Through a combination of increased technical assistance and aggregated procurement strategies, the WCX aims to address both the limited funding and technical capacity currently available to support local-level water infrastructure projects within the West Coast states.
To enhance technical assistance available for local-level water infrastructure development, the WCX will collaborate with public sector and private sector partners that possess capacity currently not available to local-level governments at an accessible cost. Through this collaboration, the WCX also aims to reduce the burden of regulatory and investment risk that may deter private investors from committing to local-level projects. To minimize long term costs of water infrastructure projects, WCX and partners will assist local governments to structure such investments as performance-based, Design-Build-Finance-Maintain (DBFM) contracts. This approach requires the private sector parties to compete on the basis of long term or lifecycle costs rather than focusing exclusively on construction costs. For projects of sufficient scale, these can be pursued on an individual basis.
The WCX collaboration also aims to establish mechanisms for project aggregation. Working with local, state, and federal government partners to identify the most viable water and wastewater projects, the partners will evaluate the possibility of aggregating selected projects in a given geographic area into a single long-term DBFM contract. By aggregating small water and wastewater projects into a master agreement, the construction, maintenance, and financing costs for individual projects can be reduced.
1. Seek commitments of private sector expertise (i.e., financial, legal, and technical) to help develop appropriate screening criteria and provide low-cost advisory services to develop the proposed structure and framework for a Regional Water Innovation Portfolio;
2. Seek funding commitments from state and federal government organizations to support loans and grant funding to participating local-level governments.
3. Seek commitments from WCX member jurisdictions, the Environmental Protection Agency, and the USDA to allow the use of existing loan programs for water and wastewater systems to be used in conjunction with an aggregated DBFM approach.
4. Develop common screening criteria for the assessment of viable local-level water and wastewater projects;
5. For any projects identified during the process that are of sufficient scale individually to be pursued as stand-alone DBFM procurements, work with the sponsoring agency and partners to advance these to procurement.
6. Evaluate the feasibility of aggregating portfolios of projects in proximity to each other.
7. Assuming this is deemed feasible, work with partners to develop the necessary structure to facilitate such a transaction and assist the sponsoring agencies to advance to procurement.
Growing populations, limited resources available for water infrastructure investment and maintenance and investment, and the mounting impact of climate change on hydrologic conditions threaten water supply and quality for all three West Coast states. The consequences of more extreme weather (intensified flooding in the rainy season followed by severe drought in the summer months) have significant economic effects on agriculture, create water shortages for municipal and industrial users, and intensify the ecological impact of insufficient in-stream flows.
Each state currently has programs to assist communities with water and wastewater system financing and long-term integrated water management plans, but local-level governments often lack the near-term funding and technical expertise to plan, design, and permit new projects. In addition, existing regulatory barriers impede the delivery of major investments in a timely manner.
The States of California, Oregon and Washington have recently partnered to create the West Coast Infrastructure Exchange (WCX), a regional body dedicated to innovative infrastructure finance and delivery. The WCX hopes to bring together partners, capital and expertise to accelerate water and wastewater investment in the region.