Glenn College Forum Highlights Improvements Necessary to Sustain Water, Transportation Infrastructure

September 26th, 2016

By Jason Warner, GOPC Manager of Government Affairs

This month, GOPC was pleased to join with our colleagues at the Mid-Ohio Regional Planning Commission (MORPC) as a part of a panel discussion at the Glenn College Leadership Forum at The Ohio State University. The panel, Keeping Things Flowing: Water and Transportation Needs in the 21st Century, focused on the growing concern about infrastructure deterioration in the state and addressed ways in which local and state governments can identity and implement innovative strategies to take on these twin crises head-on.

Jon Honeck, Ph.D., Senior Policy Fellow with GOPC, presented on Ohio’s Water and Sewer infrastructure needs, with special focus on a growing issue that often is overlooked when considering this critical utility service, stormwater infrastructure. Most of Ohio’s water and sewer infrastructure was installed in the late 19th and early 20th Century, and especially in major metropolitan downtown areas, the systems have not been updated to meet the needs of growing populations and demands of the 21st Century. This is especially true of stormwater systems. With some studies suggesting that rain events are now producing more precipitation than they did even 20 to 30 years earlier, aging sewer systems that combine wastewater and stormwater are often overwhelmed, resulting in releases of raw sewage from aging systems into rivers and streams.

JH Glenn College3

Photo Credit: John Glenn College of Public Affairs

Estimates show that Ohio needs $14.1 billion for wastewater treatment upgrades alone between 2012 and 2032, in addition to another $12.1 billion for upgrades and replacing to the state’s drinking water systems over 20 years. That is a total of $26.2 billion in infrastructure needs in just 20 years, and that does not include costs to identify and replace lead pipes, which service an estimated 650,000 homes and businesses in the state.

Coming up with the necessary funding to upgrade this aging infrastructure is complicated by the elimination of federal grants for water and sewer systems in the 1980’s. The feds now provide revolving loans to local governments to assist in system repairs and upgrades, but local communities facing economic problems must repay the loans over time, which is an challenge many small communities in the state cannot afford.  

Among the potential solutions that could help to mitigate this future crisis that Honeck discussed during the forum include new financial tools which could provide either credit enhancements or loan guarantees for small communities that lack necessary funding resources, regionalization of water systems that encourages smaller communities to band together and pool limited resources to better afford work which needs to be done, public-private partnerships, and increased state funding in revolving loan funds and grant programs. 

Thea Walsh, the Director of Transportation Systems and Funding at MORPC, next provided an overview of Ohio’s transportation infrastructure and the needs it faces in order to maintain the state’s competitive edge.  Ohio’s interstate highway system is the 12th largest in the nation, and ranks 5th in overall traffic volume and 4th in truck traffic volume. Ohio boasts the 2nd largest inventory of bridges in the nation.  Beyond roadways, Ohio also ranks 4th nationally in freight rail mileage, hosting 35 freight railroads and 5,305 miles of rail.

Despite these impressive statistics, the American Society of Civil Engineers has graded Ohio’s 125,000 plus miles of roads a ‘D’, finding that 43% of Ohio’s roadways are in critical, poor, or fair condition. Of greater concern is a finding that 2,242 of the state’s 27,015 bridges (8% of total bridges), are structurally deficient. The overall cost to motorists in the state, the personal cost of driving on roads in need of repair, is $3.3 billion per year, which amounts to $413 per motorist.

Ohio receives a significant portion of its overall transportation funding from the Federal Highway Trust Fund, which constitutes 45.1% of the Ohio Department of Transportation Revenue (FY12-14), while 32.9% is generated from the state motor fuel tax. The Federal Highway Trust Fund is supported from the federal gas tax, currently 18.4 cents per gallon of gasoline. That rate has remained unchanged since 1993. The state motor fuel tax is 28 cents per gallon of gasoline, and has remained unchanged since 2005. Moreover, because of constitutional limitations, this fuel tax revenue may only be used for highway construction, which precludes its usage toward public transportation projects. GOPC is constantly seeking ways of funding and modernizing all modes of transportation, including transit, biking, and walking.

Because the Federal Highway Administration has estimated that $170 billion in capital investment is needed annually to improve only roadways nationwide, it will be necessary in the future to increase revenue in order to make the required improvements. This will likely include raising fuel taxes, but also involve alternative sources of revenue as automobiles are becoming more fuel efficient and more vehicles that run on alternative sources (hybrid, electric) are operating on roadways.

One alternative that was discussed is a pilot program underway in the state of Oregon where individuals have volunteered to have tracking devices installed in their vehicles to track the number of miles they are traveling, and then paying per-mile fees to help fund highway and road construction and improvement. Other alternatives include the construction of new tolled infrastructure, an alternative that has been discussed to fund improvements on the Brent Spence Bridge in Cincinnati (Ohio has approved the toll bridge, Kentucky has not) and public private partnerships.

It was clear from the discussion that difficult decisions will need to be made in the months and years ahead. Investment in the state’s critical infrastructure, including drinking water, stormwater, and transportation, is necessary for two reasons. First, it is of paramount importance to ensure public health and safety. Without improvement to the state’s water systems, Ohio runs the risk of seeing repeats of the public health crisis in Flint, Michigan caused by lead contamination in the city’s water system, or the tragic failing of critical infrastructure such as the collapse of the I-35W bridge in Minneapolis several years ago. Secondly, these systems are of critical importance to our state’s economy. Ohio is at the center of the nation’s economic livelihood, located within a day’s drive of 50 percent of the country’s population, with tens of thousands of jobs tied to transportation, manufacturing, and logistics. Investment in quality water and transportation systems will ensure Ohio’s economic stability in the years ahead.

 

View the PowerPoint presentation here

 

Social Impact Bonds for Urban Redevelopment and Green Infrastructure Break New Ground

September 6th, 2016

By John Honeck, GOPC Senior Policy Fellow

Social impact bonds (SIBs) or “pay for success” models are debt arrangements established by a public agency or nonprofit organization in order to finance an innovative service or program with an uncertain rate of return.  Investors are paid back in full only if the project succeeds in meeting its goals.  In this way, public agencies are incentivized to take a more flexible approach to problem-solving.  Until recently, social impact bonds were mainly tried in social service and criminal justice fields to test approaches with significant risk.  For example, Cuyahoga County is using a SIB to test a new approach to reduce foster care placements of children with homeless parents.

Two recent deals show that the social impact bond approach can be used in infrastructure and urban redevelopment.  In Hamilton County, the Port Authority of Greater Cincinnati has been looking for ways to redevelop sites for manufacturing firms seeking to locate or expand within the county.  Although the county has many abandoned industrial sites, they are often contaminated and have outdated buildings and infrastructure.  The lack of suitable locations for manufacturing expansion puts the county at a significant disadvantage with respect to greenfield development. 

To help remedy the situation, in June, 2016, the Port Authority issued bonds with a principal amount of $7 million for the acquisition and remediation of contaminated sites in the county.[1]  The bonds were purchased by local businesses and high net worth individuals that have an interest in economic development but are willing to provide a source of long-term patient capital.  Investors hope to make a profit when the land is sold, but if the deal does not work out as planned they are only guaranteed a miniscule annual rate of return of 0.15 percent.  If the approach is successful, the Port Authority may seek an additional $13 million from other investors.  This financing strategy may provide an example for other older post-industrial cities in Ohio and the rest of the nation. 

In Washington, D.C., a ground-breaking deal showed the potential for social impact bonds for infrastructure.[2]  The DC Water and Sewer Authority announced in early September that it will seek between $20 – $30 million in financing from investors to support the installation of “green” infrastructure such as porous pavement or rain gardens to manage stormwater flowing into the Potomac River and Rock Creek watersheds.  DC Water hopes to avoid using expensive deep tunnels or other major infrastructure work that would otherwise be necessary to address a federal mandate to stop combined sewer overflows.  Like many other cities in the Eastern U.S., the older parts of Washington’s sewer system combine wastewater and storm water runoff into the same pipes, which overflow when it rains, discharging raw sewage into rivers and streams.  Investors will be repaid according the degree of stormwater control that the project achieves. 

Greater Ohio Policy Center is currently in the midst of a year-long study of innovative financing techniques for water and sewer infrastructure and brownfield redevelopment.  These two issues are critical needs for cities in Ohio and across the nation, as discussed in our earlier report.  Although social impact bonds cannot be expected to provide most of the financing needed to tackle these issues, it can promote innovative approaches to test the application of new programs.  In the long run, these arrangements can also help to build a network of stakeholder organizations that see themselves as partners in addressing a significant environmental or economic problem.  SIBs are not just about financing, they also help to focus public attention on an issue. 

 

 

[1] Press release, Port of Greater Cincinnati Development Authority, “Port Authority Issues Impact Investment Debt To Fund Industrial Site Revitalization; Closes $7.0 Million In First Round,” June 16, 2016.  http://www.cincinnatiport.org/wp-content/uploads/Port-Authority-builds-patient-capital-portfolio-6.9.16.pdf

[2] Kyle Glazier, “D.C.’s Social Impact Bond Deal Will Fund Infrastructure,” The Bond Buyer, 9-2-16, http://www.bondbuyer.com/news/regionalnews/dcs-social-impact-bond-deal-will-fund-infrastructure-1112664-1.html.

In Time for the RNC, Cleveland’s Public Square Renovation Showcases Fine Center-City Redevelopment

July 25th, 2016

By Alex Highley, GOPC Project Associate

The redesign of Cleveland, Ohio’s Public Square, which was completed in June 2016 and just in time for the Republican National Convention (RNC), demonstrates impressive investment in a legacy city’s downtown core, to the long-term benefit of the public. The remodeling of the area has transformed the area from a mere intersection of traffic to an exemplary planning case study of intelligently recreated urban space for refined functionality and imagery. By creating more green spaces with park benches, walkable paths, the artistically-modeled area now exudes an atmosphere that is welcoming for visitors and passers-by.

Along with newly paved walkways, fresh green spaces, newly planted trees, and a fountain for kids to play in, the refurbished square features a brand new outdoor café for visitors to enjoy. Statues of the city’s founder and a former mayor have been preserved and repositioned in the square. For special events, as the RNC demonstrated, Public Square acts as the central hub where citizens can congregate to absorb ranging opinions at the “speakers’ platform” on the south end of the park.

Cle Public Square

Cleveland Public Square revitalized. Photo credit: The Group Plan

The renovation of Public Square, overseen by the nonprofit city-county Group Plan Commission, in total cost $50 million. According to the Cleveland Plain Dealer, $37 million was spent on landscaping and $13 million was spent on reconstruction underground. A combination of government and private sources contributed to this project. As Greater Ohio Policy Center’s reports have argued, urban core investment will substantially improve the downtown area in many ways. Firstly, by attracting people who otherwise wouldn’t visit the area, commercial activity in the surrounding businesses will improve. Property values in the area will likely rise due to the public good of improved amenities such as green spaces. Lastly, as we saw with the RNC, the new area should act as a venue of bringing people together for events, such as the upcoming Cleveland Orchestra concert, where Clevelanders and visitors can interact and enjoy themselves.

 

Congress considers changes to EPA revolving loan formulas: Ohio may lose ground

July 6th, 2016

By Jon Honeck, GOPC Senior Policy Fellow

Background

Each year Congress appropriates funds for the U.S. EPA to provide capitalization grants for state revolving loan funds for wastewater treatment.  In Ohio, this fund is known as the Water Pollution Control Loan Fund (WPCLF).   The Ohio EPA sets priorities for the fund according to state needs and federal guidelines.  Local communities submit applications for loans to help finance wastewater treatment plant, sewer system upgrades, or conversions of septic systems to centralized sewage collection.  Ohio’s allotment of the total appropriation is set at 5.7% of the total appropriation amount; the state received $78.5 million in 2016. The annual subsidy allows the WPCLF to offer interest rates below standard market rates.  When combined with loan repayments, the fund can offer substantial amounts of financing.  In 2015, it made a record $759.6 million in loans. 

Congress orders a review

In 2014, Congress passed a major overhaul to the Clean Water Act.  This legislation, known as the Water Resources Development and Reform Act, mandated that the EPA review the allocation formula for the Clean Water Act revolving loan program.  The formula had changed little since the program was created in 1987.  At that time, the formula roughly reflected states’ share of the national population and share of the Clean Watersheds Needs Survey. 

Congress asked the US EPA to determine whether the formula addresses the water quality needs of states based on: (1) the most recent Clean Watersheds Needs Survey (CWNS); and (2) other information that the agency determined appropriate.  The CWNS takes place every four years.  In the 2012 survey, Ohio wastewater utilities identified $14.6 billion in capital projects that needed to be addressed over a 20-year period.  (Click here to access the 2012 CWNS).

Potential Revisions to the Formula

The US EPA presented its report to Congress in May, 2016.  It can be accessed here.  The agency’s main conclusion is that “the current allotment does not adequately reflect the reported water quality needs or the most recent census population for the majority of States” (emphasis in original, p. 5).    The report considers four basic factors that could be used in a revised formula:

  • Clean Watershed Needs Survey (CWNS, which the agency admits underestimates water quality needs)
  • Resident Population from the 2010 U.S. Census
  • Water Quality Impairment Component Ratio (WQICR), an existing database documenting pollution in rivers, lakes, and streams, derived from data submitted by the states; and,
  • Ratio of revolving loan fund assistance to the federal capitalization grant over the past ten years (to reward states that have increased project funding by leveraging their federal grants as much as possible);

Using these factors, the report considers three possible options for a new formula.  Each option would limit a state’s potential loss to 25% and its potential gain to 200%. 

OPTION FACTORS and FORMULA WEIGHTS
1 2012 Clean Watersheds Needs Survey (70%), 2010 population (30%)
2 2012 CWNS (50%), 2010 population (30%), WQICR (20%)
3 2012 CWNS (50%), 2010 population (30%), WQICR (10%), Ratio of assistance to federal grant (10%)

Ohio’s allocation would decline

Ohio fares poorly in all three scenarios, mostly because its share of the national population has fallen by over a full percentage point in the last 30 years, to about 3.7% of the national total.  Interestingly, Ohio’s share of the Clean Watersheds Needs Survey has fallen only slightly, reflecting the large amount of EPA-mandated combined sewer overflow work that must be done.   All three scenarios would yield double-digit declines in Ohio’s allotment, with option 1 creating an 18.2% decline, and options 2 and 3 at the maximum reduction of 25%.   In Program Year 2016, a 25% reduction would have meant a loss of nearly $20 million in federal funding. 

What happens now?

The scenarios in the report are only suggestions.  Congress would have to pass legislation to modify the current formula.  Formulas that did not have a “stop-loss” rule of 25% could have even greater effects on Ohio’s allocation.  Significant federal funding cuts would make it more difficult for the WPCLF to provide low interest rate loans to Ohio communities at a time when sewer rates are rising and affordability is becoming an issue.  It would become especially difficult to offer principal forgiveness options to Ohio’s poorest communities.  These communities already face reduced federal funding options from cuts to the Community Development Block Grant program.  Between 2000 and 2014, average Ohio sewer charges increased by 85 percent, more than twice the rate of consumer inflation.[1]  In a 2015 report on infrastructure needs, GOPC identified replacement and upgrades to water and sewer infrastructure as critical needs that span Ohio’s cities and villages of all population sizes.  Key stakeholders in the area should make every effort to inform Congress about the importance of maintaining Clean Water Act revolving loan program funding. 

[1] Author’s analysis of average user charges from Ohio EPA, 2014 Water and Sewer Rate Survey.  Consumer Price Inflation increased by 37 percent.

One Water Summit Showcases Innovative Solutions to 21st Century Water Challenges

June 20th, 2016

By Jon Honeck, GOPC Senior Policy Fellow

The U.S. Water Alliance is a coalition of water utilities, environmental engineering organizations, nonprofits, academics, and other groups interested in raising public awareness of challenges facing the U.S. water supply.  The group held its “One Water Summit 2016” in Atlanta, GA, in June, attended by GOPC Senior Policy Fellow Jon Honeck.  GOPC is engaged in a multi-year project to address water and sewer infrastructure needs in Ohio. 

Conference programming reflected the diversity of water-related challenges across the country.  Panelists at the opening plenary session discussed Atlanta’s attempt to address water supply and water quality issues brought about by decades of population growth, sprawl, and more recently, climate change.  The Atlanta metropolitan planning commission took the lead by integrating water with land use and transportation planning.  With changes in water pricing to promote conservation, the Atlanta metro region achieved a 10% water consumption decline in spite of population growth.   Water audits are now required for buildings with 25,000 ft2.  The Atlanta PACE program (Property Assessed Clean Energy) can provide commercial loans for water and clean energy efficiency that are paid back through property tax assessments.  Current efforts are aimed at improving water quality through green infrastructure.  The Turner Foundation is a major driver of this effort and a regional green infrastructure strategy is in the planning stages. 

One of the panels discussed the possibilities for implementing green infrastructure on a larger scale.  Green infrastructure has become a nationwide phenomenon with cities learning and sharing their experiences with each other.  Federal rules now require EPA-funded Clean Water state revolving funds to set aside an amount equal to 10 percent of their annual capitalization grant for green infrastructure projects.  Philadelphia has been considered a leader in this area as it implemented a plan to address combined sewer overflows under an EPA consent decree.   Atlanta has completed its CSO projects, but wants to continue to make progress in water quality to protect drinking water sources and to enhance recreational opportunities in urban areas.  Atlanta sent a large delegation to Philadelphia to learn from their experience.  The delegation included a multiple city departments and private sector groups, illustrating the breadth of the partnerships needed to carry out its goal of reducing runoff by 225 million gallons per year.   Panelists discussed the new mindset needed to implement green infrastructure, including treating natural vegetation as a capital asset and tracking long-term maintenance.  Philadelphia has no ROI information yet on its extensive green infrastructure installations because it is too soon to understand long-term maintenance costs, but green infrastructure is receiving about 3.5% of its annual capital budget.  In the Q&A session, other examples were brought up of cities moving ahead with green infrastructure, including the Northeast Ohio Regional Sewer District grants program, which provides assistance to private landowners with large surface parking lots (and large amounts of stormwater runoff), and the Milwaukee Metropolitan Sewage District, which aggressively pursuing green infrastructure for flood control and watershed management. 

One of many interesting panels discussed “Building a New Business Model for Water.”  Unlike most other countries, the U.S. water and wastewater industry is very fragmented, with 69,000 individual utilities nationwide.  David St. Pierre, CEO of the Chicago Water Reclamation District, discussed opportunities to think about larger structures through mergers, including the potential for cross-state mergers of public utilities.  This would entail putting in place a new regulatory structure that does not exist at present, but it would allow utilities to reap the benefits of economies of scale and learning that at present are only available to large international companies.  Often times, drinking water and wastewater utilities remain separate even in the same municipality.  Tony Parrot of the Louisville Metropolitan Sewer District discussed an inter-agency agreement to tie the operations of the MSD with the local drinking water utility, and how this led to the implementation of a new common billing system that will save operational costs.  The next step is to move to a full merger of the two systems.   Increasingly, some systems are turning to private companies to build or operate their facilities, and representatives of Veolia Water and MVP Capital discussed their experiences in partnering with public utilities. 

It is clear from the One Water Summit that there is tremendous energy and creativity in addressing water-related issues, and that the formerly sedate world of water utilities is changing fast.  Ohio cities have much that they can learn from their peers.  Other legacy cities, such as Louisville, are facing that challenges brought about by managing an infrastructure built for higher levels of water use.  Ohio’s capital city could also learn from growing cities like Atlanta that have combined land use and water infrastructure planning.  The issue of aging infrastructure, which is GOPC’s main concern, was brought up repeatedly by conference participants in panels and in informal conversation.  We are hopeful that GOPC’s forthcoming recommendations on financing mechanisms will not only be of use for Ohio but for other states across the nation. 

 

Ohio General Assembly Passes House Bill 512 to Reform Water Testing Procedures

June 2nd, 2016

By Jon Honeck, GOPC Senior Policy Fellow

Before leaving on its summer break, the Ohio General Assembly passed House Bill 512, a major reform to Ohio’s drinking water regulations that will tighten lead notification and testing requirements, tighten the requirements for lead-free plumbing fixtures, and provide more flexibility to the Ohio EPA and the Ohio Water Development Authority to support public drinking water and wastewater treatment infrastructure.  The bill passed with strong bipartisan support in the wake of the well-publicized crises involving lead in drinking water supplies in Flint, MI, and Sebring, OH.  The American Water Works Association estimates that there are 6.1 million lead service drinking water supply lines still in place across the nation, including many in Ohio.  With proper corrosion control methods, many of the issues with lead pipes can be avoided, although the ultimate answer is to replace these lead lines over time.  We hope that this same bipartisan spirit will carry forward into the fall and 2017 as the state grapples with important water infrastructure and water quality issues. 

Under the bill, homeowners must be notified within two business days of lead laboratory test results received by a community water system.  If the lab results show a lead level above the applicable threshold then the water system must provide information about the availability of health screening and lead blood level testing in the area to the homeowner and notify all customers that the system has exceeded acceptable lead levels within two business days, and provide information about lead testing to all customers within 5 business days.  Within 18 months of the notification of about excessive lead levels, the system must submit a revised corrosion control treatment plan to the Ohio EPA.  A revised corrosion control plan requirement is also triggered if a system changes sources of water supply, makes substantial changes to treatment, or operates outside the limits for certain metals or chemicals. Each water system is also required to map parts of its service area that are likely to contain lead lines.

Many Ohio cities are engaged in multi-year capital projects to fix combined sewer overflows and replacing aging water infrastructure.  The Water Pollution Control Loan Fund, which is controlled by the Ohio EPA, provided over $700 million in revolving loans in 2015 for these purposes.  The Fund receives an annual capitalization grant from the U.S. EPA so it can provide below-market interest rates to projects that are a high priority for the state and local partners. House Bill 512 broadened the scope of the WPCLF’s authority to match recent changes in federal law.  New funding purposes include energy conservation and efficiency at wastewater treatment plants (which use enormous amounts of electric power), watershed management, recapture or treatment of stormwater, and decentralized sewer systems to assist smaller, more isolated rural areas.  In addition, loan terms for the WPCLF are increased from 20 to 30 years, making them more affordable for borrowers.  These changes make it easier to develop creative approaches to managing the water treatment system. 

As Greater Ohio pointed out in Phase I of its ongoing infrastructure project, the state’s needs are vast and the financial capacity of many water utilities is stretched to its limit.  We will make further policy recommendations on this point in 2016. 

 

Managing Stormwater: GOPC Attends Great Water Cities Conference

May 16th, 2016

By Jon Honeck, GOPC Senior Policy Fellow

Introduction

On May 12, 2016, the Water Environment Federation (www.wef.org) held its “Great Water Cities 2016: Rainfall to Results in Action” conference in Chicago, IL.  The focus of the conference was creating a holistic approach to managing stormwater in the 21st Century, and the panel discussions were organized around recommendations from WEF’s Rainfall to Results report.  Attendees included water utility water leaders and industry representatives from across the country and as far away as Australia.  GOPC’s Jon Honeck, Senior Policy Fellow, attended as part of our ongoing water and sewer infrastructure project to find new strategies to modernize Ohio’s aging infrastructure. 

Background

Stormwater management is an issue that accompanies growing urbanization. Urbanization creates thousands of acres of impervious surfaces and removes the ability of the natural landscape to absorb water when it rains.  Unfortunately, many U.S. cities in the early 20th century constructed “combined” sewer systems that mixed rain water and sewage water in the same tunnels, causing raw sewage to discharge into waterways during heavy rains.  In recent decades, EPA enforcement of the Clean Water Act has forced cities around the country, including many in Ohio, to separate their combined sewer systems and find ways to hold millions of gallons of rainwater temporarily out of the sewer system.  This is often accomplished by building deep storage tunnels, which are extremely expensive capital projects that take years to complete.  New approaches, such as using “green infrastructure” that restores that ability of the landscape to capture stormwater runoff, are now taking center stage as cities look for ways to lower costs and provide more effective solutions.

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Stormwater Utilities

There is an emerging consensus among water industry experts that the field needs a new paradigm, called a “stormwater utility,” and that governmental regulatory frameworks and planning approaches need to change to support this.  Traditional municipal utilities have been organized around drinking water or sewer systems, each with their own user charges, infrastructure, and performance expectations.  Stormwater management in its own right was usually an afterthought, except insofar as it was needed for basic flood control.  A stormwater utility could take many forms, depending on the state and local regulations and needs, but the basic concept is an entity that can work on a large scale, across individual municipalities in a metro area, and even across an entire watershed, to plan and implement stormwater management. 

One of the keys to the paradigm shift is the concept of stormwater runoff as a commodity that has a price.  Districts around the country are implementing dedicated stormwater fees to create an ongoing revenue source for operation and maintenance.  Afternoon speaker Howard Neukrug (Senior Fellow at the U.S. Water Alliance) who implemented Philadelphia’s nationally renowned green infrastructure program, noted that the foundation of the city’s program was a parcel-based stormwater fee and redevelopment regulations that require capture of the first 1.5 inches of rainfall from new or renovated buildings.  Sometimes existing regulatory arrangements make it difficult for utilities to work on scale commensurate with the need.  Morning panelist Karen Sands, Director of Sustainability for the Milwaukee Metropolitan Sewerage District, related that MMSD has an aggressive green infrastructure program, but in order to meet its stormwater capture targets by 2035, the district would have to spend at an annual rate 18 times higher than its current level.  MMSD is now looking at other public private partnerships as a potential solution. 

In other areas of the country, federal and state regulatory frameworks create an urgent need for local governments to cooperate.  As explained by panelist L. Preston Bryant, Senior V.P. of McGuireWoods Consulting and former Secretary of the Virginia Department of Natural Resources, Virginia law treats the US EPA’s Total Maximum Daily Load (TMDL) regulation for Chesapeake Bay as a joint responsibility between the state and local governments and this has spurred regional collaboration.  The state of Virginia also has a Stormwater Local Assistance Fund as part of its EPA clean water revolving loan program that will pay for up to 50% of the costs of local projects.  The state of Maryland also has a stormwater law to help protect the Chesapeake.  Prince George’s County, MD, is an example of a county that moved ahead with a stormwater fee that is being used to fund a public-private partnership that is aggressively creating green infrastructure. 

Asset Management

Asset management for both capital projects and human resources was another theme of the conference.  It is obvious that there are a variety of approaches to maintaining green infrastructure and that there is no agreement on best, or even standard, practice. David St. Pierre, Executive Director of the Metropolitan Water Reclamation District of Greater Chicago, explained that MWRD shares the initial installation costs with local governments and then maintains agreements in which the local governments are responsible for long-term maintenance.  In Baltimore, Randy Chow, Director of the Baltimore Department of Public Works explained that the department wants neighborhood organizations to play a role in maintaining green infrastructure. Korey Gray, Business Development Officer of DC Water, described how the city public works department helps to maintain green infrastructure in Washington.  

Several of the afternoon panelists presented visions of both optimism and pessimism about the future adaptability of water utilities in general.  On an optimistic note, Marcus Quigley, CEO and Founder of Opti, a data analysis firm, noted that rapid advances in the field of sensor technology were making it possible to have real time monitoring and control of individual assets, leading to the potential for huge gains in efficiencies from existing infrastructure.  On a more pessimistic note, William Stowe, CEO and General Manager of Des Moines Water Works discussed his organization’s decision to file suite against upstream quasi-governmental water management organizations for allowing agricultural runoff (excessive nitrates) to pollute the Des Moines River.  In his view, as long as industrial agriculture remains outside of the EPA stormwater and pollution control framework, agricultural areas in the Midwest will have to invest heavily in equipment to clean excessive nitrates from their drinking water, leading to excessive financial burdens on urban residents.

The conference made it clear that stormwater management is a dynamic, emerging field in which information-sharing across geographies and across professional boundaries is essential.   There is a real desire for innovation and experimentation as local utilities try different approaches.  The need for creativity will become even more important as the 21st Century matures and the effects of climate change are felt more acutely. 

Water Resilient Cities Conference Offers Innovative Solutions to Water Infrastructure

May 5th, 2016

By Jon Honeck, Senior Policy Fellow, and Colleen Durfee, Research Intern

Greater Ohio Policy center recently attended Cleveland State University’s Water Resilient Cities conference. From April 21st to the 22nd professionals, practitioners, community development organizations, and academics gathered to discuss the current state of water infrastructure in the Great Lakes region. The innovations, needs, consequences, and potential growth of Great Lakes cities depend heavily on water infrastructure, its maintenance, modernization, and adaptation to more variable climate patterns. How do we protect our natural water bodies when faced with the desire for economic and community growth? The conversation between the themes of regional growth, natural resource protection, and looming effects of climate change is one of paramount importance when considering the future of the Great Lakes region.

The Water Innovation Keynote address was delivered by Hillary Brown, a Fellow at the American Institute of Architects and Professor at the Bernard and Anne Spitzer School of Architecture at CUNY.  Dr. Brown showed numerous examples of cities around the world are creating innovative solutions to water infrastructure needs while lowering the carbon footprint of a treatment facility or sometimes parts of a city.  Some of the most innovative practices include on-site reuse of wastewater and stormwater in large buildings and mixed use districts.  These areas are taken “off the grid” in terms of their water use and save energy through decentralized treatment systems that do not have to move water long distances.  Other examples showed treatment facilities finding ways to maximize opportunities for co-generating energy:

  • In Japan, a water utility placed acres of solar panels in its adjacent reservoir, generating electricity for the facility but also lowering evaporation from the reservoir.  The water also helps to cool the solar panels.
  • In Lille, France, a utility is recovering biogas from wastewater and other organic waste to produce biogas for the municipal bus system.
  • In Oakland, CA, a utility has constructed a biodigestion facility that generates electricity from sewage;
  • In Vancouver, Canada, heat from wastewater is being used to heat a residential district.
  • In Mankato, MN, treated wastewater is being used for cooling a traditional power plant.

In order to fully promote these types of opportunities, Dr. Brown advocates for the inclusion of specific clean energy principles in the award formulas of state infrastructure banks or state drinking water or wastewater revolving funds.  These principles include: supporting mixed land use, mitigating CO2 production, incorporating green infrastructure, integrating social and energy benefits, and including climate adaptation measures.

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In the third panel session, Professor Richard Norton from the University of Michigan demonstrated the variability and vulnerability due to climate change and development patterns on Lake Michigan’s shores. He made an interesting point that like the world’s oceans, the Great Lakes will change water levels due to climate change. However, these changes have a very different timeline than those of saltwater coastlines and therefore are more difficult to track. There is no daily tide on lakeshores as there is on our salt-water coasts. The Great Lakes ebb and flow at a variability of several meters over the course of a decade, not several hours. This variability is fairly normal. It’s the severity of the high and low levels that are anticipated due the accumulated effects of drier summers and wetter, warmer, winters over long periods of time. For example, between 1980 and 2000, Lake Michigan gained over 200 feet of beach frontage. Many property owners see this as a gain in real estate but each municipality on lakeshores has different zoning ordinances and city codes regarding lakeshore development practices.

Dr. Norton showed an example of a property owner’s development decision that highlights the vulnerability of lake shore development and the conflicts that sometimes manifest between private property owners and city zoning officials and planners. It is difficult to dissuade someone from developing on their property when for the past several years they had access to hundreds of feet of lakeshore frontage. Dr. Norton showed satellite images of Lake Michigan’s shoreline from the 1930s, 1960s, and 2000s. They varied by hundreds of feet of beach frontage – about two meters change in lake depth. The property owner decided to build a multimillion-dollar home closer to the shoreline but against the city’s guidance. Years later, the shoreline rose and nearly ran right up against the outside walls of the home. The homeowner asked for permission to build a sea wall to protect his home against the rising water and the city denied it. Eventually, the home was lifted from its foundation and moved further back from the shoreline to avoid flooding. If the water level continued to rise as it very well might, the home would be almost completely under water. The take away from Dr. Norton’s presentation is that lakeshore coasts and their communities need to understand the variability and timeline of water levels for great lakes. Development along lake shorelines is very different from that of saltwater coastal areas and in the coming decades of higher variability, lakeshores will be even more vulnerable to severe rises and falls in the water lines.

GOPC is in the midst of a multi-year project on Ohio’s water and sewer infrastructure.  The Phase I report, released in Fall 2015, analyzed infrastructure needs and gaps, and our recent report on “green” infrastructure describes how cities in Ohio and around the country are using innovative and less costly approaches for stormwater control. Our current work focuses on identifying best practices in infrastructure financing that can be adapted to Ohio.   Some examples of financing tools include credit enhancements or loan guarantees for cities without debt capacity, state infrastructure banks or other methods to pool financing needs, additional state investments in revolving loan funds or grant programs, incentives for regionalization and shared services among water and sewer systems, improved funding for integrated watershed management, and public-private partnerships.

 

Water Quality Bill Released by Governor’s Office

April 14th, 2016

This week, the Governor’s mid-biennium review budget bill related to water systems testing was introduced.  HB512 (Ginther-R) focuses on four major reform areas.

 First, it proposes new and stricter guidelines for testing lead in drinking water.

 Second, it proposes to shorten the timelines for the Ohio EPA and water system owners to notify affected residents of test results.

 Third, it proposes to extend the maximum repayment schedule for loans taken out in service of renovating or constructing wastewater treatment systems to 30 years, making these loans more affordable; it also proposes to expand the types of projects eligible for financing through state programs.

 Last, it proposes to provide more grant dollars to be used to replaced lead pipelines in schools.

 GOPC applauds Governor Kasich and the Legislature for pro-actively offering more and stronger tools to Ohio’s local communities as they work to address lead in Ohio’s water systems.  Mitigating outdated and dangerous pipes are one important component reforming and modernizing Ohio’s water and sewer infrastructure systemsFollow us on Twitter and Facebook for the latest updates on this bill and other legislation we are tracking.

GOPC Releases Memos Recommending Strategies to Reform Ohio’s Transportation Policy

March 15th, 2016

GOPC is a leading advocate for policy reforms that will support a diverse and modernized transportation system in Ohio.  To support GOPC’s most recent policy recommendations, GOPC has published a series of research memos that:

  • Analyze Pennsylvania’s 2013 comprehensive budget reform and identifies strategies that Ohio could replicate.  Undertaking a similar reform in Ohio could produce more resources and recalibrated funding to better fund all transportation modes, especially public transportation.
  • Outline the benefits of “flexing” $30 million of Ohio’s federal dollars to public transportation.  Ohio is the 7th most populous state in the country yet ranks 38th in state support of public transportation.  The allocation of existing federal funds to transit could support 370 new rural transit vans or 107 new full size buses per year.  Ohio currently has 275 rural vehicles and 900 urban buses beyond their useful life and 22 rural counties without any transit service.
  • Discuss the benefits of raising the state motor fuel tax, indexing it to inflation and removing, through statewide ballot, the constitutional provisions that restricts the gas tax’s use to highways.  By the Ohio constitution, the state’s gas tax can only be used for highway construction and repairs.  While increasing the gas tax is not a complete  solution, it is a longstanding resource that will remain so for Ohio.

To attract and retain businesses and residents, states across the country are investing in diverse, modern transportation systems that support all modes.  Ohio has a geographic advantage of being within 600 miles of over half of the U.S. and Canadian populations.  To leveraging this prime position, Ohio must invest in transit, bike/ped, rail, deep water ports, airports and highways. GOPC’s memos outline strategies to support and enhance all the modes that make up Ohio’s transportation system.

Click here to for more information and to access the memos.