States and localities are responsible for 96 percent of public spending on drinking water and wastewater facilities.
From the water safety crisis in Flint, Michigan, to the near-disaster with the Oroville Dam in California, a string of water-related events have made headlines and called into question the United States’ focus on keeping critical water systems safe and functioning.
In advance of the U.S.-focused Water Week (held March 19–25) and the U.N. World Water Day (held March 22), Brookings Institution experts explored many dimensions of water infrastructure. Ten facts derived from their research are highlighted below.
- Water plays a critical role in the economy. Thirty of the country’s largest water utilities support up to $52 billion in economic output and 289,000 jobs annually, and millions of households, businesses and industries depend on water systems every day. Investing in water infrastructure ensures these industries stay afloat, and more investment often means more jobs.
- The federal government only accounts for a small share of total public spending on water infrastructure. Despite the economic importance of water and calls for increased infrastructure investment from the Trump administration, the federal government actually plays a small role relative to states and localities, which are responsible for almost 96 percent of public spending on drinking water and wastewater facilities nationally each year. This means that regional actors, including water utilities, are shouldering a greater financial burden and must target resources more efficiently and equitably.
- Geographic and political boundaries can pose challenges to water investment. It can be difficult, however, to coordinate regional action. There are nearly 52,000 community water systems in the United States, and these frequently cross geographic and political boundaries and touch multiple watersheds and users. This can lead to both operational inefficiencies and difficulties accelerating future investment.
- The cost of water is on the rise in many cities. To cover the cost of needed upgrades and other repairs, utilities are charging users more for services. Water rates are increasing in many U.S. cities, with some estimates showing that the average monthly residential bill has gone up by 48 percent since 2010. Relative to other expenses, households have seen the price of water and sewer services soar over the past two decades.
- There is a mismatch between water investment demand and institutional capacity. Facing a backlog of repairs, many utilities are struggling to modernize existing facilities. While more than 88 percent of Americans believe some type of action is needed to solve the country’s water infrastructure challenges, only about 17 percent of utilities are confident they can cover the cost of existing service through rates and fees — let alone pursue needed upgrades.
- Only a handful of drinking water utilities in the largest cities nationally rank highly in water investment. Many drinking water utilities are confronting a wide range of financial and economic hurdles to pursue increased water infrastructure investment. In an analysis of how cities vary across six major gauges of water investment performance — including operational and debt concerns as well as other income and population pressures — only 11 of 97 cities ranked highly across all these categories, Denver and San Antonio among them. In contrast, large drinking water utilities in cities such Cleveland and Detroit struggled in many of these same categories. However, most drinking water utilities (in 55 of the 97 cities analyzed) faced a mixed picture, scoring well in three or four of these six categories.
- The private sector owns most of the nation’s dams. Water infrastructure, of course, is not simply limited to drinking water and wastewater facilities, but also includes an extensive number of other assets such as dams. According to the National Inventory of Dams, the federal government only owns about 3.7 percent of the nation’s nearly 90,000 dams. Meanwhile, state and local governments own 7.3 percent and 20 percent of all dams, respectively. The private sector, however, is the biggest owner by far (at 64.2 percent), illustrating how dam oversight and investment can vary markedly across the country.
- Sixty-nine percent of the nation’s dams were built before 1970. Most the nation’s dams are the product of a building boom in the early- to mid-20th century, and they are nearing their useful (and safe) life. Some 62,700 of the country’s 90,000 dams, or 69.3 percent, were built before 1970, and 17.1 percent pose a potentially “high hazard” to the economy, environment and human life if they were to fail.
- Climate change and water cycles are closely linked. While water infrastructure investment continues to dominate many policy discussions, it is crucial to not overlook other closely related climate concerns. According to a The Water Problem, a new book edited by Pat Mulroy, a senior fellow in the Metropolitan Policy Program for climate adaptation and environmental policy at UNLV’s Brookings Mountain West, climate and water cycles are closely tied, having a major impact across the United States. From changes in snowpack, precipitation, flooding, to seasonality of runoff and other water-related events, U.S. water systems — and the communities that depend on them — are feeling the strain of climate change. As the book puts it, “Climate is a driver of water-supply conditions … and these changes can lead to a wide range of potential risks that ripple across economic sectors and communities.”
- Despite concerns over water safety and infrastructure, Americans have greater access to clean water than most people around the globe. Pat Mulroy explains that Americans are actually better off than people in most other nations. “We in this country have no idea how fortunate we are,” she says. “We are a small minority around the world that actually has reliable 24/7 water.”
Alison Burke is director of strategic initiatives, communications, at The Brookings Institution. To read the original and complete version of this article, go to this link: http://brook.gs/2n7geZs
This article appears in the May issue of Real Assets Advisers. For more information on this magazine or to sign up for a trial subscription, click here.