Reauthorization of WRDA Reflects Nation’s Value of Water Resources

Back in November 2012, the Senate Committee on Environment and Public Works drafted a bill to reauthorize the Water Resources Development Act (WRDA). The new bill, to continue the WRDA program, came on the heels of Hurricane Sandy which resulted in the deaths of more than 120 people, destroyed entire neighborhoods on the East Coast and cost billions of dollars in damage to property and businesses. A reminder – the WRDA program serves to authorize select projects and programs of the U.S. Army Corps of Engineers.

The new WRDA reauthorization bill recognizes the value of the nation’s water resources infrastructure by greenlighting 18 projects that have been extensively reviewed, evaluated and recommended to Congress for approval. These projects represent the U.S. Army Corps of Engineers’ primary mission areas, including flood risk and storm damage reduction, navigation and ecosystem restoration.

Notable about the new WRDA bill is the recognition for the need to expand the sources of funding currently available to water and wastewater projects. Traditional funding options for water infrastructure projects are no longer sufficient to meet the evolving investment needs. In fact, there is now talk about a roughly $1 trillion infrastructure investment need within the U.S. water and wastewater sector.

As a result, the new WRDA reauthorization bill being crafted by the Senate Committee on Environment and Public Works includes a recommendation for the establishment of a pilot program that will explore the viability of an innovative financing mechanism known as the Water Infrastructure Finance and Innovation Act (WIFIA).
This WIFIA five-year pilot program, based on the successful Transportation Infrastructure Finance and Innovation Act (TIFIA) program, would support local efforts to leverage funds for water resources projects and help expand the construction of local projects. It will essentially help enable the U.S. Army Corps of Engineers and the U.S. EPA to provide an added collection of loans and loan guarantees for flood control, water supply and wastewater infrastructure projects across the United States. In the new WRDA reauthorization bill, the WIFIA pilot project is being allocated $50 million per year (for five years) which is anticipated to be leveraged to $500 million per year.

On Feb. 14, Senator Jeff Merkley (Ore.), a member of the Senate Committee on Environment and Public Works, introduced a full-fledged national Water Infrastructure Finance and Innovation Act of 2013. The newly proposed WIFIA legislation would create a financial mechanism within the U.S. EPA in order to provide access to lower-cost capital for investments in water and wastewater infrastructure. The proposed legislation (S.335) is being positioned as a proven effective way to help increase investment in local municipal infrastructure while reducing cost to local governments and ratepayers. The low-cost financing provided by WIFIA would save homeowners and businesses money while putting construction workers back on the job as municipal water system repairs and new projects are?accelerated.

“Investing in water supply and treatment systems is common sense, enabling communities to fix aging systems, expand capacity or meet clean water standards,” said Merkley. “These investments will put folks to work now and pave the path for economic development.”

WIFIA Update

On March 20th, the Senate Committee on Environment and Public Works passed the WRDA re-authorization legislation (S.601) that would create a defined five-year WIFIA pilot program. If enacted into law, the WIFIA pilot program would provide low-interest federal loans and loan guarantees for critical water projects in communities across the United States such as flood control, water supply and wastewater projects. ?
According to Title X of the WRDA legislation, the aim of the WIFIA pilot program? is strictly focused on increasing the development of critical water resources infrastructure by establishing additional opportunities for financing water resources projects that complement but do not replace or reduce existing federal infrastructure financing tools such as the State water pollution control revolving loan funds established under Title VI of the Federal Water Pollution Control Act and the State drinking water treatment revolving loan funds. According to the title, the mission of the WIFIA pilot program is to attract new investment capital to infrastructure projects that are capable of generating revenue streams through user fees or other dedicated funding sources.?

The American Water Works Association, a chief proponent for the creation of WIFIA for several years, is urging water utilities and businesses across the water sector to actively support the bill as it heads to the full Senate (expected to reach the Senate floor by May 2013). The big question: how will these two bills move forward? Will one bill be folded into the other; or will both bills achieve successful implementation? What will the House version of both bills look like? Stay tuned.

Kathy Shandling is the executive director of the International Private Water Association (IPWA) and a frequent contributor to UIM.

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