How Small Communities Fund Big Infrastructure Projects

Tap water infrastructure is among the biggest and most challenging expenses for small and medium-sized communities. Just ask James Wright, a public authority CEO in New York.

“You have to look at it from a village board’s perspective. A wastewater or water treatment plant is probably the single largest expenditure they are going to encounter,” Wright, the chief of the Development Authority Of Northern Country (DANC) said, per the Watertown Daily Times.

As Carrie Tuttle, the engineering director at DANC, put it: “No one cares until you turn on your faucet and there is no water.” She continued: “The reason is that most water infrastructure is underground and out of sight, making it harder to see developing problems. And, if a municipality does not assess an aging infrastructure frequently, problems are more likely,” she said.

These circumstances mean that infrastructure improvements often get pushed back. “A multi-million dollar project, every 20 years, is not the first thing on everybody’s mind. Municipal officials, who have to deal with those problems, try to maintain as low a rate as possible. That’s what you see occurring in many instances, and large capital expenses get deferred,” Wright said.

The struggles of three communities in New York highlight the challenge of upgrading infrastructure in small communities and what local leaders are doing to tackle the issue. One such town is Adams, NY, according to the report:

Adams, which has struggled to keep up a steady water flow, is trying to utilize two unused wells at the Adams Country Club golf course, which would produce 1.5 million gallons of water per day. Right now, the village system that supplies water to the town is running up against an insufficient water supply. Town Supervisor David Kellogg said using the wells would require water quality testing. After that, the town would need to hire engineers to assess the system and devise a plan.

Kellogg predicted a long road ahead, but he said he hoped the town can contribute funding. Orleans is another town struggling with its water infrastructure needs, the report said:

The water system in the town of Orleans has been hurt by contamination linked to Department of Transportation salt storage barns on Route 12. The town has taken a few steps toward reversing the problem, including a water line connection to Alexandria Bay and a possible new water treatment plant estimated to cost more than $13 million.

Pamelia is a third town facing water infrastructure challenges:

In the town of Pamelia, residents on Hinds Road have recently complained about dry groundwater wells, causing homeowners to drill down deeper. The town draws water from Highland Meadows Golf Course on Route 342, which is blended with DANC water. In a previous Times report, town officials said more water was being drawn from the well to offset contaminated water in Watertown lines, but the well could have led to problems faced by homeowners. The Department of Health recently urged the town to blend more DANC water with less well water to even out the two.

So, what are struggling communities to do? Loans are among the best bets, experts say.

Outside funding for these projects has changed over the years. Back in the 1960s and ’70s, Ms. Tuttle said, water projects were almost 100 percent grant-funded. Today, funding for these projects is more loan-based. Ms. Tuttle said a good project now could be 25 percent funded by a grant while the rest is from loans. Because of that, municipalities have to be more willing to adjust water rates accordingly.

Raising rates is an important part of the equation:

Mr. Wright said today’s competitive funding options are through either the U.S. Department of Agriculture or the state EFC. Funding is awarded based on the ability of the municipality to pay for improvement, Mr. Wright said. To get a piece of this funding, municipalities need higher water rates. So, if a municipality has kept its water rate low over a number of years, its funding options are slim.

Low rates can set a community up for failure when they seek funding. “Now they realize that they have millions of dollars of reinvestment, but their rates aren’t set anywhere near where they need to be to make them eligible. Sometimes before we can even get to the point where we can apply for money, we have to do a lot of up-front work,” Wright said.

Education is a key part of the equation. “Part of Ms. Tuttle’s job with DANC is consulting with communities to lay out long-term water investment plans, telling leaders that they cannot wait to take action until a disaster strikes. Instead of spending a single, sizeable lump sum to fix an emergency, municipalities should be spreading their maintenance costs out over time,” the report said, citing Tuttle.

Over the next two decades, New York will require nearly $40 billion to upgrade drinking water infrastructure, according to the state Health Department.

It’s not just a New York problem. According to the American Society of Civil Engineers, "At the dawn of the 21st century, much of our drinking water infrastructure is nearing the end of its useful life. There are an estimated 240,000 water main breaks per year in the United States."

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