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To date over 50 cities have participated in Urban Water Council events. Any city can benefit from the forum that the UWC provides to interact with other local government representatives across the nation and representatives of the private sector involved in providing various aspects of municipal water services. These forums focus primarily on policy, legislative, regulatory and financial issues related to the delivery of municipal water and wastewater services. The forums also provide cities an opportunity for education on innovative technology and management methods.

REGIONAL URBAN WATER ISSUES FORUMS

In order to solicit input on water related issues from mayors across the country, the Conference of Mayors and the Urban Water Council have sponsored a series of three regional Urban Water Issues Forums held in Tucson, Baltimore and Tulsa between December 1996 and February 1997. With participation and input from over 50 cities, the issues discussed varied widely from city to city and region to region.

Topics explored during the forums included: water resources as a critical component of sustainable development, brownfield cleanups, economic development around water resources, water supply and allocation, water conservation, watershed protection, water quality control issues which can pit rural areas against urban areas (such as agricultural pollution and development around surface water sources), tribal rights and control, state regulation versus local control, public relations and information, combined sewer overflows, and implementation of federal regulations. One issue common to all cities regardless of size or location, was the importance and cost of maintaining and upgrading the water and wastewater infrastructure that is so important to the basic quality of life in all cities. At our Forum in Tulsa, one mayor remarked that all cities have the same infrastructure needs, the only difference is the number of zeros following the dollar sign. The regional issues forums provided USCM with local input as to what cities would like to see in a reauthorized Clean Water Act.

URBAN WATER SUMMIT

Agenda - 2004 Urban Water Summit

REMOVAL OF TAX IMPEDIMENTS TO PUBLIC/PRIVATE PARTNERSHIPS

In accordance with our 1995 Resolution on Water and Wastewater Infrastructure Financing, the Conference of Mayors and the Urban Water Council have been active in encouraging the removal of Federal impediments to long-term public/private partnerships. In order to meet increasing infrastructure needs and replace decreasing federal funds, cities are looking to the private sector as an option for raising needed capital. In order to attract private capital investment, long-term transactions are essential. Significant progress has been made toward improving the treatment of outstanding tax-exempt bonds used to construct water and wastewater infrastructure in the event that infrastructure is leased or sold to a private entity or its operation subject to a long-term management contract.

In the 1986 Tax Reform Act, private sector access to tax-exempt financing was restricted. A greater distinction between "governmental bonds" and "private activity bonds" was established. The total amount of "private activity bonds" was restricted by application of a "volume cap". Much of the water and wastewater infrastructure in cities has been financed with "governmental purpose" tax-exempt bonds. Regulations issued following the 1986 Act limited management contracts with private entities to maximum five year terms. Longer terms would cause a "change in use" and governmental tax-exempt bonds would be considered private activity bonds and no longer enjoy tax-exempt status. These bonds would then (in most cases) have to be immediately redeemed. This restriction made it virtually impossible to structure long-term transactions where a significant capital investment could be made, and amortized over a reasonable time period.

Final regulations and procedures issued by the Department of the Treasury and the Internal Revenue Service in January, 1997, provide more flexibility for cities to develop innovative public/private partnerships to provide public services, such as water supply and wastewater management. In short, the rules provide a "safe harbor" which allows cities to enter into long term management contracts without impacting the tax-exempt status of governmental purpose bonds used to finance infrastructure assets. The regulations also provide more flexible remedial procedures to preserve the tax-exempt status of such bonds if the public/private partnership arrangement does not fall within the "safe harbor" provisions. The additional flexibility provided by the new regulations reflect the specific types of flexibility requested by the Conference of Mayors and represent a significant step toward allowing cities to maximize the potential benefit (including capital investment potential) of public/private partnerships for the operation, management, development and improvement of water and wastewater infrastructure.

A number of issues however, must still be addressed, including, the removal of requirements to repay (even a depreciated amount) federal grants, the role of EPA and other Federal agencies in reviewing and approving transactions, and the regulatory status of "publicly owned treatment works" (POTW's). Other impediments exist in the form of restrictive state procurement and contracting laws and regulations.

TRAINING SEMINARS

New Treasury Regulations
Procurement Processes and RFP Development - Agenda

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