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Entries for 'Steve Wilson'
Steve Wilson posted on April 23, 2012 07:38
WIFIA stands for Water Infrastructure Finance and Innovation Authority. AWWA, WEF and AMWA are supporting a new bill to establish this Authority as a funding mechanism for large water and wastewater infrastructure projects. When you read the summary they have put together that explains what WIFIA will be able to do, it seems like a cost effective approach for helping systems deal with their infrastructure needs. You can read the summary here.
But, And There Is Always A But...
WIFIA could end up being a problem for the current DW and CW SRF programs. WIFIA is meant to be a more open access sort of loan program whereby large projects can get low interest loans that save the utility and their customers money. It doesn't specify that the loans go to the systems with the greatest needs or those that are out of compliance. Thus, in some cases the funding could go for expansion projects that benefit the utility, rather than the intended use of dealing with the massive infrastructure problems being predicted for this country. On the other hand, SRF funds are directed toward those projects with the greatest need, with the goal being to protect public health and maintain compliance with the SDWA and CWA. This difference is important, especially in some states that have many small, rural systems.
Another difference between WIFIA and SRF are the use of cross-cutter rules. SRF requires utilities receiving money to meet certain federal requirements that limit how the funds can be used and requires the utilities to meet certain standards. The framers of WIFIA would prefer that the program not require many of those rules, which would make it easier for the utilities to receive funding, but reduce the oversight to ensure that the funding is being used for its intended purpose.
Lastly, SRF programs include set-aside monies that provide funding for the states to administer their programs and provide for state-managed activities that include things like technical assistance to small systems. WIFIA doesn't provide for these state resources.
Some Possible Advantages
The WIFIA summary points to lower overall costs for consumers, based on current rates, as compared to the bond market. It also points out that there are 27 states that currently leverage their SRF funds on the bond market and this would allow them to borrow from WIFIA instead with potentially 16% savings long term. I've also heard that because private companies can't get SRF funds in some states, WIFIA would be an option over corporate bonds that would lower overall costs for customers at these systems.
Some Possible Disadvantages
The biggest concern with WIFIA is how it will affect the SRF programs. The SRFs are successful programs with a strong track record that provide funding for water and wastewater system projects. SRF programs are managed at the state level by the agencies that regulate the utilities, work with them to stay in compliance, and know them best. States use the SRF programs to increase compliance and to protect public and environmental health. WIFIA would be a national program, managed at the national level that has the intended purpose of reducing the overall cost for infrastructure projects. Will national rules affect loan approval? Will the states be involved in decisions or the process for the WIFIA program? What about the small struggling system that doesn't have the ability to raise capital for infrastructure projects and is too small for a WIFIA loan?
When you read the SRF example in the summary, you might ask yourself why even have SRFs if WIFIA funding is available. The example basically says that the state financing authority could apply for WIFIA funding instead to fund its program, and indicates the cost savings over leveraging bonds instead. SRF costs the federal government about $2 billion dollars each year. WIFIA is being promoted as potentially having no long term cost to the federal government, so why would Congress want to keep both programs? That's the unintended consequence that many are worried about, and the reality that we could soon be faced with if a WIFIA bill doesn't have provisions to maintain the SRF program.
Loans For Small Systems
AWWA just released an infrastructure report that says funding for small system projects is going to cost much more per capita compared to larger systems that have the customer base to spread out infrastructure upgrade costs. Because WIFIA funds are meant for large projects, small systems would often not be eligible for WIFIA funding themselves. Asking small systems to bundle their projects, or asking the state to bundle the projects for them, also creates some questions. What if a loan is bundled for 5 projects and one of the projects defaults? What does that mean for the other 4 systems and what does that mean for the state if they applied for the loan? Will the state have to cover the defaulted loan?
If WIFIA replaces SRF, will the states be provided funds for staff to help small systems develop applications? Small systems often lack the managerial capacity to develop applications and instead use engineering firms and planning grants to get that task accomplished. Will those options still be available? They must be or some small systems will be left coming up with those funds themselves. What about states with very few, if any, systems that would qualify for WIFIA funding? If SRF goes away, what will they do to find funding for projects? Could they be out of luck until enough projects could be bundled to meet the WIFIA requirements?
What Needs To Happen
WIFIA is a great concept for dealing with the huge anticipated costs we expect to see for infrastructure upgrades in the next 25 years. As currently proposed, it will make it easy for large systems to get cheaper funding, even though those systems currently have more options available to them already. However, it could potentially have the unintended consequence of reducing or eliminating the SRF programs that support compliance and help small systems that might not have other options. Losing SRF funding would also reduce a state's ability to manage their SDWA and CWA programs because the states rely on the SRF set-asides for part of their program implementation. The SRF's are necessary and must be maintained - and, we would hope, at least at current funding levels.
Recently, AWWA sent out an email asking its members to support WIFIA, encouraging utilities to contact their senators and representatives to seek their support in co-sponsoring the WIFIA bill. If you are so inclined to get involved, be sure to stress the importance and differences between the SRF programs and WIFIA, and that any reduction in SRF will lead to unintended consequences that include reduced compliance and public health protection for small systems, and could leave many small systems with no options for dealing with their infrastructure needs. Make it clear that you only support a WIFIA bill that leaves the SRF programs intact and fully supported.
Steve Wilson posted on March 27, 2012 09:42
I was at the Alabama Rural Water Association Conference a few weeks ago and there was a really interesting talk by a lawyer for an Alabama utility. The utility is being sued by a few of their customers for poor water quality even though their water meets all health standards. If a water supply provides water that meets all of the health standards and their operation meets all of the regulatory requirements, should their customers be able to sue them if they percieve there are water quality problems? Thats a tricky question for sure.
Safe Harbor
A safe harbor law basically protects someone from civil suit if they are meeting all of the legal and professional requirements for the services they provide. For instance, a prosecutor in a district attorney's office has immunity from civil action, even if they help put an innocent man in jail. For a water system, this type of law would mean that your customers cannot sue you for percieved water quality problems if you are meeting all of the requirements of the Safe Drinking Water Act and your state regulations. Alabama currently does not have such a law.
What's Happening In Alabama
Because of the lawsuit currently going on in Alabama, there is a push to pass a "safe harbor" law as an amendment to the Alabama SDWA. It's going through their state legislature now and appears to have alot of support. In the ongoing lawsuit, 10 homeowners that are spread throughout a 53 home subdivision, claim their water has oil and grease in it. Testing by the utility and extensive testing by the Alabama Department of Environmental Management show there are only normal, background levels in the water (a trip blank even had similar levels in it). I don't want to get into the details, but 3000 customers use water from the same main, and some of the allegations (like their water catches fire), are hard to understand if the water is meeting all of the SDWA standards.
What It Means
I'm not a judge or jury, but I do believe that if a utility is meeting its legal obligations and works with their customers fairly and openly, there should be some reasonable expectation that the utility met its obligation and has their customers best interests at heart. As the speaker said, without this legislation, any customer could sue any utility and that could lead to a jury setting water standards in that state, "regulation by litigation" is the term he used. Can water systems afford litigation because of unhappy customers?
How about you? Does your state have "Safe Harbor" legislation attached to its SDWA rules? Do you think it's a good idea?
Steve Wilson posted on March 24, 2012 19:26
These aren't new words. In fact, it seems like everyone is coming out with a bigger estimate of the future cost of infrastructure every few weeks and because the numbers are so big, they all seem irrelevant for small systems. Not so. This new report by AWWA definately puts some perspective on the issue for small systems.
Buried No Longer
AWWA has released a report entitled "Buried No Longer: Confronting America's Water Infrastructure Challenge". Recently, there have been snippets on the news about $1 trillion dollars over the next 25 years and other details that certainly catch your eye. But I encourage you to take a look at the report. AWWA has set up a website for the report here, where you can download the report and read more of the AWWA perspective.
What It Says
The report is short and to the point. It's only 16 pages and a good portion of that is made up of pictures and figures. But the information provided is sobering. It points out in Figures 7 and 8 that the estimated costs per household for infrastructure replacement are about $100 annually for large systems, but $400-$800+ per household for small systems.
Small systems are a widespread concern. According to AWWA, 84.5% of all public water supplies serve less than 3,300 people. The main findings are that for most systems, water bills will have to go up. More importantly, the time is now to start planning for future upgrades. The report also looks at geographic area and how populations are changing (going up in the south and west, no so much in the Northeast and Midwest). This has implications for how your town might grow in the future.
Pipe Matters
The report lists the estimated service life for all of the major kinds of pipe. You can find that on page 8 in Figure 5. Basically, you have ductile iron and PVC on the low end of about 60 years, and cast iron on the high end of about 120 years. The take home message is this, "...most of our buried drinking water infrastructure was built 50 or more years ago..." (p.4) and "Because pipe assets last a long time, water systems that were built in the latter part of the 19th century and throughout the 20th century have, for the most part, never experienced the need for pipe replacement on a large scale." (p.14) How long has your pipe been in the ground?
What It Means
Most people living in your small community have never seen the pipes that bring them their water daily. They have no understanding of the costs of replacement, nor are they willing to pay more for their water today to plan for infrastructure replacement in the future. It's time to educate your customers and begin putting money in the bank today. Failure to do so may result in even higher costs in the future, or worse, create an unsolvable situation in your community that can only be dealt with by consolidation or reduction in service. The days of government bailout for systems that can't sustain themselves are coming to an end, so you need to ask yourself, how important is your way of life today and how important is it for the future.
Next Steps
Becoming sustainable requires planning and financial management. Is your system putting money in the bank for future infrastructure needs? Do your rates reflect the true costs of providing water? Is there "extra" in your rates for replacement costs? Do you review your financial situation and consider rate changes on a regular basis? Does your community have a long-term plan for the sustainability of its water (and wastewater) system? All of these answers should be "Yes". If they aren't, its time to get some help from your TA providers on what you can do to start down this path.
Steve Wilson posted on March 06, 2012 11:11
Put up signs
Post signs along the border of your source water protection area to notify people that
any pollution in that area can affect the quality of local drinking water.
Use and dispose of harmful materials properly
Don’t dump them on the ground! Hazardous waste that is dumped or buried can contaminate the soil and move down into the ground water, or be carried into nearby surface waters by runoff during rainstorms. You might be surprised to learn that a number of products you use at home contain hazardous or toxic substances. Products like motor oil, pesticides, leftover paints or paint cans, mothballs, flea collars, weed killers, household cleaners and even a number of medicines contain materials that can be harmful to surface water and ground water.
Don’t overuse pesticides or fertilizers
You might apply fertilizers to make your grass thick and green, your flowers colorful and your vegetable crop abundant. You also might use pesticides to keep bugs from ruining what the fertilizers have helped to produce. What you might not know is that many of these fertilizers and pesticides contain hazardous chemicals that can travel through the soil and contaminate ground water. If you feel you must use these chemicals, use them in moderation.
Volunteer in your community
Find a watershed or wellhead protection organization in your community and volunteer to help. If there are no active groups, consider starting one. Use EPA’s “Adopt Your Watershed” to locate groups in your community, or visit the Watershed Information Network’s “How to Start a Watershed Team”. These tools can be located by searching epa.gov.
Identify ways you can help prevent runoff pollution from your home, business or farm
Check out Give Water a Hand (for students) or the National Farm*A*Syst/ Home*A*Syst Voluntary Assessment Programs (for farmers and homeowners) to find out how you can be part of the solution instead of part of the problem.
Join in a beach, stream or wetland cleanup
You can make new friends while you help protect source water.
Prepare a presentation about your watershed for a school or civic organization
Discuss water quality threats, including polluted runoff and habitat loss. Highlight things people can do to protect water quality, including limiting fertilizer use and eliminating the use of herbicides and pesticides. Research your presentation using EPA’s Nonpoint Source Program.
Organize a storm drain stenciling project
Stencil a message next to the street drain reminding people “Dump No Waste - Drains to River” with the image of a fish. Stencils are also available for lakes, streams, bays, ground water and oceans, as well as the simple “Protect Your Water” logo with the image of a glass and faucet. Produce and distribute a flyer for households to remind residents that storm drains dump directly into your local water body.
SmallWaterSupply.org Comment: This information would make a great handout for your customers, in addition to reminding you about the importance of source water protection for your community. Contact us if you have any questions.
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