Congress Boosts Its Bet on WIFIA Infrastructure Program

June 1, 2017
The federal government's latest water infrastructure financing program is off to a strong start.

By Patrick Crow

The federal government’s latest water infrastructure financing program is off to a strong start.

The Environmental Protection Agency (EPA) has received 43 proposals from organizations interested in participating in the Water Infrastructure Finance Innovation Act (WIFIA) program.

Congress previously authorized EPA to distribute $17 million through WIFIA in fiscal year 2017. Those funds were expected to be leveraged into $1 billion in credit assistance that would be used to finance more than $2 billion in water infrastructure.

Now, as part of the omnibus 2017 appropriations bill, Congress also allocated another $8 million (which could facilitate $1 billion in investments) to WIFIA’s fiscal 2017 budget.

In the budget bill, in a compromise with legislators that averted the trauma of a government shutdown, the Trump Administration agreed to maintain most 2017 federal spending at fiscal 2016 levels until the 2018 fiscal year begins October 1.

Despite the administration’s previous rhetoric about slashing EPA’s budget 31 percent the agency fared very well in the 2017 budget plan. It was allocated $8.058 billion, a paltry $81 million less than in fiscal 2016. Funding for the drinking water and clean water state revolving funds (SRFs) were preserved at current levels.

EPA’s reprieve will not be long lived. The Trump team is expected to renew its efforts to truncate EPA when House and Senate appropriators begin drafting their fiscal 2018 spending programs this summer.

The National Association of Clean Water Agencies was optimistic nevertheless. “Considering the significant fiscal 2018 cuts which had been proposed for EPA by the Trump Administration and supported by some in Congress, the near-level support for EPA through the second half of fiscal 2017 is a positive sign for clean water funding as legislators and water stakeholders move toward fiscal 2018 negotiations. We need to build on this agreement as a model for the fiscal 2018 budget to ensure that critical municipal clean water priorities are funded for next year as well,” it said.

At the behest of major water associations, Congress had enacted WIFIA in 2014 to provide low-cost financing options for large water infrastructure construction. WIFIA projects in communities of more than 25,000 people must cost at least $20 million. The federal program would help with up to 49 percent of the total cost. The balance could come through tax-exempt municipal bonds, private financing or other sources.

The WIFIA program is amenable to a wide array of construction, ranging from conventional drinking water and wastewater projects to more unusual ventures such as seawater desalination, drought mitigation and water recycling. WIFIA operates separately from the SRFs but in coordination with them.

The 43 projects proposed to EPA were geographically diverse, although 18 of them were California-based. Twenty-five were for wastewater projects but the rest were varied. About a third would be co-financed through other funding tools such as the drinking water and clean water SRFs.

EPA’s next step will be to invite states to exercise their right of first refusal for funding through the SRFs. Then EPA will evaluate the proposals and invite some of them to submit full applications for WIFIA assistance. It expects to announce those projects in July.

The American Water Works Association (AWWA) noted that the nation will need to invest more than $2 trillion to repair and expand water and wastewater infrastructure in the foreseeable future. “Funding WIFIA is a tremendous step forward as we confront the nation’s water infrastructure challenge,” said Tracy Mehan, AWWA executive director of government affairs.

About the Author: Patrick Crow covered the U.S. Congress and federal agencies for 21 years as a reporter for industry magazines. He has reported on water issues for the past 15 years. Crow is now an Austin, Texas-based freelance writer.

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