SRF Budgets Take Beating, Pipeline Safety In Focus, Fracing Initiative Announced

May 2011, Vol. 66 No. 5

The EPA sewer and drinking water construction budgets for the current fiscal 2011 year dropped precipitously in the final budget passed by Congress. Fiscal 2011 actually started last Oct. 1 but Democrats and Republicans in the House and Senate had been unable to agree on a budget.

Instead, they passed a series of continuing resolutions (CR) which allowed federal programs to be funded in fiscal 2011 at fiscal 2010 levels.

But when Republicans and Democrats finally agreed on a final fiscal 2011 budget in mid-April, it included a severe cut in funding for the EPA's Clean Water and Drinking Water State Revolving Funds. The program provides money to state governments which in turn make low-interest loans to cities and counties for infrastructure construction projects. In fact, the cuts to the two SRF budgets were among the biggest in the entire final fiscal 2011 budget, a reduction of $997 million total from the fiscal 2010 total of $3.487 billion.

In FY 2010, the CWSRF received $2.1 billion and the DWSRF $1.387 billion. In FY 2011, their budgets will be $1.525 million and $965 million.

Water infrastructure lobbyists in Washington had slightly different views of the cuts. Ken Kirk, executive director, National Association of Clean Water Agencies (NACWA), believes that the budget cuts "are misguided and ignore the very real needs and financial constraints facing states and municipalities in meeting a growing array of costly Clean Water Act (CWA) requirements."

Diane VanDe Hei, executive director, Association of Metropolitan Water Agencies, admits the cut to the drinking water SRF is disappointing. But she tries to look on the bright side. "We're encouraged that the DWSRF's appropriation of $965 million is $135 million more than what it would have received under H.R. 1, and represents the third-highest annual appropriation in the history of the program," she states. H.R. 1 was the bill the House passed in February which would have cut the entire federal 2011 budget by $61 billion. It never passed the Senate.

SRF funds allow cities such as Pueblo, CO, to receive a $25 million loan at 2.8 percent interest to put in place an active sludge mode of treatment for removal of ammonia from its wastewater. That sewer loan was obtained about a year and a half ago. Gene Michael, the wastewater director in Pueblo, says the city would have had to pay 6 percent for a bank loan.