Survey Examines Asset Management Practices

Cities are finding it harder to keep pace with water and wastewater system upgrades, the U.S. Conference of Mayors said in a recent report.

Nov 1st, 2007

by Patrick Crow, Washington Correspondent

Cities are finding it harder to keep pace with water and wastewater system upgrades, the U.S. Conference of Mayors said in a recent report. The mayors group released a survey that examined the status of asset management programs in water and sewer services in major cities.

The report, disclosed at the mayor’s annual water summit, showed how cities are using asset management programs to acquire, operate, maintain and rehabilitate water and sewer systems in cost-efficient ways.

The conference said that although water and sewer services are considered a “government enterprise,” the federal financing share is minimal. It said the federal government spends about 1% for water and 5% for wastewater services, while local governments pay for more than 95%.

In 2005, local governments spent $82 billion on public water and sewer services, which indicates a growth in annual expenditures compared with the $841 billion they spent from 1991 to 2005. The mayors association estimated that local governments will spend $110 billion annually by 2010.

“With water and sewer rates continuing to increase to meet the rising costs of maintenance and improvements, cities are finding it harder and harder to keep pace,” the conference said.

The conference surveyed the use of asset management practices at drinking water and wastewater plants. Major findings of the survey, to which 330 cities responded, were:

  • About 75% of drinking water and sewer treatment plants use comprehensive or partial asset management practices.
  • More than 90% of cities have conducted full or partial inventories and condition assessments of their water and sewer pipes, and more than 70% have implemented a full or partial asset management program for their water and sewer pipes.
  • Water main breaks continue to be a major concern. Repair and replacement cycles can exceed 100 years.
  • Most cities support using asset management programs but oppose a congressional mandate making such programs a prerequisite to receiving federal financial assistance.
  • Some cities are achieving capital cost and operating cost savings through asset management programs and 50-60% expect to achieve savings in the future.

WRDA Showdown Expected

Congress and the Bush Administration were headed for a showdown over the Water Resources Development Act (WRDA), which authorizes major waterway projects, most of which fall under the jurisdiction of the Army Corps of Engineers.

Major measures in the bill included $3.5 billion for Hurricane Katrina restoration in Louisiana, $2 billion each for Florida Everglades work, California projects, and Upper Mississippi/Illinois rivers navigation improvements. Actual funding would be appropriated when it became available later.

The Congressional Budget Office said the WRDA authorizes $11.2 billion between 2008-12 and another $12 billion in the subsequent decade, for a total of $23.2 billion.

Last summer a House-Senate conference committee merged a $14 billion Senate WRDA bill and a $15 billion House bill, and reported a $23 billion measure inflated by drinking water, wastewater, and other projects that legislators wanted for their home districts.

In late September, the Senate passed the conference committee’s bill in an 81-12 vote. The House had voted 381-40 in August to accept the conference-committee bill.

President George W. Bush has pledged to veto the bill because of its cost. But Congress obviously had the two-thirds majority needed to override a veto.

Sen. James Inhofe (R-Okla.), the senior Republican on the Environment and Public Works Committee, said the overwhelming bipartisan vote in the Senate “sends a clear message to the President: don’t veto this critically important infrastructure bill.”

Senate Subcommittee Discusses Need for SRF

A Senate Environment and Public Works subcommittee explored the need for the Clean Water State Revolving Fund (SRF) at a September hearing.

Witnesses included Benjamin Grumbles, the Environmental Protection Agency’s Assistant Administrator for Water; and representatives of the U.S. Conference of Mayors, the Louisiana Rural Water Association, the Council of Infrastructure Financing Authorities, the National Association of Clean Water Agencies, and the Natural Resources Defense Council.

Sen. Inhofe said, “Since its creation in 1987, the Clean Water SRF has saved its borrowers over $3.7 billion in interest costs and also provided $8.2 billion in funding to improve the nation’s water quality. Importantly, the federal government has provided $24 billion in state capitalization grants. In 2006, there was more than $60 billion available for loans to communities.”

Inhofe warned that a Clean Water SRF bill should avoid the mistakes of previous efforts. “The bill must be clean of too many additional requirements on the applicants. We are not providing grants through the current SRF. These are loans to be repaid by municipalities (and should have) as few strings attached as possible.”

The National Association of Water Companies (NAWC) urged Congress to work within the existing Clean Water SRF and reject a trust fund or grant program.

“What Congress should not do is authorize a new trust fund or federal grant program which inevitably will lead to utility customers paying far more for water infrastructure replacement,” NAWC said.

“The Clean Water SRF should be amended, however, to assure that all Americans, regardless of whether they are served by a publicly or privately owned utility, have equal access to the fund’s benefits. This simple fairness exists in the Drinking Water SRF and should be extended to the Clean Water SRF.”

The public advocacy group Food & Water Watch has urged the creation of a clean water trust fund to finance infrastructure improvements -- avoiding annual congressional appropriations to the Clean Water SRF.

The Washington, D.C., based group said most states are facing clean water infrastructure needs far greater than their available funding. It said federal support for water pipes and treatment plants has declined from a high of about $2 billion in 1991 to slightly more than $1 billion in 2007 − a 66% decrease when adjusted for inflation.

“As recent tragedies have shown, U.S. infrastructure has seen decades of neglect. Our water systems, invisible under our homes and businesses, are facing a similar problem − one that may lead to a public health crisis,” said Food & Water Watch executive director Wenonah Hauter.

Food & Water Watch said because clean water funding is tied to the contentious congressional appropriations process, the federal contribution has shrunk from 78% in 1978 to just 3% today, forcing states to make tough choices among critical water projects.

The group said combined sewer overflows from failing and insufficient infrastructure are wreaking environmental havoc: between 23,000 and 75,000 overflows each year spill 1.26 trillion gallons of untreated sewage.

It said California faces the worst deficit, with 5-year projected needs of $10.5 billion, 210 times its projected 2008 federal funding. The state-identified needs ranged from 3 to 169 times federal funding distributed in 2007.

AWWA, NRWA Working Together

The American Water Works Association (AWWA) and the National Rural Water Association (NRWA) have agreed to increase their joint efforts.

AWWA President Nilaksh Kothari said, “Both organizations will benefit from each other’s strengths, and this new era of cooperation and coordination will ultimately serve consumers from communities of all sizes.”

The two associations said their presidents would meet semi-annually. A joint working group will develop an annual plan to fulfill the intent of the agreement, hold formal partnering sessions, and recommend amendments.

NRWA President Rodney Tart said, “It is important that our respective organizations continue to seek opportunity in areas where we can find mutual agreement.”

The two associations said their common goals are to advance education, science and technology, disseminate technical information, provide training assistance, increase public understanding, promote sound public policy, and to improve trust and confidence between AWWA and NRWA.

Separately, AWWA and the Asociación Nacional de Empresas de Agua y Saneamiento de México (ANEAS) − the National Association of Water and Sanitation of Mexico − agreed to share expertise and resources.

The two groups will examine their existing programs and other resources for potential cooperative efforts and exchange of information.

In other Washington developments:

  • The Environmental Protection Agency (EPA) has revised its Lead and Copper Rule, making seven regulatory changes in the areas of sampling, monitoring, customer notification, public education and lead-service-line testing and replacement. EPA will require water suppliers to provide consumers with information to help them make decisions about how to limit their exposure to lead in drinking water.
  • EPA also issued a technical guidance to will help integrate National Pollutant Discharge Elimination System (NPDES) permits into watershed management plans. The guidance supports approaches to permitting that may help target a watershed’s most pressing environmental needs.
  • EPA said 16 organizations are finalists eligible to apply for $13 million through EPA’s Targeted Watersheds Grants Program. The selected organizations would implement a variety of activities to improve the health of their watersheds.
  • The National Academy of Sciences and the Global Health and Education Foundation have launched “Safe Drinking Water Is Essential” (www.drinking-water.org). The Internet resource will be the first tool of its kind to provide international decision makers with peer-reviewed scientific and technical information about the options available to enhance the safety and availability of drinking water supplies.
  • Sen. Frank Lautenberg (D-N.J.) has filed a bill, the “Sewage Overflow Right-to-Know Act,” to require treatment plants to disclose when they dump raw or partially treated sewage into lakes and rivers. A companion bill in the House of Representatives is expected to get a hearing later this year.
  • At a Senate Environment and Public Works Committee hearing, the Association of Metropolitan Water Agencies (AMWA) urged Congress not to exempt concentrated animal feeding operations from cleanup liabilities under Superfund legislation. AMWA said improper management of such operations threatens the safety of drinking water supplies with pollutants such as phosphorus, nitrates, ammonia and arsenic.

More in Infrastructure Funding