Why Does Water Cost So Much?

It seems like I get more water-related questions than almost any other subject (except maybe for “how tall are you?”).  Therefore, I’m going to try to share what I know about the topic (which isn’t half as much as what City staff knows about the topic; I highly recommend poking around the City’s web page for more information).  My standard disclaimer applies to all of this, of course.

Most people living in Cottage Grove get an envelope from the City in their mailbox each month.  This envelope contains what is commonly referred to as the “water bill”, but it’s actually more than that; it’s a multiple-utility bill.  Let’s take a look.  On your bill, in the right-hand column, you should see a section that looks something like this:

Utility-Charges

As you can see, your bill lists six distinct line-items, each with an associated cost.  These line-items can be grouped into three pairs; Water and Water Improvement, Waste Water and WW Improvement, and Storm Drain and SD Improvement.

Each of these pairs is actually a distinct utility.  Water refers to the treatment and delivery of fresh, drinkable water to your home or business.  Waste Water refers to the removal, cleaning, and disposal of everything that goes down the drains of your sink, bathtub, or toilet.  And Storm Drain refers to the management of the rainwater we get each year in order to avoid flooding and harmful erosion.  Each of these is provided by the city, but each requires different sorts of expertise, infrastructure, and maintenance.

Now, for each of these three utilities, there’s also an associated Improvement charge.  While the first charge is how you pay for your share of the output (or input) of these three utilities, the Improvement charge is how you pay for your share of the foreseeable upgrades to the system.

I should probably note here that every penny paid for those six line items must, by law, be used for those purposes.  It would be a flagrant violation of the law for the City to take stormwater money to pay for anything but stormwater; it can’t be used to hire more police, or to improve a park, or to erect gigantic bronze statues of Council members next to the freeway (more’s the pity).  So there’s no “profit margin” built into any of this stuff; the charges are based on just what it actually costs to get the service to the citizen.

Anyway, I’ll go over each of the three utilities, one at a time, and try to explain how each one works.

Water

Our drinking water is pulled out of the Row River, via an inflow pipe that runs to the water treatment plant.  At the plant, the water is filtered and treated, in order to get rid of the dead leaves, bugs, fish poop, and any other floaty bits you don’t want to see in your water glass, and also to kill any nasty little microscopic pathogens that might be lurking therein.

Once that’s done, the now-clean water has to get to everyone’s homes and businesses, as well as to fire hydrants and sprinkler heads and that mist-generating thingie in Coiner Park.  It has to get to all of these places under a certain amount of pressure, so that when you turn on a faucet, you neither suffer a sudden, pipe-cracking deluge from overpressure, nor a frustratingly slow trickle from underpressure, so there are pump stations and other “worky bits” dotted around the city keeping the whole thing going.

Eventually, this water reaches someone’s property.  The water meter is the boundary; the point at which the water leaves the network of City-owned pipes, and flows into your pipes.  Once it’s on your side of the meter, it’s your water, and it’s pretty much up to you what you want to do with it, whether it’s drinking it, showering in it, filling squirt guns, or just freezing great big blocks of it and then carving it into sculptures with a chainsaw.

The cost to do all of this is immense.  Cottage Grove has nearly fifty miles of underground water pipe, much of which is under roads, sidewalks, and other inconvenient barriers.  Some of it is new and strong and is doing a great job.  More of it, though, is old and corroded, and has to be patched frequently to combat endemic leaks — some stretches now consist of far more patch than pipe, in fact.  There are even rare occasions when we* discover a stretch of wooden water pipe, which is, of course, gobsmackingly obsolete.**

To add to the cost, there is the inescapable fact that Cottage Grove is growing, and there’s no indication that that growth will taper off any time soon.  This means that we have to plan for the future; for instance, to fill new water lines in order to supply new development, or to upgrade the system to meet the needs of old locations with newly expanded needs (like when a single-family house is torn down and replaced with an apartment building).  That’s not to mention the need to keep our fire hydrants supplied with sufficient pressure and volume of water, night and day, seven days a week.

And if that doesn’t sound expensive enough, various federal and state regulations continue tightening water quality requirements, but fail to provide any money with which to pay the added expenses associated with compliance.

This is where the bill comes in.  That water meter I mentioned keeps a running tally of how much water has flowed out of the city system and into your pipes.  Most folks know that there’s a per-gallon rate that you pay for the water itself, and you see that reflected in the bill. What isn’t obvious to a lot of people, though, is that there’s also a fixed cost of just getting the water from the river to your home.

The Pizza-Yak Analogy

Let’s say you move to somewhere really far away, like the desolate wastes of Outer Fictitioustan or something.  Having grown up in Cottage Grove, you suddenly get a craving for Pinocchio’s Pizza, and you decide “I’m going to order ten of these pizzas, and I don’t care about the expense, ’cause I’m throwing a party!”  Now, for the purposes of making the math easy, let’s say each pizza costs ten bucks, so you’re spending a hundred dollars for the pizza itself.  But to put a delivery person onto a supersonic transport, for fees and tariffs and bribes to customs officials, and for transport on yak-back from the airport to the bit of the wastes where you live… all of that costs three thousand dollars.  Your final bill for ten of these pizzas, delivered to your home, ends up being $3100.

If, then next week, you decide to order just one pizza (you’re too tired to throw another party, so it’s just you eating this time), and if you don’t know all of the delivery costs that go into getting that pizza from Cottage Grove to Outer Fictitioustan, you might assume, “Well, I ordered one-tenth of the pizzas that I did last week, so my new bill should be one-tenth of last week’s bill… so $310.”  In that case, you might be shocked and alarmed to find that your credit card has been charged, not $310, but $3010.  That’s because the airfare and the bribes and the yak rental and all of that stuff doesn’t change; you’re moving less pizza, but you’re moving it just as far and as fast.  As a proportion of the costs, the actual pizza portion is relatively small, even though getting your hands on some pizza is the entire reason for the transaction in the first place.

Cottage Grove’s water charges reflect a similar effect.  The lion’s share of your bill covers making sure the network exists to get clean water to you, because that’s the most expensive part of the whole thing.  There are no yaks or bribes to officials, of course, but there are other concerns that drive prices.  For example, the City, by law, has to be able to provide you, without notice, all the water you could possibly suck through that meter, and it has to do so while simultaneously ensuring that none of your neighbors lose service as a result (this remains the case even if you never come close to actually using that much water).  How this part of the charge is calculated based on a few variables, like:

  • How big a meter you have (i.e., how much water could you pull in).
  • Your customer class (whether you’re a residential customer or a business, etc.).
  • Whether you’re inside or outside of city limits (you pay more if you’re outside city limits because… well, more pipe.

Once that fixed cost is covered, though, every gallon of water you use comes at a relatively minuscule cost.  So even if you use twice as much water as your neighbor, you’re not going to be getting a water bill that’s twice the amount.

Waste Water

Waste water works, in many ways, like the water system, except backwards.  Everything that goes down the drain in your house heads out in a pipe, which connects to a network of city pipes, which transfers all of that nasty stuff to the wastewater treatment plant over near the disc golf course at the north edge of town.

Once the sewage reaches the plant, it goes through a number of machines designed to break up anything large.***  It then goes into a series of pools populated with specific strains of bacteria that do the job of “digesting” the sewage.  There’s some other sciencey stuff that goes on to make sure that nothing coming out the other end of the plant fits the definition of “poop”, and at the conclusion of the process, you get a barn full of biosolids — the excretions of the digester’s bacteria**** — and a pipe full of water.  The biosolids get dumped into a trailer and sent off to fertilize a big farm some miles to the south.  The water could be dumped into the Willamette river… but it isn’t, and that’s where this gets really interesting.

You see, when that water comes out of the plant, it’s clean — drinkable, in fact, as Governor McCall famously demonstrated back in 1968 — but it’s several degrees too warm to be allowed to be discharged into the river, due to environmental standards.  So the City had a choice to make; either build a cooling tower to bring the water down to the required temperature, or find something to do with the water besides putting it into the river.  Well, as it turned out, buying a golf course was the cheapest available way of getting into compliance.

The treated wastewater was too warm to go directly into the river, but it’s perfectly fine to use warmer water in order to irrigate large areas.  With ownership of Middlefield Golf Course in the hands of the city, its position near the wastewater plant allows our (now sewage-free, remember) wastewater to be piped through the sprinklers there.  The temperature issues are solved, and the wastewater bills are slightly lower than they otherwise would have been, so it’s a pretty clear win.  The fact that people can also use part of our wastewater system in order to play golf is just a convenient side-effect. *****

Billing-wise, wastewater charges are calculated in more or less the same way as regular water charges.  It’s just that there’s no meter on the outgoing pipe (sewage is really hard on both pipes and meters), so the water meter numbers are used (it’s assumed you tend to send most of the water that comes into the house back out again in the form of something going down a drain).******

Storm Drain

This is generally the cheapest — and easiest to explain — of the three utilities.  When it rains, that water goes somewhere.  Making sure that that “somewhere” is the river, rather than your basement, is what storm drainage is all about.

It’s pretty straightforward.  Water goes into those grates in the street, and from there it flows downhill to the river.  The real trouble comes with state laws about stormwater treatment and population.  You see, when Cottage Grove reaches 10,000 residents (we’re very, very close at the moment), we will be legally required to treat our stormwater, instead of just letting it go into the river unhindered.  This will, as you can probably imagine, cost quite a bit of money.

Storm drain charges are calculated on an “Equivalent Service Unit” basis, which means that each single-family residence counts as one ESU.  For all other classes, every 2,650 square feet of impervious surface area counts as one ESU (impervious surface area includes things like buildings, parking lots, sidewalks… generally anything that water can’t soak into, but has to run off of).

Improvement

So all of the prices so far cover what it takes to keep our system working the way that it is.  Unfortunately, that’s not all that has to be done.  The system also has to be maintained, improved, expanded, and updated to allow for things like increased population, newer and stricter regulations, and better service quality.  And that sort of future-proofing is where the improvement line items come in; they’re calculated to cover some of those foreseeable future costs, so that the whole operation doesn’t come to a screeching halt at some point down the line.

The Bill

The long and the short of it; of all this talk about water bills and improvement costs and bacterial digesters and all that stuff is this: Our utilities are pretty expensive, and they’re going to continue to be expensive for the foreseeable future.  But they’re not expensive because anyone’s doing something wrong or underhanded — they’re expensive because that’s what it actually costs to provide those services.

The raw numbers on your bill are indisputably higher than they would be in a lot of other cities right now, but for good reason.  First, Cottage Grove is small, so those fixed costs are being shared out over a smaller number of customers than you’d see in Salem or Portland.  Second, Cottage Grove is relatively isolated, geographically.  While cities like Eugene and Springfield can share their water and wastewater infrastructure, and thus operate with per capita costs equivalent to a much larger city, Cottage Grove is, utility-wise, stuck going it alone.  Third, relatively few other cities of Cottage Grove’s size are in as good of shape as we are, financially.  Many of them haven’t yet upgraded their water plants or wastewater systems, so their utility bills are currently artificially low, but will, soon enough, be spiking upward — far beyond ours — in order to continue services.

We’ve got a lot to do here as well, to the tune of millions and millions of dollars.  If you’d like to see some specifics on the sort of money we’re going to need going forward, take a look at the presentation the Council was given at our June 8, 2015 meeting, which you can access by clicking right here.  Spoiler alert: it’s a lot.*******

Worse, as it stands right now, we’re still not collecting enough money on the bills to be able to cover all the costs and ensure future operations.  Inflation affects the price of materials, machinery, and personnel, so we know costs would go up every year even if we didn’t have to do anything more than we’re doing right now.

According to the presentation, in order to keep providing these services, rates will need to be raised annually as follows:

  • Water: 1.8% annually.
  • Waste Water: 10.5% immediately, and 3.1% annually thereafter.
  • Storm Drain: 7.9% annually.

It’s not pretty, and I wish past Councils had raised the rates some time ago, so that we wouldn’t be facing this sort of jump, but we’ve got to face facts.  It appears that our choice, realistically, isn’t between “do we raise the rates or not?”, it’s between “do we raise the rates a moderate amount now, or do we kick the can down the road and make a future Council raise the rates massively in the future?”.

— Jake


* By “we”, I of course mean “the people who actually do all the work,” rather than any group that actually includes “me”.

** Wooden pipes are replaced as soon as they’re found… it’s just hard to find the few that remain, because a) our turn-of-the-last-century maps are sometimes incomplete or inaccurate, and b) they don’t show up when you go looking with a metal detector.

*** Toy cars are some of the more common casualties of the big grinder, but sometimes a stray cellphone will meet its end there as well.

**** Don’t freak out about the biosolids.  If you’re aghast at the thought of bacterial excretions just spread out on farmland somewhere, keep in mind that it’s regarded as quite safe.  After all, bacteria poop is how we get beer, yogurt, and a good many other things that we enjoy actually putting in our mouths!

***** When I was first elected to the City Council, one of my priorities was to get rid of the golf course, because I couldn’t see any reason why a municipality should own one in the first place.  I was rapidly shown the error in my thinking, however; if we sold off the golf course, we’d lose the assurance that we’d be able to continue discharging wastewater there, and we’d end up having to build that expensive cooling tower.  I think we’re better off with the golf course.

****** Since a lot of folks irrigate their lawns, which doesn’t add to the load on the wastewater plant, the City will generally bill for wastewater in the summer based on winter usage numbers instead.

******* We’re not the only city in this situation.  Infrastructure has been going downhill all over the country, because there just isn’t the money available to keep it running properly.  If you can get your hands on the documentary “Liquid Assets,” from Penn State, I highly recommend it.  Here’s the trailer:

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