Sustainable Water Infrastructure through Innovative Financing

The History of Water Infrastructure Financing In 1970’s, The U.S. Congress passed legislation making EPA an important fiscal partner in wastewater funding In 1987, in order to better serve state and local communities specific water needs, the U.S. Congress established the Clean Water State Revolving Fund During this time, EPA developed a new permit processes to control discharges to the nation’s waterways Very large investments were made in the treatment of industrial waste and in the upgrading of the public wastewater systems

Features of the State Revolving Fund (SRF) Program Federally and state provided “seed money” State programs are allowed great flexibility State implemented and operated Public participation is encouraged Federal involvement is limited

An SRF Functions As An Infrastructure Bank Each state operates its own SRF that makes loans for wastewater treatment and nonpoint source projects; including agricultural and urban runoff, leaking storage tanks, septic systems, and protecting drinking water sources

The Gap Report Purpose -- To quantitatively understand the future needs for water investment to: Address U.S. population growth/economic needs, and Renew existing aging infrastructure. Estimates were made for water and wastewater, investment, cost and payments (2000-2019). Needs – Spending = GAP. http://www.epa.gov/owm/gapreport.pdf

GAP Findings For 20 Years - - (2000-2019) No Revenue Growth GAP Scenario Revenue Growth GAP Scenario (3%)* $263 $271 Total $161 $148 O&M $102 $122 Capital Drinking Water Clean Water   Total Gap (20 Years) (Average in Billions of $) $45 $31 Total $0 $10 O&M $21 Capital Drinking Water Clean Water   Total Gap (20 Years) (Average in Billions of $) (Annual Rate of Increase - 3% above inflation)

Great Success, Yet An Emerging Challenge A projection of increasing BOD U (Metric Tons Per Day) 5,000 10,000 15,000 20,000 25,000 1968 1978 2016 Source: USEPA, Progress in Water Quality: An Evaluation of the National Investment in Municipal Wastewater Treatment, June 2000.

EPA Has Identified Four Pillars for Sustainable Infrastructure Full cost pricing Water efficiency Better management Watershed approach Agenda For Sustainable Infrastructure

Full Cost Pricing ensures that there are sufficient revenues in place to support the costs of doing business can also have the added benefit of encouraging efficient water use

Water Efficiency reduces the need for costly infrastructure options include: metering, water reuse, water saving appliances, landscaping and public education

Better Management Asset management (Better acquisition, Operations and maintenance, and, Renewal and replacement), environmental management systems (EMS’s) Focuses on better utility performance, environmental performance, and customer service

Watershed Approach looks more broadly at water resources in a coordinated way targets resources towards highest priorities examples of watershed approaches include: permitting on a watershed basis water quality trading

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