Aging water infrastructure -- national problem hits home

By Betsy Herbert

Santa Cruz Sentinel

Posted: 09/26/13, 12:00 AM PDT

Much of the nation's water infrastructure -- especially in California -- is aging and badly in need of replacement. But, according to an Environmental Protection Agency survey released in June, the public is simply not aware of the critical nature of the problem.

"Because most of this infrastructure is out of sight and because many fine professionals work every day to keep it operating under difficult conditions, the full extent of the challenge we face is generally not understood by government officials, businesses and the public," said water expert Gerald E. Galloway in his July 25 U.S. Senate hearing testimony.

The EPA survey estimates a nationwide price tag of $384 billion in capital investment to bring public drinking water systems up to speed. California tops the list of states with $44.5 billion needed to fix its aging water systems over the next two decades.

In Santa Cruz County, public water agencies also face increasing costs from aging infrastructure, which includes water mains, pump stations, wells and treatment facilities, according to the county's Local Agency Formation Commission (LAFCO).

Why are these costs increasing now? Take, for example, water mains, which are vital for getting water to homes, businesses and firefighters. In Santa Cruz County, nine public water agencies have among them some 825 miles of water mains, much of which are more than 70 years old. As water mains age, they rust and they leak. Leaks from underground water mains can go undetected for years, accounting for up to 50 percent of total system water loss.

Water lost from main leaks is both a resource waste and a loss of agency revenue. Leaked water never reaches customer meters, so the water utility can't bill for it, and stands to lose a big chunk of its primary revenue source. Yet, the expense of replacing water mains is staggering -- $200 to $250 per foot, according to Rick Rogers of the San Lorenzo Valley Water District (Disclosure: The district is my employer).

With a statewide cost of $44.5 billion for water infrastructure over the next two decades, where is this money expected to come from? Water agencies depend primarily on water revenues from customers to fund system operations and maintenance. If they're well-prepared, water agencies may have reserve funds to help pay for big ticket capital improvements. Most likely, they will have to finance most capital improvements with long-term loans or bond issues, with ratepayers funding the debt service.

According to a 2013 American Water Works Association report, "In the years ahead, all of us who pay for water service will absorb the cost of this investment, primarily through higher water bills."

Regardless of who pays for upgrades, one thing is clear: Failure to replace aging infrastructure will only delay the inevitable, driving up costs and increasing risks. There is no known national or state funding source waiting "around the corner" to fund water infrastructure replacement, says Galloway.

Most local water districts have recently implemented multi-year rate increases. The San Lorenzo Valley Water District has proposed a series of rate increases, which it will consider at a public hearing on Oct. 24.

State law known as Proposition 218 enables water ratepayers to protest proposed rate increases. If the protest vote exceeds 50 percent, the water agency is prohibited from raising its rates.

With economic recovery lagging, increasing water rates may have a deleterious effect on some water users, especially those with low and/or fixed incomes. Ironically, because Proposition 218 requires water rates that are "fair and equitable," water agencies can't legally impose rates that subsidize one group over another; so they can't legally give low-income groups a break.