Report Points to Minnesota Water Infrastructure Crisis

An article from the West Central Initiative

Infrastructure needs in Minnesota's rural communities have reached a crisis point, far exceeding the capacity of the communities to address the challenges properly. And, at more than $6.9 billion, the needs threaten the viability of the state's communities. But a coordinated public policy response could help diminish some of the adverse effects while it also helps avert similar circumstances in the future.

That's the conclusion in a report issued earlier this year by West Central Initiative (WCI), based in Fergus Falls, Minnesota. The report summarizes a study that WCI conducted to estimate current and future needs for water, wastewater, and storm sewer repair and replacement for the incorporated cities and one sanitary district in its nine-county service area. The regional foundation serves Minnesota's Economic Development Region IV and includes 82 communities in the counties of Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse and Wilkin.

The report estimates that immediate infrastructure needs in the service area are $472 million. During the next 20 years, that number nearly doubles, reaching $813.5 million. The study's findings have been extrapolated to provide an estimate of need for all of Minnesota outside the seven-county Minneapolis-St. Paul metro area. Those total immediate statewide needs in greater Minnesota are estimated at $6.9 billion.

That substantial figure stands out even more when positioned against current levels of local, state, and federal funding. Historically, a typical annual allotment of state and federal subsidies is $30 million. Communities are estimated to be able to provide $5.37 billion. The remaining funding gap is $1.5 billion; that difference calls for immediate cooperative action by individuals and agencies.

Aging Systems, Inadequate Resources

Clearly, such numbers underscore the vulnerable position that communities are in when their infrastructure begins to fail. Aging systems, coupled with currently inadequate resources, can prove a precarious combination. And there's no ready solution. Many of the systems built in the 1930s had an estimated design life of 50 years. Today, those systems have outlived their design life and are in poor repair. Communities often lack the capacity to bond for the funds to repair or to replace these systems.

At the same time, state and federal agencies with funds to help pay for infrastructure work report a backlog of hundreds of applications in the hundreds of millions of dollars in Minnesota. Even without a backlog, the wait for financial assistance in any form can take several years. Factors contributing to this wait include a lack of quantifiable information about community infrastructure systems, which makes planning for future needs difficult.

While some of the inconveniences around failed systems are obvious, other implications are less evident. If a community is unable to offer water and sewer services, for instance, the chances of attracting residents or new businesses are low. In addition, if communities are not in compliance with state regulations, they face limits on new development. Further, if smaller communities don't receive funds to fill the financing gap, their households could face prohibitive monthly utilities bills, certain to affect affordability of living in the communities and a factor in declining property values.

The WCI report frames the complex, cause-and-effect factors in planning and sustaining infrastructure through immediate and long-term needs. Immediate needs are defined as infrastructure in need of urgent repair or replacement due to age, condition, capacity, safety or permitting. Without action, this infrastructure continues to age and to deteriorate. At the same time, it is asked to support the demands of growth and tightening regulations. As any immediate crisis is put off, more infrastructure reaches the end of its useful life, expanding the problems that communities face as well as increasing the cost of repair and replacement.

Immediate needs may have severe consequences, such as flooding from failed storm sewers or firefighting that is hampered by inadequate water supply. Multiplied over the course of several years, such conditions also threaten a community's viability, hamper development, affect public safety and erode a community's quality of life. In a decade or two, the effects intensify to include degradation of the natural environment, eventual abandonment of otherwise viable communities and the consequent increase in growth and congestion in regional centers and metropolitan areas.

The WCI study includes the total costs of specific immediate infrastructure needs for the region. For example, due to the expense of replacing water towers, water system needs tend to be the most costly. As even the smallest communities are held to the same effluent standards as metro areas, wastewater systems costs can also be prohibitive. The immediate statewide needs for each system are estimated as follows: water systems, $3.2 billion; wastewater systems, $2.8 billion; and storm sewer systems, $0.9 billion.

In the study, infrastructure needs are presented within five-year increments and also by population group, underscoring the distinctive challenges for variously sized communities. For instance, communities with more than 600 residents can generally self-finance and manage many infrastructure modifications, while smaller communities need subsidies. The report details why that is the case: if a community with fewer than 200 people immediately addressed its immediate infrastructure needs, residents' monthly utility bills could reach a prohibitive $180 per month. It is generally cheaper to fix existing systems than to abandon them and redevelop capacity elsewhere, which is a big consideration for smaller communities.

The report also notes infrastructure problems in Minnesota's developing lake areas. It does not include data, but comments on the challenges of implementing costly infrastructure projects in sparsely developed areas. Again, the absence of sufficient financial and administrative resources emerges as an impediment.

Report Recommendations

With an infrastructure crisis pressing and its ramifications looming, the WCI report calls for cooperation among local governments, state and federal funding agencies, regulatory agencies and legislators. Its recommendations focus not just on funding, but on training, setting rates that address current and anticipated future needs, providing education and initiating planning assistance. For instance, while the report states that the backlog of requests with state and federal agencies must be funded, it also suggests that providing training for city staff and personnel in planning, record keeping and infrastructure maintenance techniques could help prevent an infrastructure crisis in the future. In addition, providing capital improvement planning assistance to all communities could help justify incrementally increasing their utility rates over time to build reserves.

WCI recommends considering alternative management strategies for small communities, such as forming public utility maintenance cooperatives or outsourcing work to private operations and maintenance firms. The report also suggests that regulatory agencies consider a permitting and enforcement approach that weighs systems costs and potential environmental impact, especially for communities with populations of fewer than 600.

Another point in the report suggests community education so that residents understand and accept responsibility for the current infrastructure challenge. Few residents are aware of the true cost of repairing, upgrading and replacing their community's infrastructure.

Such steps, which combine action and planning, point to the multiple levels of involvement that could help resolve the immediate infrastructure challenges while they also help sidestep a similar crisis in the future. Cooperation among individuals and agencies can not only assist communities sustain their quality of life, but it can help them grow into stronger communities in the future.

The full infrastructure study report for West Central Minnesota communities can be found on WCI's website, at www.wcif.org. Contact West Central Initiative at 1000 Western Ave., Fergus Falls, MN 56537, or telephone 218-739-2239.

October 2003