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AMWA Policy Resolutions

Approved by the Membership, October 2007

Environmental Priorities

The Association of Metropolitan Water Agencies (AMWA) supports the U.S. Environmental Protection Agency Science Advisory Board’s (SAB) continuing emphasis on establishing environmental priorities. Environmental policy and priorities should not be driven by individual issues as they receive public attention. Public resources can and must be targeted toward the most pressing environmental problems. The SAB’s call for a scientific based approach to policy making is commendable.

AMWA specifically urges the U.S. Environmental Protection Agency to: (1) target resources at reducing the highest demonstrated risks to human health, (2) develop solutions to environmental problems using an integrated approach, examining all sources of a contaminant, (3) emphasize pollution prevention as a program priority, (4) work to improve public understanding of environmental and health risks and the costs for their correction, (5) develop improved analytical methods, (6) improve scientific understanding of environmental health impacts including the health protection of children and other potentially sensitive populations, (7) continue to provide for stakeholder involvement in the development of solutions to environmental problems, and (8) consider sustainability of our environment and resources.

Rationale:

The general philosophy presented by the SAB reflects the long held position of the Association of Metropolitan Water Agencies. Only by ranking environmental problems scientifically by risk, and considering the costs of correction is it possible to ensure that resources are devoted to the most significant problems.
Part of the present fragmented regulatory approach results from the federal government reacting to issues without regard to proper risk assessment. This fragmented approach results in the expenditure of federal, state and local resources in areas of negligible return - resources that could be devoted to meaningful problems.

Pollution Prevention

The Association of Metropolitan Water Agencies (AMWA) supports pollution prevention as a major component in ensuring that the nation’s drinking water supplies are safe and of high quality. AMWA urges the U.S. Environmental Protection Agency (EPA) to emphasize pollution prevention in all their programs and reauthorization efforts. Preventing pollutants from entering drinking water supply source water is a complex issue involving point and nonpoint sources. It is more effective to control pollutants at the source, where they are highly concentrated, than it is to remove them at the consumer’s expense after they have entered a water body or supply source.

AMWA further urges that Congress strengthen pollution prevention programs under reauthorization of the Clean Water Act; and the Federal Insecticide, Fungicide, and Rodenticide Act; and laws governing farm programs of the U.S. Department of Agriculture (USDA). Congress should also appropriate sufficient funds for nonpoint source pollution prevention programs, especially farm conservation programs. Such actions as targeting farm conservation efforts to protect drinking water sources and encouraging watershed protection planning will provide a clear pollution prevention focus for local, state, and federal activities.

The source water protection provisions of the Safe Drinking Water Act Amendments of 1996 provide a start in acknowledging at the federal level the importance of pollution prevention.

Rationale:

Pollutant prevention is more effective and equitable than removal through drinking water treatment.
EPA has the authority through various existing laws including the Safe Drinking Water Act, the Clean Water Act, the Federal Insecticide, Fungicide, and Rodenticide Act and others to control contaminants that degrade water quality and increase the cost of water treatment. EPA should align the standards setting processes and regulatory requirements of the SDWA and CWA.
USDA has authority to control agriculture-related contaminants that degrade water quality and increase the cost of water treatment.

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund)

The Association of Metropolitan Water Agencies (AMWA) supports a Superfund statute that requires responsible parties to clean up ground water contaminated with hazardous waste to at least drinking water standards, where practicable. AMWA supports retention of Section 104(a)(3)(C) to ensure drinking water systems are exempt from liability under CERCLA due to deterioration of the system through ordinary uses. The statute should also protect uncontaminated ground water, and make polluters, and not water suppliers or their customers, legally and financially responsible for damages caused by hazardous waste pollution. In cases where treatment of contaminated water is technically impracticable, alternatives that ensure a safe, reliable and permanent supply of drinking water should be preferred over remedies that involve temporary measures such as home treatment devices and the provision of bottled water. In addition, the statute should explicitly recognize the importance of including drinking water suppliers in Superfund decision making. The statute should preclude liability against drinking water suppliers for leakage from drinking water system facilities of treated water that meets National Primary Drinking Water Regulations. Further, water systems should not be named as potentially responsible parties (PRPs) when the withdrawal of water for drinking water use may contribute to or accelerate migration of contaminants from a Superfund site.

Rationale:

Ground water is a finite and precious resource. Contamination of ground water sources further narrows its availability.
Consumers have a right to a safe, reliable and permanent supply of drinking water.
As a matter of economic fairness, the clean-up burden should fall on the party responsible for the pollution.
If the responsible parties cannot be identified, cleanups utilizing Superfund should ensure that drinking water needs are met without unduly burdening consumers.
Water suppliers should be explicitly included in the process for determining Superfund remedies, given their knowledge of ground water use, community needs, and water quality issues.
Water distribution piping and water leaks may inadvertently add negligible levels of contaminants to a Superfund site. Normal withdrawal of water from an aquifer for drinking water use may cause migration of contaminants from a Superfund site.

Endangered Species

The Association of Metropolitan Water Agencies (AMWA) supports reauthorization of the Endangered Species Act of 1973 (ESA). The reauthorization should emphasize recovering listed species, preventing the need for listings, and providing flexibility to allow for consideration of different approaches to protection of endangered or threatened species. In addition, reauthorization of the ESA should focus on addressing social and economic impacts, and streamlining the process to minimize project uncertainty and delays which have historically resulted from meeting or implementing the Act’s requirements. To accomplish these objectives, AMWA recommends that the ESA specifically include:

Pre-listing agreements and recovery plans that consider multi-species habitat and regional or sub-regional ecosystems of which subject species are a part.
Scientific peer review of listing decisions and recovery plans to ensure the scientific analysis of information used is fundamentally sound.
Provision for adequate federal funding for recovery plans and federal participation in pre-listing agreements.
The evaluation, development, and implementation of other protection alternatives before impacting pre-existing development or resource utilization. Broadening recovery teams to include expertise to assist in quantifying and minimizing social and economic impacts.
Broadening recovery teams to include expertise to assist in quantifying and minimizing social and economic impacts.
The ESA should clearly focus on protecting a listed or candidate species through integration of environmental, social and economic benefits to demonstrate tradeoffs of choices.

Rationale:

The current backlog of over 275 species as candidates for listing under the ESA necessitates an ecosystem, multi-species approach to recovery and protection over broader landscapes where possible. Such an approach will provide a greater opportunity to rationalize and address the inevitable competition for water for municipal, agricultural, recreational and environmental uses.
Waiting until conditions have deteriorated to the point at which a species is threatened or endangered results in efforts that may require severe restrictions on human activities and intensive and expensive recovery efforts. Pre-listing agreements can emphasize consensus, involve States in the recovery effort, avoid delays from adversarial proceedings, and result in more effective protection of the environment at a lower societal cost.
Because of a constantly expanding database, listing decisions must, in part, be based on many assumptions about habitat needs and the viability of populations. Therefore, the U.S. Fish and Wildlife and the National Marine Fisheries Services should solicit opinions from the general scientific community to give these decisions the broadest possible acceptance and credibility.
On occasion, the ESA focus has been on impeding the renewal of federal licenses and permits that clearly provide positive societal benefits.

Safe Drinking Water Act (P.L. 104-182)

The Association of Metropolitan Water Agencies (AMWA) commends Congress for passage of the Safe Drinking Water Act Amendments of 1996 (SDWA96). The revisions represent dramatic improvements over past drinking water laws building on the lessons learned in implementing that legislation. The new law provides a framework, which allows a clear focus on those priority contaminants, which actually occur in drinking water and occur at levels of public health concern. The revised statute also provides for a sound scientific basis for regulations under the law and consideration of the benefits the public may receive from regulatory efforts and the costs they will be asked to bear to achieve those benefits.

AMWA strongly encourages Congress to follow through on their initiative by ensuring that the U.S. Environmental Protection Agency (EPA) receives adequate funding, particularly for health effects research, to implement the statute. AMWA also encourages EPA to exercise the flexibility granted under SDWA96 to ensure that congressional intent is met and appropriate decisions for the protection of public health are made.

AMWA also encourages EPA to continue its stakeholder outreach efforts that ensure public participation in the development of regulations and other drinking water initiatives.

Rationale:

AMWA strongly supported revision of the Safe Drinking Water Act and championed many of the initiatives of the new statute particularly those related to: health effects research funding, a focus on contaminants that actually occur in drinking water at levels of public health concern, consideration of costs and benefits, and adequate timeframes for compliance.
Health effects research is critical to effective implementation of the new statute, and only adequate funding by Congress in this area will allow the promise of the statute to be realized.
While the new statute provides flexibility to EPA to ensure that scarce public resources are appropriately expended to resolve the most pressing problems, EPA must exercise this flexibility to meet the intent of the SDWA96.

Ground Water Protection

The Association of Metropolitan Water Agencies (AMWA) urges the protection and preservation of the nation’s ground water and supports U.S. Environmental Protection Agency’s (EPA) development of a clear and coherent national ground water strategy that acknowledges the need for state and local government primacy in managing our nation’s ground water resources.

AMWA specifically opposes legislation that would provide safe harbor from product liability for oil companies and manufacturers of MTBE. The contamination of drinking water supplies by MTBE is a serious problem. MTBE clean-up costs should be borne by those parties responsible for the contamination and for putting the product into commerce.

The availability of ground water for a variety of purposes, but most importantly as a source of safe, high quality drinking water is essential. AMWA urges Congress to consider development of a comprehensive ground water policy which consolidates EPA’s authorities as outlined in the Comprehensive Ground Water Protection Program Guidance and addresses, at a minimum, the following key issues: protection of ground water used for drinking water and ground waters with ecological impacts such as ground waters hydrologically connected to surface waters; the relationship between the quality and quantity of ground water; the sources of contamination; relationship to states’ water rights statutes; and federal, state and local responsibilities for the management and protection of ground water.

AMWA also urges Congress to adequately fund the wellhead protection provisions of the Safe Drinking Water Act.

Rationale:

The supply of usable fresh water within one-half mile of the surface is at least twenty times greater than the total amount of surface water in the United States . Presently, ground water supplies about 50 percent of the population with drinking water, including 97 percent of rural households. About two-thirds of the ground water used in the United States is for irrigation. Industry is also heavily dependent on ground water, satisfying more than 25 percent of its water requirements from this source.
Ground water contamination is a significant problem, especially from improper disposal of hazardous wastes.
Sources of ground water contamination are waste disposal practices, agricultural activities, and natural processes. The types of contaminants include microbes, salts, heavy metals, radionuclides, and complex synthetic organic compounds.
Ground water contamination is expensive to detect and monitor. Further, once present, many of the contaminants are very difficult or impossible to remove from aquifers, and are unlikely to be changed or diluted as part of any natural progression.
The problem of potential contamination is nationwide, with contamination incidents reported from every state. The specific types of contamination show a regional clustering, however, with industrial waste problems predominating in the Northeast, agriculture-related contamination in heavily agricultural states, and saltwater intrusion in metropolitan coastal areas.

Surface Water Protection

The Association of Metropolitan Water Agencies (AMWA) supports protection, preservation and cleanup of this nation’s surface water resources through control of both point and nonpoint source pollution. AMWA supports utilizing the watershed approach as the framework for bringing together all stakeholders to identify problems within a watershed and to solve water quality concerns.

AMWA also urges federal, state and local governments to coordinate program efforts to make better use of available resources (technical, institutional and financial) and to encourage flexible innovative approaches to meeting water quality objectives.

In addition, AMWA encourages greater recognition by federal and state levels of government of the importance of rivers, streams and lakes as essential sources of drinking water. AMWA urges states to strongly consider drinking water contaminants (particularly those with acute effects) when defining impaired waterways within their borders. AMWA further urges EPA and state authorities to establish water quality criteria and standards such as total maximum daily loads (TMDLs) for pollutants of concern to drinking water suppliers. AMWA supports the application of TMDLs and the designation of water bodies as drinking water sources where applicable to protect source water.

Finally, the transition from today’s form of regulatory control to one based on a watershed management framework will take time and resources. In order for this transition to take place, AMWA encourages all levels of government to commit adequate financial and technical resources for the long-term.

Rationale:

Surface water supplies provide over 50 percent of the total drinking water demands of this country. These water sources are vulnerable to potential chemical and biological contamination.
Future improvements in water quality will be dependent on managers taking a broader focus than exists in many areas today. Only by evaluating the entire watershed to determine the interaction of all pollution sources (urban, suburban, rural and agricultural point and nonpoint sources) will decision makers be able to develop a management approach that identifies the specific pollution sources that require additional controls so that water quality goals can be achieved.
Nonpoint sources of pollution comprise the largest source of water pollution and remain one of the biggest challenges. Federal and state governments need to encourage the agricultural community (through regulatory requirements if appropriate) to participate in solving nonpoint source pollution problems attributable to agricultural practices.
Governmental coordination and cooperation are essential because watersheds often cross numerous political boundaries and the scope of these watershed planning efforts can require significant time and resources.

Drinking Water Research

The Association of Metropolitan Water Agencies (AMWA) believes continuing, federally-sponsored, health-based research is needed in a variety of areas including: understanding the health risks of waterborne substances; development of improved analytical techniques to more accurately measure the level of contaminants in drinking water; protection of drinking water supplies from contamination; identification of the most reliable and efficient methods for removing contaminants from drinking water; and development of methodologies and technologies to detect, prevent, and respond to acts of terrorism. Research should also address regional and local differences in source water quality. All research should be performed by qualified, reputable research organizations. Further, it should, to the extent possible, be oriented to provide information of direct benefit to water supply utilities and regulators.

AMWA urges Congress to provide EPA program funding at levels that will allow essential, thorough health effects research on disinfectants and disinfection byproducts. Health effects studies require special attention so that a firm, scientific basis exists for regulatory decisions including the risk tradeoffs of disinfection practices.

Regarding homeland security research, AMWA believes that the federal government through EPA and/or DHS should help fill gaps in research with a national scientific research and development program. The need for new, sophisticated technologies in water security is paramount to help water systems detect and respond to terrorist threats. AMWA also encourages the inclusion of cyber terrorism prevention and response in the research program. Water utilities increasingly rely on information systems to control many aspects of water treatment and distribution. It is essential that resources be invested now to protect water systems from physical, contaminant, and cyber threats in the future.

AMWA strongly endorses the AWWA Research Foundation’s voluntary research program, which is funded voluntarily by public and private water utilities. AMWA believes that the major focus of the Foundation’s research should remain on scientific, technical, and management issues of concern to the water supply industry. AMWA encourages Congress to maintain funding for AwwaRF and other water research organizations. The Foundation should actively seek opportunities for co-funding research with the Water Environment Research Foundation on issues of interest to both water and wastewater utilities. AMWA supports health effects research but believes that any effort to involve the Foundation in such research should be done only after extremely careful deliberations and, if conducted, should be performed by qualified, recognized health research organizations.

AMWA supports the efforts and funding of CDC, EPA and other organizations to continue research on the occurrence and significance of waterborne diseases.

Rationale:

Very little data exist regarding the health impacts of many of the substances now appearing in both surface and ground water supplies.
Health effects research is urgently needed and extremely expensive. The federal role in drinking water research should emphasize the development of scientific health effects data.
The EPA Office of Ground Water and Drinking Water and the drinking water research and development program have historically been underfunded, and, therefore unable to develop adequate occurrence, health effects, analytical methods, and Best Available Technology data for regulations. The regulation of disinfectants and disinfection byproducts demands adequate funding because a large majority of Americans are served by systems using water treatment processes. Adequate funding is essential to study health impacts, and eliminate incorrect decisions with resulting high costs.
Research into the most effective means of controlling known contaminants is needed to assure their removal is accomplished as reliably, efficiently and economically as possible. Required treatment technologies may be very costly, thus imposing a major burden upon water suppliers. Requiring the use of such technologies before they have been thoroughly demonstrated and proven under field operating conditions could result in substantial investment in a poorly suited technology, in the improper application of that technology, or in unintended water quality impacts.
Because of the public health and financial implications of drinking water related research, it is essential that it be performed by highly qualified and objective organizations.
To maximize the use of limited research budgets as well as the operating budgets of water utilities, research should be oriented toward projects that will produce information of direct benefit to water suppliers and regulators. The research is needed to help utility managers make decisions about how best to allocate resources to provide high quality water and meet federal and state requirements.
Water was identified as one of the nation's critical infrastructures. Recent global events have borne out the need for utilities to focus on finding new ways to improve the security of water system infrastructure and their operations.
To prevent duplication of effort in research, federal roles should be coordinated through designation of a lead agency.

Water Conservation

The Association of Metropolitan Water Agencies (AMWA) believes that federal, state and local water supply policies should encourage the conservation of the nation’s water resources. Individual water utilities should develop and implement their own system specific conservation programs, which could include participation in programs such as EPA's WaterSense, and take appropriate steps to ensure that there are adequate water supplies, even during periods of drought, to meet local needs. Water conservation should be accomplished through activities that result in the efficient use and management of water such as:

Metering of all water supplied as a basic conservation incentive and to measure the effectiveness of all operations including conservation activities;
Supporting adoption of national plumbing products efficiency standards;
Initiating regular water system audits to identify and correct leaks, unauthorized, or wasteful uses; and
Educating and encouraging customers to use water wisely.

There are significant regional differences in water resources, usage requirements, system capacities and demographics. The following measures should be considered locally and, if appropriate, implemented in a manner tailored to regional conditions:

Incorporation of conservation measures in all planning to meet future water needs;
Elimination of declining block rates;
Elimination of uniform monthly water rates without a usage component;
Promotion of seasonal rates, surcharges, increasing block rates and other rate structures that encourage wise water use options when appropriate for local circumstances particularly during periods of water shortages, drought, rising demand, or rising water system costs;
Efficiency improvements in industrial and agricultural uses of water; and
Development and employment of beneficial reuse projects that meet appropriate public health standards and are cost effective.

State implementation of EPA’s water conservation guidance should follow these general principles.

Rationale:

Water, perhaps the most precious natural resource, without which life would be impossible, should not be wasted. Even relatively minor shortages can disrupt normal living patterns and may undermine a variety of economic activities.
Conservation is a key part of water resource management which must assure that present and future municipal, industrial, agricultural, hydroelectric and instream needs can be met in an economically and environmentally sound manner.
Local, regional, legal, climatic, source, economic and environmental differences must be taken into account as conservation policies are developed at the national, state and local levels. The appropriate mix of conservation measures must be selected based on these differences.

Alternative Water Resource Development

The Association of Metropolitan Water Agencies supports a comprehensive, coordinated program that integrates governmental programs with the needs of water utilities to enhance existing water supplies. This requires the development of alternative water resources including desalination, beneficial reuse, prudent conservation measures and innovative programs developed through research to augment existing water supplies.

AMWA believes the establishment of reliable funding mechanisms that facilitate and encourage innovation and the development of new technologies in the area of alternative water resources is critical. Diversifying resource options that have demonstrated to be safe and cost effective will provide water utilities with choices and will allow more flexibility in operations and a greater ability to manage future risk due to uncertainties in demand, source availability and climatological conditions.

Federal and state governments should partner with the drinking water community to conduct research and develop technologies to produce alternative water resources, reduce water consumption, and resolve challenges associated with the use of alternative sources of water. The federal government should fund much needed research to review the possible adverse health effects of indirect reuse and provide guidance on the treatment techniques needed to ensure human health and safety. To this end, research should be conducted to develop products that are energy efficient, environmentally friendly, and reduce the production and disposal of waste products.

Rationale:

In many communities, demands from business, agriculture, and the environment, together with population growth, have placed a tremendous strain on existing sources of both groundwater and surface water, jeopardizing its long-term sustainability.
In addition to encouraging and promoting water conservation measures, water utilities have to diversify their portfolio of source options to ensure the water demands of the communities served are continually met.
The socio-economic and environmental impacts of a prolonged drought are severe and far-reaching. There is a need to develop renewable resources that are “drought-proof” to mitigate the damaging effects of long-term droughts.
Beneficial direct reuse allows for a different quality of water to be used as appropriate, which saves potable water for its highest and best use.
Beneficial indirect reuse also augments existing water supplies by reclaiming a portion of return flows, thereby, adding additional inflow into existing supply reservoirs.
Alternative water resource development also has positive implications for meeting present-day emergency response situations, and security challenges.

Wetlands Protection

The Association of Metropolitan Water Agencies (AMWA) supports federal, state and local efforts to develop clear, coherent, coordinated goals for the protection of vital wetlands. However, some usage of wetlands for water supply is vital to the well being of the nation. AMWA supports the concept of “no net loss” and appropriate mitigation programs to meet that end when wetlands must be used to meet water supply and other essential needs and the need to promote the preservation of ground water recharge areas from potential development. One primary goal should be the streamlining of application and approval policies and procedures so that public time and funds are expended efficiently in meeting public water supply needs.

Rationale:

Wetlands are an extremely valuable link in ecosystems supporting wildlife, fisheries and other aquatic resources. They provide food, breeding and wintering grounds for waterfowl, sustain nearly one-third of the nation’s threatened or endangered species, and provide exceptional biological productivity. Wetlands also provide valuable recreation and outdoor space areas.
Wetlands are inseparably related to the supply of safe, high quality drinking water. Wetlands may be central to local and regional hydrologic cycles serving to filter sediment, remove pollutants, recharge aquifers, control flooding and reduce erosion. Water intake structures, reservoirs and other facilities must often, by their nature, be located in or utilize wetland areas. Such use is appropriate with proper mitigation since water supplies provide essential public benefits.
Because of the nature and public benefit of many water supply projects, timely action and decisions are necessary so that public funds are not misdirected and public needs can ultimately be met. To ensure appropriate and efficient use of public funds, streamlined laws, regulations, policies and procedures are needed.

Competitiveness and Public-Private Partnerships

The Association of Metropolitan Water Agencies (AMWA) strongly believes that the interests of drinking water consumers are well served by effective, efficient and competitive publicly-owned water systems dedicated to providing consumers with safe and affordable drinking water.

AMWA further believes that publicly-owned and competitively operated water systems can achieve and maintain a competitive position by integrating into their operations the best practices found in both the public and private sectors and by creatively incorporating the use of private sector resources where appropriate.

AMWA opposes Congressional legislation indicating a preference, whether implicit or explicit, supporting the privatization (ranging from the sale of assets to contract operations) of publicly owned drinking water agencies. It is AMWA’s position that only local communities can determine whether privatization is an acceptable alternative to public service management.

Rationale:

Publicly-owned and operated water systems benefit drinking water consumers in the following ways:
- The control, responsibility and accountability for the entire water system is clearly defined.
- There are no profit motives involved that could influence key decisions.
- Publicly-owned and operated water utilities have a commitment to make needed capital investment by virtue of ownership, accountability and a long term perspective.
Publicly-owned and operated water systems have the motivation and the tools to be competitive including:
- A keen awareness of the local community's needs and values.
- A clear mandate to meet those needs and incorporate those values into the mission of water systems.
- Experienced, knowledgeable and dedicated staff.
Publicly-owned and operated water systems have demonstrated their ability to compete by:
- Creative use of private sector resources and outsourcing of various services while preserving public control and accountability.
- Improved efficiencies resulting from industry-wide benchmarking and other similar activities.
- Willingness to streamline cumbersome operating rules and procedures (e.g., procurement and personnel).
- Successful participation in a number of managed competition processes.
- Creation of effective partnerships between management and employees (in many cases through formal competitiveness agreements and relationships with labor unions).
While many utility-wide operating contracts between large metropolitan water systems and private firms have not been successful, some utilities have found that contracting with firms to operate individual components of their systems may be beneficial.

Water Supply Policies and Programs: State and Federal Roles

The Association of Metropolitan Water Agencies (AMWA) believes that states should determine water supply policies and administer water supply programs, including the delegated implementation responsibilities for the Federal Safe Drinking Water Act. AMWA believes that this delegated implementation of the Act (“State Primacy”) serves both federal and state interests in an effective national drinking water program.

The cost of administering the current and forthcoming regulatory requirements of the Act will increase substantially over the next several years and increased funding for state program implementation is needed. AMWA believes that federal funding for the state administration of safe drinking water programs should be increased to cover the full costs of these federally mandated requirements. Any additional related state drinking water quality programs should be funded from the states’ general revenue sources. To the extent that states impose fees and other direct charges on regulated water supplies, these fees and charges should be based upon demonstrable costs, equitably applied to all water suppliers, and not used to displace current funding.

Rationale:

States are much closer to local governments than is the federal government. Therefore, they are in a better position to understand and respond to the needs and priorities of urban water suppliers and the people they serve.
Financial resources vary among the states and among localities within a state. Accordingly, each state should be free to set compliance schedules that realistically reflect a water utility’s ability to meet the deadlines, consistent with protection of public health.
Separating the enactment of regulations from the financial responsibility for their implementation removes incentives for the regulators to weigh the overall societal impacts (benefits and costs) of their requirements against the finite resources available.
In many states, water suppliers already pay taxes or other fees to their states’ general funds. In some instances, these tax and fee collections already exceed the budgeted cost of state drinking water programs.
In many states, general fund commitments to drinking water programs have not only not kept pace with regulatory growth, but have remained static or retreated in the face of that growth.

Tax-Exempt Financing

The Association of Metropolitan Water Agencies (AMWA) urges Congress to retain and expand its strong support for the availability and use of tax-exempt bonds to finance essential public water supply facilities, including construction, rehabilitation and other system improvements. This authority to finance essential governmental services on a tax-exempt basis is vital to the efforts of metropolitan water agencies to continue to provide high quality, safe and reliable supplies of drinking water. AMWA urges Congress to resist restrictions that encumber public water agencies’ efforts to raise needed capital to address water supply needs and to repeal those sections of the Internal Revenue Code that limit tax-exempt financing.

Rationale:

Tax-exempt bonds remain the most significant source of capital financing to meet the needs of water suppliers.
Elimination of tax-exempt status would seriously erode the ability of AMWA member agencies to meet existing and anticipated needs, including any new drinking water quality standards.
Elimination of such tax-exempt financing would constitute a fundamental departure by the federal government and could threaten the ability of state and local governments to finance basic governmental facilities and services.
Restrictive arbitrage provisions unnecessarily increase the costs of project financing.

Financing Infrastructure Renewal

The Association of Metropolitan Water Agencies (AMWA) believes that a well-functioning water system infrastructure is fundamental to protecting the health of drinking water consumers. Although there are differences of opinion over the actual amount of funding needed to refurbish this infrastructure over the next 20 years, there is general agreement that there is an investment shortfall and that billions of dollars are needed.

AMWA believes that local water supply operations should rely primarily on water rates and other locally generated revenue to support the costs of their operations –and infrastructure replacement. AMWA supports the development of appropriate asset management plans and a demonstrated commitment to building a capital replacement fund. AMWA also supports efforts to continuously improve system operations, consolidation where feasible and appropriate and the institutionalization of sound business practices.

AMWA also recognizes that local economic conditions vary tremendously around the country and that the cost of meeting federal and state regulations impacts systems differently and is highly dependent on the abundance of supply and the quality of source water.

Therefore, in light of the complexity surrounding this issue, to address the infrastructure investment shortfall, AMWA supports a state-run, federally financed investment fund that includes loans and grants but that establishes appropriate conditions for eligibility (including, for example, demonstration by the applicant utilities that they are investing appropriate levels of their own revenues in capital repair and replacement). These funds should be targeted to enhance the long-term local sustainability of public water systems, including regional partnerships, and addresses the short-term infrastructure shortfall. Most federal drinking water assistance is reserved for smaller water systems. AMWA encourages Congress to increase its assistance to metropolitan systems – systems serving 100,000 people or more.

AMWA further supports the refinement of methods used for predicting infrastructure needs to maximize their accuracy in national cost estimates, as well as to characterize the needs of individual agencies. AMWA also supports investments in research to develop technology that best utilizes our limited resources to restore and improve infrastructure.

Rationale:

Public water systems should generally rely on rates and other local resources to fund operations, maintenance and infrastructure improvements.
However, over the next 20 years, drinking water systems face an estimated overall infrastructure investment need of $480 billion. Even with billions of dollars being spent locally, an estimated shortfall of $11 billion per year is predicted. In addition to capital improvements, O&M costs over the same period are estimated to run approximately $540 billion or $27 billion per year.
In addition to capital needs and O&M costs, federal and state regulations add significantly to the cost of providing safe and affordable drinking water.
The Federal government has a history of providing significant funding for the development of drinking water supplies particularly in the west and southwest. More recently, the Federal government created the Drinking Water State Revolving Loan Fund intended to assist drinking water systems with compliance with the Safe Drinking Water Act.
Metropolitan water systems provide nearly 60 percent of the country’s drinking water, yet only 22 percent of DWSRF funds have thus far been distributed to these systems. Furthermore, to date there are 18 states that have provided no funding to metropolitan water agencies. These are states with metropolitan communities and aging infrastructure.
Local, state and federal governments contribute to the cost incurred by drinking water systems and each level of government should participate, in an appropriate way, to pay for those costs.
Increased research funding that is well targeted, can have a considerable payback to agencies to reduce the overall infrastructure investment needed in the next 20 years.
Partnerships can help water systems in communities in need address infrastructure issues through financial, technical, operational and managerial cooperation and assistance.

Development of Water Security Legislation and Requirements

The Association of Metropolitan Water Agencies (AMWA) recognizes that water utilities must protect their critical facilities from acts of terrorism and other hazards because the provision of drinking water is fundamental to the health and economic prosperity of communities across the nation. Drinking water utilities’ first responsibility is to protect public health by providing potable water. Therefore one federal agency should take the lead in helping utilities achieve this mission, with other agencies in a supportive role.

AMWA believes that Congress and the Administration should proceed with caution in the establishment of competing and duplicative security programs between EPA and DHS. While both federal agencies may have security responsibilities, conflicting or duplicative requirements that have an impact on water quality and treatment could be dangerous to public health, would be a waste of both local and federal resources and would complicate compliance efforts.

Having more than one federal agency with authority over water security could be not only inefficient, but could impair the ability of drinking water systems to fulfill their missions, making simultaneous compliance with multiple regulations difficult or even impossible. Specifically, legislative proposals that call for or would lead to the adoption of alternative treatment practices that are inconsistent with those selected locally fail to recognize the potential for negative risk trade-offs. Requirements that propose, directly or indirectly, to displace locally preferred and effective treatment practices could undermine public health. Also, if duplicate measures are adopted by federal agencies, water systems will have difficulty assuring compliance and could incur costs with no real improvement in security.

In addition, some new water security programs include the collection of data from water providers. Given the sensitive nature of water security information, AMWA believes that Congress, states and local governments should explicitly prohibit under public information laws the disclosure of such information. Likewise, federal, state and local agencies must take all internal precautions to prevent the inappropriate disclosure of water system information.

Finally, providing safe water is a local public service, and therefore new federal security requirements should be accompanied by federal funding assistance. Otherwise, these new requirements will amount to unfunded federal mandates on local governments at a time when water treatment facilities are facing hundreds of billions of dollars in other priority infrastructure projects.

Rationale:

All metropolitan drinking water agencies have complied with the 2002 Public Health Security and Bioterrorism Preparedness Response Act by developing vulnerability assessments and submitting them to EPA and by preparing emergency response plans. Since then, water systems have made significant strides in protecting their consumers by protecting their facilities and water quality.
Water utilities are essential to maintaining the public’s health, as well as its trust and confidence in a safe and reliable supply of water. Water utilities are on the front line for defending critical water facilities across the United States.
Various water security proposals have included language requiring utilities to consider or implement “inherently safer technologies.” Such mandates, if enacted, could conflict with drinking water treatment options determined locally based on local source water quality and economic conditions. Switching from one technology to another is a matter of risk-tradeoffs, such as whether to manage risk presented by large chlorine gas supplies or to accept new risks from more frequent deliveries of smaller quantities by truck.