Water sector testifies in Congress in support of water investment

Water sector representatives testified in Congress last week in support of investment in water infrastructure and the importance of programs like the Drinking Water State Revolving Fund (DWSRF), the Water Infrastructure Finance and Innovation Act (WIFIA) and effective steps Congress can take to facilitate further cost-effective investments.Capitol

Speaking before the U.S. House Subcommittee on the Environment, former American Water Works Association (AWWA) president John Donahue of Machesney Park, Ill., presented AWWA’s recommendations about the nation’s water infrastructure, cybersecurity, source water protection, the energy-water nexus, affordability and the importance of sound science and transparency to guide regulatory actions.

“Having sound water infrastructure requires not only what we traditionally think of as water infrastructure – pipes and treatment plants – but involves additional issues, such as cybersecurity, protection of source waters, effective use of resources, and similar issues,” said Donahue, a leader in the water and wastewater profession for over 35 years.

Donahue, speaking on behalf of AWWA’s 50,000 members, called the committee’s attention to the Water Infrastructure Finance and Innovation Act (WIFIA) as a key new tool in fixing and expanding the nation’s aging water infrastructure. WIFIA lowers the cost of large water infrastructure projects by providing low-interest, long-term federal loans to communities.

Congress funded WIFIA for the first time in the 2017 federal budget, appropriating $20 million for the program. Based on current estimates from the Office of Management and Budget, funds appropriated through WIFIA could be leveraged at a ratio of about 60:1. If the program was fully authorized at $45 million for fiscal year 2018, it could cover over $2 billion in credit assistance.

“This program provides an exceptional vehicle to stimulate the investments needed to sustain our nation’s drinking water and wastewater infrastructure,” Donahue said.

Donahue urged Congress to fund the Drinking Water State Revolving Fund at least at $1.8 billion, eliminate the volume cap on private-activity bonds and preserve the tax-exempt status of municipal bonds. These are all lower-cost financing options utilities rely on to fund local water infrastructure projects outside of WIFIA.

Donahue also spoke of the importance of protecting infrastructure against cyber-attacks through a voluntary, collaborative approach with technology providers. “Technical support programs are needed to help systems – particularly in small and medium-sized communities — overcome the technical knowledge/skills gap associated with many of the security systems that have been deployed,” he said.

To improve source water protection, Donahue also encouraged Congress to sustain and expand targeted programs, particularly the conservation programs in the Farm Bill, to support collaboration between agriculture producers and water systems. As he noted: “The federal Farm Bill contains the largest funding source for agricultural land conservation efforts. Not only is robust funding needed for such efforts, but they need to be focused where they are achieving the greatest public good.”

The Association of Metropolitan Water Agencies (AMWA) also delivered on Capitol Hill last week when the association testified at a House subcommittee hearing on “Reinvestment and Rehabilitation of Our Nation’s Safe Drinking Water Delivery Systems.”

AMWA board member and Baltimore Department of Public Works Director Rudy Chow testified at the hearing on behalf of the association.  Chow told the subcommittee that AMWA is encouraged that Congress appears to be paying increased attention to water infrastructure issues and pointed to President Trump’s campaign-season call for tripling annual SRF appropriations as an admirable long-term goal.  In the interim, AMWA requested that lawmakers double Drinking Water SRF funding to $1.8 billion in the 2018 fiscal year while funding WIFIA at its fully authorized level of $45 million.  AMWA’s testimony also spoke to the importance of rejecting any attempt to impose new taxes on municipal bond interest earnings as part of any comprehensive tax reform proposal, pointing to a recent association report that fully taxing muni bond interest could increase water infrastructure financing costs by 25 percent.

Lawmakers at the hearing from both sides of the aisle agreed that the federal government has an important role to play in helping communities access affordable water infrastructure financing.  Subcommittee Chairman John Shimkus (R-Ill.) and ranking Democrat Paul Tonko (D-N.Y.) both agreed that Congress should reauthorize funding for the DWSRF, though no signals were given about the likelihood of the subcommittee tackling that issue in the near future.

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