The Funding Dilemma for Rural Water Infrastructure on Tribal Nations

Abstract

Safe drinking water is the most capital intensive of all utility services. Paying for water infrastructure improvements is a particular problem for small, rural communities, such as those on Native American reservations. These communities often rely on federal grant programs for capital improvements; however, granting agencies face difficulties deciding who to fund. By evaluating water infrastructure projects for 10 Native American communities, the authors show advantages and limitations of three methods for awarding grants—traditional benefit—cost analysis, social benefit—cost analysis, and funding criteria used for the Tribal Set-Aside grants program. Results suggest that the choice of prioritization method leads to very different results. As an example, fire protection benefits can change the viability of a water system project, but the Environmental Protection Agency does not directly consider these benefits for statutory reasons. From a life cycle perspective, mission agencies may want to reevaluate their decision-making methods to more holistically consider risk when allocating infrastructure funding.