Baltimore encouraged to seek loan to pay for water infrastructure upgrades

The Environmental Protection Agency has tapped Baltimore as a possible recipient of a federal $200 million loan to help upgrade the city’s infrastructure to stop sewage from chronically spilling into waterways.

The money would be used to improve the city’s wastewater collection and treatment and stormwater management systems, actions that are required under a $1.2 billion consent decree. A dozen projects in nine states were invited to apply for more than $2 billion in loans through the Water Infrastructure Finance and Innovation Act.

Rudolph S. Chow, director of the city’s Department of Public Works, said applying for the federal money could help “alleviate the burden placed on our local ratepayers.” Water customers in Baltimore saw a 9 percent rate increase go into effect on July 1, raising the monthly bill for a typical home by about $7. The price of water will have doubled in the city over eight years when a final planned rate increase takes effect next summer.

“Our application covers important construction projects in Baltimore’s water, sewer, and stormwater utilities, and helps us carry out our mission to support the health, environment, and economy of our city and the region,” Chow said in a statement.

While the EPA selected Baltimore as an ideal applicant for the loan, the money is not guaranteed. EPA officials say the selected projects must formally apply, pass a creditworthiness assessment and negotiate terms. The projects were selected from a group of 43 for which letters of interest were submitted to the EPA in April.

In Baltimore, the funds can also be used to upgrade water treatment and distribution operations. Ultimately, the work is intended to ensure “the reliability and performance of the pumping stations and Maryland’s two largest wastewater treatment plants,” improving the drinking water distribution system, according to the EPA.

“Rebuilding America’s infrastructure is a critical pillar of the President’s agenda,” EPA Administrator Scott Pruitt said in a statement. “These large-scale projects will improve water quality for 20 million Americans, especially those communities that need it the most — such as rural and urban communities.”

The EPA’s state revolving fund and other funding sources are helping to finance more than $5 billion in water infrastructure investments across the country, the agency said. Under the Water Infrastructure Finance and Innovation Act of 2014, EPA officials said the new loan program aims to accelerate investment by providing long-term, low-cost supplemental credit assistance.

The city’s sewage system is more than a 100 years old and was designed to discharge wastewater directly into area waterways when it becomes overloaded, a key reason why water quality is poor in the Inner Harbor, Jones and Gwynns falls and the Patapsco and Back rivers. Cracked and broken pipes allow sewage to routinely flow into city waterways. When it rains, stormwater inundates the system, sometimes washing millions of gallons of water contaminated with untreated sewage into waterways.

Over about 15 years, the city spent about $900 million on sewer system repairs. An original consent decree was put in place in 2002 that required work to be done by the end of 2015.

The new consent decree was established last summer. It requires the city to finish key repairs by 2021 and develop a plan to complete the rest of the work by the end of 2030.

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