Risk-Cost Estimation of On-Site Wastewater Treatment System Failures Using Extreme Value Analysis

Owner resistance to increasing regulation of on-site wastewater treatment systems (OWTS), including obligatory inspections and upgrades, moratoriums and cease-and-desist orders in communities around the U.S. demonstrate the challenges associated with managing risks of inadequate performance of owner-operated wastewater treatment systems. As a result, determining appropriate and enforceable performance measures in an industry with little history of these requirements is challenging. To better support such measures, we develop a statistical method to predict lifetime failure risks, expressed as costs, in order to identify operational factors associated with costly repairs and replacement. A binomial logistic regression is used to fit data from public records of reported OWTS failures, in Boulder County, Colorado, which has 14 300 OWTS to determine the probability that an OWTS will be in a low- or high-risk category for lifetime repair and replacement costs. High-performing or low risk OWTS with repairs and replacements below the threshold of $9000 over a 40-year life are associated with more frequent inspections and upgrades following home additions. OWTS with a high risk of exceeding the repair cost threshold of $18 000 are further analyzed in a variation of extreme value analysis (EVA), Points Over Threshold (POT) where the distribution of risk-cost exceedance values are represented by a generalized Pareto distribution. The resulting threshold cost exceedance estimates for OWTS in the high-risk category over a 40-year expected life ranged from $18 000 to $44 000.