This morning, legislation sits on the President of the United States’ desk that will advance policies and funding for the nation’s water infrastructure. Assuming he signs it, the Water Resources Reform and Development Act (WRRDA) of 2014 will authorize funding for existing and new water, wastewater, and stormwater infrastructure finance programs, as well as waterway and port projects. The water and wastewater infrastructure industry has been eagerly awaiting passage of this uniquely bipartisan bill (Passed the House 412-4; Passed the Senate 91-7), specifically its update to the Clean Water State Revolving Loan Program and its creation of a Water Infrastructure Finance Innovations Authority.
The policies in the Water Resources Reform and Development Act carry significant impacts for North Carolina. In the late 1980s, the Clean Water State Revolving Fund (CWSRF) program replaced construction grants in order to provide low-interest loans for water projects and establish a sustainable financing program. Since CWSRF’s inception, North Carolina has received 1.8% of the national appropriation for the program based on population and demographic trends from the 1980s and earlier. This allocation has granted over $725 million to North Carolina, which the state has used to fund nearly $1.3 billion in projects, according to DENR’s 2012 Clean Water State Revolving Fund Annual Report. WRRDA requires that, for the first time, the Environmental Protection Agency conduct a review of the current allotment formula and make recommendations for updates. The bill also extends the loan payback period from 20 to 30 years and broadens the eligibility of funds into areas involving land acquisition, water reuse, ‘green infrastructure,’ and utility resilience.
However, the CWSRF is primarily designed to provide low-interest loans to underserved local governments; large water infrastructure projects typically find it difficult to access SRF funds. In addition to the re-authorization and reform of the SRF, WRRDA also establishes the Water Infrastructure Finance Innovations Authority (WIFIA), in part to fund larger water infrastructure projects. As proposed in the legislation, WIFIA will launch as a pilot program, with $125 million in funding over five years, modeled after the Transportation Infrastructure Finance and Innovations Authority. Much of this funding will be used to help secure larger projects of national significance (costing at least $20 million), although at least 15% of the amounts made available must be used for communities that serve 25,000 or fewer people. For these communities, the minimum project amount will be lowered to $5 million.
WIFIA will work through the Army Corps of Engineers and the Environmental Protection Agency. Flood damage reduction, environmental restoration, and waterway navigation projects will be carried out via the Army Corps of Engineers, while water and wastewater projects (including energy efficiency projects for water and wastewater utilities, repair/rehabilitation/replacement of existing systems, and desalination projects) will be funded via the Environmental Protection Agency. There is also a provision for land acquisition projects through both Agencies. WIFIA is designed to leverage federal funds by attracting private or other non-federal investments to promote increased development of water infrastructure.
In addition to the legislation’s impact on water, wastewater, and stormwater projects, WRRDA authorizes many other projects that will impact North Carolina, including watershed partnerships, waterway dredging, beach nourishment, harbor maintenance, and ecosystem restoration projects. The legislation authorizes $305 million for hurricane and storm damage risk reduction projects in West Onslow Beach, New River Inlet, Surf City, and North Topsail Beach, as well as $24 million for environmental restoration in the Neuse River Basin. It is encouraging to see bipartisan support for the nation’s water infrastructure. If the President agrees, the Act will go into place October 1, 2014.
Mary Tiger is the Chief Operating Officer of the Environmental Finance Center.