The project is being financed by long-term bonds, to be repaid with revenue from water and sewer charges and a new “impervious area charge.” D.C. Water is also exploring the extent to which “green infrastructure” can contribute to reduced stormwater. The federal government has contributed about $150 million in earmarks over time, but future contributions are not predictable.
So, despite D.C. Water’s active and forward-looking management, the financing of the Clean Rivers Project raises multiple concerns.
First, the present approach puts the burden to pay on District property owners, based on the “polluter pays” principle. But loading all of the costs on District ratepayers could be risky. D.C. Water bills are on track to increase sharply: The typical residential monthly bill is projected to rise from $41 in 2009 to $103 in 2019, or an average annual increase of almost 10 percent, far surpassing the inflation rate. The increases will disproportionately affect low-income residents; we estimate that water and sewer bills will more than double as a share of their incomes by 2019.
Looking past 2019 presents more uncertainty. The rates will have to rise between 2019 and 2025 to complete the project and meet the stipulated water quality levels. But we do not know how much yet. D.C. Water does not project rates beyond 2019. But ordinarily the final costs of such large projects go up.
What if D.C. ratepayers ultimately prove unwilling or unable to pay?
We need, instead, to ensure that all the beneficiaries pay their fair share. Water disregards jurisdictions. The entire region benefits from cleaner water — a public good — and so must be part of planning, implementing and funding the cleanup strategy. Cleaner water flowing from the Anacostia and Potomac rivers in the District means that downstream jurisdictions have less of a pollution problem to address. Additionally, the effectiveness of water quality improvements taken by jurisdictions upstream of the District are lessened if the Potomac and Anacostia rivers become more polluted while passing through the District.
D.C. Water has no authority outside of its narrow rate utility. It needs help from the other beneficiaries of its efforts, including the suburbs and the federal government. The federal government is a major beneficiary of cleaner rivers; it built and operated Washington’s sewers, which generate the combined sewer overflows (CSOs); and it is a party to the consent decree to clean it up.
The Metropolitan Washington Council of Governments and D.C. Water should bring together the federal government, the states of Maryland and Virginia, the District and local jurisdictions to sort out a more rational system of payments for the benefits from the area’s clean water. While no one looks forward to a new cost, the current, fragmented efforts do not match the scale of the problem. Three suburban counties that send their wastewater to D.C. Water for treatment currently do contribute to the clean rivers project, but other area jurisdictions do not. Furthermore, Maryland and Virginia and their local jurisdictions face their own regulatory and budgetary pressures to reduce stormwater, nitrogen and sediment flows into the bay. Federal, state and local cooperation in the region to address funding for the myriad of water quality mandates would be a demonstration for the whole country. Regional transportation planning groups hammer out similar issues regularly. Now, the EPA seems ready to recognize that regional participation can work for clean water issues, too.
Without an active, involved regional effort, D.C. Water’s narrow payment base may be stretched too thin to carry out the Clean Rivers Project and meet its legal requirements. If the project lacks affordable, dependable financing, completion may be threatened, meaning our area’s waters will continue to be polluted unnecessarily. No one wants that to happen.
The writer is a nonresident senior fellow at the Brookings Institution’s Metropolitan Policy Program.