Water costs

Brian Vinchesi

At the end of September USA Today published a “Nation’s water costs rushing higher” (To read the article, enter usat.ly/QtNya6 into your web browser)

The article discussed the results of a survey undertaken with 100 municipalities regarding their water costs. The survey showed water costs had doubled or more in 29 locations and tripled in three locations over the last 12 years. The study looked at a city in at least every state and the District of Columbia. Where do you think the three U.S cities are where water costs increased the most? I’ll reveal those locations a little later in this column.

If you own, operate, manage or maintain a golf course facility that utilizes utility-provided water including treated effluent, rising costs are certainly a concern. However, you should also be concerned if you are using any other type of water as an irrigation source. Why? Because rising water rates will put pressure on large users of utility-provided water to look for alternative sources of water. This, in turn will place pressure on other large users of water regardless of the type water they use. The pressure will be both from a water source availability standpoint as well as a public perception standpoint.

Even locations that are considered flush with water had large increases in rates. What are causing these increases in pricing?

According to the article there are a number of factors, including:

• Paying off bond debt for improvements and upgrades to infrastructure
• Increases in the cost of electricity, fuel and chemicals
• Regulatory compliance
• Rising pension and health-care costs for employees
• Post 9/11 security improvements

All fo these factors also apply to effluent-water pricing, so you see that rising, as well.

Keep in mind that you don’t pay for water. Instead, you pay for the costs to deliver the water and maintain the treatment and delivery infrastructure. In maintaining infrastructure, water agency debt per customer has risen from $1,012 in 2006 to $1,611 in 2011.
 

The U.S. water infrastructure needs so much work, don’t expect to see much of a change to increasing costs according to the article. Rates will continue to rise at greater than inflationary costs. Increases will be vary from 5 percent to 15 percent per year. Research my firm has conducted shows a 7 percent a year increase on average for urban areas in the eastern United States.

Something else that is happening, as counter intuitive as it may seem, is that the price of water is increasing as its use decreases. Residential water use in 2008 was 13.2 percent less than water use in 1978. Thus, you would think less use, less cost. But since the water is essentially free and all you’re paying for is infrastructure and delivery costs, then there really is no change in those costs even with reduced use. The same infrastructure needs to be maintained and even though it is flowing less water, its size and maintenance requirements do not decrease.

Water conservation or reduced water use has, however, put off resizing of some delivery and treatment systems and it has allowed the population to grow in some cities without having to add more or larger infrastructure.

For some reason, while people accept rising energy prices and fuel prices they look differently at rising water rates. But the price of water is rising and that will put even more eyes (like we don’t have enough already) looking at large water users like golf courses in a community no matter what their source of water is.

Expect in the future that you will paying more for utility driven water but also for other sources of water including groundwater and surface waters. To date they are disguised as permit fees or registration costs but at some point it will be for the water itself, not the infrastructure, as you already own that. This is already occurring in parts of Pennsylvania and New Jersey. In the 17 western states that have “prior appropriation” water law it will be more difficult to charge for the non-utility water, but as the legal system attacks western water law, it will change with time.

As a large water user, keep your eyes and ears open, have a backup plan for your water supply and be a good steward of water. As I always say, track you water use so you can document what you need to maintain the golf course as opposed to someone telling you what you need and therefore what you can use. Be diligent and stay informed.

And the largest rate increase winners: Atlanta, Georgia (233 percent), San Francisco, California (211 percent) and Wilmington, Delaware (200 percent).