Baby Steps: 14th Annual Municipal Survey

By Robert Carpenter, Editor | February 2011, Vol. 66 No. 2

So, for municipalities, the question remains: where will the money come from? With Federal spending hitting record levels – and perceived as out-of-control by the general public -- proposals such as a second wave of Federal stimulus funding are remote as are other proposals such as an infrastructure bank. Increased spending proposals for the CWA or DWSRLF will face intense scrutiny and most likely be held at current levels or even scaled back.

States and cities are also still reeling from the recession and many face severe budget shortfalls. California and Florida’s financial woes are well documented but even states like Texas that weathered the recession better than most, is dealing with a projected two-year budget shortfall of $27 billion.

For those cities under consent degrees, the road to recovery is indeed steep as not only are they struggling with budgets, but there is no relief from their negotiated settlements with the EPA. In fact, President Obama’s regulatory initiatives at the Environmental Protection Agency (EPA) will probably be less affected by changes in congressional makeup. Increased enforcement by the EPA for cities out of environmental compliance began to ramp up in 2010 and is expected to continue – at least for 2011.

Silver lining
Still, even with all the funding, regulatory and legislative concerns, most municipalities believe that if they can tread water in the first half of 2011 and gain additional stability, the back half of the year could see at least limited spending traction moving forward into 2012.

Total spending for sewer, water and storm water construction and rehabilitation for underground piping infrastructure is projected to top $13.86 billion in 2011 compared to 2010’s $13.48 billion, an increase of $320 million or 2.8 percent. While that figure, on the surface, is not exciting news, further analysis reveals a strong positive and reason for encouragement.

In 2009 and 2010, the industry struggled mightily to survive. Cities were frustrated by the backlog of projects piling up as vanishing funding forced delays or even cancellations of vital infrastructure needs. Irritated citizens lost confidence in the ability of their city government and departments to competently manage the business of municipalities.