The Bipartisan Infrastructure Law (BIL) provides an incredible opportunity with historic levels of funding for municipalities and utilities. While the $15 billion allocated is significant, it's important to recognize that addressing the estimated 9.2 million lead service lines across America will require more resources. This challenge presents an opportunity for elected officials, utility directors, policy leaders, and the private sector to collaborate and ensure that every dollar of funding is maximized to its fullest potential.
Our organization, Community Infrastructure Partners (CIP), has been fortunate to engage with communities around the country about how best to approach this challenge. To date, general inertia has taken hold, primarily driven by one simple, underlying premise: stakeholders want a level of certainty that simply does not and will not exist. Whether that applies to the number of lines a community truly has (public side, private side, both), the amount of funding they are going to receive through BIL, and in what form (principal forgiveness vs.low-to-no-interest loans), the per line replacement cost (high degree of variability across the country, even before contractor supply shortages take effect) or any number of other factors, there is not enough concrete action being taken.
In an attempt to counter this dynamic while also attempting to integrate the highest degree of certainty that can be reasonably expected, CIP has developed the following operating principles in our approach:
- Act Now: Waiting will not bring any benefits. By acting promptly, you avoid competing with other water systems in your state for limited funding. Additionally, delaying action will only result in higher costs due to inflation. Remember, costs tomorrow will be higher than costs today. Furthermore, promptly addressing labor scarcity saves costs and ensures high-quality outcomes.
- Develop a Performance-based Programmatic Structure: Traditionally, engineering consultants have little to no incentive to accelerate the replacement of LSLs or to control costs. Having performance-based metrics embedded within a replacement program ensures the private sector is held accountable for the community's financial, technical, and socioeconomic goals. Not only will this structure control costs and ensure minimum replacement volumes, but it can also increase local contractor capacity and boost resident participation within a given region.
- Streamline Predevelopment: Focus predevelopment activities on developing a scalable replacement program to create a delivery model that enables the community to seamlessly transition into replacing LSLs. Aiming for certainty dramatically slows the pace of implementation, if not drives outright inactivity in certain communities. Ensure the procurement vehicle enables the community to replace all LSLs with the safety net of operating on a year-by-year basis.
- Combine LSL Inventory and Replacement into ONE: Many communities only apply for funding related to LSL inventory, not replacement. Often, communities hire consultants to complete an inventory using predictive analytics and machine learning. This helps get a general understanding of where LSLs may be, but it is never entirely accurate. Instead, integrate the inventory process into an implementation program. As inventory is completed in one neighborhood, replacements can begin while inventory is completed throughout the rest of the community.
- Integrate Financial Technical Assistance into Implementation: Often, Financial TA is a first step in launching an LSL program but doesn’t always continue into the replacement program. Many unpredictable components of an LSL program can affect how SRFs allocate funding and principal forgiveness. This may include identifying less lead than expected in a given census tract or a different allocation of public versus private LSLs than anticipated. Having the Financial TA aspart of the replacement program allows the community to dynamically adapt by working with the SRF to expand or change the scope.
- Embrace a Community and Public Health Lens vs. Engineering and Construction: This mindset, particularly from a community outreach perspective, drives higher rates of consent when residents understand the health impacts as opposed to a standard public works road project.
- Regionalize your Program: Make a concerted effort to develop a regional model off an anchor program. Far too many small to mid-sized water systems don’t have nearly the time or resources to build their program and are at significant risk of missing out on this historic funding opportunity. This can be done operationally and doesn’t require the creation of a regional ‘entity.’ Each system can apply for its own funding and have its award spent only in its community; however, operationally, it can be managed centrally to ensure resources are optimized, frictional costs are minimized, contractors are available, and costs are controlled.
Community Infrastructure Partners (CIP) believes it is imperative for stakeholders to adopt these operating principles and work together to maximize the impact of BIL funding. This ensures that every dollar is utilized efficiently to safeguard public health and infrastructure for future generations. We can overcome the challenges ahead and create safer, healthier communities nationwide through concerted efforts and innovative approaches.
This article offers additional perspective on a topic discussed at a January 2024 convening jointly organized by The Joyce Foundation and the Federal Reserve Bank of Chicago to identify key information and research needs that, if met, could help communities overcome economic and financial challenges to implementing lead service line replacement projects. A summary of the convening is available in a Chicago Fed Insights article.
