From The Editor | November 21, 2016

Coming To Pass: Perspective On The Water Resources Development Act (WRDA)

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By Kevin Westerling
@KevinOnWater

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Do you see the glass half empty or half full? This classic pessimism vs. optimism litmus test may also dictate how you see the passage of the Water Resources Development Act (WRDA) — the water infrastructure funding bill that passed through Congress with ease in September, albeit in different versions for the Senate and the House of Representatives and still awaiting finalization.

To be sure, any money appropriated for the massive needs faced by the water industry on all sides — in drinking water, wastewater, and stormwater; at the treatment plant and throughout the distribution system; in streams and watersheds everywhere — is welcome money. However, the total doled out, especially after political compromises, is a drop in the bucket (or glass, if you will) compared to what is actually needed to repair and replace our infrastructure, ensure safe and available supply, and become resilient and sustainable for the future.

The pessimist groans at the half-empty glass, seeing all that unfilled space. The optimist gives thanks that there is any water — money, that is — in the glass at all (especially true for those who have opportunity to drink from it). Legal, financial, and industry authority Fred Andes sees it a third way: He’s just happy that we now have a glass to fill, thanks to WRDA.

Another Perspective
Spearheaded in bipartisan fashion by Senators James Inhofe (R-OK) and Barbara Boxer (D-CA), the new bill won’t come close to resolving all of our water needs — not even halfway — but Andes nonetheless recognizes WRDA as an important legislative step in a long journey toward reinvestment, restoration, and ultimate stability.

A Harvard Law School alumnus, Andes is a partner in the Chicago and Washington, D.C., offices of Barnes & Thornburg LLP and the leader of the firm’s water team. He explained: “It’s not a panacea, but every little bit helps, and you never want to leave money on the table. WRDA and the Water Infrastructure Finance and Innovation Act (WIFIA) provisions will allow some communities to go forward with badly needed projects, but there’s still a funding gap in the trillions, based on all the studies.

“I think the sense here is ‘Let’s get something going.’ You can’t solve the problem all at once, so let’s take some bites out of it. Let’s see what works and what doesn’t. In the current political climate, that’s the way you have to do it. What’s important is that the discussion has started and is going to continue.”

Role Call
Andes recalled a time when the federal government invested heavily in water and wastewater infrastructure, particularly in the construction of wastewater treatment plants. Since then, however, the pendulum of financial responsibility has swung to local utilities and ratepayers. Does WRDA signal that the pendulum will swing back to the federal government? That would seem unlikely, and maybe even unwise, as there is great opportunity for municipalities to save and create revenue through innovation on the local level, but perhaps with a federal assist.

Beyond the Fed or ratepayers shouldering the burden alone, Andes again points to a third option. “There are other ways to promote the financing of projects and make it easier to creatively use the financial and capital markets. The provisions put forth in WRDA have teed that up in terms of what the federal government can do to get money to where it’s needed without necessarily creating a multitrillion-dollar bank of money that gets parceled out.

“You want to hear from the regulators and the municipalities to get a sense of the needs and concerns of each party in the process, including the people with money.”

By facilitating public-private partnerships, bond innovation, or alternative project delivery concepts, the federal government can help create financing opportunities that will be more cost-effective and cover more ground than traditional loans and grants. And while this isn’t new information — water agencies have lobbied for such help for years — it is Capitol Hill’s simple acknowledgment of the industry’s needs, of the glass that needs to be filled, that is most important.

How these needs, this glass, will be (ful)filled is the ongoing challenge. Are you an optimist or a pessimist?