO member EJ Water Cooperative, Inc. Initially founded in 1989 to solve water challenges in rural Dietrich, Illinois, EJ Water now serves the pooled needs of many communities, operating across jurisdictional boundaries and bringing water service to areas that were previously unserved or underserved.
Something Had to Be Done
“There was a problem,” Bill Teichmiller, CEO of EJ Water, recalls in an EJ Water video. “Locally, in Western Jasper and Eastern Effingham counties, several people realized that we didn’t have a good, plentiful water supply. The village of Dietrich was always running into water problems, especially in the summertime, because of dryer weather and demand increase. Those two things really caused a lot of awareness that something had to be done.”
By 1988, the problem had become so severe that the local school didn’t always have an adequate supply of water to flush toilets. Also, local civic leaders pointed to the need for a good supply of water to support economic development.
EJ Water turned on the tap in 1993, initially installing 100 miles of water main to serve approximately 480 households.
Today, EJ Water serves 12 Illinois counties with more than 3,300 miles of water pipeline, providing water to a population in excess of 36,000.
Economies of Scale
“You don't build an airport in every single town. You regionalize that,” Teichmiller says. “It’s the same thing when it comes to water systems.”
Regionalization makes it possible for water organizations to achieve economies of scale. These unique organizations often bring the same tools and resources to very rural areas of the country as those used in large metropolitan areas.
Even as municipalities are struggling to keep their water utilities afloat and to justify the risk of owning and operating a water utility, EJ Water is able to provide high-quality water and innovative customer conveniences – and at a cost savings.
“We spend quite a bit of money, well beyond compliance costs, to make sure our water is the best it can be,” says Teichmiller. In fact, EJ Water has been recognized twice for providing the Best Tasting Water in Illinois, once by the American Water Works Association and once by the Illinois Rural Water Association.
In addition, EJ Water has its own laboratory and a staff safety officer. It was one of the first utilities in Illinois to provide its customers with text-based notifications about the amount of their water bill and to give customers a heads up before one of its workers arrives to perform service.
Its team also includes a business analyst who uses artificial intelligence-driven tools to analyze operational data and reveal stories that help executives better manage the utility.
Cost Savings
EJ Water comprises two non-profit entities – a trust and a co-op. Its non-profit status gives EJ Water an approximate 30% cost advantage over investor-owned water organizations. It doesn’t pay income tax, sales tax, or real estate tax.
The EJ Water Co-Operative is owned by its members and carries the debt of the organization. When the debt is paid off, members are remunerated in the form of capital credits and a share of profits.
Together, the co-op and trust are eligible to receive all forms of financial support. The co-op is eligible to receive capital improvement grants, such as those from the U.S. Department of Agriculture, the Environmental Protection Agency, and those through the U.S. Department of Housing and Urban Development Community Development Block Grant program. The EJ Water Trust, on the other hand, is a charitable foundation that can accept philanthropic gifts.
‘Untethered’ From Politics
Teichmiller observes that EJ Water is “untethered” from politics. Unlike its municipally owned peers, EJ Water is unencumbered by shifting priorities when a new mayor or city council members are elected. This allows EJ Water to make long-haul decisions that are more difficult for other systems to make.
“You’ve got to remember, says Teichmiller, “that the mayor or the elected officials, they're trying to run a town. They’ve got police and fire and streets and all these complicated things. And then the utility is kind of this little thing over here to the side.”
“It's extremely difficult to go to the city council and say, ‘Hey, by the way, I would like to spend $10,000 on an interactive voice response (IVR) system. The mayor and the city council are going to say, ‘What do you need that for?’ Teichmiller says. “There are such higher priorities that a lot of city councils are dealing with, so you never get to a point where you can really innovate.”
Share Your Story
How did your water organization get its start? What innovations is your regional water system bringing to the communities it serves? Contact us at info@arwo.org to share your story.
