WATER INFRASTRUCTURE TASK FORCE Indiana Legislative Services Agency 200 W. Washington Street, Suite 301 Indianapolis, Indiana 46204 Friday November 09, 2018 INDIANA LEGISLATIVE COUNCIL 2018 Representative Brian C. Bosma Senator David C. Long Chairperson Vice-Chairperson Indianapolis Fort Wayne Representative John Bartlett Senator Rodric Bray Indianapolis Martinsville Representative Timothy Brown Senator Jean Breaux Crawfordsville Indianapolis Representative Terry Goodin Senator Susan Glick Austin LaGrange Representative Linda Lawson Senator Randall Head Hammond Logansport Representative Matthew Lehman Senator Timothy Lanane Berne Anderson Representative Kathy Richardson Senator James Merritt Noblesville Indianapolis Representative Gregory Steuerwald Senator Karen Tallian Avon Portage George Angelone Executive Director Legislative Services Agency WATER INFRASTRUCTURE TASK FORCE Membership Roster House Senate Edmond Soliday Susan Glick Co-Chairperson Co-Chairperson House District 4 Senate District 13 Carey Hamilton David Niezgodski House District 87 Senate District 10 Laymembers Jason Dudich Chris Gale The Honorable Matt Gentry Duane Giles Michael Simpson Connie Stevens Marty Wessler Staff Craig Mortell, Sr. Staff Attorney Sarah Burkman, Sr. Staff Attorney Kelly Edwards, Staff Attorney Jessica Harmon, Director - Office of Fiscal Management Analysis Corrin Harvey, Fiscal Analyst FINAL REPORT Water Infrastructure Task Force I. STATUTORY DIRECTIVE The Water Infrastructure Task Force (Task Force) was established by IC 2-5-44. The Task Force is required by IC 2-5-44 to do the following: (1) Examine recommended standards and best practices for the maintenance and life cycle management of: (A) drinking water systems; (B) wastewater management systems; and (C) storm water management systems. (2) Analyze whether individual: (A) drinking water systems; (B) wastewater management systems; and (C) storm water management systems; in Indiana are achieving the recommended standards referred to in subdivision (1). (3) Assess the adequacy of present sources of funding for the maintenance and life cycle management of: (A) drinking water systems; (B) wastewater management systems; and (C) storm water management systems; and, if necessary, identify additional sources of funding. (4) Evaluate whether, considering: (A) the availability of resources; (B) the ownership of resources; (C) changing population demographics; (D) appropriate system capacity; (E) operational expertise; (F) public health and safety; and (G) economic development; the regionalization of water infrastructure could improve system performance and ratepayer value. (5) Assess the value that an improved system of water infrastructure would add to economic development in Indiana. (6) Create an empirical decision making tool that will allow policymakers to prioritize the funding of water infrastructure projects in a manner that will: (A) account for public health, safety, and economic development, as well as ensure ratepayer value; (B) evaluate the capacity of present funding streams and, if necessary, new funding streams; and (C) test the outcomes of various scenarios over multiple timelines. 1 (8) Develop a long term plan for addressing drinking water, wastewater, and storm water management needs in Indiana that includes recommendations to the general assembly and the governor concerning: (A) Outcomes that must be achieved in order to overcome challenges facing Indiana's local water infrastructure, and the benchmarks and timelines that must be met in order to achieve these outcomes. (B) Metrics to be used in assessing the current status of: (i) drinking water systems; (ii) wastewater management systems; and (iii) storm water management systems; and in tracking the progress made toward accomplishing all goals, benchmarks, and recommended standards. (C) Funding and financing mechanisms that should be used to achieve necessary improvements in: (i) drinking water systems; (ii) wastewater management systems; and (iii) storm water management systems. (D) A determination of who should bear the financial burden of improving: (i) drinking water systems; (ii) wastewater management systems; and (iii) storm water management systems; and how the financial burden should be apportioned among those bearing the financial burden, taking into consideration the impact on affordability of water and wastewater rates. (E) Appropriate legislation for the 2019 legislative session based on the recommendations of the long term plan set forth in clauses (A) through (D). II. INTRODUCTION AND REASONS FOR STUDY Legislative Council Resolution 18-02 assigned the Task Force to study the following: (A) Standards and funding for drinking water, wastewater management, and storm water management systems and potential for regionalizing systems (Source: HEA 1267-2018.) (B) Research and outreach efforts to reduce non-point source impacts on water quality, as conducted through government supported programs and by universities, including programs related to the following: (1) nutrient management and soil health; and (2) drainage water management. (Source: HEA 1233-2018; HEA 1267-2018.) (C) Potential funding mechanisms to assist local units of government to address the 2 following: (1) sewer and water projects, including storm water management projects; (2) improving storm water drainage systems; and (3) helping to upgrade deteriorating wastewater and storm water infrastructure. (Source: EHB 1374-2018, as reprinted March 6, 2018.) III. SUMMARY OF WORK PROGRAM The Task Force met four times during the 2018 interim on these dates: September 12, 2018 September 26, 2018 October 10, 2018 October 30, 2018 All of the meetings took place in Room 404 of the State House, Indianapolis, Indiana. IV. SUMMARY OF TESTIMONY At the meeting of September 12, 2018, witnesses: (1) summarized reports concerning water infrastructure that had been issued in recent years by the Indiana Finance Authority, the Indiana Chamber of Commerce, the Indiana Utility Regulatory Commission, and the Indiana Advisory Commission on Intergovernmental Relations; and (2) discussed standards and best management practices for water utilities (including asset management, water loss, board training, operator recruitment, lead service line replacement, regional collaboration, challenges for rural communities, water affordability, and cybersecurity). The minutes of the meeting can be accessed at: https://iga.in.gov/documents/098357f7 At the meeting of September 26, 2018: (1) witnesses discussed state-wide long-term water supply and demand planning (including prioritizing infrastructure needs, engineering perspectives, the Central Indiana Collaborative of Water Utilities, and the prioritization of water infrastructure improvements in other Midwest states); (2) the chief officers of the state environmental agencies of Ohio, Kentucky, and Indiana spoke about water infrastructure improvements and health-related water issues; and (3) a former Missouri state officer discussed his experiences in implementing Missouri's water resources plan. The minutes of the meeting can be accessed at: https://iga.in.gov/documents/82c1eca1 At the meeting of October 10, 2018, the Task Force heard presentations concerning: (1) the economic development value of improved water infrastructure; (2) the aquifer underlying Charlestown State Park; (3) public-private partnerships as a means of addressing water infrastructure needs; (4) efforts underway to reduce the runoff of agricultural nutrients; (5) design advancements in agricultural ditches; (6) the soil and water research projects of the Purdue 3 University Department of Agronomy; (7) water, wastewater, and stormwater organizational structures in Indiana; (8) the Indiana Office of Community and Rural Affairs; (9) the USDA's Indiana State Rural Development office; (10) the Indiana Finance Authority's State Revolving Fund Loan Programs; (11) concerns about utility rate affordability; (12) public health aspects of water infrastructure; and (13) the Indiana Rural Community Assistance Program. The minutes of the meeting can be accessed at: https://iga.in.gov/documents/84db5b9c At the meeting of October 30, 2018, the Task Force heard presentations about municipal water infrastructure and municipal water supply matters and about the role of county drainage boards in rural drainage matters. The Task Force members also heard testimony from a representative of soil and water conservation districts and an advocate of a proposed reservoir project. Finally, the Task Force members discussed, revised a draft of, and voted on the Task Force final report. The minutes of the meeting can be accessed at: https://iga.in.gov/documents/17af4d5c V. TASK FORCE FINDINGS AND RECOMMENDATIONS EXECUTIVE SUMMARY The Water Infrastructure Task Force ("Task Force") was created by IC 2-5-44 and given the mandate set forth in PART I ("Statutory Directives") of this report. The Task Force heard almost 20 hours of testimony over four days on a broad array of water related topics that provided the appropriate foundational knowledge for members to evaluate, discuss, and make the recommendations set forth in this report. A substantial amount of testimony stressed the importance of evaluating the needs of water systems by utilizing a health based risk approach. With that in mind, many recommendations in this report focus on prioritizing public health. In addition, recommendations about asset management, water loss recognition and prevention, drought preparedness, and economic development