Water Sector Issues Joint Statement to Congress on Fully Funding SRFs

On Feb. 15, a broad group of water sector organizations representing, utilities, public works departments, executives, manufacturers, research organizations and other industry partners sent a letter to Congress requesting that it fully fund the Clean Water and Drinking Water State Revolving Funds (SRFs) to congressionally authorized levels of $3 billion each for fiscal year 2024. Organizations include AWWA, WEF, NACWA, AMWA and others.

The letter was directed to Rep. Kay Granger (R-Texas), chairwoman of the U.S. House Appropriations Committee, Sen. Patty Murray (D-Wash.), chair of the Senate Appropriations Committee, Rep. Rosa L. DeLauro, chair and ranking member of the U.S. House Appropriations Committee and Sen. Susan Collins, vice chair, Senate Appropriations Committee.

/** Advertisement **/

The letter stated in part: “Fully funding the SRFs will expand access to affordable financing for water infrastructure that protects public health. SRF subsidized loans fund infrastructure that provides safe drinking water, recycled water, wastewater services and stormwater management in thousands of communities around the nation every year. Without increased federal funding for this critical public health infrastructure, the risk of exposure to preventable diseases from poor water quality and water scarcity will increase for millions of Americans.”

The letter also notes that the demand for affordable SRF financing has “increased exponentially” in recent years. The groups representing the water sector said increased federal funding is needed to meet the growing demand for SRF subsidized loans, which has skyrocketed due to the increased cost of planning, design, construction and financing.

/** Advertisement **/

Some of the increasing costs include:

  • Budgets for water infrastructure projects have increased by as much as 40% in just the last five years. While historic inflation has ebbed, the cost of planning, design and construction remains well above pre-pandemic levels, particularly in rural communities that can least afford it.
  • In addition to repairing and replacing aging infrastructure, complying with more stringent water quality standards requires new investments in sophisticated and often expensive treatment technologies.
  • Higher construction costs are compounded by higher financing costs from rising interest rates on the municipal market. The cost of borrowing has become a barrier to needed investment in water infrastructure.

The organizations said maintaining annual federal funding for the SRFs will allow water utilities to keep water infrastructure projects on track, on time and on budget. The note that annual federal appropriations are directly linked to an SRF’s ability to maintain low interest rates on SRF subsidized loans; provide principal forgiveness and grants to communities that couldn’t otherwise afford to build needed water infrastructure; issue bonds to leverage their programs to meet higher demand for financing; and more.

/** Advertisement **/

The legacy gap in capital investment in water infrastructure is expected to grow to $434 billion by 2029, according to the American Society of Civil Engineers (ASCE).