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Even more than drinking-water systems, increased demand on the nation's waste-water system is not being met with increased funding. As urban populations continue to boom and infrastructure ages, how long can system managers keep tightening their belts before the shortfall leads to catastrophe?

Federal funding continues to wane. Despite warnings from officials such as U.S. Environmental Protection Agency's administrator Stephen Johnson that aging infrastructure must be better funded to avoid large-scale problems in years ahead, the 2007 federal budget cut water and wastewater funding.

The Clean Water State Revolving Fund (CWSRF) loan program, for one, was slashed from $887 million to $688 million. The Clean Water Trust Act of 2005 (H.R. 4560) would distribute $7.5 billion a year for wastewater infrastructure improvements, but it has been languishing in subcommittee for at least two years and shows no signs of motion.

Looking at the gap ahead. The EPA Office of Water Resource Center estimates that the discrepancy between wastewater revenue and available funding will lead to a “payment gap” of $271 billion in waste-water funding by 2019. Even if the industry diligently manages assets, conserves capital and operational costs, and structures rates more appropriately, greater federal resources are necessary to close the funding gap.

Grant pool drying up. According to the Raleigh, N.C.-based The Rural Center, the EPA continues to decrease in its role as a funding source. At one point a primary source of wastewater grants, the EPA has limited its financing to loans; that source is being further reduced.

In addition, the U.S. Department of Agriculture has cut the amount of grant funds it doles out for water and sewer improvements. Its Rural Utilities Service, which assists small-town America with infrastructure installation and management, went through 2006 with the smallest grant pool in its history, and the trend will continue in 2007.

Security driving large-system upgrades. In January 2005, the Government Accountability Office issued a report containing experts' recommendations on how federal funds should be spent to improve security at the nation's wastewater facilities. System managers have begun making modifications, mostly using Department of Homeland Security and CWSRF funds, but because security requirements for wastewater systems are less stringent than those for drinking-water systems, less has been done.

Stemming the flood. The American Water Works Association (AWWA) urges utilities to become self-sustaining—funding operations through rates and relying on federal dollars only in emergencies. However, the AWWA points out that unfunded mandates (such as those affecting combined sewer overflows and security) and declining infrastructure would make standalone operation impossible, and recommends that Congress pass legislation that boosts, rather than busts, federal wastewater funding.