Now is the Time to Address NYS Wastewater Infrastructure Improvements and Funding

Throughout New York State and across the nation, the very infrastructure that keeps our society functioning (such as roads, bridges, drinking water systems, wastewater systems, and transit systems) is in trouble. 

Soon you may start hearing more about proposed Federal infrastructure funding as Congress gets around to this issue. It is important that any such legislation adequately address wastewater in a way that local governments can take advantage of.

In 2017, the New York State chapter of the American Society of Civil Engineers released a “report card” for the state’s infrastructure (covering 9 types of systems) and based on eight critical criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation. Overall, the state’s average grade was a “C-“.  The worst score was for given to wastewater (i.e. sewage) systems. It scored a “D”. 

This article will primarily focus on New York State’s wastewater infrastructure needs and on recent proposals from the White House for dealing with infrastructure needs. 

The information for this article was gathered from the American Society of Civil Engineers, the Center for Watershed Protection, the University of North Carolina School of Government’s Environmental Finance Center, and the White House’s Legislative Outline for Rebuilding Infrastructure in America. 

Across New York State, 610 small and large wastewater treatment facilities serve 1,610 municipalities. These facilities, which collectively serve 15 million people, are dedicated to keeping water clean and safe and range in size from New York City’s facilities that process 1.3 billion gallons a day to small village systems that handle less than 100,000 gallons a day. The only wastewater treatment facility on Hempstead Harbor is Nassau County’s Glen Cove Wastewater Treatment Facility, which currently handles 3 million gallons a day and has a capacity to handle up to 5.5 million gallons a day.

Aging infrastructure has become a critical problem for the state – 1 in every 4 of the state’s wastewater facilities are operating beyond their 30-year useful life expectancy, wastewater treatment plant equipment also averages 30+ years old, and 30% of the 22,000 underground miles of sewers are 60+ years old and operating beyond their useful lives. To repair, replace, and update New York’s wastewater infrastructure would cost $36.2 billion over 20 years. New York’s wastewater funding program is simply insufficient to drive even half of the reinvestment needed in infrastructure; for every dollar needed only 20 cents is provided to clean New York’s water. 

The Glen Cove wastewater plant has been upgraded over the years and is considered state-of-the-art but some of the sewer lines and pumping stations that convey sewage to the facility are aging just like other systems around the state.

While these wastewater plants in New York are currently meeting baseline technology limits, a growing number may no longer meet these standards as their infrastructure ages beyond its expected useful life. According to a NYS Department of Environmental Conservation (DEC) survey there are 22,000 miles of sewers, more than 30% of which are more than 60 years old and beyond their expected useful life. In addition, 25% of New York’s wastewater facilities are operating beyond their 30-year useful life expectancy.

The cost of repairing, replacing, and updating this wastewater infrastructure is conservatively estimated to be $36.2 billion over the next 20 years. In the past, the federal and state governments provided significant funding for infrastructure repair and replacement, but this is no longer true today. In the 1990s, the federal Construction Grants Program was replaced by a low-interest loan Clean Water State Revolving Fund (CWSRF) program, which requires locals to match federal investments making it harder for many communities to address their infrastructure needs. 

From the Fund’s inception through 2012, the CWSRF financed over 1,550 projects totaling over $12.5 billion, using a total subsidy of over $2.2 billion. While New York’s CWSRF program has been very well-managed and continues to provide necessary funding for municipalities, the funding mechanism is simply insufficient to drive even half of the reinvestment needed in infrastructure. For example, in 2013, only $1.4 billion of the $6.6 billion in identified needs were funded which means for every dollar needed only 20 cents was provided to clean New York’s water. 

The White House’s “Legislative Outline for Rebuilding Infrastructure in America” which was released early this year, outlines the President’s proposed steps to encourage increased state, local, and private investment in infrastructure. While the plan outlines programs for all types of infrastructure, this blog post provides a quick overview of the four proposed programs with relevance to water infrastructure.

While the White House’s Infrastructure plan proposes a significant influx of federal funds, these programs seek to attract non-federal revenue streams, encourage innovation, and increase involvement from the private sector.

A key principle of the plan is to encourage states, tribes, and localities to “move towards a model of independence” from the federal government. As such, while the proposed programs would make federal funds available, they also require significant investment at the local level. In New York State, tax caps on municipal budgets (which the legislature is proposing to make permanent) may pose a significant barrier to the ability of municipalities to take advantage of these funds. 

Water infrastructure (including drinking water, wastewater, and stormwater facilities) are identified as eligible infrastructure projects in four of the proposed programs. These are:

  1. Incentives Program 
  2. Rural Infrastructure Program
  3. Transformative Projects Program
  4. Expansions to Existing Programs (WIFIA and CWSRF)

Incentives Program

The Incentives Program would include $100 Billion and administered by the Department of Transportation (DOT), US Army Corps of Engineers (USACE), and the Environmental Protection Agency (EPA) and

is designed to use grants to encourage increased state, local, and private investment in infrastructure. The goals of the program are to attract significant new, non-Federal revenue streams, leverage Federal investments, and increase economic growth. Incentive Grants would not exceed 20% of new revenue, and the recipient would be required to achieve milestones toward obtaining increased revenue prior to receiving the grant award.

Rural Infrastructure Program

The Rural Infrastructure Program would provide $50 Billion of targeted investment into rural communities where it is needed to grow economies and enhance the health and safety of residents. 80% of the funds would be provided to each state to be distributed as block grants. 20% of the funds would be reserved for rural performance grants (areas in rural areas with populations of less than 50,000). In order to apply, a state would be required to create a comprehensive Rural Infrastructure Investment Plan that details how the intended projects leverage state, local, and private sector investment.

Transformative Projects Program

The Transformative Projects Program would allocate $20 Billion to be administered by the Department of Commerce, in partnership with other federal agencies. It is meant to encourage “bold, innovative, and transformative infrastructure projects that could dramatically improve infrastructure”. The program is intended to support projects that are capable of generating revenue and provide significant public benefits, but that carry risks that would typically deter private sector investment.  This program could be used for projects that improve performance, reduce user costs or introduce new types of services. Clean water and drinking water projects would be eligible.

Funding would be available under 3 tracks: demonstration (30% of eligible costs), project planning (50% of eligible costs), and capital construction (80% of eligible costs). The program would also provide federal technical assistance under any of the tracks.

Adjustments to Existing Water Infrastructure Programs

In addition, increased funding would go to existing federal programs including the Water Infrastructure and Innovation Act (WIFIA) and the Clean Water State Revolving Fund (CSWRF).

Expansion of WIFIA would remove the current lending limit of $3.2 billion and would also eliminate the requirement for borrowers to be community water systems. It would also reduce the requirement to obtain rating agency opinions from two to one and allow for reimbursement of costs incurred prior to the loan closing. Expansion of the CWSRF would make funding available for privately owned public-purpose projects (currently, only publicly owned treatment works are eligible).

For more details, see:

Leave a Reply