tion, disinfection, laboratory facilities, waste handling, and computer automated monitoring and control devices. The storage category includes projects to construct, rehabilitate, or cover finished water storage tanks, but excludes dams and raw water reservoirs unless the raw water basins are located at the treatment facil- ity and are part of the treatment process. EPA estimated that community water systems currently have a total of 2.2 million miles of transmission lines and distribution mains. EPA reported that, based on its census and statistical samples: • large systems (serving more than 100,000 people) have approximately 607,400 miles of pipe and average 943 miles per system; • medium-sized systems (serving between 3,301 and 100,000 people) have approximately 1,234,300 miles of pipe and 134 miles per system; and • small systems (serving fewer than 3,301 people) have approximately 379,600 miles of pipe and average 9.5 miles per system. Funding water system needs Despite this growing need to repair and replace water system infra- structure, in a report released in May — Go Back to the Well — the Natural Resources Defense Council (NRDC) said that only a few states are adequately leveraging federal dollars to shrink the infrastructure funding gap. The report highlights financing strategies for states to bet- ter fund the water infrastructure serving millions of Americans. “Despite the looming funding gap, states aren’t thinking about how to meet that future need and are essentially funding water infrastructure the way you or I would manage our checking account,” said Rob Moore, director of NRDC’s Water & Climate Team. “Each year, they just add up how much EPA gives them, plus a small state match, and that’s the amount of assistance they plan to provide to help communities fix their drinking water and sewer systems. That’s not going to cut it. “Using more creative financial tools, like issuing bonds and using their [State Revolving Funds] (SRFs) to issue loan guarantees could greatly expand infrastructure funding,” Moore said. “Those increased funds could determine which states are prepared to weather the coming storms.” States have accepted tens of billions of dollars in federal assistance to set up Clean Water and Drinking Water SRFs, but most states are doing very little to grow the amount of financial assistance they can provide, NRDC said. The group’s report shows how states could maximize their SRFs and provide more financial assistance to support communities’ water infrastructure needs. EPA estimates that $745 billion is needed just to meet and maintain existing public health and environmental standards. Another $448 bil- lion to $944 billion will be required to adapt water systems to deal with flooding, sea level rise, droughts, and other impacts of climate change. For example, 2012’s Hurricane Sandy caused more than $5 billion in damage to wastewater infrastructure in New York and New Jersey.
Table 1: Total 20-year need by system size/type and project category (billions of January 2015 dollars) Image: U.S. Environmental Protection Agency
In addition to taking federal dollars, states are allowed to issue bonds to increase their SRFs’ financial capacity, as well as issue loan guarantees to provide credit assistance for water infrastructure projects, making it easier for communities to secure private financing. However, the vast majority of states do little to expand the financial capacity of their SRF programs. Only New York, Massachusetts, Ohio, and Indiana have regularly leveraged their SRFs through the sale of bonds and steadily increased the capacity of their programs. Twenty- eight states have not issued any bonds to expand their SRF financing. Most states have done relatively little. Through 2015, even states like Wisconsin and Pennsylvania, which have relatively large SRF pro- grams, had done little to grow their SRFs using their own resources, instead relying on the incremental growth afforded by annual federal assistance. NRDC identified four actions federal and state governments can take to help close the funding gap to improve the nation’s water infrastructure: • Congress should triple appropriations for the Clean Water and Drinking Water SRFs from the current level of $2 billion to $6 billion annually. • States should make loan guarantees available to more easily and cheaply finance drinking water, wastewater, and stormwater projects. • States should leverage additional funding for their SRF programs by issuing bonds. • Congress should allow states that increase the funding of their SRFs to provide additional subsidized assistance to meet the needs of low- income communities and catalyze investments in projects that are cur- rently underrepresented in SRF portfolios. Download the EPA’s 2015 Drinking Water Infrastructure Needs Survey and Assessment at www.epa.gov/drinkingwatersrf/epas-6th-drinking- water-infrastructure-needs-survey-and-assessment. Download the NRDC report, Go Back to the Well, at www.nrdc.org/ resources/go-back-well-states-and-federal-government-are-neglecting- key-funding-source-water.
Information provided by the U.S. Environmental Protection Agency (www.epa.gov) and the Natural Resources Defense Council (www.nrdc.org).
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july 2018
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