American Recovery and Reinvestment Act, ‘09 - H2bid’s Overview
A great deal of publicity has been focused on the American Recovery and Reinvestment Act of 2009 or the “Stimulus” bill as it is more popularly known.Chief among its priorities, the stimulus was aimed at jump starting an economic recovery in the United States; similar to other government efforts worldwide, the plan aimed to begin work on a number of domestic initiatives that could put large numbers of people to work. Among the spending priorities was water and sewer infrastructure. This article will examine the funding allocated in the stimulus plan targeted at water and sewer system upgrades, repairs and new construction, seeking to understand how much of the total program will go toward these projects, when it is likely to be spent and how.
A scan of the bill reveals that of the $787 billion (US) total, over $6.8 billion is earmarked for water or sewer projects . Additionally, there are earmarks for the US Army Corp of Engineers totaling over $4 billion and earmarks for the Environmental Protection Agency and the Department of Agriculture; these three agencies have typically had a role in water conservation, diversion and ecology efforts, so it is safe to assume that the overall spending will be well above the $6.8 billion baseline. Some estimates have put the total as high as $19 billion, but details supporting this sum were not found during research for this article.
Further complicating the matter of arriving at a total for water projects is that some of the money in the bill was allocated to states to use at their own discretion – within appropriate spending guidelines, of course. Many of these state grants are intended to put people to work while addressing infrastructure needs simultaneously. For that reason, many projects were selected because they were “shovel ready”, a term meaning that the planning phases are complete and the physical work can begin as soon as funding permits. These projects range from highway and bridge repair to energy infrastructure and, of course, water and sewer system upgrades and repair .
While the stimulus monies are slated to be spent over the next 10 years, however the vast majority of the funds are scheduled to be spent in the next four years. In fact approximately $599 billion of the $787 billion total is projected to have been spent by 2012. The two main drivers behind this rapid spending pace are a desire to jumpstart the US economy and, to be certain, politics; 2012 is the next major election year. While that may seem cynical, it is, in fact, a highly practical motivator. Politicians who desire re-election want to make certain that the economy recovers on their watch.
There has been a certain degree of controversy over which projects were funded. Some have argued that the hardest hit areas of the United States, that is those who have lost the most jobs in the current recession and those areas which have a chronically higher unemployment rate, should have a greater share of the stimulus monies. In fact, the “shovel ready” concept works against these areas. In previous eras, it may have been possible to start construction on a new road or begin to lay new sewer pipe quickly but ask any city or regional planner and they will tell you that there is a significant amount of work that must happen prior to the first shovel touching the earth. Most modern projects require significant up-front planning including traffic studies, environmental impact studies as well as detail design and drafting of the project and site, among others. When this is taken into account, it is understandable that the cities and states in the worst financial shape going into the recession would be the ones who were least situated to have completed all of the up-front work needed to have a long list of “shovel ready” projects.
Though some agencies such as the Department of Energy have had to come up with new ways to contract projects, it appears that most of the water infrastructure work will pass through traditional bid-contract scenarios. The states will contract directly in most cases, though some projects will be funded through the USDepartment of the Interior, in particular those that relate to drinking and waste water upgrades on Native American reservations.
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