Seattle Public Utilities Mainline Sewer Pipe Maintenance/Backup Strategy June, 2005

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1 Seattle Public Utilities Mainline Sewer Pipe Maintenance/Backup Strategy June, of 30

2 Executive Summary Seattle Public Utilities (SPU) currently experiences an average of 80 mainline sanitary sewer backups per year for which it assumes responsibility (see Figure 5 on page 8 for annual number of sewer backups for ). The causal pattern of these backups were examined and alternative maintenance strategies developed based on both historical and hypothetical future costs to determine if SPU is currently pursuing the most effective mainline sewer pipe maintenance/backup strategy possible. The goal of this report is to examine SPU s current sewer pipe cleaning strategy in comparison to other possible approaches and propose the most pragmatic future strategy based on triple bottom line costing methodology. To this end five separate mainline sewer pipe maintenance strategies were analyzed including the existing strategy. These strategies are highlighted below in Table 1: Estimated Average Strategy Description Estimated Annual Cost Number of Sewer Backups/Year A 100% Reactive $5,442, * B Existing Strategy $1,482,500 80* C More Proactive than $1,375,375 55* Existing Strategy D Predominantly Proactive $1,810,875 35* E 100% Proactive $7,744,775 25* *It is estimated that an average of 20 storm overload-related sewer backups (unrelated to the selected maintenance strategy) will occur each year due to lack of conveyance capacity in some mainlines during large rainstorm events. This category of backups has fluctuated greatly from year to year and is dependent on the frequency of high intensity storms occurring within a given year. These capacity-related backups are considered to be out of the scope of this maintenance strategy-specific analysis. It is also estimated that an average of 5 sewer backups per year will continue to occur regardless of strategy due to unforeseen circumstances. The sum of capacity-related backups and backups related to unforeseen circumstances are therefore expected to be approximately 25 per year. It is assumed that this baseline amount of backups (on average) will occur for each of the options noted above regardless of the particular strategy. Table 1 Proposed SPU Mainline Sewer Pipe Maintenance Strategies For purposes of simplicity the maintenance tasks examined in this report were tied directly to the number of sanitary sewer backups (SSOs) expected for a given strategy. This is due to the fact that SSOs were deemed to be the single most important indicator of the effectiveness of any sewer pipe maintenance strategy. It is important to note however that sewer pipe maintenance procedures also directly affect dry and wet weather combined sewer overflows (CSOs) as well as a small percentage of wastewater pump station-related overflows. 2 of 30

3 Numerous costs, both proactive and reactive in nature, have been summed to provide the overall total cost of each maintenance strategy. Figure 1 below shows how each of these factors contributes to the estimated total triple bottom line cost of each strategy. Estimated Annual Triple Bottom Line Costs $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ * Estimated Avg. Number of Annual Sewer Backups Reactive CCTV Costs Proactive CCTV Costs Proactive Grease Abatement Costs Proactive Maintenance Costs Environmental & Social Costs Regulatory Non- Compliance Costs Claims-Related Costs Due to Backups Reactive Maintenance Costs Figure 1 Proposed Mainline Sewer Pipe Maintenance Strategies Recommendation Strategy C Strategy C, as shown in Figure 1, was found to be the most cost effective strategy using triple bottom line costing methods. As such it is recommended that this strategy be pursued. Strategy C is composed of the following characteristics (as outlined in more detail in the body of this report): Moderate reduction in the amount of sewer backups as are currently experienced Moderate reduction in current reactive (non-scheduled) pipe cleaning maintenance Moderate reduction in existing sewer backup claims-related costs Moderate reduction in existing environmental and social costs due to sewer backups Moderate reduction in potential regulatory non-compliance fines due to sewer backups 3 of 30

4 Modest increase in current proactive (scheduled) pipe cleaning and maintenancerelated CCTV inspection. It is possible that this recommended increase might be attained by more efficient use of existing crews. Endorses a cost-effective sewer pipe grease abatement strategy focused on the most egregious grease ordinance violators. It is expected that a large percentage of sewer backups prevented by implementing Strategy C will occur through this new and more proactive approach to eliminating fats, oils, and grease (FOG) from SPU s sewer collection system. Sensitivity Analysis Uncertainty is inherent in all of the proposed sewer pipe maintenance strategies. In general the farther a proposed strategy deviates from the existing strategy (Strategy B) the less certain the annual expected costs will be. Boundary estimates of expected uncertainty relating to the various strategies are shown graphically below in Figure 2. Estimated Annual Triple Bottom Line Costs $12,000, $10,000, $8,000, $6,000, $4,000, $2,000, $ Estimated Avg. Number of Annual Sewer Backups Figure 2 Sensitivity Analysis for Expected Triple Bottom Line Costs Associated with Proposed Sewer Pipe Maintenance/Backup Strategies 4 of 30

5 Background Seattle Public Utilities (SPU) currently responds to an average of calls per year concerning sanitary sewer backups. The number of calls fluctuates significantly from year to year depending on several conditions; most notably the quantity, intensity, and duration of seasonal rain events. The overwhelming majority of reported sewer backups result in a backup characterized by a residential basement flooded with sewage due to a clogged or broken sewer pipe. Drainage and wastewater field crews are typically dispatched to a site shortly after a sewer backup complaint is received. Approximately 90% of all complaints result in the finding that the sewer backup has been caused by problems associated with a private side sewer (often root intrusion into the complainant s side sewer resulting in a backup event) and are therefore deemed not to be the responsibility of SPU. When a private side sewer is found by the field crew to be clogged the homeowner is informed of the likely cause and given a referral list of contractors capable of removing the blockage and/or repairing the pipe. The remaining 10% of complaints (approximately 80 per year) are caused by problems associated with an SPU sewer mainline. Table 2 below shows the typical breakdown by percentage of each type of these backups: Mainline Sewer Backup Cause Typical Percent of Total Sewer Backups Storm Overload 25% Roots 25% Grease 25% Debris 15% Other* 10% *Third party damage, pump station failure, structural pipe failure, or unknown cause Table 2 Causes of SPU Mainline Sewer Backups by Percentage Potential New Environmental Protection Agency Legislation The Environmental Protection Agency (EPA) is expected to propose NPDES permit regulations in the near future designed to minimize sanitary sewer backups. Proposed modifications to SPU s current wastewater discharge permit may include a zero-tolerance policy concerning controllable sanitary sewer backups. Under the EPA definition a controllable sanitary sewer backup consists of a backup caused by insufficient maintenance (root intrusion, grease, debris, etc.), insufficient capacity (i.e. storm overload), or power failure (leading to a sewer backup at a pump station). Controllable backups currently make up the majority of mainline sewer backups observed in the SPU 5 of 30

6 wastewater collection system. Backups of a non- controllable nature consist primarily of those caused by an Act of God such as an earthquake, or third party damage (i.e. vandalism or contractor-related construction damage). Potential new permit regulations are not expected to limit non- controllable sanitary sewer backups. Disclaimer: This analysis was undertaken with the goal of finding the most cost effective mainline sewer pipe maintenance strategy for Seattle Public Utilities using triple bottom line costing methods. The analysis assumes costs for fines related to sewer backups but does not rule out non-zero tolerance policies (it in fact endorses cost effectiveness and non-zero tolerance policies) concerning the prevention of controllable sewer backups. Current Mainline Sewer Pipe Maintenance and CCTV Inspection Productivity An important variable for any maintenance strategy is crew productivity (both existing and proposed). When properly measured, crew production can help determine whether or not an existing level of service can be increased with the help of gains made due to efficiency. Figure 3 below shows SPU Drainage and Wastewater crew productivity ( ) for the four primary activities associated with mainline sewer pipe cleaning. The figure also shows CCTV crew inspection productivity. It should be noted that Root Foaming (the chemical root treatment of intrusive roots in sewer pipes) was only begun on a large scale during the summer of Since adoption, Root Foaming has served as the primary method for eliminating roots in sewer pipes (in lieu of hydrocutting). $1.20 $1.00 Cost Per Lineal Foot $0.80 $0.60 $0.40 Hydrocutting Rodding Jet Cleaning TV Inspection Root Foaming $0.20 $ Year Figure 3 Costs per LF for SPU Drainage and Wastewater Maintenance Activities ( ) 6 of 30

7 1,200,000 1,000,000 Lineal Feet of Production 800, , ,000 Root Foaming Jet Cleaning Rodding Hydrocutting 200, Year Figure 4 Total Annual Production for SPU Drainage and Wastewater Pipe Cleaning Activities ( ) While the average annual production of sewer pipe cleaning maintenance (hydrocutting, rodding, jet cleaning, and chemical root foaming) excluding CCTV inspection has averaged approximately 850,000 linear feet from , it can be seen from Figure 4 above that production has trended downward in 2003 and It is likely that this recent decrease in overall pipe cleaning production has led to the recent increase in mainline-related sewer backups due to missed maintenance. This trend can be seen in Figure 5 (records pertaining to sewer backups due to missed maintenance were not kept prior to 2001). While many issues have been responsible for the overall decrease in sewer pipe cleaning production in the last few years it is felt that the primary reason has been an increased emphasis on diverting more resources towards sewer pipe point repair. The recently adopted (May 25, 2005 AMC Meeting) Sewer Rehab Decision Model will soon be used for decision-making regarding rehabilitation and/or replacement of sewer pipes. It is likely that implementation of the Sewer Rehab Decision Model will create alterations to the annual mix of work regarding point repair, pipe re-lining, and complete pipe replacement. Currently, in-house crews perform all pipe cleaning procedures and the majority of point repairs. All other rehab/replacement work is bid out to private contractors on an annual basis. Modifications to the number of point repair projects 7 of 30

8 (either increasing or decreasing) will undoubtedly affect the available number of field crew to perform cleaning activities, thereby also affecting total pipe cleaning production Number of Sewer Backups Backups Not Due to Missed Maintenance Backups Due to Missed Maintenance Year Figure 5 Annual Mainline Sewer Backups ( ) Maintenance Crew Efficiency It should be noted that attaining optimal efficiency of crew operations is a vital element of all of the strategies mentioned in this report. Revisiting existing cleaning frequencies, and subsequent recalibration of some of these frequencies, has the potential for achieving big gains in efficiency. Likewise, scheduling crews to concentrate as diligently as possible on locations where sewer backups repeatedly occur is an important aspect of any of the strategies with the exception of the 100% reactive strategy. Examples of ways to recalibrate existing cleaning cycles could include: Waiting for a sewer backup to occur before placing a pipe on a particular cycle (least preferred). Inspecting the entire pipe length via a conventional remotely controlled CCTV camera at the scheduled cleaning cycle return date. The cleaning cycle could then be subsequently recalibrated based on the inspection results. 8 of 30

9 Inspecting the pipe with a lesser degree of clarity using a stationary zoom camera placed in the upstream or downstream maintenance hole. Proposed SPU Mainline Sewer Pipe Maintenance Strategies Five potential future mainline sewer pipe maintenance strategies were examined ranging from purely reactive to purely proactive and including the existing strategy. Strategy A 100% Reactive Strategy A would consist of a 100% reactive mainline sewer maintenance approach to sewer backups. Costs associated with proactive maintenance (pipe cleaning, hydrocutting, etc.) and proactive CCTV investigation would be eliminated. A grease abatement policy would not be pursued. Due to the purely reactive nature of this approach it is expected that the annual number of mainline sewer backups would rise substantially from existing conditions. For the purposes of this report it is assumed that this number would reach an average of 605 per year. Costs associated with the increase in sewer backups would include high reactive (non-scheduled) maintenance costs for backup relief, high claims costs due to the increased number of claims, high environmental and social costs, and potentially high fines relating to regulatory non-compliance. An itemized breakdown of the costs associated with Strategy A, as well as the other strategies analyzed in this report can be found in Table 3 at the end of this section. Additionally, the methodology and calculations used to derive costs as well as the anticipated number of sewer backups for all of the strategies are located in Appendix A. Strategy B Existing Strategy Strategy B is the current SPU sewer backup strategy and results in an average of approximately 80 mainline sewer backups per year. An average of 850,000 linear feet (about 9% of the entire collection system) of mainline sewer pipe is cleaned annually ( average) under this strategy. The strategy allocates approximately 75% of current mainline sewer pipe maintenance resources to perform proactive (scheduled) work and approximately 25% of these resources to perform reactive (non-scheduled) work. Costs associated with reactive components of this approach, such as labor and equipment costs for sewer backup relief, claims costs, and environmental and social costs, are much lower than those in Strategy A because many fewer sewer backups are experienced. Likewise, potential fines incurred from EPA s new SSO rules would be much lower than Strategy A but higher than the other strategies analyzed. Under this current strategy CCTV inspection is rarely used pre- or post-cleaning. Grease in pipes is primarily managed by reactively cleaning or cutting and removal (by SPU field crews at SPU cost) of the fats, oils, and grease rather than enforcing the City s 9 of 30

10 existing grease ordinance. Particularly egregious violators of the ordinance are contacted however penalization for flushing grease into the sewer system does not occur. Strategy C More Proactive than Existing Strategy Strategy C utilizes a greater degree of proactive maintenance to achieve a projected amount of approximately 55 mainline sewer backups per year on average. Costs for items such as labor and equipment for sewer backup relief, claims, environmental and social costs, and potential fines relating to regulatory non-compliance are diminished from those observed in Strategy B. Important elements of this strategy include increased proactive maintenance and CCTV inspection to help prevent sewer backups. As noted earlier in this report, attaining optimal efficiency of existing crew operations is a vital element of this strategy as well as the other more proactive-centric strategies. Revisiting existing cleaning frequencies, and subsequently recalibrating of some of these frequencies, may achieve big gains in efficiency. In addition, a wide-ranging grease abatement strategy would be initiated including the addition of one full-time grease inspector to enforce the City s grease ordinance. This person would be tasked with investigating grease-related hotspots and penalizing particularly egregious violators of the ordinance. The inspector would be aided by two existing inspectors (borrowed from SPU s water quality inspection team) serving on an as needed part-time (~25%) basis. Strategy C was found to be the most cost effective of those studied in this report. Strategy D Predominantly Proactive This strategy further emphasizes proactive means to reduce sewer surcharges and is estimated to result in an average of 35 mainline sewer backups per year. Costs related to a reactive approach to sewer backups such as labor and equipment for sewer backup relief, claims, environmental and social costs, and potential fines relating to regulatory non-compliance are further reduced from the previously mentioned strategies. The proactive maintenance and CCTV inspection mentioned in Strategy C would be greatly expanded. The grease abatement strategy referred to in the previous strategy would be further expanded. Two full-time grease inspectors, as well as three part-time (~25% each) existing water quality inspectors would be tasked with inspecting greaserelated problems throughout the entire city rather than just inspecting hotspots alone. Penalization of grease ordinance violators would be an integral part of the program. Strategy E 100% Proactive This strategy relies as completely as possible on proactive mainline sewer maintenance methods to reduce the number of sewer backups to an absolute minimum. In actuality the amount of controllable backups could never reach zero due to randomly occurring and unforeseen blockages in some sewer pipes. Non- controllable sewer backups would 10 of 30

11 continue to occur. For the purposes of this report it is assumed that this strategy would reduce the number of controllable sewer backups to an average of 25 per year (see * under Table 1 on page 2 earlier in this report for an explanation of this baseline number of backups). Due to the proactive nature of this approach the various elements representing reactive costs (i.e. labor and equipment for backup relief, claims, environmental and social costs, and regulatory non-compliance) would reach an absolute minimum. In contrast, costs associated with proactive methods for reducing sewer backups would be very high. Blanket proactive mainline sewer maintenance and CCTV inspection would be instituted (it is assumed that this would be achieved by cleaning each of the pipes in SPU s sewer collection system an average of once per year). The grease abatement policy under Strategy E would be extremely comprehensive and consist of a no tolerance stance towards fats, oils, and grease. All parties found to be adding grease to the SPU sewer system would be penalized to the full extent of the law. Item Strategy A Strategy B Strategy C Strategy D Strategy E Estimated Average Number of Sewer Backups/Year Reactive (Non-Scheduled) $505,500 $127,500 $70,125 $44,625 $18,000 Maintenance Costs Reactive CCTV Inspection $478,125 $95,625 $52,800 $33,600 $0 Costs Claims-Related Costs $2,038,500 $270,000 $189,000 $121,500 $81,000 Regulatory Non- $605,000 $80,000 $55,000 $35,000 $25,000 Compliance Potential Costs Environmental and Social $1,815,000 $240,000 $165,000 $105,000 $75,000 Costs Proactive (Scheduled) $0 $382,500 $459,000 $765,000 $5,880,000 Maintenance Costs Proactive Grease $0 $0 $40,200 $132,400 $231,400 Abatement Program Costs Proactive CCTV Costs $0 $286,875 $344,250 $573,750 $1,434,375 Total Annual Costs $5,442,125 $1,482,500 $1,375,375 $1,810,875 $7,744,775 Table 3 Annualized Cost Breakdown of Proposed Sewer Backup Strategies 11 of 30

12 Appendix A 12 of 30

13 Strategy A Sewer Mainline Maintenance Strategy Proposing 100% Reactive Maintenance (Estimated Average of 1,896 Controllable Sewer Backups/Year) 1) Direct Costs Associated with Reactive (Non-Scheduled) Maintenance to Include Jetting, Hydrocutting, Rodding, Root Dragging, Chemical Root Treatment, and Direct Costs Related to Sewer Backup Resolution-Related Labor and Equipment: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. It is assumed that 80% of historically reactive (non-scheduled) work has gone towards relieving sewer backups. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 1,896 sewer backups will result from this strategy. It is assumed that the cost to reactively relieve an individual sewer backup will remain constant regardless of strategy. The average direct cost per to reactively relieve an individual sewer backup (labor and equipment only) can therefore be calculated from current (Strategy B) experience as: Furthermore, (25%) X (80%) X ($510,000/year) / (80 mainline sewer backups/year) = $1,275/sewer backup ($1,275/sewer backup) X (1,896 estimated sewer backups) = $2,417,400 Total direct costs associated with reactive (non-scheduled) maintenance = $2,417,400 2) Direct Costs Associated with Reactive (Non-Scheduled) CCTV inspection: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. It is assumed that 80% of historically reactive (non-scheduled) CCTV inspection has gone towards sewer backup relief inspection. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 1,896 sewer backups will result from this strategy. It is assumed that the CCTV costs associated with reactively relieving an individual sewer backup will remain constant regardless of strategy. 13 of 30

14 The average direct cost per backup regarding CCTV inspection can therefore be calculated from current (Strategy B) experience as: Furthermore, (25%) X (80%) X ($382,500/year) / (80 mainline sewer backups/year) = $956/sewer backup ($956/sewer backup) X (1,896 estimated sewer backups) = $1,813,000 Total direct costs associated with reactive (non-scheduled) CCTV inspection = $1,813,000 3) Direct costs Related to Claims: The amount of claims paid due to sewer backups has remained relatively constant from 1990 to The ratio of claims paid vs. number of sewer backups during this period has been approximately 1 claim filed for every 2 sewer backups experienced and 1 claim paid for every 2 claims filed Therefore, the average number of sewer claims paid under this strategy would be approximately 1,896 divided by 4 which equals approximately 474 per year Current average paid sewer claim is approximately $8,500 For the purposes of this analysis it is assumed that administration and processing costs associated with claims average $5,000 for each successful claim. Therefore the cost to SPU for claims is estimated to be $13,500 for each successful claim paid. Average annual direct costs for sewer claims paid due to backups under this strategy would be: (474 claims paid/year) X ($13,500/claim paid) = $6,399,000 4) Direct costs Related to Potential Fines from New SSO Rules: An average fine of $1,000 will be levied against each controllable sanitary sewer backup Average annual direct costs related to potential fines from new SSO rules under this strategy would be: (1,896 controllable backups/year) X ($1,000 per controllable backup) = $1,896,000 5) Indirect Costs Associated with Environmental & Social Costs: An average estimated cost of $3,000/sewer backup has been applied for combined environmental and social costs until a more detailed estimate can be developed at a later date by SPU staff. Average annual indirect costs associated with environmental and social costs under this strategy would be: (1,896 backups) X ($3,000/backup) = $5,688, of 30

15 6) Direct Costs Associated with Proactive (Scheduled) Maintenance: Under this strategy all current proactive maintenance would cease and no further proactive maintenance would be performed. Average annual direct costs associated with proactive maintenance under this strategy would be: $0 7) Direct Costs Associated with Proactive Grease Abatement Program: Under this strategy no proactive grease abatement would occur and SPU would reactively remove all grease from pipes as required. Average annual direct costs associated with proactive grease abatement under this strategy would be: $0 8) Direct Costs Associated with Proactive CCTV Investigation: Under this strategy all current proactive CCTV investigation would cease and no further proactive CCTV investigation would be performed. Average annual direct costs associated with proactive CCTV investigation under this strategy would be: $0 15 of 30

16 Strategy B SPU s Current Sewer Mainline Maintenance Strategy (Estimated Average of 80 Controllable Sewer Backups/Year) 1) Direct Costs Associated with Reactive (Non-Scheduled) Maintenance to Include Jetting, Hydrocutting, Rodding, Root Dragging, Chemical Root Treatment, and Direct Costs Related to Sewer Backup Resolution-Related Labor and Equipment: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. It is assumed that 80% of historically reactive (non-scheduled) work has gone towards relieving sewer backups. Existing cost of current base case reactive maintenance costs would continue: (25%) X (80%) X ($510,000) = $102,000 2) Direct Costs Associated with Reactive (Non-Scheduled) CCTV inspection: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. It is assumed that 80% of historically reactive (non-scheduled) CCTV inspection has gone towards relieving sewer backups. Existing cost of current base case reactive CCTV inspection costs would continue: (25%) X (80%) X ($382,500) = $76,500 3) Direct costs Related to Claims: The amount of claims paid due to sewer backups has remained relatively constant from 1990 to The ratio of claims paid vs. number of sewer backups during this period has been approximately 1 claim filed for every 2 sewer backups experienced and 1 claim paid for every 2 claims filed Therefore, the average number of sewer claims paid under this strategy would be approximately 20 per year Current average paid sewer claim is approximately $8,500 For the purposes of this analysis it is assumed that administration and processing costs associated with claims average $5,000 for each successful claim. Therefore the cost to SPU for claims is estimated to be $13,500 for each successful claim paid. 16 of 30

17 Average annual direct costs for sewer claims paid due to backups under this strategy would be: (20 claims paid/year) X ($13,500/claim paid) = $270,000 4) Direct costs Related to Potential Fines from New SSO Rules: An average fine of $1,000 will be levied against each controllable sanitary sewer backup Average annual direct costs related to potential fines from new SSO rules under this strategy would be: (80 controllable backups/year) X ($1,000/ controllable backup) = $80,000 5) Indirect Costs Associated with Environmental & Social Costs: An average estimated cost of $3,000/sewer backup has been applied for combined environmental and social costs until a more detailed estimate can be developed at a later date by SPU staff. Average annual indirect costs associated with environmental and social costs under this strategy are: (80 backups) X ($3,000/backup) = $240,000 6) Direct Costs Associated with Proactive (Scheduled) Maintenance: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. Existing cost of current base case proactive maintenance costs would continue: (75%) X ($510,000) = $382,500 7) Direct Costs Associated with Proactive Grease Abatement Program: SPU s current grease abatement strategy (although soon to change) is virtually purely reactive in nature. DWW Operations removes all grease from pipes as required to remove blockages. 17 of 30

18 Average annual direct costs associated with proactive grease abatement under this strategy are: $0 8) Direct Costs Associated with Proactive CCTV Inspection: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. Existing cost of current base case proactive CCTV inspection costs would continue: (75%) X ($382,500) = $286, of 30

19 Strategy C Sewer Mainline Maintenance Strategy Proposing Increasing Emphasis on Proactive Maintenance (Estimated Average of 55 Controllable Sewer Backups/Year) 1) Direct Costs Associated with Reactive (Non-Scheduled) Maintenance to Include Jetting, Hydrocutting, Rodding, Root Dragging, Chemical Root Treatment, and Direct Costs Related to Sewer Backup Resolution-Related Labor and Equipment: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. It is assumed that 80% of historically reactive (non-scheduled) work has gone towards relieving sewer backups. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 55 sewer backups will result from this strategy. It is assumed that the cost to reactively relieve an individual sewer backup will remain constant regardless of strategy. The average direct cost per to reactively relieve an individual sewer backup (labor and equipment only) can therefore be calculated from current (Strategy B) experience as: (25%) X (80%) X ($510,000/year) / (80 mainline sewer backups/year) = $1,275/sewer backup So, the average annual direct costs for labor and equipment to resolve backups under this strategy would be: ($1,275/sewer backup) X (55 estimated sewer backups) = $70,125 2) Direct Costs Associated with Reactive (Non-Scheduled) CCTV inspection: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. It is assumed that 80% of historically reactive (non-scheduled) CCTV inspection has gone towards sewer backup relief inspection. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 55 sewer backups will result from this strategy. It is assumed that the CCTV costs associated with reactively relieving an individual sewer backup will remain constant regardless of strategy. 19 of 30

20 The average direct cost per backup regarding CCTV inspection can therefore be calculated from current (Strategy B) experience as: Furthermore, (25%) X (80%) X ($382,500/year) / (80 mainline sewer backups/year) = $956/sewer backup ($956/sewer backup) X (55 estimated sewer backups) = $52,600 Total direct costs associated with reactive (non-scheduled) CCTV inspection = $52,600 3) Direct costs Related to Claims: The amount of claims paid due to sewer backups has remained relatively constant from 1990 to The ratio of claims paid vs. number of sewer backups during this period has been approximately 1 claim filed for every 2 sewer backups experienced and 1 claim paid for every 2 claims filed Therefore, the average number of sewer claims paid under this strategy would be approximately 14 per year Current average paid sewer claim is approximately $8,500 For the purposes of this analysis it is assumed that administration and processing costs associated with claims average $5,000 for each successful claim. Therefore the cost to SPU for claims is estimated to be $13,500 for each successful claim paid. Average annual direct costs for sewer claims paid due to backups under this strategy would be: (14 claims paid/year) X ($13,500/claim paid) = $189,000 4) Direct costs Related to Potential Fines from New SSO Rules: An average fine of $1,000 will be levied against each controllable sanitary sewer backup Average annual direct costs related to potential fines from new SSO rules under this strategy would be: (55 controllable backups/year) X ($1,000/ controllable backup) = $55,000 5) Indirect Costs Associated with Environmental & Social Costs: An average estimated cost of $3,000/sewer backup has been applied for combined environmental and social costs until a more detailed estimate can be developed at a later date by SPU staff. Average annual indirect costs associated with environmental and social costs under this strategy would be: (55 backups) X ($3,000/backup) = $165, of 30

21 6) Direct Costs Associated with Proactive (Scheduled) Maintenance: DWW Operations current mainline maintenance strategy (Strategy B) achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $382,500 for all proactive maintenance work performed (See Section 6 Strategy B). It is assumed that 20% more proactive maintenance will need to be performed (in combination with the strategic use of proactive CCTV investigation) to achieve the reduction in sewer backups expected of this strategy. Average annual direct costs for labor and equipment to perform proactive maintenance under this strategy would be: (120%) X ($382,500) = $459,000 7) Direct Costs Associated with Proactive Grease Abatement Policy: The grease abatement program improvements approved by the AMC and in the development process would be implemented. The program would consist of one full-time inspector, as well as the part-time (25%) inclusion of two existing inspectors (borrowed from SPU s water quality inspection team). It is estimated that this would reduce the need for hydrocutting of grease in sewer lines by 70%. The program would consist of inspecting selected restaurants in SPU s grease battlefield areas and enforce a more proactive SPU stance towards grease. There are 188 sewer lines currently on hydrocutting or jetting cycle related to grease removal. So, money saved per year would be: (70%) X (188 sewer lines) X (240 ft. estimated avg. length) X ($3.00 avg. cost/ft. (includes removal, disposal, and environmental damage)) X (1.0 avg. maintenance cycle/yr.) -$94,800 Estimated fully loaded cost of one full-time grease abatement program inspector and two part-time (25%) inspectors would be: (1 full-time inspector) X ($90,000/yr.) + (2 full-time inspectors) X (25%) X ($90,000/yr.) $135,000 Total = $40,200 8) Direct Costs Associated with Proactive CCTV Investigation: DWW Operations current proactive CCTV investigation strategy (Strategy B) achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $286,875 for all proactive CCTV inspection performed (See Section 8 Strategy B). It is assumed that 20% more proactive CCTV inspection will need to be performed (in combination with the strategic use of proactive maintenance work) to achieve the reduction in sewer backups expected of this strategy. 21 of 30

22 Average annual direct costs required for labor and equipment to perform proactive CCTV work under this strategy would be: (120%) X ($286,875) = $344, of 30

23 Strategy D Sewer Mainline Maintenance Strategy Proposing Predominantly Proactive Maintenance (Estimated Average of 35 Controllable Sewer Backups/Year) 1) Direct Costs Associated with Reactive (Non-Scheduled) Maintenance to Include Jetting, Hydrocutting, Rodding, Root Dragging, Chemical Root Treatment, and Direct Costs Related to Sewer Backup Resolution-Related Labor and Equipment: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. It is assumed that 80% of historically reactive (non-scheduled) work has gone towards relieving sewer backups. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 35 sewer backups will result from this strategy. It is assumed that the cost to reactively relieve an individual sewer backup will remain constant regardless of strategy. The average direct cost per to reactively relieve an individual sewer backup (labor and equipment only) can therefore be calculated from current (Strategy B) experience as: (25%) X (80%) X ($510,000/year) / (80 mainline sewer backups/year) = $1,275/sewer backup So, the average annual direct costs for labor and equipment to resolve backups under this strategy would be: ($1,275/sewer backup) X (35 estimated sewer backups) = $44,625 2) Direct Costs Associated with Reactive (Non-Scheduled) CCTV inspection: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. It is assumed that 80% of historically reactive (non-scheduled) CCTV inspection has gone towards sewer backup relief inspection. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 35 sewer backups will result from this strategy. It is assumed that the CCTV costs associated with reactively relieving an individual sewer backup will remain constant regardless of strategy. The average direct cost per backup regarding CCTV inspection can therefore be calculated from current (Strategy B) experience as: (25%) X (80%) X ($382,500/year) / (80 mainline sewer backups/year) = $956/sewer backup 23 of 30

24 Furthermore, ($956/sewer backup) X (35 estimated sewer backups) = $33,500 Total direct costs associated with reactive (non-scheduled) CCTV inspection = $33,500 3) Direct costs Related to Claims: The amount of claims paid due to sewer backups has remained relatively constant from 1990 to The ratio of claims paid vs. number of sewer backups during this period has been approximately 1 claim filed for every 2 sewer backups experienced and 1 claim paid for every 2 claims filed Therefore, the average number of sewer claims paid under this strategy would be approximately 9 per year Current average paid sewer claim is approximately $8,500 For the purposes of this analysis it is assumed that administration and processing costs associated with claims average $5,000 for each successful claim. Therefore the cost to SPU for claims is estimated to be $13,500 for each successful claim paid. Average annual direct costs for sewer claims paid due to backups under this strategy would be: (9 claims paid/year) X ($13,500/claim paid) = $121,500 4) Direct costs Related to Potential Fines from New SSO Rules: An average fine of $1,000 will be levied against each controllable sanitary sewer backup Average annual direct costs related to potential fines from new SSO rules under this strategy would be: (35 controllable backups/year) X ($1,000/ controllable backup) = $35,000 5) Indirect Costs Associated with Environmental & Social Costs: An average estimated cost of $3,000/sewer backup has been applied for combined environmental and social costs until a more detailed estimate can be developed at a later date by SPU staff. Average annual indirect costs associated with environmental and social costs under this strategy would be: (35 backups) X ($3,000/backup) = $105, of 30

25 6) Direct Costs Associated with Proactive (Scheduled) Maintenance: DWW Operations current mainline maintenance strategy (Strategy B) achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $382,500 for all proactive maintenance work performed (See Section 6 Strategy B). It is assumed that approximately twice as much (200%) of the amount of proactive maintenance currently performed will be required (in combination with the strategic use of proactive CCTV investigation) to achieve the reduction in sewer backups expected of this strategy. Average annual direct costs for labor and equipment to perform proactive maintenance under this strategy would be: (200%) X ($382,500) = $765,000 7) Direct Costs Associated with Proactive Grease Abatement Policy: A wide-ranging and aggressive grease abatement program would be implemented. This program would be more substantial than the program approved by the AMC and currently in development. This program would consist of two full-time inspectors, as well as the part-time (25%) inclusion of three existing inspectors (borrowed from SPU s water quality inspection team). It is estimated that this would reduce the need for hydrocutting of grease in sewer lines by 85%. The program would consist of inspecting all restaurants conveying food waste to the SPU sewer system and enforce a more proactive SPU stance towards grease than Strategy C. There are 188 sewer lines currently on hydrocutting or jetting cycle related to grease removal. So, money saved per year would be: (85%) X (188 sewer lines) X (240 ft. estimated avg. length) X ($3.00 avg. cost/ft. (includes removal, disposal, and environmental damage)) X (1.0 avg. maintenance cycle/yr.) -$115,100 Estimated fully loaded cost of one full-time grease abatement program inspector and two part-time (25%) inspectors would be: (2 full-time inspectors) X ($90,000/yr.) + (3 full-time inspectors) X (25%) X ($90,000/yr.) $247,500 Total = $132,400 8) Direct Costs Associated with Proactive CCTV Investigation: DWW Operations current proactive CCTV investigation strategy (Strategy B) achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $286,875 for all proactive CCTV inspection performed (See Section 8 Strategy B). 25 of 30

26 It is assumed that approximately twice as much (200%) of the amount of proactive CCTV inspection currently performed will be required (in combination with the strategic use of proactive maintenance work) to achieve the reduction in sewer backups expected of this strategy. Average annual direct costs required for labor and equipment to perform proactive CCTV work under this strategy would be: (200%) X ($286,875) = $573, of 30

27 Strategy E Sewer Mainline Maintenance Strategy Proposing 100% Proactive Maintenance (Estimated Average of 25 Controllable Sewer Backups/Year) 1) Direct Costs Associated with Reactive (Non-Scheduled) Maintenance to Include Jetting, Hydrocutting, Rodding, Root Dragging, Chemical Root Treatment, and Direct Costs Related to Sewer Backup Resolution-Related Labor and Equipment: DWW Operations has historically ( ) spent an average of approximately $510,000 annually (in-house labor and equipment) to clean sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) work and approximately 25% of resources to perform reactive (non-scheduled) work. It is assumed that 80% of historically reactive (non-scheduled) work has gone towards relieving sewer backups. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 25 sewer backups will result from this strategy. It is assumed that the cost to reactively relieve an individual sewer backup will remain constant regardless of strategy. The average direct cost per to reactively relieve an individual sewer backup (labor and equipment only) can therefore be calculated from current (Strategy B) experience as: (25%) X (80%) X ($510,000/year) / (80 mainline sewer backups/year) = $1,275/sewer backup So, the average annual direct costs for labor and equipment to resolve backups under this strategy would be: ($1,275/sewer backup) X (25 estimated sewer backups) = $31,875 2) Direct Costs Associated with Reactive CCTV Investigation: DWW Operations has historically ( ) spent an average of approximately $382,500 annually (in-house labor and equipment) to CCTV inspect sewer pipes. DWW Operations typically allocates approximately 75% of resources to perform proactive (scheduled) CCTV inspection and approximately 25% of resources to perform reactive (non-scheduled) CCTV inspection. It is assumed that 80% of historically reactive (non-scheduled) CCTV inspection has gone towards sewer backup relief inspection. From SPU has experienced an average of approximately 80 mainline sewer backups/year. It is estimated that 25 sewer backups will result from this strategy. It is assumed that the CCTV costs associated with reactively relieving an individual sewer backup will remain constant regardless of strategy. 27 of 30

28 The average direct cost per backup regarding CCTV inspection can therefore be calculated from current (Strategy B) experience as: Furthermore, (25%) X (80%) X ($382,500/year) / (80 mainline sewer backups/year) = $956/sewer backup ($956/sewer backup) X (25 estimated sewer backups) = $23,900 Total direct costs associated with reactive (non-scheduled) CCTV inspection = $23,900 2) Direct costs Related to Claims: The amount of claims paid due to sewer backups has remained relatively constant from 1990 to The ratio of claims paid vs. number of sewer backups during this period has been approximately 1 claim filed for every 2 sewer backups experienced and 1 claim paid for every 2 claims filed Therefore, the average number of sewer claims paid under this strategy would be approximately 6 per year Current average paid sewer claim is approximately $8,500 For the purposes of this analysis it is assumed that administration and processing costs associated with claims average $5,000 for each successful claim. Therefore the cost to SPU for claims is estimated to be $13,500 for each successful claim paid. Average annual direct costs for sewer claims paid due to backups under this strategy would be: (6 claims paid/year) X ($13,500/claim paid) = $81,000 3) Direct costs Related to Potential Fines from New SSO Rules: An average fine of $1,000 will be levied against each controllable sanitary sewer backup Average annual direct costs related to potential fines from new SSO rules under this strategy would be: (25 controllable backups/year) X ($1,000/ controllable backup) = $25,000 4) Indirect Costs Associated with Environmental & Social Costs: An average estimated cost of $3,000/sewer backup has been applied for combined environmental and social costs until a more detailed estimate can be developed at a later date by SPU staff. Average annual indirect costs associated with environmental and social costs under this strategy would be: (25 backups) X ($3,000/backup) = $75, of 30

29 5) Direct Costs Associated with Proactive (Scheduled) Maintenance: DWW Operations current mainline maintenance strategy achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $382,500 for all proactive maintenance work performed (See Section 6 Strategy B). Under this strategy approximately 3,500 pipe segments (out of SPU s total of approximately 46,000 pipe segments) are cleaned annually. It is assumed that each pipe in SPU s sewer pipe system will be cleaned an average of once per year under this strategy. Average annual direct costs for labor and equipment to perform proactive maintenance under this strategy would therefore be: ((46,000 pipe segments) / (3,500 pipe segments)) X ($382,500) = $5,027,100 6) Direct Costs Associated with Proactive Grease Abatement Policy: An extremely comprehensive grease abatement strategy including a thorough enforcement policy would be initiated. It is estimated that the addition of three full-time inspectors, as well as part-time (25%) inclusion of four existing inspectors (borrowed from SPU s water quality inspection team) would reduce the need for hydrocutting of grease in sewer lines by 95%. The program would consist of routinely inspecting all restaurants conveying food waste to the SPU sewer system, enforce a notolerance stance towards grease, and penalize all parties found to be adding grease to the SPU sewer system to the extent of the law. There are 188 sewer lines currently on hydrocutting or jetting cycle related to grease removal. So, money saved per year would be: (95%) X (188 sewer lines) X (240 ft. estimated avg. length) X ($3.00 avg. cost/ft. (includes removal, disposal, and environmental damage)) X (1.0 avg. maintenance cycle/yr.) -$128,600 Estimated fully-loaded cost of three full-time grease abatement program inspectors, four part-time (25%) inspectors, and increased CCTV costs would be (3 full-time inspectors) X ($90,000/yr.) + (4 full-time inspectors) X (25%) X ($90,000/yr.) $360,000 Total = $231,400 7) Direct Costs Associated with Proactive CCTV Investigation: DWW Operations current proactive CCTV investigation strategy (Strategy B) achieves an average annual total of 80 sewer backups with an approximate programmatic cost of $286,875 for all proactive CCTV inspection performed (See Section 8 Strategy B). Under this strategy approximately 1,750 pipe segments (out of SPU s total of approximately 46,000 pipe segments) are CCTV inspected annually. 29 of 30