A Busy Month for Drinking Water and Wastewater Infrastructure Systems Investments

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It’s been a busy few weeks for drinking water and wastewater infrastructure investments; this is great news because despite increased efficiency methods and sustainable practices, there is a growing gap between the capital needed to maintain drinking water and wastewater infrastructure and the actual investments made. By 2025, the investment gap for drinking water and wastewater infrastructure systems is estimated at $105 billion, and the American Water Works Association estimates that $1 trillion will be needed to maintain and expand drinking water service demands during the next 25 years. In fact, ASCE’s 2017 Infrastructure Report Card gave our nation’s drinking water and wastewater infrastructure grades of “D” and “D+,” respectively.

Fortunately, Congress has provided some federal funding options that – if robustly appropriated – could help close the funding gap needed for drinking water and wastewater infrastructure. The Drinking Water State Revolving Fund (DWSRF) and the Clean Water State Revolving Fund (CWSRF), both of which were authorized by Congress several decades ago, play a vital role in providing much-needed support for investments in state and local drinking water and wastewater infrastructure by providing low-interest loans for such projects. The EPA provides an allotment of funding for each state, and each state provides a 20% match. Since the DWSRF’s inception in 1997, $32.5 billion of low-interest loans have been allocated for drinking water infrastructure projects, while $126 billion of low-interest loans have been allocated for wastewater infrastructure projects over the course of the CWSRF’s 30 year lifespan.

Congress authorized the Water Infrastructure Finance & Innovation Act (WIFIA) in the Water Resources Reform & Development Act (WRRDA) of 2014 to fund large water infrastructure projects over $20 million through the leveraging power of private sector investments. Congress appropriated $17 million for the program in 2016 and $30 million for it in 2017. It is estimated that WIFIA’s full financial leveraging ability will allow for a single dollar to create $50 dollars for project lending.

Last month, the U.S. Environmental Protection Agency (EPA) delivered the 2015 Drinking Water Infrastructure Needs Survey and Assessment (DWINSA) Report to Congress and President Trump. The 2015 DWINSA is the sixth since 1995, and it estimates an investment need of $472.6 billion in the nation’s drinking water infrastructure over the next 20 years, a 10.3% increase, in constant dollars, over the estimated need of the 2011 DWINSA. The survey response rate was 99.7 percent, the highest rate in the assessment’s history. The assessment’s determination of the relative needs of each state will be used as the basis for the allotment of the DWSRF for the four fiscal years of 2018 through 2021.

The CWSRF, which just celebrated its 30-year anniversary milestone, recently released its Annual Report. The report found that in 2017 alone, the CWSRF extended 1,484 loans and provided more than $7.4 billion in assistance to state and local borrowers, making it the third highest funding level in the history of the program. The program also provided $780 million through 191 assistance agreements to disadvantaged communities, up from $535 million in 2016.

Last month, ASCE and seven drinking water and wastewater organizations sent a letter to the House and Senate Committees on Appropriations Subcommittees on Interior & Environment urging them to make robust federal investments in water infrastructure in Fiscal Year 2019. The letter specifically asked the Committees to double the funding for the CWSRF and DWSRF programs and to fully fund WIFIA at its authorized FY19 level, among other requests. We were pleased that the FY18 omnibus included an additional $600 million for the CWSRF and DWSRF programs, bringing the combined funding for both programs to $2.85 billion. The omnibus also included an additional $63 million for the WIFIA program, more than doubling its appropriation compared to FY17.

Last week, the EPA issued a $134.5 million loan – its first-ever loan from the WIFIA program – to King County, Washington to help finance its Georgetown Wet Weather Treatment Station; when completed in 2022, it will collect and treat up to 70 million gallons of wastewater and stormwater per day that would otherwise runoff into the Duwamish River. According to EPA’s press release, this project is expected to create an estimated 1,400 jobs and will provide education, job training, and apprenticeship opportunities during its design, construction, and operation.

As advocates of alternative water resources financing mechanisms and innovative, resilient infrastructure, ASCE is happy to support a recently introduced bill that provide creative solutions to our nation’s aging drinking water and wastewater infrastructure systems. Earlier this year, U.S. Senators John Boozman (R-AR), Cory Booker (D-NJ), Jim Inhofe (R-OK), and Diane Feinstein (D-CA) introduced S. 2364, the “Securing Required Funding for Water Infrastructure Now Act,” or the SRF WIN Act, to help tackle our nation’s aging drinking water and wastewater systems. A House companion bill, H.R. 4902, was introduced by Congressmen John Katko (R-NY) and Earl Blumenauer (D-OR).

The SRF WIN Act seeks to help states fund critically important drinking water and wastewater infrastructure projects by using a combination of the most successful aspects of both the WIFIA and the SRF programs. This new program builds on the leveraging concept in WIFIA to provide a minimum of $50 billion in new funds for State Infrastructure Financing Authorities to utilize. It’s also worth noting that this program’s funding is contingent upon annual appropriations equal to FY17 funding levels for the SRFs and WIFIA. ASCE supports this bill because it offers a new and efficient tool to leverage limited federal resources and stimulate additional investment in our nation’s infrastructure while safeguarding against any cuts to the existing SRF and WIFIA programs. ASCE has been busy advocating on Capitol Hill in support of these bills, and we urge you to contact your Member of Congress to ask them to co-sponsor this important drinking water and wastewater infrastructure legislation.

 

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