Journal
JOURNAL AMERICAN WATER WORKS ASSOCIATION
Volume 109, Issue 4, Pages E99-E109Publisher
AMER WATER WORKS ASSOC
DOI: 10.5942/jawwa.2017.109.0035
Keywords
borrowing rates; financing; state revolving fund; water infrastructure; WIFIA
Categories
Funding
- New York State Environmental Protection Fund via the Hudson River Estuary Program of the New York State Department of Environmental Conservation
- New York State Water Resources Institute at Cornell University
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Many US municipalities confront serious challenges due to aging water and wastewater infrastructure. Many systems require immediate repairs, upgrades, and replacement, but available funding is scarce. Readily available low-interest financing is of great help to such municipalities. The Water Infrastructure Finance and Innovation Act (WIFIA) approved by Congress in 2014 was a step in that direction. WIFIA is a five-year pilot program focused on supporting large-scale projects that may be under-served by existing state revolving funds (SRFs). The authors examine the structure and implementation of WIFIA and its impact on existing financing mechanisms. The cost of debt service in four representative communities in New York was compared under WIFIA, SRFs, and tax-exempt municipal bonds. Although WIFIA financing offered the lowest debt service cost, savings from WIFIA depended on the spread between US Treasury rates and borrowing rates of the SRF-administering agency.
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