Alternative Approaches to Sustainable Infrastructure
The ability of a small community water infrastructure system to provide safe drinking water and protect the environment is heavily influenced by the utility’s financial sustainability. Particularly in this era of declining grant dollars, coupled with higher costs for construction, operation and maintenance, the economic viability of the small system is threatened. New alternative approaches, using holistic project development, have benefited many small community systems. This paper will describe how the United States Department of Agriculture Rural Development – Rural Utilities Services (USDA RD-RUS) and partners are successfully implementing new approaches to sustainable infrastructure development and maintenance. Two examples illustrate the significance of employing alternate approaches and provide a model for other small community water infrastructure systems.
The USDA RD-RUS and partners have synthesized a new approach to infrastructure projects, working collaboratively with technical assistance providers, other funding agencies and community consultants. Forging a team of technical assistance partners enhances a community’s access to tools that they may not have access to otherwise. These tools include GIS mapping/inventory, asset management practices, rate analyses, intermunicipal agreements, long term strategic planning, the Environmental Financing Information Network, New York State Co- Funding initiatives and more. This approach builds the capacity of the small community system, thereby improving their ability to best position themselves for project funding and manage the long term sustainability of the system.
Additionally, the USDA RD-RUS has developed and implemented new alternative approaches to create the most affordable, and most sustainable, funding package for small systems in need of upgrades or new infrastructure systems. One new avenue focuses on underwriting, which was developed in response to an Office of the Inspector General’s audit of Agency Water and Environmental Programs. This new “underwriting initiative” assists the community by defining user rates which sustain the water system throughout the forty year financing term of the USDARD Loan. The underwriting process specifically identifies a fund amount for short-lived asset replacement, determines commercial credit viability, system affordability based upon “similar system costs”, and is the basis for an equitable user rate structure. Other initiatives include the Emergency Community Water Assistance Grant Program (ECWAG), Predevelopment Planning Grants (PPG), Technical Assistance and Training Grants (TAT), and Hurricane and Tropical Storms Grants (HTS). These programs are used to “leverage” traditional loan and grant programs to make projects affordable to the user which, in turn, enhances the financial sustainability of the system.
Partners of the USDA RD-RUS have also developed unconventional approaches to augment small system sustainability. The Region 2 Environmental Finance Center (EFC) has been working closely with the USDA RD-RUS for over four years to develop an alternative, comprehensive process to sustainable infrastructure, focusing on asset management practices, full cost pricing and public relations strategies. The EFC has hosted numerous multi-day conferences, designed to bring together community representatives and technical assistance partners, impart new skills and provide valuable networking opportunities. Additionally, the EFC provides direct community assistance, pulling together the pieces of the project, involving appropriate technical assistance partners, involving the public to generate support, and searching for the best funding strategy. Ultimately, this results in projects that are more extensively developed and financially, socially and environmentally sustainable.