You manage over 3200 miles of water and sewer lines as well as 6 water and wastewater treatment facilities. You have over 1000 valves that need to be replaced in the next year and then an average of 200 valves to replace every year after that, for the next 12 years.

Material costs for valves have risen 28% in the past 12 months due to steel prices, manufacturing costs, and tariffs.

Over the previous decade (not counting the last 12 months), material costs have risen at an average of 1.75% per year.

Labor increases at an average rate of 3% per year.

2% of all valves that exceed their replacement interval fail and create an emergency repair that costs 20 times as much as a typical replacement.

If a valve costs $2,450 today, and the current replacement cost of labor is $4,355 each, how much is the labor and material budget for the coming year?

If a valve costs $2,450 today, and the current replacement cost of labor is $4,355 each, then assuming the average material and labor escalation (1.75% and 3% respectively) remains consistent, what is the budgeted cost for the 200 valve replacements in 4 years?

Let’s say a valve costs $2,450 today, and the current replacement cost of labor is $4,355 each. If in year 4, no valves are replaced, what is the expected cost in emergency repairs?