Local options: Augment Federal Aid or Wallow in Water Woes

August 29th, 2003 by Leave a Comment

By James D. Giattina

Land use and water quality are inextricably linked. Development almost always creates impervious surfaces – the roofs, streets, parking lots and sidewalks – that increase the volume of runoff and pollutants entering our watershed. These problems have contributed to a wave of new efforts to minimize the impacts of development, efforts variously known as low impact development; conservation design; mixed use development; neo-traditional neighborhood design; Main Street revitalization; transit-oriented development or smart growth.

In communities around the country, and particularly in this region, there has been a growing concern that low-density development – also known as sprawl – has not only created longer commutes and car rides but left us with stormwater and other drainage problems that overload our watersheds.

The Environmental Protection Agency has formed partnerships to support the development of a number of technical tools to assist communities with conserving hydrologic functions on site. These tools include national guidance manuals, brochures, fact sheets and design manuals, most are available on our Web site at www.epa.gov/owow/nps/lid.

Our technical tools and manuals take an ecologically friendly approach to site development, demonstrating runoff systems that mimic the natural hydrologic pattern of the site so that runoff is either slowed, filtered or allowed to percolate back into groundwater, thus conserving it as a resource. Typical practices include disconnection of impervious surfaces, green roofs, rain barrels, engineered soils, biofiltration cells, narrower streets, vegetated swales and so forth. Many of these systems can serve a dual purpose: treating runoff while doubling as a green space, field or park.

Taking this local approach to controlling stormwater onsite not only saves money for municipalities, it can also reduce construction costs for developers by as much as 20 percent.

In addition to stormwater, wastewater treatment decisions are primary drivers of environmental impacts. Some 25 percent of U.S. homes use wastewater systems either located on their own lot (usually a septic system) or as part of a small system serving a handful of homes (cluster treatment). More than half are in suburban areas just outside of major cities. Unfortunately, some 10-20 percent of onsite systems are improperly managed and do not provide the level of treatment needed to adequately protect public health and surface and ground water quality. We have found that properly managed onsite treatment can be one way to minimize development impacts.

There has been a number of national calls for the federal government to do more to protect our water and wastewater assets. That call has been heard. The administration’s fiscal year 2004 budget proposal reaffirms the federal government’s commitment to the Clean Water State Revolving Fund, with an additional appropriation of $850 million a year during 2004-2011. In doing so, the president is lengthening the federal commitment to the loan program so the fund can provide average annual assistance of $2.8 billion per year, a 40 percent increase. In total, the administration is proposing to invest $4.4 billion above what would have been invested in the fund from fiscal years 2004 to 2011.

The president’s fiscal year 2004 budget also extends the federal commitment to the Drinking Water State Revolving Fund with annual grants of $850 million from 2004-2018. This brings the revolving level of the fund to $1.2 billion per year, a 140 percent increase.

Clearly, the federal government is doing its share to meet infrastructure needs, but the “user pays” principle of economic efficiency suggests that consumers should have the primary financial role.

Unfortunately, price signals in the water sector, usually a publicly owned natural monopoly managed by a local government (and elected officials), are barely audible. Even when water is metered and priced, other revenue sources are often mixed in with the water department so that rates do not reflect the full cost of providing service.

Our household expenditures reflect this underpricing problem. EPA calculated that households spend an average of $707 per year on soft drinks (carbonated) and other (non-carbonated) refreshment beverages, compared to an average of $474 per year per household on water and wastewater charges.

To address the underpricing of water, EPA is encouraging utilities and municipalities to charge more of the full cost of providing and treating water and wastewater. A cost-based rate structure that incorporates all of the costs of building, maintaining and operating a system into the price is essential for sustainable infrastructure. When full-cost pricing is supplemented with incentives for consumers to conserve, we move into conservation pricing, on which we provide some information on our Web site at www.epa.gov/owm/water-efficiency/water7.pdf.

Full cost pricing is always a fiscal necessity. In arid or drought-ridden areas, conservation pricing is often an environmental necessity. Either way, stronger price signals are needed to alert consumers to the actual costs of infrastructure, to provide greater revenues for repair and replacement, and to communicate the true value of water.

Advocating for full cost pricing and for loans (instead of grants) should not preclude our considering the affordability problems that low-income households may face. To alleviate these hardships, communities can offer rate structures that mitigate impacts on low-income customers.  The most prominent example is “lifeline rates” where the charge for an amount of service considered non-discretionary (the minimum sanitary requirement) is kept low, but then higher unit charges are levied on water consumption beyond that amount.

Affordability programs are offered by only 14 percent of utilities. There is still much to learn from the gas and electric utilities with their many years of experience in offering low-income assistance.

There is a lot of work to be done in the Southeast. We have a marvelous piece of the geography to restore and protect and we have ever-growing challenges to face as we strive to provide clean and safe water for our citizens. Local governments have a critical role, in some instances, a primary role to play in addressing those challenges.

James D. Giattina is director of the Water Management Division for the Environmental Protection Agency’s Region IV, which includes Georgia. This commentary is excerpted from his presentation, “The Role of the Federal Government in Water Resources Management,” during the Water Law Conference held August 26, 2003, at the University ofGeorgia.

© Georgia Public Policy Foundation (August 29, 2003). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.

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