WWEMA Window: It's Time To Make Ourselves Conspicuous

By Frank Rebori, President, Smith & Loveless Inc.

Each year, in an effort to better understand and serve its members, the Water and Wastewater Equipment Manufacturers Association (WWEMA) asks them, “What keeps you up at night?” For the past several years, the top answer has been the same: funding.

The need for improved water and wastewater infrastructure is great, but resources are few. The lack of funding that faces our industry can be synthesized to one common problem: We’re too inconspicuous. Water and wastewater infrastructure, for the most part, is located underground or in facilities away from the general population — and unfortunately, when it comes to funding, being out of sight often equates to being out of mind.

It is critical that the stakeholders within our industry — manufacturers, contractors, engineers, utilities, and municipalities — work together to make ourselves conspicuous. There are many avenues to secure increased funding, and we need to explore each of them and lend our support when possible.

For example, at the federal level, several programs and bills deserve our attention. In addition to traditional federal funding for the U.S. EPA state revolving fund (SRF) loan programs, we now have the Water Infrastructure Finance Innovation Act (WIFIA) signed into law last year to authorize funding for large projects. The Authority created by this act is charged with helping our industry find ways to take advantage of public-private partnerships to finance projects. This surely is a precursor to how the government will be working increasingly with the private sector with regard to the operation of water and wastewater infrastructure.

Introduced in 2015 and under consideration by Congressional Committees this year were the Sustainable Water Infrastructure Investment Act (H.R. 499), which would remove the state volume caps for private activity bonds (PABs) related to water and wastewater projects and could free up almost $5 billion each year to fund water and wastewater projects; the Partnership to Build America Act (H.R. 413), which would establish an American Infrastructure Fund capitalized by $50 billion in bond sales; and the Rebuild America Act of 2015 (S. 268), which would invest $14 billion each year for water and wastewater infrastructure.

In addition to federal funding possibilities, state and local funding programs are critical. The problem there often comes down to priorities. In most areas, water and wastewater are not flashy political vote-getters as are new schools or public safety programs. Dedicated funds are one possible way to protect much-needed capital dollars.

For example, at the state level, Texas’s Proposition 6, approved by voters in 2013, allocated $2 billion from the state’s $6.1 billion Economic Stabilization Fund, also known as its “Rainy Day Fund,” to provide more affordable financing to local and regional water projects such as desalination plants, pipelines, and reservoir creation. This money will not be used directly as loans or grants; rather, it will be used to subsidize the cost of loans, with the state expecting to sell $8 billion of bonds over the next 10 years. At this time, the Texas Water Development Board has received about two dozen applications from municipalities seeking funding for projects. Within the next several weeks, the board will choose which applications will receive support.

At the local level, the creation of enterprise funds has proved successful in protecting water and wastewater user fees from being appropriated by municipalities to supplement other programs and services. In addition to ensuring that user fee revenues will be dedicated to funding current and future water and wastewater services, these programs have the added advantage of helping municipalities improve full-cost determination and disclosure and therefore establish more equitable, realistic fee structures.

The possibilities for funding much-needed water and wastewater projects are many and varied. We as an industry must be open to exploring new and creative ways to finance projects, and we must be vocal about the need for our communities and our legislatures to support those projects.

Frank Rebori is President of Smith & Loveless Inc. in Lenexa, KS, and is Chairman of the Board of WWEMA.