Sustainable Water Infrastructure Investment Act Introduced

Lawmakers chose the site of a recent water main break in Clifton, N.J., to announce the introduction of bills that would lift the cap on private activity bonds (now referred to as exempt facility bonds) for water and wastewater infrastructure projects.

Sen. Robert Menendez (D-N.J.) and Rep. Bill Pascrell (D-N.J.) were joined in New Jersey to announce the bill by Sen. Mike Crapo (R-Idaho) and Rep. Geoff Davis (R-Ky.), along with local dignitaries. The Sustainable Water Infrastructure Investment Act (S. 939 in the Senate and H.R. 1802 in the House) would lift the existing cap.

The bill would provide much-needed investment options for America?s decrepit water and sewer systems, while also providing a economic boost through job creation.

This bicameral, bipartisan legislation provides states and municipalities with a greater ability to invest in their water and wastewater infrastructure by partnering with professional private water companies, including transferring financial risk through the removal of state volume caps on private activity bonds for public-purpose water facilities. The removal of this constraint will bring together the power of public water service and free enterprise.

?There is a $500 billion need for capital investment in our nation?s aging water and wastewater infrastructure,? said Michael Deane, executive director of NAWC. ?Exempt facility bonds are the single-most effective financing tool the federal government can provide to communities to bring new money into long-term, capital-intensive infrastructure projects. This legislation will better equip local officials to meet the challenges of maintaining or improving essential water infrastructure by making repairs and construction more affordable for municipalities and, ultimately, customers.?

A removal on bond caps for water projects will bring funding for this piece of the nation?s critical infrastructure in line with airports, high-speed rail and solid waste disposal, which are all currently exempt from existing caps. The bill will also generate significant tax revenue for state and local governments across the country.
According to the Joint Committee on Taxation, the revenue impact of the bill would be $354 million over 10 years, which would lead to up to $50 billion in private capital into water infrastructure projects while supporting 1.4 million jobs.

?This bi-partisan legislation will play a key role in enabling investment in our nation?s water infrastructure,? said Jeff Sterba, President and CEO of American Water Works Company Inc. (NYSE: AWK). ?Municipalities face competing demands for scarce financial resources right now and water infrastructure repair and improvement, though vital, is often deferred. Public-private partnerships are an essential part of the solution and this legislation will go a long way towards making more such partnerships a reality.?

According to the U.S. Environmental Protection Agency (EPA) and the Government Accountability Office, there is an investment gap of more than $500 billion for necessary infrastructure upgrades over the next 20 years to ensure safe drinking water and wastewater treatment. The Sustainable Water Infrastructure Investment Act could create up to 57,000 jobs by converting a modest investment by the federal government into billions of dollars of necessary economic investment into our nation?s aging water and sewage infrastructure.

A report by the Cadmus Group for the U.S. Conference of Mayors also determined that water and wastewater infrastructure investment stimulates the nation?s economy and creates jobs. This report states that for every one dollar of water and sewer infrastructure investment, it is estimated that Gross Domestic Product increases by $6.35 in the long-term.

City of Dubuque to Spend $3 Million on Sewer Improvements

The City of Dubuque, Iowa, has agreed to pay a $205,000 civil penalty and spend an additional $3 million on improvements to its water pollution control plant and sewer collection system over the next three years to settle a series of alleged violations of the federal Clean Water Act, the U.S. Department of Justice and the Environmental Protection Agency announced in April.

As part of the settlement outlined by a consent decree lodged in U.S. District Court in Cedar Rapids, Iowa, the City of Dubuque will pay half of the civil penalty to the United States, and half to the State of Iowa, which is a co-plaintiff in the case. Dubuque has also agreed to spend approximately $260,000 on a supplemental environmental project. The project will involve the reconstruction of four alleys that incorporate permeable pavement in their design, which will help reduce the flow of storm water into the city?s sewer system.

?EPA is encouraged by the City of Dubuque?s willingness to remedy its longstanding water pollution issues and to improve water quality in the Mississippi River,? Regional Administrator Karl Brooks said. ?This commitment by the city represents a significant step forward toward Dubuque?s goal to be a green city.?
Dubuque?s violations of its National Pollution Discharge Elimination System (NPDES) permit date back to the early 1970s, when its water pollution control plant was built. Along with 165 miles of gravity sewer lines, three major pump stations and eight smaller lift stations, the plant comprises a public sewer system that serves the city of approximately 92,000 residents along the Mississippi River.

Dubuque?s violations of its NPDES permit and the Clean Water Act identified by EPA and the Iowa Department of Natural Resources include approximately 39 sanitary sewer overflows which occurred between 2002 and 2007. Most of those unauthorized overflows occurred in an area known as the Key Way sanitary sewer system, and involved the pumping of raw sewage into Catfish Creek during major storms. Over the last three years, Dubuque has already spent $2 million to upgrade the Key Way system. Under the consent decree, it must demonstrate that all sanitary sewer overflows have been eliminated for one year, or face additional penalties.

The consent decree sets forth a series of schedules for the city?s completion of the various projects to improve its sewer system. All upgrades must be completed within 34 months of the consent decree?s effective date.

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