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BACKGROUND

The purpose of this study is to determine the extent to which the cost of operating and maintaining water and wastewater utility systems is influenced by different types of development patterns. The study focuses on factors that influence water distribution and wastewater collection costs (referred to collectively throughout as "conveyance"), separate from factors that have previously been found by others to influence treatment plant costs.

Part 1 of this report provides an overview on utility service patterns, discusses the relative importance of the plant and conveyance components, and reviews common pricing practices. After establishing the importance of conveyance O&M costs, this part analyzes the influence of land use patterns on wastewater collection costs in nine Cleveland and Chicago-area suburbs (and one consolidated system for a total of ten systems) with populations ranging in size from about 8,000 to about 115,000 persons.

Part 2 examines Cleveland's geographic zone-based user rates to determine if regional land use patterns might justify incorporation of land use variables into its pricing structure. This part examines the variation in service density and economy of scale in the Cleveland Division of Water's (CDOW, the Cleveland region's primary water service provider) service area. After finding substantial variations for these two factors, it determines that CDOW's geographically sensitive user rates do not likely capture the full extent of cost variations within its service area.

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