Jobs Act Sets High Bar for Water Project Funding

Water infrastructure improvement projects were earmarked for only a small portion of President Barack Obama's proposed $447 billion American Jobs Act initiative.

Nov 1st, 2011

By Patrick Crow, Washington Correspondent

Water infrastructure improvement projects were earmarked for only a small portion of President Barack Obama’s proposed $447 billion American Jobs Act initiative.

Under the legislation, $140 billion would be spent on infrastructure investment, but water projects potentially would be eligible for only $10 billion from the American Infrastructure Financing Authority.

The proposal faced stiff opposition in Congress, which may consider it piecemeal rather than as a single bill.

The National Association of Water Companies applauded any additional funding for water projects, but Executive Director Michael Deane said the $100 million size threshold was too high for many water projects.

He said water projects, “due to their out-of-sight, out-of-mind nature,” may have difficulty competing for funding with larger, more publicly visible projects like roads and bridges.

“The good news is that water infrastructure is perfect for an infrastructure bank because drinking water and wastewater systems have existing revenue streams and experience in the capital markets,” he said.

Food & Water Watch was more critical of the plan. Executive Director Wenonah Hauter said it fails to meet “the funding needs of our nation’s drinking water and wastewater systems, which every year fall $22 billion short of the amount they need to operate effectively.

“One major problem with the infrastructure bank is that its definition of a drinking water or wastewater infrastructure system is not the same as that in the Clean Water Act and the Safe Drinking Water Act (SDWA). This seemingly minor inconsistency could have severe repercussions for many small community water systems because they will now have to compete with dams, levees, solid waste disposal plants and open space management systems for funding.”

She said the funding thresholds $100 million for urban projects and $25 million for rural ones would exclude many projects. “Further exacerbating this is that projects need to be ‘regional’ or ‘national’ in scope, yet how drinking water and wastewater projects qualify as ‘regional’ is left <.”

Finally, she said the legislation seeks to maximize private investment in public infrastructure, although private financing is usually far more expensive than public financing. “Consequently, there may be no net benefit for public water utilities and their customers.”

League of Cities Report

The National League of Cities (NLC), in its annual report on municipal fiscal conditions, said the nation’s cities are cutting personnel and infrastructure projects as the economic downturn continues to take its toll.

NLC said general city revenues are continuing to fall, with a projected 2.3% decrease by the end of 2011. This is the fifth straight year of declines in revenue with probable further declines in 2012, it said.

The revenue decline is mainly due to the suppressed property market that is negatively impacting property tax revenue. Property tax collections are expected to decline by 3.7% with further declines likely in 2012 and 2013.

Income tax receipts were experiencing a decrease of 1.6%. Sales tax receipts remained largely flat, but at last year’s level, which saw the worst decrease in sales tax revenue in 15 years.

The NLC report said cities are responding by cutting personnel (72%), delaying infrastructure projects (60%) and increasing service fees (41%). One in three (36%) cities report modifications to employee health care benefits.

Cities have experienced decreases in state aid as states work to balance budgets. Since 2009, cities report cuts in general aid (50%), shared revenues (49%), and reductions in reimbursements and other transfers (32%).

NLC said that confronted with revenue shortfalls, budget cuts, and state aid cuts, 57% of city finance officers reported that their cities are less able to meet financial needs in 2011 than in 2010.

Electronic Reporting

Water groups have applauded a bill introduced by Sen. Pat Toomey (R-Penn.) to allow drinking water utilities to distribute their annual consumer confidence reports electronically -– rather than through the mail as required by the 1996 SDWA amendments.

Rep. C.W. Young (R-Fla.) introduced a similar bill in the House of Representatives earlier this year.

The Association of Metropolitan Water Agencies (AMWA), the American Water Works Association, the Association of California Water Agencies, the National Association of Water Companies and the National Rural Water Association were supporting the legislation.

The bills would apply to drinking water utilities that did not incur a maximum contaminant level violation in the year covered by the report. Utilities with a violation would have to continue mailing reports to all customers.

AMWA said some of its members have reported that the legislation could save them more than $100,000 per year in postage and printing costs.

“Much has changed in the 15 years since enactment of the 1996 SDWA Amendments, such as the explosive growth of the Internet and electronic communications,” said Diane VanDe Hei, AMWA’s executive director. “But some parts of that successful law remain anchored in the Twentieth Century, including its requirement that drinking water systems use the postal mail to communicate water quality information to their customers.”

In other Washington news:

  • The Senate Environment and Public Works Committee has approved the nomination of Ken Kopocis to be the Environmental Protection Agency’s assistant administrator for water. Kopocis is a Democratic counsel for the House Transportation and Infrastructure Committee.
  • The Association of State and Interstate Water Pollution Control Administrators has changed its name to the Association of Clean Water Administrators.
  • EPA has recognized Pueblo, Colo., for installing a 200 kW solar photovoltaic power system at a wastewater treatment plant. Pueblo got a $1.5 million federal grant for the project in 2009.
  • The agency said Public Water Supply District No. 2, of St. Charles County, Mo., will pay a $5,696 penalty for Risk Management Program violations relating to the use of chlorine gas as a disinfectant at its drinking water treatment plant in Defiance, Mo. It also will spend $80,000 to evaluate the use of non-chlorine disinfectants.
  • EPA has added areas of Hicksville, New Cassel, Westbury, Hempstead and Salisbury in Nassau County, N.Y. to the Superfund National Priorities List because volatile organic compounds have contaminated groundwater in the Magothy aquifer.
  • The agency has issued a final health assessment for trichloroethylene (TCE). It already has drinking water standards for TCE and standards for cleaning up TCE at Superfund sites throughout the country.

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