Risk and opportunity in upgrading the US drinking water infrastructure system

This paper presents a practical risk assessment methodology to provide drinking water infrastructure (DWI) decision-makers with an objective risk assessment tool. The purpose of this risk assessment tool is to maintain the desired level-of-service or systems reliability [r(f)], while managing the financial uncertainty of the expected budgetary impact within the capital improvement program (CIP). The goal of this paper is to demonstrate the value of an objective risk assessment tool for estimating the DWI decision-maker's sensitivity to the risk of systems failure (R). The objectives are to: (1) incorporate probability of systems failure [p(f)] into the CIP budgetary analysis process and (2) evaluate the affects of p(f) on the expected CIP budgetary outcome. The magnitude of the expected budgetary impact is managed through the DWI decision-maker's sensitivity to R, which is represented by the level of the rate of reinvestment (RR). The expected result of the proposed risk assessment tool demonstrates that by proactively managing R to maintain a desired r(f) will effectively manage the impact of uncertainty on the expected budgetary outcome within the CIP. The expected contribution of the practical risk assessment methodology is to provide DWI decision-makers with the ability to reduce budgetary uncertainty when allocating limited financial resources among competing operational, repair, maintenance, and expansion activities within the CIP. The conclusions of the paper reveal that if DWI decision-makers assume risk-avoidance positions through proactive asset management (AM) strategies, they will achieve positive affects on expected budgetary outcomes.