United States
Environmental Protection
Agency
, Community Water
stem Survey
2000
Volume I: Overview
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Office of Water (4607M)
EPA815-R-02-005A
December 2002
www.epa.gov/safewater
Cover Photo: Bangor, Maine Water District Thomas Hill Standpipe. Designed by
Ashley B. Tower of Tower and Wallace of New York and Holyoke, MA, the standpipe
was built during 1897 by Major James M. Davis on land once owned by the Thomas
brothers.
The standpipe is actually two structures: a 1.75 million gallon riveted steel tank
enclosed by a 110-foot tall wooden jacket. The tank itself is 75 feet in diameter and 50
feet tall. It is topped by a "carousel," a three-ton steel drum from which 24 iron trusses
reach to the sides of the building.
The wooden jacket is 85 feet in diameter. It consists of twenty-four 1 -foot x 1 -foot x
48-foot hard pine main posts covered by 42,000 board-feet of hard pine and 220,000
cedar shingles. The jacket sits atop a stone foundation 9 feet high and 3 1/2 feet thick.
A 100-step winding staircase leads to the 12-foot wide promenade deck overlooking
the City of Bangor and surrounding communities.
The standpipe is topped by a 38-foot high flagpole and a railing consisting of 192
banisters that give it the look of a large wedding cake or crown when lit at night. The
entire structure was built in just 6 months.
Listed on the National Register of Historic Places and designated as an American
Water Works Landmark, the standpipe continues to store water and regulate water
pressure for Bangor's downtown.
Photo by Brian Rourke
Printed on Recycled Paper
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inter
CONTENTS i
EXECUTIVE SUMMARY iii
Study Purpose iii
Trends and Key Findings iii
Survey Methodology vi
INTRODUCTION 1
Background 1
Data Presentation 3
Intended Uses of CWS Survey Data 4
Organization of the Report 6
NATIONAL PROJECTIONS SUMMARY 7
Water System Profiles 7
Operational Summary 11
Financial Summary 15
Conclusions 19
KEY FINDINGS AND TRENDS 21
Key Findings 21
Trends 35
APPENDIX A:
TREATMENT SCHEME DEFINITIONS AND SCHEMATICS . ..39
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Community Water System Survey 2000
Acknowledgements
Many dedicated owners, operators, and managers of community water systems made this survey
possible. We would like to thank the more than 1,200 water systems that devoted valuable time
to searching through records and completing questionnaires.
The Community Water System Survey was managed by Brian C. Rourke of the EPA Office of
Ground Water and Drinking Water (OGWDW). He was assisted with questions related to very
large systems by Yvette Selby, also of OGWDW
The Cadmus Group, Inc. served as prime contractor for this project. Abt Associates, Inc., a
subcontractor, was responsible for data processing and contributed to the survey design and
sampling plan. Three subcontractors—International Studies and Training Institute, Inc.,
McNenny Environmental Engineering and Consulting, and Southwest Environmental Engineer-
ing—conducted the site visits to collect data from small systems. Norfolk Data, Inc. entered the
data into an electronic database.
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Executive Summary
ECUTIVE SUMMARY
Study Purpose
The U.S. Environmental Protection Agency
(EPA) conducted the 2000 Community Water
System (CWS) Survey to obtain data to sup-
port its development and evaluation of drinking water
regulations. EPA developed the survey database to
provide critical data to support regulatory development
and implementation. The Agency plans to use the data
for regulatory, policy, implementation, and compliance
analyses.
Regulatory Development Analyses. EPA must satisfy
the requirements of various statutes and regulations for
analyses of proposed regulations under the Safe Drinking
Water Act (SDWA). The survey provides data on water
system operations and finances that are critical to the
preparation of these analyses.
Policy Development Analyses. The survey is designed
to collect financial and operational data on the full range
of water systems to support a variety of policy and
guidance initiatives. EPA also uses the data to respond
to periodic requests from Congress, federal agencies,
and the public for information on the water supply
industry.
Regulatory Implementation Analyses. The survey
data, along with data from the Drinking Water Infrastruc-
ture Needs Survey, can be used to assess the financial
capacity of water systems in general, and of small systems
in particular.
Compliance Analyses. EPA may use the survey data to
develop profiles of operational and financial characteristics
for different types of water systems, which can be com-
pared to the Agency's database of compliance records in
the Safe Drinking Water Information System (SDWIS).
The objective of these analyses would be to identify
characteristics of systems that may lead to compliance
problems in the future. (The data from the survey will
not be used in any enforcement actions.)
Trends and Key Findings
Most of the operating characteristics of community
water systems are unchanged from 1976, when the
first CWS Survey was conducted. The vast majority of
systems are small and privately owned, but most
people still receive their water from large publicly
owned systems.
Nevertheless, there have been important changes since
the first survey was conducted. They include an
increase in the percentage of systems that treat their
water and an overall improvement in water system
financial performance. Key findings of the 2000 Survey
include the following:
• While systems continue to make substantial
capital investments to fund water quality im-
provements, totaling more than $50 billion over
the past 5 years, investment in treatment ac-
counts for only 22 percent of systems' total
capital investments. Among publicly owned
systems, 23 percent of investment was for treat-
ment. Sixteen percent of privately owned systems'
Storage
xpense
Source
Other
Treatment
Dist/Trans
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Community Water System Survey 2000
investment was for treatment. The largest share of
the investment went toward distribution mains
and transmission lines. Storage capacity
accounted for an additional 12 percent of the
total investment. The data suggest that differences
between publicly owned and privately owned
systems have more to do with size—publicly
owned systems tend to be larger—than with
ownership. (See page 18 and Volume II, Tables
69-78.)
The percentage of systems operating at a loss
declined for most size categories between 1995
and 2000. Overall, average revenue and expenses
increased by slightly more than inflation over the
past 5 years, although many systems witnessed
real declines in both revenue and expenses per
gallon. The percentage of systems operating at a
loss or with a deficit across all size categories is 30
percent, down from approximately 40 percent in
1995- (See page 36 and Volume II, Tables 46-66
for details on system revenue and expenses.)
The Drinking Water State Revolving Fund is an
important source of funds for capital improve-
ments. Although most of the money for capital
spending comes from other sources, the Drinking
Percentage of Capital Expenses Financed by the
Drinking Water State Revolving Fund, for Publicly
Owned Systems Serving up to 10,000 Persons
Population Served
Less than 500
501 -3,300
3,301-10,000
All Systems <500 - 10,000
Percentage
28%
35%
5%
19%
Water State Revolving Fund (DWSRF) has
become an important source of funds for the few
years it has existed. In the years of the program
included in this report, approximately 17 percent
of publicly owned systems relied on the DWSRF
to finance at least a portion of their capital
improvements. This includes systems that
received traditional DWSRF loans and systems
that received loans in which all or a portion of the
principal repayment is forgiven. Nearly 20
percent of all capital costs for publicly owned
systems serving populations of 10,000 or fewer
were financed through the DWSRF. (See page 18
and Volume II, tables 79-81.)
Percentage of Systems With Deficits or Losses
by Population Service Categories
11995
Publicly Owned Systems
50% n
45% -
40% -
35% -
30% -
25% -
20% -
15% -
10% -
5% -
0% -
2000
Privately Owned Systems
50%
45%
40%
35%
30% -
25% -
20% -
15% -
10% -
5% -
0%
11995
2000
<500 501-3,300 3,301- 10,001- >100,000
10,000 100,000
<500 501-3,300 3,301- 10,001- >100,000
10,000 100,000
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Executive Summary
The percentage of systems that provide treatment
rose between 1976 and 2000. This trend is
consistent with SDWA's emphasis on water
quality monitoring and treatment. By the time of
the 1996 Amendments to the Act, substantial
progress had been made in reducing the number
of systems that do not provide treatment. This
trend continued through 2000 among small
systems, but slowed among larger systems. The
end of the decline among larger systems may
suggest that they now have treatment in place.
(See page 35 and Volume II, Table 9.)
Very few small systems use increasing block rate
structures. Only 7 percent of systems serving
500 or fewer persons use an increasing block rate
to charge for water. Small systems are much more
likely to use uniform rates or to charge a flat fee
for water. Larger systems are more likely to use
increasing block rates, with over 25 percent of
systems serving more than 100,000 persons
using these rates. (See page 29 for further detail.)
Distribution Mains, by Age
Percentage of Systems That Use Increasing
Block Rates for Residential Customers
Population Served
Less than 500
501-3,300
3,301-10,000
10,001-100,000
More than 100,000
Percentage
7.0%
15.4%
13.4%
18.3%
27.5%
More than
80 Years
4%
40-80 Years
Less than
40 Years
While the total number of community water
systems increased between 1995 and 2000, the
number of small systems declined. The number
of systems serving populations of 100 or fewer
declined by 8 percent. The number of systems
serving more than 3,300 persons, on the other
hand, increased by 20 percent. (See page 35 for
further detail.)
Systems continue to invest considerable funds in
their distribution networks. Over the past 5 years,
systems replaced over 50,000 miles of the more
than 1.8 million miles of pipe in their networks,
at a cost of more than $4 billion. The pipe in the
ground is relatively new; most of it is less than 40
years old, while less than 5 percent is more than
80 years old. (See page 14 and Volume II, Tables
35-38.)
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Community Water System Survey 2000
Final Status of Systems Selected in 2000 CWS Survey
Population Served
Sample Selected
System merged with another system in sample
Ineligible system
Refusals and invalid responses
Received
Response Rate (percent)
• Below
500
394
1
26
28
336
85%
501-
3,300
209
0
0
0
207
99%
3,301-
10,000
296
0
1
127
168
57%
10,001-
100,000
510
3
1
222
284
56%
Over
100,000
397
2
2
142
251
63%
Total
1,806
1,246
Survey Methodology
This is the fifth edition of the CWS Survey. EPA
previously collected data in 1976, 1982, 1986, and
1995- As with past surveys, the Agency collected
information on the most important operational and
financial characteristics of community water systems.
EPA took steps to improve response rates, ensure
accurate responses, and reduce the burden of the
survey on systems, especially small systems serving
3,300 or fewer persons. EPA sent water system experts
from the Cadmus Group and 3 other companies to
collect data from small systems. It mailed the survey to
medium and large systems, and provided extensive
assistance through a toll-free telephone hot line.
EPA started the 2000 Survey in the summer of 1999
with the development of preliminary questionnaires
and a sampling plan. The survey was designed to
collect data for the year 2000. Full-scale data collec-
tion occurred from June to October 2001. The overall
response rate was 69 percent; 90 percent of small
systems selected participated in the survey.
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Introduction
NTRODUCTION
The U.S. Environmental Protection Agency
(EPA) defines a community water system as a
public water system that serves at least 15
service connections used by year-round residents or
regularly serves at least 25 year-round residents.
Community water systems are a tremendously diverse
group that resists being described in terms common to
all. They range from very small, privately owned
systems whose primary business is something other
than water supply (such as mobile home parks) to
huge, publicly owned systems serving millions of
people.
The unusual architecture of the Thomas Hill Standpipe in
Bangor, Maine (cover illustration) illustrates this
diversity and the difficulty of characterizing large
numbers of systems in more or less uniform groups.
The Thomas Hill Standpipe is hardly everyone's idea
of what a water storage facility should look like. Yet
distinguishing and unusual features are to be found in
water systems throughout the country. Because EPA is
charged with protecting the water quality of over
50,000 of these systems, the challenge of this report is
to describe water systems according to certain basic
characteristics while still recognizing their incredible
diversity.
EPA periodically collects information on the financial
and operating characteristics of the public water supply
industry to support the regulatory development process.
The Agency conducted the 2000 Community Water
System (CWS) Survey as part of this effort. EPA will use
the information from this survey to prepare Economic
Analyses (EAs) in support of regulatory development and
to analyze economic and operating factors that affect
national drinking water quality.
This report presents the information collected from the
2000 CWS Survey in two volumes. Volume I, the
Overview, provides perspective on the industry by
extrapolating the survey data to present a national picture
of water systems. It presents the data by system size,
ownership, and source of water. It also compares the 2000
data to similar data from the CWS Surveys of 1995,
1986, 1982, and 1976. Volume II, the Detailed
Report, summarizes the survey findings in a series of
tables that display national estimates of water system
characteristics with particular application to regulatory
development. Volume II also provides a detailed
methodology and copies of the survey instruments.
Background
The CWS Survey was designed to collect operating and
financial information from a representative sample of
community water systems. To reduce the survey's burden
on small systems, the data were collected from systems
serving 3,300 or fewer persons through site visits by
water system professionals. Systems serving more than
3,300 persons received questionnaires in the mail. Water
system professionals were assigned to each system that
received a mailed questionnaire to help the system
respond to the survey's questions. A toll-free telephone
number and an e-mail address also were provided to the
systems for technical support.
Planning and design of the survey began in the summer of
1999- Through a series of planning sessions, preliminary
versions of the survey instrument were developed. A
separate version of the questionnaire was developed for
systems serving more than 500,000 persons. These
systems were asked additional questions about concen-
trations of several contaminants in raw and finished
water and about average well depth. Questions that
would not apply to very large systems were excluded
from their version of the questionnaire. A pre-test of
the questionnaires was conducted in July 2000 to
gauge respondents' reactions to the draft question-
naires. This was followed by a full-scale pilot test in
April and May 2001. Two clusters of small systems
were selected for site visits and questionnaires were
mailed to 40 systems.
The 2000 Survey collected some new data. Detailed data
on source capacity were collected for the first time. New
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Community Water System Survey 2000
Summary of 2000 CWS Survey Questionnaire
Question
Number
Summary of Question
General Information
Contact information, including name, telephone number, and e-mail address of person completing the
questionnaire
Year for which operating and financial data are provided
Operating Information
System ownership
Form of government for publicly owned systems
Annual water deliveries, including unaccounted for water
Names of other water systems that purchased this system's water
Annual production, by source
Maximum water produced in a 24 hour period
System schematics
Data on water source by type, including daily production by source
Indicates whether system treats its water
Average daily production, peak production, and design capacity for system's treatment facilities
Treatment objectives
Treatment practices
Contaminant concentrations (asked only of systems serving more than 500,000 people)
Water treatment waste residual management
Treatment plant operators and SCADA
Water storage, including type of storage and capacity"
Distribution mains, including miles of pipe in place by diameter, miles replaced and its cost, and age of pipe
Number of connections and customers served, by customer class
Map of service area
Indicate whether system has a cross-connection control program
Indicate type of cross-connection control program
Indicate elements included in cross-connection control program
Financial Information
Water sales and water related revenues, by customer class
Non-water related revenue
Average annual water bill
Billing structure
Use lifeline rates
Water system expenses
Water system capital investment for previous 5 years
New information
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Introduction
Final Status of Systems Selected in 2000 CWS Survey
Population Served
Sample Selected
System merged with another system in sample
Ineligible system
Refusals and invalid responses
Received
Response Rate (percent)
• Below
500
394
1
26
28
336
85%
501-
3,300
209
0
0
0
207
99%
3,301- 10,001- Over
10,000 100,000 100,000
296
0
1
127
168
57%
510
3
1
222
284
56%
397
2
2
142
251
63%
Total
1,246
data on treatment were collected, including treatment
objectives and the management of water treatment
residuals. Data on contaminant concentrations were
collected for systems serving over 500,000 persons.
New information was collected on the type of storage
and its capacity, as well as elements of cross-connection
control programs.
The survey also collected system schematics and maps.
Some information collected in the past was not col-
lected in the 2000 Survey, including data about source
water protection, operator certification, and systems'
financial assets and liabilities.
The survey sample was drawn from the approximately
52,000 systems in the 50 states and the District of
Columbia in the Safe Drinking Water Information
System (SDWIS). The survey used a stratified random
sample design to ensure the sample is representative.
The sample was stratified to increase the efficiency of
estimates based on it. Systems were grouped based on
the populations they serve and their sources of water.
(Details of the sampling plan are provided in Volume
II.) To limit travel costs, systems serving up to 3,300
persons were selected in geographic clusters in a two-
stage design. A sample of 1,806 systems was selected,
including a census of all systems serving populations of
100,000 or more.
Full-scale data collection was conducted during the
summer of 2001. Site visitors were sent to approximately
600 small systems and questionnaires were mailed to
approximately 1,200 medium and large systems. Approxi-
mately 69 percent of the sampled systems responded to
the survey. The above table summarizes the final status of
the systems in the sample. Each completed questionnaire
was subject to a thorough review by senior water system
experts before being processed for data entry.
Data Presentation
Volumes I and II of the CWS Survey Report present
tabulations of the data collected by the CWS Survey.
In Volume II, the data are generally presented accord-
ing to eight service categories denoted by size. Systems
are assigned to each size category based on the popula-
tion served, either directly (i.e., retail customers), or
through the sale of water to other public water suppli-
ers (i.e., wholesale customers). The detailed size
categories are:
• 100 or fewer
101-500
501-3,300
3,301-10,000
10,001-50,000
50,001-100,000
100,001-500,000
More than 500,000
Systems serving up to 10,000 persons are considered
small. The eight size categories are different from the
categories used in 1995- The 1995 Survey split the 501-
3,300 category into two: 501-1,000 and 1,001-3,300.
The 1995 Survey also combined the 100,001-500,000
and greater than 500,000 categories. Volume I presents
data by fewer size categories:
• 500 or fewer
501-3,300
3,301-10,000
10,001-100,000
More than 100,000
These size categories support the Agency's various
analytic requirements, as discussed below. Data on
treatment plants also are presented by the average daily
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Community Water System Survey 2000
production, in millions of gallons. These data are
shown by seven size categories:
• 0.01 millions of gallons per day (MGD) or fewer
0.01-0.10 MGD
0.1-1.0 MGD
1-10 MGD
10-100 MGD
More than 100 MGD
Data tabulations also are presented according to
ownership (public or private) and primary water
source. Systems are classified based on their primary
source: ground water, surface water, or purchased
water. For example, a system is classified as a ground
water system if it receives more of its water from
ground water sources than from surface or purchased
sources. Because systems can have three sources of
water, some may receive less than one-half of their
water from their primary source.
Many of the tables in Volume II present the 95
percent confidence intervals for each cell in the table.
As discussed in Volume II, the confidence intervals are
relatively large in some cases, due to the diversity of
community water systems. Although characterizing the
overall level of precision is difficult due to the large
number of estimates provided and the diversity of
water systems, the sample generally met the precision
targets of the sampling plan. For example, the confi-
dence intervals for estimates of average revenue and
expenses is approximately ±10 percent of the average.
The estimated confidence interval for the portion of
systems providing treatment is approximately ± 5
percentage points. (See Volume II for a detailed
description of the sampling plan and precision tar-
gets.)1
EPA conducted the 2000 CWS Survey to determine
the current baseline of operational and financial
characteristics of the water supply industry, last
established by the 1995 CWS Survey. By comparing
the results of this survey with the 1995 survey, changes
in water industry operations and expenses since 1995
can be measured.
Regulatory Development Analyses
Before establishing new regulations, the Agency must
satisfy the analytic requirements of various statutes and
regulations including:
• Executive Order 12866.
• Paperwork Reduction Act (PRA).
• Regulatory Flexibility Act (RFA).
• Small Business Regulatory Enforcement Fairness
Act (SBREFA).
• Unfunded Mandates Reform Act (UMRA).
EPA is required by SDWA to specify best available
technologies (BATs) for the removal of drinking water
contaminants and must consider technologies that can be
afforded by different classes (i.e., sizes) of water systems.
Data from the CWS Survey will be useful when identify-
ing BATs for the removal of contaminants, conducting
affordability analysis, and developing affordability criteria.
The survey data will be used in a national-level
affordability criteria document.
In addition, the Agency must prepare EAs that detail the
national costs and benefits of all proposed regulatory
actions and alternatives under consideration. In
general, the CWS Survey data provide baseline infor-
mation that is critical to the preparation of the EAs.
Intended Uses of CWS Survey Data
The 2000 CWS Survey database was developed primarily
to provide the Agency with critical data to support its
regulatory development and implementation efforts. The
Agency last undertook this effort in 1995, and before
that in 1986, to coincide with the 1986 SDWA
Amendments.
The data presented in Volumes I and II are tabulated in Stata. The
calculations are carried out in a series of programs referred to as "do
files." EPA has these programs on file and will make them available
upon request.
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Introduction
Without an accurate baseline, changes imposed by
regulations cannot be measured. Analyses such as these
support EPA's estimates of the cost of complying with
new regulations. Toward this end, data will be used in
the development of the next edition of the Baseline
Handbook.
The CWS Survey also collected data on production
capacity, system storage capacity, pipe, population
served, connections, and treatment facilities to support
the development of SDWA burden estimates in
Information Collection Requests (ICRs).
The RFA and SBREFA require the Agency to demon-
strate that SDWA regulations do not impose unreasonable
economic and financial burdens on small businesses or
governments. The analyses required by the RFA and
SBREFA can be supported by many of the same CWS
Survey data elements as the EA and ICR analyses.
Policy Development Analyses
The diverse water systems in the CWS Survey database
provide financial and operational data that EPA can use to
support various initiatives to develop policies and guid-
ance for states and public water systems concerning the
implementation and enforcement of drinking water
regulations. These policy initiatives can involve, for
example, defining financial affordability (i.e., ability to
pay).
The Agency is continually engaged in efforts to provide
summary information and reports on the status of
regulatory development, implementation, and enforce-
ment activities. Further, the Agency is periodically
required to prepare a program-level ICR to document
the burden imposed on states, the water industry, and
federal agencies in implementing SDWA regulations.
The Agency also receives periodic requests from
Congress, federal agencies, and the public for informa-
tion on the water supply industry. The 2000 CWS
Survey provides current information on the water
industry to satisfy these efforts.
Regulatory Implementation Analyses
A critical issue for EPA to address under the 1996 SDWA
Amendments is whether the drinking water industry, and
small systems in particular, have the technical and
financial capacity to comply with SDWA regulations over
a sustained period. Small water systems face financial
problems and larger systems have potentially serious
.
EPA uses data from the CWS Survey to help determine if
SDWA regulations are affordable for small systems like the
Newport Water District (NWD) in Maine, which serves 1,800
people. Pictured are Thomas Todd, Superintendent, and Gary
Silvia, Trustee, of NWD.
financial concerns as regulatory compliance and infrastruc-
ture repair and replacement drive operating costs higher.
As a result, the Agency is assisting states and water
suppliers in building the necessary technical and
financial capacity. Congress has provided money to assist
the states and EPA in building additional capacity
through the Drinking Water State Revolving Fund for
public water systems. CWS Survey data, and data from
the Drinking Water Infrastructure Needs Survey, may be
used to assess the ability of the water industry to finance
infrastructure investments.
Compliance Analyses
The Agency is engaged in several efforts to upgrade
and expand its water industry databases. One intended
use of the CWS Survey database is to support the
development of operational and financial profiles for
different types of water systems, which can be statisti-
cally correlated with the Agency's compliance records
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Community Water System Survey 2000
in SDWIS. The objective of this analysis is to identify
the operational and financial characteristics that may
result in future compliance problems. EPA can then
develop guidance to target systems that may exhibit
these characteristics. (While the data will support analyses
of compliance issues, they will not be used in any
enforcement action.)
Organization of the Report
This report has two volumes. Volume I presents an
overview of the data and the key findings of the survey.
It is composed of an Executive Summary, which
summarizes the key findings and highlights of the
survey results, and three chapters:
• Chapter 1. Introduction. Chapter 1 describes
the background, purpose, survey methodology,
intended uses, and the organization of the overall
report.
• Chapter 2. National Projection Summary.
Chapter 2 provides an aggregate perspective on
basic water industry demographics and operational
and financial characteristics of the industry. It
presents a national profile of water systems, their
customers, and their operating and financial
characteristics.
• Chapter 3. Key Findings and Trends. This
chapter discusses the principal findings of the
CWS Survey. It summarizes the operational and
financial survey findings and compares them to
the 1995, 1986, 1982, and 1976 Surveys.
Volume II presents a detailed summary of data col-
lected in the CWS Survey. No narrative descriptions
accompany these tabulations. The results are divided
between operating and financial characteristics. The
order of presentation generally corresponds to the
order and organization of the survey questionnaire. The
tables on system operation generally track the movement
of water through the system, presenting data on
source, then treatment, storage, distribution, and
cross-connection control. The financial tables present
data on revenue, billing rates and structure, expenses,
and capital expenditures.
Volume II also describes in detail the survey methodol-
ogy. It provides information on sample design and
weighting, the small system site visits, the mail survey,
and quality assurance. Copies of the survey question-
naires are supplied in an appendix.
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National Projections Summary
ECTIONS
SUMMARY
The 2000 CWS Survey collected operational and
financial data for a representative, but diverse
group of water systems. The systems rely on
various sources of water, use a number of treatment
practices, and serve populations of various sizes and
customer classes. They face a variety of financial
challenges. This chapter presents an overview of the
operations and finances of these systems, providing a
broad description of the water industry. Using data
from the sample, industry totals are presented in order
to establish themes and patterns that will be explored
in greater detail in Chapter 3-
Population Served*
System Type
Community Water
Systems
Nontransient Non-
community Water
Systems
Transient
Non-community
Water Systems
oystems
Number
53,410
20,334
93,041
Percentage
of Total
32.0%
12.2%
55.8%
Population
Served
(in millions
of persons)
258.5
6.8
12.9
*Data from Factoids: Drinking Water and Ground Water Statistics for 2000,
EPA 81 6-K-01 -004, June 2001 . Excludes systems in the Commonwealths
and Trust Territories.
Water System Profiles
Nearly 170,000 public water systems provide water to
over 258 million people throughout the United States,
according to the latest inventory of systems. Public
water systems include community and non-commu-
nity water systems.
The survey estimates there are 52,186 community
water systems in the 50 states and the District of
Columbia, which is consistent with the latest inven-
tory data. (The differences imply some systems in the
current inventory may not be active community water
systems. See Table 1 in Volume II for additional detail on
the estimated number of community water systems. The
survey's estimate of the population served by community
water systems also is slightly lower than the current
inventory data, as will be shown below.) Nearly 70
percent of public water systems are non-community
systems, but the vast majority of people are served by
community water systems. This is essentially unchanged
from 1995-
Because community water systems provide the most
exposure to risks from contaminants, they are the focus
of this survey. The tables that follow, and the data re-
ported in Volume II, deal only with community water
systems.
Water Source, System Ownership, and
System Size
The water industry in the United States is characterized
chiefly by its diversity. It includes publicly owned
systems, private for-profit and not-for-profit systems,
and systems that provide water only as an ancillary
function of their primary business. It includes systems
serving as few as 25 persons and relying largely on
ground water, to large wholesalers that provide treated
surface water to several million customers.
There are many ways to classify water systems. EPA
regulatory analyses categorize systems by the source of
water, ownership, and size of the population served.
Source water characteristics are used in EPA analyses to
account for operational configurations, potential
sources of contamination, regulatory requirements, and
costs associated with different water quality conditions.
The Agency takes water system ownership into account
when estimating the potential cost impacts of drinking
water regulations. Publicly and privately owned
systems differ in rate structure, sources of funds for
capital improvements, source of water used, and size of
service population. The size of the population served
by a system affects the quantity of water needed; it also
affects production requirements, treatment practices,
-------
Community Water System Survey 2000
Percentage of Community Water Systems,
by Primary Source of Water
Primarily
Purchased Water
Primarily
Surface Water
operations, and financial capacity. Water production
tends to involve large fixed-costs, so water systems
typically exhibit economies of scale as their service
populations increase. Thus, the unit cost of providing
water varies according to system size.
Nearly 75 percent of the nation's community water
systems rely primarily on ground water. Almost 11
percent rely primarily on surface water, while the
remaining 15 percent purchase either raw or treated
water as their primary source.
Fifty percent of all water produced by systems comes
from surface sources, including flowing streams, lakes
and reservoirs, and ground water under the direct
influence of surface water (GWUDI). Approximately
two-thirds of surface water comes from lakes or reser-
voirs. An additional 31 percent comes from flowing
streams, and 1 percent is GWUDI.
Percentage of Community Water Systems,
by Ownership
Twenty percent of water is purchased. Over 75 percent
of the water purchased is treated. The remaining 30
percent of the water produced by systems comes from
ground sources. The ground water is drawn from more
than 105,000 wells that feed into approximately
88,000 entry points to the nation's distribution
systems. (Table 2 in Volume II provides further detail
on the number of systems by water source.)
Community water systems are evenly split between
public and private ownership. The overwhelming
majority of publicly owned systems are owned by
towns, cities, counties, or other forms of local govern-
ment. Of the 51 percent of systems that are privately
owned, 27 percent are run as for-profit businesses and
34 percent are not-for-profit entities. Approximately
39 percent of privately owned systems, or 20 percent
Percentage of Water Produced by Source
GWUDI
1%
Percentage of Private Community Water
Systems, by Type
Ancillary
39%
For Profit
27%
-------
National Projections Summary
System Ownership by Primary Source of Water
Ground
Surface
Purchased
Public Private
of all systems, are ancillary systems (i.e., systems whose
primary business is not water supply but who provide
water as an integral part of their principal business).
These systems tend to serve small populations, pro-
duce smaller quantities of water, and often do not bill
customers separately for water. (See Table 3 in Volume
II for further detail on system ownership.)
Most systems that rely mainly on surface or purchased
water are publicly owned. Publicly owned systems are
Community Water Systems, by Ownership
and Population Service Categories
501-3,300 3,301-10,000 10,001-100,000 >100,000
also more likely to rely primarily on purchased or
surface sources.
The vast majority of water systems are relatively small;
systems that serve 3,300 or fewer persons account for
83 percent of all water systems. Ten percent of systems
serve 3,301 to 10,000 persons. Systems serving more
than 100,000 persons account for less than 1 percent
of all community water systems. Yet, most people get
their water from large systems, as will be shown in the
60.0%
0.0%
Community Water Systems Connections vs. Systems
by Population Service Categories
55.8%
58.8%
Systems Connections Population
<500
501-3,300 3,301 - 10,000 10,001 - 100,000
Population Served
>100,000
-------
Community Water System Survey 2000
next section. And because publicly owned systems
tend to be larger, most people get their water from
publicly owned systems. In fact, many of the differ-
ences between publicly and privately owned systems
may be due to scale, rather than ownership, since most
small systems are privately owned.
Water System Production, Customers, and
Connections
According to the survey,
community water systems
directly serve more than 254
million individuals. They
serve nearly 75 million
customer connections, 91
percent of which are for
residential customers. Be-
cause most connections are
residential, the number of
connections and the popula-
tion served are correlated.
The balance are commercial,
industrial, or other nonresi-
dential connections. Many
systems sell water wholesale
to other public water suppli-
ers. Some systems both buy and
Total Water Production by Ownership
Private
sell water.
While systems serving more than 100,000 persons
comprise less than 1 percent of all systems, they
provide water to nearly 40 percent of the customer
connections. On the other hand, more than one-half of
all community water systems serve fewer than 500
persons, but they provide water to less than 3 percent
Retail Connections, by Customer Class
Nonresidential
of all service connections. (Table 4 in Volume II
provides detail on water production by system size and
primary source of water.)
Wholesale deliveries account for more than one-quarter
of all water delivered. The remaining deliveries are for
residential and nonresidential retail customers. Resi-
dential customers account for two-thirds of retail water
deliveries, and nonresiden-
tial customers account for
the balance. Commercial
and industrial customers
receive 39 percent of the
nonresidential retail water
deliveries, or 13 percent of
all retail deliveries. Agricul-
tural and other customers
receive the balance of the
nonresidential retail deliver-
ies. (See Table 41 in Volume
II for further detail on retail
water deliveries.)
Systems deliver 119,000
gallons annually per resi-
dential connection, or
approximately 325 gallons
per day. While residential customers are the majority
of all connections, each customer (not surprisingly)
receives far less water than each nonresidential custom-
er. Nonresidential customers receive 618,000 gallons
annually, or nearly 1,700 gallons per day. Despite the
fact that nonresidential customers comprise only 9
percent of all connections, they consume more than
one-third of the water delivered.
Retail Water Deliveries, by Customer Class
(Excludes Wholesale Deliveries)
-------
National Projections Summary
Total production of all community water systems is
approximately 51 billion gallons per day, including
unaccounted for water. (Unaccounted for water in-
cludes system losses, water consumed in the treatment
process, fire fighting, and other uncompensated usage.)
Systems that rely primarily on surface sources account
for just over 50 percent of production. Large systems
produce almost two-thirds of the water. Most large
surface water systems are publicly owned, so it is not
surprising that publicly owned systems produce much
of the nation's drinking water; public systems, of all
sizes and sources, account for 91 percent of all water
production, more than 18 trillion gallons per year.
Operational Summary
Water Treatment
Water is treated in a plant or facility. For this report, a
treatment plant or facility is any location where the
water system takes steps to change the quality of the
water. It includes standard plants that are clearly
recognized as treatment facilities, such as conventional
filtration plants. It also includes smaller facilities that
may not be considered treatment plants in other
contexts; for example, a chemical feed on a well that
adds chlorine to the water is considered a treatment
plant in this report. There is one exception to the
general rule that all points where the system makes
changes to the water is a treatment facility. Systems
may boost disinfection or adjust pH within their
distribution system; these sites are not counted as
treatment facilities.
CI2
_L
Well
CI2
Well Field
The 2000 CWS Survey
collected detailed
information on system
operations. These data
will enable the Agency
to identify operational
differences among
systems and to develop
an up-to-date character-
ization of water systems
throughout the indus-
try. The survey collected
operational data from
source-to-tap: data were
collected on the quanti-
ties of water produced
by source for each entry
point to the distribu-
tion system, including
capacity information by
well, intake, and points
of purchase; treatment
objectives and practices;
treatment facility
capacity; treatment
residual management;
and storage and distri-
bution capacity. De-
tailed schematics of
treatment plants and the systems were collected as
well. Water treatment is often complex, and the
schematics provide detailed information about the
operation of the facilities in the sample. A sample of
schematics, for ground water and surface water plants
of several sizes, is provided in Appendix A.
Examples of Chlorination Schematics
Distribution System
Distribution System
CL
Wells within
the distribution
system
CI2
I I / / I
Distribution System
Seventy-one percent of
all water systems treat
all or some of their raw
water. This includes
systems that purchase
all of their water, most
of which purchase
treated water and do
not provide additional
treatment. Eighty
percent of systems that
have their own sources
of water provide some
treatment, from simple
disinfection to complex
filtration plants. More
than 99 percent of
systems that rely on
surface sources for at
least a portion of their
water treat the water.
Most ground water
systems provide
treatment as well, but
most of the systems
that do not treat water
are ground water
systems: of the systems
that do not provide treatment and do not purchase all
of their water, 88 percent rely solely on ground water.
(Table 9 in Volume II provides additional detail on the
percentage of systems not providing treatment.)
-------
Community Water System Survey 2000
Percentage of Plants with Eac.
Treatment Objective
Ground Water Surface Water
Plants Plants
Algae Control
1%
34%
Corrosion Control
26%
58%
Disinfection
98%
99%
Oxidation
11%
21%
Iron or Manganese
Removal/Sequestration
45%
32%
Fluoridation
21%
49%
Taste and Odor
8%
49%
TOC Removal
1%
31%
Particulate/Turbidity
Removal
9%
86%
Organic Contaminant
Removal
2%
19%
Inorganic Contaminant
Removal
4%
17%
Radionuclides
Removal
2%
5%
Other
15%
18%
Treatment Objectives and Practices
Treatment plants are designed to meet many objec-
tives. Ninety-eight percent of the nation's treatment
plants are designed to disinfect water. Forty-three
percent are designed to either remove or sequester iron
or manganese, and 31 percent are designed for corro-
sion control. Twenty-three percent are designed for
particulate or turbidity removal. Although the addi-
tion of fluoride is not designed to improve the safety of
water, 25 percent of the plants add fluoride.
There are important treatment objective differences
between plants treating ground water and plants
treating surface water. For example, ground water
plants are more likely to treat for iron or manganese
removal or sequestration than surface water plants.
Eighty-six percent of plants treating surface water are
designed to remove particulates or turbidity, compared
to less than 10 percent of systems treating ground
water. Twice as many surface water plants are designed
for corrosion control. (See Tables 19 and 20 for addi-
tional details on treatment plant objectives.)
Water systems use many different practices to achieve
their treatment objectives. Processes include chemical
addition, coagulation/flocculation, settling and sedimenta-
tion, filtration, membranes, and softening. To charac-
terize the various treatment practices, each plant in the
sample was assigned to one of several treatment trains,
from the relatively simple to the very complex. (Ap-
pendix A provides detailed definitions of each scheme.)
Fifty-five percent of plants that solely treat ground
water only disinfect. At the other end of the spectrum,
35 percent of surface water plants use conventional
filtration similar to the schematic on the next page. A
conventional filtration plant like the one depicted may
use as many as 9 steps, including pre-disinfection,
flocculation, sedimentation, filtration, post-disinfec-
tion, and clearwell to provide contact time for the
disinfectant. In the schematic shown, the plant disin-
fects with chlorine after filtration. Other conventional
filtration plants may add chlorine or other disinfec-
tants at this or other points in the process. Schematics
of each of the treatment trains are provided in Appen-
dix A. (See Tables 21-26 in Volume II for further
information on treatment practices.)
Treatment Residual Management
The cost of disposing of treatment residuals is an
important component of treatment costs and must be
included in evaluations of treatment requirements.
Treatment practices produce a range of residual wastes,
including brines, concentrates, and spent media.
Systems have several options for disposing of residuals,
including land application, direct discharge to surface
water, or discharge to sanitary sewers. Just over 30
percent of surface water systems, most of them larger
systems, dewater their treatment residuals. Ground
water systems, on the other hand, rarely dewater.
Surface water systems also are more likely to rely on
direct discharge than ground water systems, reflecting
their proximity to surface water and the type of
treatment they use. Only 16 percent discharge to
Percentage of Plants Using Various
Treatment Schemes
Treatment Practice
Disinfection Only
Disinfection and
other Chemical
Addition Only
IX, AA, Aeration
Filters
Direct Filtration
Conventional
Filtration
Membrane Filters
Softening
Ground Water
Plants
55%
16%
14%
8%
0%
0%
0%
6%
Surface Water
Plants
11%
1%
4%
12%
14%
35%
2%
21%
-------
National Projections Summary
Surface Water
Coagulation/
Flocculation
Sedimentation
Filtration
Distribution System
sanitary sewers. While this is one-half the share of
plants that use evaporation ponds, more than three-
quarters of plants that have access to sanitary sewers
rely on them for disposal of liquid waste. (See Tables
29-32 in Volume II for more detail.)
Operators and SCADA
Twenty-two percent of facilities treating only surface
water have an operator on site 24 hours a day, 7 days a
week (or "24/7")- The larger the system—and the
larger the plant itself—the more likely an operator is
on duty 24/7; 80 percent of surface water plants in
systems serving more than 50,000 persons—and more
than 95 percent of the plants in systems serving more
than 500,000 persons—have operators on duty around
the clock. All surface water plants that produce at least
100 million gallons of water a day
have 24/7 operators. Ground water
systems are far less likely to have an
operator on duty at all hours, in
part because they are less likely to
be run around the clock. Less than
2 percent of all plants treating only
ground water have 24/7 operators;
it is more common among larger
plants, but no more than one-half
of the largest systems and plants
have operators on duty 24/7-
(Tables 15 and 16 in Volume II
provide additional information on
system operators.)
treat ground water and do not have around-the-clock
operators use SCADA for process monitoring; 14
percent use it for process control. The percentages are
double for surface water plants. For both ground water
and surface water plants, large plants and plants in
larger systems are more likely to use SCADA than
small plants or plants in smaller systems. (See Tables
17 and 18 in Volume II for additional detail.)
Storage
Water storage is an integral component of a water
system. In addition to providing a cushion against
fluctuations in demand, storage often is required to
provide contact time for disinfectants. In this context,
not all storage is equal; clearwell and storage with
dedicated inlets and outlets will provide contact time,
Many of the plants have Supervi-
sory Control and Data Acquisition
(SCADA) systems for either process
monitoring or control. Plants that
do not have around-the-clock
operators may use SCADA to
monitor or control their systems
when the operator is not on site.
Nineteen percent of the plants that
pe of Water Storage, by Source of W
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ground Water
Surface Water
Purchased
Within distribution system
Dedicated inlet and outlet before distribution
Common inlet and outlet before distribution
Clearwell
-------
Community Water System Survey 2000
Distribution Mains, by Age
More than
80 Years
4%
40-80 Years
Less than
40 Years
but storage that "rides the line" (i.e., with a common
inlet and outlet) may not.
Systems of all sizes that rely primarily on surface water
are more likely to have clearwell storage than are ground
water systems. Surface water and ground water systems
are more likely to use storage that has dedicated inlets and
outlets than storage that rides the line. Surface water
Systems replaced over 50,000 miles of pipe in the past 5
years, at a cost of over $4 billion.
systems tend to have greater storage capacity, because
ground water systems often do not need storage. All
systems tend to have the majority of their storage
within their distribution systems, but purchased
systems have a larger share than surface and ground
water systems. (See Tables 33-34 in Volume II for
further detail on water storage.)
Distribution and Cross-Connection Control
Buried infrastructure often is the largest component of
a community water system's asset inventory. Water
systems maintain more than 1.8 million miles of
distribution mains, of which more than 60 percent is
less than 6 inches in diameter. Nearly 80 percent of
distribution mains are less than 40 years old; 4 percent
are more than 80 years old. The older pipe tends to be
in larger systems. Systems replaced over 50,000 miles
of pipe in the past 5 years, at a cost of over $4 billion.
The cost per mile of pipe replaced increases with
system size; larger systems tend to be urban and in
northern areas, where population density and frost
tend to increase the cost of maintaining and replacing
water mains.2 (See Tables 35-38 in Volume II for
detailed information on distribution systems.)
To protect their distribution systems against backflow,
approximately 43 percent of all water systems have
cross-connection control programs. Larger systems are
more likely to have a program: more than 90 percent
of systems serving more than 100,000 persons have
programs, compared to only 26 percent of systems
serving up to 500 persons. Public systems are more
likely to have programs, largely due to their size; the
percentage of public and private systems with cross-
connection control programs is similar for systems
serving populations of similar size.
More than 75 percent of the systems that have cross-
connection programs provide protection up to the tap.
The 1999 Drinking Water Infrastructure Needs Survey collected
data on the length of pipe systems expect to replace in the next 20
years and the estimated cost of that pipe. Data from both the Needs
Survey and the CWS Survey can be used to estimate the cost per mile
of pipe. The cost per mile of pipe replaced is a good deal higher in the
Needs Survey than in the CWS Survey. There are important
differences in the information collected by the two surveys that
account for some of the difference. The main difference is the time
period covered by the surveyes. The CWS Survey asks about pipe
replaced in the past five years, and the Needs Survey asks about plans
to replace pipe in the next 20 years. Sampling error also explains some
of the difference; systems that responded to both surveys report
similar cost per foot, while systems that did not provide data for both
surveys report very different costs per foot.
-------
National Projections Summary
These programs are called isolation programs. They are
designed to prevent backflow from reaching the
distribution system and provide protection within the
consumer's premises. This is in contrast to programs that
provide protection up to the meter; these containment
programs prevent backflow from reaching the distribu-
tion system, but do not provide protection within the
customer's premises. (See Tables 43-45 in Volume II
for more details about the cross-connection control
programs.)
Financial Summary
EPA needs an accurate assessment of community water
systems' finances to gauge the ability of these systems
to make the technical and capital investments required
for sustainable water operations. The survey asked
systems to provide basic information on their annual
revenue and expenses. It also requested data on the
type of capital investments made over the previous 5
years and the source of funds for the investments.
Revenue and spending data cover a single year, which
limits the Agency's ability to draw general conclusions
about the financial well-being of the industry. As with
the 1995 Survey, the data are intended to provide a
snapshot of the water industry. Also, the diverse nature
of water systems is reflected in their accounting
systems and financial reports. Two systems with similar
finances may report them differently, depending on
their type of ownership and accounting practices. To
facilitate comparisons across systems (as well as to limit
the burden of the survey on respondents), the financial
data were collected at a relatively high level of aggrega-
tion and were subjected to thorough review.
Summary of Revenue and Expenses
Most water system revenue comes from the sale of
water. Systems also generate revenue through non-
consumption-based charges, such as connection and
inspection fees, fines and penalties, and other fixed
charges. Some publicly owned systems also may receive
payments from a municipal general fund. (On the
other hand, some municipalities may use water system
revenue to fund other activities.)
Water system revenue in 2000 was $39 billion, 89
percent of which was earned by publicly owned
systems. Water system expenditures totaled $32
billion, with publicly owned systems accounting for
Water System Annual
Revenues and Expenses
(Billions of Dollars)
Water System Annual Annual
Ownership Revenue Expenses
Publicly Owned
Privately Owned
All Systems
34.5
4.3
38.8
29.1
3.1
32.2
90 percent of water systems' expenditures. These
aggregate figures mask important differences among
systems; while revenue exceeds expenditures for the
industry as a whole—and, as will be shown, for most
systems—revenue for some systems lags expenditures.
(See Tables 46-49 and 59-61 in Volume II for further
data on total revenue and expenses.)
Water systems earn revenue from water sales, fees, fixed
charges, and other water-related revenue. Water sales
revenue is based on a charge per unit of water sold.
Residential customers provide the majority of water sales
revenue for community water systems in all size categories.
-------
Community Water System Survey 2000
Customer Type
3,300 10,000 100,000 100,000
Residential
89.3%
83.5%
73.6%
67.1%
49.8%
Commercial/Industrial
6.8%
1 1 .3%
18.6%
21.1%
20.7%
Wholesale
1.1%
2.0%
4.3%
7.4%
24.6%
Other
2.8%
3.3%
3.5%
4.4%
4.9%
Total
100.0% 100.0% 100.0% 100.0% 100.0%
Water-related revenue consists of development fees,
connection fees, fines, and other payments unrelated to
the quantity of water sold. In 2000, water sales were
$33 billion, or 85 percent of total water revenue.
Private systems depend slightly more heavily on water
sales than public systems—over 95 percent of private
system revenue comes from water sales, compared to
85 percent for publicly owned systems.3
Residential customers provide 60 percent of water sales
revenue across systems of all sizes. Commercial and
industrial customers account for an additional 20
percent of water sales revenue, and wholesale revenue
comprises 17 percent of the total. Smaller systems
depend more on residential customers for revenue than
do larger systems. Close to 90 percent of water sales
revenue for the smallest systems come from residential
sales. On the other hand, residential sales account for
less than 50 percent of water sales revenue in systems
serving more than 100,000 persons. Systems serving
more than 100,000 persons typically derive a higher
proportion of total revenue from commercial and
industrial customers than do smaller systems. (Because
ancillary systems often do not charge directly for water,
they are excluded from this analysis. See Table 52 in
Volume II for more detail.)
Water System Revenue, by System Ownership
100% -
90% -
80% -
70% -
60% -
50% -
40% -
30% -
20% -
10% -
0% -
$0.2 B
Public
Private
Water-Related Revenue
Water Sales
Note: the sum of water sales and water-related revenue in the
following table does not match total water revenue in the previous
table because some systems could not distinguish between sales and
water-related revenue and only reported their total revenue. (Tables
50 and 51 in Volume II provides additional detail on sources of
revenue.)
Non-residential customers, such as this bottling plant,
provide 20% of all systems' water sales revenue. Systems
serving more than 100,000 persons typically have higher
commercial and industrial revenues than smaller systems.
-------
National Projections Summary
Total Expenses, by Type of Expense
Operating Expenses by Component
Other
Debt Service
Operating
Expenses
3%
Contractors
Although residential customers are the source of most
water system revenue, non-residential connections
generate considerably more income per connection.
On average, nonresidential customers pay $1,686 per
year, compared to $302 for residential customers. The
difference is driven largely by the larger volume of
water consumed by nonresidential customers. Addi-
tional detail on the average charge per connection and
per thousand gallons of water delivered by system is
provided in Chapter 3- (See
Tables 53-57 in Volume II
for additional detail.)
is for employee compensation, including salaries and
benefits, and payments to contractors. The balance is
for other routine operations and maintenance (O&M).
Systems employ 213,000 staff members, including
part-timers. They also employ 13,000 employees
through contractors hired to operate the systems. (This
does not include contractors hired for specific tasks,
e.g., electricians hired to fix electrical problems. See
Tables 67-68 in Volume II.)
Water systems spent $32.2
billion in 2000 on the
production and delivery of
water. Routine operations
and maintenance ac-
counted for 70 percent of
all expenses, or $21 billion.
Debt service—interest and
principal on past loans—
totalled $6 billion, or 20
percent of total expenses.
Other expenses, including
non-routine expenses and
capital investments, make
up the balance of spending.
(Table 62 in Volume II
provides additional detail
on expenses by category.)
Thirty-eight percent of
routine operating expenses
Water System Expenses
by Population Service Categories
(Dollars in Millions)
$16
$131 $168 $646 $2,134
in
<500
501-3,300
3,301-
10,000
10,001-
100,000
>100,000
O&M
Debt Service
Other
-------
Community Water System Survey 2000
Larger systems account for the bulk of water system
expenses. O&M accounts for a smaller share of ex-
penses as the population served increases; bigger
systems devote more of their expenditures to debt
service and other expenses (which includes capital
expenditures). As a share of total expenses, debt service
for systems serving more than 100,000 persons is twice
that of the smallest systems. The share of total expen-
ditures devoted to "other expenses" is three times larger
in systems serving more than 100,000 persons than it
is in systems serving fewer than 500.
Capital Spending
Water systems made nearly $53 billion in capital
investments in the 5 years leading up to the survey, or
more than $10 billion annually. Spending on distribu-
tion mains and transmission lines accounted for 48
percent of all capital investments over this period.
Treatment accounted for an additional 20 percent, and
storage another 11 percent.4 Spending for land, source
development, and other investments accounted for the
rest of the investments.
Sources of Funds for Investment in Drinking Water Infrastructure for the Nation
Population Served
Current Revenues
DWSRF Loans
DWSRF Principle Repayment Forgiveness
Other Government Loans
Other Government Grants
Borrowing from Private Sector
Other
Below
13%
15%
13%
12%
40%
5%
2%
501-
27%
23%
11%
15%
11%
11%
2%
3,301-
34%
4%
1%
17%
14%
26%
4%
10,001-
100,000
47%
4%
1%
17%
5%
25%
1%
Over
100,000
37%
2%
0%
1%
1%
58%
1%
All
Systems
39%
4%
Privately Owned Systems
Current Revenues
DWSRF Loans
DWSRF Principle Repayment Forgiveness
Other Government Loans
Other Government Grants
Borrowing from Private Sector
Other
56%
0%
0%
1%
8%
12%
23%
63%
0%
0%
8%
15%
12%
2%
36%
0%
0%
2%
12%
46%
4%
28%
3%
0%
7%
8%
52%
1%
50%
4%
0%
3%
0%
43%
0%
41%
Current Revenues
DWSRF Loans
DWSRF Principle Repayment Forgiveness
Other Government Loans
Other Government Grants
Borrowing from Private Sector
Other
23.2%
1 1 .3%
9.9%
9.7%
32.3%
6.6%
7.1%
33.5%
19.3%
9.1%
13.5%
1 1 .4%
11.1%
2.1%
34.2%
3.8%
0.5%
15.4%
13.5%
28.8%
3.9%
45.1%
3.7%
0.8%
15.7%
5.6%
27.9%
1 .2%
37.7%
2.1%
0.1%
1 .0%
1 .2%
57.1%
0.7%
39.1%
3.9%
7.7%
5.0%
41.9%
Systems were asked to report the amount of funds invested in treatment, as well as land, water source, distribution networks, etc. They also
were asked to report the percentage of their total capital investment that went towards water quality improvements, system expansion, and
replacement or repairs. Spending on treatment and water quality improvements is not identical. Some investment in treatment may be
considered spending on water system expansion, system replacement, or repair. Also, spending on items other than treatment, such as the
distribution network, may be counted by systems as water quality improvements.
-------
National Projections Summary
Type of Capital Expense
by Ownershii
Publicly Owned Systems
Land
Privately Owned Systems
Other
2%
Source
Storage
Treatment
Other
Land
1%
Source
Dist/Trans
Treatment
Dist/Trans
Borrowing from the private sector funded 42 percent
of the investments, while current revenue funded 39
percent. The Drinking Water State Revolving Fund
(DWSRF) program is an important sources of funds
for small systems; half of DWSRF assistance went to
systems serving populations of 10,000 or fewer,
financing 20 percent of their capital investments. This
includes loans in which all or a portion of the principal
repayment is forgiven. (These data are for the first
three years of the DWSRF program, 1997 through
2000. See table 81 in Volume II for details on capital
expenditures.)
The table on page 18 estimates the percentage of total
capital investment in the nation that is financed by
each source of funds. In contrast, Chapter 3 presents
estimates of the percentage of capital investment
financed by each funding source for the average
system. Because systems invest different amounts, the
distribution of the source of funds for the nation in the
aggregate will be different from the average system. By
way of example, consider two systems. The first invests
$10,000 in its infrastructure. It finances 50 percent of
the investment from current revenue, and the other 50
percent through borrowing from the private sector.
The second system invests $100,000 in its infrastruc-
ture and relies on private-sector borrowing for 100
percent of the funds. Ninety-five percent of the capital
investment of these two systems is financed by private-
sector borrowing ([0.5*$10,000 + 1.0*$100,000]/
[$10,000 + $100,000]). This is equivalent to the
results reported in this chapter. On the other hand,
the two systems on average rely on private-sector
borrowing for 75 percent of the funds for their capital
investments ([50% + 100%]/2). This is equivalent to
the results reported in Chapter 3-
Conclusions
The drinking water industry is large and capital
intensive. Water systems spend over $30 billion
annually to provide water to more than 250 million
persons, and invest more than $10 billion annually in
infrastructure. They rely on a range of water sources and
treatment practices. The summary measures presented in
this chapter provide an overview of the industry as a
whole; the tables in Volume II provide detailed informa-
tion at a system and treatment facility level. The tables
provide a sense of the diverse nature of the industry by
highlighting differences by system size, ownership, and
water source. The tables in Volume II also show a 95
percent confidence interval for most estimates; these
intervals often are relatively large, which also reflects
the diverse nature of the systems.
-------
Community Water System Survey 2000
Profile of Community Water Systems
There are 52,186 community water systems in the 50 states and the District of Columbia that supply water to
nearly 260 million persons. They consist of publicly owned systems, privately owned systems, and systems
that provide water only as an ancillary function of their principle business. Most systems rely primarily on
ground water sources. The great majority of systems also serve 3,300 or fewer persons. However, most
people get their water from large, publicly owned systems that rely primarily on surface water.
Community Water Systems:
By Ownership
Public 25,510
Private 16,302
Ancillary 10,374
By Water Source
100 Percent Ground Water 35,308
Mostly Ground Water 3,280
100 Percent Surface Water 4,595
Mostly Surface Water 1,024
100 Percent Purchased Water 6,933
Mostly Purchased Water 1,046
By System Size
25-500 29,119
501-3,300 14,017
3,301-10,000 5,052
10,001-100,000 3,484
100,000+ 514
-------
Key Findings and Trends
FINDINGS AND TRENDS
This chapter provides a more detailed discussion
of the system-level results of the 2000 CWS
Survey. The first part of the chapter describes
key findings of the survey. The second part compares
the results of the 2000 Survey with previous surveys.
In both parts, system operations are described first,
followed by system finances.
Key Findings
Operating Characteristics
The essential functions of a water system are the produc-
tion and delivery of drinking water. Some community
water systems have very sophisticated treatment facilities
designed to treat several million gallons of surface water
daily. Others have only one or two wells, provide little
or no treatment, and serve small populations. Still
other systems purchase all of their water from large
wholesalers, who sell no water directly to consumers.
The following table summarizes the treatment produc-
tion and storage capacities of primarily ground water
and primarily surface water systems. Surface water
systems tend to have larger average daily flows and
peak demands, as measured by average daily produc-
tion and peak daily production. As discussed in
Chapter 2, surface systems tend to be larger; but even
among systems of equivalent size, surface systems tend
to treat more water, which reflects the treatment needs
of surface water. (See Tables 5, 13, 14, and 34 in
Volume II for additional details.)
One important difference among water systems is the
extent to which they have excess capacity. One measure
of excess capacity is the ratio of the total amount of
water a system can treat daily, known as system design
capacity, to the maximum amount of water it needs to
produce in a day, i.e., the peak daily capacity. The
ratio of design-to-peak capacity is inversely related to
system size. The assumption is that larger systems tend
to be more efficient. Demand is also assumed to be
more stable in larger systems; in a small system, a
relatively small change in demand can require a
significant change in production.
The results of the 1995 Survey indicated that the design-
to-peak ratio also is a function of the source of water: the
treatment and storage requirements associated with
ground water and surface water affect the ratio of
design-to-peak treatment capacity. This result is
confirmed in the 2000 data. Ground water systems
tend to have larger design capacities, despite their
lower treatment flows. Ground water systems gener-
ally rely on additional pumping and treatment capac-
ity to meet peak demands. Surface water systems, on
the other hand, generally use more capital-intensive
treatment techniques and tend to rely on storage to
meet peak demands. Therefore, the ratios for ground
water systems tend to be higher than the ratios for
surface water systems of similar sizes. The ratio for
large ground water systems, which tend to have more
sophisticated and capital-intensive treatment processes,
is similar to large surface water systems.
The decline in the ratio of design-to-peak treatment
capacity as the service population increases is reflected
in the storage capacity of systems. On average, small
systems have just under 214,000 gallons of storage; in
contrast, large systems serving more than 100,000
persons have more than 72 million gallons of storage.
Another measure of a system's efficiency is the percent-
age of water produced that actually gets delivered to
customers. Approximately 5 percent of ground water
and 10 percent of surface water is uncompensated or
unaccounted for water. Some of this water is uncom-
pensated usage—for example, systems may be required
to provide water to the municipality for fire protection,
without direct compensation. (While they are not paid
directly for this water, overall rates may be designed to
pay for the cost of providing this water.) Other unac-
counted for water is consumed during the treatment
process; for example, depending on their type, mem-
branes reject up to 50 percent of the feed water. Water
-------
Community Water System Survey 2000
Summary of Production and Storage
Population Served
1 Below
501-
3,300
3,301-
10,000
10,001-
100,000
Over
100,000
1
Primarily Ground Water
Average Daily Production (Gallons)
Peak Daily Production (Gallons)
Design Capacity (Gallons)
Ratio: Design to Peak Capacities
Storage Capacity (Gallons)
Average Daily Deliveries (Gallons)
Ratio: Average Daily Deliveries to Average Daily
Production
27,964
72,592
201,969
5.21
218,505
23,601
0.98
153,055
345,525
671,988
2.31
270,844
156,116
0.91
1,031,379
1,845,842
2,795,402
2.06
1,092,285
1,021,541
0.90
5,272,962
9,593,771
7,825,284
1.42
5,789,073
3,825,897
0.90
20,144,458
28,056,757
36,949,449
1.07
30,059,140
2,829,421
0.96
Primarily Surface Water
Average Daily Production (Gallons)
Peak Daily Production (Gallons)
Design Capacity (Gallons)
Ratio: Design to Peak Capacities
Storage Capacity (Gallons)
Average Daily Deliveries (Gallons)
Ratio: Average Daily Deliveries to Average Daily
Production
43,743
81,263
155,262
2.54
167,881
38,655
0.98
278,432
511,658
964,780
2.00
682,418
279,459
0.87
931,677
1,575,798
2,315,524
1.47
2,033,940
908,024
0.86
5,453,497
9,082,162
12,453,728
1.50
8,549,816
5,787,735
0.90
78,714,010
127,779,390
148,531,670
1.35
102,707,800
87,122,300
0.91
also is used to backwash filters. In some sense, these
types of unaccounted for water are not inefficiencies;
they are inherent in running a water system. System
leaks and other losses, in contrast, are a source of
inefficiencies because they do not provide added value.
(Table 5 in Volume II provides additional detail on
unaccounted for water.)
Ratio of Peak Daily Production to Average Daily Production,
y Ownership
Publicly Owned Systems Privately Owned Systems
Population Served
Less than 100
2.50
2.00
101-500
2.56
1.85
501 -3,300
2.77
1.73
3,301-10,000
1.84
1.76
10,001-50,000
1.75
1.64
50,001-100,000
1.63
1.50
100,001-500,000
2.08
1.69
More than 500,000
1.66
1.67
2.63
Median
1.67
2.14
1.98
2.36
2.20
1.78
1.56
1.58
1.55
1.43
1.24
1.44
1.35
1.36
1.36
The table to the left provides
another measure of system
efficiency, comparing the average
ratio of peak daily production to
average daily production. Smaller
systems tend to have larger ratios
than larger systems, which
indicates that smaller systems are
subject to larger fluctuations in
demand than larger systems,
relative to the amount of water
they produce. Changes in
consumption by a few house-
holds can have a relatively large
impact on a small system; a big
system with larger and more
predictable commercial and
-------
Key Findings and Trends
industrial demand may see less
variation. (See Tables 12-14 in
Volume II for additional details
on plant capacity at the plant
level.)
In fact, smaller systems are more
likely to serve primarily residen-
tial customers, as shown in the
table at the top of this page.
Ninety-five percent of water
deliveries in systems serving 100
or fewer persons are to residential
customers; publicly owned very
small systems almost exclusively
serve residential customers. More
than one-half of all public and
private systems serving up to 500
persons provide water only to
residential customers. Commer-
cial, industrial, and other cus-
tomers become more significant
components of water system
business as system size increases.
Publicly owned systems serving
more than 500,000 persons
actually sell most of their water to
non-residential customers. (See
Table 39 in Volume II for addi-
tional details.)
The same general pattern holds
for water sales revenue. Residen-
tial customers provide a smaller
portion of total water sales
revenue as system size increases.
While the general pattern is the
same as for deliveries, there are
important differences. For very
small systems, the percentage of
revenue that comes from residen-
tial customers is slightly lower
than the percentage of water
delivered to them. This pattern is
reversed in larger systems. This
situation implies that residential
customers pay lower rates than
nonresidential customers in the
smallest systems, but pay higher
rates in medium and larger
systems. (Table 52 in Volume II
provides further detail.)
Residential Deliveries as a Percentage of Total Deliveries,
Publicly Owned Systems Privately Owned Systems
Population Served
Less than 1 00
1 01 -500
501 -3,300
3,301-10,000
10,001-50,000
50,001-100,000
100,001-500,000
More than 500,000
Mean
99%
85%
79%
63%
56%
49%
46%
36%
Median Mean
100%
100%
88%
59%
58%
53%
50%
36%
95%
94%
86%
70%
64%
54%
47%
62%
Median
100%
100%
87%
79%
65%
48%
41%
62%
Residential Sales as a Percentage of Total Sales, by Ownershi;
Publicly Owned Systems Privately Owned Systems
Population Served
Less than 100
91%
100%
101-500
86%
98%
501-3,300
86%
92%
3,301-10,000
72%
70%
10,001-50,000
64%
68%
50,001-100,000
57%
64%
100,001-500,000
52%
59%
More than 500,000
39%
45%
99%
100%
98%
100%
91%
100%
86%
92%
80%
89%
74%
79%
60%
60%
72%
69%
.edian Annual Water Delivered per Connection (Gallons)
Customer Category
Population Served
Commercial.
residential Industrial Agricultural
Less than 100
71,429
0
83,333
101-500
72,165
0
0
501-3,300
76,271
89,286
111,111
16,667
3,301-10,000
83,775
306,733 1,000,000 363,636
10,001-50,000
87,844
433,657 1,687,500 454,546
50,001-100,000
106,452
610,417 1,934,211 442,049
100,001-500,000
117,219
646,806
882,979 1,832,773
More than 500,000
120,798
806,272
0 381,818
J
-------
Community Water System Survey 2000
Median annual deliveries per residential connection for
systems of all sizes is approximately 77,000 gallons.
Annual deliveries per residential connection increase
with system size. There is considerable variation in the
quantity of water delivered per residential connection,
even among systems of similar sizes. Because the
deliveries per connection for a small number of systems
is very large, the median is a better measure of central
tendency than is the mean. As expected, commercial,
industrial, and agricultural consumers use considerably
more water per connection.5
Eighty percent of systems that do not purchase water
provide treatment. The following table provides some
detail on the type of treatment provided. Virtually all
systems that rely solely on surface water sources
Percentage of Systems Applying Various Treatments at One or More Treatment Facility
Population Served
• B6IOW OUT- J,JU1-
500 3,300 10,000
lUjUUI-
100,000
uver
100,000
100 Percent Ground Water
Mean Number of Treatment Facilities
Percentage of Systems Not Providing Treatment
1.3 1.5 2.3
28% 14% 17%
2.7
0%
5.7
0%
Disinfection with no additional treatment
Other chemical addition
Ion exchange, Activated Alumina, Aeration
Other Filtration (not direct or conventional)
Direct Filtration
Conventional Filtration
Membranes
Softening
60% 36% 33%
15% 14% 23%
8% 33% 23%
10% 7% 2%
0% 0% 0%
0% 0% 8%
1 % 0% 0%
6% 10% 11%
23%
14%
36%
10%
1%
0%
1%
15%
17%
3%
55%
16%
0%
0%
0%
10%
100 Percent Surface Water
Mean Number of Treatment Facilities
Percentage of Systems Not Providing Treatment
^mi^^m^^K^ui^bMjV
Disinfection with no additional treatment
Other chemical addition
Ion exchange, Activated Alumina, Aeration
Other Filtration (not direct or conventional)
Direct Filtration
Conventional Filtration
Membranes
Softening
1.0 1.0 1.2
0% 0% 0%
34% 3% 0%
0% 3% 5%
2% 3% 9%
25% 12% 8%
15% 9% 9%
7% 37% 35%
7% 2% 1 %
8% 32% 33%
1.1
0%
0%
0%
6%
0%
14%
65%
0%
15%
1.7
0%
0%
2%
9%
2%
12%
61%
0%
13%
The estimate in this chapter differs from the one presented in Chapter 2. The estimate of 119,000 gallons reported in Chapter 2 is the
estimate of the water received by households and is weighted by the amount of water delivered. The estimate in Chapter 3 is the residential
delivery by the median system. Because residential deliveries per system vary by system size, the two estimates are not the same. See Table 41 in
Volume II for further detail on average and median deliveries per connection across systems.
-------
Key Findings and Trends
provide some treatment as do more than three-quarters
of systems that rely solely on ground water. (See Table
9 in Volume II.)
On average, small systems that rely solely on ground
water sources average 1.3 treatment facilities. This
increases to 2.3 facilities for systems serving 3,301 to
10,000 persons, and to over 5 facilities for systems
serving more than 100,000 persons. (The estimate for
systems serving populations of more than 100,000
excludes 2 systems that have more than 100 treatment
plants. If these outliers are included, the average
number of treatment plants per system in this size
category increases to 11.) Systems relying solely on
surface water, by contrast, tend to have fewer plants on
average. Small surface systems average one plant per
system, since they tend to have one surface water
intake. Surface water systems serving more than
100,000 persons have 1.7 plants on average. There is
obviously considerable variation around these averages.
Some surface water systems have as many as 8 surface
water plants; some ground water systems have more
than 200 plants. (See Table 11 in Volume II.)
As systems become larger, the treatment they use tends
to become more complex. Approximately 60 percent of
small ground water systems simply disinfect. Larger
ground water systems are more likely to use other
chemicals, disinfectants, and some forms of filtration.
They also are much more likely to use softening tech-
niques, including cation exchange. (This analysis is
different from the figures presented in Chapter 2,
which focused on the percentage of treatment plants
that used each treatment train. This analysis focuses on
Average Number of Entry Points per
System by Primary Water Source
Ground Water Surface Water
Population Served
Less than 500
501 -3,300
3,301-10,000
10,001-100,000
More than 100,000
Systems
1.4
1.8
2.9
4.6
7.6
Systems
1.4
1.3
1.6
2.2
3.3
Miles of Pipe Replaced During Previous Five Years as a Percentage
Population Served
Less than 1 00
101-500
501 -3,300
3,301-10,000
10,001-50,000
50,001-100,000
100,001-500,000
More than 500,000
Publicly Owned
26%
14%
5%
3%
4%
3%
2%
3%
Systems
Bjra
0%
0%
0%
1%
1%
1%
1%
2%
Privately Owned
6%
4%
0%
9%
2%
1%
2%
4%
Systems
Bjra
0%
0%
0%
3%
0%
0%
1%
2%
the percentage of systems that employ each train in at
least one plant.) Approximately one-third of surface
water systems that serve up to 500 persons use disin-
fection and no additional treatment. Most surface
systems serving more than 500 persons use more
sophisticated treatment. Thirty-five percent of systems
serving 3,301-10,000 persons use conventional
filtration; this increases to more than 60 percent for
systems serving more than 10,000 persons. Softening
also is relatively common for systems serving popula-
tions of more than 500. Less than 1 percent of ground
water systems and only 3 percent of surface water
systems use membranes. (Tables 21 and 22 provide
additional detail on the level of the plant, rather than
the system.)
A key factor in potential cost of proposed drinking
water rules is the number of entry points to the
distribution system. If new treatment is required, it
would take place at the entry point. As seen in the
above table, the number of entry points increases with
system size, because larger
systems tend to have more
sources than smaller systems.
Ground water systems tend to
have more entry points than
surface water systems, since each
well may feed directly into the
distribution system. In fact,
some large ground water
systems in the sample had
several hundred entry points.
(These systems are excluded
from the table above. See Table
7 in Volume II for additional
detail on the number of entry
points per system.)
-------
Community Water System Survey 2000
hiulation Served per Mile of Existing Pipe, by Ownership
(Excludes Wholesalers With No Retail Customers)
Population Served
Less than 1 00
101-500
501 -3,300
3,301-10,000
10,001-50,000
50,001-100,000
100,001-500,000
More than 500,000
Publicly Owned
Mean
62
88
134
220
231
279
445
465
Systems Privately Owned
Median Mean
65
75
115
168
196
221
275
315
130
187
201
140
346
236
246
340
Systems
Median
99
148
90
87
105
223
214
380
While production and treatment often are the focus of
economic analyses, the largest component of a water
system's asset inventory is pipe. The considerable
variation in system spending to maintain distribution
networks reflects the diverse age and condition of pipe
in the ground, and the financial condition of the
systems. Publicly owned systems replaced 7 percent of
their pipe, on average, over the past 5 years. Systems
serving up to 100 persons replaced 25 percent of their
pipe, on average, over this period. (Most replaced
none, but several replaced more than 50 percent of
their pipe. These systems had less than one-half mile of
distribution mains.) The median indicates that at least
one-half of the small systems replaced no pipe between
1996 and 2000. The median is somewhat more stable
than the mean; the median small system replaced no
pipe, and the median medium and large systems
replaced approximately 1 percent of their pipe in the
past 5 years. (Tables 35-38 in Volume II provide more
detailed information about systems' distribution
networks.)
Not surprisingly, larger systems tend to have larger
populations per mile of pipe than smaller systems, as
shown in the above table. This is because large sys-
tems, especially publicly owned large systems, tend to
be located in densely populated urban areas.
Financial Characteristics
The typical water system has a substantial investment
in fixed assets, including pipe, storage, and treatment
facilities; the average cost per gallon of water delivered
drops as deliveries increase and systems spread the
fixed cost of their investment
over the larger quantities of
water. Larger systems, therefore,
face lower average costs than
smaller systems and have lower
costs per connection and per
gallon of water produced.
(These economies of scale often
mean water systems are natural
monopolies and are one reason
that water systems are regulated
when not owned outright by
the public sector.) Because of
economies of scale, system size is
a key factor in explaining
financial performance. In
addition to their greater produc-
tion, larger systems also have
larger rate bases and more accountants and support
staff. Therefore, larger systems generally perform better
financially than small systems. This has implications
for the system's financial well being and for its manage-
rial and technical capacity.
Revenue and Expenses
As discussed in Chapter 2, water systems generate close
to $39 billion dollars annually in water sales and water
related revenue. On average, water systems earned
$815 million in 2000, with considerable variation
around this average. Much of the variation is explained
by the size of the population served by the system.
Systems serving up to 500 persons earn an average of
$22,000 per year, while systems serving more than
100,000 persons earn over $41 million. Public systems
tend to earn more revenue because they tend to be
larger; the average revenue of public and private
systems of similar size are roughly equivalent. (See
Tables 46-48 in Volume II for more details.)
Average Annual Water Systems Revenue
in Dollars
Population
Served
Less than 500
501 -3,300
3,301-10,000
10,001-100,000
More than 100,000
Publicly Owned Privately Owned
Systems Systems
53,176
185,867
756,035
3,654,402
40,797,408
12,795
178,375
792,240
3,601,541
45,853,541
-------
Key Findings and Trends
One way to compare revenue of different
sized systems is to consider revenue per
customer connection. The average charge per
connection is $416, with considerable
variation around the average. (This estimate
excludes ancillary systems, which often do
not charge directly for water. It also excludes
wholesale revenue because systems did not
report the number of retail customer connec-
tions associated with their wholesale deliver-
ies.) The graph to the right shows the
distribution of earnings per connection. Most
systems have revenue between $200 and
$500 per connection. The distribution has a
long, right tail, because some systems earn in
excess of $10,000 per connection each year
(mostly from large nonresi-
dential customers).
Revenue per Connection
c
o
'•§
fl!
0.4
0.3
0.2
0.1
10 100 1,000 10,000 100,000
Revenue per Connection
Population Served
Less than 500
501-3,300
3,301-10,000
10,001-100,000
More than 100,000
As discussed in Chapter 2,
spending on water by resi-
dential and nonresidential
customers is quite different.
Average revenue per connec-
tion from nonresidential
customers is significantly
larger than earnings from
residential customers.6
The median system earns
$260 per residential connec-
tion. Publicly owned systems
tend to earn less than pri-
vately owned systems per residential
connection; this is true overall and within
each system size category. Because a small
number of systems have very large revenue
per connection, median revenue is a better
measure of central tendency than the
average. (See Tables 56-57 in Volume II
for more detail on residential revenue per
connection.) Publicly owned systems
serving more than 100,000 persons tend
to earn more per connection than smaller
systems; residential revenue per connec-
tion does not vary consistently with
system size among privately owned
systems. Overall, systems earn $519 per
Residential Connections Nonresidential Connections
Publicly
Owned
Systems
222
Privately
Owned
Systems
290
237
336
217
318
237
287
251
314
Publicly
Owned
Systems
324
Privately
Owned
Systems
69
392
519
870
551
1,072
1,584
1,498
1,293
Residential Revenue per Connection
0.4 ,
0.3 -
ra 0.2
0.1
10 100 1,000
Residential Revenue per Connection
10,000
Note that the analysis here is different than the analysis in Chapter 2. Chapter 2 reported the amount paid by typical residential and nonresi-
dential customers. The analysis here in Chapter 3 changes the focus from the customer to the system: it reports the average revenue per
connection received by systems, by customer class. Because the number of residential and nonresidential customers differs across systems, and
because systems charge different rates for water, the two measures will not be the same.
-------
Community Water System Survey 2000
Revenue per Thousand Gallons: Publicly Owned Systems
by Population Service Categories
6.00 -
5.00 -
4.00 -
(A
I 3.00 -
o
Q
2.00 -
1.00 -
0.00 -
3.43
2.79
2.46
1.96
1.71
11.91 |2j£
1.65
II
1.36
25-500
501-3,300 3,301-10,000 10,001-100,000 >100,000
Residential Commercial/Industrial Wholesale
6.00 -i
5.00
Revenue per Thousand Gallons: Privately Owned Systems
by Population Service Categories
5.21
3.13
0.00
25-500
501-3,300 3,301-10,000 10,001-100,000 >100,000
Residential
Commercial/Industrial
Wholesale
nonresidential connection. Public systems tend to earn
more per nonresidential connection than private
systems.
Residential customers present special concerns. On
average, water systems receive the large majority of
their revenue from residential customers, and they
would bear much of the cost of efforts to improve
water quality and to maintain or expand the system.
Median revenue per residential connection is less than
1 percent of median household income.7 There is a
great deal of variation around the median, as well as
This is based on an estimate of national median household income
of $42,151 (U.S. Bureau of the Census Current Population Survey,
Money Income in the United States: 2000.)
-------
Key Findings and Trends
considerable variation
in household income,
so not every household
pays this share of their
income for drinking
water. But on a
national basis, most
systems charge a
relatively small portion
of household income
for water. (EPA will
conduct detailed
analysis of the relation-
ship between revenue
per connection and household income.)
The final factor that affects system revenue, in addition
to the number and type of customer, is the rate the
system charges for water. The median rate per thou-
sand gallons for residential customers is $2.72. Non-
residential customers tend to pay less per thousand
gallons (except privately owned systems in the smallest
size category), and larger systems tend to charge less
Percentage Use of Residential Rate Structures
Population Served
Rate Structure
Uniform rates
Declining block rate
Increasing block rate
Peak period or seasonal rate
Separate flat fee
Combined flat fee
Other
I Below
500
46.0%
6.7%
7.0%
0.0%
26.9%
1 7.2%
1 .4%
501-
3,300
54.0%
28.3%
15.4%
0.3%
8.4%
0.1%
1 .2%
3,301-
10,000
55.7%
34.9%
13.4%
2.0%
19.9%
3.2%
4.1%
10,001-
100,000
56.7%
34.5%
18.3%
1 .3%
26.8%
5.2%
1 .9%
Over
100,000
55.6%
24.5%
27.5%
9.6%
25.3%
2.0%
3.7%
All
Systems
19.1%
11.5%
0.6%
20.2%
9.1%
1.7%
Note: columns will not sum to 1 00 because some systems use more than one rate structure.
purchases. (See Tables 53-55 in Volume II for further
detail.) Balancing costs to nonresidential customers
(especially large-volume users) and residential custom-
ers is important since demand stability is a key objec-
tive of systems. Without large-volume customers,
residential customers would not have lower rates and
would need to pay a larger share of fixed costs.
Water systems rely on a variety of approaches to charge
per thousand gallons. Wholesale customers tend to pay for water. The most common means of charging residen-
the lowest rates, although their rates are similar to
nonresidential customers of privately owned systems
serving between 3,301 and 100,000 persons. Their
lower rates reflect their relatively high volume of
tial customers is to use a single rate per gallon of water
sold; one-half of all systems rely on uniform rates.
Separate flat fees (20 percent of systems) and declining
rates (19 percent) are the next most common rate
Spending per Thousand Gallons
by Population Service Categories
Publicly Owned Systems
Privately Owned Systems
6.00 -]
6.00 -,
0.40
0.20
0.00
0.00
25-500 501-3,300 3,301- 10,001- >100,000
10,000 100,000
25-500 501-3,300 3,301- 10,001- >100,000
10,000 100,000
Other Debt Service • O&M
Other Debt Service • O&M
-------
Community Water System Survey 2000
istribution of Operating Ratio
(Percentage of Systems)
Population Served
Below
500
501- 3,301- 10,001- Over
3,300 10,000 100,001
Operating Ratio of Publicly Owned Syst
<1
36.2% 26.5% 14.4% 18.3% 23.6%
1 to 1.2
27.3% 19.5% 28.2% 23.4%
9.6%
36.5% 54.0% 57.4% 58.3% 66.8%
Operating Rat:
<1
33.7%
9.3% 27.0% 17.3%
6.6%
1 to 1.2
15.8% 34.1% 11.2% 16.5% 36.6%
50.5% 56.7% 61.8% 66.2% 56.8%
Ooeratina Ratio of Ancillary Svstem
<1
87.9%
1 to 1.2
7.1%
5.1%
structures. Only 12 percent of systems use increasing
block rates, and most of them are large systems. Large
systems also are more likely to use a seasonal rate
structure. Nine percent use a flat fee combined with
other non-water related charges. (Table 58 in Volume
II provides additional detail on residential rate struc-
tures.) Some systems use more than one rate structure.
Chapter 2 reported that systems spent $32 billion in
2000. On average, water systems spent $863 million,
with a large degree of variation around the average. As
with revenue, expenses depend largely on system size.
Systems serving up to 500 persons spent just under
$20,000 on average, compared to $683,000 for systems
serving more than 100,000 persons. Expenses tend to be
higher for publicly owned systems, even among
systems of similar size. (These figures exclude ancillary
systems to allow comparisons with the revenue esti-
mates.)
A more meaningful comparison is expense per thou-
sand gallons produced. Expenses tend to decline with
system size, reflecting the economies of scale inherent
in the production and delivery of drinking water.
Spending on O&M as a share of total spending also
tends to decline with system size. (Tables 63-64 in
Volume II provide additional detail on expenses per
thousand gallons.)
Privately owned systems tend to
spend more per thousand gallons
than publicly owned systems,
especially if the systems are
small. Privately owned systems
also tend to spend more per
thousand gallons for O&M than
publicly owned systems. Spend-
ing per thousand gallons for large
publicly and privately owned
systems is similar.
One measure of the financial
health of a system is its operating
ratio. The operating ratio is
calculated by dividing total
operating revenue by O&M
expenses. (Note: this measure
should not be confused with the
operating ratio used by public
utility commissions to calculate a
rate base.) Operating revenue
includes water sales revenue,
connection fees, and development fees.8 O&M ex-
penses include employee and contractor expenses and
other routine operating expenses. Debt service expense,
capital expenditures, and other non-operating expenses
are excluded. (Tables 65-66 in Volume II provide an
alternative ratio: total revenue to total operating
expenses, including debt service but excluding capital
and other non-operating expenses.)
If the operating ratio is less than 1.0, the system is
running an operating deficit or loss that year, or it is
relying on non-operating revenue to finance opera-
tions. As the ratio increases, more funds are available
from operations for non-operating expenses like debt
service. Ratios of 1.0 to 1.2 are considered acceptable;
above 1.2 is considered strong.
The table on this page summarizes operating ratios by
system size and ownership. Roughly one-third of
publicly and privately owned small systems have
While it would be reasonable to exclude connection and develop-
ment fees, the expenses they fund would need to be dropped from
operations and maintenance expenses. Because these details on
expenses are unavailable, they could not be excluded; therefore, the
connection and development fees are included in operating revenue.
If connection fees and development fees are excluded from the
calculation of the operating ratio, the percentage of systems with an
operating ratio above 1.2 declines 2-3 percentage points in each size
category for both publicly and privately owned systems.
-------
Key Findings and Trends
operating ratios of less than 1.0. Most ancillary sys-
tems have ratios below 1.0, which reflects the fact that
they generally do not charge directly for water; while
they may lose money supplying water to their custom-
ers, the business as a whole may be profitable. Systems
that have ratios less than 1.0 may have positive cash
flows due to depreciation. This may have a larger
impact on privately owned systems than publicly
owned systems, because privately owned systems are
more likely to include depreciation in their annual
operating expenses. The share of systems with ratios
greater than 1.2 increases with system size, to more
than two-thirds for the largest systems, whether
publicly or privately owned.
A couple of notes of caution regarding the interpreta-
tion of these measures are warranted. Systems are
grouped into the three categories based on commonly
applied thresholds. The ratio thresholds are intended
to characterize the industry in general, but they may
not be appropriate measures of the well-being of
specific water systems. Some well-run water systems
may have operating ratios of less than 1.0 for reasons
that are consistent with good planning and manage-
ment, and it would be inappropriate to characterize
them as weak. But if the operating ratio of a significant
portion of systems in a sector is less than 1.0, the
financial well-being of systems in that sector may be in
question.
Second, financial data are recorded and reported in
different ways by different systems. The questionnaire was
designed to collect general information on revenue and
expenses in a consistent manner across systems. Data
on total debt service payments were collected, but
principal and interest payments were not disaggre-
gated. Also, the survey did not collect data on depre-
ciation. The ratio is intended to provide a general
measure of financial well-being; more detailed financial
data than were available in this survey are required for
more specific analyses.
Capital Expenditures
Community water systems invested, on average, $1.2
million in infrastructure over the 1996-2000 period.
Publicly owned systems tended to invest more than
privately owned ones. Most of the investment is carried
out by large systems. (See Tables 69-72 in Volume II
for more detail.)
Average Annual Capital Improvement
Expenditures (Millions of Dollars)
Population
Publicly Owned Privately Owned
Less than 500
501 -3,300
3,301-10,000
10,001-100,000
More than 100,000
0.034
0.048
0.199
1.114
12.606
0.004
0.060
0.177
0.808
10.013
Systems need to invest in infrastructure for a variety of
reasons. They may need to upgrade their treatment to
improve water quality, either to comply with federal
drinking water standards or for other reasons. They
also need to maintain their capital stock, making major
repairs to worn assets, or replacing assets that have
reached the end of their useful lives. Finally, they may
need to expand their system capacity to provide water
to a growing population.
The survey asked systems to divide their recent capital
investments into these three categories. The responses
provide a general sense of the underlying reasons for
the investment. There is some overlap, because the
reasons for investment are not mutually exclusive. For
example, a system may need to replace a worn-out
asset. In doing so, it may install a larger capacity asset
to meet the needs of a growing population; it also may
change the technology to comply with federal rules.
Water Industry Capital Expenditures
by Purpose
System
Expansion
Water Quality
"\
\
20%
Replacement
-------
Community Water System Survey 2000
'ublicly Owned Sys'
Water Quality Improvements
Repair/Replace
Expansion
Whether this invest-
ment is for water
quality improvements,
repair and replace-
ment, or system
expansion depends
largely on the priori-
ties of the system;
therefore, it was left
up to the system to
allocate the funds.
Also, systems may
report an expenditure
as affecting quality
only if it is related
directly to treatment.
Water systems spend
much of their funds
on their distribution networks; much of this expense
may be to improve the quality of their water, but may
be reported as repair and replacement.
Based on the systems' responses, 53 percent of the
investment over the past 5 years was to replace or
repair assets. Twenty-seven percent of investment was
for system expansion. The remaining 20 percent of the
of Capital Expenditure'
y Ownership
Population Served
Below 501- 3,301- 10,001- Over All
25%
10%
13%
18%
21%
58%
54%
55%
43%
39%
53%
17%
35%
31%
39%
39%
Water Quality Improvements
25%
28%
27%
14%
14%
Repair/Replace
60%
23%
29%
37%
53%
54%
Expansion
15%
49%
45%
49%
32%
21%
_
by Ownership
"enditures
Population Served
H±M]
500
^Eijl^l
3,300
HFriB
I'n'rSB
^E*^^
10,000 100,000 100,000
Publicly Owned Systems
Land
Water source
Distribution and transmission system
Treatment
Storage
Other
0%
12%
49%
20%
11%
9%
1%
10%
50%
20%
14%
4%
3%
9%
51%
19%
11%
6%
2%
8%
52%
20%
12%
7%
3%
9%
45%
24%
10%
9%
Privately Owned Systems
Land
Water source
Distribution and transmission system
Treatment
Storage
Other
1%
14%
32%
22%
22%
9%
0%
10%
46%
8%
27%
8%
3%
11%
46%
21%
9%
4%
1%
6%
60%
15%
6%
12%
0%
13%
52%
11%
4%
20%
total capital investment was for water quality improve-
ments. This 20 percent matches the 1995 Community
Water System Survey findings. Privately owned systems
tended to use more of their investments for water
quality improvements than publicly owned systems.
This difference is due, in part, to the larger size of
public systems: for both publicly and privately owned
systems, the share of investment attributed to water
quality improvements
tends to decline with
system size, and publicly
owned systems tend to be
larger. (See Tables 76-78
in Volume II for further
detail.)
An alternative view of the
purpose of the investment
is to look at what was
purchased. On average, 49
percent of the investment
by publicly owned
systems was for their
distribution and transmis-
sion systems; privately
owned systems spent 40
percent of their invest-
ments on these systems.
Public systems put an
additional 12 percent into
storage, while private
systems used 18 percent
in this way. Treatment
accounts for an additional
-------
Key Findings and Trends
Below 501- 3,301- 10,001- Over All
Publicly Owned Syste
Current Revenue
57%
70%
74%
80%
91%
70%
DWSRF Loans
11%
13%
3%
8%
12%
DWSRF Principle Repayment Forgiveness
14%
7%
2%
4%
3%
7%
Other Government Loans
11%
13%
14%
15%
6%
Other Government Grants
26%
18%
28%
20%
6%
22%
Borrowing from the Private Sector
9%
13%
27%
38%
47%
Other
Privately Owned Systems
6%
3%
4%
1%
3%
Current Revenue
83%
72%
67%
85%
88%
DWSRF Loans
0%
0%
0%
3%
18%
DWSRF Principle Repayment Forgiveness
0%
0%
12%
0%
0%
Other Government Loans
2%
9%
2%
22%
13%
Other Government Grants
3%
15%
12%
17%
0%
5%
Borrowing from the Private Sector
9%
24%
51%
38%
70%
Other
6%
7%
9%
10%
0%
20 percent of the investment for both public and
private systems. Small systems tend to spend a smaller
percentage of funds than larger systems on distribution
and transmission systems and a greater share on
storage, source development, and, at least for private
systems, treatment.9 (See Tables 73-75 in Volume II for
additional details.)
Systems have several means of financing their capital
investments, including cash, government grants and
loans, and private sector borrowing. Most large systems
rely on current revenue for at least a portion of their
capital investment. A substantial portion of publicly
owned systems serving 25-500 persons also relies on
other sources of funds, including government grants
and loans.
Investment in treatment does not need to equal investment in water
quality improvements. See footnote 4 on page 18.
More than 80 percent of all privately owned systems
financed their investment with current revenue, while
only 13 percent borrowed from private sources.
Borrowing by privately owned systems from private-
sector sources tends to increase with system size: over
70 percent of systems serving more than 100,000
persons borrow from private sources, while only 9
percent of systems serving up to 500 persons borrow
from the private sector. Publicly owned systems are
somewhat more likely overall to borrow from private-
sector sources; nearly 20 percent did so. While private-
sector borrowing increases with system size among
publicly owned systems, the largest public systems are
less likely than their private-sector counterparts to
borrow.
The table above shows that most systems, whether
publicly or privately owned, rely on current revenue to
-------
Community Water System Survey 2000
Avera.,e Percen^o^s,™ Each Source
Population Served
Below
501-
3,301-
10,001-
Over
All
Publicly Owned Systems
Current Revenue
DWSRF Loans
DWSRF Principle Repayment Forgiveness
Other Government Loans
Other Government Grants
Borrowing from the Private Sector
Other
45%
7%
10%
4%
20%
9%
6%
53%
11%
4%
8%
11%
11%
3%
50%
3%
0%
11%
16%
17%
2%
56%
3%
1%
9%
5%
25%
0%
65%
4%
1%
2%
1%
27%
1%
51%
7%
8%
13%
14%
Privately Owned Systems
Current Revenue
DWSRF Loans
DWSRF Principle Repayment Forgiveness
Other Government Loans
Other Government Grants
Borrowing from the Private Sector
Other
82%
0%
0%
2%
2%
8%
5%
65%
0%
0%
5%
10%
13%
7%
52%
0%
5%
2%
4%
28%
9%
56%
3%
0%
5%
10%
26%
3%
66%
1%
0%
5%
0%
28%
0%
78%
0%
4%
10%
finance their investments; in fact, systems finance the
majority of their investments out of current revenue.
Less than 10 percent of publicly owned systems
received loans from the DWSRF. An additional 7
percent had principal repayments forgiven by the
program. Smaller systems were somewhat more likely
to use DWSRF loans and were much more likely than
larger systems to receive SRF grants.
The table above shows the average percentage of funds
systems obtained from each source. On average,
systems receive an additional 12 percent of their
investment funds through private-sector borrowing.
Publicly owned systems finance somewhat more of
their investments through borrowing, due in large part
to their size: as system size increases, reliance on
borrowing as a source of funds almost quadruples.
Publicly owned systems also are more likely to use
DWSRF loans. (Some states do not make DWSRF
funds available to private systems.) While small
privately owned systems borrow more from the private
sector than small publicly owned systems, small
publicly owned systems more than make up for the
difference with DWSRF and other public-sector loans.
The table on this page presents estimates of the
percentage of capital investment financed by each
funding source for the average system. The table on
page 18, in contrast, reports the amount that came
from each funding source for all capital expenditures
nationally, in the aggregate. (Table 80 in Volume II
provides further detail on sources of funds.)
-------
Key Findings and Trends
Trends
The 2000 Survey is the fifth CWS Survey. Previous
surveys were conducted in 1976, 1982, 1986, and
1995, providing data on nearly 25 years of water
system operational and financial experience. The
analysis will focus on changes since 1995 because those
data are used as a baseline for EPA cost models.
Trends in Operating Characteristics
The fundamental characteristics of the water industry
have not changed since the 1995 Survey. As described
in Chapter 2, most systems are small, privately owned,
and rely on ground water sources. Most people,
however, receive their water from large, publicly owned
systems that rely primarily on surface water sources.
More systems relied primarily on purchased water in
2000 than in 1995, increasing from 10.6 percent to
15-3 percent. Fewer systems relied primarily on
ground water: 79-8 percent were primarily ground
water systems in 1995, compared to 73-9 percent in
2000. Of course, small changes in the quantities of
water purchased can produce relatively large changes in
the number of systems that are classified as primarily
ground water, surface water, or purchased water
systems. Therefore, this change does not necessarily
represent a dramatic shift in water source.
The total number of systems increased by just under 4
percent between the two surveys. But the number of
smallest systems—those serving up to 100 persons—
declined by more than 8 percent. This decline was
offset by increases in the number of systems serving
101-3,300 persons, so that the total number of
systems serving fewer than 3,300 grew by 1 percent.
Systems serving more than 3,300 persons grew by
nearly 20 percent.
One of the metrics that EPA has followed over the
previous CWS Surveys is the percentage of systems that
provide no treatment. Since the first survey, this
number has steadily declined, as seen in the chart on
this page. (Since most large systems provide treatment,
the graph focuses on smaller systems.) While the
overall number of systems that do not provide treat-
ment continued to decline, the trend appears to have
stopped, at least for now, for several size categories in
the 2000 Survey. This can be interpreted in one of two
ways. It may indicate that progress in ensuring that
water purveyors treat their water has slowed. On the
other hand, it may indicate that substantial progress
has been made since 1974: virtually all water from
surface sources receives some form of treatment, and
ground water is treated when existing standards require
it. Recent changes in federal rules and proposed rules
in the pipeline likely will lead to further reductions in
the percentage of ground water systems that do not
treat. Furthermore, the percentage of the population
consuming water from untreated sources is very small
because only small ground water systems that serve less
than 2 percent of the total population served by
Percentage of Systems Not Providing Treatment
by Population Service Categories
80%
70%
34% 33o/0
25-100
101-500
501-1,000
1,001-3,300
1976
1982 1986 • 1995
2000
-------
Community Water System Survey 2000
Percentage of Ground Water Systems Not
Providing Treatment,
by Population Service Categories
80%
70%
60%
50%
40%
30%
20%
10%
0% L
• 1995
2000
25-100
101-500
501-3,300
community water systems do not treat their water.
(Table 9 in Volume II provides further detail on
systems not providing treatment in 2000.)
The chart on this page shows that the percentage of
ground water systems not providing treatment has
remained virtually unchanged since 1995- It focuses
The overall number of systems that do not provide any
treatment continued to decline, according to the 2000 Survey.
solely on ground water systems. It also combines two
size categories to increase the precision of the estimate.
The percentage of ground water systems not treating
declines slightly for the smallest size category, and
increases slightly for the others. The differences are not
statistically significant.10
Trends in Financial Characteristics
Overall, average water sales and water-related revenue
increased between 1995 and 2000. Revenue per
thousand gallons increased by 12 percent in real terms
between 1995 and 2000, which is an average annual
increase of 2.3 percent. Systems serving up to 3,300
persons tended to increase the revenue they collected
per thousand gallons, while revenue per thousand
gallons declined in real terms for larger systems. (The
small system increase may reflect the quality of the
data collected in the two surveys; both the overall
response rate and the item response rates on the
revenue questions for small systems increased dramati-
cally in 2000 because site visitors collected the data.
See Table 54 in Volume II for further detail on revenue
per thousand gallons.)
Operating expenses per thousand gallons of water
delivered increased slightly since 1995- (Operating
expenses are equal to employee and other O&M costs
and debt service. It excludes capital and other non-
operations-related expenses.) As with revenue, the
overall increase masks differences among systems of
different sizes. Systems in some size categories wit-
nessed modest declines in cost per thousand gallons,
while others saw costs per thousand gallons increase
over the 5 year period. (Table 63 in Volume II provides
details on total expenses per thousand gallons pro-
duced.)
While average revenue and expenses per thousand
gallons often moved in the same direction for most
system size categories, the magnitude of the change
was often quite different. For example, revenue per
thousand gallons for systems serving more than
100,000 persons declined 14 percent, while their
expenses remained relatively constant. While not
Note that the percentage of systems not treating water in 1995 is
slightly different than previously reported. The 1995 data include
systems that did not respond fully to the treatment questions.
Previously, it was assumed that these systems in fact provided
treatment. This likely understated the percentage of systems not
providing treatment in 1995. These systems were dropped from the
current analysis.
-------
Key Findings and Trends
Population Served
25-500
501 -3,300
3,301-10,000
10,001-100,000
encouraging, the
changes in the relative
cost and revenue per
thousand gallons does
not necessarily translate
into a deterioration in a
system's financial
position, since total
expenses and revenue
depend on the quanti-
ties produced and sold.
In fact, changes in the
quantities produced
and sold can affect costs
and revenue per gallon.
Overall, a substantial
portion of systems
continues to have costs that exceed revenue, but the
percentage of publicly owned systems reporting an
operating deficit and privately owned systems report-
ing an operating loss declined for all but one size
category.
As noted above, operating expenses include employee
and other routine operating expenses and debt service;
it excludes capital purchases and other expenses not
related to system operations. Revenue includes water
sales and water-related revenue, and excludes non-
water-related revenue.
Trends in Water Sales Revenues and Operating Expenses
(Dollars per Thousand Gallons Delivered)
Water Sales Revenue
Percentage
Change
since 1995
(in 2000
Dollars)
Operating Expenses
Percentage
Change
since 1995
(in 2000
4.57
22.7%
3.97
11.2%
2.62
-19.6%
2.56
-3.9%
More than 100,000
1.82
-14.2%
3.59
-4.7%
3.40
13.1%
2.26
-11.2%
2.20
1.8%
1.60
-0.5%
While more than 40 percent of public systems serving
fewer than 500 persons operated with losses in 1995,
only 31 percent did so in 2000. The percentage of
privately owned systems in the smallest size category
operating at a loss was constant at 39 percent. The
percentage of publicly and privately owned systems
with operating losses or deficits tends to decline with
system size. Expenses exceeded revenue in 20 percent
of public systems serving more than 100,000 persons
in 2000, which is down from 23 percent in 1995-
Among privately owned systems of this size, 3.4
percent operated at a loss, compared to 5-7 percent in
Percentage of Systems With Deficits or Losses
by Population Service Categories
Publicly Owned Systems
Privately Owned Systems
<500 501-3,300 3,301-
10,000
10,001- >100,000
100,000
<500 501-3,300
3,301- 10,001- >100,000
10,000 100,000
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Community Water System Survey 2000
1995- The percentage of publicly owned systems
serving more than 10,000 persons and operating at a
loss increased slightly. The percentage of publicly and
privately owned systems operating with a deficit or a
loss increased slightly between 1995 and 2000 among
systems serving 10,001-100,000 persons.
Some caveats are needed before drawing conclusions
about the financial well-being of the industry:
• The survey's estimates of surpluses or deficits are
from a single year's financial data. As noted earlier,
water systems often face temporary deficits while
waiting to implement higher rates. There also
may be a strong cyclical component to system
finances; the recent down turn in the overall
performance of the economy may affect system
finances, reversing some of the improvements
shown in the previous graphs (at least for systems
with substantial nonresidential sales).
• Combined systems (e.g., water and sewer, water
and power) often had difficulty disaggregating
their operating expenses. Many combined
utilities track sales revenue for each operation
separately, but combine operating expenses.
Systems (and site visitors to small systems) often
used simple rules of thumb to approximate
water-related expenses, e.g., assuming expenses
are proportional to revenue. In some cases, non-
water-related expenses may remain in reported
expenses, which may lead to an overestimate of
the percentage of systems that have operating
losses or deficits.
The relatively small percentage of large, privately
owned systems that have losses may reflect their
reliance on equity capital. Profits are needed to
pay dividends to shareholders or to maintain
share value.
Some systems may be technically insolvent. This
may be true especially among small systems. For
very small systems, there is a thin line between
solvency and insolvency; a temporary insolvency
may be resolved relatively quickly. For example,
a small homeowners association may be able to
levy a small assessment on all customers to
become solvent.
Expenses include some items that are important
accounting expenses, but do not require cash
outlays. Depreciation, for example, often is a
large item, but requires no cash payments.
Systems, therefore, may be operating at a loss but
still have positive cash flow. (See Jordan, J.L.,
"Do You Use Your Depreciation Funds Wisely,"
Of/low, Vol. 21, No. 12, December 1995, p.l.)
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Treatment Schemes
EATMENT SCHEME
APPENDIX DEFINITIONS AND SCHEMATICS
Treatment plants in the sample are assigned to one of eight treatment schemes, based on the system's response
to the treatment questions. The treatment schemes move from relatively simple to relatively complex prac-
tices. The more complex practices may include the steps taken in the less complex trains. For example,
conventional filtration plants likely disinfect. These treatment schemes are defined as follows.
1. Facilities that provide disinfection and no other treatment. These include:
Chlorination
Ozone
UV
Other (chloramines, chlorine dioxide, etc.)
Blending
2. Facilities that provide treatment in the form of chemical addition beyond just disinfection, but less
than "mechanical" processes. These practices include:
Corrosion control
Sequestration
Fluoridation
pH control
Blending
3. Facilities that use ion exchange, activated alumina, or aeration.
4. Facilities that provide treatment and filter their water, but do not use direct or conventional filtration
or membranes. These include:
Microstrainer
Bag and cartridge
Green sand filtration
Diatomaceous earth
Pressure filtration
GAG
5. Systems that provide direct filtration, but do not use conventional filtration, membrane technology, or
softening processes.
6. Systems that provide conventional filtration, but do not use direct filtration, membrane technology, or
softening processes.
7. Systems that use membrane technology, regardless of what may come before the membrane
treatment.
8. Systems that provide softening processes, regardless of what may come before or after the softening.
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Community Water System Survey 2000
Treatment Scheme 1: Chlorination/Other Disinfection Only
Application: All Sizes Categories - Surface Water and Ground Water
Well
Chlorinator
CI2
Well
1
Well Field
Wells within
the distribution
system
1
Distribution System
Distribution System
_
/ / CI2/ /CW
/ — AnJ — I-—H
Distribution System
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Treatment Schemes
Treatment Scheme 2: Other Chemical Addition
Application: All Size Categories - Surface Water and Ground Water
Source: Well Field
Chlorinati
Fluoride Addition
o
Q-
Well Field
F, CI2
F CI2
Well
Distribution System
Wells within F',c'2
the distribution O—*—
system
Distribution System
FCI2
Distribution System
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Community Water System Survey 2000
Treatment Scheme 3: Ion Exchange, Activated Alumina, Aeration
Application: All Size Categories - Ground Water
f . if-S&jjfi *<£*£
• f. •. . .a Shi1*^ _ '^;5*Ii
Source
Cation Exchange
Well Field
IX, AA,
Aeration
Well
CI2
Cl,
IX, AA,
Aeration
Distribution System
Distribution System
Anion Exchange
Chlorination
-------
Treatment Schemes
Treatment Scheme 4: Filters
Application: All Size Categories - Ground Water and Surface Water
Source
Cartridge Filtration
Bag Filter and Chlorination
Well Field
Well
1
Filtration
Distribution System
CI2
Filtration
Distribution System
Ground Sources
J
CI2
Surface Water
Filtration
Distribution System
Surface Sources
-------
Community Water System Survey 2000
Treatment Scheme 5: Direct Filtration
Application: All Size Categories - Surface Water
Source
Coagulation/Flocculation
Chemical Addition
Surface Water
Coagulation/
Flocculation
CI2
Filtration
Distribution System
Filtration
>rination
-------
Treatment Schemes
Treatment Scheme 6: Conventional Filtration
Application: All Sizes - Surface Water
Source
Coagulation/Flocculation/
Sedimentation
Surface Water
Coagulation/
Flocculation
Sedimentation
CI2
Filtration
Distribution System
Filtration
Chlorination
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Community Water System Survey 2000
Treatment Scheme 7: Membrane Filtration
Application: All Sizes - Ground Water and Surface Water
Source
Chlorination
Reverse Osmosis Unit
Well
Micro - Membrane
Filtration
Distribution System
Surface Water
CI2
Reverse
Osmosis
Filtration
Distribution System
-------
Treatment Schemes
Treatment Scheme 8a: Softening
Application: All Sizes - Ground Water
Source
Cation Exchange
Well
D LI
Cl,
Distribution System
-------
Community Water System Survey 2000
Source
Treatment Scheme 8b - Softening
Application: All Sizes - Surface Water
Coagulation
Surface Water Flocculation Sedimentation
Stabilization
Filtration
Clearwell Distribution System
Flocculation
Sedimentation/Filtration
Lime Addition
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THIS PAGE INTENTIONALLY LEFT BLANK
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Office of Water (4607M)
EPA815-R-02-005A
December 2002
www.epa.gov/safewater
Printed on Recycled Paper
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