Replacing blanket mandates with targeted assistance will improve the quality of planning, which is important for protecting the taxpayer investment in federally-funded water infrastructure projects.
What are the requirements?
Federal law requires recipients of loans from the Clean Water SRF to meet specific planning requirements:
Cost and Effectiveness Analysis: Recipients must certify that they have conducted a cost and effectiveness analysis of the processes, materials, techniques and technologies for carrying out the proposed project or activity and have selected the project or activity that maximizes the potential for efficient water use, reuse, recapture and conservation and energy conservation.
Financial Sustainability Plan: Recipients must develop and implement a fiscal sustainability plan that includes an inventory of critical assets, an evaluation of the condition and performance of assets, and a funding plan to maintain, repair, and replace assets plus a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan.
Since 2014, federal law has required all loan recipients of the Clean Water SRF to meet these requirements for all projects.
What's the issue?
Sound analysis and planning can save money and improve outcomes. However, requiring the same analysis and planning for every project and every applicant may not be the most cost-effective approach. SRFs are in the best position to determine how best to work with loan applicants and recipients to encourage and facilitate good planning.
What's the solution?
Federal law should recommend management and planning tools but allow SRFs to determine what analysis and management plans should be required of each loan applicant based on the scope of the project and the capacity of the applicant. Allowing the Clean Water SRF to use up to 2% of their capitalization grant to support technical assistance for development and implementation of plans - just like the Drinking Water SRF - may also provide a more collaborative approach to helping communities improve management practices.