Water utilities
Principle 3
Embrace Innovative Strategies and Technologies
Explore new approaches to boost the efficiency of your replacement program.
Key Actions
Key Action 1
Adopt contracting best practices
Make information about lead service lines and what you will do to address this issue accessible to all.
Utilities can manage lead service line replacement (LSLR) costs through efficient contracting policies. Replacement costs vary from $3,000 to $26,000 per line, depending on the scope. While some expenses, like traffic control and permitting, are unavoidable, strategic policies can help keep prices in check.
Contracting approaches that can support cost-effective LSLR practices include the following:
Evaluate contract size and scope of work
Evaluate contract size and scope of work to ensure that bid advertisements are appropriately structured for your region. Adjusting lead service line replacement contracts to match contractor capacity can increase interest from contractors and help reduce replacement costs through competition.
Increasing the size of bid packages
Increasing the size of bid packages may reduce the keep costs per lead service line. Many utilities have found that increasing the number of lead service lines per contract to a significant scale, say greater than 300-400 LSLRs or even in the 1000s, helped increase cost-efficiencies by creating economies of scale for utilities like St. Paul Regional Water Services, Indiana American Water, City of Elgin, and Louisville Water Company.
Varying the size of bid packages
Varying the size of bid packages may allow smaller contractors or plumbers to bid on projects, which if awarded increases the pool of skilled workforce, increases the competition, and may allow for more local contractors. Opening up the work to smaller firms may reduce the cost per LSLR.
Self-performing non-uniform construction
Self-performing non-uniform construction where the conditions for the lead service line replacement (LSLR) are not well defined and contractor estimates will be high or may increase the contractor’s risk and or required specialty skill set. Leveraging in-house construction capabilities for “oddball” conditions can eliminate the uncertainty from contractor bids.
Creating separate bid items for non-uniform construction items
Creating separate bid items for non-uniform construction items while bundling the uniform items. By bundling the uniform items into lump sum bid items and breaking out line items for the cost associated with the non-uniform items (e.g., cost for greater than 25 ft replacement pipe, meter box replacement, non-standard asphalt patching, non-standard traffic control) the contractor’s risk is reduced on the lump sum bid items and allows lower prices for the lump sum bid items.
Pre-procuring materials
Pre-procuring materials through state cooperative purchasing agreements can reduce costs for construction materials. This requires the utility to maintain an inventory system and management structure to support construction activities, often including contractor efforts.
Develop transparent contract language
Develop contract language that provides transparency and incentivizes contractors to meet your community’s priorities on an expedited schedule. Some examples of how you can use contracts to work faster include:
Include simple pay terms
Include simple pay terms by breaking out line items for each cost associated with lead service line replacements (LSLRs) instead of a lump sum (e.g., cost for 25 ft replacement of ¾-inch pipe, meter box replacement, asphalt patching, traffic control)
Incentivize with pay for success terms
Incentivize with pay for success terms that encourage contractors to deliver work on a faster schedule or at a lower cost per lead service line.
Stipulate workforce development requirements
Stipulate workforce development requirements that include apprenticeship program requirements or minimum goals for hiring local residents.
Toolbox
Contracting best-practices
Cooperative purchasing & procurement
Key Action 2
Streamline the permitting process
Permitting for lead service line replacement can be a time and cost challenge for some municipalities. To prioritize public health in the community, municipalities should consider streamlining and prioritizing lead pipe replacement-related permitting process steps (e.g., plumbing application, inspection, road opening, etc.) over routine work by other departments.
Some considerations for streamlining permitting include:
Batch processing permits
Batch processing permits on an entire street or neighborhood basis instead of processing permits individually per residence to reduce costs and save time.
Prioritize LSLR permits
Prioritize lead service line replacement (LSLR) permits ahead of routine permits for street, gas, or other infrastructure work to expedite the removal of LSLs.
Consider reducing or waiving permitting fees
Consider reducing or waiving permitting fees. Though permits are an important source of revenue for municipalities, high permitting prices could pose barriers to moving forward with lead service line replacement, forcing utilities to delay when pipes are replaced. Additionally, a contractor’s charge for pursuing permits may well exceed the revenue collected from the fee.
Embrace virtual inspections
Embrace virtual inspections, photographs, or videos as an alternative to in-person inspections by plumbing code officials.
Allow inspections by 3rd party inspectors
Allow inspections by 3rd party inspectors rather than code officials, or plan for hiring short-term support during the project’s peak stages.
Create an on-line portal
Create an on-line portal for easy upload of permit applications by the lead service line replacement contractor.
Allow permit applications to be submitted or adjusted
Allow permit applications to be submitted or adjusted after the work is done to provide flexibility as these projects may have many moving pieces and the work may not always occur as planned.
Establish an escrow account for permit fees
Establish an escrow account for permit fees so that “check clearing time” does not cause delays in the process. Accurate recordkeeping of the appropriate permit fees is a critical requirement for escrow close-out at the end of the phase or project.
Toolbox
Simplified permitting & inspections
Key Action 3
Coordinate with other construction activities
Coupling your lead service line replacement project with other public work projects that require digging up the same streets, sidewalks, and landscapes, such as water main replacements or roadwork, can help stretch funds by increasing cost-efficiencies. Additionally, coordinating such activities will also minimize disruptions to customers.
Incorporate LSLR into broader capital planning
Incorporate lead service line replacement (LSLR) into broader capital planning and asset management activities to maximize administrative and construction cost-efficiencies and minimize disruptions. The cost of road work and excavation associated with an LSLR project can be significant—making up 30-40 % of an LSLR cost—therefore, coordinating between several construction projects is a prudent approach.
Some broader construction activities that could be coordinated with LSLR projects include:
- Water main replacements or relining
- Sewer lateral replacement
- Meter replacement
- Gas utility work
- Broadband installation
- Roadwork
While coordination of LSLR with water main renewal programs is an important way to reduce unit cost of LSLR, utilities should use the best practice of separating program funds to ensure that water main replacements are not significantly reduced due to LSL work.
Consider exceptions on road construction and paving moratoriums
Reconsider road opening moratoriums and pavement restoration policies to create an exception for lead service line replacement. This policy allows lead service line replacement (LSLR) programs more flexibility to do the work and avoid unnecessary delays. It should be noted that for roads that are governed by the county or state, coordination with those entities is required to address moratoriums.
Right-size traffic control measures
Right-size traffic control measures. Most water infrastructure projects include traffic control services to ensure public safety, however, the approach differs significantly across municipalities ranging from basic controls (e.g., placement of cones/signs and possibly a flagger) to advanced measures (e.g., temporary street closures) that typically involve local police, often paid on overtime. The advanced measures are far more expensive, potentially doubling the hourly cost.
Toolbox
Coordinated construction activities
Key Action 4
Leverage trenchless methods and innovations
Removing existing LSLs using traditional open-cut trenching can be costly, and disruptive to customers as it may impact their property. Many utilities are leveraging trenchless construction methods to both expedite the construction process and minimize impacts to customers.
Consider using a pull-through method
Consider using a pull-through method for lead service line replacement (LSLR). A new service line can either be pushed or pulled along the existing path or new path rather than an open-cut excavation. Pull-through technologies are being used successfully by utilities; however, the technique may have limitations in certain soil types.
Opt for directional drilling methods
Opt for directional drilling methods. As an alternative technique for pulling, utilities can consider directional drilling to reduce the impact on the customer. While directional drilling may be costly for “one-off” replacements, it can be advantageous for larger lead service line replacement (LSLR) programs that are approaching replacements on a neighborhood scale, because this technique can drill many new service lines in an area within a short period.
Several utilities have noted that the pull-through method may periodically fail at certain construction applications; therefore, they leverage directional drilling to avoid the need to reschedule work if the other construction methods are inadequate.
Toolbox
Key Action 5
Evaluate alternative project delivery opportunities
Evaluate alternative and innovative project delivery opportunities that can expedite your replacement program. Some creative approaches include:
Community-Based Public-Private Partnerships (CBP3s)
Community-Based Public Private Partnerships (CBP3s) can be an effective model for increasing speed, cost-effectiveness, and equity through a de-risked delivery. Community-based private-public partnerships (CBP3s) are a collaborative model where government, private companies, and community-based organizations work together to meet public service needs. In a CBP3, the private partner would be responsible for financing, planning, design, construction, operation, maintenance, and/or rehabilitation and replacement of lead service line infrastructure.
By pooling resources, expertise, and funding from both public and private sectors, CBP3s have the potential to increase the ability to leverage public funds while minimizing impacts to a municipality’s debt capacity. Utilities can get a start on figuring out whether a CBP3 approach would be an effective strategy by using this CBP3 calculator.
Empower homeowners to receive contractor bids
Empower homeowners with the responsibility for receiving bids from contractors to initiate the lead service line replacement (LSLR) process. Many Wisconsin utilities’ lead pipe replacement programs require homeowners to request multiple quotes from a contractor or plumber and coordinate replacement work. After utility staff certify that the work was completed to their standards, the utility then pays the contractor for the completed work. This approach requires the utility to ensure that public-side service line replacements are performed in parallel with private-side efforts to avoid partial replacements.
Consider home warranty
Consider home warranty programs to help homeowners cover the costs of damages and repairs to service lines that may occur while lead service line replacement (LSLR) programs are being carried out. These warranties cover damages to major housing systems that would not typically be covered under homeowners’ or renters’ insurance, such as plumbing. These sorts of services could be provided to homeowners to cover damages and the cost of repair to the private side of the service line, potentially saving them time and money.
