7913

• UCREFRP Catalog Number: 7913
• Author: Freshwater Society.
• Title: Water Management in Transition, 1985.
• USFW Year: 1985.
• USFW - Doc Type: Navarre, MN.
• Copyright Material: YES

All levels - local, state,
regional and national -
must move toward a shift in
their views regarding the
value of water, the
willingness to pay for water,
and the types of mechanisms
used to finance the
construction, repair, and
operation and maintenance
of water facilities.

A new federal-state
relationship focuses not on
direct financing but on
fostering self-sufficiency in
financing.

Nationally, we are in the midst of a major transition in the way all water-related
facilities are financed. To accomplish water investment in the short- and long-
term future, a new political-institutional approach must be put into place. All
levels -local, state, regional and national- must move toward a shift in their
views regarding the value of water, the willingness to pay for water, and the types
of mechanisms used to finance the construction, repair, and operation and
maintenance of water facilities.

Creative approaches to financing are needed to break out of the traditional
federal-grant-plus-government-revenue bond structures and look instead to the
development of privatization and to combinations of public-private financing
approaches. The entire water community - citizenry, consulting engineers,
equipment manufacturers, and state, local and federal officials - must become
educated as to alternative modes of financing. Now, indeed, may be the time
for a new look at the role and responsibilities of the investment banking
community as true financial advisors and strategists, not merely brokers of bond
issues.

Overcoming Barriers To Achieve Objectives

On the pragmatic level, the issue becomes one of identifying state and local
legal barriers to a variety of funding mechanisms and moving constructively to
resolve them - all within the broader context of a well thought-out financial
strategy for the state or locality. Such a strategy must take into account the
community's short- and long-term capital formation needs, including reasonable
options for technological and engineering solutions.

The achievement of these objectives requires consideration of the following
fundamentals:
· Public awareness and education as to the true value and cost of water must
be implemented to obtain the commitment to provide financing;
· Artificial demarcations among water purposes - simplistically, quality and
quantity - must be blended into a more sophisticated realization of the
ongoing, indivisible interrelationship of all water uses, an understanding that
freshwater is a total resource and must be managed as such;
· A problem-solving approach to water management and financing must replace
regional rivalries;
· Recognition must begin to take place of the new role of the financial
community as financial advisor from the time of project inception, working
hand-in-hand with the consulting engineer to identify needs, solutions and
the best means of financing;
. At the federal level there must be a dynamic process to remove existing
barriers to joint governmental/private ventures, including an examination of
tax laws, procurement laws and regulations, and the creation of incentives
for state/regional financing mechanisms.

Reaching these goals will require a dynamic process of public education;
municipal, state, and regional coordination; and a new federal-state relationship
which focuses not on direct financing but on fostering self-sufficiency in
financing. The lesson of the old adage must be learned:
"Give a man a fish, and he has food for a day.
Teach a man to fish, and he will have food for a lifetime."

About the author:Joan Kovalic practices law in Washington, D,C., with the firm ofT aft, Stettinius
& Hollister. She has had extensive private and public experience in water law and financing
issues, representing businesses, state and local governments and organizations such as the
National Water Alliance and the Interstate Conference on Water Problems, She formerly served
as deputy director of EPA's Municipal Construction Grants Program and the U.S, House of
Representatives assistant counsel for Water and Environment.

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