Estimated 5-year funding requirements for drinking water and wastewater
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Baltimore is sinking. But it's not the ground that's doing the swallowing. Virtually all water mains have been in service for 65 years without regular inspections. More than half of storm drains were installed before 1950. Capital improvements and maintenance are leapfrogging the water utility's current maximum debt load of $1.017 billion for water and $1.11 billion for wastewater. Rates for both services have tripled since 1996 and, says Mayor Stephanie Rawlings-Blake, “we can't keep raising debt ceilings without thought to our ratepayers.”

Indianapolis water rates are going up on Jan. 1, 2013, with more increases to come, reports Sarah Holsapple of Citizens Energy Group, the city's Department of Public Utilities. Having signed a consent decree to lower combined-sewer overflows, the city needs $1.8 billion to build a 25-mile deep tunnel system.

Communities across the country face similar financial demands accruing to similar water infrastructure imperatives; some the result of consent decrees, some not. The gap between how much water and wastewater utilities have and how much they need is at least $500 billion (see chart below).

To close the gap, many communities compete for low-interest loans through the state revolving fund (SRF) programs in the Clean Water Act and Safe Drinking Water Act. But congressional appropriations have been declining, and will continue to shrink. Likewise the White House; President Obama's 2013 budget proposal, for example, requests:

  • $850 million for drinking water, 7.4% less than this year's $918 million
  • $1.18 billion for wastewater, 19.8% less than the $1.47 billion enacted for 2012

There are two other federal programs — one through the Agriculture Department, one through Housing and Urban Development — but they're tiny and targeted at a narrow slice of localities.

With current federal resources clearly inadequate to prevent a national “water Waterloo,” communities through their professional and trade associations have come up with potential supplements that have landed on congressional desktops around the Capital.

Two ‘old' ideas get new twists

Both of the following sources would supplement, not replace, the revolving loan programs.

Innovative financing fund. Baltimore's Rawlings-Blake was one of the co-sponsors of a resolution adopted by the U.S. Conference of Mayors' Water Council last summer to create a Water Infrastructure Financing Innovations Authority similar to the one in existence for roads through the Transportation Infrastructure Finance and Innovations Act.

Since 1998, the law's enabled the Federal Highway Administration (FHWA) to provide loans, loan guarantees, and standby lines of credit to regionally and nationally significant projects. Rep. Bob Gibbs (R-Ohio), chair of the Water Resources and Environment Subcommittee in the House Transportation and Infrastructure Committee, held two hearings this spring on a draft bill, but hasn't formally introduced the legislation.

Trust fund. Rep. Timothy Bishop (D-N.Y.) introduced legislation (H.R. 3145) that would create a similar investment fund as well as a Clean Water Trust Fund.