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Policy Statement 302 - Cost Sharing in Water Resources Infrastructure Programs

 
Approved by the Energy, Environment, and Water Policy Committee on April 6, 2020
Approved by the Public Policy Committee on May 18, 2020
Adopted by the Board of Direction on July 11, 2020

Policy

The American Society of Civil Engineers (ASCE) believes that:

  • Cost-sharing is a necessity among federal, state, and local entities involved in the design, construction, operation, and maintenance of multijurisdictional water resources infrastructure projects.
  • Political and agency leadership must be steadfast and innovative in developing long-term cost sharing and financing approaches for water resources infrastructure projects and programs, including planning for the impacts of changing climate patterns and extreme events.
  • Planning for interstate or large multijurisdictional projects is an inherently federal function that should be predominantly funded by the federal government. It is important to perform integrated regional and watershed planning to maintain and enhance the integrity of flood-protection systems, water supply, navigation, and the environment across multiple jurisdictional boundaries.
  • The life-cycle costs of the project should be considered, including clear upfront designation of which entity will cover lifetime maintenance costs and potential cost savings due to environmentally sustainable approaches.

Issue

Cost-sharing is an important part of funding water resources infrastructure projects and ensures that local beneficiaries are part of the project development decision making process. As noted by the Congressional Research Service (April 2019), since WRDA 1986 (P.L. 99-662), nonfederal sponsors have been responsible for a significant portion of the financing of studies, construction, and operations and maintenance of most projects. Non-federal sponsors generally are state, tribal, county, or local agencies or governments. 

Cost-sharing programs for water resources infrastructure projects among federal, state, and local interests are developed to require an appropriate balance of financial investments from all parties. It should be the initial responsibility of the federal sponsoring authority, as directed by Congress, to set forth a program of study and implementation, which includes commitment by the project beneficiaries for what they consider to be their share of cost contribution. 

Local cost-sharing partners have specific, often localized, water resources challenges to which federal support is being sought for technical and financial assistance. The federal government is best suited as a partner in these projects to represent regional, system or watershed interests and to effectively integrate local projects into a geographically larger water resources infrastructure program.

Cost-sharing rules have evolved since 1986 to accommodate variability of project beneficiaries across the range of infrastructure types. Some projects have clearly localized benefits such as flood control and therefore have a larger local cost-share. Whereas, inland navigation projects are less localized and support national movement of goods on large, multi-state river systems.

Rationale

Effective cost-sharing of water resources investment is a key area of interest for ASCE. As the ASCE Infrastructure Report Card points to pressing needs across the nation, a robust discussion of how to get projects financed and constructed is warranted. Careful tracking of cost-sharing policies, criteria, and resulting project delivery is needed to guide robust response to local needs while attentive to larger watershed impacts.

Congress is making additional tools available to advance infrastructure investment. WRRDA 2014 which authorized a new financing mechanism, the Water Infrastructure Finance and Innovation Act (WIFIA), which provides loans and loan guarantees, for a range of water project types.

WRRDA 2014 and WRDA 2016 expanded the authorities for non-federal entities to perform studies and construct projects (or elements of projects) that typically would have been undertaken by federal agencies. These statutes also provided that the costs of these non-federal-led activities are shared by the federal government largely as if the federal agency performed them. Thus, non-federal entities advancing water resource projects may be eligible to receive credit or reimbursement (without interest) subject to the availability of federal appropriations for their investments that exceed the required non-federal share of project costs. 

ASCE Policy Statement 302
First Approved in 1985


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