President’s Budget Could Boost Water Industry Construction

On the heels of the pro-water American Recovery and Reinvestment Act, President Barack Obama has proposed major boosts for the Clean Water and Drinking Water state revolving funds (SRF).

Apr 1st, 2009

By Patrick Crow, Washington Correspondent

On the heels of the pro-water American Recovery and Reinvestment Act, President Barack Obama has proposed major boosts for the Clean Water and Drinking Water state revolving funds (SRF).

The administration’s proposed budget for fiscal 2010 budget would allocate a combined $3.9 billion for the SRFs, up from $1.5 billion in the fiscal 2009 budget. The budget plan is separate from the economic stimulus package, which earmarked an additional $6 billion for the two federal programs.

According to the White House, the proposed budget for the SRFs would support more than 1,000 clean water and nearly 700 drinking water projects annually. It said the administration would seek SRF program reforms that will put funding on a “firmer foundation” and treat smaller utility systems more equitably.

The Obama budget proposed a 34% increase in the Environmental Protection Agency’s budget to $10.5 billion.

In addition to the SRF funding, the proposed budget would provide more than $1 billion to clean up the most contaminated sites in the Superfund program and reinstate the Superfund tax in 2011. The budget also seeks $5 billion per year for a new National Infrastructure Bank that would fund projects with a “significant national or regional economic benefit.”

Congress will use the administration’s budget proposal as the starting point for its compilation of the 2010 budget, which would go into effect next Oct. 1.

Ken Kirk, executive director of the National Association of Clean Water Agencies, said, “The increased funding levels show this administration is serious about addressing the water and wastewater infrastructure crisis confronting our communities.”

However, NACWA said the clean water SRF still needs a sustainable funding source apart from annual appropriations. It said communities currently pay 95% of the cost for clean water projects, while the federal government pays only 5%. That is compared to the 78% and 22% split in the 1970s.

“To help fill the gap, ratepayers, already constrained by the sagging economy, are facing higher water and sewer bills,” NACWA said.

For the current fiscal year, the House Appropriations Committee has approved a bill to increase EPA’s budget by $100 million, to $7.6 billion. The bill would keep SRF spending at the 2008 levels -- $829 million for the drinking water and $689 million for the clean water funds, for a $1.518 billion total.

President Obama signed the $787 billion economic stimulus bill into law on Feb. 17. It included $2 billion for drinking water projects, $4 billion for wastewater utilities, and $1.4 billion for rural drinking and waste water projects.

Gary Zimmerman, executive director of the American Water Works Association (AWWA), said the stimulus legislation “will push forward projects critical to our nation’s public health protection, fire protection, economic strength and our overall quality of life.

“While the funds committed represent only a tiny fraction of the need, AWWA is optimistic that the investment in water will jump-start many critical projects and create hundreds of thousands of new jobs.

“We applaud Congress’s decision to waive requirements that states provide matching funds, which would be difficult in today’s economic climate, and will speed distribution of funds. It also makes good sense to give priority to projects that can begin construction within a year, giving utilities necessary time to complete construction plans or obtain environmental permits.”

Diane VanDe Hei, executive director of the Association of Metropolitan Water Agencies (AMWA), said the $2 billion for drinking water could directly create more than 17,000 construction jobs. She added that the $2 billion is a small step toward the $276.8 billion in drinking water investments that the Environmental Protection Agency has estimated the nation will need over the next 20 years.

AMWA noted that the law requires states to commit funds to projects that would be under contract or construction within a year.

“We hope that this provision, in conjunction with language directing states to give funding preference to ready-to-go projects regardless of their priority ranking, will entice states to add urban projects to their priority lists,” she said.

Congressional Action

The House of Representatives has acted early in the session on several water bills that the prior Congress failed to pass.

The Water Use Efficiency and Conservation Research Act would establish an EPA program to promote water-use efficiency and conservation. The author, Rep. Jim Matheson (D-Utah), said, “EPA estimates that if all U.S. households installed water-efficient appliances, the country would save more than 3 trillion gallons of water – and more than $17 billion – annually.”

The Produced Water Utilization Act would research ways to use water mixed in oil and natural gas production. Sponsor Ralph Hall (R-Texas) said oil companies produce up to 2.3 billion gallons per day of water that currently cannot be used in an environmentally responsible way.

A House panel also has approved a grab bag of water bills. The Subcommittee on Water Resources and Environment, a unit of the Transportation and Infrastructure Committee, said the Water Quality Investment Act calls for the spending of $18.7 billion over five years. Congress would have to appropriate the funds later.

The bill would authorize $13.8 billion in grants for the Clean Water SRF, $250 million for alternative water source projects under section 220 of the Clean Water Act (CWA), and $1.8 billion under CWA section 221 to help municipalities control their combined sewer and sanitary sewer overflows. The legislation also would amend the CWA to require the public be notified of overflows.

In other Washington news:

– The Water Environment Federation has formed a partnership with the Alliance for Water Stewardship, an international group of organizations that promote the responsible use of water resources. The partnership has mapped a 3-year plan to outline principles and practices for large water users and providers.

– The U.S. Geological Survey has completed a study on the quality of drinking water from privately owned wells. It sampled 2,100 wells in 48 states, testing for 214 naturally occurring or man-made contaminants. They included nutrients (such as nitrate), radon, trace elements (such as arsenic and uranium), major ions, pesticides, and volatile organic compounds.

– EPA has given Philadelphia a $2 million grant for a pilot project to guard against drinking water sabotage. The city could get up to $9.5 million, depending on EPA’s budget over the next three years. The project, called the Water Security Initiative, is expected to serve as a model for other utilities. Similar grants have gone to New York City, San Francisco, and Dallas. WW

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