Ken Harlow
Dir., Mgmt. Services
Irvine

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Asset Management

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Early in 2000, the Water Infrastructure Network (WIN) published a major report calling for increased federal funding of water and wastewater infrastructure costs.  The continuing saga, which may result in substantial funds becoming available for system replacement and rehabilitation, is chronicled below.  This will be of great interest to all water resource agencies.

For closely related topics, see the Asset Management page.  For a more general look at "wet" issues, check out Cindy Paulson's Water Resources page.


What’s new?

We ran this USA Today article in our national coverage on bcwaternews.com a few weeks back, but I think it's worth a "reprint" here. It details a Gannett News Service analysis on aging sewer systems and delves into how local governments nationwide plan to spend billions modernizing their systems. Plenty of extra material too - videos, graphics, analysis and other news from across the country. (Posted June 2, 2008)

Other news below. Articles and other entries are organized from latest at the top to earliest at the bottom.


Infrastructure Funding News (latest first)

Not sure if you saw this one, but three congressional leaders asked the Government Accountability Office to look at ways to finance a Clean Water Trust Fund that would provide at least $10 billion per year to maintain and upgrade wastewater treatment and sewer-collection systems. Check it out on the Water Infrastructure Network. (Posted Feb. 20, 2008)

A new life for this page? Just hours before the Minneapolis bridge collapse, Senators Dodd and Hagel introduced the National Infrastructure Bank Act of 2007, targeting publicly owned mass transit systems, roads, bridges, drinking water and wastewater systems and housing properties. Funds will be lent by the private sector; lenders will earn tax credits in lieu of interest. Interesting! Additional stories are here and hereHere is a discussion of the bill by its authors. (Posted August 3, 2007) An interesting report on why agencies sometimes pass up SRF funding, from the U.S. Conference of Mayors, Mayors Water council. (Posted October 17, 2006)

HR4560, in the House, is named the Clean Water Trust Fund Act of 2005. Introduced by Congressman John J. Duncan, Jr. (R-TN), it establishes a national trust fund to improve the nation’s wastewater treatment facilities. It provides "funds to local communities to update their wastewater treatment facilities. It also increases funding for improvements in infrastructure management, research, and the development of new technologies that will improve our ability to manage our water resources." Big bucks being asked for but probably not a finisher this year. Full text is available via the link above; here's the press release. This bill also funds a "National Center for Utility Management" -- see our Asset Management page for more. (Posted March 15, 2006)

A secret source has sent this Water Environment Federation Position Statement on Sustainable Infrastructure for Clean and Safe Water. Our source adds, "In response to the funding limitations that water and wastewater utilities are facing, WEF developed this position statement. The statement received review and input from many WEF committees and members before it was adopted by the Board in April 2005. WEF supports a three-pronged approach to solve the infrastructure challenge: Better asset management, continuing federal investment, and participation of the general public and business community." (Posted November 28, 2005)

Here's an interesting paper by Richard G. Little, Director of The Keston Institute for Infrastructure School of Policy, Planning, and Development at the Marshall School of Business, University of Southern California. Mr. Little's short paper tells us Why Infrastructure Matters, pointing out some basic truths about infrastructure renewal that we (and our communities) would do well to remember. (Posted October 18, 2005)

The Advanced Asset Management Collaborative Working Session, hosted by the USEPA, was held in Washington DC on May 5-6 with 140 asset management practitioners from around the world attending. The official web page is on our Asset Management page. Of interest here is that one of the "top ten" agenda items decided at the session was this: "Asset Management Plans be made requirements for any Government funding."  See page 2 of the referenced PDF file. Your editor, who was there, notes that this includes any grant or subsidized loan funding, including SRF loans. Any comment, AMSA? (Posted June 14, 2005)

New Senate bill S. 2550 authorizes SRF funding of $20 billion over five years. This bill, approved by the Senate Committee on Environment and Public Works, is the latest in a series of bills that ties SRF funding eligibility to good asset management (see earlier stories below). It is not expected to become law this year but indicates the way things are moving. Here's a snippet of the relevant portion of the bill:

"PRIORITY SYSTEM - A State shall provide financial assistance from the water pollution control revolving fund of the State only for projects described in subsection (c) by amending the priority system established by the State under subsection (g) under which the State--

(A) gives more weight to an application for assistance by a treatment works if the application includes--

(i) an inventory of assets, including a description of the condition of those assets;

(ii) a schedule for replacement of assets;

(iii) a financing plan indicating sources of revenue from rate payers, grants, bonds, other loans, and other sources"

For the record, the title of this bill is the "Water Infrastructure Financing Act." (Posted 9/24/04)

The long-awaited GAO report on asset management is here. This report, supposedly advising Senator Jeffords on how to help utilities improve AM, concentrates on the "capital" side of AM and stays away from difficult issues -- such as Sen. Jefford's own efforts to tie better AM to eligibility for SRF funding. Interesting perspectives from several US utilities, though. (4/20/04, posted 4/22/04)

Swimming in Sewage — From Assetman Nick Arhontes, here's a report from the NRDC about SSOs, nasty plant discharges, and so forth.  75 pages, nicely put together, with lots of photos and case studies.  The report has a number of recommendations including a federal infrastructure trust fund.  Interesting!  (February 2004, posted 2/23/04)

Do YOU have an Asset Management Plan? Ken Harlow is joined by Marsi Steirer and Joe Harris of the City of San Diego, and Steve Allbee of the EPA on this one, explaining why we need an Asset Management Institute. One reason? Well, the government is here to help us by tying SRF funding to good asset management practices. Remember S.1961? The AMI may be our only defense! This paper is also on our Asset Management page. (11/16/03, posted 11/23/03)

Sewer Overhauls Drive Fee Hikes — Interesting lengthy article from USA Today on the massive funding needs facing combined sewer systems, and the likely huge rate increases that will be required. Includes pleas for federal funding but there's not much hope. (10/27/03, posted 11/04/03)

Updated ASCE Infrastructure Report Card — "The condition of our nation's roads, bridges, drinking water systems and other public works have shown little improvement since they were graded an overall D+ in 2001, with some areas sliding toward failing grades."  Alarmist but entertaining.... (09/04/03, posted 09/04/03)

EPA's Clean Water and Drinking Water Infrastructure Gap Analysis — This much-anticipated and sometimes-purloined EPA report is available as of September 30, 2002.  Here it is, finally, courtesy of EPA's own Steve Allbee.  The report analyzes the 20-year "gap" in funding for new infrastructure, with the accent on replacement of aging assets.  Companion piece for the WIN Report and other interim needs analyses, most of which are referenced on this page.  See also EPA's fact sheet on this report. (09/30/02, posted 10/1/02)

S.1961 Stalled, Dead for This Year — WEF report that "holds" on the bill have pretty much made it a defunct issue this year, as we forecasted earlier. As you may remember (see articles below), S.1961 funded the State Revolving Funds and made asset management plans and capital recovery rates a condition for borrowing.  Dead for now, but it's still there.  (09/13/02, posted 09/16/02)

Newsweek article: The Coming Water Crisis — Major article on decaying infrastructure.  "Across the country, long-neglected mains and pipes, many more than a century old, are reaching the end of their life span. When pipes fail, pressure drops and sucks dirt, debris, and often bacteria and other pathogens into the huge underground arteries that deliver water."  A bit alarmist but good reading. (08/12/02 issue, posted 08/09/02)

CBO Report on Infrastructure Funding — The Congressional Budget Office has released this report on water and wastewater infrastructure replacement needs through 2020.  Broad range of estimates, with the WIN numbers near the top of the range.  The overall tone seems negative re federal funding ("...distort prices and thus undermine incentives for cost-effective actions by water systems and ratepayers...")  (05/24/02, posted 06/03/02)

S.1961 Moves Forward -- with Difficulty — Davis Bacon provisions, "burdensome" requirements, other concerns hobble the bill prior to committee approval. Some original Republican sponsors vote "nay."  (05/17/02, posted 05/20/02)

AMSA blasts S.1961 — As hinted below: "AMSA is urging you to call your Senators on the Environment and Public Works Committee today or tomorrow to express opposition to S. 1961, the Water Investment Act of 2002. . ." (04/08/02, posted 04/11/02)

What's all the H.R. 3930 Fuss? — Here's a short analysis of the asset management aspects of H.R. 3930, along with a link to the full text of the bill.  As far as AM goes, the bill is a bit weak-kneed compared with S.1961 (see analysis of S.1961 here).  Since the administration fails to support either bill, maybe this is much ado about nothing. . . (posted 03/18/02)

Administration Opposes House Funding Bill  — House bill H.R. 3930, proposing $20 billion for the State Revolving Funds,  is opposed by the Bush administration as being too expensive.  Homeland security takes precedence. (3/14/02, posted 03/15/02)

Reactions to S.1961  — Industry comments and testimony:

  • AMSA fears that ". . . Congress does not have confidence in our management skills and believes we are not charging Americans enough for their water, and that the states and the EPA need to micromanage our operations."  That would, indeed, seem to be the case.

  • The National Society of Professional Engineers seems to agree with AMSA's viewpoint, and offers detailed changes to the bill.

  • WEF gives a neutral report on the status of deliberations.
It's true! S.1961, a critical analysis  — Brown and Caldwell's Ken Harlow takes a hard look at the The Water Investment Act of 2002 and finds ... great intentions but a severe lack of definition.  Oh well, a journey of a thousand miles....  (02/25/02, posted 02/25/02)

SRF loans to require asset management?  — Depends on your code words.  Proposed $35 billion legislation requires that recipients demonstrate "technical, managerial, and financial capacity."  This WEF article has more funding details, too.  Agree or disagree?  See our poll!  (02/15/02, posted 02/19/02)

Water infrastructure budget falls short, says WIN — WIN press release says, "The Water Infrastructure Network today expressed serious concern about the Administration's fiscal year 2003 budget for drinking water and wastewater infrastructure funding."  (02/04/02, posted 02/08/02)

GAO reports on water infrastructure funding programs — The U.S. General Accounting Office has released a report on federal assistance for water infrastructure. The GAO study provides information on federal and state spending from 1991 through 2000. The GAO reports that revolving loan funds made about $25 billion available during this period, with about $10.1 billion coming from state sources. GAO also found 56 different state-sponsored grant programs for drinking water and/or wastewater infrastructure.  (November 2001, posted 01/07/02)

WPC attacks WIN proposals, grants — From the Water Partnership Council (see story below):  ". . .a federal grant program is not the full answer to solving the problem of upgrading the nation's aging water and wastewater infrastructure systems." This article clarifies the relations ship between the WPC and the H2O Coalition.  (12/19/01, posted 12/21/01)

Private sector responds to infrastructure needs — H2O Coalition, move over: The Water Partnership Council intends to piggy-back on the WIN initiative to promote privatization and contract operation.  "Some of the leading US providers of operational services for water and wastewater treatment officially formed a new group today to support the use of public-private partnerships to meet the nation's growing infrastructure needs." (11/13/01, posted 11/14/01)

APWA lobbies senate for funds — APWA President writes Senate leadership: "As Congress considers measures to address the current economic slow-down, I write to urge you to ensure that the economic stimulus package under consideration in Congress include investment in our nation's public infrastructure." (10/30/01, posted 11/08/01)

Democrats press infrastructure funds — "Led by U.S. Senate President Pro Tempore Robert C. Byrd (D-WV), Senate Democrats have inserted a $20 billion package for infrastructure, including water and wastewater, in an economic stimulus package currently being considered." (11/02/01, posted 11/05/01)

AMSA calls for sewer funding — "A representative of the Association of Metropolitan Sewerage Agencies (AMSA) told a Senate subcommittee that federal funds are needed to help the nation's cities upgrade its aging water and sewer infrastructure systems." (11/01/01, posted 11/02/01)

No infrastructure funding this time around — From WEF: "The U.S. House of Representatives narrowly approved a $100 billion economic stimulus package bill on October 25 that focused strictly on tax cuts and unemployment benefits." Maybe the story's not over yet....  (10/26/01)

National League of Cities asks for $7 billion — In the guise of economic stimulus this time: "The NLC recommends expedited federal funding of not less than $7 billion, which would create approximately 280,000 jobs over 12 months to complete water infrastructure rehabilitation and replacement projects that are ready to commence."  (10/22/01, published here 10/24/01)

WIN letter to Jeffords — A letter from the chairperson of WIN to the chair of the Senate Environment and Public Works Committee, concentrating on the "gap" and urging him to support increased federal funding for infrastructure replacement.  (07/16/01, published here 08/08/01)

Mandatory Asset Management? — The results of our reader's poll, indicating that the majority would support requirements for good asset management in return for access to federal replacement and refurbishment funds for their infrastructures.  Interesting reading!  (07/20/01)

"No Federal Funding Needed" — CEO J. James Barr of the American Water Works Company says of infrastructure replacement: "Whatever the final cost, it's certainly manageable at the local level without federal intervention."  Another swipe at the WIN initiative.... (07/12/01)

"Dawn of the Replacement Era" — A major AWWA report concentrating on main replacements, $250 billion worth.  Our infrastructure demographics show a huge and rising need for replacement in this report, which calls for better financial planning.  Here's AWWA's press release.  See also a recent paper on how to plan for future asset replacements.  (06/19/01)

Whitman's Statement on Infrastructure Funding — Here's the statement of EPA Administrator Whitman before the House of Representatives on May 2, 2001.  She lays out Bush's budget for water and wastewater infrastructure, SSO funding, and all the rest.  (05/12/01).

A Special Commentary: SoCal infrastructure warrior Blake Anderson explains what the WIN initiative must do to succeed, why CASA and AMSA members should support it, and why special districts should be proud (not ashamed) of the visibility that the Little Hoover Report on Special Districts has given their reserves. (05/01/01)

The H2O Coalition fights WIN's recommendations in these three reports, all PDF files:  Testimony before the Senate, an Infrastructure Problems and Solutions paper, and a side-by-side comparison of recommendations of the H2O Coalition versus the WIN coalition. (03/29/01)

ASCE's Infrastructure Report Card 2001 — This detailed report (by infrastructure type) sees a $1.3 trillion investment to bring our systems up to snuff. Water and wastewater get "Ds" on this report card.  (03/08/01).

EPA's Drinking Water Infrastructure Needs Survey — This Second Report to Congress says: "Drinking water systems will need to invest $150.9 billion over a 20 year period to ensure the continued provision of safe drinking water. Results from the survey are used to develop a formula to allot Drinking Water State Revolving Fund grants."  (02/16/01).

"WIN Perpetuates the Problem" — The H2O Coalition offers another nay-say: "WIN would have the American taxpayer pay for a multi-billion dollar bail-out of the coming infrastructure funding problem without doing anything systemically to address the underlying causes of the looming crisis." (02/16/01).

"Cash Down the Sewer" — The Orange County Register attacks federal funding for our aging sewers.  "Water and sewers are the quintessential local issue. If the feds are responsible for this matter, there's nothing they won't get involved in."  The editorial talks about "municipal fiscal shell games," and closes: "That's why privatization -- rather than a huge federal bailout -- is the best way to upgrade creaking infrastructure systems." (02/15/01).

"Water Infrastructure NOW" Press release and full text  — The new WIN report: ". . .the network calls for a five-year, $57 billion federal investment in drinking water, sewer, and stormwater infrastructure to replace aging pipes, upgrade treatment systems, and continue to protect public health and the environment. The report also urges Congress to create a long-term, sustainable, and reliable source of federal funding for clean and safe water." (02/13/01).

Voinovich Bill Press Release and Full Text  — Introduced February 6: "The Clean Water Infrastructure Financing Act would provide $3 billion per year for five years in grants to states who in turn loan the funds to local communities to repair and upgrade existing wastewater treatment facilities."  Does that get your attention?  (02/07/01).

"$1 Trillion Problem Beneath our Streets"  — Reader Steve Allbee is quoted in this AP article about decaying sewers, from the Associated Press. (02/06/01).

Whitman Support of Sewer Infrastructure — Proposed EPA Administrator Whitman lists sewer infrastructure support among her top three priorities.  AMSA sees a boost for the Water-21 initative. (01/22/01).

Congressional Support for SRF Funding — Report of strong support for HR 2720, which authorizes $15 billion over five years for "construction, repair and rehabilitation of wastewater collection and treatment facilities." (12/13/00).

APWA Endorses the WIN Report — Calls for federal subsidies of local infrastructure spending (9/28/00).

WATER-21 Moving Ahead — AMSA Fax Alert: "This week, key House committee leaders confirmed that federal water infrastructure funding legislation - WATER 21 - tops their environmental priorities for the 107th Congress." (9/22/00).

$50 billion for Water Infrastructure — EPA's Ken Greenberg sends along this article on efforts of the Water Infrastructure Caucus to gain funding for local water and wastewater asset replacement costs (WATER-21).  That WIN Report figure of $23 billion unfunded needs annually is quoted (9/19/00).

The Gap, text — EPA's Steve Allbee has been kind enough to offer this paper, which explains the huge gap expected between the cost of infrastructure replacement and the funds available.  Accompanies the slideshow directly below.  Thanks Steve!

The Gap — A PowerPoint show by EPA's Steve Allbee, explaining the analysis underlying the unfunded infrastructure replacement needs described in the WIN Report.  This is the August 10, 2000 version as seen at CASA.

WIN ReportClean and Safe Water for the 21st Century, showing a half-trillion dollar shortfall in water and sewer replacement funding over the next 20 years.