HomeMy WebLinkAboutmemo and letter to Baucus re WIFIA1
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Craig Woolard, Director of Public Works
Chris Kukulski, City Manager
SUBJECT: Letter to Senator Max Baucus regarding the Water Infrastructure Finance and Innovation Act pilot program as part of the Environment and Public Works Committee’s
draft Water Resources Development Act legislation
MEETING DATE: February 4, 2013
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Authorize the City Commission to sign a letter to Senator Max
Baucus supporting the Water Infrastructure Finance and Innovation Act pilot program.
BACKGROUND: A Water Infrastructure Finance and Innovation Act pilot program is being
considered as part of the Environment and Public Works Committee’s draft Water Resources Development Act legislation. This program could provide the City of Bozeman with low-cost
financing options for future large water infrastructure projects.
FISCAL EFFECTS: This program would offer low cost financing options for large water
infrastructure projects.
ALTERNATIVES: As suggested by the City Commission.
Attachments: Letter
CITY OF BOZEMAN Bozeman, Montana Office of the City Commission
Street address: 121 N. Rouse Ave. Phone: (406)582-2320 Mailing address: P.O. Box 1230 Fax: (406) 582-2339 Bozeman, Montana 59771-1230 TDD: (406) 582-2301
January 30, 2013
The Honorable Max Baucus
United States Senate
511 Hart
Washington, DC 20510
Dear Senator Baucus:
The City of Bozeman deeply appreciates the inclusion of a “Water Infrastructure Finance and Innovation Act”
(WIFIA) pilot program as Title X of Environment and Public Works Committee’s draft Water Resources
Development Act (WRDA) legislation. Just as the committee’s WRDA bills have historically enjoyed strong
bipartisan support, we believe that well-crafted WIFIA legislation that creates jobs as well as promoting public
health, fire protection, environmental protection, and economic growth will attract similar widespread
backing.
A recent study commissioned by the American Water Works Association (AWWA) has found that restoring our
existing drinking water systems and expanding them to serve a growing population will cost at least $1 trillion
in the next 25 years. Wastewater infrastructure needs roughly parallel those for drinking water. In addition,
many communities face serious affordability problems as they struggle to address the twin challenges of
crumbling infrastructure and additional regulatory requirements.
Studies of water infrastructure finance options have identified a WIFIA as a particularly innovative and
effective finance tool, which is important in the current fiscal climate. As you know, WIFIA would offer low-
cost financing to major water infrastructure projects, and require loans to be repaid in their entirety to the
U.S. Treasury. This approach will help local water systems stretch their dollars further, with limited or no long-
term federal budgetary impact due to the historically low default rate of local water and water utilities. In
addition, under the provisions of the Federal Credit Reform Act, a WIFIA would leverage a large volume of
lending for a relatively small federal investment.
A WIFIA’s ability to offer loans for large water infrastructure projects is crucial. As you know, even though we
don’t have “large” cities in Montana, our water projects can be large in scope and cost. Over the last several
years, the City of Bozeman has invested over $40 million in a new water treatment facility and over $40
million in a new wastewater reclamation facility to serve our growing and vibrant community. These projects
could have benefitted from the proposed WIFIA program. As Bozeman continues to grow there will be needs
for additional large water and wastewater infrastructure projects and having the proposed WIFIA program in
place could save our community millions of dollars of financing costs over the life of these projects. Other
communities in Montana would benefit as well.
Large projects, particularly those costing more than $20 million, are often beyond the means of most drinking
water and clean water state revolving loan fund programs, which tend to focus on small to medium-sized
projects. We envision WIFIA complementing the existing SRF programs, thus ensuring that communities of all
sizes have an opportunity to upgrade their water infrastructure with low-cost financing.
In reading the draft, we have some suggestions to make this legislation even more effective. Those are
attached. We applaud Sen. Jeff Merkley’s introduction of a WIFIA bill as well and look forward to working with
the committee on passage of water infrastructure finance legislation.
Again, we commend the Committee on Environment and Public Works for taking these important steps in
addressing the nation’s water infrastructure challenges and gladly offer our assistance.
Sincerely,
Sean Becker Jeff Krauss Carson Taylor
Mayor Deputy Mayor Commissioner
Cyndy Andrus Chris Mehl
Commissioner Commissioner