Avoid Getting Tapped Out: Pricing Strategies to Ensure Clean, Safe Water Continues to Flow
Unlike other on-demand services like an instant movie download, water is not a luxury expense. It is necessary for living a safe and healthy lifestyle. In a time when cities, such as Flint, Michigan, are facing the unthinkable reality of unsafe or dry taps, Coltrane’s message to community officials who say they can’t afford to fix their community’s water problems is simple: They can’t afford not to.
As managing director of Shafer, Kline & Warren (SKW) Water Resources South Region, Coltrane specializes in the effective treatment and distribution of water and wastewater for communities large and small. He has studied growth patterns, investigated system facilities and produced comprehensive planning documents to ensure communities not only have water today, but are prepared to operate and maintain their water resources for years to come.
“There are some places that brag that they haven’t raised rates in 20 years, and the residents think that is a good thing,” said Coltrane. “To me, that’s sad. They have done nothing to control their future and have only postponed the inevitable cost of replacement to the next generation.”
Coltrane advises that by understanding the life span of water systems, developing a comprehensive maintenance and replacement program, planning for reasonable rate increases and leveraging the plans to maximize funds, communities can proactively manage their water systems to ensure clean water is available now and in the future.
“When you sign on to be a city commissioner or official, you are there to watch out for the public’s health and safety,” said Coltrane. “The delivery of clean, safe water is an essential component of that.”
Understanding System Lifespans
One of the underlying assumptions that Coltrane confronts as a consulting engineer is that utilities have a 100-year life expectancy. He clarifies that while a system might have this lifespan, there are parts of that system that have a 20-year lifespan.
“It’s essential to identify the life expectancy of each asset within a system and plan to address them over time,” said Coltrane. “Plus, many of the water districts that came into existence in the 1960s use products that are inferior to today’s products. They are coming to the end of their life expectancy and 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 of the system could exceed the service’s worth. However, by creating a plan that matches the life span of the system, municipalities can ensure they are able to replace system components as needed to maintain safety, reliability and efficiency.
“For example, if you have a 100-year lifespan on 100 miles of pipe, a very simple plan is to replace one mile of pipe per year,” said Coltrane. “What can happen is that people try to save money by replacing a half mile at a time, but then the replacement plan is twice the life expectancy of the pipe.”
Develop a Comprehensive Plan
Understanding the integrity of facilities and systems is the foundation for developing a planning document for the municipality. Coltrane advises performing a root cause analysis and developing a comprehensive plan is essential for maintaining water systems.
“Do not plan for the water system and ignore the tank,” said Coltrane. “Take a complete view of the entire system as well as population trends, regulations and risk factors.”
It is essential that the planning document fits the local area. Topography can shorten lifespans of systems as well as the materials used.
“You should do a risk model. In some places the highest risk is age, others it is financial or regulatory, so the local plan has to fit each unique set of circumstances,” said Coltrane.
Plan for Rate Increases
Each year, cost of living adjustments reflect the corresponding inflation.
“As stewards of public health and safety, we have to address misperceptions of rate increases for fundamental utilities like water. Why should the cost of living go up and utilities stay the same?” asked Coltrane. “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.”
Coltrane added that many of the small towns and rural water districts initially built their systems on grant funds, but without those same start-up grants available, the communities need to account for replacing systems at full price.
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 work on planning, cities and districts can watch economic and material trends during implementation,” said Coltrane. “In one case, we were saving 10-25 percent on materials off the standard bid process.”
By looking at the big picture and understanding the importance of maintaining clean, safe water, communities can create sustainable water systems.
“Our culture is such that we want everything now, and it can be hard to think about the future,” said Coltrane. “But we can’t take water for granted. By changing the way we think about water, we can sustain our quality of life and preserve this standard of living for our children and grandchildren. That’s something worth investing in.”
Shafer, Kline & Warren
11250 Corporate Ave.
Lenexa, KS 66219