Editorial

A better way to pay the bills? Perhaps

Published Nov 23, 2012 at 04:00AM

The price of Bend’s surface water project and sewer needs can feel like an assault on ratepayer wallets.

Just the water intake facility and pipeline may cost $20 million. Early estimates for Bend’s sewer demands put the cost at $100 million.

The need to do something may not be in question. The price sure is.

Could there be a better way to fund projects like these?

Oregon, California, Washington and British Columbia are trying something new. They created a nonprofit partnership to try new ways to come up with the money. It’s called the West Coast Infrastructure Exchange or WCX.

There may be some $1 trillion in needed infrastructure investment across the region over the next 30 years. It will be a challenge to pay for that out of general fund budgets. And the traditional ways to finance and manage them could use a new look.

For one, there may be movement in Congress to do away with the tool states and local governments have traditionally used to finance the projects. Both the Simpson-Bowles Commission and the Congressional Budget Office have issued recommendations to eliminate or reduce federal support for tax-exempt bonds for this kind of borrowing because of the cost.

That may or may not happen. But there’s also interest in tapping into the potential of private capital funding. There are many challenges. This is a fairly new concept for the public and for investors. It’s not a free pot of gold. The public is going to have concerns about control, costs and quality.

Private capital has traditionally shied away from public projects because of the bureaucratic tangles and low investment returns. But infrastructure projects can also be safer than other forms of investment. They can be a way of balancing risk in a portfolio.

So what the states and Canadian province have done is take a couple first steps. A management team coordinated by the Oregon State Treasury is going to come up with a way to evaluate projects — perhaps bundle them — and look for other ways to make the new concept workable.

Clean drinking water. Good roads and bridges. Sewage capacity. If they all are working smoothly, they keep Oregon humming along.

If they are not, they ambush the economy. They curb commerce and cramp how people live.

It’s way too early to say if this experiment is going to be a cheaper or better way of paying for infrastructure. But Oregon and the other government partners should be applauded for trying.