On June 29, 2009, the United States Government Accountability Office (GAO) released its report, “Clean Water Infrastructure: A Variety of Issues Need to Be Considered when Designing a Clean Water Trust Fund.”  The long awaited report from the GAO acknowledges that our Nation faces tremendous challenges in replacing and rehabilitating our water infrastructure, with estimated needs between $400 and $600 billion over the next 20 years for safe drinking water and wastewater treatment infrastructure.

The GAO report does not make any specific recommendations on how a trust fund would be administered, or which revenue sources are most viable.  However,  it does outline issues that need to be addressed in establishing a Clean Water Trust Fund and identifies potential funding options including excise taxes on water pollutants and water-intensive industries that could generate approximately $10 billion annually. The taxes would apply to beverages, pharmaceuticals, pesticides, flushable products and water appliance industries. In researching its report, the GAO reached out to 28 industry associations including AGC of America, the Internal Revenue Service and the U.S. Environmental Protection Agency (EPA).

AGC and the Water Information Network (WIN) Coalition have endorsed the concept of a Clean Water Trust Fund to create a long-term, sustainable, off-budget source of funding for water infrastructure to finance construction and maintenance of this critical infrastructure.

On July 15, 2009, the House Transportation and Infrastructure Subcommittee on Water Resources and Environment is scheduled to conduct a hearing titled “Opportunities and Challenges in the Creation of a Clean Water Trust Fund.”  AGC anticipates introduction of “trust fund” legislation by Congressman Earl Blumenauer (D-Ore.) in the near future.

For additional information, contact Perry Fowler at (703)837-5321 or fowlerp@agc.org.

On June 10, 2009, the House Appropriations Interior & Environment Subcommittee approved it’s FY 2010 bill, which provides funding for the Department of the Interior and other agencies, including the U.S. Environmental Protection Agency. This bill delivers on the President’s requested budget of $3.9 billion for EPA’s Drinking Water and Clean Water State Revolving Fund (SRF) programs with an increase of approximately 250% from FY09 appropriations (excluding the $6 billion in ARRA stimulus funding).

The bill provides $2.3 billion for the Clean Water and $1.5 billion for Drinking Water SRF programs with additional funding allocated to specific earmarked projects. The bill also funds the President’s request of $475 million for the Great Lakes Restoration Initiative and various other programs. For a complete listing of programs with funding levels click here.

The full Appropriations Committee is expected to vote on this legislation June 18, 2009.

For additional information, please contact Perry L. Fowler at fowlerp@agc.org.

On Monday June 6, 2009, AGC’s Chief Economist Ken Simonson gave a presentation to senior management including capital planning, design and program management staff at Washington, DC’s  Water and Sewer Authority (WASA).  WASA provides drinking water and wastewater services to 500,000 customers in the District of Columbia, and 1.6 million customers in Maryland and Virginia. In his presentation, Simonson discussed the outlook for construction markets and highlighted increasing unemployment and material price trends in the construction industry.

AGC’s Municipal &Utilities Division Director Perry L. Fowler also participated in the WASA briefing and discussed current industry trends and regulatory issues impacting AGC contractors such as  American Recovery and Reinvestment Act (ARRA) Buy American requirements and recent waivers issued by the EPA.  Former AGC of D.C. president and AGC national board member Dragan Stojanovic, Norair Engineering Corp., also attended the meeting.

Simonson is scheduled to speak to the New York City Department of Environmental Protection at its Newtown Creek Water Pollution Control Plant on June 22. Both the Washington, D.C. and New York water agencies have multi-billion dollar construction plans and sought out AGC’s chief economist for his take on the outlook for materials costs.

If you know of a water or wastewater agency that would like to schedule a similar presentation for its senior management and estimating or engineering staff, please contact Perry Fowler at fowlerp@agc.org.

EPA is announcing new revised Drinking Water State Revolving Fund (DWSRF) allotments that will be provided to the states, the District of Columbia, Puerto Rico, U.S. Territories, American Indian Tribes and Alaska Native Villages if the President's budget request for Fiscal Year 2010 is enacted.  These allotments reflect the results from EPA's most recent Drinking Water Infrastructure Needs Survey and Assessment, which was released on March 26, 2009. The revised allocation percentages affect DWSRF Program appropriations for the four years from Fiscal Years 2010 through 2013. 

Under these new allotments, each state will receive a minimum of 1% of the national funds available to states as required by Congress. The President's budget request for FY 2010 includes an increase in the minimum funding to be made available to American Indian and Alaska Native water systems from 1.5% to 2.0% of the total funding appropriated for the DWSRF. The President also requested an increase in the minimum funding to be made available to United States Territories from 0.33% to 1.5% of the total available.

The goal of the DWSRF program is to provide states with a financing mechanism for ensuring safe drinking water to the public. States have used federal capitalization grant funds to establish loan programs from which assistance is provided to public water systems. Eligible infrastructure projects include upgrades of treatment facilities, eligible storage facilities and transmission and distribution systems. Projects to consolidate water supplies may also be eligible. Since the program began in 1997, states have provided nearly $14.6 billion in low interest loans for more than 6,000 projects. 

The second major purpose for which a state may use its capitalization grant is funding "set-asides."  States are allowed to reserve up to 31% of their capitalization grant for a variety of specific purposes designed to further public health protection under the SDWA. Examples of activities that can be funded through set-asides include: technical assistance to water systems, source water protection, operator certification and enhancing the ability of systems to operate successfully in the long term. 

Information about the Drinking Water State Revolving Fund program can be found at http://www.epa.gov/safewater/dwsrf.html

The U.S. Environmental Protection Agency (EPA) has issued a di minimus waiver for Buy American requirements contained in American Recovery and Reinvestment Act.  This is the second Buy American waiver issued by EPA; the first national waiver applied to projects eligible for re-financing, or projects which were awarded in anticipation of stimulus funding between October 1, 2008 and February 17, 2009. 

This nationwide waiver can be applied to materials or components which constitute five percent (5%) or less of the total cost of materials incorporated into a water infrastructure project funded by the ARRA through EPA's Clean Water and Drinking Water State Revolving Loan (SRF) programs.  This waiver was deemed to be in the public interest by the EPA in order to ensure that ARRA-funded projects proceed within the timelines established in the legislation while meeting the ultimate goal of the stimulus' infrastructure component of creating and sustaining jobs and investing in our infrastructure.

AGC's efforts were critical in educating the EPA about the complexity and components of typical water infrastructure projects, such as treatment plants or pipe replacement and rehabilitation projects.  AGC has been particularly concerned about Buy American requirements exposing members to unnecessary liability, particularly for smaller items which are not typically manufactured in the United States, such as some ductile iron pipe fittings, flanges, valves and other necessary items.

To download a copy of the 6-page EPA document click here.

For additional information contact Perry L. Fowler at fowlerp@agc.org or (703) 837-5321.

We are now accepting presentations for AGC's 91st Annual Convention. The convention will take place March 17-20, 2010 at the Marriott Orlando World Center in Orlando. The deadline for submitting presentations is June 18, 2009.

We're looking for eager, knowledgeable and dynamic individuals and panels to submit proposals for consideration. We would encourage you to submit or to pass this information along to other people who you think would make great speakers.

Don't miss your opportunity to participate at convention and to share your knowledge and experience with attendees. A limited number of speaking opportunities are available for presentations that focus on current and emerging issues, best practices or challenges facing the construction industry and/or construction executives.

For more information: Download the Call for Presentations PDF

All inquiries and submissions should be sent electronically to the attention of Meri Woods, woodsm@agc.org.

Due to the changing landscape in federal contracting, it is more important than ever that contractors - those experienced in federal work or those looking to move into the this market - are aware of rule and regulation updates and the impact of the American Recovery and Reinvestment Act on the federal contracting process.  This webinar series provides an overview of the existing process and walks attendees through the evolution of federal contracting.

Two remaining webinars will take place on Thursdays June 4 and June 11 from 1:30 PM - 3:00 PM (ET). 

Please click the links below for more information

June 4 - How to Handle Claims and Disputes
June 11 - The Recovery Act

For more information, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

AGC members and Chapters continue to use the Liquid Assets documentary to raise awareness about national and local water infrastructure needs.  Carolinas AGC, the West Virginia Contractors Association, and AGC of St. Louis have all recently sponsored events in recent months using Liquid Assets to meet with state and local officials, universities and community groups.

AGC of America would like to bring attention to the successful use of the Liquid Assets documentary by the CAWV to highlight state and local needs.  Please click here to read an article in the March/April edition of West Virginia Construction news to learn about their successful Liquid Assets campaign.

For information about how you can use Liquid Assets to raise awareness in your community, visit www.agc.org/liquidassets.

If you would like to receive a copy of Liquid Assets or would like additional information please contact Perry L. Fowler at fowlerp@agc.org or (703) 837-5321.

In January 2009, AGC met with senior officials from the U.S. Department of Transportation's Pipeline and Hazardous Material Safety Administration (PHMSA). At this meeting PHMSA alerted AGC that it intends to announce an Advanced Notice of Proposed Rulemaking (ANPR) to begin soliciting comments on developing criteria for federal enforcement of damage prevention laws in states that are deemed to have inadequate enforcement of damage prevention laws for excavators, utility/facility owners, one-call centers and professional locaters as mandated by the 2006 PIPES Act.  PHMSA has indicated that it will proceed with the ANPR by the end of this month.

The objective of the PIPES Act was for states to develop damage prevention programs.  The legislation provides grants to enable states to succeed in one-call enforcement.  Specifically, Section 2 of the PIPES Act established a new grant program to assist states that have or plan to implement comprehensive 9-point damage prevention programs that include civil penalty enforcement by state authorities for violations of their one-call laws.  The grant program is ongoing.  PHMSA has made state damage prevention program grants for calendar years 2008 and 2009 and will make grants for 2010 by the end of 2009.

The PIPES Act gives PHMSA limited "backstop" authority to conduct civil enforcement against excavators in a state that has failed to do so effectively if certain conditions are met.  Specifically, section 2(a) of the PIPES Act limits PHMSA's authority to conduct federal civil enforcement actions against "persons who violate that State's damage prevention laws, unless the Secretary has determined that the State's enforcement is inadequate to protect safety, consistent with this chapter, and until the Secretary issues, through a rulemaking proceeding, the procedures for determining inadequate State enforcement of penalties."

If PHMSA determines that direct federal enforcement against excavators becomes necessary in a particular state or states, PHMSA will need to undertake a rulemaking to establish procedures for declaring a state's enforcement inadequate, which is a prerequisite to federal civil enforcement against an excavator (who is not a pipeline operator) in that state.  PHMSA will need to establish procedures for declaring state enforcement inadequate through a rulemaking proceeding, and then find a given state to be inadequate using those procedures, before resorting to federal enforcement in that state. 

PHMSA's goal is in this process is to minimize the need to declare state damage prevention programs inadequate by working with states to strengthen their own enforcement programs. AGC has been assured that PHMSA will take a balanced approach in the development of enforcement regulations in this rulemaking process and will continue to work with AGC and the Common Ground Alliance (CGA) to ensure that the principles of fairness and shared responsibility are adhered to in the proposed rule. Once the ANPRM is publicly available, AGC will solicit input from members and AGC Chapters.

 For additional information contact Perry L. Fowler at fowlerp@agc.org or (703) 837-5321.

On April 23, 2009, the Office of Management and Budget (OMB) issued ARRA guidance establishing government-wide guidance and standard award terms for agencies to include financial assistance awards which will impact federally assisted programs, namely grants, cooperative agreements and loans as part of their implementation of the Recovery Act. 

Ultimately Agencies such as U.S. DOT and EPA will and have released their own guidance for programs based on the OMB guidance. Highlights of the OMB guidance include:

• Implementation of Section 1512 of the Recovery Act which requires contractors to report on their use of Recovery Act funds - to include jobs created by the funds, jobs retained by the funds, and the total compensation of the top five most highly compensated individuals employed by the contractor and first-tier subcontractors. Reports from contractors for all work funded, in whole or in part, by the Recovery Act shall be submitted no later than the 10th day after the end of each calendar quarter.
• Implementation of Section 1605 of the Recovery Act which prohibits the use of funds appropriated for the Recovery Act for any project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. But, requires that the Buy American requirement be applied in a manner consistent with U.S. obligations under international agreements and provides for waivers under certain limited circumstances.
• Implementation of Section 1606 of the Recovery Act which requires all mechanics and laborers employed on projects funded directly by or assisted by (in whole or in part) Recovery Act funds to be paid wages at no less than the prevailing rate (as determined by the Department of Labor).

The OMB guidance also requires contractors to maintain records that adequately identify the source and application of Recovery Act funds, both at the prime contractor level and subcontractor level.

AGC is in the process of soliciting comments from members and is preparing to submit comments on behalf of the entire association by the June 22 deadline. Click here to read the ARRA OMB Interim Guidance.

For more information or to share your input on AGC's OMB comments please contact Perry L. Fowler at fowlerp@agc.org or (703) 837-5321.