Increased Sewer/Water Funding Headlines Many Changes In Washington

UPDATE: This article was written before President Obama signed the stimulus bill into law 2/17/2009. The AP reports $7.2 billion of the bill’s money will go to the EPA, primarily to help “repair and improve drinking water systems and fund projects that protect bays, rivers and other waterways used as sources of drinking water.”(“How Government Stimulus Will Affect You,” 2/17/2009) Logistics Management reports an additional $4.6 billion “for water infrastructure projects undertaken by the U.S. Army Corps of Engineers.”–Ed.

Sewer and drinking water funding has been a back burner issue in Washington for the past decade, as local infrastructure needs have come to a boil. But the economic stimulus package Congress will pass very early in 2009–and which President Barack Obama will sign–will include substantial funds for water infrastructure, freeing up at least a portion of the logjam of long delayed projects.

The only question now is whether stimulus funds will be a one time shot in the arm or the start of a much more free flowing, permanent federal injection dedicated to answering what is estimated to be a $300 billion to $500 billion funding gap over the next 20 years in local sewer and drinking water funding needs.

In addition to questions about the size and permanence of water infrastructure funding, the Obama administration and a more Democratic-dominated Congress will undoubtedly reverse what was a laissez-faire Bush administration attitude toward environmental issues, replacing it with a much more activist mindset (with both positive and negative implications), and lend a much more sympathetic ear to labor unions as well.

But the biggest issue for the underground construction industry will undoubtedly be the size of the jolt from the 2009 stimulus package. The House passed a stimulus bill at the end of September (but failed to clear the Senate), before the recession worsened, which included $6.5 billion for the Clean Water State Revolving Fund (CWSRF) and $1 billion for Drinking Water SRF as part of its Job Creation and Unemployment Relief Act (H.R. 7110). That money would have been over and above the regular 2009 appropriations for the two SRFs, which will likely be about $800 million each.

Jim Berard, a spokesman for Rep. James Oberstar (D-MN), a major player on infrastructure issues, says that any stimulus bill that Obama signs will be considerably larger dollar wise than H.R. 7110, since the recession has worsened substantially since last September. The U.S. Conference of Mayors wants a doubling of the water infrastructure funding that was in the Job Creation bill. It has published a list of 2,536 sewer and drinking water projects across the country that are ready to go. They total $15.6 billion and would create 133,000 jobs.

Trust Fund gains steam

The early 2009 stimulus package will not include, however, authorization of a new Water Trust Fund, which many view as the long term solution for funding the huge sewer and drinking water backlogs at the local level. A report from the Government Accountability Office (GAO) expected to hit Congress in mid January will examine the possibilities for funding a new Water Trust Fund at a level of $10 billion a year. The report was requested by Oberstar and the chairwoman of the House Water Resources and Environment Subcommittee, Rep. Eddie Bernice Johnson (D-Texas). But Berard explains that if a trust fund is to be authorized, it would be done in the context of legislation reauthorizing the CWSRF. A bill doing that passed the House last year – minus a Trust Fund amendment – but fell short in the Senate.

Creation of a trust fund may have a slightly better chance in the 2009 with Democrats in control of the White House and firmer control of Congress because the idea is backed by environmentalists, a key Democratic constituency. For example, the Waterkeeper Alliance, a group founded by Robert Kennedy Jr., published a report called A Blueprint for Clean Water, completed after Obama won the presidency, which calls for creation of a Clean Water Trust Fund.

Environmentalist ascendancy in the Obama administration may be something of a double edged sword, however. Groups like Riverkeeper, Natural Resources Defense Fund and Sierra Club will push a “clean water” agenda which will reverberate at EPA in the form of tighter regulations on sewage and drinking water treatment and recycling–which could result in infrastructure spending. That agenda includes such initiatives as resurrecting the proposed Capacity Assurance, Management, Operation and Maintenance (CMOM) regulations, ditched during the Bush administration, which provide detailed regulations for operators of sanitary sewer collection systems in such areas as providing adequate capacity to convey wet weather flows and performing adequate operation and maintenance. Lisa Jackson, the new EPA administrator, is likely to push to get the CMOM regulation and other water rules back on track. Dena Mottola Jaborska, executive director of Environment New Jersey, calls Jackson, who headed the department of environmental regulation in the Garden State, “a strong advocate on water infrastructure” in New Jersey.


But for underground construction companies, environmental regulations can cut both ways. A good example there is the proposed rule the EPA issued on Nov. 19, 2008 which would force construction companies to take remedial actions to prevent storm water flowing over an excavated construction site from picking up sediment and contaminants and then dropping them in rivers or lakes. The proposed rule would require all construction sites to implement a range of erosion and sediment control best management practices (BMPs) to reduce pollutants in storm water discharges. Construction sites disturbing 10 or more acres at a time would also be required to install sediment basins to treat their storm water discharges. That rule will be finalized, and maybe even toughened up, under Jackson.

Like environmentalists, labor unions will also have new clout, and their first item of business is getting Congress to pass “card check” legislation–formally called the Employee Free Choice Act–which President Obama has said he would sign. President George W. Bush threatened to veto the bill in the last session after it passed the House. The Senate never passed that legislation, which allows the National Labor Relations Board to certify a union if it is presented with signed authorization cards from a majority of employees the union is seeking to organize. This would help eliminate the long standing National Labor Relations Act requirement for federally supervised secret ballots in union elections. Stephen E. Sandherr, chief executive officer of Associated General Contractors of America, says the card check bill is a poor way to gauge the employees’ true preferences. “The status quo, which allows both card check and secret ballot elections, remains the fairest way to make this determination,” he explains.

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