Gov. Rendell signed legislation into law this week that would provide $1.2 billion in funding for water and wastewater facilities, as well as inadequate flood control measures and unsafe and high-hazard dams.

The bills were Senate Bill 2 (Earll-R-Erie) and Senate Bill 1341 (Musto-D- Luzerne).

"A sustainable infrastructure that is capable of protecting its citizens and providing quality, dependable services is paramount to the public's health and well-being," said Gov. Rendell. "Our water-related infrastructure—our drinking water and wastewater plants, our dams and our flood protection projects—are aging and deteriorating after decades of neglect and underinvestment. These bills provide new investments not just for capital improvements, which are increasingly expensive but, as in the case of wastewater facilities, to support other nonstructural options that are oftentimes more cost-effective."

Senate Bill 2 will provide $800 million over the next 10 years for critical water, sewer, flood control projects and repairs to unsafe, high-hazard dams in areas outside of Philadelphia and Pittsburgh. The debt service on the bond will be repaid using uncommitted game revenues distributed by the Commonwealth Financing Authority.

Senate Bill 1341 will place a referendum on the November ballot asking voters to approve an additional $400 million for improvements in public drinking water and wastewater systems, including innovative, cost-effective strategies such as nutrient trading. If approved, the funding would be used for grants and loans to be administered by the Pennsylvania Infrastructure Investment Authority.

"With this new law (Senate Bill 1341) we are providing a great opportunity for citizens to make a substantive new investment in our clean water infrastructure," Sen. Musto, Minority Chair of the Senate Environmental Resources and Energy Committee said. "The grants and low-interest loans that would be available through this legislation will provide badly needed financial assistance to communities throughout Pennsylvania who are struggling to maintain aging water and sewer systems.”

Federal/State Clean Water Mandates

Under both bills, the 183 publicly-owned water systems in Pennsylvania that are facing federal mandates to reduce the amount of nutrient pollution in the Susquehanna and Potomac river basins and downstream in the Chesapeake Bay will be eligible for additional support. The grants and loans may be directed towards plant upgrades, but other more cost-effective options – such as nutrient credit trading, water conservation and water reuse – may also be eligible.

"Communities like Mechanicsburg are facing ever-increasing costs to provide a clean, reliable source of drinking water and effective wastewater treatment for is residents and businesses," said the Governor. "Rather than only considering capital upgrades to these facilities, which can leave ratepayers with substantially higher rates, we want to ensure other cost-effective options, such as regionalization and nutrient trading are considered."

The Governor pointed to examples like Mount Joy Borough, Lancaster County, which used nutrient credit trading to lower its nutrient reduction costs 35 percent, and Fairview Township, York County, which followed suit and saved its taxpayers 75 percent as opposed to a capital upgrade.

The Department of Environmental Protection will work with the Commonwealth Financing Authority and PENNVEST in evaluating projects to ensure applicants are pursuing measures that result in the lowest cost to Pennsylvania's citizens and communities.

Water Infrastructure Needs

In Pennsylvania, there are 900 community drinking water facilities and 1,100 community wastewater operations that are owned by a municipality or municipal authority that would qualify for funding under Senate Bill 2. Grants will range from $500,000 to $20 million.

According to a recent federal clean water needs survey, Pennsylvania is facing nearly $11 billion in unmet drinking water infrastructure needs and at least $7.2 billion in unmet wastewater infrastructure needs.

As part of his efforts to address Pennsylvania's aging water-related infrastructure, Gov. Rendell established the Sustainable Water Infrastructure Task Force through executive order.

The task force is responsible for calculating an estimate of total water infrastructure needs facing the commonwealth and identifying innovative technical, operational and financing strategies to meet the state's needs.

The group of legislative, business, municipal and public interest leaders will issue a report by October 1 that provides recommendations and financing options to support water-related services in the Governor's fiscal year 2009-10 budget proposal.

Flood Protection

Senate Bill 2 also provides at least $100 million for flood control projects. Applicants would be responsible for providing easements and rights-of-way, relocating buildings and utilities, altering or rebuilding inadequate bridges in association with the flood protection project when necessary, and operating and maintaining the project.

"As Pennsylvania is one of the nation's most flood-prone states, we must take steps to ensure our communities are safeguarded against the threat of having a flood control project or dam fail and wash out homes and businesses," said Gov. Rendell. "While the costs of these projects can be daunting if our infrastructure is allowed to deteriorate, so, too, will Pennsylvania's business climate and quality of life."

Senate Bill 2 also provides a minimum of $35 million to address state and municipally owned unsafe, high-hazard dams in need of repair. Applicants are responsible for funding of at least 25 percent of the amount authorized by the Commonwealth Financing Authority for a project.

DEP will review the applications and make recommendations to the authority, which ultimately decides which grants are awarded. Criteria for funding include the level of hazard posed by the dam and whether the proposed project is the most cost-effective way to address the hazard.

Grants from Senate Bill 1341, if approved, would be up to $50 million, depending on the type of project and the size of the system.

"While these measures are a step in the right direction, they will by no means close the almost $20 billion gap in funding for Pennsylvania's water infrastructure needs," said Gov. Rendell. "We need continued funding as well as an in-depth examination of at non-structural alternatives such as best management practices and right-sizing."

Senate Bill 2 is now Act 63 of 2008 and Senate Bill 1341 is now Act 64 of 2008.

For more information on clean water needs, visit the PA Fair Share for Clean Water Plan website.

7/11/2008