Congress Trims State Revolving Funds, EPA Budget

The Senate and House of Representatives have approved spending bills that would cut the Clean Water and Drinking Water State Revolving Funds (SRFs) by a total of $101 million.

By Patrick Crow, Washington Correspondent

The Senate and House of Representatives have approved spending bills that would cut the Clean Water and Drinking Water State Revolving Funds (SRFs) by a total of $101 million.

The Drinking Water SRF would be reduced to $919 million and the Clean Water SRF to $1.479 billion. The omnibus appropriations bill would reduce EPA's budget $233 million to $8.4 billion in fiscal 2012, including a 33% cut for the office of EPA administrator Lisa Jackson.

House Republicans said the EPA had been funded at unprecedented levels in recent years due to federal programs to revive the economy. They initially had proposed a $1.5 billion spending cut for the agency.

The legislation would repeal a two-year-old requirement that states set aside 20% of their Drinking Water loans to fund green infrastructure projects. Instead, the states would be allowed to determine how much green infrastructure to support.

The bill requires the states to reserve 10% of their Clean Water SRF allocations for green infrastructure. And they must set aside 20% to 30% of all SRF funding for subsidies (such as principal forgiveness or negative interest loans) for disadvantaged communities.

Amendments to the bill prohibit EPA from regulating stormwater pollution discharges from construction sites and require the administration to report to Congress on all climate change programs funded in fiscal 2011.

Wenonah Hauter, executive director of Food & Water Watch, said, "These cuts further Congress's attack on funding for clean water. Although these funds go to states to provide low interest loans to communities struggling to provide a basic, essential service, they have faced an inordinate amount of cuts this year."

The public interest group has proposed that Congress establish a $30 billion water fund to ensure a steady source of federal funding.

Meanwhile, a report by the American Society of Civil Engineers (ASCE) forecast an $84 billion/year water infrastructure investment gap by 2020 if current trends continue.

The study said water and wastewater infrastructure across the U.S. was underfunded by nearly $55 billion in 2010, and the gap will grow to $84 billion in 2020 if no policy changes are made. By 2040, the gap could reach almost $144 billion.

ASCE said many of America's water and wastewater infrastructure systems were built a century ago and they are overburdened.

It said without new investments, by 2020 unreliable and insufficient water infrastructure will cost the average American household $900 a year in higher water rates and lower wages. American businesses can expect an additional $147 billion in increased costs and the economy will lose 700,000 jobs by 2020.

The study said annual capital investment in water infrastructure now is $36.4 billion and must increase to $91 billion to meet the needs of a growing population. It said an additional $9.4 billion per year between now and 2020 would avoid $21 billion per year in costs to households and businesses.

The report said retail stores, restaurants and bars, and construction business face the greatest job losses as a result of aging water infrastructure, driven by a combination of less disposable income, increased water costs and the higher costs of water-based goods.

It said the economic impact could be lessened if households and businesses adopt water sustainability practices and reclaim more water through green infrastructure.

Steven Landau, the lead author of the report, warned, "The longer we wait to make needed repairs and upgrades, the more acute these problems become and the higher the costs to American families and businesses."

Those points were made again when three water organizations urged Congress to enact a Water Infrastructure and Innovations Act (WIFIA) to reduce the costs of critical water infrastructure projects.

In a statement to the Senate Water and Wildlife Subcommittee, the American Water Works Association, the Association of Metropolitan Water Agencies and the Water Environment Federation (WEF) also urged strong federal support for the existing SRF programs, which would be supported in part by the proposed WIFIA program.

"Lowering the cost of borrowing for water and wastewater infrastructure is an important way to leverage local funding and help America rebuild and rehabilitate our aging water infrastructure," the statement said.

The water organizations stressed that Americans are best served by water systems that are self-sustaining through rates and other local charges. By providing low-interest loans to water utilities, however, WIFIA would lower the cost of capital for communities while having no or little effect on the federal budget deficit.

WIFIA would access funds from the U.S. Treasury at near-Treasury rates, and those funds would be repaid to the WIFIA with interest. WIFIA would be modeled after the Transportation Infrastructure Finance and Innovations Act (TIFIA).

The three groups noted that EPA's latest Drinking Water and Clean Water Needs Surveys concluded that water and wastewater systems face more than $600 billion in infrastructure improvement costs through 2028 to simply maintain current levels of service.

In other Washington news:

--The fiscal 2012 omnibus appropriations bill extended for a year the Department of Homeland Security's Chemical Facility Anti-Terrorism Standards, which exempt drinking water and wastewater treatment facilities from regulation under the program.
--The American Chemical Society said a new study has found that water discharged into lakes and rivers from municipal sewage treatment plants may contain significant concentrations of the genes that make bacteria antibiotic-resistant. The research was conducted at a sewage treatment plant in the Duluth, Minn., harbor.
--EPA awarded Lee's Summit, Mo., $1.45 million toward a $2.3 million expansion of its sewer system. The project includes 9,800 feet of sewer pipe and 32 manholes.
--Chicago has agreed to a settlement with EPA to resolve complaints about untreated sewer discharges during wet weather events. The Metropolitan Water Reclamation District will expand its capacity to handle storm water runoff in a series of stages in 2015, 2017 and 2029. It also will pay a $675,000 civil penalty.
--EPA awarded Wichita, Kan., $123,000 toward a $391,000 project for improvements to its storm sewer system in an area developed in the 1950s without sewers.
--WEF's board has approved a position statement that calls for innovative and beneficial uses of biosolids. It said a comprehensive approach to wastewater treatment and solids management is needed to ensure the recycling and recovery of all associated resources including water, nutrients, organic matter and energy.
--EPA granted Mason City, Iowa, $214,000 toward a $500,000 project for drinking water improvements. It includes the installation of a generator to control the chlorine level in the distribution system.
--South Bend, Ind., has agreed to make $509.5 million in improvements to its combined sewer system and reduce overflows of raw sewage to the St. Joseph River. EPA said the city typically discharges more than 2 billion gallons of untreated sewage during 80 events per year.
--The U.S. Geological Survey has issued a study on the decreasing groundwater resources in the Denver Basin aquifer. It said the data will be used to predict aquifer response to continued development in the Front Range urban corridor of Colorado.
--EPA has ordered Monte Vista Water Co. to reduce arsenic levels in its drinking water or face penalties of up to $37,500 per day. The water system serves more than 150 residents northwest of San Francisco, Calif.
--A National Ground Water Association position paper has noted the benefits of federal investment in groundwater infrastructure. It said the groundwater industry employs more than 200,000 persons involved in well and pump installation and service, consulting, remediation, education, and the manufacturing and distribution of products.
--EPA has awarded Russell, Kan., $388,000 to help fund a $843,500 project to replace deteriorating cast iron pipe in drinking water lines. The work includes 5,400 feet of six-inch and 4,500 feet of eight-inch plastic pipe.

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