Environmental Protection Agency Administrator Scott Pruitt and Gov. Eric Holcomb announced Thursday an unprecedented effort to leverage $436 million in public loans into an even larger private capital investment to modernize Indiana's aging water infrastructure.
Holcomb said he hopes the state can replace lead service lines, that are in some cases a century old, to end lead contamination in both city and rural communities drinking water.
"Indiana is leading the way by creating an innovative approach to solve an old problem. This is another shining example of local, state and federal government coming together. Water is one of the pillars of our diversified economy,” the governor said.
Bruno Pigott, commissioner of the Indiana Department of Environmental Management, said of the low-interest loan program that will be available across the state, "started with the governor wanting to take infrastructure to the next level."
"James McGoff, director of Environmental Programs for the state revolving fund, tried to think of a way to further those goals, and we were surprised to find the state of Indiana was the first to do this."
Pigott said, "In a typical year, the federal government will give around $30 million for wastewater projects and maybe $12 million in drinking water projects, so when you are talking a $436 million investment, that represents a very large upgrade as well as the ability for the state to use this in a much more flexible way than in the past when it only benefited municipalities. This allows a greater lengthy of time for the loans to be repaid."
Pigott said the communities, like Crown Point, will use the savings from the lower interest rates the state is creating to remove lead tainted service lines.
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Holcomb said, "We seem to be on a roll in East Chicago and we want to keep that momentum going. It is not just our big cities. Our rural areas are in great need, too. We are going to build this thing," Holcomb said.
A majority of Indiana's pipes was installed after World War II, though some still in use date back to the 1890s, and have been "overused, undermanaged and need to be replaced," according to the report.
Moreover, at least some of the pipes are made of lead, or other metals now corroded by age, and potentially are releasing chemicals into distributed drinking water that can cause kidney damage, anemia, hypertension and abnormal brain development.
In Northwest Indiana, Hammond will receive $67.5 million to increase the capacity of its sewer system; Crown Point will receive $19.3 million; and East Chicago $14.1 million.
A 2016 Indiana Finance Authority report stated the state aging water infrastructure needs $2.3 billion in repairs to protect human health as well as stem the loss of some 50 billion gallons a year that never make it to a customer.
It stated Indiana's 554 independent water systems are struggling to maintain quality service as water pipes, mains and other underground assets reach or exceed their useful lives.
Holcomb said in the past only municipalities benefited from infrastructure grants, but there is enough flexibility to offer money to any community water system needing help.
Indiana has more than 46,000 miles of water pipes operated by community water systems that serve 4.76 million Hoosiers, or 72 percent of the state's population.