In a time of uncertainty regarding infrastructure policy and funding, regional and national trends can be found in water projects throughout the country. W&WD Managing Editor Amy McIntosh asked Jason Wuliger, co-founder and vice president of SplashLink.com, about some of these trends in project types and funding opportunities.
Amy McIntosh: What are some regional trends you are noticing in terms of types of water projects?
Jason Wuliger: So far in 2017, we are seeing continued demand for infrastructure improvements across the country. The issues of inadequate and aging infrastructure transcend geographic boundaries.
The Great Lakes region is seeing demand for surfaces, coatings and linings at several times the demand we are seeing for those products and services in other regions. In fact, there is more demand in the Great Lakes region than in all other regions combined. Often a trenchless substitute for pipe replacement, the accelerated adoption in the Great Lakes region is indicative of the budgetary pressure they are facing alongside intense need for infrastructure improvements.
If you do installation or maintenance work, so far in 2017 the best places to be [are] either on the Gulf Coast or in New England. Increasingly, pumps, piping and various materials can be purchased from afar, but there is still no substitute for a player with a local presence when these items need to be put in the ground or made a part of a system.
In good news for the smart water community, we are seeing higher levels of interest in the central plains with more utilities and communities interested in a data-driven understanding of their systems.
McIntosh: What is the state of funding nationally?
Wuliger: There is a lot of fear regarding funding right now. [President Donald Trump’s] proposed budget calls for sizable reductions to the budgets of the U.S. Environmental Protection Agency and the U.S. Department of Agriculture, the end of the Community Development Block Grant Program, and the near elimination of other programs that many have come to rely on, like the Great Lakes Restoration Initiative.
As traditional funding options decline amidst continued water quality and infrastructure concerns, we are seeing an increase in the number of atypical funding options coming to the fore. Public-private partnerships are increasing in popularity, private investors are using brokers to pursue other avenues to make investments in revenue generating public projects, the philanthropic community is getting more active, vendors are partnering with financial institutions to offer customized solutions to potential customers, and banks are devoting entire teams and product lines to the water industry in areas like project and equipment finance, as well as providing lines of credit to expanding companies.
The emerging trend of solution providers bringing their own funding is only going to increase as companies try to insulate their businesses from government budget reductions. They are teaming with financial partners to allow their customers to get work done today while paying for it over an extended period. Those communities are mitigating the risk of catastrophic failures of aging infrastructure as well as procuring work in today’s dollars, while the companies involved are winning more work from customers who find they no longer need to defer important improvements.
McIntosh: What is in store for future water projects?
Wuliger: One thing we know for sure is that the need for solutions will remain high. Utilities and municipalities will not proceed with a project until they know how they are going to pay for it. Kicking the can down the road on infrastructure improvements is less and less possible where systems have exceeded their useful life by years or even decades. Emergency events also become virtually certain the further a system is pushed, leading to greater and more unpredictable strain on budgets.
There is a looming crisis for those who have been relying on traditional funding streams that will necessitate that they look to alternative approaches. ... The data also suggests that smart water solutions will be implemented in greater numbers all over the country as communities and utilities look to understand their systems better to get the most out of them.
The bottom line is players will need to be more creative than ever when it comes to finding the money needed to do necessary work. As financial players and philanthropists continue to adjust to this new reality, we will see an increasing number of projects being paid for through previously unutilized funding mechanisms. Staying on top of the changes and knowing where to look will be key.
Charitable Dollars at Work
In addition to public funds and private investors, Wuliger sees funding opportunities from philanthropic organizations. In areas such as watershed protection and restoration or water quality remediation, these private foundations can help make projects a reality.
“While it may not be as obvious on its face as project funding from government sources, these opportunities can often serve as a stopgap in areas in which other funding has run dry,” Wuliger said. “For example, remediating your community’s storm water issues could be key to protecting a nearby watershed, and therefore attractive to a private philanthropic funder.”
Wuliger said partnering with charitable organizations that have similar priorities can lead to funding sources that were not previously considered.
Jason Wuliger is co-founder and vice president of SplashLink.com, an online platform providing water industry market intelligence and tools for industry buyers, sellers and innovators of water solutions to connect with each other, as well as billions in funding and thousands of project opportunities from sources across the industry. Wuliger has appeared on various TV and radio networks to analyze water-related news, and is frequently asked to present at industry conferences and events. Wuliger is an attorney and is the past president of the Lake County, Ohio, Bar Assn. Wuliger can be reached at [email protected].