Association Comments on Tax Exempt Bonds Changes
On May 23, NACWA submitted comments along with a coalition representing the municipal water and wastewater sector on a proposed rule that would change the way the Internal Revenue Service (IRS) defines “political subdivision” for purposes of tax-exempt bond issuance. The rule imposes two new requirements: first, that political subdivisions operate in a way that provides “no more than incidental benefit to private persons;” and, second, that a single entity of state or local government must have control over the political subdivision.
Under existing regulations, a “political subdivision” is “any division of any state or local governmental unit which is a municipal corporation or which has been delegated the right to exercise part of the sovereign power of the unit.” This has meant that a public entity with authority to exercise taxing, eminent domain, or police (regulatory) powers, is able to issue tax-exempt bonds. If the proposed rule is enacted as is, certain member utilities may be at risk of not clearly meeting the new requirements, which could restrict the ability to issue tax-exempt bonds to finance projects.
NACWA’s comments focused on the impact the proposed regulations could have on utilities’ access to tax-exempt bonds and urged Treasury and the IRS to revise the proposed language. NACWA will appear at the public hearing at the IRS offices on June 6, and plans to meet with Treasury and the IRS to discuss the need to revise the proposed regulation to avoid unintended restrictions on the public water sector’s use of tax-exempt bonds. NACWA members with questions or comments on the proposed regulation should contact NACWA Deputy General Counsel,
NACWA Stormwater Proposal Included in House WRDA Bill
Last Wednesday, the House Transportation & Infrastructure Committee passed HR 5303, the Water Resources Development Act (WRDA) reauthorization package for flood control projects undertaken by the Army Corps of Engineers (ACOE). At the request of Representatives John Duncan (R-TN) and Dan Lipinski (D-IL), the Committee included a provision developed by NACWA designed to lead to better integration of municipal stormwater projects and ACOE-sponsored flood control projects in order to address water supply and/or water quality challenges faced by municipalities.
Water resources management is becoming a complex challenge for local communities as they confront issues such as severe and persistent drought in the West and extreme wet weather events in the Midwest and East. Depending on a community’s location, storm events can either lead to replenished water supplies or to larger water quality deadzones. Municipal stormwater management programs are increasingly imposing greater costs on ratepayers. The provision offered by Representatives Duncan and Lipinski provides an opportunity to help communities optimize stormwater resources to support water supply or water quality goals and to use ratepayer resources more efficiently.
The House proposed 2016 WRDA package has been characterized by many as a “pamphlet” version compared to the 2014 WRDA package and the Senate proposed 2016 WRDA package because it is limited to projects overseen by the ACOE. The full House and Senate may take up consideration of their respective proposals in June after which a conference committee will be convened to reconcile the two proposals. NACWA held a webinar last week discussing the highlights of the Senate package, which contains several policy priorities for Member Agencies. The Association will be working with its members to urge adoption of these proposals by Congress in a final WRDA authorization bill.
Funding for Integrated Planning Included in FY17 EPA Budget
The House Appropriations Committee released its proposed Fiscal Year (FY) 2017 spending package for EPA that includes the Administration’s request for $6.5 million to help communities develop plans under the Agency’s Integrated Planning initiative, one of NACWA’s key funding requests.
The Committee also included just under $2.1 billion for both the Clean Water (CW) and Drinking Water (DW) State Revolving Fund (SRF) programs; however, it shifted more money to the DWSRF ($1.070 billion compared to $863 million in FY16) than in previous years due to concerns over lead in drinking water. The CWSRF would see a substantial reduction under the proposal ($1 billion compared to $1.393 billion in FY16) and overall, the SRFs would receive approximately $150 million less than last year’s allocation ($2.257 billion). The House proposal provides $50 million for the Water Infrastructure Financing & Innovations Act (WIFIA), which EPA expects to launch later this year.
The proposed package, adopted by voice vote by the Interior & Environment Appropriations Subcommittee, will be considered by the full committee when Congress returns from its recess in June.
Members Provide Input on Great Lakes CSO Notification
NACWA hosted a call on May 25 with Member Agencies that have combined sewer overflow (CSO) discharges into the Great Lakes and EPA to discuss CSO notification procedures and costs. EPA is required by the FY16 appropriations bill to develop public notice requirements for CSOs into the Great Lakes, with implementation required by December 2017 (see Advocacy Alert AA 15-20 for more information).
The call provided an opportunity for utilities to provide information for EPA to consider as it drafts the notification requirements, including current practices that utilities use to monitor and model CSOs and the additional costs for expanding these systems. Though the appropriations language was limited to CSOs in the Great Lakes, EPA has expressed interest in applying the new public notice requirements nationwide. NACWA has objected to expanding the limited scope of Congress’ directive in the bill. The Association will continue to provide input to EPA about the impacts of notification requirements. Member Agencies with comments or information should contact
, NACWA Director of Regulatory Affairs.
Railroad Anti-Fee Campaign & Tennessee Standards Law the Focus of Stormwater Groups
On May 25, the Virginia Association of Metropolitan Stormwater Agencies (VAMSA) shared information with the National Stormwater Advocacy Network (NSAN) via conference call, regarding how national railroad companies are developing a national strategy to fight impervious area-based stormwater charges. In a particular example, the railroad attempted a legislative fix intended to rollback statutory authority to impose stormwater utility fees (“fees”) for railroad right-of-ways in Virginia. When this attempt failed, thanks in large part to VAMSA’s advocacy, the company filed a federal lawsuit challenging fees as discriminatory for charging railyards differently than residential properties.
It is highly likely that national railroad companies will continue to seek to avoid stormwater fees through a strategy aimed at state legislatures, city councils and site-by-site implementation. The group noted there could be a need for a national strategy and comprehensive joint effort to oppose the railroad companies’ efforts.
The Tennessee Stormwater Association (TNSA) and NACWA member, the City of Nashville, described the nuances of the recently enacted Tennessee Post Construction Standards law. The law would require that NPDES MS4 permits issued by the state be no more restrictive than federal requirements for post-construction management of stormwater. Both TNSA and the Tennessee Department of Environmental Conservation opposed the law – and on the call, TNSA discussed the possible effects it could have on Tennessee Phase I and Phase II communities.
Eighteen of Tennessee’s Phase II communities have already adopted a retention standard, as have some of the Phase I communities, such as Nashville. Nashville has taken steps to protect their program and outline how it complies with the “minimum federal requirements of federal law”, a.k.a. the Maximum Extent Practicable (MEP) standard.
Members are asked keep NACWA informed of any potential impact of these developments and if they begin to hear of similar activities cropping up in their states.
2015 Cost of Clean Water Index Survey Report Now Available
NACWA’s 2015 Cost of Clean Water Index Survey indicates that the average cost of wastewater services rose 3.1 percent in 2015, significantly more than the rate of inflation (as measured by the Consumer Price Index). The 2015 Index, released this week, found that the national average amount that a single-family residence pays for wastewater collection and treatment is now $452 per year.
This is the 14th consecutive year that sewer service charges have increased faster than inflation, doubling the average charge since 2000 ($222). In addition to the national overview information, the Index includes breakdowns by EPA Region. NACWA has conducted its Index Survey since the 1980s to provide a consistent benchmark for tracking fluctuations in what people are paying for wastewater services.
EPA Reviewing Clean Water Funding Mechanisms
EPA is collecting comments on the Information Collection Request (ICR) the Agency is planning to submit to Office of Management & Budget for its Water Infrastructure Finance and Innovation Act (WIFIA) application materials. The WIFIA program was authorized in the 2014 Water Resources Reform & Development Act (WRRDA) and provides loans and loan guarantees for clean water and drinking water projects.
This is a crucial opportunity for utilities interested in applying for WIFIA financing to review the application and provide input for EPA on the program. EPA will be using the comments collected to further evaluate recipients and to develop loan agreement documents. The supporting documents, including a draft application, are available on the federal rulemaking website. Comments are due by July 22, 2016.
EPA also submitted its Review of the Allotment of the Clean Water State Revolving Fund (CWSRF) Report to Congress on May 24. The Report was required under WRRDA 2014 and reviews the adequacy of the current CWSRF allotment formula to address the clean water needs in eligible states and territories.
Wipe Flushability Guidelines Work Continues
Work on improving the guidelines for flushability and labeling of wipes continued during a May 24 meeting. Representatives from NACWA, the Water Environment Federation (WEF), the American Public Works Association (APWA), and INDA (the trade association of the nonwoven fabrics industry) participated in the meeting, with Frank Dick, Vice Chair of NACWA’s Pretreatment & Pollution Prevention Committee and Industrial Pretreatment Coordinator for the City of Vancouver Department of Public Works in Washington State, participating on NACWA’s behalf.
The meeting included discussions about results from recent testing of wipes, along with how these tests can be used to inform the improved guidelines. The associations have a goal of finalizing the improved guidelines that are fully protective of wastewater utilities by September 2016. This effort is supported by NACWA’s Targeted Action Fund (TAF) and is an important part of NACWA’s ongoing Toilets Are Not Trashcans campaign.
Once the flushability guidelines are finalized, they will provide a useful basis for legislation on flushable wipes, such as the bill passed by the Minnesota Senate on May 19 that specified both flushability criteria for wipes labeled “flushable” and labeling requirements for non-flushable wipes. The bill was not voted on by the Minnesota House, but may be considered again next session. Since both the flushability guidelines and labeling code of practice are voluntary, legislative action may be needed in the future to ensure compliance nationwide.
EPA Releases Final Environmental Justice Plan, NACWA to Comment
EPA released a final draft of its Environmental Justice (EJ) 2020 Action Agenda on May 23, laying out the Agency’s plans over the next five years to incorporate EJ concerns into its actions and rulemakings. The Agenda is intended to integrate environmental justice into EPA’s initiatives, cultivate strong partnerships to improve on-the-ground results, and chart a path forward for achieving better environmental outcomes and reducing disparities in the nation’s most overburdened communities. EPA is accepting comment on the document until July 7.
EPA released a preliminary version of the Agenda last year for comment, and NACWA submitted comments encouraging the Agency to include affordability considerations as part of its EJ program. Since last year, NACWA has ramped up its interaction with EPA on EJ issues, including through formation of a workgroup. These discussions have been productive, with both NACWA and EPA agreeing that there are areas for additional collaboration and dialogue around environmental justice and clean water issues. NACWA will be working through the Association’s EJ Workgroup to develop comments on the 2020 Action Agenda.
The EJ Workgroup will also be spearheading, pending Board of Directors approval, a project to develop a compendium of EJ and community service practices at municipal clean water agencies. This document will not only help provide a resource for utilities looking to develop EJ initiatives, but it will also highlight the good work that NACWA members are already doing to address EJ concerns in their communities. Association members with thoughts or comments on the Action Agenda should contact NACWA Chief Advocacy Officer,
by June 17.
Media Highlights Broad Range of Clean Water Issues
The broad array of water challenges nationwide was the focus of a series of articles this month in Politico’s The Agenda. The issue includes articles on the federal role in water infrastructure, the Chesapeake Bay cleanup plan, a Q&A with DC Water’s General Manager - George Hawkins, and more. These articles provide an in-depth look into the various challenges facing the clean water sector and the specific funding and legal challenges to upgrading infrastructure and improving water quality.
The series also highlights the innovation and progress made by utilities as they embrace new technologies and become resource recovery agencies that manage wastewater as a resource. Clean water issues have been gaining increased media attention in the aftermath of the Flint water crisis and it is important to use this opportunity to share the clean water sector’s story with the public to build trust and support for water and wastewater infrastructure.
Infrastructure has also been a focal point for presidential candidates. Most recently, Secretary Clinton increased her support for infrastructure declaring that she intends to send a major infrastructure bill to Congress within her first 100 days in office. The plan would be “the most significant increase in infrastructure investment since President Eisenhower built the Interstate Highway System” according to a Clinton aide, and expands the previous $275 billion infrastructure proposal revealed last November.
NACWA is pleased to see the push for infrastructure from candidates and the attention that the campaigns have brought to the crumbling state of the nation’s infrastructure.
Rally Ho! NACWA attends its first River Rally
NACWA sponsored and participated in the River Network-hosted River Rally on May 22, and in doing so had a unique opportunity to join a community of river conservationists who are looking for ways to better collaborate with the municipal community. River Network brings together local caretakers, advocates, and river enthusiasts to protect and restore rivers and watersheds.
While in Mobile, Alabama, NACWA met with the President of River Network and other key environmental non-governmental organization leaders, who as a group are exploring entering into a Memorandum of Understanding (MOU). The group agreed to work together to ensure that each has a greater presence at the other’s annual meetings.
NACWA Participates in Water Quality Trading Meeting
Last week NACWA attended the National Network on Water Quality Trading's Spring Dialogue - Measuring Progress on Water Quality Trading . The event brought together conservation, agricultural, regulatory, and regulated point source communities to discuss the metrics and development of trading programs, building off of the comprehensive Water Quality Trading- Options and Considerations document the Network developed last year. The National Network is being coordinated by Willamette Partnership and has received funding from the US Department of Agriculture and Electric Power Research Institute. NACWA is engaged to bring the perspective of the clean water utilities to the Network and participates on its Steering Committee.
The National Network event was preceded by a daylong meeting led by the Association of Clean Water Administrators (ACWA) and Willamette Partnership, which NACWA was invited to observe. The meeting brought together a half-dozen state regulatory agencies engaged with water quality trading to create a series of templates that will be publicly available to state and local entities working to develop their own trading programs. Members should contact NACWA Manager of Legislative Affairs,
with any questions about these events.
New Report Focuses on Climate Change Practices in Stormwater Management
U.S. EPA’s Office of Research & Development released a report, Stormwater Management in Response to Climate Change Impacts: Lessons from the Chesapeake Bay and Great Lakes Regions, which explores ways to further the adoption of climate change adaptation practices in stormwater management. While the overall message of the importance of building local capacity, green infrastructure cost/benefit, and implementation of resilient practices within current governance structure, is one that the clean water community has heard before, the report is a good collection of tools, data, and methods for planners and utilities.
- Register for a webinar on Customer Assistance Programs at Drinking Water and Wastewater Utilities hosted by EPA's Water Infrastructure and Resiliency Finance Center on June 7 from 2:00 – 3:00 pm Eastern.
- Register today for the U.S. Water Alliance’s One Water Leadership Summit, June 8-10, 2016, in Atlanta, GA. The Summit is the premier gathering of the country’s sharpest minds addressing our nation’s most urgent water challenges to build stronger and more prosperous communities.
- Apply for the Utility of the Future (UOTF) Today recognition program by 5:00 pm Eastern, June 17, 2016.
From Conflict to Collaboration
NACWA is excited to welcome our first guest blog from the conservationist community. American Rivers has often been a strong partner of NACWA and our members, and this blog “cross-pollination” is an example of collaboration on a national level!