BENEFITS AND COSTS OF PREVENTION:
CASE STUDIES OF
COMMUNITY WELLHEAD PROTECTION
VOLUME 1
Source Water Protection
Business and Economics Series
Report No. 2
November 30,1995
Office of Ground Water and Drinking Water
U:S. Environmental Protection Agency
Washington, DC, 20460
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ACKNOWLEDGEMENTS
" This project and report were completed under Environmental Protection Agency (EPA)
Contract No. 68-C4-0011, Work Assignment 1-14, by the CADMUS Group, Ron Bergman, EPA
Work Assignment Manager. Charles Job provided technical direction and expanded the final report
to incorporate detailed analysis and reporting of individual community costs and funding sources
separate from the detailed case studies in Volume 2. EPA wishes to express its appreciation to the
officials who participated in this project from the States of Louisiana, Maine, Massachusetts, Ohio,
Pennsylvania, and Washington, and from the communities of Gilbert, LA, Norway, ME, Dartmouth,
MA, MMdletown, OH, Gettysburg, PA, Lancaster County, PA, and Tumwater, WA, for their
cooperation that made this study possible. ,
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TABLE OF CONTENTS
Volume 1
EXECUTIVE SUMMARY .................... ?.?.:....... ES-1
1. INTRODUCTION .......; 1
1.1 Definition of Benefit .. 1
1.2 Methodology . ...;.......... ..... 3
1.2.1 Pilot Study ......... 3
1.2.2 Case Study Selection ,. 4
1.2.3 Site Visits 5
1.2:4 Assessing Costs and Benefits '.......;......... 5
1.3 Major Assumptions and Premises ........... 7
1.4 Organization of this Report Tr:.... ...'.. ;.... 9
2. OVERVIEW OF THE CASE STUDIES .., .. .'. . 10
2.1 Comparison of Case Studies 10
2.2 Case Study Summaries ...... 11
2.2.1 Gilbert, Louisiana ....... .. . .... is
2.2^2 Norway, Maine ~........... .......... 16
2,2.3 Tumwater, Washington . 18
2.2.4 Gettysburg, Pennsylvania ..'...,.:.'. , 19
2.2.5 Lancaster County, Pennsylvania 20
2.2.6 Dartmouth, Massachusetts 21
2.2.7 Middletown, Ohio ......... 22
3. ANALYSIS OF BENEFITS AND COSTS ............'..;......... :......... 24
3.1 Contamination Costs Avoided (Benefit) .., . 24
3.1.1 Response to PWS Contamination ................. ......... 24
3.1.2 Aquifer Clean-up .;.....,. ......: .. 28
3.1.3 Comparison of Costs for Providing Safe Drinking Water and Total
Projected Remedial Costs 30
3.1:A Extent of Outside Funding for Contaminant Remediation ........ f 32
3.2 Wellhead Protection Costs 32
3.2.1 Cost Determinants ...... 32
3.2.2 Extent of Outside Funding for Wellhead Protection ........... 37
3.2.3 Costs by WHP Element .r 38
3.2.4 Comparison with Other Reported WHP Costs '..-., . 44
3.3 Comparison of Benefits and Costs 47
3.4 Qualitative Analysis of Benefits and Costs ..' 54
3.5 Comparison of Funding Sources for Remediation and Prevention ...... 55
3.6 Approximate Value of Contaminated Water ...... 56
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TABLE OF CONTENTS
(Continued)
4.
CONCLUSIONS
Bibliography
. 58
; 62
Volume 2
(Separate Report)
DETAILED CASE STUDIES OF SEVEN COMMUNITIES
PART ONE
1.0 Introduction and Overview
2.0 Benefit/Cost Case Study Reports
Borough of Gettysburg, Pennsylvania
Eastern Lancaster County, Pennsylvania
Village of Gilbert, Louisiana
Town of Dartmouth, Massachusetts
City of Tumwater, Washington
City of Middletown, Ohio
Town of Norway, Maine
PARTTWO
1.0 LESSONS LEARNED
u
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Ill
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EXECUTIVE SUMMARY
Introduction
The benefits of avoiding contamination of community drinking water sources are greater than
the costs of implementing a local prevention program for wellhead protection. Wellhead protection
(WHP) offers community leaders a less expensive approach to protect public health and avoid the
costs of future contamination of their ground water sources of drinking water. This analysis of seven
communities shows that, on average, dealing with contamination of their ground water supply may
be 30 to 40 times.more costly than to prevent it in the first place. The Wellhead Protection Program
is designed under the Safe Drinking Water Act (Section 1428) to prevent contamination from
entering the ground waters supplying public water wells, but is not a guarantee. At this time, forty
States and Territories have adopted wellhead protection programs under this law, but in most States,
communities decide on the direction of implementation. The "basic" steps of a wellhead protection
program include forming ateam of local stakeholders, delineating the protection area around public
wells, identifying potential contamination sources, and developing and implementing a local
management plan. In most States, the type of plan and its implementation are determined at the
community level. The results of this study suggest that the ratio of contamination costs to basic
prevention costs may be as large as 200:1.
Six of the seven communities in this study identified below had experienced actual or
irnmiment contamination of the ground waters supplying their public water systems. > These
experiences were motivating factors in their decisions to implement local wellhead protection
programs. A seventh community area, a portion of an eastern Pennsylvania county comprised of
four small adjacent communities, not currently affected by contamination but near one of the others,
decided to implement a wellhead protection program jointly on their own. The responses of the
leaders-of these seven locations to contamination and prevention provide the data for this study.
These data include the documented costs of responding to contamination affecting their ground water
sources of drinking water and the documented costs of subsequently establishing a wellhead
protection program to prevent future contamination incidents. The study identifies the
contamination costs as being avoidable in communities that implement prevention activities through
wellhead protection programs- Since contamination costs could be avoided through prevention, the
avoided costs are benefits (referred to as "avoided-cost benefits) for communities implementing
wellhead protection programs because future funds would not have to be spent on contaminant
remediation. The avoided-cost benefits are compared to WHP costs to obtain benefit-cost ratios for
the seven communities, assuming that their contamination costs would not have occurred if wellhead
protection had been implemented earlier.
Communities Selected .
The communities selected for this case study, their estimated populations, and settings are:
ES-1
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Benefits and Costs of Prevention
November 30, 1995
Communities ,
1) Gilbert, Louisiana
2) Norway, Maine
3) Tumwater, Washington
4) Gettysburg* Pennsylvania
5) Eastern Lancaster County
(4 adjacent towns), Pennsylvania
Population
700
4,000
13,000
12,000 '.'_
20,000
. ' - \
Setting
Rural
Rural .
Suburban
Suburban
Rural
(Gettysburg and Eastern Lancaster County serve as a "community pair")
6) Dartmouth, Massachusetts 24,000
7) Middletown, Ohio 60,000
Suburban
Central City
Benefit-Cost Analysis
J
The case studies demonstrate that in the long run, the cost of responding to a contamination
incident significantly exceeds the cost of developing and implementing a WHP program. In the six
case study communities that experienced contamination and developed a WHP program, the ratio
of avoided- cost benefits to WHP development and implementation costs ranged from 5:1 to 200:1,
on a per-well basis. Exhibit ES-1 presents a summary of the results for each community. Past costs
were adjusted to 1994 dollars (U.S.) using the Consumer Price Index. Future costs to 2005 were
discounted at 7 percent The analyis of undiscounted costs provided similar results and ratios.
A number of factors affect the interpretation and magnitude of the study's results. This
report is addressed to community officials, and not to national decision makers, to provide examples
of potential costs of contamination and WHP implementation and to assist in planning and decision
making at the community level. Thus, the accounting perspective of this report is at the community
level and not State or national levels. Furthermore, this analysis assumes that the probability of
contamination is 100 percent since six of these communities did have a contamination incident. This
assumption would overestimate the probability of contamination for many communities. This
analysis does not quantify or estimate the risk or probability of contamination to a ground water
source of drinking water for any particular location or nationally to weight the case study results for
application to other communities. Should contamination occur, however, the communities would
face the full cost of cleanup and not a cost weighted by a probability or average cost across the State
or country. The opportunity costs of volunteers' tune is included for two communities that used
volunteers to identify potential contaminant sources. Most costs that were easily identified and
documented were for local, State, and Federal government expenditures. Business or private sector
costs that could be easily identified and documented are included in this analysis. Costs for
contaminant remediation that could not be documented-include: health related costs, lost production
of individuals and businesses, interruption of fire protection, loss of economic development
.Opportunities, and loss of property value or tax revenue. From a prevention standpoint, business
ES-2
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Benefits and Costs of Prevention
November 30, 1995
EXHIBIT ES-1
SUMMARY COMPARISON OF TOTAL AND PER WELL
CONTAMINATION AND BASIC WELLHEAD PROTECTION COSTS
( All costs adjusted to 1994 Dollars)
COMMUNITY
(POPULA-
TION)
GILBERT
Louisiana
(700)
NORWAY
Maine
(4,000)
TUMWATER
Washington
(13,000)
GETTYS-
BURG/LAN-
CASTER CO.
Pennsylvania
(12,000/20,000)
DARTMOUTH
Massachusetts
(24,000)
MIDDLE-
TOWN
Ohio
(60,000)
TOTAL
TOTAL
CONTAMINA-
TION COST*
$1,094,645
$545,904
$1,712,440
$4,015,351
(Gettysburg)
$2,353,291
' $970,342-
, $1,475,470
$11,197,101
PER WELL
CONTAMINA-
TION COST
$547,323
$545,904
$570,813
$4,015,357
$1,176,646
$323,447 -
'$491,823
$933,092***
BASIC
WHPCOST
$5,487
$101,014
$286,954**
. $248,370**
(Lancaster Co.)
$693,365
$295,892
$1,631,087
PER WELL
BASIC
WHPCOST
$2,744
$101,014
$22,073
, $22,579
$99,052
$22,761
. $34,704***
RATIO OF
CONTAM.TO
BASIC WHP
COST
200:1
5:1
6:1
16:1
3:1
3-5:1
7:1
RATIO OF
PER WELL
CONTAM. TO
BASIC WHP
200: 1
5:1 -'
26:1
178:1
12 : 1
14-22:1
27 : 1***
* Includes costs of alternative water suplies, water treatment, and contaminant source removal or remediation.
** Includes opportunity cost of volunteers' time for potential contaminant source identification. .
*** Weighted by number of wells either contaminated or protected in each community. ;
costs associated with changes hi processes, activities or facilities beyond those already planned or
required by current law were not documented.
Smaller towns do not necessarily have small contamination problems; the contamination can
be just as extensive or serious as in larger cities. For example, the contaminating incident in Gilbert
involving two wells serving 70.0 people is nearly as costly as Middletowris remediation of ground
water supplying three wells and 60,000 people. In addition, the costs of prevention do not have to
correspond to community size. Because of particular protection concerns, both large and small
communities may desire to implement prevention measures, such as ground water monitoring or
detailed facility inspections, beyond the basic steps identified above. These additipnal protection
measures are referred to as "special protection" in this report. Three communities - Norway,
ES-3
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Benefits and Costs of Prevention
November 30, 1995
Tumwater, and Middletowri - are spending significant funds for ground water monitoring to provide
early warning of future contamination. If ground water is the only reliable, high quality drinking
water source, expenditures for special protection are probably warranted.
While the probability that all the wells in a community would be closed because of actual
or imminent contamination (which did happen in the two smallest communities, Gilbert and;
Norway) may not be 100 percent, a community may desire to consider the costs of responding to
such a problem in estimating total avoided-cost benefits in comparison to prevention costs. If all
the protected wells in this study were to become contaminated (using the locally developed costs
reflecting the respective areas' hydrogeologic settings) contaminant remediation of the ground water
sources of drinking water in these locations may cost as much as $68 million. The combined costs
for the 47 wells to receive special protection is $4.9 million and for basic protection is $1.6 million.
The respective avoided-cost benefit to prevention cost ratios are 14:1 and 42:1. Even if the
probability of contamination were 50%, and the contamination costs in this analysis were considered
to be 50% too high, the combined average avoided-cost benefit to basic WHP cost ratio would still
be 10:1 (see Exhibit ES-2).
EXfflBITES-2
Ratios of
Avoided-Cost Benefit to Wellhead Protection Costs
Assuming All Wells Are Contaminated (100% Probability of Contamination)
Community
Gilbert
Norway :
Tumwater
Lancaster Co.
Dartmouth
Middletown
TOTAL
Population
. 700
4,000
13,000
20,000
24,000
60,000
No. of
Protected
Wells
. 2
1
13
11
7
13
' ~47~
With
Basic
Protection
200:1
5:1
26:1
178:1
12:1
22:1
42:1
With
Special
Protection
1
200:1
4: 1
11
104: 1
4:1
5:1
14:1
Sensitivity Analysis: Assuming 50%
Probabilityof Contamination and 50%
of Contamination Costs/Basic Prot Costs
50 : 1
, 1:1
7:1.
44: 1 ,
3:1,
5:1
10:1
Comparison of Funding Sources for Contaminant Remediation and Prevention
Larger communities in this study funded most of their remedial and WHP costs themselves,
whereas smaller communities relied on assistance from State and Federal sources. Overall, sources
of funding for the contaminant remediation of the six communities' ground water supplies were:
Community, 50%; State, 38%; Federal, 12%; and private, <0.5%. For the wellhead protection costs,
Gilbert funded 80 percent of its basic WHP program through assistance from State programs. The
other communities all funded most of their basic, WHP and special protection activities themselves.
ES-4
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Benefits and Costs of Prevention
November 30,1995
Overall, for the six basic WHP programs, the communities funded 84 percent of the cost themselves,
States funded 6 percent, Federal programs 4 percent, and private sources 7 percent. Ninety-four
percent of all special protection activities were funded by communities and 6percent by States. This
analysis of funding sources suggests that small communities will need support for both remedial and
prevention activities. However, it also gives an indication that considerably less State and Federal
money would be spent assisting any particular small community hi preventing contamination of its
drinking water source rather than remediating;the contamination after it occurs.
Conclusions
Considering the cost of contamination - much of which could not be monetized for the
purpose of this study - the cost of prevention is worth the investment. The benefits, expressed as
possible avoided costs of contamination in this report, are substantial. For the smallest community,
Gilbert, LA (population, 700, with 2 wells and 250 water connections), the benefit-cost ratio is
200:1. For Gilbert, the expenditure of $5,487 for prevention is very small in comparison to its cost
of a new water supply - nearly $400,000 - and subsequent cleanup of the contamination to reduce
future risk, a projected additional cost of $700,000.
For the larger communities, the benefits (possible avoided costs) are also significant. Their
possible benefit-cost ratios range from 5 to 178 : 1. The combined average per well benefit-cost
ratio for a basic prevention program considering the results of all seven communities is 27:1. These
larger commuhities decided to incorporate other factors and concerns that raised their program
development and future implementation costs, such as recent contamination and resulting desire for
detailed delineation and management plans. Even so, the combined average possible per well
benefit-cost ratio for all special program development and implementation is nearly 9:1, almost an
order of magnitude difference, with a range of 4:1 to 104:1. Unquantifiable contamination costs
would make the benefit-cost ratios larger (i.e., larger avoided-cost benefits).
While this analysis is based on a limited number of communities, the benefits of preventing
contamination of drinking water supplies are evident. Further analysis of costs for a larger number
of systems should occur to obtain a better distribution of communities. In particular, more analysis
of smaller communities should be conducted to establish the range of costs consistent with their
needs for protecting their drinking water sources and the high costs of contamination. Prevention
costs for three of this study's communities were within or near the ranges calculated by Washington
State for its communities that are developing and implementing WHP programs. For the larger
communities that decided to invest considerably more in their wellhead protection programs, the
steps they took indicate a strong desire to protect their water supply from contamination and service
interruption, and, in some cases, protecting their only water source. Protecting public health through
drinking water supply protection is a priority in these communities, even though they have had
problems. The experience of these communities should benefit communities that currently have safe
drinking water and desire to keep it that way. . ~
'' " 'ES-5 - -. .'' - ' ' '
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1. INTRODUCTION
The benefits of avoiding contamination of community drinking water sources are greater than
the costs of implementing a local prevention program for wellhead protection. Wellhead protection
offers community leaders a less expensive approach to protect public health and avoid the costs of
future contamination of their ground water sources of drinking water. This analysis of seven
communities shows that, on average, dealing with contamination of their ground water supply may
be 30 to 40 times more costly than to prevent it in the first place. In this ananysis, benefits are
considered to be the possible avoided costs of remediating contamination, which six of these
communities, not previously having a wellhead protection program, were not able to avoid.
Wellhead protection is designed under the Safe Drinking Water Act (Section 1428) to prevent
contamination from entering the ground waters supplying public water wells, but is not a guarantee.
At this time, forty States and Territories have adopted wellhead protection programs under this law,
but in most States, Communities decide on the direction of implementation. The "basic" steps of a
wellhead protection program include forming a team of local stakeholders, delineating the protection
area around public wells, identifying potential contamination sources, and developing and
implementing a local management plan. In most States, the type of plan and its implementation are
determined at the community level. .
The six case studies provide a starting point for future analyses of the avoided-cost benefits
of prevention programs for wellhead protection. . For the 43,000 communities out of 48,000
nationally which rely on ground water sources and have not started a wellhead protection program.
or are only partly implementing such a program, this report offers economic results showing that
wellhead protection is an excellent investment. In particular, for small communities, the cost of
contamination is so large in comparison to implementing a locally tailored prevention program that
an avoided contamination cost to prevention cost ratio may be as large as 200:1.
- ' . ' ' '
The seyen community experiences documented in this report show the wide array of
activities that have already impaired or pose future threats to the quality their ground water sources
of drinking water. Past and present hazardous waste sites, commercial and industrial operations,
underground storage tanks, and chemical spills are the contaminant sources in these communities.
This groundwater contamination has imposed or has the potential to impose significant costs on
these communities and their residents. Treatment and/or replacement of the water supply has
required these local governmental units to make substantial capital outlays and to increase user
charges. Only after experiencing contamination of their ground water supplies of drinking water did
six of these communities initiate a wellhead protection program from which basic and special
protection costs were determined.
Substantial information exists on the direct costs of remediating, treating, or replacing
contaminated drinking water. Information also is available on the costs of developing and
implementing preventive ground water protection programs. Less information is available on the
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Benefits and Costs of Prevention
November 30, 1995
indirect costs of unremediated groundwater contamination, such as health or economic development
costs. These various types of data have not been systematically compiled, analyzed, and compared,
however. .
The purpose of this study is to compare the cost of local wellhead protection to the cost of
contamination which could potentially be avoided by implementing a WHP program. Additionally,
the information in this study is intended to assist local decisionmakers assess the value, cost and
feasibility of implementing wellhead protection in their communties. While the results reported
below for the seven communities are neither exhaustive nor statistically representative of all
communities, they do provide an indication and present the potential extent and range of benefits for
a prevention program to protect community drinking water sources.
1.1 Definition of Benefit
The benefits that individuals and businesses realize from WHP fall into two categories. The
first is the benefit accruing from the use of water as a commodity for drinking, and for agricultural
and industrial purposes. Because markets exist for water, the commodity value usually can be
calculated. The second type of benefit is called a resource benefit. This type includes the benefit
of: (1) being able to use groundwater as a resource sometime in the future, (2) having a source of
water for future generations, and (3) knowing the ground water is not contaminated, even if it is not
used. Because markets generally do not exist for resource benefits, they are not usually calculated.
The technique used in this study to measure commodity benefits is known as the avoided
cost method. This technique estimates the costs that would be incurred in the absence of a WHPP.
Because a WHPP is designed to prevent these costs, they are treated as "benefits" of the program and
are called avoided-cost benefits. . .
The use of the avoided cost technique is premised on response costs. If ground water may
be contaminated, communities and others that rely on that water can expect, at some point, to incur
costs associated with responding to contamination. The expected value of these costs depends on:
The cost of actions taken hi response to contamination, which generally include
remediating or treating the water, or in cases of severe contamination, developing
alternative water supplies;
The costs of damages that result from the contamination, such as losses in
agricultural crop production or increased industrial production costs; and
The probability of contamination.
An effective WHPP will significantly reduce the likelihood of contamination, thereby reducing the
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Benefits and Costs of Prevention
November 30, 1995
expected cost of contamination responses and damages. If the costs associated with responding to
contamination can be avoided by implementing a WHP program, the avoidance of these costs is
regarded as a quantifiable or tangible benefit. , .
. ., ' . ' ' . = ; ....''.> '.;< < : :
The second step in quantifying the benefits and costs of WHP is to assess:
.The cost of developmg and implementing the WHP program; and
The probability that the WHP program will prevent Contamination.
> ' ' i- " , ,
For purposes of calculating benefits and costs in this report, a contamination incident has a 100
percent probability of occurring and a WHPP will be completely effective.
* - . ' ' '''-
This report encompasses the results of case studies of communities which have experienced
contamination of ground water sources and have implemented WHP programs.1 The objective of
each case study was to quantify, to the maximum extent possible, the costs of responding to
contammation and me costs of developmg and implementing the WHP program.
1.2 Methodology
Three broad types of information guided the development of the study methodology and the
selection of case studies:
. -"'* ' ' -,"''"
Community/public water system (PWS) description (e.g., population, land use-
patterns, geology and hydrology, number of wells, and financial and management
characteristics of .the PWS);
History of the contamination incident and WHP program development (e.g.,
discovery, characterization, and response to contamination, and development and
implementation of preventive measures); and
Cost data (e.g., cost to provide replacement water, aquifer remediation costs, and
costs of developing and implementing a WHP program).
The study team, developed a comprehensive list of required data elements within each of the three
categories. The team also identified probable sources of information for each data element (e.g., data
bases, knowledgeable staff, or local/state/federal agencies).
'The study also included two pilot case studies: one each of a community that has experienced contamination .and
a community with a wellhead protection program.
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Benefits and Costs of Prevention
November 30, 1995
1.2.1 PHot Study
Early in the development of the methodology, the team proposed that two geologically and
socioeconomically similar communities could be studied and compared. One community would
serve as the subject of analysis on the costs and effects .of WHP, and another as a "reference"
community from which to compile data on contamination. At the recommendation, of EPA Region
3 and the Pennsylvania Department,of Environmental Resources, the team selected Gettysburg,
Pennsylvania and four communities in nearby Lancaster County for the pilot study. A well hi
Gettysburg has been contaminated by a nearby dry cleaning facility. The four localities hi Lancaster
County are co-developing a regional WHP program. The larger municipality of Gettysburg and the
group of four communities appeared to be similar enough that their costs could be compared.
The pilot study validated the proposed methodology for collecting data and demonstrated that
the types of data sought were appropriate. The project .team discovered, however, that despite a
similarity hi geology, .the socioeconomic differences between the two communities may result in
differences in approach and associated costs. As a result of the pilot study, the project team decided
that each subsequent case.study would focus on'a single community that had experienced a
contamination incident and developed a WHP program.
1;2.2. Case Study Selection
In attempting to make the project as representative as possible of the nation as a whole, the
project team made an effort to include case studies in several geographic regions of the country.
Several EPA Regional offices recommended points of contact hi state envhronmental agencies.
Because state staff often work closely with communities on contamination and WHP issues, the
project team consulted with them early in the case study selection process. The team asked state
staff to recommend communities where:
The response to a contamination incident affecting community water systems is
, underway and the cost has been sufficiently documented;
WHP program development is sufficiently far along to permit estimation of both
development and implementation costs;
Local staff would be willing to participate hi interviews and assist in gathering cost
data.
The availability of data became the key factor hi the selection of case studies: Locations in which
litigation constrained available information or where WHP programs were too recently initiated to
allow reasonable estimates of future costs were not included.
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Benefits and Costs of Prevention
November 30, 1995
The communities selected, thek estimated population, and settings are:
Communities Population
1) Gilbert, Louisiana 700
2) Norway, Maine 4,000
3) Turn-water, Washington 13,000 .
4) Gettysburg, Pennsylvania 12,000
5) Eastern Lancaster County,
(4 adjacent communities), Pennsylvania 20,000
(Gettysburg and Eastern Lancaster County serve as a "community pair")
6) Dartmouth, Massachusetts
7) Middletown, Ohio
24,000
60,000
Setting
Rural
Rural
Suburban
Suburban
Rural
Suburban
Central City
Figure 1 is a map showing the general locations of these communties.
1.2.3 Site Visits
After selecting a community as a case study, the project team contacted the PWS operator
to schedule a visit, and to inquire about other appropriate contacts. The team set up interviews with
local;, state, or EPA Regional staff involved with either responding to the contamination or
developing the WHP program. People interviewed included: PWS operators; state/local health
department officials; property owners, real estate agents, or tax assessors who would be familiar with
the effects of contamination or WHP on property values; consultants and engineers working with
the community on contamination or WHP; officials at the agency responsible for aquifer
remediation; state drinking water program staff; and private citizens. The team traveled to the
communities to interview these staff in person and obtain information from decision documents and
project files.
1.2.4 Assessing Costs and Benefits
While onsite, the project team collected data on the costs of responding to contamination and
developing and implementing the local WHP program. The study team consulted decision
documents, consultant reports, WHP program documents, PWS budgets, equipment invoices, and
contract information. "..,'..
Because many communities are in the early stages of responding to contamination or
developing thek WHP programs, the project team frequently had to estimate out-year costs. For
contamination incidents, the team relied on preliminary decision documents (e.g., conceptual design
reports) and presented costs of the most likely or preferred remedial scenarios. To estimate ongoing
WHP costs, the team asked knowledgeable staff to estimate the "unit" cost of an element of
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CO
I
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Benefits and Costs of Prevention
November 30, 1995
implementation, such as an inspection or a round of monitoring. Using this information, the team
projected annual WHP program implementation costs.
Based upon the data collected, the team arrayed costs to date (i.e., from the discovery of
contamination/inception of the WHP program until September 1995) and projected future costs
(from October 1995 to September 2005) into cost spreadsheets. For purposes of comparison, all past
costs were adjusted to constant 1994 dollars using the Consumer Price Index for urban areas. Future
cost streams were discounted to the present (1994) at a 7 percent annual rate. ,
1.3 Major Assumptions and Premises
Several major assumptions and premises are consolidated and stated here to facilitate
understanding the results of the rest of this report: ,' .
(1) ' The costs of contamination to ground water sources of drinking water supply can be avoided
through community actions in a wellhead protection program. WHP is not a guarantee of
avoiding all future contamination, but very significantly reduces future possibilities of
contamination to ground water sources of drinking water.
(2) These avoided costs of contamination become benefits to communities' residents, businesses
and governments, since funds would not need to be expended in the future to deal with
contamination, assuming prevention activities for wellhead protection are completely
i successful. ;
(3) This report is addressed to community officials, and not to national decision makers, to
provide examples of potential costs of contamination and WHP implementation and to assist
in planning and decision making at the community level. Thus, the accounting perspective
of this report is at the community level and not State or national levels. The results of this
report should not be extrapolated to the national level. Averages and ranges reported are for
comparison and summary purposes for the communities as a group in this report only. The
number of communities is too small to represent a statistically significant sample. In
particular, a greater proportion of smaller communities would be needed to be representative
of the distribution of community water systems'sizes.
(4) While the probability of any particular well becoming contaminated is not known with
certainty, any public well has some probability of being contaminated because of the
complex nature of the subsurface and the variable but widespread use of chemicals in
manufacturing, agriculture and residential applications. One factor increasing the probability
of contamination is that most of the surficial aquifers of the United States are highly to
moderately vulnerable to contamination. (US EPA, 1991) Another factor is the increasing
observation of microbial contamination of ground water surces of drinking water. While
-------
Benefits and Costs of Prevention
November 30, 1995
the expected value of the probability of contamination may be low in a particular location,
once contamination occurs (even in a low probability situation), the community must face
the full cost of contamination (e.g., an unlikely chemical spill occurs in a recharge zone or
near a well), and, therefore, should consider the probability to be 100 percent for planning
purposes. This full cost of contamination would not then be weighted by a probability, or
by an average derived for all communities of that size, of occurrence, as it would be from a
national planning perspective. NOTE: This analysis does not quantify or estimate the risk
.or probability of contamination to a ground water source of drinking water for any particular
location or nationally to weight the case study results for application to other communities.
(5) The communities which are the case studies in this report did not have fully implemented
WHP programs early on and, therefore, obviously did not receive the benefits of such
prevention efforts. These communities are now or will soon be protecting their public wells
through wellhead protection. The costs of contamination that they were not able to avoid
serve as a "benchmark" for other communities to evaluate against and are referred to in this
report as "avoided-cost benefits" (as described in more detail above). Other communities
would need to evaluate the extent of such benefits in their particular situations. These case
study communities serve as starting points and examples of the magnitude and range of such
benefits. With respect to water supply protection, the worst case (as exemplified in some of
the communities which lost all their wells to contamination) should be used for planning
purposes, since any well has some probability of becoming contaminated.
(6) The costs of contamination could be significantly higher or lower than reported here. An
earlier EPA analysis (EPA, 1992) found that past contamination of public water supply wells
for a range of 51 small to large communities resulted in actual and projected remedial costs
of from $380,000 to over $37,000,000 (in 1991 dollars).
(7) The costs of wellhead protection could be higher or lower as also documented by the State
of Washington (Washington Department of Health, 1995). The needs of each community
will be different, with some communities having only one source of water supply which may
require substantial attention for protection. Other communities wilt have simpler needs for
protection because of few but still significant contaminant sources.
(8) Basic wellhead protection, while not a guarantee, is sufficient for preventing contamination
to public water supplies. This assumption is important in providing the benefit-cost results
that follow in this report. Because of local conditions, some communities may desire to
implement additional measures to provide further assurance of protection that would also
increase their costs.
(9) The analysis assumes that the readily documentable costs for both contamination response
and wellhead protection are sufficient. In some cases, private sector costs are included where
8
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. Benefits and Costs of Prevention
November 30, 1995
documented. Many contamination costs could not be developed because they were not
documented, including health related costs, lost production of individuals and businesses,
interruption of fire "protection capabilities, loss of economic development opportunities, and
loss of property value or tax revenue. Prevention costs that could not be documented include
business costs associated with changes in processes, activities or facilities beyond those.
already planned or required by current local, State or Federal law or regulation. These
remedial and prevention costs should be evaluated further in future analyses.
1.4 Organization of this Report
The remainder of this report is organized as follows:
Chapter 2: Overview of the Case Studies contains a brief summary of the seven case
studies.
ChapterS: Analysis of Benefits and Costs compares the costs of groundwater
conteminationtothecostofWHP. This chapter also analyses the sources of funding
for contamination response and wellhead protection.
-------
2. OVERVIEW OF THE CASE STUDIES
2.1 Comparison of Case Studies ,
The seven small to medium-sized communities in this study represent a variety of economic
and geologic settings. Exhibit 1 presents an overview of community and PWS characteristics,
contamination information, and WHP activities and status for the communities.
Two of the communities are located in the Northeast, two axe in the Mid-Atlantic, one is in
the Midwest, one in the South, and one is in the Pacific Northwest The PWSs serve from less than
1,000 to over 50,000 residents. Four of the seven serve populations between 12,000 and 24,000
people. Three communities are rural (Lancaster County, Gilbert, and Norway); three are suburban
(Gettysburg, Dartmouth, and Tumwater); and Middletown is a small industrial city. Four of the
communities (Gettysburg, Lancaster County, Dartmouth, and Tumwater) are facing pressure from
rapid development .
Three of the communities (Tumwater, Middletown, and Norway) are situated on glacially-
deposited sediments. One (Dartmouth) is located over bedrock; Gilbert is located on alluvial
sediment; and Gettysburg and Lancaster County are situated in rolling hills underlain by sedimentary
rock.
Six of the seven communities studied experienced a contamination incident Contamination
in two communities (Gilbert and Norway) is due to leaking storage tanks at gas stations; dry cleaners
contaminated the well in Gettysburg. Both dry cleaners and gas stations are on the list of the most
likely sources of contamination in Tumwater, but the exact source has not been determined. In each
contamination incident, the community responded to protect the quality of the water provided to its
residents, either by purchasing drinking water, treating water at its affected wells, or developing new
water sources. In all but Dartmouth, state or federal agencies stepped in to remediate the aquifer and
soils.
Six of the seven communities studied have WHP programs. Of these six communities, three
have reached the implementation stage (Gilbert, Dartmouth, and Norway). The three communities
that are still developing their WHP programs have delineated WHP areas (or WHPAs) and
conducted source inventories, and are currently working on management and contingency plans.
10
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' Benefits and Costs of Prevention
November 30, 1995
All six communities began wellhead protection at least partially in response to. the
contamination incidents they experienced. Communities also responded to increasing development
by adopting WHP. Gilbert, Dartmouth, and Tumwater adopted WHP to comply with state
requirements. Norway began WHP in anticipation of Maine's statewide WHP program, which was
subsequently defeated in the State legislature. Middletown is adopting a WHP program partially in
response to a state requirement for them as a condition of approval for PWS improvements. Four
of the communities are undertaking a regional approach to wellhead protection, recognizing that
ground water quality can be affected by activities beyond jurisdictional boundaries.
To manage their WHP As, the communities have adopted combinations of management tools.
These include: site plan reviews; source prohibitions; minimum lot size requirements; impervious
cover restrictions; design and performance standards; inspections; and public education programs.
"Three communities (Tumwater, Middletown, and Norway) periodically monitor water quality around
their supply wells. ' _.....-.
2.2 Case Study Summaries
In the sections below, each case study'is presented in a brief synopsis. More detailed case
study reports appear in "Benefits and Costs of Prevention: Case Studies of Community Wellhead
Protection; Volume II; Detailed Case Studies of Seven Communities." These case studies in Volume
II provide a thorough description of the contamination incident, its effects';, the. community's
response, and associated costs, and WHP activities and costs.
Special Note on contamination response and remedial costs: The contamination response
and remedial costs are only the documented costs for this expensive, and typically long term, effort.
These costs may be borne by local, State and/or Federal governments. The potential costs that could
not be documented include:
o Health related costs associated with illnesses that were not documented but may have been
associated with contaminated water supply and lost production '...,.'''
o Interruption of drinking water supply until alternate sources are procured
o Loss of fire protection capabiliaties and insufficient water pressure to put out fires
o Interruption to commercial andindustrial processes and lost production
o Loss pf economic development opportunities because of contaminated water resource and
drinking water being unattractive to relocating, expanding or new companies and businesses
o Loss of property value and tax revenue .
While all of these undocumented costs associated with contamination may not have occurred in
every community examined in these case studies, several did occur and would significantly increase
the contamination costs described. For communities that have not experienced contamination of
13
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Benefits and Costs of Prevention
November 30, 1995
their source waters, the documented remedial and undocumented community response costs are
indicative of the magnitude and range of potential "avoided contamination costs" or "benefits."
Special Note on Prevention Costs: The total prevention program costs for wellhead
protection documented hi these case studies are high since most of the communities were faced with
existing contamination problems. These communities desired to reduce the prospect of having to
deal with further contamination of their source water in the future by implementing wellhead
protection programs. In response to the contamination of then- drinking water source, these
communities implemented significant efforts that communities without such problems may not
decide to do. Specifically, ambient .monitoring around the wellfield, detailed inspections, public
school curriculum, and other efforts directed specifically at responding to potential chemical and
biological threats may be beyond the needs or the affordability of many communities. In particular,
smaller -communities with fewer potential contaminant threats can implement basic wellhead
protection programs that respond to their needs at lower cost. Prevention program expenditures may
be funded by local, State and/or Federal governments. The costs presented below for the local
wellhead protection programs are separately stated for "basic protection elements" and then the
incremental costs for additional "special protection elements" deemed necessary by the respective
communities. The "basic protection elements", include forming a team of local stakeholders,
delineating the protection area around public wells, identifying potential contamination sources, and
developing and implementing a local management plan. In most States, the type of plan and its
implementation are determined at the community level. "Special protection" includes (but is not
limited to) use of complex methods for delineating protection areas, ground water monitoring,
detailed facility inspections, and spill remediation.
Also, certain prevention (wellhead protection implementation) costs could not be easily
documented and were not estimated. These costs include the incremental cost to businesses to
modify processes, activities or facilities beyond those costs incurred to be hi compliance with other
local, State or Federal laws and regulations, or already planned. The documented costs are mainly
for local, State or Federal expenditures for wellhead protection. Private sector costs were included
where readily identified and available. A previous EPA report indicates that businesses hi some
locally-managed wellhead protection areas have incurred costs to modify processes or facilities
earlier than originally planned. (EPA, 1995) These costs were not quantified by the businesses.
However, these costs were planned to reduce business costs and future business liability for possible
ground water contamination incidents due to chemical handling, storage or use. These latter costs
somewhat offset the process or facility modification costs (although the extent of offset is not
known). These costs should be examined further hi future studies.
Total and "Per Well" Costs: Costs presented below are for both total and "per well" costs
for contamination and/or remediation (that could be quantified within the scope of this analysis) and
wellhead protection (or prevention). Total costs are those that could be easily quantified as
14
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Benefits and Costs of Prevention
November 30, 1995
discussed above, based on interviews with local and State officials and oh file reviews. "Per well"
costs are given to allow comparison across the communities and to determine if economies of scale
exist. Per well analysis is also appropriate since any and all wells could be contaminated or
protected. In one case, Dartmouth had two separate wells contaminated by different incidents.
Gilbert had both of its two wells contaminated by one incident. Middleto wn had three of its 16 wells
contaminated by one contamination source, with other sources being examined for threats to other
wells. Costs per well give a perspective on projecting remediation and potentially avoidable costs
per well for the respective locations. ,If all wells were contaminated over time, hopefully an
avoidable scenario through wellhead protection, the ratio of avoided-cost benefits to prevention
costs would be much larger than shown in the case studies below, and could be estimated.
2.2.1 Gilbert, Louisiana
Gilbert is located in northeastern Louisiana. The village is almost exclusively rural, with
land used mainly for agricultural and residential purposes., Gilbert's two wells, which tap the same
aquifer, provide water for about 700 people. .
In 1990, Gilbert residents began to complain that their water smelled of gasoline, and the
PWS operator called the Louisiana Department of Health and Hospitals (LDHH) to report the
problem. DHH tested samples from Gilbert's wells and notified the Louisiana Department of
Environmental Quality (LDEQ) that the wells were contaminated with benzene. LDHH instructed
Gilbert to stop using the wells. Gilbert connected to nearby water supplies on a temporary basis,
plugged the old wells, and then drilled replacement wells. Soon after starting the new wells, Gilbert
found excessive levels of manganese in one of the wells and shut it down. The remaining well is
sufficient to meet current needs.
Contaminant source identification studies concluded that the benzene had leaked from an
underground storage tank at an abandoned gas station 150 feet from one of Gilbert's wells. The tank
had been removed in 1987, but had left behind enough benzene to make the soil near the site
flammable. LDEQ conducted an investigation to characterize the contamination in preparation for
the development of a corrective action plan, and proposed remedial alternatives, which have yet to
be implemented.
As of 1995, the total cost of responding to the contamination was approximately $426,000.
Gilbert paid approximately $95,000 of this total, using grants from the Farmers Home
Administration, the Leaking Underground Storage Tank (LUST) Trust Fund, and the Department
of Housing and Urban Development's Community Development Block Grant program. In addition,
the Gilbert Water System lost 10 to 12 customers, who Opted to drill private wells. Between 1995
and 2005, remedial costs will total $648,000. Aquifer remediation has not yet begun, as LDEQ has
been unable to secure funding. .
15
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Benefits and Costs of Prevention
November 30, 1995
When LDEQ staff came to Gilbert for a WHP program meeting they found that, because of
the contamination, the village was without a source of water. LDEQ assisted Gilbert in compiling
ah inventory of 27 potential contamination sources and siting new wells away from the sources.
After Gilbert constructed the wells, LDEQ delineated a WHPA using a fixed radius around the wells.
The village, aided by LDEQ, wrote and adopted a management ordinance and contingency plan,
based on models provided by LDEQ. Gilbert implemented its WHP program hi 1993.
Given the small area and relatively few sources of potential contamination, Gilbert utilized
a basic approach to wellhead protection with the State's assistance. Gilbert's WHP program cost
approximately $4,666. Most of these costs are salary costs for LDEQ and LDHH personnel. Gilbert.
also spends about $125 per year for informal inspections of potential sources. A summary of
Gilbert's contamination response and remediation costs compared to program implementation costs
is (past costs adjusted using the Consumers' Price Index; projected costs discounted using a 7 percent
rate): .
Contamination Costs: $1,094,645
Wellhead Protection
Basic Costs: $5,487
Special Protection Costs: 0
Contamination Costs per well:- $547,323
Basic Wellhead Protection Costs per well: $2,744
Potential Per Well Contamination to
Basic Prevention Costs katio: 200:1
2.2.2 Norway, Maine
Norway is located in southwestern Maine. The town is predominantly residential, with some
commercial and light industrial development. Norway's well, which taps the Little Androscoggin
River Valley aquifer, serves about 2,000 of its 5,000 residents.
1990, during a routine UST inspection, Maine Department of Environmental Protection
(DEP) personnel discovered a leaking pipe supplying a pump at Steve's Country Store, a gas
station/variety store. Samples from a monitoring well installed under a DEP order provided
evidence that the leak had contaminated soil and ground water around the site with hydrocarbons
and methyl tertiary butyl ether (MTBE). DEP ordered the gas pumps and the drinking water well -
shut down.
Aquifer studies conducted for the WHP program in 1988 provided valuable information on
ground water flow in the vicinity of Steve's Store, allowing DEP to respond quickly to prevent the
16
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Benefits and Costs of Prevention
November 30, 1995
gasoline from migrating into the well. DEP installed an air stripper to treat the contaminated water,
a soil venting system to treat the contaminated soil, and a series of monitoring wells to track the
remediation. The well was reopened in 1992 after a 16-month remedy. During the time the well was
shut down, Norway purchased water from the Town of South Paris. DEP continues to pay
laboratory costs for monitoring water quality near the well.
The total cost of responding to the contamination was about $536,000. Norway paid about
$10,000 in staff costs. The remainder was funded through DEP funds. Between 1995 and 2005, the
ongoing costs for post-remedial monitoring will total $10,000.
Interest in WHP began as a result of concern over the rapid commercial development near
Norway's well during the 1970s and 1980s. Because of the recent development and ground water
contamination, Norway decided to obtain a detailed delineation and management plan for its
protection area and to continue to monitor ground water quality which expanded its wellhead
protection approach beyond a basic program to address local concerns. In 1988, Norway retained
a consulting firm to perform a wellhead protection study. Using this study, the town delineated a
WHP A based on ground water flow patterns and identified eighteen potential sources of
contamination within the WHP A. Norway passed an ordinance to protect its WHP A and conducts
bi-annual monitoring. Parts of this WHPA extended into the neighboring towns of South-Paris and
Oxford and many of the potential contamination sources were located in Oxford. Therefore, Norway
encouraged the participation of these two towns in the WHP effort. In 1994, Norway and South
Paris passed Wellhead Protection Ordinances to manage their sources. Oxford has yet to do so.
As of 1995, the total cost of Norway's WHP program was about $115,715. Norway paid
about $8.3,400 of this total. The remainder was funded through a U.S. EPA Wellhead Protection
Demonstration Grant and contributions from Oxford, South Paris, and a regional council of.
governments. From 1995 to 2005, monitoring and oversight of the WHPA will cost Norway
$22,000. A summary of Norway's contamination response and remediation costs compared to
prevention program implementation costs is:
Contamination Costs: $545,904 ,
Wellhead Protection
Basic Costs: $101,014
Special Protection Costs: $37,289
Contamination Costs per well: $545,904
Basic Wellhead Protection Costs per well: $101,014
Potential Per Well Contamination to
Basic Prevention Costs Ratio: 5:1
17
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Benefits and Costs of Prevention
November 30, 1995
2.2.3 Tumwater, Washington
Tumwater is located in southwest Washington, near the state capital, Olympia. The city is
mainly residential, with some industrial and commercial areas. Tumwater is experiencing a great
deal of growth pressures. Tumwater's sixteen wells tap three aquifers to serve its 13,000 residents.
In August 1993, while conducting routine monitoring, Tumwater detected trichloroethylene
(TCE) in three of its wells. The city shut the wells and increased pumping from its other wells. The
city also received expedited approval on a pending water rights application to develop new wells.
* , "
The Washington Department of Ecology, EPA Region 10, and the city conducted field
investigations to determine the source of the contamination. By the end of 1994, they narrowed the
list of potential sources down to four, including two current or former dry cleaners and a gas station.
They also conducted studies to characterize the contaminant plume, arid found mat the pumping of
the wells had drawn the contamination to the wells.
As of September 1995, the total cost of responding to the contamination was $787,541.
Tumwater has paid about half of these costs. Over the next ten years, contamination costs will total
$914,899.
Tumwater began its WHP effort in 1993, when it received a state grant to develop a WHPP.
The city decided on a detailed delineation of its WHP area in response to existing contamination
of its ground water supply and potential contamination sources, and to monitor ground water quality.
To date, Tumwater has passed three aquifer protection ordinances, developed a preliminary list of
potential sources, and ranked the sources according to the threat they pose to the wells. During its
contaminant source inventory^ Tumwater identified five confirmed contamination incidents. The
city's WHPP includes development of a ground water monitoring network. The wells will be located
either upgradient of wells or immediately downgradient of known contaminant sites. Tumwater
expects to complete its WHP program development by mid 1996.
Costs as of 1995 for developing and implementing Tumwater's WHP program total about
$348,000, half of which will be paid by Washington through the grant awarded in 1993: A summary
of Tumwater's contamination response and remediation costs compared to prevention program
implementation costs is:
Contamination Costs:
Wellhead Protection
Basic Costs:
Special Protection Costs:
$1,712,440
$286,954
$397,322
18
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Benefits and Costs of Prevention
November 30, 1995
Contamination Costs per well: $570,813
Basic Wellhead Protection Costs per well: $22,073
Potential Per Well Contamination to
Basic Prevention Costs Ratio: 26:1
2.2.4 Gettysburg, Pennsylvania -
Historic Gettysburg is located in south-central Pennsylvania, The borough has evolved into
a relatively busy commercial, institutional, and residential center. Gettysburg is characterized by
its tourist attractions, the Gettysburg National Military Park and Eisenhower National Historic Site.
Gettysburg relies upon eight wells tapping the Gettysburg Formation and nearby Marsh Creek to
serve about 12,000 people.
Gettysburg first discovered volatile organic chemical (VOC) contamination of its Well #6,
located in the center of town, during State-required pre-operational monitoring. The primary VOCs
present were tetrachloroethene (PCE), trichloroethylene (TCE), and 1,2-dichloroetheries (1,2-DCE).
The Pennsylvania Department of Environmental Resources (PADER) conducted a preliminary
search for the source of the contamination in late 1986. It focused on nearby dry cleaners because
PCE is a solvent commonly used in dry cleaning processes. PADER identified J.C. Cleaners as the
likely contamination source, and subsequently determined that a drain located within the building
was the source. For undetermined reasons, the drain failed and leaked wastewater into the soil.
Pumping appears to have drawn contamination into Well #6.
Soil and ground water in the vicinity of the site were contaminated with VOCs, and a former
private well on the J.C. Cleaners site may have caused contamination to move into the water-bearing
zone of the well. Gettysburg has been treating the water at its well with an air stripper since 1987.
PADER intends to install a ground water collection and treatment system to remediate the
contamination plume, and is currently assessing two remedial scenarios, which may last either five
or 30 years.
The total cost of the contamination incident to date is $ 1.7 million. Gettysburg has incurred
approximately $349,000 of this cost. Over the ten year period from 1995 to 2005, remedial costs
will range from $2.3 million to $2.9 million; over thirty years, the costs may exceed $3.9 million',
A summary of Gettysburg's contamination response and remediation costs is (comparision to
prevention program implementation costs appears below in 2.2.5 Lancaster County, Pennsylvania):
Contamination Costs: $4,015,351 /
Wellhead Protection Costs: (See Lancaster County below)
19.
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Benefits and Costs ofPrevention
November 30, 1995
Contamination Costs per well: $4,015,351
Basic Wellhead Protection Costs per well: (See Lancaster County below)
Potential Per Well Contamination to Prevention Costs Ratio: (Combined under
Lancaster County below)
2.2.5 Lancaster County, Pennsylvania
' ' ' >
Lancaster County is located in southeastern Pennsylvania and is approximately 55 to 60
miles east of Gettysburg. Agriculture is the primary land use: the county is the most agriculturally
productive non-irrigated county in the United States. Four communities in the eastern part of the
countyTerre Hill, New Holland, Earl Township, and East Earl Townshipare the subject of the
case study. The region is almost completely dependent on ground water: eleven wells tap the
Hammer Creek Formation and the Elbrook-Zooks Corner dolomite to serve approximately 19,000
people. The four communities are co-developing a regional WHP program. Interest in wellhead
protection for Lancaster County began around 1990, when EPA Region 3 wanted to pilot test a
WHPA delineation method for fractured bedrock aquifers using a geological method known as
fracture trace analysis.
Three protective zones have been delineated around each of the four communities' wells
using fracture trace analysis. Consultants to the communities searched EPA and PADER databases
for potential contamination sources. Local officials and other volunteers conducted door-to-door
surveys of potential contamination sources, and developed a list of 119 potential sources of
contamination. .
The four communities are joining together to develop a single comprehensive ordinance to
impose active zoning controls within the WHPAs. Work on this ordinance has begun. Plans for the
ordinance include imposing permit fees, design and performance standards, as well as initiating a
public education program focusing on farmers. Contingency plans have been discussed but not
developed.
The cost as of September 1995 of developing the WHP program is $66,000. The WHP
program was financed by grants from EPA Region 3 and PADER, and community matches. Once
the WHP program is implemented, permitting fees will fund the program. From 1995 to 2005, these
costs may total $351,000, principally for a detailed facility inspection program, which will be a
major factor affecting its future program implementation costs. These eastern Lancaster County
towns and Gettysburg serve as a "community pair" for this study, comparing the contamination
remedial costs of Gettysburg to the wellhead protection costs in nearby Lancaster County.
20
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Benefits and Costs of Prevention
November 30, 1995
Contamination Costs:
Wellhead Protection
Basic Costs:
Special Protection Costs:
\ .
Contamination Costs per well:
Wellhead Protection Costs per well:
(Refer to Gettysburg above) ,
$248,370
$175,589
(Refer to Gettyburg above)
$22,579 :'
Potential Per Well Contamination (Gettyburg) . \
to Basic Prevention (Lancaster Co.) Costs Ratio: 178:1
2.2.6 Dartmouth, Massachusetts
Dartmouth is located in southeastern Massachusetts, along the coast of theAtlantic Ocean.
The town is mainly residential, but has commercial, industrial, and manufacturing areas. Dartmouth
relies upon seven sand/gravel wells tapping two aquifers to serve 24,000 of its 27,000 residents. To
meet its total demand, the town annually purchases 20 percent of its water from the neighboring city
of New Bedford. ,
In 1978, responding to calls from concerned citizens, Dartmouth found organic and VOC
contamination from a hazardous waste dumping operation in its Route 6 well. As a resultj the town
lost the well and has been forced to purchase, replacement water. In the early 1980s, the town
discovered VOC and hydrocarbon contamination from an old town dump site while siting its Chase
Road well. The town responded by installing an air stripper/greensand filtration plant at the well.
As of September 1995, the total costs of discovery, characterization, cleanup, and water
replacement at Dartmouth's two wells is $ 1,380,694. Since the closure of the Route 6 well, the town
has lost revenue from the sale of waternetting $513,687. From 1995 to 2005, Dartmouth will pay
over $389,000 to purchase replacement water. At the Chase Road well, the town paid a total of
$777,247 to study the contamination and install and operate an air stripper/greensand filtration plant.
Between 1995 and 2005, O&M costs will total approximately $583,000.
Contamination of its drinking water supply prompted :Dartmouth to voluntarily undertake
an innovative wellhead protection program in 1980. Dartmouth was one of the first communities
in the nation, and .the first in Massachusetts, to adopt WHP,
Dartmouth's WHP program, developed in response to the contamination its wells
experienced from uncontrolled and illegal dumping of hazardous waste in two water supply areas,
is highly protective of its wellfields. The largest WHP expense is for a daily detailed on-site
inspection of the wells and wellfields, which is nearly 90 percent of the total program cost. The
WHP As are managed through close cooperation among several departments of local government:
21
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Benefits and Costs of Prevention
November 30, 1995
the Water Department has responsibility for day-to-day management of the WHPAs. The Planning
Commission proposes bylaws for aquifer protection and mandates best management practices within
WHPAs, and the Building Commission, implements zoning bylaws. The Department of Health
inspects septic systems. Fire Departments carry spill response kits to respond to fuel spills
associated with traffic accidents. Dartmouth is considering equipping police cars with similar kits,
as police officers usually arrive first to the scene of traffic accidents.
To date, development of Dartmouth's bylaw and the delineation process have totaled
$183,510, or $26,215 per well. The annual costs of WHP in Dartmouth are $154,052, or $22,000
per well. Between 1995 and 2005, WHP implementation will cost Dartmouth approximately $1.1
million. A summary of Dartmouth's contamination response and remediation costs compared to
prevention program implementation costs is:
Contamination Costs:
Wellhead Protection
Basic Costs:
Special Protection Costs:
$2,353,291
$693,364
$1,614,256
Contamination Costs per well: $1,176,646
Basic Wellhead Protection Costs per well: $99,052
Potential Per Well Contamination
to Basic Prevention Costs Ratio:
2.2.7 Middletown, Ohio
12:1
Middletown is located in southwestern Ohio, about half-way between Cincinnati and Dayton.
The city supports a wide variety of land uses, including residential, commercial, and light and heavy
industrial. Middletown depends on thirteen wells, tapping the Great Miami Buried Valley Aquifer
System, to serve its 60,000 customers.
In the five years since Middletown discovered VOCs in its wells, monitoring detected PCE
consistently in three wells and occasionally in two other wells. Upon discovering the contamination,
Middletown shut down three wells. The Ohio Environmental Protection Agency (OEPA) identified
AEP Flexo, Inc., a manufacturer of flexographic printing plates as the source. The facility used PCE
in its process and had spilled and disposed of the chemical improperly for years. OEPA entered into
a consent decree with AEP Flexo in July 1993. Under the decree, AEP Flexo is investigating the
contamination and preparing for remediation. ,
22
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Benefits and Costs of Prevention
November 30,, 1995
Responding to the contamination incident has cost Middletown $732,000 as of September
1995. AEP Flexo's investigation costs were not provided; however, under the terms of the consent
decree, AEP Flexo will reimburse OEPA's oversight costs, which total about $46,000 to date.
Between 1995 and 2005, Middletbwn will spend between $192,000 and $697,000 to provide safe
drinking water to its residents, depending on whether the city decides to construct air strippers.
In 1991, partly in response to the contamination incident, Middletown began developing a
WHP program. The city's consultant delineated WHPAs for the wells; city staff and the consultant
conducted a contaminant source inventory by consulting databases of potential contaminant sources
and then supplementing this information with a windshield survey. They identified approximately
80 potential and three confirmed sources of contamination. The consultant then prioritized the
potential sources based upon the risks they posed to the wells and identified seven high priority areas
for ground water monitoring. In December 1993, Middletown completed a draft management plan.
Middletown borrowed Dayton's "Intensity of Land Use Classification" management
approach. Under the approach, every parcel of land is assigned a rating, based on the amount and
types of chemicals used or stored onsite. No increase in the hazard ranking is permitted; land owners
must adopt engineering controls or risk management measures to maintain the site ranking should
they wish to store more chemicals onsite. The city also developed a framework for a contingency
plan. .
To date, Middletown has spent $98,000 to develop its WHP program, including $12,000
from a U.S. EPA Wellhead Protection Demonstration Grant By 2005, the city expects to have spent
approximately $1.3 .million on the program, to be funded through a $0.50 monthly connection fee
and a 5 percent usage surcharge on industrial customers. Part of this expense will be the creation
of a Risk Reduction Fund to financially assist businesses in adopting measures to prevent
contamination, and an Emergency Response Fund. Other than ground water quality monitoring in
the wellfield, these funds represent the largest expense of the Middletown WHP program, going
beyond a basic approach to respond to local concerns. A summary of Middletown's contamination
response and remediation costs compared to prevention program implementation costs is:
Contamination Costs:
Wellhead Protection '
Basic Costs:
Special Protection Costs:
Contamination Costs per well:
Basic Wellhead Protection Costs per well:
Potential Per Well Contamination
to Basic Prevention Costs Ratio:
, $970,342-$1,475,470
$295,892
$1,082,220
, $323,447-$491,823
$22,761
14-22:1
23
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3. ANALYSIS OF BENEFITS AND COSTS
As discussed in Chapter 1, the primary goal of this study was to demonstrate that over the
long run, the cost of responding to contamination (a potential avoidable cost) exceeds the cost of
developing and implementing a wellhead protection program. Sections 3.1 and 3.2 summarize the
costs of contamination (which could potentially be avoided by other communities through
implementing a WHP program, and therefore counted as "benefits" hi this study) and WHP,
respectively. Section 3.3 presents the resulting benefit/cost ratios. Section 3.4 addresses a
comparison of funding sources. Section 3.5 presents^ discussion of intangible contamination costs.
Section 3.6 covers the commodity value of the contaminated water in the case study communities.
3.1 Contamination Costs Avoided (Benefit)
Contamination costs consist of the costs associated with two parallel courses of action hi
response to groundwater contamination. First, communities affected by contamination must protect
their water supplies. Second, an aquifer remedy must be selected, installed, and implemented,
usually by state or federal agencies. In responding to PWS and aquifer contamination, the
communities, state and federal agencies, and responsible parties will pay between $500,000 and $4
million per well.2 Exhibits 2 and 3 compare remedial costs in each community and present the
organizations that will pay those costs. A previous analysis by EPA hi 1992 indicated that for a
selection of 51 communities with contaminated or threatened drinking water systems, the cost of
remediation averaged $5.9 million per community water system, with most costing between $1
million and $10 million. (EPA, 1992)
t - - . '
3.1.1 Response to PWS Contamination
When contamination is discovered, communities must react to prevent the contaminants from
reaching then* customers. Each community faced with contamination acted either to treat water
entering the distribution system, or to provide an alternative water supply hi the short-term (by
purchasing water) or hi the long-term (by siting new wells).
Treatment of PWS Wells
If it is feasible and cost-effective, communities may opt to apply treatment to their water
supply wells and continue using those wells. Gettysburg and Dartmouth chose to install air strippers
on their contaminated wells. Treatment at the well imposes both capital costs and increased
operation and maintenance (O&M) costs on the PWSs.
Capital costs usually include expenses for purchasing and installing treatment equipment.
2A11 costs are presented as constant 1994 dollars, unless otherwise noted.
24
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Benefits and Costs of Prevention
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These costs can be significant one-time expenditures for a PWS. Gettysburg paid $321,117 to
acquire land for and to construct an air stripper on its well. Dartmouth paid $81,250 for an air
stripper tower and greensand filtration plant at its Chase Road Well. 6&M costs for treatment
plants such as air strippers include the additional electrical, maintenance, and supply costs associated
with the added treatment. In addition, PWSs may have to conduct additional monitoring to ensure
the quality of the water entering the distribution system. Gettysburg's annual O&M costs total
$13,280 for additional monitoring and electricity. As of 1995, the Gettysburg Municipal Authority
(GMA) paid $27,500 in O&M costs; between 1995 and 2005 GMA will incur incremental.
monitoring and electrical costs of $58,000 to $100,000. Dartmouth pays $76,300 annually for the
incremental electricity, chemical treatment, and maintenance of the air stripper/greensand filtration
at the Chase Road Well.
-; Emergency Replacement of Water
Purchasing water is an option for affected communities if ah adjacent water system has a
surplus water supply and is able to sell its water. Communities may purchase water either in the
short-term, until remediation is complete.* or in the long-term to permanently replace a lost well.
Water often must be purchased at the highest rates charged by the new supplier. Gilbert, Dartmouth,
and Norway incurred costs between $50,000 and $200,000 annually to purchase replacement water.
Gilbert purchased water from two nearby communities at a higher rate than it normally
charged its customers: the village paid $75,500 for replacement water .over an 18 month period.
Additionally, Gilbert paid $26,300 for transmission lines to tie into the neighboring PWSs.
. x
Although Dartmouth has historically purchased a portionof its water from the City of New
Bedford, loss of the Route 6 well forced the town to increase its dependence on New Bedford's water
system. Paying commercial water rates (the highest New Bedford charges), Dartmouth spends an
additional $55,000 annually to replacei'the 8.1 million gallons the well once supplied.
During its 15-month water emergency, Norway purchased water from the Town of South
Paris, at a total cost of $133,000. Maine DEP paid the cost of the purchased water above Norway's
usual production cost via the State's Third Party Damage Claim process.
' , \
Development of New Sources
Searching for and developing new ground water sources appears to be the most expensive
response to loss of a well. Gilbert, Tumwater, and Middletown were forced to develop new drinking
water sources. The Village of Gilbert spent almost $280,000 to plug its two c6ntaminated wells and
to acquire land for and construct two replacement wells. This accounted for over 70 percent of the
total cost associated with the contamination incident.
27
-------
Benefits and Costs of Prevention
November 30, 1995
Tumwater spent $76,000 per well ta replace three of its wells. Although Tumwater planned
to eventually site one of these wells to meet growing water demand, the city was forced to incur
substantial costs to site the wells away from contamination; this figure represents the incremental
siting costs. Middletown is forced to incur substantial water supply development costs several years
earlier than anticipated at an incremental cost of $ 17,000 per well, on a present value basis.
Indirect Costs to PWSs
Gilbert appears to be the only water system that has experienced documented indirect costs
due to contamination of its water supply. Initially, the Gilbert Water System (GWS) did not raise
water rates to compensate for the incremental costs associated with purchasing water. As a condition
to receiving its FmHA grant, Gilbert was required to raise its water rates. In response to both the
contamination and the higher water rates, approximately 10-12 residents abandoned public water and
drilled private wells.
Gilbert's city clerk estimated that this loss of customers deprives GWS of approximately
$200 per month in revenue. Given that the village collects approximately $ 10,000 per year in water
and sewer rates, this amounts to a 2 percent drop in revenue. The clerk could not provide
information on whether GWS's operating costs have fallen because of the reduced demand.
3.1.2 Aquifer Clean-up
Cleanup of the contaminated aquifer typically involves a much more costly response effort
than the PWSs can usually undertake. Groundwater cleanup costs can exceed several million
dollars, so State or Federal assistance is sought to pay to remove contamination, especially if it is
now or considered to be a potential continuing orfuture contamination source.
Capital Costs
Capital costs refer to the up-front expenditures response agencies incur to assess the extent
and severity of contamination, select an appropriate response action, and procure the necessary
equipment Capital costs include direct costs (e.g., purchased equipment and construction materials,
equipment and material installation, and health and safety equipment) and indirect costs (e.g.,
surveying, construction inspection, engineering/design, and administrative activities).
Assessing Contamination
Assessing the scope of the contaminant plume and selecting a remedy are the first steps to
aquifer cleanup. In the case studies, these costs totaled from $28,330 to $1.4 million per well.
28
-------
Benefits and Costs of Prevention
November 30, 1995
In Gilbert, LDEQ performed a preliminary contamination assessment and developed
a corrective action plan, spending $23,500 per well in contractor and start effort.
LDEQ anticipates conducting additional delineation of the contamination before
treatment is installed, at an estimated cost of $4,830 per well.
Tumwater, WSDOE, and EPA Region 10 conducted two investigations of the
wellfield contamination, at a cost of approximately $69,000 per well. The City spent
$42,000 per well and WSDOE spent $1,700 per well for their joint initial
investigation: EPA's Expanded Site Investigation cost approximately $133,800 per
'',' 'well.' ^ "'',...:''' - , -
In Gettysburg, PADER has spent at least $1.4 million (as of September 1995) for the
contamination assessment and to assess remedial alternatives for cleaning the ground
water and soil around the J.C. Cleaners site.
Dartmouth spent $89,760 to study contamination at. the Route 6 well and the
surrounding aquifer. At the Chase Road site, Dartmouth performed a Phase II
assessment of contamination (at a cost of $89,250), and a Risk Assessment (at a cost
of $15,470).
Middletowris investigation of its contamination incident cost $114,000 per well. The
responsible party is likely spending a similar amount hi its investigation. OEPA's
oversight costs from 1992 to 1995 total $15,300 per well.
Constructing Treatment Operations ,
Once a remedy is selected, the responding agency must build a treatment plant or otherwise
execute the remedy. Remediation is complete only hi Dartmouth and Norway. In several of the
other case studies, decision documents or knowledgeable staff have indicated what response costs
likely will be.
In Gilbert, LDEQ anticipates spending approximately $96,000 per well to construct
an air sparging and soil vapor extraction systems. This estimate assumes that the
preferred remedial alternative is implemented.
Norway is the only community studied that has constructed, implemented, and
completed a treatment operation. Maine DEP drilled two production wells, and
constructed an air stripper. The total up-front costs associated with the remedy in
Norway were approximately $322,000.
In Gettysburg, PADER is currently examining two alternative scenarios for
*'29
-------
Benefits and Costs of Prevention
November 30, 1995
groundwater treatment and soil vapor extraction. The agency projects that
remediation of soil and ground water will require approximately $820,000 hi capital
expenditures. PADER will fund the cost of remediation through its Hazardous Sites
Cleanup Program (HSCP). ,
Operation and Maintenance Costs
O&M costs are the ongoing expenses of implementing a remedy over several years. O&M
costs include electricity., maintenance., materials, administration, insurance, taxes, licenses,
equipment replacement, and sample analysis.'
As indicated above, Norway is the only community for which ongoing aquifer remediation
costs are known for certain, although reasonable estimates of remedial costs in Gettysburg and
Gilbert are available.
In Gilbert, O&M costs associated with remediation will probably total $223,000 per
well between 1995 and 2005. This figure includes $89,762 per well for the'
hydrocarbon recovery system, $87,795 per well for soil vapor extraction, and $3,850
per well for the proposed air sparging system.
In Norway, Maine DEP pumped and treated ground water for 18 months. The total
O&M cost of the remedy from 1990 to 1995 was $22,100. Additional monitoring
of water quality will probably total $10,000 between 1995 and 2005.
In Gettysburg, the net present value of O&M costs for the years 1995 to 2005 will
be from $2.3 million to $2.8 million, depending on the duration of the remedy. If
remediation takes 30 years, total O&M costs could exceed $3.9 million.
3.1.3 Comparison of Costs for Providing Safe Drinking Water and Total Projected
Remedial Costs
Comparison of costs for providing safe drinking water and total projected remedial costs
indicates that for the six communities, providing safe drinking water was a significant cost. These
costs for providing safe drinking water include connecting to alternative sources of supply, installing
new wells, or water treatment. Total projected contaminant remedial costs include the provision of
safe drinking water and aquifer remediation. As Exhibit 4 shows, overall 53 percent of the remedial
costs were for safe drinking water supply. In Dartmouth, 100 percent of the remedial costs were for
safe drinking water. In Gettysburg, only 10 percent were for safe drinking water, while hi Gilbert,
the smallest community hi 1he study, 36 percent of remedial funds went for drinking water supply.
Since providing long-term safe drinking water supply is the major concern of communties
30
-------
Benefits and Costs of Prevention
November 30, 1995
: . . ' ' < . ~ - -
with wellhead protection, these alternative water sources or treatment may be considered the
principal costs to be avoided by wellhead protection. Averaging over all the communities, the ratio
of the avoided cost of an alternative safe drinking water supply to basic wellhead protection is 4:1.
For Gilbert, serving 700 people, this ratio is 72:1. These ratios vary considerably among
communities and also suggest that small communities may proportionally have substantially higher
costs for water supply alternatives in comparison to wellhead protection. Additionally, the ratios
are higher when evaluating total projected remedial costs of contamination since the drinking water
supply costs may not take into account long term supply requirements and other factors affected by
contaminated ground water. Typically, removing any source that could continue to contaminate or
threaten the drinking water supply is also a priority and must be inqluded. Both provision of a safe
drinking water supply and contaminant remediation are included in Total Projected Clean-up Costs
in the Exhibit 4, below. Long-term public health costs are not included in these evaluations.
Community
Gilbert
Norway
Tumwater
Gettysburg
Dartmouth
Middletown
TOTAL
EXHIBIT 4
Remedial Costs
. ' ' For '_..','
Safe Drinking Water and Total Projected Clean-up
($1994)
Subtotal for
Providing
Safe Drinking
Water Supply
Total
Projected
Drinking Water
And Glean-up
$5,408,673-
$5,913*801
$10,691,973-
$11,197,101
Percent
Drinking
Water
of Total
$394,733
$149,201
$1,180,040,
$406,927
$2,353,291
$924,481-
$1,429,609
$1,094,645
$545,904
$1,712,440
$4,015,351
$2,353,291
$970,342-
$1,475,470
36%
27%
69%
10%
100%
95%- -
97%
- 53%
Ratio of
Remedial Drinking
Water Costs to Basic
Prevention Costs
72
., 2
,4
2*
3
3-5
3-4
* Ratio is for Gettysburg's remedial costs for safe drinking water supply divided by Lancaster Co.'s
basic wellhead protection program costs.
31
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Benefits and Costs of Prevention
November 30, 1995
3.1.4 Extent of Outside Funding for Contaminant Remediation
The smaller communities relied on outside sources of funding - State and Federal programs
-for contaminant remediation. Exhibit 3, Who Pays for Contaminant Remediation?, shows the
amount of remedial costs and the source of funding by community. State and Federal programs
funded 91 percent of the remedial activities in Gilbert, 97 percent in Norway, and 90 percent in
Gettysburg, the three smaller communities in the study. In Tumwater, 25 percent was funded by
State and Federal programs. Dartmouth funded 99 percent and Middletown funded 97 percent of
the contaminant remediation cqsts themselves. Overall, 50 percent of the remedial costs of the six
communities were funded by State and Federal sources.
3.2 Wellhead Protection Costs
The case study communities are at different stages in the development of their WHPPs.
Three communities (Gilbert, Dartmouth, and Norway) have completed all of the WHP elements, and
their programs are hi the implementation stage. Middletown and the communities of Lancaster
County have developed, but not yet adopted, source management strategies. Tumwater currently
is developing its source management plan. . .
This section summarizes WHP costs as of September 1995, as well as projected expenditures
through September 2005. To account for size differences among the case study communities, costs
are reported as per-well costs, except where otherwise noted. Most costs that were readily identified
and easily documentable were for local, State and Federal government expenditures. Private sector
expenditures are included where available and documented. Exhibit 5 presents the Basic and Total
Wellhead Protection Program Costs to 2005.
3.2.1 Cost Determinants
Total WHP costs as of September 1995 vary widely among the case study communities,
ranging from $2,700 to $329,700 per well. For Tumwater, Middletown, and Lancaster County
communities, costs as of September 1995 largely represent WHPP development. In Gilbert,
Dartmouth, and Norway, these costs include both development and implementation activities.
f *. * *
WHPP Development
Gilbert, the smallest and most rural of the communities, has the lowest WHP cost to date.
Total expenditures are approximately $2,300 per well. Lancaster County and Middletown have
. similar per-well basic protection costs of approximately $6,000 and $4,800, respectively.
Dartmouth's per well basic development costs are five times as high as Middletowh's, Lancaster
County's, and Tumwater's, at $99,000. Norway's $101,000 per-well basic plan cost is the highest.
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NOTES TO EXHIBIT 5
"'
1 . A public School Education program on ground water protection. '
ntaminant sources in WHPA.
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2. Wellhead protection area (WHPA) monitoring reflecting concern for other
- i
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practices. ,
3 25 percent of Wells and Wellfield inspection
; in a more basic program with no previous
to o
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4. Assumes that the incremental cost of implementing WHP immediately arc
costs, since well operation must be checked regularly whether or not a WHP
contamination incidents, the duration and frequency of inspection may be les
boundaries. - '..
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itial contaminant sources; evaluated at 120 hours
led, equaling $6,600.00. As a practical matter,
3 &
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6. Includes the opportunity cost of local government officials working after he
(estimated) multiplied by $55.00 per hour, an estimated hourly rate if a consu
these costs were not incurred by the community.
spections beyond a basic WHP program.
, c
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7. Half of Permitted Facility Inspection considered to be additional local cost
itaminant sources; evaluated at 31 5 hours
stc, equaling $1,61 0.00. As a practical matter,
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8. Includes the opportunity cost of community volunteers (senior citizens) to
(estimated) multiplied by $4.25 (1994 minimum wage) and by a factor of 1.2 1
these costs were not incurred by the community.
nd documentation to State. ;
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9. Additional reporting and briefings reflecting additional local concerns; also
i
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ant sources ii
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10. WHPA monitoring reflecting concerns for other potential specific contami
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11. Includes spill response costs beyond basic WHP program.
<
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nt sources in
CO
12. WHPA monitoring reflecting concern for other potential specific contamin
-------
Benefits and Costs of Prevention
November 30, 1995
Given the small sample size, it is difficult to identify any general factors that appear to
influence the cost of developing a WHPP. However, the experience with contamination did cause
several of these communities to take additional efforts to assist them in protecting their wellfields
from future contamination, such as the early warning mat monitoring wells might provide. One can
assume that, in certain circumstances, economies of scale are present. Delineation and source
identification costs may be affected by the number of unique WHPAs that must be delineated; they
are also sensitive to the number of wells and distance between wells in the wellfield, as well as the
pumping rates which affect the size of the protection areas. A community with three wells hi
separate wellfields could be expected to have higher per-well C9sts than a community with three
wells in one wellfield. The costs of developing management and contingency plans for alternate
water supplies probably are not significantly affected by the number of WHPAs, since, presumably,
the plans are not entirely WHPA-specific. Thus, economies of scale may occur.
Factors unique to each case study community appear to exert the biggest influence on WHPP
development costs. For example:
Gilbert's low cost can be attributed to LDEQ's use of the fixed radius delineation
method. Further, Gilbert used a "fill in the bank" contingency plan and modelled its
ordinance on examples provided by LDEQ. ,
Norway's high per-well cost can be attributed to a lack of economies of scale. The
town undertook a relatively complex delineation and aquifer characterization effort
for its sole well.
Tumwater's relatively high development cost can be attributed to its extensive
gf oundwater monitoring effort and its heavy reliance on consultants to develop its
management and contingency plans, and to conduct the preliminary source
identification effort.
Middletown relied extensively on its volunteer Wellfield Protection Committee to
develop several elements of the WHPP, keeping costs lower than they might have
been otherwise.
Implementation Costs
WHP costs between October 1995 and September 2005 appear to reflect the communities'
implementation approaches, more than anything else. Expected per-well basic protection costs range
from $411 in Gilbert to $41,000 in Dartmouth. It is interesting to note that the other communities
36
-------
Benefits and Costs of Prevention November 30, 1995
have similar per well implementation costs. Future costs in Tumwater' and Lancaster County are
$11,700 and 16,000, respectively. Middletown's expected $18,400 basic protection Cost per well is
one-third that of Dartmouth's. Note that during the next few years, Middletown will be building
reserves in its Risk Reduction and Emergency Response Funds. If spending on the two funds is
included, Middletown's per-well cost increases to $80,700. Implementation costs cover the
following activities:
. . ' . ' . , ' 'i ' "'..
Gilbert's PWS operator conducts informal inspections of potential contaminant
sources.
Norway's primary activities are informal patrols of the WHPA and periodic ground
water monitoring. '
The Lancaster County communities plan to focus on inspections of potential
contamination sources.
Dartmouth conducts permit reviews and patrols of the WHP As.
, Middletown plans to inspect potential contaminant sources and conduct ground water
monitoring. In addition, Middletown plans to accumulate funds in its Risk Reduction
and Emergency Response Funds.
None of the communitiescould provide costs to business of complying with WHPPs. Many
of the performance and design standards that communities have incorporated into their WHP
ordinances are restatements of existing federal or state environmental requirements. Thus, their
compliance costs cannot be attributed to WHP. For example, Middletown and Tumwater require .
new USTs to have double walls, a current requirement under RCRA UST regulations.
3.2.2 Extent of Outside Funding for Wellhead Protection
None of the case study communities paid the entire cost of developing its WHPP. Each
community benefitted from financial or in-kind contributions from EPA, states, or private
organizations. These outside sources of assistance accounted for between 12 percent and 92 percent
of the total cost of WHPP development:
3Although Tumwater has not yet developed a management plan, it is likely to be similar in approach to that of
neighboring Lacey. Implementation costs in Lacey are projected to be about $110,000 per year. Given that the
Tumwater PWS is about half the size of the Lacey PWS, it is reasonable to assume that annual implementation costs
would be approximately half Lacey's, or about $55,000, with $20,000 for basic program implementation and $25,000
for ground water quality monitoring. .
-------
Benefits and Costs of Prevention
November 30,1995
Gilbert obtained approximately $4,300 in staff assistance from LDEQ (92 percent).
Norway benefitted from a $26,500 ($27,030 in 1994 dollars) EPA WHP
Demonstration Grant for WHPP development (23 percent).
Tumwater received a $170,500 ($173,913, in 1994 dollars) grant from the
Washington State Centennial Clean Water Fund (50 percent).
Lancaster County communities received a $30,000 ($32,700 in 1994 dollars) grant
from EPA Region 3 for delineation and a $20,000 ($20,400 in 1994 dollars) grant
from PADER for developing a management plan (47 percent of the cost of WHPP
development).
Dartmouth received two wells from Dartmouth Power Associates; the value of the
associated WHPA delineation was approximately $88,000 (73 percent).
Middletown was awarded a $12,000 ($12,240 in 1994 dollars) EPA WHP
Demonstration Grant to develop a WHP curriculum for public schools (12 percent).
Exhibits 6, 7 and 8 compare the sources of funding for wellhead protection. Notably, 88
percent of all wellhead protection program costs for the six communities combined were paid for
or provided in kind by local sources (e.g., city/town, water district, local company, adjacent town).
3.2.3 Costs by WHP Element
The Wellhead Protection Program, as described in Section 1428 of the Safe Drinking Water
Act and in program guidance, includes the basic elements of: .
(1) Forming a local team, including the water purveyor;
(2) Delineating the area below which the ground water supplies the well and/or welifield;
(3). Identifying potential contaminant sources;
(4) Developing a contaminant source management strategy or plan, including public
information and education;
(5) Preparing a contingency plan for alternate water supplies; and
(6) Developing a plan for protecting areas supplying new wells.
As conditions warrant, a WHP program may be expanded and tailored to special protection needs
of the community. This tailored special protection may include detailed hydrogeologic
investigations and modeling, ground water monitoring, expanded public education, detailed site
inspections, remedial spill response and other management activities.
The study communities provided information on the cost of various WHP elements, although
certain elements are combined in some cases. These are described in the following sections.
38
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Benefits and Costs of Prevention
November 30, .1995
Delineation/Contaminant Source Identification
In several communities delineation costs could not be separated from source identification
costs, so costs should be interpreted with caution. Per well delineation costs range from $1,674 in
Gilbert to $66,713 in Norway. The complexity of the delineation method used appears to be the
driving factor in determining cost. Generally, the more extensive the modelling effort required, the
higher the cost. Gilbert is the only community where the WHPA was delineated using a fixed
radius; the other five employed groundwater modelling techniques. Norway's relatively high
delineation costs are attributable to a lack of economies of scale. All the communities (except
eastern Lancaster County) required detailed delineation of their wellhead protection areas because
of contamination at or moving toward their wells.
Information available for communities not included in this study but having currently safe
drinking water supplies indicates, that delineation costs for a basic wellhead protection can range
from $100 if community has resident or volunteer hydro'geological expertise and obtains public
software for WHP delineation, to $3,000 for a similar approach but desiring more hydrogeologic
interpretation through a State or local agency expert or a consultant Obtaining the services of the
State Geologist's Office may cost more or less than this latter figure, depending on the hydrogeologic
interpretation needed; it may even be free to a.community in some circumstances or States, Of
course, the simplest approach for very small systems wanting to get started with WHP is to use an
arbitrary fixed radius for the.distance set by the State for wellhead protection areas around PWS
well(s). As long as the location of the well(s) is (are) known and can be mapped, the protection areas
can be delineated on a geologic map within an hour and determined in the field within a day.
Usually, these fixed radii are typically about 1/4 mile for the smallest systems. In this report's
analysis, the costs described in this paragraph are categorized as part of "Basic" wellhead protection.
Basic contaminant source identification can be obtained relatively inexpensively. Two
communities in this study, Tumwater and eastern Lancster County, used volunteers to identify
potential contaminant sources. Tumwater's volunteers were principally organized retired senior
citizens, who spent about 315 hours doing a detailed contaminant source survey. Evaluated-at a
minimum wage ($4.25/hour multiplied by a 1.2 overhead factor), the opportunity cost of this time
is $1,610. In eastern Lancaster County, local community officials and other volunteers worked after
hours to conduct then* contaminant source inventory. The opportunity cost of this time is estimated
to be $6,600 for 120 hours (evaluated at a consultant's hourly rate of $55/hour). From a practical
standpoint, communities would not actually incur these costs, but these estimates give an idea of the
costs without volunteers. By comparison, costs in twelve other communities (not part of this study)
around the country for volunteers to go door-to-door has averaged $5,000 per community, regardless
of community size. This cost includes insurance for the volunteers, mileage reimbursement (if
necessary) and the time of a coordinator. The cost to a local government for coordinating such an
activity may be considerably less than $ 1,000, depending on the size of the community.
42
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Benefits and Costs of Prevention
November 30,. 1995
Source Management Strategy Development
Compared to delineation and contaminant source identification, development of source
management strategies and plans are a relatively small contributor to WHP costs. However, source
management plans rely heavily on these first two major steps of delineation and contaminant source
identification. In most cases, these costs include developing a plan document and ordinance
language. Development costs in the study communities ranged from $18 per well in Gilbert to
$33,875 in Norway.4 The other four communities had costs of between $863 and $6,713 per well.
, - ' -"-', ' ป
A major factor that communities are concerned with is the cost of getting a WHP plan in
place to guide implementation of wellhead protection. Exhibit 9 addresses the cost of developing
a wellhead protection program through the management plan. The basic WHP costs incurred by the
six communties show that on average 29 percent of the costs from program inception through ten
or more years of implementation are used for delineation, contaminant source identification and
management plan development. Although not a statistically significant sample, the smaller
communities spent a larger proportion of their first 12 to 15 years of WHP funds on management
EXHIBIT 9
Development and Implementation Costs
' " .". .'. - _ ' . For A. ' '."' , .
Basic Wellhead Protection Program
($1994)
Community
Gilbert
Norway
Tumwater
Lancaster Co.
Dartmouth
Middletown
TOTAL
Subtotal for Basic
WHP Program
Through Management
Plan Development
$4,666
$82,588
$134,754
$79,780
$118,605
$56,820
$469,003
Total for Basic
WHP Program
Incl. Implement'n
Through 2005
$5,487
$101,014
$286,954
$248,370
$693,365
$295,892
$1,622,872
Percent Basic
Management Plan
Development of Total
Basic WHPP Impl'n
85%
81%
47%
32%
17%
19%
29%
4In Norway, source identification costs cannot be separated from management plan development costs.
43 -
-------
Benefits and Costs of Prevention
November 30, 1995
plan development, and therefore a smaller portion for implementation. This result makes sense when
considering that smaller communities have fewer contaminant sources to track or work with to
protect their wellhead protection areas as they move into the implementation phase of their program.
Ground Water Monitoring
Tumwater, Middletown and Norway monitor ground water quality downgradient from high-
risk potential contaminant sources, and upgradient from their wellfields. Tumwater's monitoring
plan appears to be the most comprehensive; it is also the most expensive element in Tumwater's
WHP effort. The total cost of $8,462 per production well includes the cost of siting wells and
developing a data system. Norway's monitoring activities total about $5,800. Middletown has spent
$877 per production well on ground water monitoring so far, and plans to construct additional
monitoring wells in 1996. Ground water monitoring is treated as a special protection effort in this
report.
Contingency Planning
Only two communities provided costs of developing contingency plans. The cost of plan
development varies widely, depending on the scope of the effort. Gilbert used a 'TiU-in-the-blank"
contingency plan provided by LDEQ, at a cost of only $116 per well. In contrast, Tumwater is
developing a comprehensive contingency/spill response plan at a projected cost of $3,382 per well.
Public Education/Outreach
Public education and outreach generally account for a small fraction of WHP costs.
Middletown is the only study community that developed a formal public education campaign. The
other communities have used or plan to use previously prepared outreach materials.
The availability of an EPA WHP Demonstration Grant played a significant role in
Middletown's decision to develop educational curricula for elementary and high school students.
The total cost, including the city's match, was approximately $2,000 per well.
3.2.4 Comparison With Other Reported WHP Costs
This analysis shows that communities can take very simple or very complex and tailored
approaches to wellhead protection. Based on the experience of Gilbert, LA, small communities can
complete a wellhead protection plan for under $5,000, with ongoing implementation costs under
$200 per year to make regular checks of the protection area for any irregularities. Anecdotal
information for communities not included in this study indicates that larger communities (5,000 to
60,000 or more) that do not have an experience with contamination can also implement a basic
prevention program for under $50,000, and perhaps as little as $20,000, depending on the level of
44
-------
Benefits and Costs of Prevention
November 30, 1995
volunteerism and cooperation of business. Regular follow-up, such as checking the protection area
by foot or car, and other management may cost as much as $10,000 to $20,000 per year. These costs
are comparable to those for the communities covered in this report.
The State of Illinois Environmental Protection Agency has provided communities with
delineations and contaminant source identifications for fixed radius WHPAs of 1,000 feet for all
community water systems. Additionally, for communities utilizing shallow unconfined aquifers and
desiring more detailed delineations for greater protection, the State EPA will use computer models
and its hydro-geologic expertise to delineate more accurate protection areas. Along with the
delineation, the State provides potential contaminant source.identifications. The State estimates that
these detailed delineations, using a simple computer model such as the WHPA, Code, and
contaminant source identifications for small systems with one or two wells costs $6,000 (about
$3,000 per well). For larger systems serving one community with 5 to 20 wells and an area of less
than 50 square miles, the delineation, using more complex computer models such as MODFLOW
and interpreting hundreds of well records, and source identifications costs about $35,000, or about
$1,750 to $7,000 per well. For areas covering over 50 square miles and serving several community
water systems using 25 to 30 wells, this cost is about $70,000, or $2,300 to $2,800 per well.
(Communication, R.P. Cobb, Illinois EPA, November, 1995)
The State of Washington Department of Health (DOH) has prepared its estimate of WHP
program implementation costs based on results from State WHP grant awards to communities, input
from a technical advisory panel and professional experience. The State estimated the following costs
based on system size as measured by the number of connections:
Number of
Connections
15-49
50-99
100-500
500-999
1,000-2,499
2,500-9,999
10,000 or more
Estimated 5-Year Cost
Per System .
$500
$2,000
$5,000
$5,000
$7,500-40,000
$10,000-60,000
$15,000-100,000
These .cost estimates include delineation, contaminant source inventory, initial management plan
development, contingency water supply and spill response planning. The State notes that direct costs
to a water supplier could be as high as $450,000 or more depending on the number of connections,
hydrogeologic setting, vulnerability to contamination, accuracy of the delineation desired, and the
45
-------
Benefits and Costs of Prevention
November 30, 1995
extent and type of planning needed in a particular community. (Washington DOH, 1995) The costs
of these two. States' experiences are confirmed by the analysis of the seven communities in this
study. " .
A similar breakdown of WHP costs as that for the State of Washington for the six
communities in this study that have implemented wellhead protection showing the number of years
of WHPP development and implementation and system size (by number of connections) provides,
the results hi Exhibit 10.
EXHIBIT 10
BASIC PROGRAM DEVELOPMENT COSTS AND
TIMING OF EXPENDITURES FOR WELLHEAD PROTECTION
($1994; previous costs adjusted using CPI; future costs discounted at 7%)
Community
Years of WHP
Development/
Implement'n
No. of Cost of Cost of
Connec- Basic Prog. Basic Prog.
tions Development Implement'n
(approx- through through
imate) 1995 1995
Gilbert
Norway
Tumwater ,
Lancaster
Dartmouth
Middletown
1992-1995
1990-1995
1993-1995
1990-1995
1988-1995
1985-1995
250
800
4,800
7,400 '
8,900
;20,400
$ 4,666
91,883
134,754
72,780
183,510
61,820
$229,533
Cost of
Basic Prog.
Implement'n
1996 through
2005
$
821
9,131
152,200
175,590
286,917
239,072
This table shows that in comparison to the cost estimates by system size (i.e., number of
connections) for the State of Washington, Gilbert (population, 700), Lancaster (pop., 20,000), and
Middletown (pop., 60,000) had costs for basic WHP program development within or near the ranges
suggested for Washington communities of similar size. The other three communities, Norway
(4,000), Tumwater (13,000), and Dartmouth (24,000), all had needs for detailed delineations and
spent the additional funds to do so. These latter three communities also had additional expenditures
for developing more detailed management plans or ordinances that they required. It should be noted
that because the Wellhead Protection Program is constantly evolving and each community takes its
own initiative to improve and shape the program to meet its needs, such ranges as reported above
in program development costs are expected.
46
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Benefits and Costs of Prevention
November 30, 1995
3.3 Comparison of Benefits and Costs
The case studies demonstrate that, in the long run, the cost of responding to a contamination
incident significantly exceeds the cost of developing and implementing a WHP program. Exhibits
11 and 12 compare total and per-well contamination and WHP costs (i.e., costs to date plus expected
costs through September 2005). m the six case study communities mat experienced contamination
and developed a WHPP, the ratio of contamination costs to WHP development and implementation
costs ranged from 5:1 to 200:1, on a per-well basis. The average per well ratio for all the case study
communities of contamination costs to WHP costs is 27:1. Exhibit 11 provides these costs as
undiscounted values, not taking into account the time value of money. The analyis of undiscounted
costs provided similar results and ratios.
' '"."',
As discussed in Sections 1.1 and 1.3, this analysis assumes that (1) the probability of
contamination is 100 percent, and (2) the WHP program will be 100 percent effective. In reality,
contamination is not a certainty, and the WHP program will not always be completely effective, so
the actual ratio of benefits to costs may be different.
Exhibit 13 summarizes uncertainties in the cost calculations which could bias the ratio of
benefits to costs upward or downward. In Gilbert, Tumwater, and Middletowri, aquifer remediation
costs are uncertain or incomplete. In the latter two communities, it is likely that the addition of
aquifer remediation costs would push the ratio of benefits to costs significantly higher. In Gilbert,
the direction of the bias is uncertain, because the duration of remediation may be either longer or
shorter than the ten years estimated in the case study. As noted previously, many costs associated
with ground water contamination and the response of residents, business, and local and State
governments to it could not be quantified or monetized in this study. These potentially large costs
. could make the ayoided-contamination-cost benefits much larger. On the WHP side, costs for
implementation and/or business compliance probably are understated in several communities; thus,
the ratio probably is overstated. In any case, it is unlikely that elimination of the uncertainties would
cause WHP costs to exceed contamination costs, on a per-well basis.
In looking at the contamination costs across the communities, the contaminating incident in
Gilbert involving two wells serving 700 people is about costly as Middletown's remediation of
ground water supplying three wells and 60,000 people. One conclusion that can be drawn from this
comparison is that smaller towns do not necessarily have small contamination problems; the
contamination can be just as extensive or serious as in larger cities. Both larger and smaller
communities can spend large amounts of funds On wellhead protection if they want to ensure a
protected water supply without interrupted service from contamination. Norway (population, 4,000)
is spending significant funds for ground water monitoring to provide early warning of contamination,
as is Tumwater (pop., 13,000) and Middletown (pop., 60,000). If ground water is the only reliable,
high quality drinking water source, expenditures for monitoring and special protection are probably
warranted. Middletown is within the area designated under Section 1424(e) of the Safe Drinking
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COMMUNITY
Contamination: Overestimated-some routine
maintenance cost may have been attributed to
contamination; duration of aquifer remedy unknown.
WHP: Underestimated-community officials' time has
value, but is not quantified; implementation cost are
estimated
Conclusion: Uncertain
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WHP: Underestimafed-oversight costs are probably
i Conclusion: Ratio is accurate
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Contamination: Underestimated-remedy has not b<
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available
WHP: Overestimated-implementation costs are
estimated based nearby communities' experiences
Conclusion: Ratio may be underestimated
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Contamination: (Gettysburg) Underestimated-cost
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WHP: (Lancaster, County) Overestimated-Extent of
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Contamination: Underestimated-remedial costs ar
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WHP: Underestimated-cost to businesses unavaHal
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MIDDLETOWN
-------
Benefits and Costs of Prevention
November 30, 1995
Water Act as the Sole Source Miami Valley Buried Aquifer System, indicating that no other sources
of water are reasonably or economically available. Thus, the potentially unquantifiable and/or
unmonetized benefits of avoiding future contamination in such communities may be high regardless
of WHP program implementation costs. ,
While the probability that all the wells in a community would be closed because of actual
or imminent contamination (which did happen in the two smallest communities in this study, Gilbert
and Norway) may not be 100 percent, a community may desire to consider .the costs of responding
to such a problem in estimating total avoided-cost benefits in comparison to prevention costs. If all
the protected wells in this study were to become contaminated, using the locally developed costs
reflecting the respective areas' hydrogeologic settings, contaminant remediation of the ground water
sources of drinking water in these locations may cost as much as $68 million. Exhibit 14 displays
details of this analysis. The combined cost for the 47 wells to receive special protection is $4.9
million and for basic protection is $1.6 million. The respective combined avoided-cost benefit to
prevention cost ratios are 14:1 to 42:1. (The ratios for each community in Exhibit 14 are similar to
the per well ratios previously presented. The combined average, or "Total;" ratios below are larger
EXHIBITS
Ratios of
Avoided-Cost Benefit to Wellhead Protection
Assuming All Wells Are Contaminated (100% Probability of Contamination)*
No. of With With Sensitivity Analysis*: Assuming 50%
Protected Basic Special Probability of Contamination and 50%
Community Population Wells Protection Protection of Contamination Costs/Basic Prot Costs
Gilbert > 700, 2 200:1 200:1 50:1 '
Norway 4,000 ,1 5: 1 4:1 1:1
Tumwater 13,000 13 ,26:1 11:1 7:1
Lancaster Co. 20,000 11 178: 1 104:1 44: 1
Dartmouth 24,000 7 12:1 4:1 3:1 ,
Middletown 60,000 13 22:1 5:1 5:1
TOTAL 47 42:1 14:1 10: 1
* Calculations for Sensitivity Analysis assuming (a) 100% probability of contamination of all wells for "With Basic
Protection" and "With Special Protection" and (b) 50% probability of contamination of wells and 50% of contamination costs
reported in this study: , .
(a) [number of protected wells X per well contamination costs] / [number of protected wells X Basic WHP cost per well]
(b) [(number of protected wells X.5) X (per well contamination costs X.5)] /
[number of protected wells X Basic WHP cost per well]
53
-------
Benefits and Costs of Prevention
November 30, 1995
because contamination costs are projected for all protected wells, not just for those that are currently
contaminated or imminently threatened.) In doing this computation in the future, a community may
desire to evaluate the probability of ground water supplying its wells becoming contaminated and
then decide whether to use the worst case estimates for planning to protect public health or modify
the estimates to some other expected value for avoided-cost benefits. Even if the probability of
contamination were 50% (rather the 100% assumed in the worst case) and the costs in this report
were considered to be 50% too high, the average or expected avoided-cost benefit to basic WHP cost
ratio would still be 10 : 1, assuming the basic WHP costs were appropriate. Higher ratios-would
likely apply to smaller communities.
3.4 Qualitative Analysis of Benefits and Costs
In addition to the quantifiable benefits which have been described and compared in the
previous sections, there are certain unquantifiable or intangible costs associated with contamination.
Compilation of these costs is based on anecdotal evidence from knowledgeable people in the
communities.
The most commonly noted intangible cost of contamination concerns the potential
marketability of properties near affected sites. Property owners, real estate agents, or tax assessors
in Gettysburg, Tumwater, and Middletown noted the possibility that contamination may affect
property sales.
A realtor in Gettysburg indicated that neither the value nor salability of properties
near J.C. Cleaners have been affected by the contamination. She notes that
contamination incident is hot well known hi the community. She did speculate that,
in general, contaminated sites tend to limit the market for adjacent and/or affected
properties, however. Anecdotal evidence suggests that federal Superfund sites in the
county may have had limited effects on the market for adjacent properties. The
realtor attributed the lack of quantitative evidence to the small number of property
transactions in the area.
In Tumwater, a few local real estate agents have noted a slight drop in sale prices and
have speculated that the contamination incident may be partly to blame. Also, City
officials report that some property owners have expressed concern about the
contamination. For example, the owner of some commercial property located near
the wellfield recently asked the-City for reassurance that the incident would not affect
his chances of selling the property at a fair price.
The contamination in Middletown has caused concern among business owners in the
54
-------
Benefits and Costs of Prevention
November 30, 1995
Hook Drive Industrial Park, One business owner expressed concern that he would
not be able to sell his building because the contaminant plume extended under'his
property.
Community contacts noted other unquantifiable costs:
In Gilberts benzene concentrations in the distribution system exceeded the Maximum
Contaminant Level for several months. Benzene is a human carcinogen and has been
associated with numerous other health effects. Although no health effects have
appeared in Gilbert yet, they may appear over time. .
ซ In Tumwater, between the closure of the three contaminated wells and construction
of the replacement well a year later, Tumwater frequently could not maintain
adequate water pressure in its distribution system for fire control. A serious fire
could have posed a severe threat to public safety and loss of property;
3.5 Comparison of Funding Sources for Remediation and Prevention
Examining the funding sources for both the possibly avoided contaminant remediation costs
and WHP program costs, results show that larger communities fund most of the remedial and WHP
costSj whereas smaller communities rely on assistance from State and Federal sources. Exhibits 4,
6 and 7 provide details of the funding sources. The results show that the the two smaller
communities, Gilbert (population, 700) and Norway (pop., 4000) relied on Federal funding sources
for 87 and 97 percent of their remedial costs,, respectively. Additionally, Gilbert obtained another
5 percent of its remedial assistance from the State of Louisiana. The remainder of their contaminant
remediation has been or will be funded by the communities. The larger communities, Middletown
(pop., 60,000) and Dartmouth (pop., 24,000), funded 97 and 99 percent, respectively, of their
remedial costs themselves. Overall, the combined sources of funding for the contaminant
remediation of the six communities' ground water supplies are: Community, 50%; State, 38%;
Federal, 12%; and private, <0.5%.
' "
For the wellhead protection costs, Gilbert funded 80 percent of its basic WHP program
through assistance from State programs. The other communities all funded from 72 to 100 percent
of their basic WHP programs and in most cases 100 percent of their special protection activities
themselves. Overall, for the combined six basic WHP programs, the funding sources are:
Community, 84 %; States, 6 %; Federal, 4 %; and private, 7 %._ Ninety-four percent of all special
protection activities were funded by communities and 6 percent by States.
This analysis of funding sources suggests that small communities will need support for both
remedial and prevention activities. However, it also gives an indication that considerably less State
55
-------
Benefits and Costs of Prevention
November 30, 1995
and Federal money, would be spent assisting any particular small community in preventing
contamination of its drinking water source rather than remediating the contamination after it occurs.
Dollar for dollar, the benefits (measured as avoided costs) far exceed the costs of ,WHP program
development and implementation, as indicated in the analysis of this study's smaller communities.
Larger communities appear to fund their remediation of contamination problems" and prevention
needs themselves for the most part. .
3.6 Approximate Value of Contaminated Water
f - ,
.Another approach to measure benefits is to determine the commodity value of the
contaminated ground water that could have been produced but was not or will not be used for public
water supply. Uncontaminated ground water has value to the PWS, determined by the price of water
its customers are willing to pay. Once ground water becomes contaminated, it loses value because
it cannot be sold to customers, or it must be treated prior to being sold. Three communities (Gilbert,
Dartmouth, and Norway) were forced to purchase replacement water from other communities. The
other communities (Gettysburg, and Tumwater) added treatment, tapped new sources, or increased
pumpage from existing sources. Exhibit 15 presents estimates of the value of the contaminated
ground water hi each community. The estimates are based on the approximate quantity of water that
would have been pumped from the affected wells in the absence of contamination and the unit price
ofthe water.
Exhibit 15 shows that the value ofthe contaminated water for these six communities may
approach $111 million. This estimate may be overstated for three reasons. In Tumwater and
Middletown, actual pumpage from the affected wells could not be determined, so the calculations
are based on the maximum safe yield ofthe wells. Second, where a community has a block rate
structure, the unit cost ofthe water is based on the highest block rate. Third, some wells may have
sufficiently clean water available to them earlier than 2005; however, contaminated water may still
reside in the aquifer and not be usable. The estimates assume that the water could have, been
produced through 2005, the planning horizon of the study. The value of this water far outways the
cost of its protection. In these case studies, the cost of all special and basic protection measures is
estimated to be $4.9million, with the basic protection portion being $ 1.6 million.
56
-------
Benefits and Costs of Prevention
November 30, 1995
Community
Gilbert* -
Norway
Tumwater#
Gettysburg*
Dartmouth*
Middletown#
TOTAL
EXHIBIT 15
Approximate Value of Contaminated Water
($1994)
Time Period Water Not Pumped
4/92-12/05
9/90-12/05
8/93-12/05
8/86-12/05
6/78-12/05
2/88-12/05
523,656,000 gal.
93,587,000 cu.ft.
233,767,000 cu.ft.
10,799,446,000 gal.
,1,752,816,000 gal.
44,902,517,000 gal.
* Based on estimated pumpage from contaminated wells.
# Based on maximum safe yield of the contaminat
NOTE: 1 cu.ft. = 7.4805 gal. ' . '
Unit Price
$1.50/1000 gal.
$2.48/100 cu.ft.
$1.15 7100 cu.ft.
$2.87/1000 gal.
$1.36 II000 gal.
$1.60/1000 gal.
Value
$. 785,000
$ 2,321,000
$ 2,688,000
$ 30,994,000
$ 2,384,000
$71,844,000
$111,016,000
57
-------
Benefits and Costs of Prevention
November 30,1995
4.0 CONCLUSIONS
Considering the cost of contamination - much of whieli could not be monetized for the
purpose of this study, the cost of prevention is worth the investment. The benefits, expressed as
possible avoided costs of contamination in this report, are substantial. Exhibit 16 provides a
summary graphical comparison of the avoided-cost benefits and WHP costs per well for each
community. For the smallest community, Gilbert, LA (population, 700, with 2 wells and 250 water
connections), the benefit-cost ratio is 200:1. For Gilbert, the expenditure of $4,666 for prevention
is very small in comparison to its co.st of a new water supply - nearly $400,000 - and subsequent
cleanup of the contamination to reduce future risk, a projected additional cost of $700,000.
For the larger communities, the benefits (possible avoided costs) are also significant. Their
possible benefit-cost ratios range from 5 to 178 : 1, on a per well basis. The combined average per
well benefit-cost ratio for a basic prevention program considering the results of all seven
communities is 27:1. These larger communities decided to incorporate other factors and concerns,
such as recent contamination and resulting desire for detailed delineation and management plans^
that raised then: program development and future implementation costs. Even so, the combined
average possible per well benefit-cost ratio for all special program development and implementation
is nearly 9:1, almost an order of magnitude difference, with a range of 4:1 to 104:1. Unquantifiable
contamination costs would make the benefit-cost ratios larger (i.e., larger avoided-cost benefits).
To apply these results to other communities or nationally, additional analyses are needed to
determine the risk and probability of contamination to ground water sources of drinking water across
a statistically representative set of communities. The derived probabilities could then be used to
weight the avoided-cost benefits for application in other locations.
While this analysis is based on a limited number of communities, the benefits of preventing
contamination of drinking water supplies are evident. Further analysis of costs for a larger number
of systems should occur to obtain a better distribution of communities. In particular, more analysis
of smaller communities should be conducted to establish the range of costs consistent with then-
needs for protecting their drinking water sources and the high costs of contamination to them. Half
of the communities investigated in this study had prevention costs that were within or near the ranges
calculated by Washington State for its communities that are developing and implementating WHP
programs. For the larger communities that decided to invest considerably more in their wellhead
protection programs, the steps they took indicate a strong desire to protect their water supply from
contamination and service interruption, protecting their only water source, in some cases. Protecting
public health through drinking water supply protection is a priority in these communities, even
though they have had problems. The experience of these communities should benefit communities
that currently have safe drinking water and desire to keep it that way.
In terms of the extent, and priority for local" funding;, small communities will need support for
prevention activities. While this study includes a small selection of communities, it appears that
58
-------
Benefits arid Costs of Prevention
November 30, 1995
substantially fewer State and Federal funds would be needed to assist any particular small
community in preventing contamination of its drinking water source rather than remediating the
contamination after it occurs. While future cases would need to be evaluated individually, larger
communities seem to have most of the funding capability to take care of their contamination
problems and prevention needs themselves, based on these results.
59
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Benefits and Cost* of Prevention
November 30, 1995
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Benefits and Costs of Prevention
November 30, 1995
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