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Terra Goodnight · May 11, 2016

Proposal Would Help Fix Ohio’s Aging Water Systems

Ohio is facing a looming water quality crisis, and state lawmakers have proposed a potential solution that could come before voters in the fall. Over 11.1 million Ohioans depend on water from the taps of Ohio’s public water systems. In many communities, this infrastructure is aging and badly in need of repair. Officials in Cincinnati, just one of Ohio’s 1,218 community water systems, are maintaining a sewer system that is more than 100 years old. Overall, Ohio rates only a C- for the state of its infrastructure, as determined by the American Society of Civil Engineers. In addition to inheriting an aging infrastructure, dozens of Ohio communities are also under legal orders from the US EPA that require them to address the overflow of raw sewage into sources of drinking water and recreation. According to the Greater Ohio Policy Center, 88 cities are operating under consent orders with US EPA. These orders mandate that communities fix their outdated system designs that carry a combination of sewer and wastewater or result in overflows of raw sewage into sources of freshwater during storm events. It is estimated that repairs could cost over $14.5 billion, three-quarters of which is needed in Ohio’s mid-sized cities with 200,000 or fewer residents. The total cost of upgrades needed by Ohio’s sewer, drinking water and wastewater systems is estimated at approximately $26.4 billion. Most of the responsibility to build and maintain infrastructure falls on local governments. Typically, 99 percent of the cost of water system are paid for by local taxpayers. And in many Ohio communities, these rates have increased dramatically in recent years in order to support necessary repairs. The average annual bill for residential sewer service in 2014 was $626, up 3.2% from the year before and growing faster than the cost of inflation. Water service costs the typical residential customer another $573 each year, and those costs are also climbing faster than other household expenses. Yet, despite its importance in supporting growth in both residential and business users, spending on capital infrastructure has actually declined as the economy has grown. Investment in infrastructure on a per capita basis dropped from $1.17 in 1960 to just eighty-five cents in 2007 (in 2009 dollars). Part of the reason that communities are unable to keep up with mounting capital construction projects to deal with an aging, and in many cases, toxic water and sewer infrastructures is that local government are coping with funding declines. An IO analysis found that Ohio cities have been cut by nearly half a billion dollars annually as a result of state policy changes enacted since 2011. For many of the communities we examined, the loss of state revenue was between 10 and 25 percent of their annual budgets. Taken together with effects of the global recession on tax collections, many communities have little left after meeting basic budgetary obligations to pay debt service on bonds to finance needed infrastructure repairs. There are a number of financial aid programs available for water and sewer projects, but each is aimed at a specific need, such as rural or Appalachian communities or low-income populations, and many have very low maximum loan or grant amounts, or require matching funds. Ohio’s Senate Minority Leader, Joe Schiavoni has proposed issuing up to $100 million in bonds annually for 10 years to provide a boost to local communities upgrading their water, wastewater and sewer systems. The proposal from Schiavoni, Senate Joint Resolution 3 (SJR3), would provide another tool for communities trying to move projects forward. The proposal, which has sponsors from both parties, would permit the state to issue $1 billion in bonds over ten years in order to award grants to local communities for wastewater treatment systems, water supply systems, and stormwater and sanitary collection, storage, and treatment facilities.  Schiavoni proposed the legislation after sewage overflows into Youngstown’s Mill Creek Metroparks resulted in an extensive fish kill from toxic E. coli bacteria. The Senator learned the city faced $147 million in necessary system upgrades, mandated by a settlement with the US EPA to bring it into compliance with the Clean Water Act, and is working on a timeline of up to 20 years to complete the work. Youngstown is hardly alone. In addition to the other 86 systems mandated to upgrade to avoid sewer overflows, Cincinnati is obligated to spend $3.4 billion on its aging system, a mutli-decade endeavor that has already resulted in residential sewer bills climbing to nearly $1,000 per year. In addition to moving projects forward on a faster timeline, the proposal could also give the state a needed jobs boost. Researchers at the University of Massachusetts determined that 19,769 total jobs are created for every $1 billion in public spending on water infrastructure. The US Conference of Mayors commissioned a study that found investments in water and sewer infrastructure often have greater returns than spending on other types of infrastructure because of its contribution to economic activity. In fact, spending on public infrastructure creates more jobs than tax cuts. SJR3 is currently pending in a Senate Committee, but if passed by both chambers of the legislature, would go to voters for approval in November.

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