Green Infrastructure Capital and Operation and Maintenance Costs - City of Philadelphia Clean Waters Pilot Program Final Report

A previous post summarized budget costs for Philadelphia's extensive green infrastructure program, showing budget costs of $568,00 per hectare, comparable to recent Ontario LID project tenders with an average cost of $575,000 per hectare.

The Philadelphia Water Department's has also reported extensively on green infrastructure costs and performance in their report Green City, Clean Waters Pilot Program Final Report. Highlights are presented below.

Green Infrastructure Capital Costs (Construction)

"The median construction cost per unit of impervious drainage area was $353,719/ac" - that equates to $872,000 per impervious hectare (2015 dollars).

"Median construction cost per unit of storage volume (Greened Acre) is $248,365/ac-in" - that equates to $2416 per cubic metre.

Overall costs appear to be increasing over time as shown in the following chart - to convert cost per acre to per hectare, multiply by 2.47 :

Green Infrastructure Construction Cost by Feature Type

Capital costs vary according to the type of green infrastructure (called GSI in Philadelphia). The following chart shows the variability in cost per managed impervious area for various types, suggesting some economies of scale for larger managed impervious areas.

The following chart shows the range of cost, median and average cost per managed impervious acre. A high variability in costs is shown from project to project.

Construction Cost by Loading Ratio / Efficiency

The cost efficiency of a green infrastructure project can vary according to its loading ratio, i.e., the relative size of the contributing runoff area to the project area itself. The following chart shows how project costs decrease for larger loading ratios - costs at ratios of 15 or greater are 25% less than costs for ratios of 10 and under. Also it appears that costs level-off for ratios of 15 and greater (i.e., the average cost for a loading ratio of 15 or greater is the same as for a loading ratio of 10 to 15).

Green Infrastructure Operation and Maintenance Cost

Operation and maintenance costs have been reported as well and show a wide variability. The following chart shows cost per impervious drainage area by broad type of green infrastructure, whether a subsurface or surface feature. The data indicates that surface features - those that are vegetated - cost on average more than subsurface features to maintain.

The average cost per impervious acre of $8000 equates to about $20,000 per impervious hectare. The following chart shows the variability in operation and maintenance costs according to each specific green infrastructure type. The chart shows for example higher costs for surface bumpouts and rain gardens than subsurface trenches and basins. For example, on average a bumpout costs almost twice as much as a subsurface basin.

The operation and maintenance cost appears to be approximately $20,000/$872,000 = 2.3% of capital cost. Lifecycle replacement / reconstruction of green infrastructure features, based on their deterioration over time,  would generally add to this cost and could be considered to be 1-4% of capital cost depending on the service life of the feature (i.e., features that last 25 years add 4% depreciation, and those that last 100 years add 1%).

Using these unit costs, overall lifecycle costs for Ontario-wide implementation are explored below, assuming an initial 50-year build-out period and a range of green infrastructure measures with service life durations of 25 to 100 years.

Given 852,000 urban hectares in Ontario, and assuming these are 50% impervious, the cost of green infrastructure retrofits in this province would be $370 billion dollars in capital construction cost (using $872,000 per impervious hectare) - that compares to the current Ontario stormwater infrastructure deficit of $6.8 billion. The Ontario-wide annual operation and maintenance cost for 426,000 impervious hectares would be $8.5 billion assuming $20,000 per impervious hectare - that O&M cost is over 1% of Ontario's GDP. Based on these costs, green infrastructure policies that prescribe wide-spread implementation require careful review for affordability. To recap:

Capital cost = $366 billion (using slightly lower unit cost of $860,000 per Row 12 below)
Annual O&M cost = $8.5 billion
Annual depreciation = $7.2 billion
Annual lifecycle cost (O&M + depreciation (reserve/rebuild)) = $15.8 billion

The following table summarizes the unit costs and illustrates the Ontario-wide costs that should be a cause for concern.

Ontario Green Infrastructure LID Capital, Operation and Maintenance and Lifecycle Depreciation / Reconstruction Costs - Units Costs per Philadelphia Green City, Clean Waters Pilot Program Final Report  

The follow chart illustrates the time series of costs including initial capital construction, operation and maintenance ramp-up followed by sustained operation and maintenance, reserve contributions for lifecycle asset reconstruction / rebuild according to service life (assumed 1/3 25-year, 1/3 50-year and 1/3 100-year durations), and rebuild costs (starting in year 26). It is assumed that 50 and 100-year service life assets are rebuilt over 50 a 50 year period, similar to the initial construction period.

Ontario Green Infrastructure LID Capital, Operation and Maintenance and Lifecycle Depreciation / Reconstruction Costs - 50-year initial buildout and ongoing replacement of assets beginning in year 26, funded by annual reserve.

After the initial build, the average annual operation and maintenance and depreciation costs (that are reflected in the reserve and rebuild costs) is $15.8 billion.

Some academics, including those who promote green infrastructure for amenity or other stormwater management values, have proposed green infrastructure for the purpose of flood control as well. In order to achieve flood mitigation benefits, however, widespread implementation in the sewersheds or tributaries that have flood risks is required - in that case, the costs would appear to be prohibitive to achieve quantifiable flood reduction benefits. For illustrative purposes, a York Region 100 hectare catchment has recently undergone sewer capacity upgrades at a capital cost of approximately $20M and with nominal changes in net operation and maintenance cost (larger sewers replace older ones) and a 100 year service life - implementation was over 3 years. In comparison, the green infrastructure capital costs would be in the order of $872,000 * 50% impervious * 100 hectares = $44M with additional operation and maintenance costs and lower service life durations of 25-100 years, and long term implementation (over decades) with challenges on implementation on private properties, challenges with implementation in newer tributary catchment areas with low flood risk and high existing asset value (i.e., no co-benefits of watermain replacement, etc.). Basically, the conventional flood mitigation (grey infrastructure) approach is less expensive, has a shorter implementation time and more reliably addresses the flood risk issue (i.e., green infrastructure infiltration can aggravate wastewater inflow and infiltration stresses, can adversely affect foundations, and can be unreliable in high groundwater tables areas or during saturated conditions when green infrastructure storage in ineffective).

Some further case studies and detailed assessment are required to explore where and how some green infrastructure features can contribute to Ontario urban flood risk goals in a technically effective, timely and cost-effective manner. Similarly, analysis is needed to evaluate the strategic role of green infrastructure for achieving other stormwater management goals beyond flood risk mitigation.

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How do Philadelphia GSI / green infrastructure costs compare to those of other jurisdictions? One can compare unit costs of $872,000 per hectare for Philadelphia's 1,100 projects with those in Onondaga County, New York. Costs for various types of green infrastructure measures are summarized in a recent article: http://stormwater.wef.org/2015/12/real-cost-green-infrastructure/http://stormwater.wef.org/2015/12/real-cost-green-infrastructure/.

The following chart illustrates lower unit costs with larger projects projects, similar to the Philadelphia reporting.

Green Infrastructure Unit Cost by LID (GSI) Type - Onondaga County, New York

These construction costs may be expressed as costs per area for projects. Considering projects managing 1 to 1.5 acres of impervious area the average cost per acre and hectare are summarized in the table below.

Green Infrastructure unit cost for projects managing up to 1.5 acres of impervious area  - Onondaga County, New York

 Excluding green roof projects, the average construction cost per impervious acres managed is over $368,000, or $783,000 per hectare. This cost is close to the Philadelphia cost of $872,000 per impervious hectare. Assuming 80% impervious surfaces in a catchment, the unit construction costs for project excluding green roofs in Onondaga County, New York is about $627,000 per hectare. This value is in the range of Ontario pilot projects with costs average costs of $575,000 per hectare.

The article citing Onondaga County green infrastructure costs notes that lower costs can be achieved by bundling implementation with other roadway works. In those cases costs were $320,000 per impervious hectare, or approximately $288,000 per total hectare, assuming 90% impervious coverage in those street projects.

Operation and maintenance costs for green infrastructure are summarized by CH2M as well. One observation that is similar to Philadelphia cost reporting is that vegetated systems are more costly to maintain than non-vegetated systems. The following chart summarizes costs per impervious area for various green infrastructure (LID, GSI) measures.

Green infrastructure operation and maintenance costs by type per impervious area managed.

Excluding green roof measures, a annual maintenance costs range from about $500 per impervious acre (low range for infiltration trench) to $3300 per impervious acre for tree infiltration trenches. A typical cost would be about $1500 per acre per year ($3700 per impervious hectare per year) which is 1500/368,000 = 0.4% of capital cost. This is significantly below the Philadelphia unit cost of $8000 per impervious hectare. It is also significantly below reported O&M/capital costs ratios reported in the American Society of Civil Engineers' report Cost of maintaining green infrastructure. In that report O&M costs for infiltration trenches and bioretention ranged from 5-20% and 5-7% respectively per one source (USEPA 1999 summarized by Weiss et al. 2007), and 8% for bioretention per another (Normalized UNHSC Installation and Maintenance Cost Data).

Green Infrastructure Implementation Funding - Private Sector Costs Proposed as Offsets Paid by Benefiting Municipalities

How to fund green infrastructure and low impact
development stormwater management measures on
private property .... no easy answers. 

The report Economic Instruments to Facilitate Stormwater Management on Private Property is an interesting read, looking at how green infrastructure (GI) could be implemented and funded on private property to advance stormwater management goals. There is a link to the report.

The White Paper / study report explores the costs and benefits of green infrastructure, or low impact development (LID) measures, and looks at the barriers to implementation on private property - and there are many. These Barriers to the Implementation of LID Technologies include:

1. High up-front costs
2. Uncertain ongoing maintenance requriements
3. Low return on investment
4. Limited benefits accrue directly to property owners, yet they incur the high costs
5. High transaction costs

The report illustrates the types of costs and benefits under #4 in the following graphic:

Imbalance in public and private costs and benefits for green infrastructure / low impact development implementation.

The graphic illustrates that private costs are high, but the majority potential benefits are public.  Also, the private benefits are very low, like the potential reduction in stormwater management fees available to compensate for the GI or LID measures.

How high are the costs for implementing GI or LIDsfor improved stormwater management? Another interesting graphic shows annualized costs considering capital costs distributed over a 25 year service life (e.g., like annual depreciation of the asset) and annual operation and maintenance (O&M) cost.

LID capital and operation and maintenance costs greatly exceed the potential annual credit for stormwater fees. 

The report's impervious percentage of 20% seems too low
compared to typical urban development patterns in Ontario.
Typical residential percentages are double the report's
assumed value. Typical non-residential percentages can
even be higher (i.e., lots covered almost entirely by impermeable
roof top and parking lot surfaces.

The annual cost of LID measures averages about $5,000 per year considering a 'lot size' drainage area of 5000 square metres, or $10,000 per hectare. The cost estimates consider an area with 1000 square metres of impermeable area, meaning an impervious area percentage of 20% (i.e., very, very low for many urban areas ... meaning these average costs should be higher - see example impervious area coverage at right - while this is residential development, non-residential development has followed similar trends).

Given the disparity in costs and benefits, an obvious barrier to implementation of GI and LID on private property, what is proposed to incentivize implementation? Make someone else pay of course! Who pays? The Public Sector. They call this "OFFSETS" and explain it as follows:

"Offsets are payments offered to proponents of LID infrastructure in compensation
for costs incurred when significant benefits accrue to other parties. A principle of
equity or fairness underlies this type of compensation based on the argument that
costs should be borne proportionately by those who benefit from the green
investment.

Public sector contributions in the form of offsets are justified to achieve a balanced
approach to cost sharing that reflects how all costs and benefits are incurred. Doing
this requires identification and quantification of benefits.."

So ultimately, the idea is that the public pays regardless of whether GI or LID is implemented on public land or on private land. What could these costs be in Ontario and what are the impacts to Ontario taxpayers?

Ontario has over 850,000 hectares of urban land use that
does not have enhanced stormwater management control, and
could be eligible for green infrastructure (LID) retrofits.

Ontario's SOLRIS land use mapping indicates 852,000 hectares of urban land use as of the year 2000. Previously we've estimated the capital cost considering a unit cost of $390,000 per hectare based on Ontario tender costs - see image ar right. All this urban land would in all likelihood have no water quality treatment and be eligible for stormwater managment enhancements. How do we know? Table 1 in the Economic Instruments to Facilitate Stormwater Management on Private Property report indicates that despite the use of quality controls, "Use of enhanced controls is negligible." (see table below).

If we retrofit the untreated area with GI / LID, the annualized cost would be simply $10,000 per hectare x 852,000 hectares = $8.5 billion per year ... forever.

Assuming this cost is allocated to municipalities who benefit from the green infrastructure, and these municipalities distribute the cost to Ontario households, we can estimate the annual household cost. The 2016 census indicates that there are 5,169,170 private households in Ontario meaning a cost of $1650 per household per year. Given household after-tax income of $65,285, the green infrastructure cost would represent about 2.5% of this income.

The Ontario stormwater infrastructure deficit has been estimated at $6.8 billion. If green infrastructure / low impact development lifecycle costs are not funded annually by taxpayers, and debt is used to fund the infrastructure investment, like a green bond, this deficit would double in a single year, and increase by the more than the existing deficit each and every year.

Allocating GI / LID costs seems like a shell game.

Allocating GI / LID costs seems like a shell game, shifting private property costs to the public sector, shifting public sector costs to
the downstream municipalities that accrue potential benefits. In the end there is only one source of funding however.... all of us. Elaborate credit systems, offset schemes, Drainage Act assessments, and fancy 'green bonds' are ways of spreading out the high up-front cost of LIDs. But ultimately, we all pay.

It will be interesting to see the next stages of the study authors' work and how the White Paper could be applied. The report states for example "The White Paper also provides background for a pilot study to be undertaken in the Southdown area of Mississauga. This study will examine the potential of aggregating private commercial property under the Drainage Act to secure installation of communal LID technologies and realize cost-efficiencies." The exploration of the Drainage Act was part of another study under the banner "Aggregated Communal Approaches to Green Infrastructure Implementation". The Drainage Act allows costs to be distributed to landowners across catchments in which improvements are made - the challenge is that landowners against whom costs are assessed have to buy in to the cost-sharing plan and can appeal.