The Cost of Source Water Protection

Robert Morgan, Ph.D.

January 19, 2018

Source water protection (SWP) is an essential element of any public water systems treatment scheme. Unfortunately, in many utilities the program is underfunded and often under appreciated. Funding for SWP is frequently dependent upon receipt of grants from various federal programs. An effective program requires continuity. Grant funding is good, but programs change and priorities change. Relying on grants to fund the SWP program is a recipe for failure. Making SWP programs sustainable is a priority of the American Water Works Association and other national organizations. So, just what does it cost a utility to implement an effective SWP program?

The answer to the question above is of course, it depends. It depends mostly on what is required of the SWP program. In some situations, it may be sufficient to implement a simple public outreach campaign. Other utilities have gone as far as to buy the entire watershed tributary to their source of water. Most are somewhere between those extremes. A typical program will have some element of monitoring and assessment, public awareness, education and outreach, technical and financial assistance, as well as regulatory involvement, emergency preparedness and reporting. The extent of the SWP program is unique to each utility.

Surprisingly, the extent of the program is not the only factor to consider. Utilities do not exist in a vacuum. Likely there are other organizations and entities already working in the source water protection area that contribute to the overall goal of protecting a water resource. The local regulatory atmosphere is also important. How well are current regulations insuring implementation of construction erosion and sediment control and other land use activities? How good is the local stormwater program implemented? Finally, how available are extramural funds in the vicinity? So the utilities direct cost of SWP is a reasonable question.

The following protocol is certainly not the only way to determine the cost to a utility of implementing SWP. And, it likely is not the best way. But it is the way that we derived the funding target for SWP at Beaver Water District when I managed their program:

Step 1: Develop a long-term strategic plan that lays out what needs to be done to protect the source of water. This plan should have estimates of the quantity of practices and programs needed in the particular source water protection area. Source water protection is never complete, so the plan covers some life-cycle.

Step 2: Estimate the cost of fully implementing the strategic plan over the life cycle of the strategic plan. This will likely be a shockingly large number (ours was close to 300 million). But we are not yet done.

Step 3: Using whatever accounting tool you like, determine the annualized cost of implementing the strategy. This is the effort that needs to be expended annually.

Step 4: This is the fun part. The utility is not alone in working to protect water quality in the source water protection area, and the utility is also not the only beneficiary. As an example, the Natural Resources Conservation Service is active across the county working with farmers and ranchers to implement agricultural best management practices on their land. Those practices help to protect the source water. As another example, a non-governmental organization may have interest in protecting water quality for wildlife habitat or recreation. In that case they may be both a funder and a beneficiary. Cities are implementing stormwater management programs. Construction contractors apply erosion and sediment control to their projects at their own cost. So, money is already being spent in the SWP area. The utility needs to partner with these other groups and also make a good estimate of their current effort and the value of that effort.

Step 5: Make a good realistic estimate of the funds that can be secured in grants annually. This is tricky because the programs come and go and the priorities change over time. But there should be some kind of track record that can be developed. Be conservative.

Step 6: The annualized cost from step three minus the current expenditures from step four and the sustainable grant funding from step five is the gap in funding that needs to be filled.

Step 7: Decide what percentage of that gap is the utilities fair share. Remember the utility is not the only beneficiary. It may be reasonable to expect partners to pick up their effort as well.

Step 8: The funding gap multiplied by the utilities fair share of that gap is a good estimate of the annual cost to the utility for SWP.

A utility might extend this analysis one more step by asking if their contribution to the effort might make more extramural funding available. It is possible that an influx of utility funding would generate additional grants or other efforts. If that is a realistic opportunity, then the utilities cost could be reduced a bit.

Utilities like most institutions have financial constraints. Funding for r SWP frequently is difficult to justify to boards or commissions because it is outside of what utilities are used to doing. Having a realistic estimate of costs helps the SWP manager demonstrate SWP as a business objective. In other words, it puts SWP in terms that directors understand.

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