What the federal infrastructure bill means for water systems nationwide

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The current crisis in Jackson, Mississippi, is a dramatic reminder of the fragility of Americans’ water systems. When recent flooding overloaded the city’s already-hampered water treatment plant, tap water became undrinkable for the city’s 180,000 residents, more than 80 percent of whom are black. The city no longer has enough water pressure to fight the fires.

The collapse of the system was the culmination of decades of underfunding, and in that respect, Jackson has plenty of company. The Environmental Protection Agency’s latest survey – conducted in 2015 – pegged the price of repairing drinking water infrastructure in the United States at $472.6 billion over the next 20 years. That was nearly $90 billion more than when the EPA had asked four years earlier.

In cities and rural communities, the nation is losing ground.

The Infrastructure Investment and Jobs Act 2021 was designed to help the country get its way back. It is providing more than $55 billion over five years to rebuild drinking water and wastewater treatment plants. This is in addition to the billions allocated through the American Recovery Plan Act 2021, which so far has provided about $14 billion for water projects.

Jackson stands to benefit from the Infrastructure Act, said Denise Schmidt of Duke University’s Center for Environmental Policy Innovation. But critical questions lie ahead.

“The unknowns are Jackson’s project ranking in the year he applies, the priority of his projects for loans versus forfeiture of principal, and the amount of his award,” Schmidt said.

It doesn’t help that under Mississippi rules, the city needs special state approval for any water project loan over $5 million.

Before we dive into the details of the infrastructure program, a reality check is essential: upgrading water works is a slow business.

“It doesn’t happen overnight,” said Nathan Gardner-Andrews, policy officer for the National Association of Clean Water Agencies. “From planning, to design, to construction, these are multi-year projects.”

That said, here is an account of what the Infrastructure Act made possible, its limitations, and the political struggle it sparked at the state level.

Breakdown of the $55 billion allocated to water projects

The bulk of infrastructure funding is distributed through the EPA’s Drinking Water and Clean Water Revolving Loan Programs. The drinking water program accounts for $30.7 billion (including $15 billion for the replacement of lead pipes) and the drinking water program—mainly wastewater treatment and stormwater management—accounts for 12 .7 billion.

The remaining billions are distributed through programs targeting specific issues or communities. For example, $5 billion in grants are available for small, underserved communities, and the Department of Health and Human Services has $3.5 billion available for facilities overseen by the Indian Health Service.

Almost all the money is distributed according to a formula. The EPA sends each state its designated share. After that, it is entirely up to the state to decide which local projects to fund.

States are encouraged to increase the number of projects in the early years. Some of the federal money requires the state to pay a certain percentage of the total cost of the project. The state match is 10% if states approve projects in the first two years that funding is available, but the match increases to 20% in the following three years.

The new infrastructure law also has a twist that opens the door to intense negotiations at the state level.

Drinking water and clean water programs typically provide funding in the form of loans that local water system operators must repay to the state.

But under the Infrastructure Act, 49% of new funds must go to disadvantaged communities as grants, not loans. Ultimately, it’s up to state officials to determine which places qualify as disadvantaged, but EPA guidelines urge them to focus on “low-income people and communities of color.”

“Of course, if you’re a local utility, you would prefer a grant to a loan,” Gardner-Andrews said. “There will be difficult conversations within the states.”

The infrastructure package will not meet all the needs

Every four years, EPA polls indicate which water projects they would like to fund. The most recent snapshot in 2015 showed that for drinking water alone, state wish lists had a total price tag of $472.6 billion for work needed over the next 20 years. The American Society of Civil Engineers has estimated that the funding gap for safe and clean water will reach $434 billion by the end of the decade.

The $55 billion that has been allocated will more than double Washington’s current contribution to local water projects, but estimates of the total need show that much work remains.

Jackson alone would need $1 billion to fix his drinking water system, Mayor Chokwe Antar Lumumba said Aug. 30. And billions more, he said, would be needed to tackle the full list of water problems facing the city.

“States and localities are responsible for more than 90% of total government spending on water infrastructure each year,” said researcher Joseph Kane of Brookings, a Washington-based policy group. “They’re struggling to keep up, as the infrastructure ages and more repairs become inevitable.”

Many local governments, but especially those like Jackson with many low-income residents, are caught between a growing need to invest and a limited ability to pay.

Management consulting firm McKinsey said the average water pipe in the United States is 45 years old, with some cast iron pipes over a century old.

Much of the country’s water and wastewater infrastructure was built in the 1970s and 1980s and is wearing out. Repairs and maintenance have lagged as overstretched state and local governments juggle funding priorities, the report said.

Gardner-Andrews said Washington deserved a lot of credit for the cash injection, but added that it was just the beginning of what was needed.

Obstacles Await Us

Federal funds began to flow. About $10.8 billion is for states, territories and tribal areas. Time is running out for local water system operators to ensure they submit all their documents, including engineering design, environmental review and financial plans, if they want to seek approval state this year.

A local operator might need to “wait up to a year to apply if they miss a deadline,” said Duke University’s Schmidt.

Schmidt also warned that the infrastructure act’s focus on getting money to economically distressed communities could add time to the process. The EPA has urged states to review their selection criteria. In some cases, there may be a discrepancy between EPA priorities and state priorities. Sorting this out is a key issue.

Duke University’s Center for Environmental Policy Innovation found that historically only about 7% of eligible system operators have taken advantage of the EPA’s Drinking Water Revolving Loan Fund.

“Small, racially diverse communities were even less likely to access this funding,” Schmidt said. “Without policy reforms, funding the Infrastructure Investment and Jobs Act is unlikely to yield different results.”

Developing the plans also requires technical support. But a lack of staff at local and state levels and a shortage of engineers to develop apps create another pinch point, Schmidt said.

In a recent report, the center found that 10 states were leaving more than 10% of their available money unused. The reasons tended to boil down to a lack of time and staff to submit applications.

Gardner-Andrews of the National Association of Drinking Water Agencies said he thinks with additional technical support included in the infrastructure bill, this may not be as big an issue at the moment. coming.

“All states will move,” he predicted. “They won’t leave the money on the table.”

Writer Tori Gantz assisted with reporting.

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