Printer-friendlyEmail to friend

It’s the economy vs. the drought, and the one facing the loss is the small water system.

Water systems are being squeezed on all sides nowadays. On the one hand, some areas are facing long dry spells at best, all-out droughts at worst. The lack of fresh water going into reservoirs or water tables forces systems to call for water conservation so they don’t run out. In the struggling economy, many customers are welcoming conservation to save themselves some money.

Unfortunately, water conservation puts systems into a totally different squeeze – a financial one. Having folks conserve water means they don’t buy as much, which means a sometimes significant drop in revenue for water systems.

So what can be done?

In this edition of eBulletin, we’ll make a few suggestions on how to balance conservation with finances. We’ll give a few ideas on how to pinch pennies here and there, and we’ll provide solutions if you do hit a financial snag.

Running on empty
It’s been in the news often lately. A water system, despite facing a loss of revenue, decides to ask city officials to implement water conservation measures. Often, it’s because dry condition have strained groundwater and surface water supplies.

In 2007, severe drought brought Atlanta, Georgia, to the brink of running out of water. Water shipments and an eventual break in the drought helped its residents.

Water shortages are nothing new to many states, especially in the West and Southeast where persistent droughts have strained water resources. But shortages are a growing problem that will continue to spread, according to a 2003 report from the U.S. General Accountability Office. The report is titled “Freshwater Supply: States’ Views of How Federal Agencies Could Help Them Meet the Challenges of Expected Shortages.”

The report states that it’s “notoriously difficult” to accurately forecast water use nationwide, but “numerous signs indicate that our freshwater supply is reaching its limits.”

The report estimates that between 2003 and 2013, 36 states will face a water shortage. Six years later, several states, particularly in the West, are facing that reality. Droughts have squeezed Southeast states, like Florida and Georgia, as well. Extreme drought is being felt in Michigan and Texas, according to the U.S. Drought Monitor. The West Coast states continue to suffer from drought that has reached severe limits in parts of California, Nevada and Washington. The outlook through October 2009 shows no improvement expected there.

Population booms also are straining water resources. As people spread out into more rural areas, the small water sources that were adequate for a few are being severely taxed by the boom.

In California, state officials with the Department of Water Resources recently listed several small water systems that may be vulnerable to drought after the third consecutive year of dry conditions. Most of the list includes small water systems. The list is part of the Drought Preparedness and Water Conservation program aimed at curbing water usage by 20 percent by 2020. Information on the program, as well as the drought vulnerability list, can be found at the link below.

Such conditions have forced some water systems to recommend water conservation. Others have had to make conservation steps mandatory, either on a temporary or permanent basis.

For many systems, water conservation from customers means lower revenue. However, the lower consumption doesn’t strain the system as much, which means some expansions or improvements can be delayed.

The EPA took conservation examples from several cities nationwide and published the results in a report titled “Cases in Water Conservation.” One town, Cary, N.C., was able to hold off on creating two expansion plants because of conservation measures that will reduce the water consumption 16% by 2028.

So should you encourage your customers to conserve water? The EPA provides a set of guidelines that can help you answer that question.

The guidelines in Part 3 cover small water systems and include worksheets to help you draw up your own rules. The worksheets help you figure out how each guideline can help your water systems. They include a worksheet for estimated costs of materials and measures to help conserve vs. the cost saved by conservation and a worksheet to draw up a public conservation strategy.

A link to the chapter can be found below.

Additional Resources
California Drought Preparedness and Water Conservation program
http://www.cdph.ca.gov/certlic/drinkingwater/Pages/DroughtPreparedness.aspx
U.S. Drought Assessment
http://www.cpc.ncep.noaa.gov/products/expert_assessment/drought_assessment.shtml
EPA – Cases in Water Conservation (PDF)
http://www.epa.gov/WaterSense/docs/utilityconservation_508.pdf
EPA Water Conservation Plan Guidelines
http://www.epa.gov/watersense/pubs/guide.htm
Part 3 Basic Guidelines
http://www.epa.gov/watersense/docs/part3_508.pdf

Saving internally
There are several ways to save your system money, both now and down the road.

One big money saver is an obvious one, but one not always easy to do – fix the leaks.

Even small leaks can cost a water system thousands of dollars over time.

There are several methods of leak detection, from expensive infrared scanners to sound detectors. Of course, the most obvious way is to observe the giant puddle forming in the street. That’s usually a pretty good indicator that something is amiss.

While there are obvious signs, some more subtle signs may point to a leak as well. Keep an eye on landscaping and vegetation near water lines. Is there a particular spot where grass and other vegetation are growing much faster than the areas around them?

Or is there a spot where everything is dying because it’s too moist? It’s possible that vegetation is so healthy or is dying because it’s getting extra helpings of water from a leaking pipe. Check the soil in and around these isolated spots for excess moisture.

Fixing the leaks can make a big difference. In the EPA’s Cases in Conservation report mentioned earlier, the small town of Gallitzin, Pennsylvania, explains how fixing its leaks made a world of difference.

The town had about 1,000 connections, but it had a water loss of more than 70 percent. So it began by restructuring its meter reading program to create more accurate readings. It found most of its leaks and had an outside contractor find the rest. It started a comprehensive leak repair and corrosion control program, and it used technical assistance from a state environmental outreach program to improve its maintenance and billing systems. Four years later, November water consumption dropped by nearly 200,000 gallons compared to the same month the year before, and water loss plummeted to about 9 percent.

Conservation isn’t just limited to water. Conserving funds can help you water system just as much. Before conducting monthly meter checks, see if you can map out a route that will require less gas. Instead of driving from house to house, consider parking, walking the street or the block to check the meters, then returning to your car and proceeding to the next block, rather than idling at each house. Conserve around the office by making sure not to order an excess of supplies, and check around on prices. The online sites may seem to offer better deals, but are they much cheaper once you figure in shipping and handling? Investing in a good printer may save you in the long run by eliminating the need to buy different types of forms from office supply retailers. Do most of your workers drink soda from cans? Consider recycling. It may add a few extra dollars to the general fund each month.

One thing you can do for customers, time permitting, is to randomly check customers’ accounts to see if their water usage has gone up steadily or rapidly over the last few months or year. If there is a noticeable change, alert the customer. It could just be that they got a new swimming pool, or did some landscaping they want to keep thriving. It could also be they have an unknown leak.
Alerting your customers to a potential leak helps you build a good relationship with your customers. It can build trust and good will and lead to fewer complaints. If a customer does have an excessive water bill due to an unknown leak, try working with the customer to arrive at a satisfactory payment option. Can you forgive some of the excess, or can you spread the payments out over time?

If a customer’s bill is five times the normal rate, they’re going to have a hard time coughing up the extra cash. It’s better in the long run to work with them on a payment plan rather than declare them delinquent, especially if they’re having to pay to fix a bad leak. Remember, you catch more flies with honey than with vinegar.

That said, it is important to collect all the payments due to the system. In smaller towns, it’s not uncommon for late bill payments or missed payments to go uncollected. But letting delinquencies get out of hand not only hurts your system, but eventually hurts your other customers as well.

Make sure you have a good handle on bill payments. Keep on top of late payments, and cut off water if necessary when payments are missed. While it’s your job to offer your services in a courteous manner, it’s the customer’s job to pay for those services. Whether they’re small-town buddies or county acquaintances, it’s important to make sure you collect from everyone to keep your revenue up.

Keep good records of your billing, including histories and special payment arrangements. There are several computer programs available nowadays that can keep track of payments and other small business transactions. A new computer and the right software may prove to be a worthy investment if it helps regulate your billing.

Finally, make sure your water rates are where they should be. With the rising cost of everything, it’s important to make sure your rates don’t get left behind. It’s not a bad idea to do a rate study every once in a while to see where you stand on rates. If you’re barely breaking even each month, chances are you need a rate increase, or at least a reassessment of your expenses. Check with your local Rural Community Assistance Partnership office to find out how to conduct such studies.

Help is available
For now, most states have extra money available to help water systems thanks to the 2009 American Recovery and Reinvestment Act, otherwise known as the Stimulus. Much of this money is being distributed through the states’ Revolving Loan Funds (RLFs) or State Revolving Funds (SRFs). These are the same funding arms that pass out money every year to water systems.

Grants and loans also are available through federal agencies like the EPA and USDA-Rural Development. Smaller loans can be obtained through programs such as the Rural Communities Assistance Partnership’s Revolving Loan Fund or the Delta Regional Authority Intermediary Relending Programs.

If you do have billing or leakage issues, check with your local RCAP representative. RCAP’s technical assistance providers can help you determine the best way to adjust your billing practices and implement repair programs that will keep you in budget and keep your customers satisfied. These providers do everything from rate studies to going before city councils and town hall meetings to explain assessments and needs to city officials and customers. They also will help you apply for grants and loans through programs such as those funded by Stimulus money.

Contact information for your regional RCAP office is provided below.

Additional Resources
Recovery.gov – Stimulus project tracking
http://www.recovery.gov/
Water Environment Federation - Stimulus Funding Resources
http://www.wef.org/GovernmentAffairs/StimulusFunding/