NLC Participates in EPA Dialogue to Assess Financial Capability for Municipal Clean Water Act Obligations

May 6, 2013

By David DeVaughn

Last week, the National League of Cities (NLC), the National Association of Counties (NACo), and the United States Conference of Mayors (USCM) participated in a new dialogue with the U.S. Environmental Protection Agency (EPA) designed to clarify how the financial capability of a community will be considered when developing schedules for municipal projects necessary to meet Clean Water Act (CWA) obligations. In addition to the national associations, local officials also participated in the meeting. Representing NLC were Mayor Judith Davis of Greenbelt, MD; Mayor Sal Panto of Easton, PA; and Rob Robinson, Planning and Code Administration from the City of Gaithersburg, MD.

In the meeting, the local officials and association representatives discussed ways in which the agency could expand the use of benchmark indicators of household, community and utility affordability to better assess financial capability of a communities. The consensus of the local officials was that the current reliance on two percent of median household income (MHI) for wastewater and combined sewer overflows (CSO) controls is a misleading indicator of a community's ability to pay, and often places a particularly high burden on residents at the lower end of the economic scale.  Also discussed was the need for the agency to facilitate consistent policy implementation across EPA regional offices.

In the June 2012 EPA Integrated Municipal Stormwater and Wastewater Planning Approach Framework, the Agency recognized the challenges local governments face in meeting CWA obligations, and the conflicts cities face in balancing environmental protection with economic feasibility. All attendees were pleased that EPA has taken the next step and entered into this dialogue.

This meeting (and the dialogue) follows the release of January's EPA memorandum, "Assessing Financial Capability for Municipal Clean Water Act Requirements." In that memo, the Agency acknowledged that the two percent of MHI indicator is just "one of many considerations that should be evaluated in determining the most appropriate [compliance] schedule. EPA expects that the full range of financial indicators as well as municipal-specific information will be considered [by the EPA regions] when developing schedules."

In addition to last week's session, over the course of the year, EPA and local governments will discuss:

• How to meet the obligation of the CWA by utilizing flexibilities in the statute and implementing regulations to prioritize necessary investments;

• How rate structures present both limitations and opportunities;

• How innovative financing tools, including public private partnerships, are related to affordability; and

• How other community specific factors, including obligations under the Safe Drinking Water Act, should be considered in developing appropriate compliance schedules.

"At the end of the day," said NLC Executive Director Clarence Anthony, "we hope through this dialogue that we can reach an agreement with EPA on a new methodology for how household and community affordability are determined. EPA needs a more realistic and complete picture of the financial burdens on residents who are ratepayers and local governments."