Housing Complex

Can D.C. Really Pay For Massive Sewer Upgrades?

Probably not, according to a study out today from the Brookings Institution.

Last October, D.C. Water broke ground on the Clean Rivers Project, a $2.6 billion, 20-year effort to control and cleanse the water that pours off the land and into the Chesapeake Bay. To pay for it, the agency has issued bonds, which are supposed to be paid off through user fee revenue.

The problem is, user fees are actually decreasing as consumers get more efficient with water use—a good thing!—and rate hikes fall disproportionately on poor people. To offset the direct cost to the public, D.C. Water charges landowners "impervious area fees" for all the new concrete they create, since it accelerates runoff into the system. But that isn't nearly enough to cover debt service on the bonds, Brookings says. The federal government—which mandated the improvements in the first place—has contributed about $150 million in earmarks, and there's no telling whether any more is on the way.

The Brookings report (which was underway before the D.C.-focused Greater Washington Research program was folded into their larger division on American cities, meaning fewer such reports in the future) doesn't give a number for how big a dollar gap D.C. Water is facing to finish this thing. But it does express fear that getting it done will crowd out other D.C. Water priorities, and urges everybody in the region to get together and figure out how neighboring governments might help foot the bill. Of course, as we know from perpetual Metro funding shortages, that's always a difficult conversation to have.

UPDATE, 8:38 a.m.: D.C. Water says that current revenues will be enough to cover the rest of the project without help. "If we ran a serious risk of not being able to pay back the bonds, nobody would buy them and our credit rating would be terrible," writes spokesman Alan Heymann. "Instead, our last two issues were oversubscribed and our credit rating increased the same year the US government got a downgrade."

Photo by Darrow Montgomery. Full report after the jump.

[scribd id=94534454 key=key-2o4hnih0kqyzodas5zwp mode=list]

  • Skipper

    Don't worry, WASA will figure out even more ways to jack user fees to cover their costs. By the time the class-action lawsuit over WASA's blatant lying about their lead pipes is all done, they'll be doubling everyone's bills to pay off the lawsuit.

    You should look into their unlawful mandates to developers who are replacing small sections of water mains on projects.

  • Read Scott Martin

    We live our values. When the city was more flush than it is now, Mayor Williams had a choice: to crusade for a new baseball stadium or a publicly financed deep tunnel sewer. WASA has been up front. They will pay for this by jacking up the bills to consumers. Sorry Nats fans, you get to have a nice baseball stadium but a nasty river running by it.

  • Lance

    @Read Scott Martin, DC WASA is a REGIONAL authority (like WMATA, aka Metro). The rate payers are spread across the region (northern Virginia, suburban Maryland, and DC), and what DC spent on a stadium has no relation to what money this regional authority to spend.

    Incidentally, the stadium was paid for with government bonds which get paid back by the revenues from the stadium. So, other than using up some of the District's credit line (and valuable urban space that could go to better uses), the stadium isn't really costing DC taxpayers anything.

  • Eric

    Lance is exactly right. The funding sources for any of these projects are usually not directly correlated and the stadium was financed with future revenue sources, in contrast with new sewer infrastructure which is not a source of revenue.

    However, I have to take Lance to task on the value of the urban space that the stadium used. I believe it was a fantastic use of space in an area that was otherwise not urban when it was built. For the intentional limits on parking garages and surface parking, as well as how it seamlessly abuts neighboring blocks, the stadium wins kudos all around. See Fenway Park for another stadium you might compare to Nats Park to see its potential.