Water Infrastructure Funding Faces Obstacles to Passage

The Senate recently passed the Water Resource Development Act, and the House and Senate may to reintroduce the Sustainable Water Infrastructure Investment Act, but there are obstacles that may make these funding sources impractical even if they are enacted.

By Carl Smith

Almost every industry magazine, newsletter or online publication we read today includes articles relating to industry financing and the emergent need to repair our decaying water infrastructure in the United States. WWEMA recently surveyed its members, asking the open-ended question, "What keeps you up at night?" Four out of five respondents replied that it was funding and/or the economy.

The Senate recently passed, with bipartisan support, S.601, the Water Resource Development Act - a positive step in addressing our infrastructure needs. Included in the bill is a five-year pilot program providing secured loans from the U.S. Treasury for 10 water supply and wastewater projects costing at least $20 million each. The House is expected to take up this measure and pass this important legislation when it returns from its August recess.

Action is also anticipated in the House and Senate to reintroduce the Sustainable Water Infrastructure Investment Act, which received overwhelming bipartisan support during the last session of Congress. This measure would eliminate state volume caps on private activity bonds for public-purpose water and wastewater projects, potentially providing $50 billion in private-sector capital for the industry over the next 10 years at a nominal cost to the U.S. Treasury of $258 million. In addition, this legislation will have a large impact on the U.S. labor force, creating more than 1.4 million sustainable jobs while strengthening and protecting our most valuable resource: water.

While we are hopeful that Congress will pass these bills, there are obstacles that may make these funding sources impractical even if they are enacted, one being the "Buy American" provisions. As we learned after the passage of the American Recovery and Reinvestment Act in 2009, tying access to these funds to domestic content requirements would create administrative backlogs resulting in unnecessary project delays, and in some cases even cancellation of much-needed water and wastewater projects. It would also substantially increase costs to already cash-strapped communities and budgets. Further, it would increase the potential of protectionist actions being taken by other countries, which could seriously damage needed U.S. exports and job growth.

Decreased funding in State Revolving Funds (SRFs) has also contributed to the negligence and lack of repair to our infrastructure. Rate increases alone cannot resolve the problems, nor are they a cure-all. We need a collective effort by local, state and federal agencies to explore creative financing models and to attract investment to meet our most critical funding needs. It's time for our government leaders to turn on the spigot of goodwill and bipartisan support to address and fund the aforementioned acts.

Now is the time to act. The American Society of Civil Engineers (ASCE) recently graded our nation's water infrastructure at a "D." How sad that the greatest nation in the world has allowed its water infrastructure to erode to a less-than-satisfactory grade. Likewise, we need to protect our resources for our immediate safety and the safety of future generations to come. The demand for water is ever-increasing, and the need to meet future demands is real and present. Failure to act is not an option.

WWEMA has partnered with other leading industry associations urging lawmakers to eliminate state volume caps on private activity bonds and to oppose any legislation that attaches "Buy American" provisions to water infrastructure projects.

WWEMA will continue to champion these causes, supporting our industry at a critical juncture in its efforts to fund critically-needed water and wastewater infrastructure projects and to promote exports of U.S. technology on a global scale.

About the Author: Carl Smith is the VP of Sales/Marketing at Val-Matic Valve and Mfg. Corp. (Elmhurst, IL), and is a member of the WWEMA Board of Directors.

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