By Judy Sheahan
August 5, 2002

Trenton Mayor Douglas Palmer, Chair of the Conference's Urban Water Council on July 29, briefed mayors on the status of water infrastructure legislation at the Boston Leadership Meeting.

Palmer gave a brief history of the two major bills currently working their way through Congress. The House Transportation and Infrastructure Committee reported out H.R.3930, the Water Quality Financing Act of 2002. It would provide $20 billion over five years for wastewater infrastructure through State Revolving Loan Funds.

The Senate Environment and Public Works Committee passed S.1961, the Water Investment Act of 2002. It provides $41.5 billion over five years for water and wastewater infrastructure through State Revolving Funds.

Palmer said that both bills require, as a condition of receiving funds, a utility to do infrastructure assessments, consider alternative financing mechanisms, and base rates on actual costs to run and replace existing facilities. He mentioned that both he and Mayor Mike Sullivan of Holyoke (MA) testified on behalf of the Conference of Mayors and that while they told Congress that Mayors welcomed better asset management plans and increased competition, the Conference of Mayors would be unwilling to accept what is basically an unfunded mandate, given the fact that there will be no increase in appropriated funds from historical levels.

"We need to inform members of Congress that they either need to increase funding for water and wastewater systems beyond historical funding or they need to strip out or better clarify the unfunded mandate portions of the bill," Palmer said.

Palmer went on to describe another water and wastewater financing tool, H.R. 2207, an IRS modification, that would exempt water and wastewater infrastructure from the state volume cap for private activity bonds. It is estimated to cost the Treasury $147 million for 10 years and could potentially cause an additional $6 billion in private sector investment. Palmer said that the Urban Water Council has been lobbying hard to gather support for this bill.