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Most models and approaches toward cost accounting of Stormwater Control Measures (SCMs) use standardized engineering economics. These models use the first cost and annualized O&M costs, brought forward to present value using assumed interest rates, etc.  Models that are more sophisticated will break the first costs down to show engineering design, project administration, land, and construction costs. O&M costs can be segmented for minor and major operations. In some models, costs are estimated from a statistical database based on costs from other projects.  For example, the cost of pond maintenance is estimated on data from ten case history’s which are normalized to the area of the pond.  Others are based on unit costs of labor, equipment, disposal costs, administration, etc.   Each method has its advantages and drawbacks. However, my guess is that both methods lack the precision that people are looking for, and is some cases, are underestimating or overestimating costs.

Other economic factors can significantly affect the life cycle costs of an SCM that I have yet to see.    These factors include opportunity costs and risk accounting.  An opportunity cost relates to alternative land uses, local design codes, and land availability.  Alternative land uses can be extra parking spaces in limited parking areas.  As an example, a car dealer in Washington told me once that a single space “turns” $3,000 dollars per week in revenues.  At a 30% margin, that’s $900 per week or about $45,000 per year.  For 10 spaces that is approaching one half million dollars per year of lost revenue.  Therefore, from the owner/developer perspective, their economic equation goes far beyond simple installation and O&M costs.  In another case, the loss of parking reduces the footprint of the building due to code restrictions.  This impacts the long term earnings for commercial and retail space which again add up to substantial sums of capital that can trivialize the first costs and O&M costs.  Lastly, for land costs, sometimes there is just no land available. Many retail and commercial enterprises, such as restaurants, have minimum land space needs and the need to take up extra space by some SCMs negates the practicality of developing the land in the first place.

With respect to O&M we do not consider the increased risk associated with longer term maintenance intervals.  As an example, assume there are two SCMs, one which requires annual maintenance while the other is maintained once every 5 years.  For the sake of illustration, assume both have the same annualized costs. However, there is a chance that some unexpected event, such as an illicit discharge or an erosive high intensity storm may happen which requires unexpected maintenance.  Since the one is maintained, every year this risk is covered in the costs, whereas the other SCM would be subjected to more frequent maintenance requirements such that the overall risk-based cost is higher than one would estimate without risk based accounting.

When (and the sooner the better) SCMs are being maintained as they should be, I believe we need to collect better numbers and use more sophisticated approaches to fully understand their true costs and economic impacts.

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