People, Regulations Strain Water and Sewer Systems

AMERICA'S water and sewer facilities are staggering under twin demands: expanding urban populations and stricter environmental regulations.

The Environmental Protection Agency (EPA) estimates that it will cost $80.4 billion to upgrade municipal wastewater treatment facilities. Of this amount, $12 billion is needed to bring facilities that are violating environmental regulations into compliance.

At the same time, the federal government is reducing its direct spending to help localities build new waste-water treatment plants. After passing the 1972 Clean Water Act with tough new standards for water treatment, Congress dug into its pocket, boosting aid to local governments for water facilities from $1.3 billion in 1972 to $7.2 billion in 1977. The assistance was intended to be temporary, however. By 1990, funding had dropped to $2.6 billion, and the 1987 amendments to the Clean Water Act mandate t hat federal subsidies end by 1994.

As federal assistance dropped off in the late 1980s, local government budgets also were running into new constraints. Though city government revenues shot up 22 percent during the '80s, 54 percent of cities and towns surveyed by the National League of Cities are in the red this year.

With less government money available and water quality standards growing, household water bills could double in the next decade, the EPA reports.

"There is a terrific gap between federal funding and the increasing requirements because of higher environmental standards," says Roger Feldman, a partner at McDermott, Will & Emery, a Washington law firm. Federal support is also lacking to help finance "higher and higher filtration standards" for drinking water, he says.

In an effort to narrow that gap, Sen. Pete Domenici (R) of New Mexico proposed legislation to allow local governments to issue "Environmental Infrastructure Bonds." These would be designed to attract private financing to help municipalities build and run water treatment facilities. He has been trying for five years to get the amendment passed.

Speaking on the Senate floor last week, Mr. Domenici said that "if you go out into the hinterland and talk to the people who run our cities ... the one thing you hear almost constantly is, `Why do you continue to give us so many mandates and then you do not help us pay for them?' "

"I don't see how we can meet future needs without greater reliance on the bond market and private investors," he said. Though the amendment was tabled, the senator says he will reintroduce it next year.

Infrastructure maintenance problems currently hitting New York City provide a hint of the challenges that lie ahead for many other cities. New York's first sewer was dug in 1696, and its first water supply system was installed in the late 1700s.

Of the 6,300 miles of sewer pipe in the New York system, only about 25 miles are replaced annually.

The city's current 10-year capital plan provides nearly seven times as much money for emergency repair of collapsed sewers as it does for scheduled re-placement of old pipe. Because emergency re-pair is 30 percent more expensive, a report by the Infrastructure Institute in New York advocates boosting the replacement schedule to reduce overall costs.