Payback planning

April 2006 » Feature Articles
In the land development business, determining the availability of utility system capacity is the first of many questions that need to be answered to determine a project’s viability.
Glenn S. Burkhardt, P.E.

Proactive wastewater, stormwater, and water distribution system planning provides quick answers to development questions and equitable cost recovery

Have you ever approached a community to determine if there is adequate capacity in its water, wastewater, or stormwater systems only to find the answers are several months away with an uncertain cost? Or, have you worked for a community and faced a developer’s seemingly daily pleas for answers on utility capacity questions? Fortunately, a lowerstress approach can make sense for both communities and developers.

In the land development business, determining the availability of utility system capacity is the first of many questions that need to be answered to determine a project’s viability. Historically, many communities determine utility infrastructure needs after a conceptual development plan is presented. However, developing an understanding of the utility system capacity under this approach becomes a lengthy, reactive process.

The community often is required to request proposals for professional services, which involves advertising, proposal preparation, proposal review, interviews, and formal approval, often taking three months or longer. The utility system planning professional often will need several months to establish current conditions, determine existing system capabilities, validate initial conclusions, prepare a written report, and incorporate feedback before the report is complete. Consequently, the process can take six months or longer just to begin answering the question whether utility system capacity is available.

Once the report is complete and it is determined that there is insufficient capacity to accommodate the proposed development, the utility system planning professional then begins the process of determining necessary improvements and the associated cost. Under the historical reactive planning process, the ultimate answer to the initial utility capacity question often takes as long as a year to obtain.

Proactive planning

The proactive utility system planning process frequently takes the same amount of time to prepare as a single reactive utility system investigation, but it saves time in responding to future utility capacity inquiries. Additionally, the proactive utility system planning process often will be more expensive than one reactive utility system investigation, but it offers ultimate savings when multiple utility system investigations are anticipated in the future.

The proactive utility system planning approach can offer a comprehensive understanding of how vacant land areas will influence future infrastructure improvement needs. This understanding allows the community to develop a cost-recovery strategy for the master plan preparation, to determine a more equitable cost-sharing formula for future utility infrastructure improvement needs, and to plan for future improvements in a more timely and costefficient manner.

Therefore, proactive utility system planning offers greater efficiency in addressing developer capacity inquiries, provides a more economical approach in serving developer needs, and promotes an opportunity to share more equitably both planning and improvement costs with those who benefit from them.

Getting started

A proactive plan begins with identifying the ultimate service area envisioned for each utility system and the anticipated development densities of currently vacant land areas. This process warrants discussion with neighboring communities to develop utility service agreements that establish long-term service area boundaries and service area development densities consistent with each local government’s respective land use master plan.

A scaleable plan for each utility system should be developed, illustrating the piping configuration of the utility system.

Plans should be GIS based with database linkage to make the process of plan updating easier and to provide "what-if " analysis capabilities.

Separate databases should be developed for land use and for each utility system.

The databases should include existing conditions and physical information that could change over time or that could influence utility capacity. At a minimum, the databases not only should include information important to capacity assessments, but also should be expandable to incorporate more detailed physical features and information that could be useful for ongoing system maintenance management, utility locating, or future construction planning activities.

The land use database should include an estimate of existing development expressed in residential equivalent units (reu’s) for water and sanitary sewer systems and in runoff acreage for stormwater systems. Include a link to the point of connection on the sewer or water system for each existing development. The database for vacant land should include the buildable acreage, and each vacant parcel should be assigned a density consistent with the community’s master plan. Also, link vacant parcels to the point where these future demands will be connected to the sewer or water system. By separately identifying vacant land areas, anticipated development densities, and connection points to the utility systems, the community can readily update the master plan to reflect future zoning amendment decisions and development plans. Defining individual points of connection to the utility system also offers the ability to consider connection alternatives and their impacts on future improvement needs.

The sanitary sewer database should include a full-flow sewer capacity calculation feature and pumping station system flow/head relationship to facilitate what-if analyses that become useful in determining future improvement needs. Each reach of sanitary sewer should identify the design capacity, current use, current available capacity, and ultimate use expressed in reu’s to assess more quickly the sanitary sewer system’s ability to accommodate a proposed development, or to identify segments that may require improvement.

By creating a sanitary sewer database broken down by sewer reach, what-if analysis can be performed more easily.

A network analysis model should be developed for the water distribution system linked to a database for this utility system. The model should be calibrated under both static and dynamic flow conditions to offer reasonable accuracy in predicting future conditions. A pressure contour map of the water distribution system should be maintained for current and ultimate-development, maximum day demand conditions. Also, maintain a fireflow contour map of the water distribution system showing the available fire flow at residual pressures of 50 psi for commercial districts and 20 psi for residential districts.

The storm sewer database should include a breakdown of tributary areas, runoff coefficients based on development density, and flow contributions considering any stormwater detention or retention facilities for existing developments. Each reach of storm sewer should identify the design capacity, current use, available capacity, and ultimate use expressed in runoff acreage (area times the runoff coefficient) to assess more quickly the storm sewer system’s ability to accommodate a proposed development or to identify segments that may require improvement.

The capacity of each unit process at the water and wastewater treatment facilities should be identified and the available capacity should be related to the number of reu’s that could be accommodated before future expansion is needed. A plan to serve the ultimate development within the water distribution and wastewater collection system should be prepared, considering a phased implementation strategy to allow refinement of the plan as development occurs. The capacity available with each unit process improvement should be identified to determine more quickly the extent of improvements that may be necessary to accommodate a proposed development.

The development of a proactive utility system plan requires a significant investment of time and financial resources for a community. However, an interactive utility system plan allows the community to maintain a current understanding of its utility system capabilities and limitations with a relatively small time investment to update information as development occurs or improvements are made. An interactive utility system plan also offers the ability to advise potential developers quickly on improvements that they need to consider in their financial planning.

Master plan cost recovery

The need for utility system master planning is linked directly to the anticipation of future development. Therefore, the cost of master planning should be apportioned among the properties that ultimately benefit from this service. Individual properties have differing utility system needs; therefore, it is reasonable to distribute the master planning cost by individual utility service. Because each development imposes differing impacts on the utility infrastructure, it also is reasonable to distribute the master planning cost by development impact.

The first step in allocating utility master planning costs is identifying the cost to develop the sanitary sewer, storm sewer, water distribution, water treatment, and wastewater treatment components of the master plan. The second step is to identify the future capacity needs of vacant land within the ultimate service area for the individual utility system components. The third step is to identify those vacant properties that have not contributed to previous master planning efforts through application of special assessment fees. The fourth step is to determine the cost for annual updating and maintenance of the master plan and the anticipated build-out duration for vacant land included in the plan.

The last step is to anticipate the probable timing of vacant land development.

Then, a cash flow analysis of master planning costs and future master planning revenues is prepared, including an interest financing cost for the initial and ongoing investment. Through an iterative analysis, the service charge for master planning services can be determined for each utility system on a unit-benefit basis. The use of a spreadsheet analysis tool allows the service charge to be updated on an annual basis to reflect the remaining balance of the initial investment, considering revenues received from developments, and to update anticipated costs to maintain the master planning database system.

The resulting analysis provides an equitable unit-cost basis for assessing future developments. The community can publish a unit-cost table that that will be applied to every development.

Capital improvement costs

A cost opinion for future capital improvements to accommodate the ultimate service area development should be prepared for each utility system.

Determine the development impact of all properties benefiting from each improvement to establish the unit benefit cost. By adding together the total unit benefit costs for an individual property, the community can offer more specific cost impact information to a developer for the property being considered.

Capital cost opinions can be updated readily using a published construction cost index each year to maintain a current forecast of the costs that should be anticipated for utility service. The end result is a master plan that offers relatively quick answers—with more certainty and less stress—of the cost to obtain the necessary capacity to serve a development.

Glenn S. Burkhardt, P.E., is vice president, Water and Wastewater Services in Atwell-Hicks’ Ann Arbor, Mich., office. He is responsible for planning, design, and construction management of water supply, treatment, and distribution systems; and wastewater collection, treatment, and disposal systems. He can be contacted at 1-734-994-4000.


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