Ensuring citizens have clean water without breaking the bank.
Our country’s drinking water and wastewater systems are deteriorating. There are still 6-10 million service lines made of lead, many in communities of color and low-income neighborhoods. The Environmental Protection Agency (EPA) has estimated it will cost hundreds of billions of dollars to modernize our drinking and wastewater systems. Under the Clean Water Act and Safe Drinking Water Act, the federal government contributes some funding to states through EPA's Clean Water and Drinking Water State Revolving Fund (SRF) programs.
States use this funding to make low-or no-interest loans to communities to build water and wastewater infrastructure, in addition to other assistance. These loans are repaid with interest, and these funds are then used for future loans.
A Problem.
Congress asked my organization to examine the sustainability of SRF funds. They were interested in understanding if this policy mechanism could reduce or eliminate the need for future appropriations. My team evaluated the factors that affect states’ abilities to (1) factors that affect selected states’ abilities to sustain their SRF funds, (2) selected states’ actions to enhance their SRF funds and views about sustaining the funds, and (3) steps that EPA takes as part of its oversight. We analyzed EPA and state financial data and interviewed EPA officials, nine experts, and officials in 21 states.
Through our analysis, we demonstrated there were several elements of the SRF program structure, established by law, that hindered the program’s financial sustainability without continued investment. Federal law requires states to use some SRF funds to subsidize borrowing costs. When given, such funds are permanently removed from a state’s SRF program.
Subsidy authorities and requirements have varied over time and between the two SRF programs. Subsidies help communities that cannot afford loans. Other factors that impact sustainability include administrative costs, and requirements to charge below-market interest rates, and limits on interest revenue from allowable investments.
An elegant solution.
A worthwhile investment.
SRF programs are not financially sustainable without continued investment or changes to the structure of the programs. Accordingly, we recommended EPA enhance its monitoring measures and develop projections for forecasting future lending capacity so Congress can make evidence-based decisions about either making continued investments or changing the structure of the programs. EPA is now forecasting.
Source Information
Infrastructure investment amounts: https://www.epa.gov/infrastructure/water-infrastructure-investments
GAO report: https://www.gao.gov/assets/gao-15-567.pdf
Leveraged Capabilities
Team Leadership
Program and project management
Policy design direction
Mixed Methods Research/Ops
Research design and planning
Secondary research
Generative primary research
(IDIs, qual/quant analysis, etc.)
Evaluative primary research
(Analytics assessments)
Client Relations and Business Development
Congressional relations
Stakeholder engagement strategy
Writing