Water Online

June 2013

Water Online the Magazine gives Water & Wastewater Engineers and end-users a venue to find project solutions and source valuable product information. We aim to educate the engineering and operations community on important issues and trends.

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Analysis What Can WIFIA Do For You? The nuts and bolts of the Water Infrastructure Finance and Innovation Act (WIFIA) are revealed, as well as its benefits to municipalities. By Dan Hartnett W hen most Americans visualize the nation's aging infrastructure, thoughts typically turn to the decaying bridges and potholed roads on which they travel every day. The nation's water infrastructure, on the other hand, is largely forgotten, though hundreds of millions of people rely on it to deliver clean and safe drinking water to the tap. Unfortunately, this vast network of underground pipes and hidden-away treatment facilities is facing profound challenges of its own. Take, for example, the 650 different water main breaks that inconvenience the residents of cities and towns across the country on an average day. Over the course of a year, these force communities to waste nearly two trillion gallons of treated water at a cost of $2.6 billion.1 Figures like these help put the scale of the problem into focus. Though we know the water infrastructure problem is expensive, so too is the solution. One recent study found that the country's buried network of drinking water pipes will require at least $1 trillion in new investments over the next 25 years.2 The U.S. EPA, meanwhile, estimates that water and wastewater systems together will need nearly $633 billion over the next two decades just to maintain current levels of service — not counting additional expenditures necessary to account for expansion and population growth.3 Challenges of this magnitude require innovative solutions. Spurred by these figures and the need to think creatively in today's era of tighter budgets, a new approach to financing water infrastructure improvements is getting attention on Capitol 30 wateronline.com ■ Hill. Known as the "Water Infrastructure Finance and Innovation Act," or WIFIA, the proposal has the potential to offer cities and towns low-cost water infrastructure financing options without compromising quality or relying on unsustainable rate increases. Moreover, WIFIA will encourage innovative approaches to replacing infrastructure and reward communities that think outside of the box as they rebuild and renew their water systems for the coming decades. To fully understand the value behind WIFIA's new approach, it is important to first consider how communities currently maintain and upgrade their water infrastructure. According to the U.S. Conference of Mayors, the country's local governments — and local taxpayers — pay for 95% of water and sewer infrastructure development, rehabilitation, and operating costs. These investments totaled $82 billion in 2008.4 Local water rates and service fees cover typical operating and maintenance costs, and larger infrastructure projects — from major water main replacement efforts to treatment plant upgrades and water resource projects — are often financed through local municipal bond sales. These generate the needed capital up front, but also cause communities to collectively pay billions of dollars in interest charges over time. Other funding sources include the federal Clean Water and Drinking Water State Revolving Fund (SRF) programs. Authorized by Congress and administered by the EPA, SRFs follow a formula to annually disseminate federal dollars for water and wastewater infrastructure among the states and territories. Individual state revolving fund administrators then lend their share Water Online The Magazine

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