Affordable Strategies to Accelerate Lead Service Line Replacement
Lead exposure is a major public health issue that can lead to developmental delays, damage to the brain and nervous system, and learning and behavior problems. More than half of Americans under the age of six have some level of lead in their blood. Lead-contaminated water is a significant source of lead exposure.
QV and the Michigan Municipal League Foundation (MML Foundation) partnered with the cities of Dearborn, MI, and Bay City, MI, to develop and test cost-effective strategies to replace lead-containing water service lines (i.e., lead service lines), which bring drinking water from water mains to homes and businesses.
Through a series of workshops with key stakeholders in both cities, QV and MML Foundation identified priority actions designed to lower costs for replacing lead service lines and increase access to low-cost capital. Stakeholders identified over 100 actions, which were consolidated to 8 unique strategies currently being implemented and tested by each community.
Problem
Lead exposure is a major public health issue that can lead to developmental delays, damage to the brain and nervous system, and learning and behavior problems. More than half of Americans under the age of six have some level of lead in their blood, and 2.5% of those children have elevated lead levels. Lead-contaminated water is a significant source of lead exposure, contributing between 10-20% of a child’s total lead intake, and 40-60% for children fed with formula.
A major source of lead contamination from water is through service lines that connect residences to main water lines. According to the EPA over 9 million households in the United States today are at risk of lead poisoning from lead service lines (LSLs) – the majority of those households are in low-income communities and communities of color. The majority of LSLs were installed from the late 1800s through the 1940s due their durability and malleability compared to iron pipes. It wasn’t until 1986 when Congress amended the Safe Drinking Water Act that lead pipes were banned; and it wasn’t until 1991 the EPA took action to remove LSLs through the federal Lead and Copper Rule.
"Lead Pipes" by Massachusetts Dept. of Environmental Protection is licensed under CC BY 2.0.
In 2018, following the Flint water crisis, the State of Michigan implemented a state Lead and Copper Rule which mandated that all LSLs must be replaced by 2041. Six years later the EPA revised the federal Lead and Copper rule to require lead service line replacements (LSLRs) nationally by 2034.
While the accelerated timeline for LSLRs is important to step toward removing lead exposure for millions of Americans, it comes with a cost. According to Brookings, it will take between $28 billion to $47 billion to replace 6 to 10 million LSLs at an average cost of $4,700. Funding under the Bipartisan Infrastructure Law (BIL) made $15 billion available, only a fraction of the funding required. Without additional budget allocations, the new Lead and Copper rule became a mostly unfunded mandate.
The gap in federal funding for LSLR must be covered by states, water utilities, municipalities, and ultimately rate payers. This is even more challenging in Michigan due to a state law that requires LSLR costs to be borne by utilities and local governments and prohibits residents and business from being forced to pay for LSLR directly.
The unfunded mandate is disappointing to clean water advocates because investments in LSLRs are not just vital for public health, they also yield significant economy-wide savings. According to a study by the Environmental Defense Fund, the BIL’s allocation of $15 billion will yield between $26 and $51 billion in health and societal benefits. If the U.S. made the full investment to replace all lead service lines, that benefit would rise to more than $205 billion. While there is a clear return on investment, there is no clear path to establishing the upfront capital required.
This is why, despite new funding, the pace of lead service line removal and replacement remains slow, and many communities are not on track to meet LSLR deadlines. QV and the MML Foundation sought to address the realities of LSLR by developing replicable and scalable approaches to meeting the LSLR replacement deadline while lowering LSLR costs, expanding capacity to manage LSLRs programs, and filling the funding gap.
Approach
QV and the MML Foundation partnered with the Joyce Foundation, the Robert Wood Johnson Foundation, and Masco to launch a LSLR pilot program that develops and tests a set of replicable, community-driven approaches to facilitate quicker, less expensive lead service line replacements. The cities of Dearborn and Bay City joined the effort, and invited the team to meet with stakeholders, community groups, and city staff to analyze needs and beta test solutions.
QV and the MML Foundation began by assembling two cross-functional advisory teams in each city. The first advisory team (i.e., the Design Team) utilized design thinking to co-create solutions that best match community needs. The second advisory team (i.e., the Validation Team) vetted and tested the ideas from the Design Team, to ensure that solutions are inclusive and meet identified needs, while remaining feasible and implementable, and resulting in a net benefit to the community.
Both advisory teams were comprised of leadership from the municipality, the water utility, community groups, philanthropy, and agencies like the Michigan Department of Environment, Great Lakes, and Energy (EGLE), and the Chicago Federal Reserve.
The Design teams were determined to understand the full range of needs and challenges to LSLR before beginning to ideate solutions. With the right stakeholders in the room, they identified 3 key issues to solve for:
Insufficient funding to pay for all lead line replacements. Each city faced replacement costs in the tens of millions, which were unbudgeted. They were surprised to discover, however, that replacement costs were significantly different. In Bay City, the average cost to replace a line is approximately $5,600, while in Dearborn, it is around $8,500. The national average for line replacement is $8,000. QV and the MML Foundation discovered that Bay City was able to keep their costs lower because they used previous federal funding through the American Rescue Plan Act (ARPA) to hire in-house staff to implement most line replacements. Dearborn hired outside contractors for most of their replacements, which were also in high demand in neighboring cities like Detroit. Unfortunately, Bay City’s ARPA dollars are set to expire in December 2026. In FY 2025, both Bay City and Dearborn applied for Drinking Water State Revolving Fund (DWSRF) support when EGLE opened the program for LSLR-specific activities. Bay City was awarded funding and principal forgiveness, while Dearborn did not receive any funding. This outcome reflects Michigan’s current DWSRF ranking and rating criteria, under which Dearborn did not score high enough to qualify. As a result, Dearborn is responsible for fully funding all remaining LSL replacements across the City.
Challenges communicating the need for LSLR to communities. Both cities have a larger than average number of Asset Limited, Income Constrained, Employed (ALICE) households: 53% of households in Bay City and 31% of households in Wayne County (where Dearborn is located). The state average is 27%. A larger percentage ALICE households reside in older residential buildings that were developed when lead service lines were more commonly installed. This creates an environmental justice issue, where lower income households are more likely to suffer from lead exposure. In addition, each city has a diversity of residents that speak various languages and represent various cultures. In Dearborn, for example, there is a large Muslim community. If one or more men representing the city knock on the door of a Muslim household, it was unlikely that women at home without the presence of their husbands would speak to the representative due to their faith.
Insufficient capacity to develop and manage lead service line replacement programs. Given the above two challenges, Bay City and Dearborn lacked internal capacity to develop an inclusive, equitable, and comprehensive lead service line replacement program. More staff capacity is needed.
With the above issues in mind, the Design team generated more than 100 potential solutions. The Validation team then consolidated the Design team’s strategies to 8 priority actions:
Create a Fund: Express support for MML Foundation’s development of a Local Revolving Fund to support LSLR activities in low-income communities across the city.
Collaborate with Local Philanthropy: Build partnerships with community foundations and local family foundations to assist with communication, capacity support, and community-funding.
Renter Ordinance: Explore the establishment of a renter’s ordinance that would allow renters access to LSLR work on behalf of the landlords.
Alternate Payors: Examine Health Care and Health Providers supporting LSLR activities in an effort to identify specific local stakeholders for potential engagement.
Regional Procurement: Explore opportunities for municipalities and utilities within a specific geographical area to collaborate on joint projects for LSLR. By coordinating regional participation, the cities aim to achieve economies of scale, reduce costs, and ensure a consistent supply of necessary equipment and resources.
Streamline Permitting and Inter-Agency Coordination: Implement expedited permitting procedures to improve coordination between local government agencies involved with LSLR projects. Establishing dedicated teams or liaisons for LSLR will help reduce administrative delays and improve project timelines through more efficient communication and approval pathways.
Cost per Line Analysis: Accelerate LSLR by analyzing the cost per line in specific communities. The analysis will provide insights into the financial, logistical, and regulatory challenges unique to a specific area. By understanding the breakdown of costs – such as labor, materials, excavation, permitting, and restoration – the cities can identify inefficiencies and areas for potential savings. Additionally, the cost analysis will assist in forecasting total project expenses, securing appropriate funding, and optimizing strategies to lower costs and improve the speed of replacements.
Community Liaison: Funding support for a community liaison will assist with cross-cultural communications and LSLR community education.
Impact
"88c029: Louisville Water Co. crew working on water main" by Bill Alden is licensed under CC BY-SA 2.0.
A key outcome of our work with Bay City and Dearborn is the development of a roadmap for establishing a state-wide charitable revolving loan fund geared toward essential workforce development activities. The fund would complement existing funding mechanisms, such as the State Revolving Fund (SRF) and attract philanthropic dollars from large foundations and individual donors. Ideally, the loan fund would offer below-market rates and provide direct loans to municipalities and water utilities to address a range of financing needs related to LSLR.
In addition to pursuing a charitable revolving fund, the cities are actively advocating through appropriate channels to reform the current DWSRF ranking and rating criteria, aiming to qualify for future funding. They hope to access low-interest state loans within the next nine years. They are also implementing efficiencies, including a dig-once policy for line replacements, which will help reduce costs and close funding gaps.
Despite these efficiencies, it’s clear that the DWSRF program remains the most effective funding source for LSLR activities, especially for smaller, underserved communities that need access to affordable capital. Consequently, policy advocates continue to push for state-level programmatic reforms and increased funding allocations to support these communities in meeting this critical, but unfunded, mandate.
The partnership between QV and the MML Foundation has generated critical insights and strategies that extend well beyond the local context. While the immediate focus was on Bay City and Dearborn, the lessons learned – particularly around cost-effective program design, community engagement, and capacity building – have significant potential to inform national efforts to accelerate LSLRs.
The challenges each city faces in LSLR serve as a litmus test for other communities across the United States, particularly given that Michigan cities had a five-year headstart before the new 2024 federal Lead and Copper rule went into effect. We aimed to understand what Bay City and Dearborn learned during that time, the ongoing challenges they face, and how their experiences can help advance and accelerate LSLR efforts in other cities. These insights are being compiled in a lead service line replacement playbook, filled with tested practices and approaches developed in these communities that could be replicated across Michigan and nationwide.