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.
While local water systems have traditionally relied upon water rates and other locally generated revenue to support the costs of their operations and infrastructure replacement, the significant costs communities will face in coming years related to addressing emerging contaminants, adapting to climate change, replacing lead service lines, and other needs means that federal assistance will be necessary to supplement local investments. To this end, AMWA supports robust funding for the Drinking Water State Revolving Fund (DWSRF) and the Water Infrastructure Finance and Innovation Act (WIFIA) program, each of which offer low-cost loans for critical public health and infrastructure projects. The government should continue to enforce appropriate conditions for DWSRF and WIFIA 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 imposed on communities seeking funds.
AMWA also supports robust ongoing funding for several targeted EPA grant programs that are intended to help water systems address specific issues. These include the Reducing Lead in Drinking Water Grants program, which offers funds to replace lead service lines, and the Midsize and Large Drinking Water System Infrastructure Resilience and Sustainability program, which helps qualifying public water systems pay for projects to respond to the effects of climate change, extreme weather, and cyber threats. AMWA believes all 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 additionally supports the continued development and implementation of the U.S. Army Corps of Engineers’ Water Infrastructure Financing Program (CWIFP), which is intended to provide low-cost financing for flood and storm damage reduction projects, including projects to maintain, upgrade, and repair dams. AMWA believes the program is worthy of ongoing, significant investment and supports increased funding to continue upgrading dam infrastructure throughout the nation.
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.
When a significant influx of water infrastructure funding is appropriated by Congress for the EPA or other agencies to distribute to states, AMWA encourages Congress to ensure that local funding recipients are provided with sufficient time to efficiently spend the funds on necessary water infrastructure projects and are not put in a position to simply spend down dollars before they expire.
EPA should also provide additional funds to assist state administrative agencies that manage federal grant programs.
Rationale:
- Public water systems should generally rely on rates and other local resources to fund operations, maintenance and infrastructure improvements, but this should be supplemented by federal loan and grant assistance.
- 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 nearly $625 billion, including $235 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, operations and maintenance (O&M) costs also add tens of billions to these projected annual funding shortfalls.
- Financing costs have increased significantly during past economic downturns, 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.
- 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.
- State administrative agencies oversee the distribution of key federal water infrastructure financing programs, including but not limited to the Drinking Water State Revolving Fund. It is essential to ensure that state agencies have the appropriate resources to administer and manage the increase in applications, budget oversight, and grants that result from significant increases in program funding.
- Federal infrastructure funding programs that are open to various entities can be confusing for water utility staff to navigate and discourage utilities from pursuing funding opportunities. Sector-specific webinars, assistance, and outreach can increase interest.
1 “7th Drinking Water Needs Survey and Assessment,” United States Environmental Protection Agency, April 2023.
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.