The American Water Works Association (AWWA) Water Utility Council Chair Aurel Arndt urged members of Congress to expand upon existing federal efforts aimed at shoring up the nation’s aging water and wastewater infrastructure. Testifying before the US Senate Committee on Environment and Public Works, he offered recommendations that could dramatically reduce risks for citizens reliant upon public water systems while creating virtually no budgetary burden on the federal government.
Arndt, speaking on behalf of AWWA and its approximately 50,000 members, specifically called the committee’s attention to the Water Infrastructure Finance and Innovation Act (WIFIA) program, a five-year low-interest loan pilot project approved through the Water Resources Reform and Development Act in 2014. While the program is authorized at $35 million in fiscal year 2017, Congress appropriated only $2.2 million annually in the first two years to enable US EPA to develop administrative processes for the water infrastructure loan program. “The first two years have been lost to setting up the program. We urge Congress to at least extend the pilot test for another two years. However, given the success of the Transportation Infrastructure Finance and Innovation Act (TIFIA), we do feel Congress would be justified in making WIFIA a permanent program as well.”
In addition, WIFIA would leverage money provided by Congress in a manner similar to TIFIA but at a much greater rate. For instance, while TIFIA provides $10 in loans for every dollar appropriated, some on Capitol Hill have suggested that the ratio for WIFIA loans could be 1:50 due to water utilities’ exceptional creditworthiness. Another issue raised by Arndt during his testimony related to preserving tax-exempt interest benefits for investors who purchase municipal bonds. He also urged the senators to appropriately fund the State Revolving Fund loan program, which primarily benefits small-to-medium-sized water systems, and to remove annual caps on the use of private activity bonds for water infrastructure projects.
WEF and WRA
Rudolph Chow, Director of the Baltimore Department of Public Works, testified on behalf of the Water Environment Federation (WEF) and the WateReuse Association at the same hearing. With more than 30 years of experience in the water sector, he is a proponent of surface and underground infrastructure renewal and has spent his career developing and implementing new and innovative programs aimed at protecting these systems while mitigating affordability issues. Testifying before Chairman James Inhofe (R-OK), Ranking Member Barbara Boxer (D-CA) and other Committee Members, his remarks focused on three main points:
– Affordability – The challenges communities are having with meeting their regulatory requirements with limited funds is a national problem;
– Federal Funding of Infrastructure – Congress should provide robust support for existing and proposed federal funding and financing programs; and
– Economic Benefits of the Clean Water and Drinking Water State Revolving Fund Programs (SRF).
At the Committee’s request, WEF and WateReuse recently conducted an analysis of the estimated economic impact generated by SRF spending in four example states, including taxes that return to the federal government and the employment and output from that spending. The four states—California, Maryland, Ohio, and Oklahoma—were chosen as a good cross-section of states across the nation that were representative of geographic size, population size, cost of living, rural/urban populations, and general age of infrastructure. (Although WEF and WateReuse are still finalizing the analysis that will go into the Committee’s official record, the preliminary results revealed that on average, for every one million of SRF dollars spent in those four states, there was a significant return to the national and local economies.)
EPCOR and NAWC
Joe Gysel testified on behalf of EPCOR Water USA, Inc. and The National Association of Water Companies (NAWC). He discussed the state of the nation’s water infrastructure, public-private partnerships in the water sector and the role of private water management companies, including investor-owned utilities. Gysel also commented on the role the federal government can play in stimulating much-needed investment in the systems that deliver this critical resource. Explaining the role NAWC member companies play in assisting communities facing water challenges, he pointed to the unique strengths and operational acumen of the private sector. Gysel noted that public-private partnerships (P3s) can reduce municipal costs and shift debt burdens allowing municipalities the ability to address other important city priorities and that private companies have entered into more than 2,000 such partnerships.