Optimal Strategies for the Financially Sustainable Management of Watershed Resources and Water Distribution Infrastructure

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The applicant proposes to contribute to the knowledge-base required to implement Ontario Ministry of the Environment's (MOE) financially sustainable drinking-water and wastewater system legislation by integrating two major research elements. First, a fully-integrated hydrologic simulation model will be enhanced to quantify the interaction of groundwater and surface water flow with engineered structures representing the water and wastewater distribution system within the municipality, where this interaction occurs due to leaking water mains as well as sanitary and storm sewers, and impacts the quantity and quality of the watershed-scale water resource with a specific emphasis on nutrient loading. Second, a municipal financial control model will be developed to simulate the impact of alternative management strategies for balancing the revenue from prescribed water rates multiplied against the amount of potable water consumed as well as wastewater discharged, with expenses needed to fund capital works and operation and maintenance activities to maintain the condition of the water and wastewater distribution system. The optimal management strategy seeks to minimize total costs with a sustainable capital reserve, and simultaneously acts to minimize nutrient loading on the watershed. The outcome of the applicant's research is to develop software that integrates the proposed hydrologic and financial control models into a single computation framework, and enables municipalities to comply with the MOE's financially sustainable drinking-water and wastewater system legislation. In particular, the software will explicitly allow municipalities to integrate hydrologic and financial uncertainty into the framework, and explicitly price the risk that a given management strategy may fail to meet design objectives defined by either future nutrient loading or self-financing conditions.