Finding ways to finance infrastructure projects
Divide and conquer
Sutton, Mass., a middle-class community of nearly 10,000 residents, is one place where that approach has been successfully applied. When high levels of iron and manganese were found in a local groundwater supply, water officials realized that a new water treatment plant was needed to correct the problem.
The three wells were located in the Manchaug section of Sutton, in an area within the town that receives its drinking water from the Manchaug Water District. Even though Sutton itself may not have qualified for income-based USDA grants, the Manchaug Water District did because its 400 residents have a median income below 75 percent of the state's median income. As a result, the Manchaug Water District was able to obtain grants, rather than just loans. Ultimately, the USDA gave the Manchaug Water District a 55 percent grant to build a new $1.8 million water treatment facility. The residents in Sutton would not have been granted the federal funds if the Manchaug Water District had not existed.
Virtually any small community with a diverse resident base can pursue this approach. By carving out discrete water, wastewater or other utility districts comprised of residents who satisfy the USDA's salary requirements, cities and towns across the country can qualify for these and other income-based grants. The beauty of this approach is that while it provides access to funds that may not otherwise be available, it also offers the added benefit of getting aid for those in the community who most need assistance.
In fact, the USDA is an excellent source of funds for all types of rural infrastructure programs. The department's Water and Environmental Programs (WEP) division provides a wide range of grants, loans and loan guarantees for drinking water, sanitary sewer, solid waste, and storm drainage facilities in rural areas and cities and towns with 10,000 or fewer residents. Last year alone, WEP provided more than $1.5 billion to fund these infrastructure projects.
Of course, the federal government is not the only potential source of funds for infrastructure projects. Some states also have grant programs that can help. For instance, Massachusetts has a program called MassWorks that is designed to provide grant money to promote employment and economic development. Infrastructure improvement projects can be ideal for these types of grants because they provide short-term construction jobs, as well as year-round and seasonal employment related to local industries that rely on the utilities and infrastructure that are being funded.
Coastal communities in which real estate and tourism play key economic roles, such as Cape Cod, provide good examples. The long-term economic benefits of wastewater and drinking water projects are clear. After all, who is going to buy rental or residential properties if the drinking water isn't safe? How long will vacationers visit if they can't swim in the water because it's polluted? And what happens to the local fishing industry if pollution drives out fish populations?
Obviously, each of these issues is of primary importance to the long-term economic welfare of these coastal communities, and each has a significant impact on local employment. When you look at the issue from this perspective, it is easy to see why cities and towns should seek out employment and economic development grant programs like MassWorks to help fund drinking water and wastewater infrastructure development and improvement.