Funding for Drinking Water Will Remain A Challenge to 2037 & Beyond
The drinking water crisis in Flint, Michigan heightened the public’s attention across the U.S. about the issue of the deteriorating decades-old drinking water infrastructure. Along with the rest of America, Cansler Consulting watched as the crisis unfolded. Members of Congress, state and federal regulatory officials conducted multiple hearings and site visits to learn more about these challenges occurring in multiple municipalities throughout the U.S. What they learned is, without future federal budget pressures, drinking water infrastructure issues are likely to remain prominent in the U.S. through 2037 and beyond. Lobbying and government relations are the most effective ways to apply those pressures.
Federal Agencies re: Water Safety
Three federal agencies are main sources of U.S. federal funding for drinking water, wastewater, and stormwater infrastructure. They include:
- The U.S. Department of Agriculture (USDA),
- U.S. Department of Housing and Urban Development (HUD) and
- the Environmental Protection Agency (EPA).
Among the statutes for which the Environmental Protection Agency (EPA) has sole or significant oversight responsibilities for potable water in the U.S. are:
- Clean Water Act [Federal Water Pollution Control Act], as amended. The Federal Water Pollution Control Act, as amended, provides the framework for protection of U.S. surface waters. The law recognizes that it is the primary responsibility of the States to prevent, reduce, and eliminate water pollution.
- Safe Drinking Water Act of 1974 [Public Health Service Act (Title XIV)], as amended in 1996, charges EPA with the responsibility of implementing a program to assure that U.S. public drinking water supplies are free of contamination that may pose a human health risk, and to protect and prevent the endangerment of ground water resources which serve as drinking water supplies.
- The Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) authorized an innovative financing mechanism for water-related infrastructure of national or regional significance and authorized the EPA to provide federal credit assistance to eligible entities. The FY 2017 budget requests $20 million to begin issuing loans under the new WIFIA program, offering another tool in support of drinking water and wastewater infrastructure projects. Of this total $20 million, about $15 million will be used in credit subsidies that translates into a potential loan capacity of nearly $1 billion to eligible entities for infrastructure projects with the initial loans taking place in FY 2017.
WIFIA supplements the existing State Revolving Fund programs, helping to meet the United States’ water infrastructure needs and address key priorities. The WIFIA program accelerates investment in the U.S.’ infrastructure by providing supplemental credit assistance, in the form of direct loans, to innovative credit-worthy projects.
The amendments added to the Safe Drinking Water Act in 1996 mandated that EPA conduct an assessment of the U.S.’ public water systems’ infrastructure needs every four years and use the findings to allocate Drinking Water State Revolving Fund (DWSRF) capitalization grants to states. The DWSRF was established to help public water systems obtain financing for improvements necessary to protect public health and comply with drinking water regulations. From 1997 to 2011, states loaned $21.7 billion to water systems for 9,188 projects. Below are some of the relevant findings of EPA’s latest 2011 assessment.
First, it should be noted, States determine the desired uses for their waters, set standards, identify current uses and, where uses are being impaired or threatened, develop plans for the protection or restoration of the designated use. They implement the plans through control programs such as permitting and enforcement, construction of municipal waste water treatment works, and nonpoint source control practices.
In the U.S. more than 156,000 public water systems provide drinking water to the approximately 320 million people population. Over 97% of these public water systems serve fewer than 10,000 people.
According to EPA, while most small systems consistently provide safe, reliable drinking water to their customers, many small systems are facing a number of significant challenges in their ability to achieve and maintain system sustainability. These challenges include aging infrastructure, increased regulatory requirements, workforce shortages/high-turnover, increasing costs, and declining rate bases.
Peter Grevatt, Director, Environmental Protection Agency‘s Office of Ground Water and Drinking Water, testified in 2015 before the House Energy and Commerce Committee, “The investment shortfall for water/wastewater infrastructure, or the amount of money needed to fix these systems, is somewhere in the order of $600 billion. Drinking water needs account for more than half of that figure, mostly for pipeline maintenance. There are more than 700 water main breaks a day in the U.S., or about one every other minute.”
Moreover, in EPA‘s fifth national assessment of public water system infrastructure needs (the 2011 Drinking Water Infrastructure or Assessment (DWINSA)) shows a total need of $384.2 billion in capital improvement projects over the period spanning January 1, 2011 through December 31, 2030 for U.S. water systems to continue to provide safe drinking water to the public. This total comprises the infrastructure investment needs of about 52,000 community water systems and 21,400 non-profit non-community water systems, including American Indian and Alaska Native Village water systems, and the costs associated with proposed and recently promulgated regulations.
In previous assessments conducted by EPA in 1995, 1999, 2003, and 2007 the results indicate a sustained level of need. The last three assessments covering the period 2003-2011 showed an average need of water infrastructure improvements of $379.93 billion (adjusted to 2011 dollars). Such results indicate that EPA has continued to improve upon their capturing longer term needs.