By Mike Dimitriou
We need to make water infrastructure a clear priority in the new administration’s infrastructure investment plans. Let’s make sure there’s a “W” in any new infrastructure program.
The President has announced a goal of spending $1 trillion dollars on rebuilding our infrastructure. The plan, which they are calling a “blueprint for rebuilding America’s infrastructure,” outlines an ambitious, 10-year, $1 trillion proposal that aims not only to update and repair critical infrastructure, but create 15 million jobs in the process. While not fully defined yet, water and wastewater could get roughly 10 percent of the funds. At the same time, the administration has proposed a steep 24 percent cut in U.S. EPA funding in its 2018 budget.
But there’s a silver lining.
The budget also includes a clear commitment to refocus the EPA on clean water and clean air regulations. The cuts proposed are not in water programs. This gives us a unique opportunity to use the new emphasis on infrastructure to build a long-term action plan to deal with our most pressing water needs.
It’s also a paradigm shift — because a key element in the infrastructure plan is public-private partnerships. Private investment together with traditional public funding will provide the money needed.
So how could we make this work?
First, we know the need in both drinking water and wastewater, so let’s make sure the funding gets to those who have the greatest need. The states have primacy and are best suited to prioritizing needs. Let’s get the money to them in a manner that allows them to distribute. Let the U.S. Army Corps of Engineers or Interior Department manage the process. They both have large project experience. Let the EPA provide technical guidance and support.
Second, prioritize and set concrete 10-year goals with metrics. Let the states set up a critical need list and prioritize funding based on the list over 10 years. Make it a transparent and open process. Provide specific and public milestones for meeting goals and tracking spending. Let’s make sure small and medium-sized utilities get their fair share.
Third, use the funds to best advantage. Don’t eliminate the use of municipal tax exempt bonds but augment them with additional sources. Use the Water Infrastructure Finance and Innovation Act (WIFIA) as a vehicle to provide funding at low interest. Stretch the spending dollars by allowing alternative financing, public-private partnerships, and private project funding. Eliminating the volume cap on private activity bonds is a “no brainer”. Add safeguards to monitor and protect the investment. Using the existing funding mechanisms to get the funds distributed is not always the most efficient. Let utilities seek private funding on their own and allow utilities and municipalities to form project public-private partnerships.
Fourth, allow utilities to evaluate and select what products, technologies, or delivery methods work best for them. Take advantage of the latest project delivery methods. Encourage non-traditional methods such as design-build and construction management at risk (CMAR) to deliver projects quicker and with less expense.
Allow utilities to select the product or technology they want. Allow for pre-selection based on transparent evaluations using lifecycle cost analysis or long-term operating cost benefits to reduce their operating costs. Allow funds to enhance operations, like adding smart systems, automation, and monitoring.
Encourage new technology by providing a specialized funding source that would support new and innovative distribution, collection, treatment, and operations approaches while protecting the utility from the risks that come with trying new things. Use EPA resources to help the states and utilities understand and evaluate new technologies. This also includes supporting small systems with a pool of management and technical staff who can support them in the decision-making process.
WIFIA could be used as a funding source for these “specialized” projects.
Finally, make this a long-term, multi-year effort that requires planning and monitoring of the spending program at the state and local levels. And let’s hold both the EPA and state and local regulators and utilities accountable for achieving goals within budget.
Mike Dimitriou is President of WRT, LLC and a member of the Water and Wastewater Equipment Manufacturers Association (WWEMA) Board of Directors and Chair of its Investment Committee. To learn more about WWEMA, go to www.wwema.org.
Image credit: "W," Bill Smith © 2014, used under an Attribution 2.0 Generic license: https://creativecommons.org/licenses/by/2.0/