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Policy Statement 480 - Water Infrastructure and Facilities Construction Funding

ASCE Policy Statement                                                                                                           480

 

WATER INFRASTRUCTURE AND FACILITIES CONSTRUCTION FUNDING 

 

                  Approved by the Energy, Environment, and Water Policy Committee on December 12, 2011
Approved by the Public Policy Committee on May 4, 2012
Adopted by the Board of Direction on July 20, 2012

Policy 

 The American Society of Civil Engineers (ASCE) recommends: 

  • Funding for water infrastructure system improvements and associated operations be provided by a comprehensive program. 
  • The creation of a Water Infrastructure Trust Fund to finance the national shortfall in funding of infrastructure systems under the Clean Water Act and the Safe Drinking Water Act, including stormwater management and other projects designed to improve the nation’s water quality.
  • A variety of financial mechanisms for the trust fund, such as appropriations from general treasury funds; issuance of revenue bonds and tax exempt financing at state and local levels; public-private partnerships; state infrastructure banks; user fees on certain consumer products; and other innovative financing mechanisms, including broad-based environmental restoration taxes to address problems associated with water pollution, wastewater management and treatment, and stormwater management.
  • Reauthorization of the Clean Water Act and Safe Drinking Water Act to increase and expand the federally funded State Revolving Loan Fund (SRF) program.

 

Issue 

The nation now faces an investment gap of more than $20 billion a year between what water and wastewater systems need to spend and what they are currently spending to meet federal requirements and other system demands.  In fact, some estimates place the need at $300 billion over the next decade.  Local solutions can solve only a small portion of this problem and if nothing is done, we risk losing the environmental, public health, and economic gains made over the last 30 years.

The federal government is best suited to address this crisis because of the public health nature of these investments, inequity between communities to pay on their own, and the inter-jurisdictional and geographic dispersion of benefits of such investments.  There are many examples of comparable federal intervention where similar problems faced other modes of public infrastructure.

Originally, all investment in drinking water and wastewater treatment was local.  By the 1960s, the condition of America’s waters was poor.  In 1972, the federal government established a grants program that recognized the value of water infrastructure investments to the American economy and quality of life.

Over the decades of the 1970s and 1980s, the federal government passed significant legislation mandating increasingly stringent water quality and safe drinking water requirements, which resulted in increasing local investment.  In the 1990s the trend continued with renewed legislative attention to wet-weather sources of pollution and their controls plus promulgation of some drinking water standards in the parts per billion.  The more stringent effluent discharge standards require large increases in treatment process volume and complex equipment.  A capital cost for even small communities range in the tens of millions of dollars and for large communities can approach hundreds of millions of dollars.  Coupled with the large capital costs is an increase in operating and maintenance costs.

Not nearly as much federal investment has accompanied these requirements as it once did, but the requirements are still there and growing.  The net effect is declines in federal outlays and sharp increases in local outlays to the point now where local capital investment appears to be crowded out by local operations and maintenance needs.

Congress created the SRF programs under which monies used by local governments for the construction of wastewater and drinking treatment facilities will be repaid to states to create a "revolving" source of assistance for other communities.  Funding authority for the SRF program expired in 1994 and needs to be renewed in order to continue to assist local communities in obtaining the capital necessary to rebuild America's wastewater infrastructure. 


Rationale  

America’s drinking water, stormwater, and wastewater systems are aging or failing and must be upgraded or expanded to meet increasing federal and state environmental requirements.  These requirements have created a crisis that is beyond the means of local communities to solve and for which federal assistance is clearly justified.  Not meeting the investment needs of the next 20 years risks reversing the environmental, public health, and economic gains of the last three decades.

 

ASCE Policy Statement 480 
First Approved in 2000