Investment in Water Infrastructure California Water Association

Many of the nation’s water and sewer systems include infrastructure that dates back to the early 1900s. Even more recent systems that were built with federal funds during the 1970s now need upgrading or replacing. Currently, 85% of water systems are operated by cities and other government entities, most of which are facing declining property tax revenue. The remaining 15% are owned and operated by investor-owned utilities. Investment in Water Infrastructure

In 2010, nearly 87 percent of city finance officers reported declining revenues and that their cities were less able to meet fiscal needs than in previous years. While the nation’s infrastructure has been deteriorating, during the last three decades, standards governing drinking water quality have become more stringent. Many water systems require improved technologies and upgraded infrastructure to meet these higher standards. Investment in Water Infrastructure

Key water industry experts are increasingly recommending a revamped role for the national government regarding water infrastructure investments, as well as increased partnerships with the private sector. Such partnerships can assist communities by providing capital needed to upgrade infrastructure. Investment in Water Infrastructure

As an example of a private-public partnership, a town with limited financial and staffing resources can contract its system to a private water utility. The utility can offer greater economies of scale in its services by providing better management, improved technologies, access to capital, emergency response and ultimately a more cost-effective water system. Investment in Water Infrastructure

Numerous surveys indicate that governments traditionally realize cost savings of 20% to 50% when the private sector is involved in providing services. A water system that costs a town $1 million to operate may only cost a water utility $800,000. Investment in Water Infrastructure