More Households Will Struggle to Pay Water, Sewer Bills: EPA

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By Amena H. Saiyid

The number of households that are unable to pay their sewer and water bills could more than double in the next 10 years, an Environmental Protection Agency official said Feb. 22.

“Affordability is a real issue, no doubt about it. It is real and it’s growing,” Andrew Sawyers, director of EPA’s Office of Wastewater Management, told the Environmental Financial Advisory Board, which provides advice to EPA on lowering costs and increasing environmental and public health protection investments.

Advisory board member G. Tracy Mehan, who served as EPA’s assistant administrator for water under President George W. Bush, and other board members said they recognize the need to consider affordability.

A recent Michigan State University study estimated 13.8 million, or 11.9 percent, of the nation’s households will face hardships in paying water and sewer bills. That level is based on EPA criteria that 4.5 percent of a household’s median income goes toward paying those bills.

“I suspect this is going to continue to grow, perhaps double, even triple,” Sawyers said, alluding to the study as well as to reports that three in 10 households in Philadelphia are unable to pay their bills.

EPA’s Response

The issue has taken on added importance at the EPA, which is trying to carve out a federal role in assisting communities in providing clean and safe water to its residents, Sawyers said. “How do we respond?” asked Sawyers.Providing clean and safe water is a challenge with water and sewer infrastructure that is operating past its useful life, in some instances triple its useful life, Sawyers said. Cities and towns struggle to shore up the revenues to support the $655 billion in funds to repair and replace water and sewer systems through the state revolving fund programs for both drinking water and clean water.“The need is significant,” Sawyers said, emphasizing the need for the board to advise the EPA on finding ways to finance these expensive repairs.

New President Donald Trump, however, campaigned on the pressing need to upgrade overall U.S. infrastructure.

Advisory Board’s Task

Sawyers said he wants the advisory board to recommend how the EPA can provide a comprehensive approach to the many diverse communities struggling to upgrade water and sewer systems. He pointed to three types: rural communities lacking financial expertise to undertake costly infrastructure projects; cities such as Baltimore and Detroit facing population declines and that have trouble raising revenues; and medium-sized cities that are unable to take on additional debt.

Chris Meister, a board member and Illinois Finance Authority executive director, observed that in his state, downstate communities don’t have the same resources as more vibrant metropolitan ones. He also said it is easy to put Infrastructure out of mind because it is out of sight.

Sawyers said the EPA does plan to provide more financing beyond the traditional state revolving funds through the use of its newly launched Water Infrastructure Financing Innovation Act program (WIFIA), provides Treasury-backed credit to borrow funds for water and wastewater projects costing at least $20 million. The Department of Agriculture’s Rural Water Program also could help, he said. In addition, the EPA is looking to provide more technical expertise to smaller water and wastewater systems. Sawyers was particularly enthused with the idea of providing a financial template for communities that would walk them through principles of underwriting projects.Some board members raised the prospect of addressing affordability through a program modeled after the Low Income Heating Energy Assistance Program (LIHEAP) that assists residents with paying their electricity and gas bills. But Sawyers said he was more in favor of replicating an Iowa program offering even lower-interest loans than the state revolving fund to cities wanting to invest in green infrastructure projects. He said it wouldn’t be difficult to tailor that program to address affordability.The National Academy of Public Administration is due this September to release a draft report that examines affordability in terms of compliance with costly Clean Water Act mandates, such as reducing combined sewer overflows. Sawyers said he looks forward to reading this report, which would attempt to define affordability and provide a comprehensive approach to tackling this looming issue.

Drinking Water Excluded

The study’s main focus on combined sewer overflows at the expense of drinking-water concerns concerned Mehan, executive director of government affairs at the American Water Works Association, who cited this to Sawyers at the meeting.Mehan said the NAPA officials with whom he spoke were intentionally or unintentionally “clueless” that agreements to reduce combined sewer overflows can come at the detriment of drinking-water concerns. Also discussed at the advisory board meeting was a new collaboration between the National Environmental Justice Advisory Council and the Environmental Financial Advisory Board to identify approaches to finance water infrastructure in vulnerable and overburdened communities. The EPA charged the board in August 2016 to come up with recommendations for how to finance water infrastructure in environmental-justice communities where residents predominantly are minorities or low-income and have been traditionally excluded from decision-making.Jill Witkowski Heaps, who is chairing this collaborative, said it will be crucial to identify communities of concern from a water-infrastructure perspective. This will include determining whether communities that lack access to expertise be considered or pockets of low-income people or people of color in larger cities become the focus, she said.

To contact the reporter on this story: Amena H. Saiyid in Washington at asaiyid@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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