Stimulus package excludes financial relief for water sector

Congress released a massive stimulus package last week that was signed by President Donald Trump amid the COVID-19 pandemic that could have serious economic ramifications both in the United States and around the globe. The bill included significant funding for a variety of private industries, but direct financial relief for the water sector was not included, according to the National Association of Clean Water Agencies (NACWA) and other industry associations.

“While Congress’s recently passed stimulus package will provide significant help to many families, organizations and businesses in desperate need in the wake of COVID-19, it failed to offer support to one of the most fundamental services that everyday citizens need now more than ever –  clean water,” said NACWA CEO Adam Krantz.

“The workers who ensure essential water services are environmental first responders and have been working 24/7 throughout this crisis. At a time when proper sanitation and the flow of clean water to every home, hospital, and essential industry is more critical than ever before, the decision to not include meaningful support for this sector is shameful.”

The final package focused mainly on four areas advocated by Senate leadership: aid to small businesses, direct cash payments, loans to companies in distressed industries such as airlines, and money to fund the medical response.

Krantz said the public clean water sector is currently projecting a 20 percent loss of revenue as utilities around the country have halted water shutoffs for nonpayment and have stepped up by restoring water service to delinquent accounts during this crisis to ensure the public health. This is in addition to significantly decreased revenues as commercial and industrial usage grinds to a halt in many cities and communities nationwide.

NACWA said it conservatively estimates the impact to clean water utilities nationwide of lost revenues due to coronavirus at $12.5 billion, a low-end estimate, the association said, adding that some utilities are anticipating closer to a 30 or 40 percent loss in revenue. The estimate is based on the historical utility financial data NACWA has on file through its Financial Survey and recent reports from NACWA members on the decrease in usage they are observing in their systems.

“While it is important to support our airlines and cruise industries, it strikes me that Congress should also be ensuring similar funding support through grants and loans to ensure needed maintenance and construction projects will proceed at the Nation’s water utilities,” Krantz said.

While the CARES Act (H.R. 748), which Trump signed into law on Friday, does not provide direct assistance for water systems, the Association of Metropolitan Water Agencies (AMWA) said the bill does include several pots of money for states and large communities to address coronavirus-related expenses that could include the cost of water service.

Per AMWA, the final version of the bill includes:

  • An economic stabilization fund administered by the Treasury Department that will provide at least $454 billion worth of short-term loans and loan guarantees to businesses, states and municipalities affected by the pandemic.
  • A $150 billion coronavirus relief fund that will offer direct payments to states, tribes, and certain local governments for the purpose of offsetting costs associated with the COVID-19 public health emergency. Each state will be guaranteed at least $1.25 billion for coronavirus-related expenses incurred between March and December of this year, and municipalities and counties with populations of greater than 500,000 will be eligible to receive a direct share of these funds. It appears that these large cities and counties that receive relief funds will be free to use a portion to cover unanticipated costs related to the provision of water service during the crisis.

Left out of the final CARES Act was direct assistance to help water system ratepayers pay their water bills during the crisis or restrictions on water service disconnections during the public health emergency. Each concept had been proposed in a coronavirus bill introduced by House Democratic leaders as a marker for negotiations, and House Democrats had shown particular interest in using existing health and welfare programs to distribute water rate assistance. The House bill, for example, would have used the Energy Department’s Low Income Home Energy Assistance Program and Department of Health and Human Services programs for needy families as mechanisms to getting water rate assistance to low-income households. Ultimately, though, these ideas were not included in the CARES Act.

During development of the legislation AMWA, NACWA and a coalition of other water, wastewater and infrastructure advocacy organizations wrote to House and Senate leaders to highlight the importance of water system funding. Specifically, the organizations requested assistance with costs associated with any moratorium on water service disconnections and funding to assist with utilities’ operational costs as revenues decrease. While these objectives were not directly addressed in CARES Act, they will remain on the table for discussion as the next response bill – “phase 4” – is pieced together. However, at this point the next stimulus bill appears to be at least several weeks away, AMWA said.

NACWA is calling on Congress to provide low-income clean water rate assistance for those most in need to help keep current on their bills, just as is being done in the areas of energy and food assistance. The organization said it remains optimistic that provisions to bolster water sector utilities will be a core part of the next phase of stimulus package negotiations.

This post has been updated from a March 26 version to reflect new information regarding the signing of the coronavirus stimulus package on March 27. Sources: AMWA, NACWA

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