The Association of Metropolitan Water Agencies (AMWA) believes that well-functioning water infrastructure is fundamental to protecting public health. Looking to the future, there is a consensus that several hundred billion dollars will be needed to finance drinking water infrastructure upgrades and refurbishments.
AMWA believes that local water supply operations should rely primarily on water rates and other locally generated revenue to support the costs of their operations and infrastructure replacement. However, because local economic conditions vary tremendously around the country and the cost of meeting federal and state regulations impacts systems differently, AMWA supports robust funding for the Drinking Water State Revolving Fund (DWSRF). The government should continue to enforce appropriate conditions for DWSRF eligibility (including, for example, demonstration by applicant utilities that they are investing appropriate levels of their own revenues in capital repair and replacement, such as implementation of rate increases for capital investment), but should also take steps to minimize the paperwork burden this places on communities.
AMWA also supports robust ongoing funding for other infrastructure financing assistance programs, including an EPA grant program intended to help communities and low-income ratepayers replace lead service lines, and the Water Infrastructure Finance and Innovation Act (WIFIA) program, which Congress created to supplement the SRFs with low-cost loans for major water infrastructure projects that generally do not receive significant assistance through existing federal water infrastructure programs. In each case, federal water infrastructure funding programs should be targeted to enhance the long-term local sustainability of public water systems as well as to address near-term infrastructure needs.
AMWA supports the development of appropriate asset management plans, a demonstrated commitment to funding capital replacement, the consideration of consolidation and regional partnerships where feasible and appropriate, and the institutionalization of effective utility management practices to increase utility competitiveness for federal infrastructure assistance.AMWA further supports the refinement of methods used for predicting infrastructure needs to maximize their accuracy in national cost estimates, as well as to characterize the needs of individual agencies. AMWA also supports investments in research to develop technology that best utilizes our limited resources to restore and improve infrastructure.
- Public water systems should generally rely on rates and other local resources to fund operations, maintenance and infrastructure improvements.
- There is a consensus that the nation’s water systems face billions of dollars’ worth of infrastructure investment needs over the coming decades. EPA’s most recent Drinking Water Needs Survey predicted that over the next 20 years public drinking water systems face an estimated overall infrastructure investment need of $472.6 billion, including $145.1 billion for systems serving more than 100,000 people.1 EPA’s 2012 Clean Watersheds Needs Survey identified another $271 billion in needs for wastewater and stormwater infrastructure.2 Similarly, a 2011 report from the American Society of Civil Engineers projected a $143.7 billion gap between water and wastewater infrastructure needs and spending by 2040.3 In addition to capital improvements, O&M costs also add tens of billions to these projected annual funding shortfalls.
- Past economic downturns have caused financing costs to increase significantly, so the federal government must maintain programs to help utilities finance critical infrastructure improvements when the private market is unable to do so.
- Beyond capital needs and O&M costs, federal and state regulations add significantly to the cost of providing safe and affordable drinking water.
- The Federal government has a history of providing significant funding for the development of drinking water supplies particularly in the west and southwest. The Federal government also created the Drinking Water State Revolving Loan Fund intended to help drinking water systems comply with the Safe Drinking Water Act.
- Through June 30, 2018, the DWSRF had provided more than $38.2 billion in funding assistance to communities nationwide through 14,577 individual loans – an average of about $2.6 million per project.4 The Water Infrastructure Finance and Innovation Act (WIFIA) program, created by Congress in 2014, has begun to supplement SRF funding by offering $6 billion worth of water infrastructure funds through 33 loans issued across the country as of October 2020.5
- Local, state and federal governments contribute to the cost incurred by drinking water systems and each level of government should participate, in an appropriate way, to pay for those costs.
- Increased research funding that is well targeted, can have a considerable payback to agencies to reduce the overall infrastructure investment needed in future years.
- Partnerships can help water systems in communities in need address infrastructure issues through financial, technical, operational and managerial cooperation and assistance.
1 “Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress,”, United States Environmental Protection Agency, March 2018.
2 “Clean Watersheds Needs Survey 2012: Report to Congress,” United States Environmental Protection Agency, January 2016, January 2016.
3 “Failure to Act: The Economic Impact of Current Investment Trends in Water and Waste Treatment Infrastructure,” American Society of Civil Engineers.
4 “Drinking Water State Revolving Fund: 2018 Annual Report," United States Environmental Protection Agency, July 2019.
5 "EPA Announces $156 Million Water Infrastructure Loan to the City of Memphis, TN,” United States Environmental Protection Agency, October 8, 2020.