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Entries for the 'Funding' Category
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 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.
JAdomaitis posted on November 30, 2011 07:25
2012 Americorps Planning Grants
Intent to Apply due: Dec. 15 (via email to: americorpsgrants@cnc.gov)
Applications due: Jan. 18, 2012
Americorps has three different grant opportunities available: Indian Tribes Planning Grants, and State and National Planning Grants. These planning grants are meant to assist and better prepare organizations who hope to compete for an Americorps grant in the next grant cycle. The six areas that grant competion will focus on are economic opportunity, disaster services, healthy futures, education, veterans & military families, and environmental stewardship. Applicants may apply for up to $50,000, but the applicant must not have previously received an AmeriCorps grant.
Technical Assistance and Training Grants for Rural Systems (USDA Rural Development)
Apply by: Dec. 31
Grants are available from USDA Rural Development to help non-profit organizations in rural areas with a wide range of issues relating to the delivery of water and waste disposal service. Please see http://www.rurdev.usda.gov/UWP-wwtat.htm for more information.
FY 2012 Indian Community Development Block Grant (ICDBG) - HUD
Apply by: Jan. 4, 2011
The ICDBG program from HUD is offering single-purpose grants which can be used for a wide range of infrastructure, housing, and economic development purposes, which includes (but is not limited to) water and sewer system development. Go to this page for more information. Please note that Congress must still appropriate the funding for the FY 2012 program. HUD's SWONAP staff is conducting two ICDBG Notice of Funding Availability (NOFA) workshops (one in Phoenix on Nov. 30-Dec.1, and one in Albuquerque on Nov. 30) designed principally for tribes, tribal organizations and individuals directly involved in the preparation of ICDBG Applications. To register for the Phoenix workshop go here. To register for the Albuquerque workshop go here.
Steve Wilson posted on October 12, 2011 09:24 
Both in June and recently, we wrote blog posts about the results of an operator survey published by the North Carolina Environmental Finance Center. This is another piece from their report dealing with operators suggestions for retention ideas.
Better Pay, Benefits Top The List
Below are the suggestions from operators as to what a utility could do to better recognize and retain them, as listed in the NCEFC survey results report.
- Higher Pay
- Increase Pay with Certification Level
- Improve/Include Benefits
- Pay for and Allow Attendance at Seminars/Workshops/Classes
- Cost of Living Increase
- Merit-Based Pay Increases
- Provide Incentives
- Certificate of Appreciation
- Hire More Staff
- Public Acknowledgement
- Pat on the Back
- Realize the Importance of Our Jobs
- Training of Board Members
- Increase Communication Between Board and Employees
- Become More Involved with Day-to-Day Operations
I want to talk about the last 4. Honestly, if community leaders did these 4 things, some of the salary and benefit issues would likely be more understandable to them, and the community as a whole would be more likely to develop sustainable practices.
They All Fit Together
To get the mayor and/or board to realize the importance of the operator's job, they need to communicate with the operator, become more involved in daily operations, and be trained on the issues and responsibilities they face. Maybe we have been going about this all wrong. Instead of just requiring training for board members, as some states now do, board members should also meet with the operator on a regular basis, say every other week on a weekday morning for breakfast. The operator can give an update on what has been happening, what issues he has been dealing with, what things he plans to ask the board to do and why.
In addition, each board member should spend a day each quarter working with the operator. They could help collect samples, help read meters, see how a backwash cycle is completed, order chemical, and anything else that would help them understand what goes into the operation of a water plant. I hear all the time that the problem with training board members is that they serve their two years, then someone new takes over. If a community had this sort of program in place, how long would it be before the list of supporters for the system grew well beyond the current board?
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