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CLEAN SEWER TRUST FUND MAY FACE UPHILL BATTLE
Greenwire
August 20, 2003
By Marty Coyne, Greenwire senior reporter
Despite an effort by wastewater utilities to gain additional federal funds
for upgrading antiquated and chronically failing sewer systems, cities should
not count on a mandated stream of federal dollars to spare consumers the real
costs of improving local sewer systems.
That's the message coming from Capitol Hill in response to a proposal from
wastewater utilities to establish federal clean water trust fund to aid in the
massive expenditures required to bring leaky sewer systems into compliance with
the Clean Water Act.
The current budget crunch and sticky policy questions make it unlikely that
Congress would act on the proposal from the Association of Metropolitan Sewerage
Agencies to establish a new tax to finance such a fund, according to
congressional sources.
The utility association floated the proposal after reviewing several years of
study by AMSA and the U.S. EPA documenting a large shortfall between funding for
sewer upgrades and the financial needs to replace aging pipes and
infrastructure.
So far, consumers are making up the gap, officials said, with rate increases
ranging from a few percent to 100 percent of what consumers were paying a few
years ago.
Residents of Baton Rouge, La., for example, are paying twice what they did just
three years ago to finance deferred maintenance and repairs to that city's
system. In Toledo, Ohio, wastewater managers plan to raise rates annually for
the next 10 years to finance $450 million in infrastructure improvements
mandated by the U.S. EPA. And in Holyoke, Mass., city officials estimate average
sewer bills will jump from $200 per year to $833 per year to eliminate untreated
wastewater discharges.
EPA estimates show that between 2000 and 2019 the difference between funding and
costs for sewer and wastewater improvements in the United States will be about
$271 billion, according to a Gap Analysis completed by the agency last
September. Meanwhile, the Water Infrastructure Network, a coalition of
municipalities, engineering groups, sewer utilities and others, placed the gap
about about $241 billion.
AMSA responded to the funding crisis earlier this month with a document entitled
A National Clean Water Trust Fund: Principles for the Efficient and Effective
Design. The document argues that in light of the significant economic and public
benefits of wastewater treatment, sewer upgrades should be financed by a trust
fund similar to those established for other key aspects of critical national
infrastructure, the proposal says.
Utility managers hope Congress will consider the the report's findings carefully
before rejecting their proposal offhand due to budget constraints. AMSA notes in
the document that other infrastructure needs financed by taxes include highway
construction, airports, mine reclamation, and wildlife restoration.
"America's 15,000 wastewater utilities underpin the economies for the regions
they serve, but they also serve the nation as a whole, since the clean water
they produce flows openly into the rivers, lakes, and coastal areas of the
nation where all Americans can and do enjoy swimming, boating, and clean water
drinking, agriculture and industry," the proposal states.
But a Senate Environment and Public Works Committee source offered little
optimism for the proposal, saying "this just isn't the time to enact a tax" to
address sewer upgrades.
In addition, there are significant policy questions associated with trust funds,
no matter how they are financed, the source said. "I'm not sure that having
money in a national trust fund is the best option because communities will be
competing with every other community to get their money."
Although an equitable allocation formula could be developed for a trust fund,
the committee source said the Senate is more likely to act on a separate water
quality funding bill passed by the House Water Resources and Environment
Subcommittee last month. The bill, the "Water Quality Financing Act," would set
a $20 billion federal loan program (Environment & Energy Daily, July 18).
House sources could not be reached for comment, but the funding legislation,
H.R. 1560, faces a major hurdle because House Majority Leader Tom Delay
(R-Texas) is opposed to union efforts to change the bill so that federal monies
would be used to pay prevailing local wages for projects.
Click here to download a copy of the AMSA proposal.
http://www.eenews.net/Greenwire/Backissues/images/082003gwr1.pdf