Can CBP3s Hold Back the Water in the Upper Midwest?

umimra

I spoke at the annual conference for an organization called the Upper Mississippi Illinois and Missouri Rivers Association (UMIMRA) recently to share information on the Community-Based Public-Private Partnership (CBP3). This group, comprised of levee district leaders, farm producers, and those with ties to the U.S. Corps of Engineers (USACE), were interested in learning about P3s, which is how I got the call to speak.

To prepare for this talk, I learned a lot about the state of our nation’s levee systems. For instance, there are over 14,000 miles of levees in the US and approximately 43% of the population is protected, one way or the other, by levees within their county or jurisdiction. More significantly, a majority – 68% – are maintained through local levee districts, not the Federal government, and most critically, 82% of levees are not accredited by FEMA leaving farm producers without Federal flood insurance protection in many instances. It’s not surprising, then, to hear that ASCE gave levees a D- in their most recent infrastructure report card. A significant change in the ways that levees are maintained and accredited occurred after Hurricane Katrina, when the USACE changed their policies regarding the requirements regarding the structural stability and integrity of levees.

This is a particularly tough time for this policy change, as documented increases related to climate change in the Midwest – regardless of the cost to do so – are taking place that places a greater stress on flood control systems. Considering that the average age of levees in the US is 54 years, it is clear that this stress is impacting an already-vulnerable infrastructure. Beyond flood control, this becomes a food security concern, as areas flooded in the Upper Mississippi and related river systems are among the most fertile and productive land in the world. Losing the productivity of this land, even for one season, has clear implications – and as the world population continues to grow, there is an ongoing pressure to produce more and more food. Levees are literally the last line of defense to protect these agriculturally significant lands.

But it’s not all about structural flood control – in fact, there are nature-based solutions that will add resiliency to the systems in these areas to reduce the stress on the structural investments and to so in a way that is fiscally responsible and cost-effective. For instance, designing controlled overflows through a river system to take advantage of the flood attenuation potential in floodplain areas can alleviate downstream stress on levees. Also, utilizing natural channel design to enhance stream and river systems will provide a more adaptive and restorative dimension to these systems – and nothing is more resilient than nature itself. Best of all these types of environmentally-based solutions are often less expensive than structural measures and provide additional benefits of ecosystem services and recreational value.

So how does the CBP3 approach, which is currently focused on urban stormwater runoff, tie in with flood control infrastructure? First, there are many parallels between levee and stormwater management infrastructure; both sectors are led at the local level that are distributed across many parts of the U.S.; both are tied to local governments that vary in sophistication and resources; and fourth, both have potential avenues to ongoing revenues to support the infrastructure.  A CBP3 entity could be established that partnered a levee – or a group of levee districts – with a private party who would help to lead the CBP3 program, but before this happens, the levee district(s) and other public entities should invest in an effort to define their needs for flood control as well as community and watershed interests.  Their goals could be to have levees that are FEMA accredited, but also seek a portion of the levees to use controlled overflows to gain floodplain storage and other ecosystem services provided by a wetland system.  Further, there may be a desire to reduce sedimentation within the river reach, which would reduce costs for dredging, so there is a desire to restore and stabilize upstream headwater streams using natural channel design and enhance forest buffers in agricultural upland areas.

After defining the goals, the public entities should perform a Value-for-Money analysis, which is an effort that compares a status quo approach to accomplishing the goals (the “Public Sector Comparator” or PSC) with a CBP3 option to get an apples-to-apples comparison on the cost for each option.  Note that costs here include risk-based costs, schedule-based costs, and O&M costs as well as capital costs.  If the VfM analysis shows that it is favorable to use a CBP3 approach, the public entity would release an RFQ outlining the goals/needs of the community and choose a small group of qualified firms who would then go through an RFP process and the public entity would choose the best partner for this program.  The levee district and the private entity would then form a CBP3 entity together, which would put in place the framework for a program.  The CBP3 entity would then develop a financing strategy with a focus on finding the cheapest mix of public and private funding available to initiate capital investment, such as new levee construction and major levee rehabilitation.  Additionally, the CBP3 would look for nature-based solutions that will add ecosystem value and increase the resilience of the overall system.  The CBP3 will package capital projects in a manner that will reduce overall project delivery costs through a streamlined design-build approach, and would use fees or taxes associated with levee district revenues to leverage low-interest private equity that would help to pay for ongoing maintenance needs.  The CBP3 entity would take on the risk of ensuring that FEMA accreditation is provided and would do so at a fixed cost.

The vision of the CBP3 approach is to provide an approach that drives down project delivery and maintenance costs, accelerating the pace of implementation, and also provides a platform for reasonably-priced and responsible financing from both the public and the private sector in a way that will not saddle a community with onerous debt obligations.  Is the CBP3 approach the silver bullet?  Certainly not, as no silver bullet exists anywhere; however, the CBP3 approach may provide a better option for communities to protect their agricultural and natural resource assets than simply crossing one’s fingers and hoping that Federal dollars will fall from the sky looking– those days are over, but we do not have the luxury of pushing investments back much farther out.  Infrastructure only gets older each year, and the changing climate that is driving higher precipitation rates in the Upper Midwest, and other regions, creates an uncertainty that is unsustainable.  It’s clear that we need to have an “all of the above” approach to infrastructure investment, and the CBP3 approach is a strong candidate within this context.