An Assessment of the Economics of Natural and Built Infrastructure for Water Resources in Maine Charles S Colgan PhD Damon Yakovleff MCPD Samuel B. Merrill PhD May 2013 Acknowledgements !e authors wish to acknowledge the contributions and feedback of the following individuals and organizations: Mark Anderson (University of Maine-Orono), John Burrows (Atlantic Salmon Federation), Gregg Caporossi (!e Trust for Public Land), Barbara Charry (Maine Audubon), Diano Circo (!e Trust for Public Land), Dan Coker (!e Nature Conservancy), Andy Cutko (Maine Natural Areas Program), Geo" Herman (Maine Munic- ipal Association), Paul Hunt (Portland Water District), Shaleen Jain (University of Maine-Orono), Kris Johnson (!e Nature Conservancy), Linda Orel (!e Trust for Public Land), Josh Royte (!e Nature Conservancy), Mark Smith (!e Nature Conservancy), Nancy Smith (GrowSmart Maine), John Talberth (World Resources Institute), R. Collin !errien (Maine Dept. of Conservation), Andrews Tolman (DHHS-Drinking Water Program), Steve Walker (Maine Department of Inland Fisheries & Wildlife), and Jed Wright (U.S. Fish and Wildlife Service). Special thanks to the Doris Duke Charitable Foundation, for its support of collaborative conservation #nance research, and to the Elmina B. Sewall Foundation, for its long-standing commitment to the environment and human well-being in the state of Maine. About the Authors Chales S. Colgan is Professor of Public Policy & Management and is a Research Associate of the New England Environmental Finance Center and Chair of the Graduate Program in Community Planning & Development in the Muskie School of Public Service at the University of Southern Maine. Damon Yakovle" is a Research Associate of the New England Environmental Finance Center. Samuel B. Merrill is Director of the New England Environmental Finance Center and an Associate Research Pro- fessor of Community Planning & Development in the Muskie School of Public Service. An Assessment of the Economics of Natural and Built Infrastructure for Water Resources in Maine i Table of Contents Acknowledgements .....................................................................................................................................i About the Authors .......................................................................................................................................i Executive Summary ..................................................................................................................................2 Introduction ................................................................................................................................................9 Economics of Water Resource Management: Evidence from Outside Maine ................................. 10 Drinking Water Quality and Reliability ............................................................................................... 10 Riverine Flood Hazard Mitigation ........................................................................................................ 11 Coastal Flooding Protection .................................................................................................................. 12 Addressing Stream Crossing Vulnerabilities ....................................................................................... 13 Stormwater Management ....................................................................................................................... 14 Economics of Water Resource Infrastructure: Evidence from Maine .............................................. 18 Natural Infrastructure Conservation Need Analysis for Maine ........................................................ 18 Avoided Costs of Riverine Flooding in York County (Natural Infrastructure) ............................. 21 Coastal Flood Protection Investments (Natural Infrastructure) ....................................................... 24 Upgrading Culverts in Maine (Built Infrastructure) .......................................................................... 25 Low Impact Development for Stormwater Management (Built Infrastructure)............................. 26 Value of Filtration Avoidance Waivers in Maine (Natural, Built Infrastructure) ........................... 27 Conclusion ............................................................................................................................................... 28 References ................................................................................................................................................. 29 Appendix 1: Natural Infrastructure Spatial Analysis .......................................................................... 32 Appendix 2: Aquatic Connectivity Improvement - A Municipal Case Study ................................. 52 Appendix 3: Maine Potato Board Irrigation Survey Report (2010) .................................................. 57 ii The farmhouse lingers, though averse to square With the new city street it has to wear A number in. But what about the brook That held the house as in an elbow-crook? Robert Frost ©David McClain Executive Summary Clockwise: ©Bruce Kidman; ©Town of Sullivan; ISTOCKPHOTO.COM; ©Bridget Besaw ©Bridget ISTOCKPHOTO.COM; Sullivan; of ©Town Clockwise: ©Bruce Kidman; Water is Maine’s most essential resource. Yet Dispersed population growth has spread the need for new we only seem to notice it when there is too systems across the landscape, creating stresses on both the quantity and quality of Maine’s historically abundant much or too little of it. groundwater and surface water supplies. Steps to address Water is critical to everything that lives in Maine. Most the inadequacies of these systems to manage stormwater of the ways we use, or are a"ected by, water are greatly $ows are long overdue. in$uenced by how we decide to manage the state’s water A changing climate is producing increasingly frequent and resources. Traditionally, when population size justi#ed the extreme precipitation. York County, for example, experi- investment, we have focused on the construction of central- enced 100 year and 500 year $oods within a single year. ized water supply systems and strategies to remove wastes. But the demands on these centralized water systems are Historically, almost all water resource issues were addressed changing. by building expensive new infrastructure. Today it has 2 Water resources are most effectively and HɝFLHQWO\PDQDJHGE\ERWKEXLOGLQJ DQGQRWEXLOGLQJQHZLQIUDVWUXFWXUH !e report concludes that there are numerous opportunities for Maine to meet the demands for new, upgraded, and ex- panded water resources management and to do so at much lower costs than is o&en thought (or feared) possible. Four aspects of water resources are examined in the report: 1. Maintaining drinking water quality 2. Mitigating $ood hazards 3. Ensuring adequate culverts 4. Managing stormwater Maintaining drinking ISTOCKPHOTO.COM water quality Maintaining drinking water that meets the strict standards of the federal Safe Drinking Water Act requires that water supply, transport, treatment, and distribution systems must be of high quality. But high quality can come at a high price; #nding least-cost solutions to meeting federal requirements is a continuing challenge for public water systems. As pop- ulations grow, thresholds are reached where meeting federal standards can require expensive new treatment technol- ogies. Avoiding such expense is an urgent need for many regions. New York City confronted this problem a decade ago. A&er a cost/bene#t analysis, the City decided it would be more © David Bates © David cost e"ective to conserve land around their water sources and take other steps to preserve the cleanliness of the water become clear that water resources are most e"ectively and coming to the City from the Catskill Mountains, 100 miles e%ciently managed by both building, and not building, new to the northwest. Over ten years, the City spent $1.4 billion infrastructure. Promoting the use of natural systems’ abil- to purchase land and protect supplies in the Catskills. But ities to keep water clean, to di"use the e"ects of $ooding, this substantial sum was considerably less than $3.0 to $6.0 and to dispose of wastes (within limits) is now accepted as billion in capital construction costs (plus $250 million in an e"ective and economically viable alternative to building annual operating costs) that would have been required in large new structural solutions to water problems. the alternative. Where the option to preserve land was not available, in the Croton watershed, New York City had no !is report examines the opportunities to more cost e"ec- choice but to spend $2.8 billion on a #ltration plant. tively address water resource management needs in Maine through the combined use of natural systems (“natural in- While a water system serving nine million people may frastructure”) and lower cost decentralized structures (part seem an out-of-scale comparison for Maine, the New York of the general category of “built infrastructure”). experience has very useful lessons for Maine. New York’s An Assessment of the Economics of Natural and Built Infrastructure for Water Resources in Maine 3 approach, for example, requires that land conservation be on a strictly willing seller-willing buyer basis and the con- served lands are open for an array of recreational uses from hunting and #shing to hiking and cross-country skiing. Closer to home, a recent study sought to apply the New