Feds Slow To Dole Out Funds During Infrastructure Crisis

The largest federal program devoted to drinking water systems has been slow to dole out funding despite an infrastructure crisis plaguing cities and town across the country, according to an analysis by the Associated Press

“Project delays, poor management by some states and structural problems have contributed to nearly $1.1 billion in congressional appropriations sitting unspent in Drinking Water State Revolving Fund accounts as of Aug. 1,” the analysis said.

Established in 1996, the Drinking Water State Revolving Fund (DWSRF) accounts for about a tenth of the EPA budget. The fund provides low-interest loans to states for drinking water projects, according to a report by the EPA’s own watchdog, the Office of the Inspector General.

It’s not just the federal government creating challenges in this program. The states carry some of the responsibility, as well. The AP analysis also found that states are not always using tap water money for infrastructure projects.

“About 1 in 5 dollars in recent years has gone to purposes such as paying the salaries of state employees and contractors. Those expenses are allowable but leave less for the repair and replacement of leaky pipes, deteriorating treatment plants and century-old storage tanks,” the AP analysis said.

The program faces an uncertain political future, according to the AP. “Republicans who control Congress want to cut it by about $150 million a year. President Obama proposed a 30 percent increase. Supporters are rallying to its defense.”

Still, the analysis included some positive notes about the DWRSF. Roger Crouse, Maine's drinking water administrator, offered praise.

"It's benefited residents with higher quality, safer water, at a lower financial impact on their wallet," he said, per the analysis. "It's a great program."

The program uses a sound financial model, proponents say. It focuses on providing loans repaid over time rather than grants. And state managers said funding delays exist for good reasons, including the complexity and long-term nature of water projects.

Supporters argue that the program’s careful approach “ensures money goes to worthy projects and to systems that can repay loans. Cities sometimes reject rate increases and cancel their plans, and projects get bogged down during environmental studies or in design and bidding stages,” the analysis said.

For similar stories, visit Water Online’s Funding Solutions Center.