Report: New water supply reservoirs risky ventures in the SoutheastJuly 10th, 2012
Read the report at www.AmericanRivers.org/MoneyPit.
Washington – Southeast U.S. communities should think twice before building new water supply reservoirs, according to a report released today by American Rivers.
The report, Money Pit: The High Cost and High Risk of Water Supply Reservoirs in the Southeast, documents the financial risks and water resource risks tied to the development of new reservoirs in the region. The report comes at a time when many local governments throughout Georgia, the Carolinas and neighboring states are considering significant spending of public taxpayer and ratepayer dollars to build new water supply reservoirs. Collectively, current reservoir proposals in Georgia could cost at least $10 billion in taxpayer and ratepayer dollars.
“Building a water supply reservoir is an incredibly expensive undertaking that carries tremendous risk and saddles communities with debt, with no guarantee they’ll receive the hoped-for water,” said Jenny Hoffner, Director of Water Supply for American Rivers.
“Many leaders see reservoirs as a historically proven way to secure water supply, but looking in the rearview mirror is not the prudent way to navigate the challenges ahead,” said Hoffner. “Local leaders need to know there are lower-risk, lower impact ways to secure water supply. A new reservoir should be the last option on the list, not the first.”
“Saddling a community with debt for a major reservoir project is like buying more house than your family can afford,” said Ben Emanuel, Associate Director of Water Supply for American Rivers.
The report outlines five key financial and resource risks inherent in the pursuit of new water supply from reservoirs:
- Reservoirs are highly expensive, racking up debt for ratepayers and taxpayers.
- A reservoir’s price tag is typically a moving target.
- Reservoir financing plans often rely on inflated population growth projections, ultimately leaving existing residents holding the bag.
- In order to remain full, a reservoir depends on increasingly uncertain rainfall. And, a reservoir loses water when high temperatures cause evaporation.
- Reservoir water is a contested resource subject to competing demands in the river system.
The report also offers five key recommendations for local leaders who seek to reduce their communities’ risks—both financial risks and closely linked water resource risks—in planning for enough clean water for the future:
- Optimize existing water infrastructure first.
- Plan for water use to decrease as a community grows.
- Pursue flexible water supply solutions, like efficiency measures.
- Demand accurate assessments of costs.
- Examine water availability to minimize resource risks.
In addition, the report shines a light on recent water supply reservoir projects that provide cautionary tales of communities burdened by expense and debt, and leaving taxpayers and ratepayers scrambling to escape a seemingly bottomless money pit.
One notable example is the new Hickory Log Creek Reservoir in Canton, Georgia, which quintupled in price during its development. The project has left the City of Canton scrambling to find a way to sell off its share in the reservoir to ease an unplanned-for financial strain. The reservoir’s debt burden has hurt the town’s ability to address basic community needs such as paving streets and buying fire trucks.
Despite the warning signs at Hickory Log Creek and elsewhere, there are still a growing number of new reservoir proposals across the Southeast, with over 20 additional proposals currently on the drawing board in Georgia alone. One of these proposals, for a reservoir on Georgia’s Flint River, could come with a $4 billion price tag.
The report is available for download at www.AmericanRivers.org/MoneyPit.