2021 Water Infrastructure Survey: Summary Report 2

It has been well-documented and long understood that Oregon’s water infrastructure is in significant

need of repair, upgrade and investment. Our water infrastructure plays a critical role in supporting

community public health, livability, economic development, environmental protection, housing, and a

growing population. Not only is Oregon’s existing infrastructure in serious need of repair, but local water

and wastewater providers are also facing new and emerging challenges that will require additional

investment and add additional costs. These challenges include:

billion in water infrastructure needs from the 121 of Oregon’s 241 cities that responded to the survey.

Of the $7.6 billion in identified needs, $4.3 billion was attributed to water quality-related projects,

including wastewater treatment plants, while $3.3 billion was related to drinking water and water

supply/storage projects. An LOC transportation infrastructure survey was also conducted in 2016, and

identified $3.7 billion in transportation-related infrastructure needs (highway and non-highway).

Fortunately, during the 2017 legislative session, the state Legislature approved a $5.3 billion

transportation infrastructure investment package.

related to water/sewer rate affordability. Page 4 outlines key findings from the 2021 survey, including a

breakdown of drinking water/water supply needs versus water-quality related needs. Ultimately, the

survey identified the significant combined water infrastructure needs for the coming 20 years as

follows:

overstated. Oregon’s water infrastructure is too often out of sight, and therefore, out of mind. It often

2021 Water Infrastructure Survey: Summary Report 3

outpacing the budgetary capacity of local communities. As a result, many communities are experiencing

increasing drinking water and sewer rates that are resulting in affordability challenges throughout the

infrastructure in the United States are projected to surpass $1 trillion in the next 25 years and could

triple the cost of household water bills.

level. According to a white paper from the National Association of Clean Water Agencies, “the

Congressional Budget Office has found that the federal cost-share of total water capital, operations, and

maintenance spending in the country has declined in real dollars over the past four decades and has

fallen below 5%. This federal share is much smaller than other core infrastructure sectors, such as

highways (close to 50%), mass transit and rail (17%), and aviation (17%). Local and state

for clean and safe water…is coming directly from ratepayers.”

It is important for policymakers to understand the shift that has taken place, and the immense costs that

local communities are facing. Across Oregon today, communities are can’t afford to address failing or

deficient infrastructure. Unfortunately, this can, and has, resulted in some communities being unable to

infrastructure that was necessary to support additional growth. The reality is that these immense costs

are largely being addressed at the local level, using local ratepayer dollars (water/sewer/stormwater

bills), system development charges, or through temporary increases to property taxes (temporary tax

levies or general obligation bonds). For those communities that can access state funding resources, it is

important to recognize that much of this funding assistance comes in the form of low-interest loans.

While there are some existing opportunities for loan forgiveness, those opportunities are limited, and

many communities are finding that they must still finance infrastructure costs locally, plus interest. We

have reached the point in Oregon where the backlog of needs continues to grow, while costs continue

to increase. This has resulted in communities that are simply unable to afford necessary projects and has

resulted in impacts to low-income and other vulnerable populations.

remain financially solvent when ratepayer revenues are impacted as a result of increased arrearages. As

of 2020, there were no federal or state-funded low-income assistance programs to help Oregonians pay

2021 Water Infrastructure Survey: Summary Report 4

water and sewer bills. The problem isn’t that low-income assistance programs have not, and do not,

exist. Those programs, however, exist at the local level, funded through local ratepayer dollars. This

dynamic creates some unique equity challenges for low-income Oregonians, those on fixed incomes,

and for small communities, as an increase in water rates to help offset affordability challenges is likely to

simply intensify those affordability challenges. The LOC identified the need for additional state/federal

ratepayer dollars as a legislative priority for the 2021 legislative session. And in December of 2020,

Congress approved more than $600 million in federal water/sewer ratepayer assistance, with another

$500 million approved in March of 2021. The LOC is focusing on implementation of the federal program

(Low-Income Household Water Assistance Program) and will continue to advocate for additional funding

from state and federal resources.

The 100 cities that responded to the survey (out of 241 cities in Oregon), identified $9.7 billion in water

infrastructure needs, including water quality-related needs and drinking water/water supply needs.

needs identified by survey respondents totaled $2.12 billion. PSU was able to extrapolate the data to

identified by survey respondents included an additional $2 billion; representing approximately $7.6

billion as a statewide estimate of total drinking water/water supply needs.

The LOC anticipates that drinking water infrastructure needs will only increase as a result of seismic risk

assessments and mitigation plans that are now being required by the Oregon Health Authority’s

Drinking Water Services program (as of 2018) and will be incorporated into regular water master plan

updates for communities that are located within more seismically vulnerable parts of the state. One city,

with a population of slightly more than 27,000, highlighted the extent of this emerging need as follows:

these include water supply curtailments due to fish persistence and other permit conditions, and a need

to build additional water supply storage including secondary supply sources to ensure continued

drinking water supply during times or shortage, contamination events (e.g. harmful algal blooms) or

other disruptions of service. In addition, many communities have identified other water-related

infrastructure needs for levees and dams that are in need of repair, replacement, and seismic upgrades.

2021 Water Infrastructure Survey: Summary Report 5

Finally, it is important to note the importance of source water protection investments for drinking water

supplies. This work is critical to ensure safe drinking water. Investments, including funding to address

failing septic systems and coordinated efforts to address and help mitigate impacts from harmful algal

blooms, are just two examples that highlight the importance of critical source water protection

investments. Unfortunately, as a result of recent wildfires, there may be additional risks to downstream

to increased likelihood of harmful algal blooms.

identified by survey respondents totaled $3 billion. Again, PSU was able to extrapolate the data to

quality standards that must be met for public/municipal wastewater providers. If a municipality does

not know the water quality standards they must meet, it is very difficult to invest in the appropriate

treatment technologies and system upgrades that may be necessary. Unfortunately, due to the backlog,

many of these permits have expired, though some have been administratively extended, for more than

10 years. As a result of litigation, the Oregon Department of Environmental Quality (DEQ) has issued a 5-

year permit issuance plan to update permits. As municipal wastewater providers receive updated

permits, they will very likely receive updated, and more stringent, water quality standards that must be

met in order to discharge treated wastewater. Some of the more challenging emerging pollutants in

recent years have included temperature, mercury, and copper. The LOC has worked with the DEQ and

the Legislature to provide additional staffing capacity and targeted investments to address the water

2021 Water Infrastructure Survey: Summary Report 6

Oregonians to pay for necessary infrastructure, and communities with smaller populations and those

serving lower-income populations are disproportionately impacted when costs and regulations increase.

At this point, many communities simply can’t afford necessary infrastructure. Addressing this backlog

will require significant additional investments from the state and federal government. In addition, the

LOC encourages the state to work with local governments to ensure that small and rural communities

have access to the resources necessary to plan for infrastructure investments. Many communities are

far from “shovel-ready,” and will need assistance to ensure that they are prepared to accept federal

infrastructure dollars that may become available.