AWWA to Congress: Water Infrastructure Bank concept holds water

Aug 28, 2009

The American Water Works Association (AWWA) urged members of Congress to create a federal water infrastructure bank to help America invest in its aging water systems. In testimony before the House Subcommittee on Water Resources and Environment, Chips Barry, a former member of AWWA’s Water Utility Council and current manager of Denver Water, told the committee that the United States is best served by water systems that sustain themselves through consumer rates and other local financing. However, the federal government can help by providing access to low-interest loans.

"The federal water infrastructure bank would provide direct low interest financing or loan guarantees for projects of regional or national significance, or which were simply too large for the state to accommodate," Barry said in delivering AWWA’s testimony.

Complete testimony and a detailed report on AWWA financing recommendations are available at www.awwa.org/InfrastructureBank.

The federal water infrastructure bank would be authorized to borrow money through the federal treasury system at very low rates, just as commercial banks do. In turn, the water infrastructure bank would:
  • Make low-interest loans for larger water projects (those that are too big to access the State Revolving Fund).
  • Help those states that want to leverage their SRF capitalization grants, making even more capital available for low interest SRF loans.

A federal water infrastructure bank would require no new taxes, striking the right balance between federal assistance and local responsibility, Barry said.

AWWA’s testimony came during a hearing prompted by a new bill called the "Water Protection and Reinvestment Act," introduced by Rep. Earl Blumenauer (D-Ore). The bill proposes to raise $10 billion annually for a water trust fund by taxing various industries.

"More effective tools for financing water infrastructure include enhancement of the existing state revolving loan fund (SRF) programs," the testimony said. "It is particularly important to ensure that large water systems have guaranteed access to and meaningful participation in SRF programs. Other effective tools include removal of the annual volume caps for private activity bonds for water projects, full-cost pricing for water service, and creation of a dedicated federal water infrastructure bank."

Barry said that a key concern with federal trust funds is that Congress typically does not spend all the funds raised for the stated purpose. Frequently, money from the funds is either lent to other programs or not appropriated for the full amount collected.

Established in 1881, AWWA is the oldest and largest nonprofit, scientific and educational organization dedicated to safe water in North America. AWWA has approximately 60,000 members worldwide, and its 4,500 utility members serve 80 percent of North America’s population.


Contact:
American Water Works Association
6666 W. Quincy Ave.
Denver, CO 80235
PH.: 303.794.7711
FAX: 303.347.0804
Internet: www.awwa.org

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