watersmart software waterside chat: best practices to gain support for rate increases

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WATERSMART SOFTWARE 1 Best Practices to Gain Public Support for Rate Increases July 19, 2016 Sapna Mulki–Director for Water, Hahn Public Communications Justin Wallin– COO & CMO Probolsky Research Moderator: Dominique Gómez – Director of Market Development, WaterSmart Software

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Page 1: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

WATERSMART SOFTWARE 1

Best Practices to Gain Public Support for Rate Increases

July 19, 2016

Sapna Mulki–Director for Water, Hahn Public CommunicationsJustin Wallin– COO & CMO Probolsky Research

Moderator: Dominique Gómez – Director of Market Development, WaterSmart Software

Page 2: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Agenda•Housekeeping•Meet Our Panelists• Introductory Presentations• Sapna Mulki• Justin Wallin•Moderated Discussion•Open Q&A•Next WaterSide Chat – TBD•How-To Webinar – 8/23 • Follow-up to this WaterSide Chat

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House Keeping•WaterSide Chat will be recorded• Video and presentation materials will be made available to all attendees later in the week• All attendees are muted so submit your questions through the GoToWebinar ‘Question’ panel

• Follow us on Twitter: @getWaterSmart• Share your thoughts: #watersidechat

Library of WaterSide Chats at http://www.watersmart.com/media

Page 4: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Panelists

Sapna Mulki Justin WallinDirector for Water

Hahn Public Communications

COO & CMO Probolsky Research

Page 5: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Quick Survey

Page 6: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Panelists

Sapna MulkiDirector for Water

Hahn Public Communications

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Premise: Utilities often do not get the public and political support needed for entire water rate increase requested mainly due in part to ineffective communication tactics.

Tested 13 messages

Sample size included:800 CustomersMajority homeownersDiverse ethnicities and varying education levels

Represented 350 utilities in water, electric and gas

Hahn Public Study:

Page 8: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Message Category

Definition

Fact Concrete and speak to verifiable characteristics of an increase.

Feature Speaks to values that consumers derive from their relationships to the utility; security, satisfaction, convenience.

Character Attacks the character of the utility being greedy or corrupt.

Competency Attacks the ability to perform the job; inefficient and wasteful.

Messages Tested

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Least Persuasive

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Most Persuasive

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What makes a message…

− Safety− Saving $$− Environmental

sustainability− Innovation− Commitment to high

standards of service and customer satisfaction

− Comparisons to other utilities/cities/communities

− Resources directed towards non-utility purposes

− Attracting new businesses and job growth

Most Persuasive Least Persuasive

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Why are the messages…

− Fair− Factual− Accurate− Descriptive

− Abstract− Complex− Generalized

Most Persuasive Least Persuasive

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• Reduce abstract messaging about safety and reliability.

• Use highly specific messages- date, time, cost, reiterate value of infrastructure, ensure continued service.

• Empower a third party messenger and limit the use of utility representative as spokesperson.

• Create an objective blue-ribbon panel of community leaders, neighborhood representatives, subject experts such as engineers, academia and financial consultants.

Recommendations:

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Resources:

• To learn more please reference our white paper.

• https://www.hahnpublic.com/

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Panelists

Justin WallinCOO & CMO

Probolsky Research

Page 16: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Support Oppose Unsure/Refused

43.0% 43.4%

13.6%

Don’t take support for grantedExample of divided opinion: Charging the full cost of fixed costs

Question: The water agency that delivers water to your home charges you not only for the water you use, but also for the fixed costs associated with delivering water to your home, the repair, maintenance and replacement of water pipelines, pumps and water treatment facilities as well as chemicals and necessary to keep our water supply safe.

Most water agencies in California do not change customers enough to recover the full cost of their fixed costs, meaning the agencies lose money every month. These water agencies sometimes take money out of reserve funds to cover the difference. Recently water agencies in California have gradually started moving toward recovering 100% of of the fixed costs of delivering water to their customers to prevent spending down reserves and to ensure reliable water service in the future. Do you support or oppose this move toward water agencies charging customers the full cost?

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(949) 855 6400www.probolskyresearch.com

* Research conducted Thursday, June 16 through Monday, June 20, 2016 throughout the State of California

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• Second largest retail water agency in Orange County, California

• Over 155,000 customers in Mission Viejo, Rancho Santa Margarita, Coto de Caza, Las Flores, Ladera Ranch and Talega• 80% white, 17% Latino• Median age: 46 years old• Median houseold income:

$97,000• Median home price: $630,000

• NO groundwater resources…all drinking water must be purchased from Metropolitan Water District of Southern California

• 44% of budget is cost of purchasing water

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(949) 855 6400www.probolskyresearch.com

Case Study: Santa Margarita Water District

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BUT Ratepayers can be willing to pay more62.3% supports Santa Margarita Water District’s new rate structure

Question: SMWD has changed its rate structure so that these fixed costs are spread equally and more fairly among similar types of water users, who would pay similar amounts. Fixed costs are now the baseline for every bill from SMWD.

In addition to this baseline fixed costs charge, customers will be allocated a water budget based on their type of household or business. Every SMWD customer has unique water needs. Typically, more water is necessary for large homes than condominiums, and businesses use water in a variety of different ways. The new rate structure provides each customer with a personalized water budget designed to meet their specific indoor and outdoor water needs. Those customers who are efficient and use the lowest-cost water will therefore pay the lowest rates. Customers who are less efficient pay more for the increasing cost of the water they consume.

Would you say that you support or oppose SMWD’s new rate structure that includes a baseline fair, fixed cost for water infrastructure as well as a customer-controlled water budget?

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(949) 855 6400www.probolskyresearch.com

Support Oppose Unsure/refused

62.3%

26.3%

11.3%

* Research conducted Wednesday, October 14 through Tuesday, October 20, 2015 within the boundaries of Santa Margarita Water District

Santa Margarita Water District

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Message IdentificationWhat is most effective? And identifying “mover messages”

Question: SMWD is a leader in using recycled water for landscape irrigation and has been successful in obtaining water from additional sources in the local area to supplement supply. The District stores recycled water in the 1.2 billion gallon Upper Oso Reservoir…..

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(949) 855 6400www.probolskyresearch.com

51.9%

22.8%

21.5%

3.8%More likely to support 51.9%Less likely to support 22.8%Makes no difference to me 21.5%Unsure/Refused 3.8%

How does this affect those who initially opposed?

Who does this affect those who were initially unsure?

66.7%

24.2%

6.1%3.0%

More likely to support 66.7%Less likely to support 24.2%Makes no difference to me 6.1%Unsure/Refused 3.0%

74.3%

11.3%

11.7%

2.7%

More likely to support 74.3%

Less likely to support 11.3%

Makes no difference to me 11.7%

Unsure/Refused 2.7%

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-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100%-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Bec

ome

less

like

ly t

o su

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com

e m

ore

likel

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sup

port

Those who were initially unsure

20(949) 855 6400www.probolskyresearch.com

Size of bubbles = all voters

Thos

e w

ho in

itia

lly

oppo

sed

Become less likely to support Become more likely to support

District will be able to maintain new water infrastructure

Customers will be able to control how much they pay for their water use

Every SMWD customer will receive a personalized water budget each month

The District fixed costs of operating and maintaining its water system

Customers will be able to obtain modifications to their water budget

District's water supply is purchased from the MWDSC

SMWD has decreased its staffing levels

To expand its water resources and increase local reliability

SMWD has prioritized water supply projects

SMWD plans to further diversify its water supply

SMWD is a leader in using recycled water

Message MappingClear identification of mover messages

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Always test your messages Don’t ignore opposition or alternatives

• Test your messages against opposing arguments

• Test alternatives (even those that don’t seem fully plausible)

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(949) 855 6400www.probolskyresearch.com

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Messages that we have found to be consistently effective

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(949) 855 6400www.probolskyresearch.com

Recycled water efforts (especially in the context of insulating ratepayers from fluctuations in costs of imported water/independence)

Water supply diversification (such as desalination, etc.)Water supply reliability projects (such as reservoirs, etc.)

Preserving/maintaining local natural resources (such as watersheds)

Create a “resume” of accomplishments to test

Better able to maintain reserve funds

Employee pension contributions, lean workforce…

Revenue generating activities (cell towers?)

Funding education programs and rebates

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Thank you

Probolsky Research3990 Westerly Place Suite 185

Newport Beach, CA 92660 USA

(949) 855-6400 Newport Beach(415) 870-8150 San Francisco(202) 559-0270 Washington DC

www.probolskyresearch.com

Page 24: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Q & A

Sapna Mulki Justin WallinDirector for Water

Hahn Public Communications

COO & CMO Probolsky Research

[email protected] [email protected]

Page 25: WaterSmart Software WaterSide Chat: Best Practices to Gain Support for Rate Increases

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Next WaterSide Chat –TBD but.. Join Us

August 23, 201611 a.m. PSTRegister at www.watersmart.com/always-on-customer

Bojinka Bishop– Ohio State University & Former Public Affairs Director for AWWANathan Adams – Water Efficiency Administrator, Santa Margarita Water DistrictEmily Kleeman – Senior Product Manager, WaterSmart--------------------------------------------------------------------------------------------------------Join this how-to webinar where you will learn how to craft the right messages, at the right time, and through the best channels.