Wastewater Treatment: Overview and Background Page: 4 of 6
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63% of all loans and other assistance (comprising 23% of total funds loaned) have gone
to assist towns and cities with less than 10,000 population.
Other Federal Assistance. While the Clean Water Act is the principal federal
program of this type, some other assistance is available. (For additional information, see
CRS Report RL30478, Federally Supported Water Supply and Wastewater Treatment
Programs.) For example, the Department of Agriculture (USDA) operates grant and loan
programs for water supply and wastewater facilities in rural areas, defined as areas of not
more than 10,000 persons. FY2008 appropriations totaled $535 million, sufficient to
support more than $1.6 billion in program activity (counting both appropriations and
repaid loans). Two other programs are:
" The Community Development Block Grant (CDBG) program
administered by the Department of Housing and Urban Development
(HUD). FY2008 funds totaled $3.6 billion. Water and waste disposal
projects compete with many other funded public activities and are
estimated by HUD to account for less than 20% of CDBG obligations.
" The Economic Development Administration (EDA) of the Department
of Commerce. EDA provides project grants for construction of public
facilities, including but not limited to water and sewer systems, as part of
approved overall economic development programs in areas of lagging
economic growth. In FY2008, EDA's public works and economic
development program was funded at $146 million.
How Localities Pay for Construction Costs. SRFs fund 10% to 20% of the
nation's annual wastewater treatment capital investment. Cities, states, and other federal
programs provide the remainder. Local governments have primary responsibility for
wastewater treatment; they own and operate 16,000 treatment plants and 24,000 collection
systems nationwide. Construction of these facilities has historically been financed with
revenues from federal grants, state grants to supplement federal aid, and broad-based local
taxes (property tax, retail sales tax, or in some cases, local income tax). More recently,
cities and counties have turned to fees or charges levied on users of public services to
cover all or a portion of local capital costs.
Shifting the Clean Water Act aid program from categorical grants to the SRF loan
program had the practical effect of making localities ultimately responsible for 100% of
project costs, rather than less than 50% of costs. This has occurred concurrently with
other financing challenges, including the need to fund other environmental services, such
as drinking water and solid waste management; and increased operating costs (new
facilities with more complex treatment processes are more costly to operate). Options that
localities face, if intergovernmental aid is not available, include raising additional local
funds (through increased user fees, developer charges, general or dedicated taxes),
reallocating funds from other local programs, or failing to comply with federal standards.
Each option carries with it certain practical, legal, and political problems.
Water Quality Improvements. Over the past 35 years, the nation has made
considerable progress in controlling and reducing certain kinds of chemical pollution of
rivers, lakes, and streams, much of it because of investments in wastewater treatment.
Between 1968 and 1995, biological oxygen demand (BOD) pollutant loadings discharged
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Wastewater Treatment: Overview and Background, report, November 17, 2008; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc809020/m1/4/: accessed June 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.