Pennsylvania Earmarks $1.2 Billion for Water Infrastructure
Aug 01, 2008
With Pennsylvania facing nearly $20 billion in unmet needs for its water and wastewater facilities, as well as inadequate flood control measures and unsafe, high-hazard dams, Gov. Edward G. Rendell signed into law a historic investment in the state’s infrastructure that will provide up to $1.2 billion in new investments to ensure safe, clean water and safer communities.
“A sustainable infrastructure that is capable of protecting its citizens and providing quality, dependable services is paramount to the public’s health and well-being,” said Rendell as he signed Senate bills 2 and 1341 at the Mechanicsburg Wastewater Treatment Plant in Cumberland County. “Our water-related infrastructure — our drinking water and wastewater plants, our dams and our flood protection projects — are aging and deteriorating after decades of neglect and underinvestment. These bills provide new investments not just for capital improvements, which are increasingly expensive but, as in the case of wastewater facilities, to support other nonstructural options that are oftentimes more cost-effective.”
S.B. 2 will provide $800 million over the next 10 years for critical water, sewer, flood control projects and repairs to unsafe, high-hazard dams in areas outside of Philadelphia and Pittsburgh. The debt service on the bond will be repaid using uncommitted game revenues distributed by the Commonwealth Financing Authority.
S.B. 1341 will place a referendum on the November ballot asking voters to approve an additional $400 million for improvements in public drinking water and wastewater systems, including innovative, cost-effective strategies such as nutrient trading. If approved, the funding would be used for grants and loans to be administered by the Pennsylvania Infrastructure Investment Authority (PENNVEST).
Under both bills, the 183 publicly owned water systems in Pennsylvania that are facing federal mandates to reduce the amount of nutrient pollution in the Susquehanna and Potomac river basins and downstream in the Chesapeake Bay will be eligible for additional support. The grants and loans may be directed toward plant upgrades, but other more cost-effective options – such as nutrient credit trading, water conservation and water reuse – may also be eligible.
“Communities like Mechanicsburg are facing ever-increasing costs to provide a clean, reliable source of drinking water and effective wastewater treatment for is residents and businesses,” Rendell said. “Rather than only considering capital upgrades to these facilities, which can leave ratepayers with substantially higher rates, we want to ensure other cost-effective options, such as regionalization and nutrient trading, are considered.”
Rendell pointed to examples like Mount Joy Borough, Lancaster County, which used nutrient credit trading to lower its nutrient reduction costs 35 percent, and Fairview Township, York County, which followed suit and saved its taxpayers 75 percent as opposed to a capital upgrade.
The Department of Environmental Protection will work with the Commonwealth Financing Authority and PENNVEST in evaluating projects to ensure applicants are pursuing measures that result in the lowest cost to Pennsylvania’s citizens and communities.
In Pennsylvania, there are 900 community drinking water facilities and 1,100 community wastewater operations that are owned by a municipality or municipal authority that would qualify for funding under S.B. 2. Grants will range from $500,000 to $20 million.
According to a recent federal clean water needs survey, Pennsylvania is facing nearly $11 billion in unmet drinking water infrastructure needs and at least $7.2 billion in unmet wastewater infrastructure needs.
As part of his efforts to address Pennsylvania’s aging water-related infrastructure, Rendell established the Sustainable Water Infrastructure Task Force through executive order. The task force is responsible for calculating an estimate of total water infrastructure needs facing the commonwealth and identifying innovative technical, operational and financing strategies to meet the state’s needs. The group of legislative, business, municipal and public interest leaders will issue a report by Oct. 1 that provides recommendations and financing options to support water-related services in the governor's fiscal year 2009-10 budget proposal.
S.B. 2 also provides at least $100 million for flood control projects. Applicants would be responsible for providing easements and rights of way, relocating buildings and utilities, altering or rebuilding inadequate bridges in association with the flood protection project when necessary, and operating and maintaining the project.
“As Pennsylvania is one of the nation’s most flood-prone states, we must take steps to ensure our communities are safeguarded against the threat of having a flood control project or dam fail and wash out homes and businesses,” said Rendell. “While the costs of these projects can be daunting if our infrastructure is allowed to deteriorate, so, too, will Pennsylvania’s business climate and quality of life.”
S.B. 2 also provides a minimum of $35 million to address state and municipally owned unsafe, high-hazard dams in need of repair. Applicants are responsible for funding of at least 25 percent of the amount authorized by the Commonwealth Financing Authority for a project.
DEP will review the applications and make recommendations to the authority, which ultimately decides which grants are awarded. Criteria for funding include the level of hazard posed by the dam and whether the proposed project is the most cost-effective way to address the hazard.
Grants from S.B. 1341, if approved, would be up to $50 million, depending on the type of project and the size of the system.
“While these measures are a step in the right direction, they will by no means close the almost $20 billion gap in funding for Pennsylvania’s water infrastructure needs,” said Rendell. “We need continued funding as well as an in-depth examination of at non-structural alternatives such as best management practices and right-sizing.”