Let the Dollars Flow: A pot of gold for Illinois - Metropolitan Planning Council

Skip to main content

Let the Dollars Flow: A pot of gold for Illinois

It was standing room only at MPC's Oct. 15 event on funding water infrastructure maintenance.

Did you know Illinois has $2 billion in low-interest loans for water service infrastructure to communities today? Yes, there is actually a significant amount of money available right now in our state to jump-start much-needed investment in our water supply, wastewater and stormwater infrastructure.

National infrastructure reinvestment figures such as $1 trillion for drinking water and $388 billion for wastewater are staggering. Here in Illinois the estimated cost is $32 billion over the next 20 years to maintain and upgrade our water service infrastructure. For some context, in 2014 the Illinois Environmental Protection Agency loaned $501 million for water infrastructure maintenance and upgrades. It’s a great start, but we have a long way to go to bring all our water infrastructure up to par. At the same time, we are experiencing increasing stormwater infrastructure issues, which are causing significant water quality and urban flooding problems. Innovating and upgrading our wet weather infrastructure to handle this new norm is critical and will require funding.

Ensuring financing options are viable and equitable for all communities is important to the Metropolitan Planning Council (MPC). There is a choreography that has to happen to bring an infrastructure project to fruition—from planning to permitting; financing to contracting. All aspects need to work together for the overall performance to be successful. Delayed or uncertain water financing mechanisms increase costs for communities. Which is why over the past year, in partnership with the Ill. Environmental Protection Agency and the Metropolitan Mayors Caucus, we have been exploring ways to streamline the application process for one such financing option: the State Revolving Fund. This fund provides low-interest loans for communities to improve drinking water, wastewater and stormwater infrastructure. To encourage more communities to apply for this significant but underutilized state low-interest loan for water infrastructure, the partnership conducted research, stakeholder surveys and interviews to recommend a number of reforms to the State Revolving Fund application process.

Our State Revolving Fund recommendations report, released last week, features tangible ways to improve the application process of this important funding source to allow communities to access these funds. The recommendations fall into five general categories:

  • Update and streamline the loan application forms and website
  • Standardize the loan application processes and reduce unnecessary requirements
  • Capitalize on available funds to provide the most value to communities
  • Increase interaction, education and awareness of the Fund
  • With its recent eligibility, develop stormwater criteria and forms

While some of the recommendations—such as providing a flowchart to outline the loan process and creating a bundled application packet—might seem rather mundane, it is often the simple details that affect the usefulness of a program.

In conjunction with the release of this report, on Thursday, Oct. 15, more than 100 water industry professionals gathered at MPC for a roundtable discussion to learn about the latest in water infrastructure financing and hear about the changes Ill. Environmental Protection Agency is making to its State Revolving Fund program. Agency Director Lisa Bonnett spoke about a number of improvements her team is undertaking to have the program be more effective and streamlined. Director Bonnett announced the formation of a stakeholder group that is helping guide the Agency in updating the fund program rules to examine new financing structures, improve review timelines and establish a framework to help communities tackle nonpoint source and runoff pollution issues. Based on MPC’s recommendations report, Ill. Environmental Protection Agency is also working to:

  • Improve its procedures to better assist applicants through the loan application process
  • Make changes in-house to better streamline review timelines and eliminate unnecessary or redundant internal processes
  • Update the current website for improved navigation and usability, including the bundling of loan application forms

In addition to water infrastructure financing at the state level, the Oct. 15 roundtable addressed a funding stream that is being worked on at the national level, which recognizes the importance of water infrastructure reinvestment. Jordan Dorfman of the U.S. Environmental Protection Agency presented an update about the status of the Water Infrastructure Finance and Innovation Act, otherwise known as WIFIA. WIFIA is designed to help fund large nationally and federally significant water infrastructure projects on the order of $100 million with the minimum project threshold being around $20 million so as not to compete with the State Revolving Fund. While WIFIA is available to any utility currently eligible under the state program, this national funding source would also be available for private borrowers. Dorfman stated that Congress has not yet appropriated funds for WIFIA, however they are currently working to get funding for WIFIA into the President’s budget for FY2017. He is also hopeful that current stipulations about 51 percent of a project not being eligible for tax exempt bonds will be modified in order to make the loan more attractive once the program is up and running.

In addition to state and national financing assistance, local communities must explore new pathways for revenue generation and engage in public discussions about local water rates to ensure safe and sustainable water services now and into the future. To address the innovative approaches some utilities are doing, MPC’s roundtable featured George Hawkins, general manager for the D.C. Water and Sewer Authority (DC Water). Hawkins spoke about the Green Century Bond DC Water utilized to finance massive infrastructure improvements. The idea is that the infrastructure will still be there in 100 years, so a longer debt term is fair. DC Water also engages in revenue-generating activities such as patenting innovations in technology and tools, and using biosolids as an asset, not a waste stream. All of which brings added value to its customers, and encourages creativity and employee talent.

There was also a discussion about how and why utilities need to communicate with their customers. Hawkins believes that before tackling rates and financing needs, the fundamental challenge and question every utility should ask itself is how you communicate with your customers. If the first and only time you interact with consumers is when you are asking them for a rate increase, that will be difficult for them to accept. DC Water is a leader in developing new ways of both operating and financing a sustainable water service utility in the 21st Century. 

“If your customer does not know you, they will not invest in you.”—George Hawkins, DC Water

It is important for us to recognize that no one financing option will solve all our water infrastructure needs. And while we face enormous reinvestment challenges, the good news is that we have a great product (H20). MPC is committed to helping streamline existing financing options and driving innovation in new revenue streams for water services.

Comments

No comments

More posts by Danielle

  1. Sincerest Thanks and Best of Luck, Sarah!

All posts by Danielle »

MPC on Twitter

Follow us on Twitter »


Stay in the loop!

MPC's Regionalist newsletter keeps you up to date with our work and our upcoming events.

Subscribe to Regionalist


Most popular news

Browse by date »

This page can be found online at http://www.metroplanning.org/news/7231

Metropolitan Planning Council 140 S. Dearborn St.
Suite 1400
Chicago, Ill. 60603
312 922 5616 info@metroplanning.org

Sign up for newsletter and alerts »

Shaping a more equitable, sustainable and prosperous greater Chicago region

For more than 80 years, the Metropolitan Planning Council (MPC) has made the Chicago region a better place to live and work by partnering with businesses, communities and governments to address the area's toughest planning and development challenges. MPC works to solve today's urgent problems while consistently thinking ahead to prepare the region for the needs of tomorrow. Read more about our work »

Donate »