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Policy Statement 480 - Water Infrastructure and Facilities Construction Funding

 

Approved by the Energy, Environment, and Water Policy Committee on January 22, 2019
Approved by the Public Policy Committee on April 28, 2019
Adopted by the Board of Direction on July 13. 2019

Policy

The American Society of Civil Engineers (ASCE) supports raising the awareness of the true costs of safe drinking water, stormwater, and wastewater treatment and the following approaches to increase federal, state, and local investments in water infrastructure:

  • Regular review and assessment of user fees in order to determine if they are adequate to cover all life cycle costs; 
  • Where appropriate, conduct studies to identify disadvantaged communities and their ability to pay rising utility burdens, including establishing appropriate burden sharing among government and consumers; 
  • Continued reauthorization of the State Revolving Loan Fund (SRF) programs under the Safe Drinking Water Act and the Clean Water Act;
  • Eliminate the state cap on private activity bonds for water infrastructure projects to bring in new private financing to bear on the problem; 
  • Maintain full appropriations to the levels authorized by law for the Water Infrastructure Finance Innovations Authority (WIFIA); and 
  • Establish a federal Water Infrastructure Trust Fund and a National Infrastructure Bank to fund and finance the national shortfall in funding of infrastructure systems under the Clean Water Act and the Safe Drinking Water Act.

Issue

The Environmental Protection Agency (EPA) has identified the nation's needs of over $743 billion for water, wastewater, and stormwater systems. Without significant investment, the nation risks losing the environmental, public health, and economic gains made over the last 40 years.

The issue of water infrastructure financing is best addressed by a strong partnership between local utilities and the federal government because of the public health nature of these investments, the inability of some 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 components of public infrastructure. 

Originally, all investment in drinking water and wastewater treatment was provided locally. By the 1960s, the condition of America's water infrastructure was poor. In the 1970s, the federal government established funding programs that recognized the value of water infrastructure investments to the American economy and quality of life.

During the 1970s and 1980s, the federal government passed significant legislation mandating increasingly stringent water quality and safe drinking water requirements, resulting in increased local investment. In the 1990s the trend continued with renewed legislative attention to stormwater sources of pollution and their control plus promulgation of additional stringent drinking water standards. The higher water quality and drinking water standards require large capital and operational costs for increases in treatment process volume and complex equipment. Replacing the nation's aging and obsolete water infrastructure will require significant investment, including higher water rates that more accurately reflect the cost to maintain and operate the systems while meeting more stringent standards.

Not nearly as much federal investment has accompanied these requirements to protect the health and the environment as it once did, but the requirements remain and are increasing. The net effect is a decline in federal outlays and sharp increases in local outlays. One impact of this shift is a decrease in local capital investment in order to afford increased local operations and maintenance needs.

Congress created the SRF programs under which monies provided to the states by the federal government are used by local governments for the construction of wastewater and drinking water facilities and are repaid to states to create a "revolving" source of assistance for other communities. The funding authority for the Safe Drinking Water Act SRF program was renewed in 2018, however, funding authority for the Clean Water 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 existing federal and state environmental requirements, additional capacity needs, and increasing sources of pollution. These requirements have created a crisis that is beyond the means of local communities to solve alone 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 four decades.

ASCE Policy Statement 480
First Approved in 2000

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