Sustainable Water Infrastructure through Innovative Financing 1 The

Sustainable Water Infrastructure through Innovative Financing 1

The History of Water Infrastructure Financing n In 1970’s, The U. S. Congress passed legislation making EPA an important fiscal partner in wastewater funding n 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 n During this time, EPA developed a new permit processes to control discharges to the nation’s waterways n Very large investments were made in the treatment of industrial waste and in the upgrading of the public wastewater systems 2

Features of the State Revolving Fund (SRF) Program Ø Federally and state provided “seed money” Ø State programs are allowed great flexibility Ø State implemented and operated Ø Public participation is encouraged Ø Federal involvement is limited 3

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 4

The Gap Report n Purpose -- To quantitatively understand the future needs for water investment to: – Address U. S. population growth/economic needs, and – Renew existing aging infrastructure. n Estimates were made for water and wastewater, investment, cost and payments (20002019). n Needs – Spending = GAP. 5 http: //www. epa. gov/owm/gapreport. pdf

GAP Findings For 20 Years - (2000 -2019) Revenue Growth GAP Scenario (3%)* No Revenue Growth GAP Scenario Total Gap (20 Years) (Average in Billions of $) Clean Water Drinking Water Capital $122 $102 Capital $21 $45 O&M $148 $161 O&M $10 $0 Total $271 $263 Total $31 $45 (Annual Rate of Increase - 3% above inflatio 6

Great Success, Yet An Emerging Challenge A projection of increasing BOD (Metric Tons Per Day) Source: USEPA, Progress in Water Quality: An Evaluation of the National Investment in Municipal Wastewater Treatment, June 2000. U 25, 000 20, 000 15, 000 10, 000 5, 000 0 1968 1978 2016 7

EPA Has Identified Four Pillars for Sustainable Infrastructure n Full cost pricing n Water efficiency n Better management n Watershed approach a d n e g A For e l b a n i Susta cture u r t s a r Inf 8

Full Cost Pricing ensures that there are sufficient revenues in place to support the costs of doing business n can also have the added benefit of encouraging efficient water use n 9

Water Efficiency reduces the need for costly infrastructure options include: metering, water reuse, water saving appliances, landscaping and public education 10

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 11

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 12

Thank you 13