Tools for Funding Your Water Conservation Program

A community’s water rates should recover the full cost of running a water system, including its primary water conservation program. However, if more ambitious water conservation goals cannot be funded with rates, a water bank can provide another source of funds.

How does a water bank work? A water bank allows a community to collect a fee from new developments for each unit of new water demand. The revenues are then used to reduce water use through conservation efforts elsewhere in the system. For example, fees can fund rebates for replacing older fixtures and appliances with high-efficiency toilets or clothes washers.

In setting up a water bank, keep these key principles in mind:

1. A dedicated fund, or banking mechanism is necessary
2. The fee charge must bear a reasonable relation to the cost of implementing the offset and the program’s administrative costs
3. Retrofits should meet a higher bar for efficiency. For example, the program could require that toilets and other plumbing retrofits meet WaterSense standards and appliances meet EnergyStar standards.
   CASE STUDY: 
    

Danvers water bank funds local water conservation program The Town of Danvers established a Water Use Mitigation Program (WUMP) in 2009 to offset water demand from new development. Projects that produce new or increased water demand pay an impact WUMP fee based on the calculated cost to remove two gallons of water from the town’s water system for every gallon of water that the project adds to the system. The WUMP fees are used to reduce water demand by funding rebates for both residential and commercial customers that upgrade to more water efficient plumbing fixtures and appliances. Since the program’s inception, Danvers has collected impact fees totaling nearly a million dollars, processed approximately 2,000 rebates, and saves an estimated 1.07 to 2.5 million gallons of water annually.

• Massachusetts Water Conservation Standards, Appendix A
• Click here for information on Net Blue - a resource to help establish a program for water neutral community growth.

State Funding for Water Conservation Planning

•  Clean Water State Revolving Fund.

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