Monitoring water infrastructure's role in the economic stimulus program
John Salo
Senior VP
Business Consulting Practice


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Healthy water activity on the Hill

In spite of all the public attention on health care, there still is some activity in Congress related to water infrastructure funding:

  • The Senate has begun consideration of a $32 billion appropriations bill to fund EPA, Department of Interior and related agencies for FY 2010. The House version of the bill (HR 2996) has a comparable level of funding and provides $10.19 billion for EPA programs, including $3.63 billion for clean water and drinking water infrastructure.
  • The Water Infrastructure and Financing Act (S 1005) is still waiting for action by the full Senate; apparently, the bill is being held up to due to questions about the allocation formula. Water sector organizations are trying to help move it forward. The bill would provide approximately $40 billion for clean water and drinking water SRFs, as well as grant programs for sewer overflow control and Great Lakes funding.
  • The Feb. 17, 2010, "shovels in the ground" deadline is looming for projects funded by the economic stimulus program. There still is much variation from state to state as to how stimulus funds are being awarded. In some states, funds are going to primarily rural areas and leaving out urban agencies; in other states, funds are being spread among many agencies and awards consist of both low-interest loans and grants. Some wastewater agencies have been able to take advantage of the green infrastructure set aside; others are waiting for October DOE announcements for funding awards for renewable energy projects.
  • The Water Protection and Reinvestment Act (HR 3202), which was introduced by Rep. Earl Blumenauer (D-Ore.) in mid-July, now has 15 co-sponsors. This bill would create a water trust fund of $50 billion over the next five years.
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Trust fund, water bank on the table

With the "shovel in the ground" deadline only seven months away, more ARRA-funded projects are getting under way. The EPA is providing detailed information on awards and expenditures of ARRA funds, and its web site provides state-by-state maps of its $7.22 billion investments under the recovery act. Weekly reports are provided to OMB that list all the individual grant awards made by the EPA.
 
In addition to the economic stimulus funding, two major proposals related to long-term funding are on the table:

Water Trust Fund
Rep. Earl Blumenauer (D-Ore.), along with a bipartisan group of four other representatives, has introduced the Water Protection and Reinvestment Act of 2009 (HR 3202). This legislation would create a water trust fund that would generate $12 billion annually from FY 2010 through FY 2014, for total funding of nearly $60 billion to local communities to address drinking water and wastewater infrastructure needs. The fund would be paid for with several small taxes on industries that produce and consume water-based goods, as well as items that are flushed into sewer systems.
 
On June 29, the GAO released its 50-page report, Clean Water Infrastructure: A Variety of Issues Need to be Considered When Designing a Clean Water Trust Fund. This report provided an impartial analysis of possible revenue sources and was used in part to develop the funding basis for HR 3202.  It is estimated that each $1 billion spent on water infrastructure will create approximately 35,000 jobs.
 
Water Infrastructure Bank
The American Water Works Association is supporting a federal Water Infrastructure Bank. The bank would be authorized to borrow money from the federal Treasury at very low rates. In turn, the bank would make low-interest loans for larger projects that typically are too big to access the State Revolving Fund. Click the link to read more about a detailed report on AWWA's financing recommendations.

In looking at long-term infrastructure needs, a new report by Ernst and Young and the Urban Land Institute advocates a four-prong approach that would change policy and funding.

 

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