Water Resources Planning in South Florida during a Difficult

Economy: No Time for Unreasonable and Unfunded

Mandates

Water Resources Planning in South Florida during a Difficult

Economy: No Time for Unreasonable and Unfunded

Mandates

Thomas M. Missimer, Ph.D., P.G.Robert G. Maliva, Ph.D., P.G.

Schlumberger Water ServicesFort Myers, Florida

IntroductionIntroduction

Florida is in an economic crisis that is perhaps Florida is in an economic crisis that is perhaps the worst in 50 years.the worst in 50 years.

South Florida has lost population in the last two South Florida has lost population in the last two years.years.

The ability of water supply utilities to The ability of water supply utilities to implement existing water supply plans is implement existing water supply plans is dependant on a reliable, continuous revenue dependant on a reliable, continuous revenue stream.stream.

Costs of operations are up and overall net Costs of operations are up and overall net revenue is down for many SW Florida public revenue is down for many SW Florida public utilities.utilities.

Issues Facing Utilities during Issues Facing Utilities during This Economic CrisisThis Economic Crisis

Reductions in future water use Reductions in future water use projectionsprojections

Reductions in net revenueReductions in net revenue Costs to complete planned infrastructureCosts to complete planned infrastructure Bond payments/reductions in ratingsBond payments/reductions in ratings Additional costs to comply with new Additional costs to comply with new

regulationsregulations

Some Measures Recently Taken Some Measures Recently Taken by South Florida Utilities to by South Florida Utilities to Reduce CostsReduce Costs

Reductions in personnelReductions in personnel Deferment of projected capital Deferment of projected capital

improvements and alteration of water improvements and alteration of water planning documentsplanning documents

Deferment of some scheduled Deferment of some scheduled maintenancemaintenance

Legal challenges to new regulationsLegal challenges to new regulations

Some Current Regulatory Some Current Regulatory Initiatives with Major Associated Initiatives with Major Associated CostsCosts

Year-round water conservation Year-round water conservation regulationregulation

Application of water use permitting to Application of water use permitting to reclaimed waterreclaimed water

Phasing out of ocean outfalls for disposal Phasing out of ocean outfalls for disposal of treated sewage effluentof treated sewage effluent

Numerical standards for nutrient Numerical standards for nutrient concentrations in surface waterconcentrations in surface water

Year-Round Water Year-Round Water Conservation RegulationConservation Regulation

Sounds reasonableSounds reasonable Can require considerable modification of Can require considerable modification of

the water conveyance system to limit the water conveyance system to limit time of water deliverytime of water delivery

Limitation to one or two days for Limitation to one or two days for irrigation can cause violations of state irrigation can cause violations of state and federal laws within the distribution and federal laws within the distribution system (pressures, storage)system (pressures, storage)

Reduces revenue collected for both Reduces revenue collected for both water use and wastewater treatmentwater use and wastewater treatment

Application of Water Use Application of Water Use Permitting to Reclaimed Permitting to Reclaimed WaterWater

Adds costly layer of bureaucracyAdds costly layer of bureaucracy Can require expensive distribution Can require expensive distribution

infrastructureinfrastructure Can cause additional, expensive monitoring Can cause additional, expensive monitoring

mechanisms to monitor reclaimed water usemechanisms to monitor reclaimed water use Comprehensive planning coordination with Comprehensive planning coordination with

local government utility planslocal government utility plans Can cause contract violations with Can cause contract violations with

consumersconsumers

Phasing Out of Ocean Outfalls Phasing Out of Ocean Outfalls for Disposal of Treated Sewage for Disposal of Treated Sewage EffluentEffluent

Will require new wet season disposal method, Will require new wet season disposal method, such as deep injection wellssuch as deep injection wells

In certain cases it cannot to placed into the In certain cases it cannot to placed into the reclaimed water system because of high salinity reclaimed water system because of high salinity (i.e. Miami-Dade north collection system).(i.e. Miami-Dade north collection system).

Can cause billions of dollars in capital Can cause billions of dollars in capital improvementsimprovements

If wastewater is to be added to the reclaimed If wastewater is to be added to the reclaimed water system, it will have to be desalinated water system, it will have to be desalinated which creates another waste stream which creates another waste stream (concentrate requiring disposal).(concentrate requiring disposal).

Numerical Standards for Numerical Standards for nutrient concentrations in nutrient concentrations in surface watersurface water

Causes re-design of numerous Causes re-design of numerous wastewater treatment facilities (billions wastewater treatment facilities (billions of dollars)of dollars)

Will reduce concentrations of nutrients Will reduce concentrations of nutrients in reclaimed water, thereby forcing in reclaimed water, thereby forcing additional fertilizers to be usedadditional fertilizers to be used

Some utilities cannot afford the WWT Some utilities cannot afford the WWT modifications and would have to reduce modifications and would have to reduce or eliminate reclaimed water reuseor eliminate reclaimed water reuse

Combining Economic Downturn Combining Economic Downturn with a Dubious Drought with a Dubious Drought DeclarationDeclaration

Economy causes a reduction in use and Economy causes a reduction in use and consummate reduction in both the water consummate reduction in both the water and wastewater revenue streamsand wastewater revenue streams

Implementation of Phase III drought Implementation of Phase III drought restrictions, not necessarily justified, restrictions, not necessarily justified, causes additional reductions in both causes additional reductions in both revenue streamsrevenue streams

Overall reduction in revenue has caused Overall reduction in revenue has caused nearly catastrophic economic impacts to nearly catastrophic economic impacts to some utilitiessome utilities

Cost of Droughts When Not Cost of Droughts When Not Scientifically JustifiedScientifically Justified

Political DroughtPolitical Drought – water is physically – water is physically available, but an agency regulating available, but an agency regulating water acts to create a situation to water acts to create a situation to increase funding, increase power, or increase funding, increase power, or otherwise exert greater control over otherwise exert greater control over local governments and utilities.local governments and utilities.

SFWMD 2006 – 2007 DroughtSFWMD 2006 – 2007 Drought

2006 & 2007 set a new 2006 & 2007 set a new District-wide record for low District-wide record for low rainfall in two consecutive rainfall in two consecutive calendar years.calendar years.

District-wide rainfall total District-wide rainfall total was reported to be 83.6 was reported to be 83.6 inches versus average of inches versus average of 105.6 inches (52.8 105.6 inches (52.8 inches/yr).inches/yr).

District-wide rainfall deficit District-wide rainfall deficit = 22 inches. = 22 inches.

SFWMD 2006 – 2007 SFWMD 2006 – 2007 DroughtDrought

Effects of 2006-2007 drought varied Effects of 2006-2007 drought varied considerably across the SFWMD area. considerably across the SFWMD area. There was a large spatial variation in There was a large spatial variation in rainfall.rainfall.

Local rainfall data for drought period was Local rainfall data for drought period was compared against available historic data compared against available historic data for stations in the SFWMD.for stations in the SFWMD.

Sources:Sources: Southeast Regional Climate Center (SERCC)Southeast Regional Climate Center (SERCC) National Oceanic and Atmospheric National Oceanic and Atmospheric

Administration (NOAA).Administration (NOAA).

2006 & 2007 Rainfall Versus Historic 2006 & 2007 Rainfall Versus Historic MeansMeansStationStation 20062006

(in.)(in.)20072007(in.)(in.)

MeanMean(in.)(in.)

2006 & 2006 & 2007 2007 vs.vs.

MeanMean(in.)(in.)

HistoricHistoricMin.Min.(in. & (in. & year)year)

Avon ParkAvon Park 32.3032.30 38.9738.97 52.7452.74 -34.21-34.21 26.1026.10(2000)(2000)

OrlandoOrlando 36.3536.35 38.4938.49 50.1850.18 -25.52-25.52 30.3830.38(2000)(2000)

Fort PierceFort Pierce 33.8433.84 49.3149.31 52.7752.77 -22.39-22.39 32.6632.66(1988)(1988)

Moore Moore HavenHaven

37.1237.12 37.5537.55 47.6347.63 -20.59-20.59 29.6329.63(1981)(1981)

OkeechobeOkeechobeee

30.4530.45 41.5041.50 44.9944.99 -18.03-18.03 25.3225.32(2000)(2000)

2006 & 2007 rainfall versus historic 2006 & 2007 rainfall versus historic meansmeansStationStation 20062006

(in.)(in.)20072007(in.)(in.)

MeanMean(in.)(in.)

2006 & 2006 & 2007 2007 vs.vs.

MeanMean(in.)(in.)

HistoricHistoricMin.Min.(in. & (in. & year)year)

Miami Int. Miami Int. AirportAirport

64.6764.67 63.9763.97 60.0160.01 8.628.62 37.0537.05(1956)(1956)

West Palm West Palm BeachBeach

54.1554.15 63.8063.80 60.8660.86 -3.77-3.77 32.6632.66(1988)(1988)

Fort Fort LauderdaleLauderdale

61.8761.87 66.4366.43 66.4366.43 -4.56-4.56 35.5435.54(1961)(1961)

Fort MyersFort Myers 56.2756.27 47.0247.02 54.5654.56 -5.83-5.83 32.8332.83(1964)(1964)

HialeahHialeah 59.4659.46 64.7764.77 65.9665.96 -7.69-7.69 41.1041.10(1961)(1961)

SW Florida Water LevelsSW Florida Water LevelsLower Tamiami Aquifer Well C-391Lower Tamiami Aquifer Well C-391

SFWMD Drought ResponseSFWMD Drought Response

Implementation of Phase II Severe Water Implementation of Phase II Severe Water Shortage Restrictions Shortage Restrictions Goal = 30% reduction in demandGoal = 30% reduction in demandStill in effect even though many areas do not Still in effect even though many areas do not have a have a severesevere water shortage. water shortage.

Implementation of Phase III Extreme Water Implementation of Phase III Extreme Water Shortage Restrictions (1/15/08 to 4/18/08) Shortage Restrictions (1/15/08 to 4/18/08) Goal = 45% reduction in demandGoal = 45% reduction in demand

Restrictions were essentially District-wideRestrictions were essentially District-wide..

Drought Management Drought Management ConsiderationsConsiderations

Magnitude of the precipitation shortage and Magnitude of the precipitation shortage and spatial variability in the deficits.spatial variability in the deficits.

The available natural water in storage that The available natural water in storage that could be used during the drought.could be used during the drought.

Potential duration of the drought.Potential duration of the drought. Economics of drought mitigation measures Economics of drought mitigation measures

(impacts to consumers, loss of revenues to (impacts to consumers, loss of revenues to producers/utilities).producers/utilities).

Potential economic, environmental, and water Potential economic, environmental, and water resources impacts of non- or delayed resources impacts of non- or delayed implementation of mitigation measures.implementation of mitigation measures.

Reality of 2006-2007 Reality of 2006-2007 DroughtDrought Worst impacted area was the center of the District Worst impacted area was the center of the District

from Lake Okeechobee area northwards. from Lake Okeechobee area northwards. Low rainfall in the Lake Okeechobee area and low Low rainfall in the Lake Okeechobee area and low

lake level limited exports to the east coast.lake level limited exports to the east coast. Coastal areas were less impacted by the drought.Coastal areas were less impacted by the drought. Coastal Southwest Florida did not experience Coastal Southwest Florida did not experience

severe drought conditions. severe drought conditions. Water restrictions (Phase III Extreme Water Water restrictions (Phase III Extreme Water

Shortage Restrictions) were emplaced in areas that Shortage Restrictions) were emplaced in areas that were not experiencing were not experiencing extremeextreme drought conditions. drought conditions.

Impacts of Water Restrictions on Impacts of Water Restrictions on UtilitiesUtilities

Most utilities do not have large budget excesses Most utilities do not have large budget excesses to cover sudden unexpected drop in revenues. to cover sudden unexpected drop in revenues. Large utilities reported losses of revenues in Large utilities reported losses of revenues in millions resulting in deferral of capital projects, millions resulting in deferral of capital projects, reductions in machinery and equipment reductions in machinery and equipment purchases, staff lay-offs, and water restriction purchases, staff lay-offs, and water restriction surcharges.surcharges.

Utilities that invested the most in costly Utilities that invested the most in costly alternative water supply systems ironically alternative water supply systems ironically faced the greatest hardships as they must still faced the greatest hardships as they must still pay for the expensive systems even though pay for the expensive systems even though revenues were suddenly reduced.revenues were suddenly reduced.

Increase in peaking factors as residential water Increase in peaking factors as residential water use in concentrated into short periods of time.use in concentrated into short periods of time.

Impacts of Water Restrictions on Impacts of Water Restrictions on UtilitiesUtilities

Water utilities finance their operations Water utilities finance their operations through the sale of water. through the sale of water.

Wastewater fees are also commonly tied Wastewater fees are also commonly tied to water sales.to water sales.

Revenues must covered on-going Revenues must covered on-going operational expenses and debt service.operational expenses and debt service.

Much of utility costs are fixed (debt Much of utility costs are fixed (debt service, staff, maintenance, overhead) service, staff, maintenance, overhead) and still need to be met irrespective of and still need to be met irrespective of water sales.water sales.

Drought response issuesDrought response issues

Appropriateness of universal responses to droughtsAppropriateness of universal responses to droughts

District-wide “one-size fits all” or “shared pain” response District-wide “one-size fits all” or “shared pain” response is simpler to implement and in one sense appeals to a is simpler to implement and in one sense appeals to a sense of fairness (“we are all in this together”).sense of fairness (“we are all in this together”).

Results in some water users and utilities facing Results in some water users and utilities facing hardships that are not necessary based on local hardships that are not necessary based on local hydrologic conditions.hydrologic conditions.

Consideration should be given to degree of utility Consideration should be given to degree of utility implementation of AWS.implementation of AWS.

Restrictions have a variable benefit depending on Restrictions have a variable benefit depending on freshwater use and local climatic conditions.freshwater use and local climatic conditions.

Alternatives: restrictions based on County or utility Alternatives: restrictions based on County or utility service area.service area.

Drought response issuesDrought response issues

Disincentives against utility drought protection methodsDisincentives against utility drought protection methods

Drought-proofing efforts, such as the development of alternative Drought-proofing efforts, such as the development of alternative water supplies (desalination), and reuse systems in general did water supplies (desalination), and reuse systems in general did not yield utilities and customers any direct benefits as far as not yield utilities and customers any direct benefits as far as maintaining normal water use patterns.maintaining normal water use patterns.

▪▪ Reduced financial incentive to invest in AWS. Such investments Reduced financial incentive to invest in AWS. Such investments may make utilities more vulnerable to droughts as they must still may make utilities more vulnerable to droughts as they must still be paid for during water restriction periods.be paid for during water restriction periods.

The value of committing to the reuse system was also diminished The value of committing to the reuse system was also diminished as most customers do not meet 100% of supply from reuse as most customers do not meet 100% of supply from reuse system and therefore faced the same reductions as other water system and therefore faced the same reductions as other water users.users.

Alternative – link water restrictions to use of fresh groundwater. Alternative – link water restrictions to use of fresh groundwater.

Drought response issuesDrought response issues

Water restrictions as an education methodWater restrictions as an education method Credibility Issue.Credibility Issue.

Noah - Any chance the Phase II SevereWater Shortage Restrictions will be lifted soon?

Politics, Economics, and DroughtsPolitics, Economics, and Droughts

This combination can cause very poor decisions to This combination can cause very poor decisions to be made that will have long-term, negative be made that will have long-term, negative impacts on utility planning and management (i.e. impacts on utility planning and management (i.e. City of Cape Coral situation)City of Cape Coral situation)

Poor drought management based on political Poor drought management based on political expediency rather that science leads to severe expediency rather that science leads to severe impacts on utilities.impacts on utilities.

By political question, it is meant that policy By political question, it is meant that policy choices are being made between different options choices are being made between different options that are ultimately based on personal values and that are ultimately based on personal values and opinions. People of good will may disagree.opinions. People of good will may disagree.

Implementation of new regulations in an economic Implementation of new regulations in an economic downturn does have serious implications on utility downturn does have serious implications on utility operations, management and planning.operations, management and planning.

ConclusionsConclusions

Severe changes in the economy have serious Severe changes in the economy have serious effects on utility planning and revenues.effects on utility planning and revenues.

Leeway must be given to utilities by regulatory Leeway must be given to utilities by regulatory agencies during economic downturns to not disrupt agencies during economic downturns to not disrupt operations.operations.

A moratorium on new regulations applied to A moratorium on new regulations applied to utilities during economic downturns is appropriate. utilities during economic downturns is appropriate.

Implementation of water restrictions should be Implementation of water restrictions should be based more on local hydrologic conditions and based more on local hydrologic conditions and fresh water use rather than political expediency.fresh water use rather than political expediency.

Drought response plans should have incentives for Drought response plans should have incentives for investment in AWS as a means of drought-proofing.investment in AWS as a means of drought-proofing.