DALLAS -- Michigan municipalities may need to more than double investment in water infrastructure to avoid crises like the disaster in Flint, a report commissioned by the Michigan Infrastructure & Transportation Association showed.
MITA estimated that Michigan communities, which have collectively invested an average of $447 million a year between 2004 and 2013 on drinking water infrastructure, need to spend an additional $731 million to $1 billion on an average annual basis until 2030 in order to meet federal standard on clean drinking water.
The same is true for the money being spent on wastewater and storm water infrastructure. The report stated that Michigan communities already spent an average of $691 million each year but that amount falls short of meeting Michigan’s long-term needs, “particularly for storm water management.”
“The underfunding of our underground infrastructure has been going on for much longer than the recent Flint crisis,” said Lance Binoniemi, MITA vice president of government affairs. “Sewer and water systems are critical resources that aren’t being acknowledged or dealt with until we’re in the midst of a crisis.”
“An essential role of government is to ensure communities have reliable drinking water and wastewater treatment. We need to make an important investment in the health and well-being of Michigan residents by addressing our infrastructure needs,” he added.
The increased investment is needed to update aging water and wastewater treatment systems some of which are between 50 to 100 years old with others dating back to the 1800s, the report stated.
The report, prepared by Public Sector Consultants for MITA is based on data the U.S. Census Bureau. Each year, the bureau collects information from local and state governments on revenue and expenditures through its Annual Survey of State and Local Finances.
PSC also examined data from the Municipal Advisory Council of Michigan, which maintains records of outstanding bond debt held by Michigan communities, to gain insight into all open loans related to water and sewer infrastructure. The report also used surveys from the EPA that estimate both drinking water investment needs and wastewater and storm water investment needs to reach the report’s conclusions.
MITA’s figures for water infrastructure management don’t include the state’s costs to reestablish a safe drinking water supply in Flint. The city is suffering fallout from a water contamination crisis that began after it broke off from the Detroit Water and Sewerage System in 2014 when its contract to receive Detroit-supplied water ended.
The city began pulling water from the Flint River and intended to use it until later this year, when it links to a new Karegnondi Water Authority pipeline.
Authorities failed to properly treat the Flint River water and it corroded pipes throughout the system, creating lead contamination that remained even after the city switched back to Detroit water.
Michigan Gov. Rick Snyder has asked the state’s lawmakers to appropriate $232 million to tackle both the short-term health and long-term safety concerns of Flint residents in the wake of the crisis.
Water infrastructure in the state is generally financed through loans or bonds. Loans have been supported through federal appropriations to capitalize state revolving loan funds for both drinking water and wastewater management. These funds require a 20 % match, which Michigan provides through voter-approved bonds.
Since they were created, Michigan’s Clean Water and Drinking Water Revolving Loan Funds have provided has issued more than 275 loans totaling over $857 million. The state’s storm and wastewater infrastructure is financed through Michigan State Revolving Fund, which has issued over 550 loans totaling more than $4.46 billion.
Michigan is also working on new avenues for communities to access financing.
In March, Snyder mobilized a new advisory commission to study the state’s infrastructure.
The 21st Century Infrastructure Commission will focus will focus on long-term strategies to help ensure Michigan’s roads and bridges, water and sewer systems, energy and communications systems remains safe and efficient now and into the future.
The 27-member commission includes individuals representing the business, government, nonprofit, and academic communities. The commission must present an infrastructure assessment and its recommendations no later than Nov. 30, 2016.
Snyder also recommended that $165 million could be put in the infrastructure fund in lieu of a deposit to the state’s rainy day fund in his fiscal 2017 budget recommendation.
In 2013, the state launched the Storm water, Asset Management, and Wastewater to provide low interest loans to support construction projects identified through such planning documents. The state has allocated $450 million to the program, which will be disbursed over multiple years.