Clean Water Weekly

On Tuesday November 4th, lawyers for state and industry challengers of the Obama Administration’s Waters Of The U.S. (WOTUS) rule will submit their opening briefs to the 6th Circuit Court of Appeals. Two separate environmentalist groups will also submit opening briefs.

The rules challengers will be without a key memos from the Army Corps of Engineers. Leaked memos from an Army Corps. general in protest that his agency was cut out of the EPA’s rule making processed warned the rule is riddled with ‘contradictions’ and ‘fatally’ flawed have been bared from the lawsuit. The three-judge panel disallowed the documents by deeming them deliberative process materials, fearing allowing them would deter agency officials from speaking openly about the rule making process.

According to Politico, these memo’s revealed last summer by the House Oversight and Government Reform Committee show an intense disagreement between on-the-ground experts at the Army Corps and the political appointee overseeing the agency and the EPA.

“The rule’s contradictions with legal principles generates multiple legal and technical consequences that, in the view of the Corps, would be fatal to the rule in its current form,” Maj. Gen. John Peabody, then the corps’ second-in-command, wrote in a highly unusual April 2015 memo to Jo-Ellen Darcy, the Assistant Secretary of the Army for Civil Works.

Regardless of the court’s refusal to allow these memo’s, there is now no doubt that the WOTUS rule is deeply flawed, as the CWC and many other groups have been saying since it began the regulatory process at EPA. These memos also show a stark divide between political and non-political opinions, calling into question the merits and motivations behind the rule.

At CWC, we oppose the WOTUS rule, which will do more harm than good. The rule will vastly expand the definition of ‘wetlands’ under the Clean Water Act, which will make it much more bureaucratic, costly, and time consuming for the construction of desperately needed water infrastructure projects. In many cases, without these water infrastructure projects, the environmental repercussions will continue to mount, calling into questions the motives of those in favor of this rule. In other words, proponents of this rule argue it will help the environment, but if construction and wetland redevelopment projects are stymied by bureaucracy resulting from this rule, the environment will suffer worse than without the rule.

America’s infrastructure has been deteriorating for decades. Estimates for the financial resources needed to repair, replace, and bring our infrastructure up to code rage from $2 -$5 trillion dollars.

Individual states face billions in clean water and drinking water infrastructure rehabilitation costs. You can find EPA’s estimates for state needs on the Clean Water Council website. Even if state lawmakers have the appetite to invest in infrastructure, which many statehouses are finding to be the case, state budgets and limited resources don’t exist for the investment required.

But hopefully, that’s all changing. Both Presidential candidates have released plans to invest in infrastructure. Former Secretary Clinton’s plan would infuse $275 billion over five-years into rebuilding America’s infrastructure paid for through reforms to the business tax code. Clinton’s plan has been public for months. This passed weekend, Donald Trump released his plan. Trump calls for  $1 trillion over ten years in new infrastructure spending through Public Private Partnerships (P3s) and private investment tax incentives.

Both candidates pledge infrastructure will be a part of their first 100 days agenda, which has historically marked a period of deference to a new President.

Yesterday, the Senate blocked a procedural motion to bring up a bill that would have continued to fund the government and extend current budget numbers until December. Protesting the lack of emergency funding for Flint, Michigan, but providing emergency funds to Louisiana, the measure failed 45-55. Senate Republicans are arguing that the funding is more appropriate for water infrastructure legislation (WRDA) currently moving through Congress. The Senate passed WRDA bill (S. 2848) included $220 million for Flint and other communities struggling with water infrastructure emergencies.

In the House, GOP leadership is struggling to figure out how to move forward with it’s version of WRDA (H.R. 5303) which does not included funding for Flint. The House has been working through amendments, but it remains unclear whether democrats will push through an amendment to send aid to Michigan.

In any event, the House must pass WRDA and a budgetary measure to fund the government before it adjourns to hit the campaign trail. The latter must also gain 60 votes in the Senate to avoid a government shutdown.

We, at the CWC, don’t believe funding America’s infrastructure should be a bargaining chip. Congress must pass legislation to fund the government, and it should also weigh the significant public health, national security, and economic stimulation benefits of investing in water infrastructure. The budget, and WRDA, should both be passed as soon as possible.

On September 15th, the Senate passed its version of the Water Resources Development Act (WRDA), legislation aimed at improving America’s water infrastructure. The legislation (S. 2848) passed the Senate by a vote of 94-3 with the lone ‘no’ votes coming from Senators Flake (AZ), Lee (UT), and Sasse (NE). Apparently these Senators feel the water infrastructure in their state is sufficient despite the estimated $13.1 billion, $6.6 billion, and $4.8 billion each of their respective states need to bring their clean water and drinking water infrastructure up to current standards. Perhaps they know something no one else seems to know: where their states can find that kind of money in their annual budgets.

Traditionally, WRDA has been directed at water navigation projects like ports, levees, and waterways projects, but the Senate’s version in 2016 broadens the scope of WRDA to include clean water, drinking water, sewer, and wastewater projects that need significant investment. This is a change the Clean Water Council fully supports.

Many of the Senate version’s highlights will substantially benefit America’s water infrastructure. The major investments include:

• $70 million capitalization of WIFIA- OMB says this will be leveraged into $4.2 billion in water infrastructure loans.
• $300 million for lead-pipe replacement.
• $1.4 billion for small and disadvantaged communities to build water and wastewater services compliant with the Drinking Water Act.
• $100 million for drinking water infrastructure emergencies.
• The creation of a Water Infrastructure Trust Fund capitalized by a voluntary labeling on bottling. This is Rep. Blumenauer’s bill that NUCA has regularly supported and will create a new funding source for water infrastructure projects.
• Authorizes 25 Army Corps. of Engineers water infrastructure projects in 17 states.

These are significant achievements and CWC and our advocacy partners should be proud, but understand that the fight has not yet been won. The House must still act.

House Transportation and Infrastructure Committee Chairman said last week that he hopes to bring the House’s version (H.R. 5303) to the floor this week (Sept. 19-23). The House version authorizes 28 Army Corps. projects but does little more.

Make no mistake, we encourage the House to act to pass WRDA, but the CWC believes the House version misses an opportunity to create significant economic stimulation and job creation through water infrastructure investment. The significant reforms, investment, and program authorizations included in the Senate version invests in America’s health, safety, transportation, and, ultimately, future by prioritizing a broad spectrum on water infrastructure projects. CWC will be supporting and advocating in favor of S. 2848 and urge our partners to do the same.

Infrastructure is not just a government problem. Yes, local, state, and federal governments often plan, finance, and own infrastructure as a public good, but when infrastructures fail, or when short-term focus balloon’s the cost of infrastructure projects, we all pay the price.

According to a May 2016 study conducted by the Bipartisan Policy Center entitled, “Bridging the Gap: A New Model to Modernize U.S. Infrastructure,” both public and private interests play a role in improving America’s infrastructure. According to the report, America’s infrastructure will require trillions of dollars in upgrades, modernization, and expansion to stay in compliance with the Clean Water Act. This figure is certainly more than local communities can afford, let alone the federal government, which provides ample opportunity for collaboration between public and private entities to finance the growing need for improvements. Which is why the reports provides recommendations to attract $250 billion in private capital over 5 years for funding public infrastructure projects through private revenue streams.

However, there are three main barriers standing in the way of private investment for infrastructure projects. First, public agencies aren’t conducting the appropriate analyses needed to facilitate a project pipeline ready for investors. Second, a lack of public consensus on the long-term priorities of our country creates political risk that deters investment. Third, America’s permitting structure hinders progress due to its bureaucratic and complex nature that often leads to delays, expense overruns, and difficulty for investors to see a return.

To combat these barriers, The Bipartisan Policy Center, proposes seven recommendation to improve infrastructure. First, emphasis must be placed on outreach, engagement, and education of every project. This means beginning project development with a statement of public value, and creating transparency for the engagement and education of stakeholders throughout project development. Second, there must be established a broad project enabling framework that enables public-private partnerships for all types of projects and at all levels of government and a funding mechanism to assist in the up-front costs associated with setting up public-private partnerships. Third, all public assets must be inventoried for physical and economic condition in order to truly understand infrastructure needs.  Forth, project delivery and financing should have access to the full range of public, shared, or private options, as dictated by the nature and benefits of the project. Fifth, simplify project development and permitting by delineating agency review and permitting responsibilities and timelines. Sixth, expand revenue options for investors and maximize the use of emerging funding sources that directly engage the private sector. Lastly, increase the variety and strength of financial tools available for infrastructure projects.

These changes, in some cases require legislative or legal action, but the benefits of investing in infrastructure, far outweigh the difficulties. Water infrastructure projects, specifically, default on financing in less than 1% of projects making it among the safest investments. Additionally, the return on investment in water infrastructure is nearly three times the cost in terms of economic development surrounding the project or after completion. These are real benefits, whereas delaying action on necessary projects only create more problems and costs.

The solution provided by the Bipartisan Policy Center is focused on teamwork between the government and private sector and long-term focus. We at the CWC applaud the Bipartisan Policy Center on their report and support many of their recommendations.

http://cdn.bipartisanpolicy.org/wp-content/uploads/2016/05/BPC-New-Infrastructure-Model.pdf

A Bloomberg article from August 2, 2016 entitled   “Bottled Water to Outsell Soda for the First Time, with Nod to Flint” illustrates growing public skepticism about the health and safety of what comes out of their taps in the wake of recent calamitous water infrastructure failures. In the wake of recent water crises in Flint, Michigan, Americans have been forced, many for the first time, to consider the safety of the drinking water in their homes. Much of our country’s water infrastructure is over 100 years old, and in serious need of repair and replacement to remain safe and reliable. Should these infrastructure systems fail at an increased rate, heavily populated areas will be hit the hardest, as population density and the cost to repair will considerably impact citizens.  The article states that, “At least $384 billion of improvements are needed to maintain and replace essential parts of the country’s water infrastructure through 2030, according to the Environmental Protection Agency.” This is, quite simply, money America doesn’t have to spend without significant re-prioritization.

Bottled water might seem the best immediate solution to crises like Flint, Michigan, where clean water is not available from the tap. Plenty of celebrity campaigns strive to help with the crisis by donating clean water. “Sean Combs and Mark Wahlberg‘s bottled water company pledged to give 1 million bottles. This includes help from hip hop artists Wiz Khalifa and Detroit-native Eminem,” claims Time Magazine. These donations were considered among the largest public donations to aid the victims of infrastructure failures  in a city in desperate need of drinkable water.

But is bottled water the best solution? Bloomberg reports significant inefficiencies in the production of bottled water. It takes 3 times the volume of a bottle to manufacture a single  bottle.  When you consider the manufacturers still rely on the same public water infrastructure the rest of us use,  can bottled water be considered a sustainable solution?

Bottled water is mostly sold by the four largest bottled water companies: Nestle Waters, Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group. According to Bloomberg, “PepsiCo and Dr Pepper’s water business grew by double digits in the first quarter of 2016, while PepsiCo’s carbonated soft-drink volume declined 2 percent.” Nestle is North America’s, the largest bottled-water manufacturer, and its Pure Life brand is “filtered municipal water“ Bloomberg reports.

This bottled water comes at a cost that is in stark contrast to a vision of American water prosperity–every person should be able to turn on their sink and fill up a glass of clean fresh water regardless of their zip code or let their pets drink from the hose outside. Bottled water is “2,000 times more expensive than tap on average,” according to Peter Gleick, president emeritus and chief scientist at the Pacific Institute.

While there should always be a market for bottled water, replacing tap water with bottled water is inefficient, expensive, more detrimental to our country. Bottled water is a short term bridge without a true solution as even the water bottling companies rely on the same water infrastructure that leads to our homes. If investment isn’t made in our infrastructure, even the water bottling companies will struggle to produce bottles.

The solution is, as CWC has advocated, robust investment in water infrastructure to repair, replace, and expand current infrastructure systems.

With the 2016 Presidential general election quickly approaching, both major party candidates, Hillary Clinton and Donald Trump, have finalized the policy platforms for their campaigns.  Although neither party truly took advantage of the opportunity to discuss and promote America’s vital infrastructure, both parties include some discussion about their view of the future of America’s water infrastructure. Regardless of the winner in November, water infrastructure will be an important issue in America’s near future.  We at the Clear Water Council hope both parties recognize the seriousness and significance of investing in American infrastructure.

For the Democratic Party, Hillary Clinton is proposing revitalizing water infrastructure through increased federal investment, in addition to promising to make America’s water infrastructure more energy efficient and sustainable.

According to Business Insider, “Clinton said she would increase federal spending on infrastructure projects by $275 billion in the five years after her possible inauguration.”

To augment her clean water infrastructure plan, Clinton has also proposed continued upkeep to America’s dams and levees. “Our 84,000 dams and roughly 100,000 miles of levees serve to protect us from floods, facilitate the movement of goods, generate electricity, and more,” states the Democratic National Committee (DNC) platform. The DNC platform touches on disparities existing between the upkeep of these key pieces of infrastructure and their uncontestable importance to clean water and energy in America. We will continue to benefit from dam systems which irrigate our farms, hold water supplies in their reservoirs , and protect us from major storms and flooding. The Democratic National Committee has also proposed creating a national Infrastructure Bank to leverage more investment.

In contrast with the DNC’s platform proposing increased water infrastructure spending on a federal level, the Republican National Committee (RNC) and presidential hopeful Donald Trump’s plan for spending increases in American water infrastructure aim to utilize private funding.

According to Business Insider, “even after his initial campaign launch, [Trump] has committed to …large [infrastructure] improvements throughout his campaign.” The RNC platform is in favor of funding clean water projects, and insists that funding will come from the private sector. They plan to do this by eliminating regulatory hurdles.

Under the “Building 21^st century infrastructure” section of the Republic National Committee’s platform, more is proposed about reforming water infrastructure. The platform aims to revitalize 21^st century energy and water systems, modernize schools, and continue to expand high speed broadband networks. The RNC platform also claims that “[the GOP] will protect public health and safety by modernizing drinking and wastewater systems,” but is sparse on specifics.

The GOP website also highlights a current and persisting water crisis in America. The party claims that most Americans take for granted the seemingly endless availability of clean water in our country. GOP.com says that, “engineering surveys report crumbling drinking water systems, aging dams, and overwhelmed wastewater infrastructure.” A revitalization of American water infrastructure could bring jobs, prosperity, and above all clean water to all Americans.

Although Democrats and Republicans may hold two separate agendas when it comes to campaigning, both can agree that the condition of America’s pipes, water treatment plants, and dams is a pressing matter of national concern and must be addressed this election year.

Read the full platforms for yourself here:

DNC

RNC

In April, the Water Environment Federation (WEF) and WateReuse published the results of a study aimed at quantifying the economic impacts of increased federal investment in the State Revolving Funds (SRFs). The study, The Economic, Job Creation, and Federal Tax Revenue Benefits of Increased Funding for the State Revolving Fund Programs, shows how increased investment would generate significant tax revenues, high paying jobs, and higher economic output.

The State Revolving Fund (SRF) Programs provide an affordable way to finance water and wastewater projects. Congress must annually appropriate funds for the Drinking Water SRF (DWSRF) and Clean Water SRF (CWSRF) programs through the EPA’s annual appropriation bill.  The study points out that appropriations for the SRF programs has dropped substantially from 2010 to 2016.

The study aims to show what the economic output would be if appropriators were to increase SRF appropriations, which the CWC has supported and advocated. The study assumes the SRF appropriations will be increased to $4.7 billion in 2017 (nearly doubling the appropriation level, and then incrementally increased over the next five years to $12 billion. These are unrealistic expectations, but illustrating the benefits of such an investment is paramount.

Specifically, the study found for every federal SRF dollar spent, 21.4% is returned to the federal government in the form of taxes, allowing greater investment. According to the study, the proposed $34.7 billion federal allocation will leverage an additional $116.2 billion in state spending ($151 billion total) in SRF project funding. Additionally, the increased SRF funding would also create half a million new jobs with an annual salary of  $60,000 a year. Finally, the increased appropriations will generate $102.7 billion in total economic output across industries, strengthening our economy.

These results mirror what we already know and have reported here continually. Investing in water infrastructure is good for everyone and our economy.

To download the 8-page study, The Economic, Job Creation, and Federal Tax Revenue Benefits of Increased Funding for the State Revolving Funds Programs

As the Republican Convention is in full-swing this week, followed by the Democratic Convention next week, the CWC implores both parties to make America’s infrastructure a major column of their party platforms.

The economic and public health benefits of ensuring a clean and reliable water infrastructure cannot be ignored. As we have reported here many times, investing in water infrastructure returns nearly three times the investment in economic demand for goods and services. At the state level, the economic demand nearly doubles the investment. Federal investment of $1 billion in water infrastructure would provide state and local governments $82.4 million in additional tax revenues that can be used to greater fund infrastructure projects.

On top of the benefits, there is substantial need for investment in our water infrastructure. Not only have there been significant news-worthy infrastructure failures, but the reaction to those failures has not yet resulted in any tangible action. Estimates of the total dollar amount needed to repair, replace, and construct water infrastructure in America now top $3 trillion dollars. That number only increases the longer Congress waits to act. The American people expect their water infrastructure to work at home, at their job site, and for emergency services. Delaying any sort of investment is imprudent economically, but also dangerous.

Both parties provide lip service to supporting water infrastructure, but both will miss an opportunity to really make a difference if neither includes water infrastructure investment and construction in their party platform. Investing in water infrastructure is a clear jobs message, not just for the construction industry, but also for the economic demand that immediately gains access to reliable and clean water. Investing in water infrastructure is a clear environmental protection message as well.  Investing in water infrastructure that expands capacity, repairs leaks and runoff, and cleans the water is good for the environment and for our economy. But let us not forget that water infrastructure is the foundation on which all other things are built and function. The American way of life would be substantially different if our hospitals didn’t have access to water; our schools would be very different if our children couldn’t use drinking fountains; and our economy would be very different if our factories couldn’t cool machinery and products with water.

We at CWC, in the strongest and most respectful way possible, recommend both parties include the investment in water infrastructure as a primary pillar of their economic platform, their public health platform, their national security platform, and their overall vision of America in 2017 and beyond.

For all intents and purposes, the federal budget process is over. Over as in, not moving forward, not over as in completed.

The House will take up the Interior, Environment, and Related Agencies Appropriations bill for fiscal year 2017 this week. As we discussed in our previous post, the Interior Appropriations bill funds the EPA’s State Revolving Fund programs, and the WIFIA program, both of which are primary funding sources for water infrastructure projects nationwide.

On the other side of Capitol Hill, it has become clear the Senate has given up on regular order for the budget.

On July 11, 2016, the White House threatened to veto the House version for policy riders that bar funding for specific regulations put out by the Administration. While critical of these provisions within the legislation the White House did offer some interesting – though half-hearted – praise for “the bill’s investments in EPA’s water infrastructure financing programs, including the State Revolving Funds for clean water and drinking water projects and the new Water Infrastructure Finance and Innovation Act loan program.” The Presidents own proposed budget would have cut $256 million from the SRF’s.

With both the House and Senate adjourning for the Presidential Conventions by July 15th, it seems Congress will again come up short of its Constitutional obligation to set the budget for the country. The likely alternative is a continuing resolution (CR)- or bill that would simply extend current spending levels- until a set date. That date, could be cause for some debate. It has been reported that the House’s most conservative faction, the House Freedom Caucus, will push for a CR that lasts well into the first hundred days of the next president. House Appropriations Committee Chairman Hal Rogers (R-MI) has been vocal against a CR of that length, but it is unclear where the majority of House Republican’s stand and whether House Democrats will cooperate.

From the CWC’s perspective, a CR would be favored when compared to the House version of the Interior, Environment, and Related Agencies Appropriations Act for Fiscal Year 2017 because the House version would cut $186 million from the SRF programs. Those cuts become significantly less likely in a CR. The Senate version would increase SRF accounts by $114 million, but seems even less likely than the House version to be enacted.

As the appropriations season closes, we at the CWC remain optimistic that the House and Senate will come together to pass a Water Resources Development Act (WRDA). Both chambers have introduced legislation, but neither has been considered by the full body. The CWC wishes to reiterate to lawmakers the powerful economic drivers that derive from robust investment in water infrastructure. Our economy, public health, and way of life rely on widespread, reliable access to clean and potable water. WRDA would take measurable steps toward investing in water infrastructure and ensuring our water infrastructure is safe and reliable for years to come.