SB 68: Encouraging Taxpayer Savings
Current and future water infrastructure costs are major expenses for local governments and by extension, Hoosier taxpayers. A 2010 report by the U.S. Conference of Mayors found that the nation will spend nearly $3.8 trillion on water and wastewater infrastructure over the next 20 years. According to the 2013 report card for America’s Infrastructure commissioned by the American Society of Civil Engineers, Indiana alone will have nearly $5.9 billion in drinking water and $7.1 billion in wastewater infrastructure needs over the next 20 years. These major expenses are placing enormous strain on local government budgets while less money may be available from the state or federal government to assist in water infrastructure upgrades or replacements. Utilizing an open and competitive procurement process can save taxpayer dollars and strengthen local government budgets.
Much of the nation’s water transmission systems are constructed using clay or ductile iron pipe. Both of these materials, while innovative at one time, are highly subject to corrosion. The costs of corrosion are real. The Journal-American Water Works Association has cited research showing corrosion costs to the nation’s water systems to be $50.7 billion annually. In addition, it is estimated that the use of corrosion-prone materials has resulted in nearly 300,000 water main breaks in North America according to a study by the Competitive Enterprise Institute. Hoosiers should be mindful of the issue since Indiana is considered a “high risk” state for steel corrosion potential, based on research conducted by the National Taxpayers Union.
While the decision of what materials to use in local water projects should be made locally, an open and competitive procurement process should be considered for all materials to save money. For instance, it is estimated that if PVC were used for Indiana’s future water infrastructure needs as described above, the result would be well over $1.3 billion in savings.
Unfortunately, many cities and towns, including many in Indiana, exclude or limit materials that could help save taxpayers and ratepayers money. For example, Bloomington and Carmel are two localities in Indiana that limit or exclude low-corrosive, alternative materials such as PVC from being used in water and/or wastewater pipe construction. Sometimes it is simply tradition or local preference that builds these biases into the building specifications. Yet, increasingly more and more cities, including Indianapolis, have now found that an “open and competitive procurement process” can be very useful in saving local taxpayer dollars.
Indianapolis recently made the move to allow the use of new materials for its water lines. Mayor Ballard writing in an article for the Mayors Water Council stated that, “a lifecycle analysis found that PVC has both a longer useful life than traditional pipe materials, and has a lower cost to both install and maintain.” Today, nearly one-third of all pipes in the Indianapolis water system are made with PVC materials.
Again, while decisions should be retained locally, legislation in the form of Senate Bill 68 to encourage an open and competitive procurement process for water infrastructure is needed to save taxpayer dollars and to keep our local governments financially secure.
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