Advocacy Alert

NACWA is pleased to release a white paper today that outlines various funding and financing options the federal government could pursue to help municipal clean water utilities recover from the current economic challenges facing the sector due to the COVID-19 pandemic. 

The document, which has been reviewed by the Association’s Finance Workgroup, comes as many clean water utilities around the nation are facing unprecedented lost revenue due to the widespread economic impacts of the coronavirus pandemic. NACWA has estimated that the clean water sector could collectively face an approximate $16 billion impact, and the Association and its members have been aggressively advocating with Congress for financial support to help address these needs. The white paper outlines direct federal funding action Congress can take in the short-term, as well as some innovative financing solutions that could provide important financial relief in the medium to long-term. 

On the direct federal funding front, the paper notes that while some utilities were on a sound economic footing prior to the pandemic, the impacts of the widespread economic disruption associated with the outbreak are creating serious revenue challenges for many clean water agencies. These stressors – if not addressed to make up for lost revenue – threaten to exacerbate existing affordability challenges and negatively impact future utility investments.

At a time when the pandemic has reinforced the critical role clean water agencies play in providing basic public health and sanitation, the need for additional direct federal support has never been so clear. One option outlined in the paper, which NACWA has been advocating for, is the establishment of a federal Low-Income Water and Sewer Assistance Program to help the most vulnerable households pay for clean water service while also providing utilities with much needed federal financial assistance. 

The white paper also includes several innovative financing strategies that do not require a direct outlay of federal funds that Congress could pursue to assist utilities in recovering from the pandemic’s economic impacts. These strategies include restoring and accelerating advanced refunding, establishing a targeted water sector liquidity facility, expanding state revolving loan fund lending with short-term loans, expanding and improving access to bank qualified debt, and establishing a new taxable, interest-subsidized infrastructure bond. 

The concepts outlined in this paper will guide NACWA’s advocacy efforts to secure additional financial resources for the clean water community – both in the short-term as Congress debates the next COVID-19 relief package and in the long-term as federal policy emerges over the coming months. It is increasingly apparent that Congress will continue to evaluate numerous legislative vehicles for additional pandemic response well into the Fall and possibly into early next year, depending on the outcome of the November elections. 

NACWA thanks Eric Rothstein, with NACWA Corporate Affiliate Galardi Rothstein Group, and Jim Beard for their significant time and expertise in helping develop the white paper, as well as the Association’s Finance Workgroup for reviewing it. This is a “living document” that NACWA will continue to update and change over time as the economic response to COVID-19 evolves and new ideas emerge.  If members have thoughts or input on the document, they are welcome to share them – please contact Nathan Gardner-Andrews, NACWA’s General Counsel & Chief Advocacy Officer, with any comments.