Washington (Feb. 12, 2018) – Over the next 20 years, the United States faces hundreds of billions of dollars in water infrastructure liabilities, which creates a significant need for creative cost-containment strategies that can stretch each dollar further. In a new policy study, R Street Institute Visiting Senior Fellow, Jonathan Coppage, argues that by systematically introducing competitive infrastructure policies that are performance oriented and open to innovation, governments can mitigate their unfunded liabilities while continuing to deliver effective and reliable water services.
As the United States transitions into the “replacement era” of water infrastructure, local governments are at risk of severe fiscal stress if they fail to successfully adapt to new investment conditions. Coppage points out that procurement policies designed around familiar materials and methods risk leaving too little margin for error as successive generations of pipes reach the end of their lifespans and federal clean water regulations continue to demand compliance. “In the best-case scenario, municipal water managers will need to think creatively and execute their plans efficiently to stave off both municipal bankruptcy and ratepayer revolt,” Coppage notes. “By adopting performance-based procurement standards, local governments can become flexible enough to adopt new methods and materials as their circumstances demand.”