How Infrastructure Asset Management Planning Can Deal with Seattle’s High Water Bills

Californian’s covet all the water that rainy states like Washington get, but some Seattle residents wonder if Californians would actually be willing to pay the price that comes with all that water.

High water prices in Seattle have led to a decline in water usage over the last fifty years.

In 2010, the average Seattleite used 52 gallons of water per day, which is far lower than the national average of 89 gallons.

The Seattle Times reports:

“As it turns out, when you pay for water, no cost is assigned to the water itself. All you’re paying for is the infrastructure. The water has to be treated, pumped and delivered — that’s covered by your water bill. Sewer prices, often higher than water rates, cover the cost of cleansing the water that goes down the drain. And stormwater fees pay for projects that reduce polluted runoff (unlike Seattle, many municipalities do not include stormwater fees in the monthly water bill; instead, general tax revenues are used).

Seattle has such high rates because we’ve invested more than most places in our water infrastructure in recent years. We relocated our reservoirs underground, in compliance with federal mandates, to keep our drinking water safe from contaminants. And in partnership with King County, we opened Brightwater, a state-of-the-art (and very expensive, at $1.8 billion) sewage-treatment plant.

“The city also invests in watershed restoration — few cities can claim to own the land that their drinking water comes from, as Seattle does in the Cedar River,” Walton told me. “And some taxes are embedded in the water rate, which not all cities have.”

Using long-term asset management analysis to deal with water infrastructure cost

It’s fair to say that while dry states would do anything to increase their water productivity, most residents are unprepared for the cost – not only to put the infrastructure in place/repair the existing infrastructure but the increase in water costs for the on-going upkeep of water infrastructure.

Inframanage.com notes that this is one of the real advantages of long term infrastructure asset management analysis and planning.

The long-term costs of treatment systems (including periodic upgrades), storage, pipes, and water delivery/sewer and stormwater discharge can be developed.  The inter-generational issues associated with these costs can be analyzed and debated.

Following this, a long-term, sustainable and fair infrastructure funding plan can be developed and agreed with the community.  

Often the annual costs will be higher than current, if only because in many cases the current tariffs and charges will not take into account all the costs, as many of these costs will be hidden.

Car ownership example explains infrastructure asset management planning

To use the example of car ownership that everyone knows so well, cars cost capital to purchase, then need fuel and regular maintenance to maintain running reliably.  Insurance and other licensing costs also add to the annual cost of ownership.  

As a car owner, you get to choose the type/standard of car or truck you are running, and whether you pay your capital in lumps (say purchasing every 3 years) or monthly by leasing.  

Leasing builds on the depreciation and interest costs of the car monthly, capital lumps mean you pay it at the time of purchase or trade.  Essentially, you get to pay the full cost, either way, it is just your choice how you do this.

With water utility infrastructure, you also need capital to replace worn-out assets and purchase new assets (such as new treatment plants that have been required by legislation, regulation or license conditions).  

These assets also depreciate (wear out from use) much the same as cars, but take longer to do that – for pipes 100 years plus, for treatment assets, maybe a 20-30 year cycle.  

With these longer replacement cycles, the lease versus capital injection decisions can have the impact of transferring the large costs heavily to just one ‘generation’ of users – and this is where the discussion of inter-generational equity needs to be had.

Coming back to car ownership – if you pay capital at the start (rather than lease) you can kid yourself that your overall costs per year are lower, but this is seldom true.  

All that is happening is that the real costs are hidden until you make the decision to replace the car, then the true costs become apparent very quickly.  

If you haven’t made provision for these costs then you will be faced with some decisions – downgrading car types (a lower level of service), holding on to your existing car longer (potentially higher maintenance costs, and also a lower level of service) or borrowing a lot of money to afford the new car.

Why infrastructure asset management analysis is important

This, in a nutshell, is what is happening with water, wastewater and stormwater networks with no long term infrastructure asset management planning in place.  

The real costs of providing the services and owning the assets are hidden, but they are still there.  At some stage, someone will have to pay that cost.

Using the well-developed techniques and tools of infrastructure asset management allows for analysis of all costs associated with the delivery of service.  

From there, decisions can be made about what is affordable, how to fund the services, and how to fund and maintain the system in a way that is equitable to current and future users.

The added benefit of infrastructure asset management analysis is that you will have the ability to optimize your decision-making and subsequent operations, maintenance and renewal programs, so as to deliver the optimal long-term sustainable lifecycle cost of running the system and delivering the service.