THE STATE OF NEW JERSEY'S WATER INFRASTRUCTURE

American Society of Civil Engineers Gives Sewer Systems "D" Grade

What you can't see, can hurt you. Such is the case with our deteriorating, underground water infrastructure—a system where leaks can go undetected for months. These public health risks often are close to fishing areas, swimming areas and children's playgrounds.

New Jersey 's aging wastewater treatment and conveyance systems were recently given a "D" grade by the American Society of Civil Engineers in their report entitled 2007 Report Card for New Jersey's Infrastructure . Our drinking water systems didn't fair much better, managing a mediocre "C" grade by the Society.

We ask a lot of our water systems, including treating and transporting more than 1.2 billion gallons of drinking water every day and treating and disposing over 15 billion gallons of domestic and industrial wastewater each day.

The out-of-sight, out-of-mind water systems that supply our faucets, showers and toilets should never be taken for granted. Behind these every day fixtures is a high-tech network of pipes, pumps and treatment systems that cost billions of dollars to operate and maintain.

At present, repairs and replacements of the state's water and sewage pipes and treatment plants is estimated at more than $20 billion. With the average age of our sewer lines being over 70 and the estimated life expectancy of pipe at 50, we are nearing a time when unanticipated failures may occur.

Add to age, the ever increasing need to keep pace with regulatory discharge requirements and the cost assessment jumps to nearly $24 billion.

Meeting the high costs of improving our infrastructure is an ongoing challenge. In fact, the funds for fixing water infrastructure are rapidly drying up. Federal funding for New Jersey 's clean water programs dropped to $27 million in federal fiscal years 2006 and 2007, down from $44 million in 2005 and $54 million in 2004. In addition, funds from New Jersey 's Bond Acts in 1981, 1985, 1989, 1992, and 2003 are nearly depleted.

The New Jersey Environmental Financing Program (EIFP) is projecting shortfalls of $90 million in 2009 and $274 million in 2010. These projections are based upon a current project demand of $520 million per year.

Federal funding shortfalls will require the DEP to implement its project priority system to preclude some applicants from receiving loans—a project ranking methodology that has never been needed in the funding program's 21-year history. The ranking awards points to each project based upon environmental benefit. The end result: many much-needed infrastructure projects, that will benefit the environment, will not be constructed because the shrinking pool of available funds will go to higher ranked projects.

Over the past 21 years, the EIFP has funded more than $4.3 billion in infrastructure projects, created tens of thousands of jobs and saved New Jersey 's taxpayers and ratepayers nearly $2 billion in finance costs.

Maintaining this highly successful program will require a strategy for restoring federal funding and/or additional funding from state bond acts.

We anticipate an annual shortfall of $150 million from revolving fund sources, if matched with the Trust's bonds and other current fund sources, would support a $520 million per year program. This will maintain the program at its current funding level until 2012.

Since the gap between the funds we need and the funds available for critical improvements is rapidly expanding, we have been actively meeting with federal legislators to alert them to the critical state of New Jersey's infrastructure.

The benefits of a fully funded infrastructure program are twofold: 1) the resultant environmental improvements will enhance and improve water quality and public health, which helps maintain our state's multi-billion dollar recreation industry and 2) the funds will help our slumping economy recover with an influx of tens of thousands of jobs.

Considering the necessity of ensuring adequate funds are committed to New Jersey's drinking water and sanitary wastewater systems, and the significant savings afforded borrowers through the EIFP, we are hopeful that federal legislators will act before our aging infrastructure begins to fail. This will ensure that our rivers, lakes, streams and beaches are protected and preserved for the state's future generations.