Avoid Getting Tapped Out: Pricing Strategies to Ensure Clean Water Continues to Flow

by | Dec 14, 2017 | News, Water

shafer, kline & warren aging pipelines

Consumers and industries have come to expect access to virtually unlimited quantities of potable water. Every day, when the tap is turned on to fill a glass, take a shower, or irrigate a lawn, water is there, ever present and on demand. But taking clean water for granted can be dangerous.

Water is not a luxury expense. It is necessary for living a safe and healthy lifestyle. In a time when cities like Flint, Mich., have faced the unthinkable reality of unsafe or dry taps, officials can’t afford to ignore their community’s water problems.

McClure Engineering Company (MEC) is dedicated to maintaining safe, clean community water supplies. Our water resources team has studied growth patterns, investigated system facilities, and produced comprehensive planning documents to ensure communities not only have water today, but they are prepared to operate and maintain their water resources for years to come.

We develop innovative engineering solutions for cities, rural, and wholesale water districts, as well as industries of all sizes. We understand our designs help communities build more than just infrastructure improvements – we help improve lives and ensure the health, safety, and welfare of its residents.

In turn, we educate community officials on the lifespan of its water systems and help them develop a comprehensive maintenance and replacement program, plan for reasonable rate increases, and leverage the plans to maximize funds. With this approach, communities can proactively manage their water systems to ensure clean water is available now and in the future.


Understanding System Lifespans

While a utility’s average life expectancy is 100 years, parts of the system may only have a 20-year lifespan. It is essential to identify the life expectancy of each asset within a system and plan to address them over time. For example, many water districts that came into existence in the 1960s use products that are inferior to what is available today. As these products reach the end of their life expectancy, they need to be inspected, repaired, or replaced.

One of the dangers of not planning and maintaining these systems is that the operations and maintenance costs could exceed the service’s worth. By creating a plan that matches the lifespan of the system, municipalities can ensure they are able to replace system components as needed to maintain safety, reliability, and efficiency.

A simple maintenance plan for a community is to replace a section of pipe per year. If the pipeline is 100 miles long, then an easy solution is to replace or repair one mile of pipe each year. However, communities introducing cost-cutting measures will try to save money, for example, by replacing only a half mile of pipe rather than the full mile, stretching out the replacement plan’s timeline to twice as long as the life expectancy of the pipe. This seemingly simple, logical change to conserve money ends up creating a higher risk profile for the entire system because each delayed inspection, repair, or replacement ratchets up the likelihood of failure.


Develop a Comprehensive Plan

Mark Twain famously quipped, “The secret of getting ahead is getting started.” This perfectly defines the approach MEC’s water resources team takes when helping clients develop a planning document for a municipality. This begins with a root-cause analysis and development of a comprehensive plan that is essential for maintaining a water system, and includes a comprehensive overview of the entire system, as well as taking population trends, regulations, and risk factors into account. All the information is then outlined as a risk model that aids key stakeholders and operations managers in deciding how best to maintain or improve their system.

By using a risk model, the local plan can fit the unique circumstances of a community, which could be asset age, financial resources, or regulatory risks. The planning documents also must consider the geographic area, as topography can shorten the system’s lifespan or help determine the best materials to be used.


Plan for Rate Increases

Each year, cost of living adjustments reflect the corresponding inflation. By raising water rates with the cost of living, municipalities can sufficiently support their operating costs and effectively maintain their system without a sudden raise of 50 percent or more to account for a budget shortfall.

Many small towns and rural water districts initially built their systems on grant funds, but without those same startup grants available, communities need to account for replacing systems at full price. Which means owners and operators have increasingly competitive priorities for their time and attention between the financial health of water services, as well as the mechanical and structural health of their assets.


Plan to Maximize Funds

One of the benefits of the comprehensive planning and incremental rate increases that reflect the cost of living is that these steps allow cities to maximize the efficiency of their funds. Once they have done the planning, cities and districts can watch economic and material trends during implementation.

By looking at the big picture and understanding the importance of maintaining clean, safe water, communities can create sustainable water systems. Changing how we think about water can sustain our quality of life and preserve a standard of living for the future