Factors Impacting Consequence of Failure
Prior to assigning consequence of failure ratings to each asset, system staff will want to create a consequence rating structure. Once the rating structure is created, system staff will rate the consequence of failure of each asset using the rating structure. The consequence of failure rating is complex because it includes a variety of qualitative and quantitative factors that need to be considered together within the triple bottom line categories of financial, environmental, and social. It can be difficult to blend these types of factors and decide how to value each of them compared to the others. As an example, the system may have to pay direct costs related to an asset failure, such as cost of water loss, repairs, fines or property damage. There are also potentially indirect costs that may occur in the form of social consequences that are not easily quantified, such as business or customer interruptions, traffic delays, public perception or reputation. Often when an asset fails, the consequences of that failure will fall into at least two of the three Triple Bottom Line categories, if not all three.
To assess the qualitative and quantitative consequences from gray and green assets, consider all the information the system may have, such as past experience, known financial costs, past regulatory failures, complaints from customers, and models to help predict the consequences of failure. Impacts of relevant natural hazards (e.g., wildfire, earthquake, tornado, or hurricanes) on assets may be more challenging to estimate because data may not be readily available, and the events are relatively infrequent. Because these events can potentially have high consequences, especially to large natural assets, there are several models available to predict how these natural assets will respond to natural disasters. For example, watershed models can be used to quantify the effect of a fire on erosion and water quality in an affected river that serves as source water. Additional sources of information such as source water assessments, watershed assessments, USFSUnited States Forest Service Forest-to-Faucet maps, or others can serve as reasonable proxies for consequence estimates.
Systems must look at financial, environmental and social consequences when assessing the overall consequences of asset failure in order to make holistic and informed judgements across all types of assets. Below are descriptions of these three consequence categories as well as some examples of the type of consequences that fall into each category. When assessing the overall consequences of asset failure and assigning a rating, systems should consider the factors below.
Consider all of the potential financial costs associated with an asset failure. The examples below are not an exhaustive list of financial costs but are some of the most common costs to consider. These common costs include repair/replacement, collateral damage caused by the failure, legal costs associated with the failure, loss of revenue, cost of water lost, regulatory fines, and any required payments to businesses affected by the failure (if the business had losses related to the failure but the system did not have to pay anything toward these losses, it is classified as a social consequence rather than a financial one.)
Cost of Repair/Replacement – Depending on the type of asset and the extent of the failure, repair may be simple, moderate or extensive. Some failures may be so severe, or repairs may be so expensive that asset replacement is the best option. If the asset can be repaired easily at a reasonable cost, the consequences are lower. As the costs and complexity of repairs increase, the consequence of failure increases. For example, a small leak in a water distribution pipe can be repaired with a clamp, or a chlorine pump can be replaced with a spare pump or perhaps the parts can be replaced inside the pump. Both of these situations would constitute a lower consequence of failure. The failure of a major wastewater collection pipe or wetlands may be more involved and expensive, may require extensive efforts to repair, and may result in a number of additional consequences beyond financial (environmental, public health, social). These types of failures will result in higher consequences.
Costs or Impacts Related to Collateral Damage Caused by the Failure – In some cases, when an asset fails, damage may extend to other assets within the system or to assets unrelated to the water, stormwater, or wastewater system. One example of this type of damage is a drinking water line failure causing a sinkhole which in turn causes major sections of a road to collapse or damages the foundation of a building, or damage to cars falling in the sinkhole. Another example is several planters becoming clogged over time and the planters experience a large storm event in which water cannot properly infiltrate. The water may go into a store front, potentially causing damage inside the store. Another example is a sewer pipe failure that leaks sewage into a home or yard or onto a schoolyard or playground. In these cases, there may be a significant amount of clean up required to restore property or habitat. The system may be held responsible for this collateral damage, and in these cases, the costs related to this type of failure need to be considered. Collateral damage may also occur within a utility. If a sewer collapses, debris may be delivered to the wastewater treatment plant which may damage motors or other moving parts.
Legal Costs Associated with Asset Failure – In some cases, individuals or businesses may sue for damages related to harm to property, injuries sustained, or lost revenue caused by an asset failure. For example, imagine a driver is driving down the road and his car falls into a sinkhole caused by a water line failure and the driver sustains an injury. The driver may sue the system to cover the costs associated with the injury and loss of work time. If the sinkhole causes damages to businesses, they may sue for damages. Systems can also be sued for causing significant environmental damage. These costs would be in addition to the costs of repairing and replacing damaged property or other assets.
Cost of Shutting Down or Limiting Operations – Shutting down or limiting operations, even for a short period of time, may have significant economic impacts for businesses. A sewer pipe leak near a major roadway may prevent customers from visiting businesses because of road blockages or odor. The reduction in business income due to repair work having blocked or shut down the businesses can financially impact businesses. Lack of service may also impact the system’s revenue if the service disruption is lengthy, and water is not passing through the meters of business customers.
Property Values – Property values can be raised when significant green infrastructure is installed in neighborhoods due to the aesthetic appeal and the opportunity for outdoor recreation. However, failure of that green infrastructure leading to unkept, clogged or dilapidated green assets can just as easily decrease livability and property values and negatively impact those living in the community.
Some types of asset failure can lead to environmental consequences. Any abrupt or significant change to water quantity and quality can lead to negative environmental impacts. Asset failures that have environmental impacts may not always be easy to assess in monetary terms. However, some attempt should be made to assign some type of quantitative or qualitative value to the environmental consequences. Environmental consequences resulting from asset failures include contamination of waterways or land, loss of habitat, negative impacts to plants or wildlife, violations of any regulatory requirements, or discharge of waste products. An example of an environmental impact related to a failure would be a sewer pipe break that caused sewage to enter a waterway or flow onto public or private land. A value, in either quantitative or qualitative terms, would need to be placed on this type of consequence. If the leakage resulted in a regulatory fine, the cost of the fine would be included in the financial category. The magnitude of environmental consequence can be assessed in relative terms. A failure that resulted in large quantities of raw sewage being discharged into a major waterway should be given a high consequence rating; a failure that resulted in a moderate amount of sewage leaking on land could be given a medium rating; and a failure that would cause small amounts of sewage to be discharged onto impervious surfaces only could be given a low rating.
Contamination – One of the main objectives of green infrastructure is to capture and treat rain and stormwater. Many of these assets are protecting source water or recreational waterways. Any failure would not only increase the treatment load for water or wastewater systems but could also allow untreated or insufficiently treated contamination to enter waterways. There is a close relationship between urbanization and water quality. Stormwater picks up trash, excess nutrients, sediment, and other pollutants that flow into a storm sewer system or directly to a lake, river or wetland. By capturing and treating rainwater where it falls, green infrastructure practices can reduce the pollution in rivers, lakes, and coastal waters. An asset failure for a water system could mean contaminated water reaching the waterways. Wastewater assets are already treating contaminated water and thus inherently any failure of the system poses a contamination risk. For example, a sewer pipe that leaked sewage into a waterway or onto public or private land could cause significant environmental impacts. While drinking water is generally considered safe, the discharge of chlorinated water has the potential to impact aquatic life. This type of discharge can have environmental consequences, even if it would not cause public health consequences.
Violations or Fines – Some type of failures will result in violations of regulations. Violating environmental law and EPAEnvironmental Protection Agency regulations that are in place to protect the public health and the environment can lead to severe consequences. In addition, it is possible that the violation can result in a fine. For example, if a system violates their stormwater discharge permit by having several overflows or exceeding the permit limit for a contaminant like E. Coli in the discharged effluent, they can face fines in the tens of thousands of dollars. While the environmental consequence of the violation is considered in this category, the fine associated with the consequence is considered in the financial category.
Loss of Habitat – Failures of assets can have significant negative impacts on wildlife habitat. Some green assets such as canopy and open space may be habitat for birds, mammals, amphibians, reptiles, and insects. These green assets can act as nature corridors for wildlife to move through a city’s urban environment. Failures of these assets can impact their ability to serve these functions. Failure of gray assets can cause erosion problems or contaminate wildlife habitat.
Impact on Wildlife – Some type of asset failures will directly impact wildlife. Polluted water, whether it be stormwater or wastewater, has adverse effects on wildlife and aquatic life. For example, trash can clog waterbodies, excessive nutrients can cause harmful algae blooms and sediment can reduce visibility and destroy habitat. Polluted waterways poison fish and other aquatic life and can reduce oxygen levels in the water dramatically, thus threatening marine life. Chlorinated drinking water that enters waterways can also have an impact on aquatic life.
Social impacts refer to any impact to people, which in the case of a water, wastewater, and stormwater system, can be the general public, elected leaders, and employees. When an asset fails, there may be minor or major impacts or inconveniences to the community, elected leaders, or employees. Social consequences can relate to safety, public health, traffic inconvenience, business disruption, service outages, or the public’s ability to use or enjoy an area or facility. In some cases, the impacts may be minor, such as a 1-hour water outage in the middle of the day or a 2-hour blockage of one lane of a minor street, while in others it may be much higher. On the other hand, if the system has very few isolation valves such that a water line repair requires a large portion of the system to be shut down, the inconvenience to the public is much greater. In the first case (a simple repair in a residential area that shuts off a few customers for an hour), the consequence of failure related to the social impact is low. In the second case where the whole system must be shut down to make the repair, the social impact is much higher. These examples have focused on inconvenience, which may appear insignificant, but to members of the community, the inconvenience may be extremely important and may affect how they feel about the system in general. If customers have negative impressions of the system, it can impact the ability to raise revenue. More consequential social costs include impacts related to public health and safety. Water, stormwater, and wastewater infrastructure failures can negatively impact water quality which can threaten public health, public recreation, and safety. Of particular concern are asset failures that may pose a safety concern to employees. One example is a walkway and railing on top of a wastewater equalization tank. The employees use the walkway and railing to make observations or collect samples. This metal walkway and railing were severely corroded and had numerous areas of weakness, including the fact that the railing easily moved back and forth when touched. If the walkway and railing asset failed while an employee was standing on it, the employee would fall into the raw sewage tank and may be seriously injured or lose his or her life.
These consequences, as well as those less severe related to inconvenience, may be hard to quantify monetarily but should be included in a qualitative way. Below are categories of social consequences systems should consider.
Public Health – Some types of asset failures can negatively impact public health. Polluted runoff poses a threat to public health by contaminating the rivers, lakes, and coastal waters where communities swim, boat, fish, and obtain drinking water. Some communities have combined sewers that convey both stormwater and wastewater and if these pipes fail, a combined sewer overflow (or CSO) can occur. This situation is possible during periods of heavy rainfall. If the CSOCombined Sewer Overflow occurs near waterways, the polluted water can enter lakes, rivers, or oceans potentially creating a public health risk. Failure of green and gray assets can also lead to recreational and drinking water sources being contaminated with bacteria, sewage, or excess nutrients that cause toxic algal blooms. A decrease in local water quality can result in higher health care costs for the community. Increased vegetation with green infrastructure creates co-benefits, such as improved air quality or reduced heat island effect, but failures reduce or negate those additional improvements.
Public Safety – Some types of failures can negatively impact public safety. Asset failures may damage roads and directly impact public safety. For example, if a water line fails and causes a sinkhole people in cars, houses or sidewalks may be hurt. Another asset failure could leave water covering the street. If that water freezes, that could negatively impact traffic and cause accidents. Asset failures may cause streets or sidewalks to be blocked and, if not fixed quickly, could lead to safety concerns. Assets near critical facilities (e.g., schools, parks or hospitals) and those near primary roads should have higher consequence ratings.
Impact on Community Resources – Water, wastewater, and stormwater infrastructure failures may have impacts on community resources. The failure of green assets could temporarily reduce recreation space or recreational opportunities. Trees and parks help transform an urban neighborhood into an inviting, exciting place to live, work and play. Overgrowth and lack of maintenance on these and similar green assets could reduce property values and harm businesses because people may be less likely to spend time in areas with degraded infrastructure. This type of asset failure (which is best defined as a level of service type failure) can also reduce the activities of residents in outdoor spaces. If green assets are not maintained, especially in the first few years, the vegetation is likely to fail. Failure of the vegetation diminishes the urban heat island reduction that occurs when urban areas replace man-made land cover with trees, green roofs and other green infrastructure that cool the areas by shading, deflecting radiation from the sun, and releasing moisture into the atmosphere. Level of service failures such as odor complaints associated with sewers, wastewater treatment plants or pump stations that are not addressed in a timely manner aggravate and frustrate the community. These inconveniences lead to a lack of confidence and ultimately a negative impact on the system’s public image.
Public Image & Confidence – Certain types of failures may negatively impact the public’s confidence in the water, wastewater or stormwater system and this may have a detrimental effect on the system. The assets must be in working order to deliver the level of service desired by the system and its customers. If the assets fail, the ability to deliver the desired level of service may be compromised. An asset that has a major impact on the ability to meet the level of service would be considered more critical to the system than an asset whose failure would not have a significant impact on level of service. Failure with any social consequences (public health, smell, aesthetics, level of service, safety) can cause widespread loss of community confidence in government and adverse media coverage, possibly resulting in diminished ability to raise revenues necessary to operate the system. Therefore, it is important to weigh these consequences just as heavily as environmental and financial consequences. As an example, the failure to provide safe water to the community of Flint, Michigan not only effected the public image of that system; it effected the public image of the water industry as a whole. It is important to consider how hard a system must work to gain public confidence and how quickly it can be lost. Once lost, it may be extremely difficult to retrieve.