Contact: Sandra Fallon, National Environmental Services Center
Phone: (304) 293-4191 x5582; E-mail:

Article/References Word Count: 2,461
Article Release Date: September 2010


Article Release Date: June 7, 2011
Article/References Word Count: 2,010

Planning Ahead Improves Water and Wastewater Services
By Sandra Fallon, National Environmental Services Center at West Virginia University

The Public Works Department in Riverton, Wyoming, population 10,000, makes planning a priority, and it has paid off. On Superbowl Sunday, for example, water system personnel can be found watching the football game instead of working out in the cold weather replacing broken water lines, according to Riverton's Public Services Director Bill Urbigkit. By planning ahead and keeping up with repairs and replacements, the department has been able to prevent water line breaks and to significantly extend the life of the system's equipment.

When Urbigkit took the job in the 1990s the utility plan was already in place, thanks to funding from the state of Wyoming's Water Development Commission. "That plan has allowed us to anticipate maintenance and repair needs over the last 15 years, and to set aside adequate reserves to pay for those improvements. We have very few water main breaks and water leaks because our lines are in good shape. The norm in other communities can be hundreds of breaks every winter, which equates to treating water and letting it flow directly into the ground--a costly way to do business."

Why Plan Ahead?
Planning ahead can help you implement practices that save money. For example, protecting your drinking water sources (streams, lakes, rivers, aquifers) from pollution can save the cost of removing that pollution through expensive treatment processes at the drinking water plant. Using water meters helps calculate the amount of water used by customers so that you can collect those fees. Choosing proven decentralized wastewater technologies, such as onsite or cluster systems versus a costly centralized system, can be more affordable and easier for a small or rural community to manage.

Planning ahead can help you develop an equipment repair and replacement schedule and a strategy to cover those costs. As with your car, house, or any piece of equipment, keeping it in good repair helps to ensure safe, cost-efficient, and long-lasting operation. The same goes for water and wastewater systems. Knowing the condition and expected life of the equipment will help determine when to fix or replace it. In turn, that helps estimate how much money you'll need and when you'll need it, allowing you to set aside the right amount of revenue, a little at a time. Planning will also guide your efforts to obtain or raise funds through water rate adjustments, loans, grants, and bonds.

Planning ahead helps you anticipate changes that can affect the system. Knowing the community's future water and wastewater needs, upcoming regulations, and number and types of customers is key to determining future services, expenses, and income. Considering the impact
of climate change, natural disasters, or other unexpected events can guide your efforts to put preventive, emergency response, or long-term adaptation measures in place.

Planning ahead helps protect the public health and preserve what is likely your community's largest capital investment. Planning for system protections, operations, improvements, and funding strengthens your ability to protect public health, which is the most important goal, says Pat Kline, a consulting engineer and small system expert. Another key consideration, according to Mark Rounsavall, the Rural Community Assistance Partnership (RCAP) Program Manager for Community Resource Group, Inc. (Southern RCAP), is to protect the community's sizable investment in the water or wastewater plant. "When people realize it's either the biggest or one of the biggest investments their community has made, the importance of safeguarding that investment becomes clear."

First Things First: Know the System's Financial Condition
Understanding your system's current financial condition and the cost of doing business is essential, according to Rounsavall. Three financial documents--the income statement, balance sheet, and cash flow statement--produced by your bookkeeper, accountant, or independent auditor, provide this information.

The balance sheet (or statement of financial position) identifies the system's net worth--how much the system is worth at a given point in time, and indicates whether or not the system is operating with a deficit. The income statement (or statement of activity) shows the results of operations over a period of time--how much revenue the system has earned and the amount of expense it has incurred. The cash flow statement breaks down all of the system's financial transactions and shows how they affect the flow of cash. Examining these documents, performing simple calculations, and comparing the numbers from year to year provides a wealth of information for planning and making corrections, such as:

Urbigkit says he doesn't know how you'd plan or have any credibility when talking to ratepayers without knowing your financial situation. "For some small systems, it can be like pulling teeth to get all the financial information together, but you've got to do it. The software and tools available today make it easier to organize and get access to your financial data." He recommends getting help wherever you can, such as from assistance providers, your independent auditor, perhaps even a student from the local high school who can help input data and get the software up and running.

Starting the Planning Process
Small and rural water and wastewater systems should consider planning at least five-years and up to twenty years out. While this may sound overwhelming, all planning typically comes down to four basic questions:

A common planning technique for getting a handle on system conditions is known as a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis. For most purposes, a good review of internal conditions (good and bad), and what’s going on externally will be sufficient.

System strengths could include things like good relationships with customers, trained operators who will likely remain at the system, solid finances, and up-to-date infrastructure. Conversely, weaknesses such as employee turnover, money troubles, or aging facilities must be listed. External conditions--be they threats or opportunities--include potential emergencies, whether your area is growing or losing population, if new regulations are in the offing, if private companies are buying nearby systems, and if there are plans for consolidating or regionalizing systems. Climate change impacts such as drought, severe or changing precipitation, sea-level rise, and the resulting effect on the availability and dependability of your water sources and services should also be considered. Of course, no one can see into the future, but a SWOT analysis will be invaluable when problems arise.

Where are we now? The financial and SWOT analyses, if done honestly, provide an accurate picture of the way things are right now. It's also useful to collect data about pollution threats, current customers, current water consumption patterns, and current system capacity.

Where do we want to be? What will the system be like in five, ten, twenty years? When will you need to make major upgrades or replacements? Will you add new customers? Which water and energy conservation and efficiency measures will you implement? These questions allow you to state, in concrete terms, where your system will be by the end of the plan’s timeline. Many systems find it useful to craft mission and vision statements to capture who they are, what they do, and what they seek to achieve.

How do we get there? To achieve the goals you’ve set, describe how to make them happen. Each goal should have a specific plan of action and the list should be prioritized. Document who will be responsible for leading each project, when it will be done, and how much it will cost. Take advantage of strengths and opportunities, minimize weaknesses and threats to the system. Remember to be realistic. Setting too many goals often means that none are done very well.

How will we measure our progress? It's easy to say, "We will add new customers" but hard to quantify and, therefore, hard to document progress. A better method is to say, "We'll add 50 new customers in each of the next five years." Decide what the milestones are for the various goals and set stages for achieving them. Goals should be measurable, and progress (or lack thereof) should be reported to the board and other stakeholders on a regular basis.

Plenty of Work But Worth It
Planning takes commitment and leadership--there are no two ways about it. But the effort will be worth it. And, you don't have to do it alone. Kline recommends seeking assistance from your state's Rural Community Assistance Partnership office, federal or state agencies, a neighboring water or wastewater system, or knowledgeable community members.

"Many of us have a natural aversion to numbers as well as to planning," says Rounsavall, "and think that if things are OK today, why worry about tomorrow? There's a long tradition of thinking 'water is free' even though the cost of treatment, equipment, maintenance, and pumping water to and from our homes keeps going up. Sooner or later we have to face the real cost of providing this service." Urbigkit stresses the importance of taking pride in the system and leaving it in better shape for future customers and employees. Understanding your system's financial condition and planning ahead can be positive steps in the right direction.

References and Resources
Asset Management: A Handbook for Small Water Systems, One of the Simple Tools for Effective Performance (STEP) Guide Series (2003). U.S. Environmental Protection Agency (EPA).
Free guidebook with worksheets and examples for implementing an asset management plan.

Guide for Board Members (working title) (to be released in 2011). Rural Community Assistance Partnership (RCAP). A comprehensive desk reference for water and wastewater utility board members. Addresses a board's legal and management responsibilities, finances and funding sources, and system operation and maintenance.

Check Up Program for Small Systems (CUPSS) (2010). U.S. EPA. Asset management software for small drinking water and wastewater systems.

Financial Management Guide (working title) (to be released in 2011). Rural Community Assistance Partnership (RCAP). An overview of financial management, including developing and balancing a budget, estimating and collecting revenue, income statements, balance sheets, cash flow statements, and audit reports.

Minimum Standards for Water System Management & Planning Documents (2009). New Mexico Environmental Finance Center. Identifies management and planning tools used by water systems and the resources available to help systems develop their own plans.

Running Your System Like a Good Business (2004). Mark Kemp. National Environmental Services Center. In On Tap, Summer 2004.  Provides an overview of strategic planning and budgeting for small and rural water systems.

Small System Guide: Understanding Utility Financial Statements (2011). Community Resource Group, Inc. Describes how to read and understand a water or wastewater utility's balance sheet, income statement, and cash flow statement, and prepare an audit report.

Small Utility Board Training CD ROM (2007). Montana Water Center. Three-hour self-paced course designed for water board members and elected officials. Covers public water system regulation, operation, planning, budgeting, and communication.

Strategic Planning: A Handbook for Small Water Systems, One of the Simple Tools for Effective Performance (STEP) Guide Series (2003). U.S. EPA. Provides strategic planning strategies and worksheets for owners and operators of community water systems and non-transient non-community water systems serving 3,300 people or fewer.



About the Rural Community Assistance Partnership (RCAP) and the National Environmental Services Center (NESC).
RCAP (; 800-321-7227) and its programs across the country offer water and wastewater training and assistance to small and rural communities, tribes, and water utilities. NESC (; (304) 293-4191) offers information, technical assistance via telephone, educational resources, and magazines and newsletters addressing water and wastewater issues for these same audiences.

Author Bio. Sandra Fallon is a training specialist with the National Environmental Services Center at West Virginia University.