IAPMO’s industry update: disaster recovery & clean water

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Dain HansenDain Hansen is vice president of Government Relations, The IAPMO Group. He lends his frequent perspective of Capitol Hill, and the plumbing industry.

Here is an edited version of his update December 08, 2017

Panel Recommends Changes to Two-Decade-Old EPA Water Affordability Guidelines. In a highly anticipated report, a panel chartered by Congress to advise public agencies on effective governance recommends that the EPA revise how it appraises financial burdens when communities are required to upgrade water and sewer systems. Observers say that the revisions, if the EPA accepts them, could change the agency’s permitting and enforcement of municipalities under the Clean Water Act and Safe Drinking Water Act, the bedrock federal environmental laws that occasionally result in multibillion-dollar modifications of water treatment facilities. That means communities could have more time to complete required projects. Defining or measuring affordability is one task. Acting on it is another. A more lenient definition from the EPA means that communities may approach unaffordable rates more quickly and thus be granted more time to plug leaky sewers and build mammoth cisterns to hold back rainwater. Instead of 15 years to curb sewage discharges, a city may get 25 years or 30. The system improvements will still be required, just farther down the road. The question that lingers is still, how to pay for it? Delaying a project for a few years may allow a community to identify a cheaper solution. But it may not. Federal grants for such projects largely dried up in the 1980s, though low-interest loans are still available and certain states such as California and Texas have stepped in with significant state funding. Philadelphia has pioneered a water rate based on household income, and other cities are considering similar measures, expresses Hansen.

FEMA Chief Pleads For Rethinking Of Disaster Recovery. Calling on Congress for help, the government’s top emergency coordinator said this week that the federal approach to disaster recovery is “fragmented” and “backward.” FEMA Administrator Brock Long asked lawmakers to tweak so-called Stafford Act rules that bar some mitigation cash from being spent until after a community has been damaged and that require disaster-devastated areas to be rebuilt no better than their previous standard. Particularly for recovery efforts in Puerto Rico, it wouldn’t make sense to rebuild infrastructure the way it was before hurricanes Irma and Maria, the administrator contended. Long also suggested Congress move certain mitigation money out of the constraints of the Stafford Act, allowing pre-disaster prep funding to flow to communities before a catastrophic event occurs. The combined devastation wrought by this summer’s triple whammy of storms, combined with the expanse of wildfire damage in the West, has brought FEMA’s systems under increased scrutiny this year. In aiding recovery from this year’s storms and wildfires, FEMA enrolled almost 5 million people in individual assistance programs in less than 100 days.

State Update.

Commission Seeks Fracking Ban in Watershed Supplying NYC. A commission that oversees water quality for the watershed that supplies Philadelphia and half of New York City with drinking water is taking another step toward permanently banning natural gas drilling and hydraulic fracturing. The Delaware River Basin Commission this week published regulations to enact a formal ban on drilling and fracking, the technique that’s spurred a U.S. production boom in shale gas and oil. It also puts additional restrictions on the industry disposing wastewater within the watershed or using water from the river and its tributaries. The commission imposed a moratorium on drilling and fracking in 2010 and voted in September to start the process of a ban. Hearings and a public comment period are to follow, with a final vote possible next year. The area supplies drinking water to 15 million people.

Harvey Leaves Thousands Still Waiting On Clean Water. Thousands of people are still waiting on access to safe drinking water in parts of Texas more than three months after Hurricane Harvey. The storm and the heavy rains that followed overflowed drainage districts, cut off water and prompted hundreds of boil-water notices across the Gulf Coast. More than a dozen boil-water notices remain in effect across affected areas. The areas included cities, mobile home parks and housing developments in seven counties across southeast Texas. The Texas Commission on Environmental Quality reports more than 3,700 people in those areas haven’t had clean drinking water since late August.

Industry Update.

American Cities Could Be Stuck With Part of Tab for Congress’s Tax Cuts. Congress’s plan to cut taxes by more than $1 trillion could send part of the bill to America’s states and cities. The House tax measures would pull the tax-exemption from investments in so-called private activity bonds that finance projects like airports, water facilities and roads, promising to make financing tens of billions of dollars worth of public works each year more expensive. It would also do away with advanced refundings, a technique municipalities frequently use to refinance their debt when interest rates fall. Tax break or no, localities still need to build roads, maintain schools and keep the water running. Without tax-exempt status, money for projects now financed with private activity bonds would be raised in the taxable bond market, where the cost is higher. For example, an A-rated municipality that issues $100 million in 30 year general-obligation bonds in the taxable market rather than the tax-exempt market would see an additional cost of 0.55 percentage points, or $16.5 million more over that term. White House officials said this week that the President will sign the tax reform bill regardless of whether the tax exemption for private activity bonds is included in the final deal or not.

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