June 2009 Vol. 236 No. 6

Government

Questions Arise On SRF Stimulus Funding

Questions are arising from states and localities about requirements for spending the water infrastructure funds in the Stimulus bill, called the American Recovery and Reinvestment Act (ARRA) of 2009.

The EPA has distributed $1.4 billion of the $4 billion from the Stimulus bill provided for the Clean Water and Drinking Water State Revolving Funds. States must commit 100% of their funds by Feb. 10, 2010.

Some states are uneasy about some the conditions for spending the funds. Chief among the sticky wickets is the “Buy American” provision. It states that construction companies must use U.S.-made iron, steel and manufactured goods on all sewer and drinking water projects funded with stimulus dollars. The EPA issued guidance on April 28 spelling out under what conditions states can apply for an exemption from that provision. (EPA Buy America guidance is at: http://www.epa.gov/water/eparecovery/docs/04-29-2009_BA_waiver_process_final.pdf)

Exemptions will be applied for on a large scale, apparently. The day after that guidance was issued, Matthew J. Millea, Acting President, New York State Environmental Facilities Corporation, told the House Transportation and Infrastructure Committee that there is “an inherent conflict” in the Buy American provision and the Green Reserve incentive. “While we would prefer to have these monies invested domestically, the reality is that many technological innovations require foreign made systems and materials,” Millea said.

The Green Reserve provision in the stimulus bill requires states to use 20% of their total grant for such things, in the sewer area, as energy-efficient retrofits and upgrades to pumps and treatment processes, or for green infrastructure which could include restoring natural hydrology by infiltrating, evapotranspiring and capturing and using stormwater. In the context of the DWSRF, green infrastructure consists of site-specific practices, such as green roofs and porous pavement at drinking water utility facilities.

Another issue regards states divvying up SRF Stimulus funds relates to which projects are funded. In New York the decision was made to download ARRA funds only to SRF projects which were on the state’s 2009 Intended Use Plan, which was developed prior to the Stimulus bill being passed.