[Senate Hearing 110-1135]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1135
MEETING AMERICA'S WASTEWATER INFRASTRUCTURE NEEDS IN THE 21ST CENTURY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TRANSPORTATION SAFETY,
INFRUSTRUCTURE SECURITY, AND WATER QUALITY
of the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
September 19, 2007
__________
Printed for the use of the Committee on Environment and Public Works
Available via the World Wide Web: http://www.fdsys.gov
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland JOHN BARRASSO, Wyoming1
BERNARD SANDERS, Vermont LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island CHRISTOPHER S. BOND, Missouri
Bettina Poirier, Majority Staff Director and Chief Counsel
Andrew Wheeler, Minority Staff Director
----------
Subcommittee on Transportation Safety, Infrastructure Security, and
Water Quality
FRANK R. LAUTENBERG, New Jersey, Chairman
BENJAMIN L. CARDIN, Maryland DAVID VITTER, Louisiana
AMY KLOBUCHAR, Minnesota CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island GEORGE V. VOINOVICH, Ohio
BARBARA BOXER, California, (ex JAMES M. INHOFE, Oklahoma, (ex
officio) officio)
______
1Note: During the 110th Congress, Senator Craig
Thomas, of Wyoming, passed away on June 4, 2007. Senator John
Barrasso, of Wyoming, joined the committee on July 10, 2007.
C O N T E N T S
----------
Page
SEEPTEMBER 19, 2007
OPENING STATEMENTS
Lautenberg, Hon. Frank R., U.S. Senator from the State of New
Jersey......................................................... 5
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 7
Voinovich, Hon. George, V., U.S. Senator from the State of Ohio.. 10
Vitter, Hon. David, U.S. Senator from the State of Louisiana..... 12
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland 102
WITNESSES
Grumbles, Hon. Benjamin H., Assistant Administrator for Water,
U.S. Environmental Protection Agency........................... 13
Prepared statement........................................... 15
Responses to additional questions from:
Senator Lautenberg....................................... 21
Senator Cardin........................................... 21
Palmer, Hon. Douglas H., Mayor of Trenton, NJ, President of the
U.S. Conference of Mayors...................................... 30
Prepared statement........................................... 32
Brasseaux, Hon. Glenn, Mayor of Carencro, LA, Board Member,
Louisiana Rural Water Association.............................. 36
Prepared statement........................................... 38
Freeman, Joe S., Chief, Financial Assistance Division, Oklahoma
Water Resources Board, Vice President, Council of
Infrastructure Financing Authorities........................... 41
Prepared statement........................................... 43
Responses to additional questions from:
Senator Lautenberg....................................... 45
Senator Inhofe........................................... 46
Westhoff, Christopher M., Assistant City Attorney, Public Works
General Counsel for the City of Los Angeles, President of the
National Association of Clean Water Agencies................... 49
Prepared statement........................................... 51
Responses to additional questions from:
Senator Inhofe........................................... 54
Senator Cardin........................................... 54
Stoner, Nancy, K., Director of the Clean Water Project at the
Natural Resources Defense Council.............................. 55
Prepared statement........................................... 57
Responses to additional questions from:
Senator Boxer............................................ 73
Senator Lautenberg....................................... 74
Senator Cardin........................................... 75
ADDITIONAL MATERIAL
Statements:
Briant, Robert A., Chairman, Clean Water Construction
Coalition.................................................. 83
The American Society of Civil Engineers...................... 88
National Association of Water Companies...................... 95
Ullrich, David A., Executive Director, Great Lakes and St.
Lawraence Cities Initiative................................ 100
The Associated General Contractors of America................ 104
Navarrete, Judy, Executive Director, Water Infrastructure
Finance Authority of Arizona (WIFA)........................ 107
National League of Cities.................................... 109
American Council of Engineering Companies (ACEC)............. 117
Bonner, Linda Hanifin, Ph.D., Executive Director, National
Onsite Wastewater Recycling Association.................... 120
Frevert, Larry W., P.E. President, American Public Works
Association................................................ 123
Association of State and Interstate Water Pollution Control
Administrators (ASIWPCA)................................... 127
MEETING AMERICA'S WASTEWATER INFRASTRUCTURE NEEDS IN THE 21ST CENTURY
----------
WEDNESDAY, SEPTEMBER 19, 2007
U.S. Senate,
Committee on Environment and Public Works,
Subcommittee on Transportation Safety, Infrastructure
Security, and Water Quality,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m. in
room 406, Dirksen Senate Building, Hon. Frank Lautenberg
(chairman of the subcommittee) presiding.
Present: Senators Lautenberg, Inhofe, Warner, Voinovich,
Vitter, Cardin.
OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR
FROM THE STATE OF NEW JERSEY
Senator Lautenberg. Good morning. We call this subcommittee
hearing to order. As I took the chair here, I went for this
pitcher into the glass in an area where it is recommended,
often, that you don't drink the water, and I wonder whether
this is just a reality check to see whether or not I will
survive the hearing. But the fact of the matter is that there
are signs in this great city of ours that we see periodically
because of failures of the system that the water production
system and other problems involved with inability for the
wastewater treatment plants to turn out water that doesn't
pollute the Potomac and other major water sources.
I want to welcome everybody to today's hearing on the need
to modernize our sewage treatment systems, stormwater systems
to keep wastewater out of our rivers, streams, and oceans.
In 1972, we established the Clean Water Act that would help
us keep our waterways safe and clean. Now, part of the Clean
Water Act helps us to build new sewage treatment plants. The
first thing that we did, the first means of funding them was
through grants. But since 1987, we use loans through the State
Revolving Fund or SRF. The SRF funds have provided $25 billion
for States to improve their infrastructure, clean their water
so that people can use it recreationally and for other purposes
as well.
The current funding levels, however, for the State
Revolving Fund falls far short of what we need. Much of the
infrastructure, including pipes and treatment plants, is simply
worn out or inadequate in its size, overwhelmed often by too
much water.
I am pleased to see the Ranking Member on this committee,
our friend from Oklahoma, Senator Inhofe. As I think about the
things that we are going to consider today, Senator, am I
correct in remembering that Oklahoma has had unusually heavy
rainfalls?
Senator Inhofe. Yes, that is correct.
Senator Lautenberg. Because part of the problem is the
deluge that we see frequently in different parts of the
country. That too overwhelms our system, in addition to the
normal growth that we have through development.
EPA estimates that there is somewhere between 23,000 and
75,000 sanitary sewer overflows each year. Those spills dump
billions of gallons of untreated sewage into our rivers, our
lakes, and coastal waters. In addition, combined sewer overflow
spill is 850 billion gallons of contaminated stormwater into
our waterways each year, and EPA estimates that it will take
$170 billion over the next 20 years to fix these sewer systems.
But instead of making this important investment, the
Administration has proposed a nearly $400 million cut in the
SRF for 2008.
Now, without more investment, more people will be exposed
to sickness and disease, beaches will close and marine life
certainly will suffer. President Bush needs to fully fund the
SRF and we have to reauthorize it so that money is available to
cities and towns to keep their water clean. In addition to
increased funding our subcommittee will examine how best to
spend those funds, including what role green infrastructure can
play in reducing the burdens on our sewer systems.
I would also note that in addition to our mission to
reauthorize the SRF, Senator Voinovich and I have introduced
the Water Quality Investment Act. This bill would authorize
$1.8 billion in Federal grants to local communities to clean up
combined sewer and sanitary sewer overflows.
We look forward to the testimony from our witnesses, but
now we ask our colleague, Senator Inhofe, for his statement.
[The prepared statement of Senator Lautenberg follows:]
Statement of Hon. Frank R. Lautenberg, U.S. Senator from the
State of New Jersey
Let me welcome everyone to today's hearing on the need to modernize
our pipes and sewer systems to keep waste out of our rivers, streams
and oceans.
Since 1972, we have relied on the Clean Water Act to keep our
waterways safe and clean. Part of the Clean Water Act helps us build
new sewage treatment plants. First we used grants to pay for them.
Since 1987, we have used loans through the State Revolving Fund, or
``SRF.''
The SRF has provided $25 billion for States to improve their
infrastructure and clean their water so people can swim, fish and boat
in it. But the current funding level for the SRF falls far short of
what we need. Much of the infrastructure, such as pipes and treatment
plants, is simply worn out--or overwhelmed by too much water.
EPA estimates that there are between 23,000 and 75,000 sanitary
sewer overflows each year. Those spills dump between 3 and 10 billion
gallons of untreated sewage into our rivers, lakes and coastal waters.
In addition, Combined Sewer Overflows spill 850 billion gallons of
contaminated stormwater into our waterways each year. EPA estimates it
will take $170 billion over the next 20 years to fix these sewer
systems. But instead of making this important investment, the
Administration proposed a nearly four hundred million dollar cut to the
SRF for 2008. This is irresponsible. Without more investment, people
will get sick, beaches will close, and our marine-life will suffer.
President Bush needs to fully fund the SRF, and we must reauthorize it
so that money is available to cities and towns to keep their water
clean. The federal government's role in repairing our aging pipes,
pumps and treatment plants must grow.
In addition to increased funding, our Subcommittee will examine how
best to spend those funds, including what role ``green infrastructure''
can play in reducing the burdens on our sewer systems. I would also
note that in addition to our mission to reauthorize the SRF, Senator
Voinovich and I have introduced the Water Quality Investment Act. This
bill would authorize $1.8 billion in federal grants to local
communities to clean up Combined Sewer and Sanitary Sewer Overflows. I
welcome any testimony from our witnesses on that legislation as well.
There is nothing partisan about keeping our waterways safe and
clean, and I hope our Subcommittee will act soon to strengthen our
clean water programs.
OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM
THE STATE OF OKLAHOMA
Senator Inhofe. Thank you, Senator Lautenberg, Mr.
Chairman. First of all, I would like to thank you for having
this long-overdue hearing. As Chairman of this committee during
the past two Congresses, I have twice moved comprehensive
legislation to reauthorize both the Clean Water and the
Drinking Water State Revolving Loan Funds. I am pleased to see
that this issue remains a committee priority.
This will come as a shock to many of you out there, but
Senator Lautenberg and I don't always see eye to eye on issues.
On this one I think we do. We recognize----
Senator Lautenberg. I remember one 16 years ago.
Senator Inhofe. That is right. That is right.
[Laughter.]
Senator Inhofe. It is back.
But I am glad also to welcome Mr. Joe Freeman. He is chief
of the Financial Assistance Division from the State of
Oklahoma. I welcome you to being here for this important
hearing. Mr. Freeman has been a great resource to my staff, and
I welcome his insights into how the program is currently
working and what we may do to make it work better.
I am also pleased that the National Rural Water
Association, based in Oklahoma, is represented today by the
Louisiana chapter. I welcome you here. The majority of the
Nation's wastewater systems are small systems, and theirs is a
perspective from which we can all benefit hearing.
The Clean Water SRF is the cornerstone of Federal clean
water systems to the Nation's cities and towns. Since its
creation in 1987, the Clean Water SRF has saved its borrowers
over $3.7 billion in interest, costs, and also provide $8.2
billion in funding to improve the Nation's water quality.
Importantly, the Federal Government has provided $24 billion in
State capitalization grants. In 2006, there was more than $60
million available for loans to communities.
Today's hearing is limited to wastewater or clean water
needs. Oklahoma has projected $586 million in clean water
related needs over the next 20 years. As one of today's
witnesses mentions, this figure does not include any future
costs due to new regulations. Further, in the last drinking
water survey, Oklahoma's reported needs were $4.8 billion over
the next 20 years. Importantly, $107 million of that need is
known to be a direct result of Federal drinking water
requirements. Without providing sufficient Federal funds to
help cities to meet those requirements, they become not just
requirements, but Federal unfunded mandates.
I have to say this, with the arrival of Senator Voinovich.
He and I were both, Mr. Chairman, mayors of major cities.
People talk about problems facing the cities. It is not
prostitution and crime, the greatest problem, I think he would
agree with me, are unfunded Federal mandates. This is what we
are committed to correcting, and a lot of it comes from the
legislation that we are talking about right now.
My staff has received assurances that the absence of
drinking water from this hearing will not preclude us from
reauthorizing the drinking water SRF program. I look forward to
working with my colleagues to develop a clean, comprehensive
funding proposal.
The effort that we are about to undertake will be the
fourth time in four Congresses that we have attempted to move a
water infrastructure bill. Only one of our previous three
attempts at passing a water infrastructure bill was bipartisan.
I hope that this year we can again have a bipartisan bill, as
we did last Congress under my leadership, and that we can work
together to move it to the Senate floor. To do that, we must
avoid many of the mistakes of previous efforts.
The bill must be clean of too many additional requirements
on applicants. We are not providing grants through the current
SRF; these are loans to be repaid by municipalities, and they
are. In order to truly provide them with Federal assistance in
meeting their regulatory obligations under the Federal
environmental statutes, we have to provide loans with as few
strings attached as possible. There are legislative proposals
pending that include additional requirements for States and
localities to meet, and while I am sure someone can find value
in almost all of these requirements, I am concerned their
cumulative impact may be to create a program far too burdensome
for anyone to use.
Additionally, in previous attempts, even last year, we
failed to come to a unified committee resolution to the issue
of Davis-Bacon. Failing to do so again will likely result in
yet another stalemate. I must again, as I have in the past,
encourage all parties to come to the table to find a path
forward that keeps the committee united behind a single bill.
This is an important issue. While some may disagree over
the exact amount of the funding gap, there can be no denying
that it exists. The question before the committee is what, if
any, changes do we need to make to the Federal clean water
program to ensure it is best meeting the needs of our local
communities and lessening that gap.
As the single-most conservative member of the U.S. Senate,
as voted by the American Conservative Union, I have
consistently voted for developing and improving the Nation's
infrastructure and providing for our Nation's defense. I think
that is what Government is supposed to be doing, Mr. Chairman.
I look forward to this hearing and to working with my
colleagues to develop a comprehensive funding program, and I
thank you again, Senator Lautenberg, for calling this hearing.
[The prepared statement of Senator Inhofe follows:]
Statement of Hon. James M. Inhofe, U.S. Senator from the
State of Oklahoma
I would like to thank Senator Lautenberg for having this long
overdue hearing. As Chairman of this Committee during the past two
Congresses, I twice moved comprehensive legislation that reauthorized
both the clean water and drinking water state revolving loan funds. I
am pleased to see this issue remains a Committee priority.
I am glad to welcome Mr. Joe Freeman, Chief of the Financial
Assistance Division for the State of Oklahoma. Mr. Freeman has been a
great resource to my staff and I welcome his insights into how the
program is currently working and what we may do to make it better. I am
also pleased that the National Rural Water Association, based in
Oklahoma, is represented today by the Louisiana chapter. The majority
of the Nation's wastewater systems are small systems and theirs is a
perspective from which we can all benefit hearing.
The Clean Water SRF is the cornerstone of Federal clean water
assistance to the Nation's cities and towns. Since its creation in
1987, the Clean Water SRF has saved its borrowers over $3.7 billion in
interest costs and also provided $8.2 billion in funding to improve the
Nation's water quality. Importantly, the Federal Government has
provided $24 billion in state capitalization grants. In 2006, there was
more than $60 billion available for loans to communities.
Today's hearing is limited to wastewater or clean water needs.
Oklahoma has projected $586 million in clean water related needs over
the next 20 years. As one of today's witnesses mentions, this figure
does not include any future costs due to new regulations. Further, in
the last drinking water needs survey, Oklahoma's reported needs were
$4.8 billion over the next 20 years. Importantly $107 million of that
need is known to be a direct result of Federal drinking water
requirements. Without providing sufficient Federal funds to help cities
to meet those requirements, they become not just requirements, but
Federal unfunded mandates. My staff has received assurances that the
absence of drinking water from this hearing will not preclude us from
reauthorizing the drinking water SRF program. I look forward to working
with my colleagues to develop a clean, comprehensive funding proposal.
The effort that we are about to undertake will be the fourth time
in four Congresses that we have attempted to move a water
infrastructure bill. Only one of our previous three attempts at passing
a water infrastructure bill was bipartisan. I hope that this year we
can again have a bipartisan bill as we did last Congress under my
leadership and that we can work together to move it to the Senate
floor. To do so, we must avoid many of the mistakes of previous
efforts.
The bill must be clean of too many additional requirements on the
applicants. We are not providing grants through the current SRF. These
are loans to be repaid by municipalities. In order to truly provide
them with Federal assistance in meeting their regulatory obligations
under the Federal environmental statutes, we must provide loans with as
few strings attached as possible. There are legislative proposals
pending that include additional requirements for states and localities
to meet. While I am sure someone can find value in almost all of these
requirements, I am concerned their cumulative impact may be to create a
program far too burdensome for anyone to use.
Additionally, in previous attempts, even last year, we failed to
come to a unified committee resolution to the issue of Davis-Bacon.
Failing to do so again will likely result in yet another stalemate. I
must again, as I have in the past, encourage all parties to come to the
table to find a path forward that keeps the Committee united behind a
single bill.
This is an important issue. While some may disagree over the exact
amount of the funding gap, there can be no denying that it exists. The
question before the Committee is, what if any changes do we need to
make to the Federal clean water program to ensure it is best meeting
the needs of our local communities and lessening that gap? As the
single most conservative member of the Senate, as voted by the American
Conservative Union, I have consistently advocated for developing and
improving the Nation's infrastructure and providing for our Nation's
defense. I look forward to this hearing and to working with my
colleagues to develop a comprehensive funding proposal. Thank you again
to Senator Lautenberg for holding this hearing.
Senator Lautenberg. Thank you.
Senator Voinovich, we welcome you and ask you for your
statement at this time.
OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR
FROM THE STATE OF OHIO
Senator Voinovich. Thank you, Senator Lautenberg and
Senator Vitter. Thank you for holding this hearing on
wastewater infrastructure.
Water infrastructure has been a longstanding concern of
mine. In fact, my first bill that I introduced as a young
legislator in the 1960's was a $375 million State bond issue to
get the State involved with wastewater treatment. I think it is
clear that we are facing an environmental and public health
crisis in this country when it comes to water infrastructure,
and I am very pleased that this subcommittee has made it a
priority by holding this hearing.
In addition, I would like to thank the witnesses for being
here today. As a former Governor and mayor, I respect and know
firsthand the enormous challenges you have in addressing the
issues in your cities and States.
As many of my colleagues know, the Clean Water SRF program
is an effective and immensely popular source of funding for
wastewater collection and treatment projects. Billions of
dollars have already been spent and billions more are needed to
upgrade this Nation's aging wastewater infrastructure. I firmly
believe the Federal Government is responsible for paying its
fair share. That is why I was very disappointed that the EPA's
2008 budget proposed severe spending cuts for the Clean Water
SRF program. I hope the increased funding levels in both the
Senate, $1.1 billion, and the House, $887 million, Fiscal Year
2008 interior appropriation bills for the program will remedy
that situation.
As in many States, Ohio's needs for public wastewater
system improvements greatly exceed the typical Clean Water SRF
funding levels.
Mr. Chairman, when we really did something about wastewater
was back when the Feds picked up 75 and the locals picked up
25. That is when we really moved from primary down to tertiary
treatment.
According to the Ohio EPA, Ohio's capital investment needs
for publicly owned wastewater treatment facilities are $12.9
billion. Of that amount, almost $6.3 billion of improvements
have been identified as necessary to address combined sewer
overflow problems in over 100 communities. The city of Akron,
for example, has proposed to spend $426 million over 30 years
to fix the city's CSO problems. Of course, they can't do it
over 30 years because the EPA tells them they have to do it in
15 years.
That is why I am an original cosponsor of Senator
Lautenberg's bill, the Water Quality Investment Act, which
would authorize nearly $2 billion in Federal grants to fund the
repair and replacement of combined sewer overflows and sanitary
sewer overflows. In 2002 and 2004, the EPW Committee adopted my
amendments to authorize funding for this program as part of the
Clean Water and Safe Drinking Water reauthorization
legislation. I look forward to working on this issue once again
with you, Senator Lautenberg, to see if we can make something
happen.
I am also concerned about the impacts of the funding needs
for water infrastructure in our rural communities. In Ohio,
many of these communities are in Appalachia. Data from the EPA
survey shows that 47 percent of our Appalachian households
nationwide are not served by public sewers. For many
communities, this lack of service is forcing residents to haul
water from springs or rain barrels. A 2003 Appalachian Regional
Commission water and wastewater needs study reported that
counties with higher densities of septic tanks received less
public funding than counties with lower densities of septic
systems.
I am concerned that these communities are not receiving
funding because the SRF process is too cumbersome. I am anxious
to hear from our witnesses today on how Congress can address
this problem for our rural communities as we consider
reauthorization for the Clean Water SRF.
It expired at the end of Fiscal Year 1994 think of that,
1994 and the failure of Congress to reauthorize the program
sends an implicit message that wastewater collection and
treatment is not a national priority. The longer we wait to
reauthorize this program, the longer it creates uncertainty
about the program's future in the eyes of borrowers. It could
delay or, in some cases, prevent project financing. In order to
allow any kind of substantial increase in spending,
reauthorization of the Clean Water SRF program is necessary.
I am particularly interested in hearing all of the thoughts
of our witnesses on the Clean Water SRF program's benefits and
limitations as it currently stands. I would also like to know
what you believe we in Congress can do to change the
reauthorization to make the program more beneficial to our
Nation's cities and States, and, again, I thank you for being
here.
[The prepared statement of Senator Voinovich follows:]
Statement of Hon. George V. Voinovich, U.S. Senator from the
State of Ohio
Senator Lautenberg and Senator Vitter, thank you for holding this
hearing on the wastewater infrastructure. Water infrastructure has been
a long-standing concern of mine. In fact, my first bill that I
introduced as a young state legislator in the 1960s was a $375 million
state bond issue to get the state involved with wastewater treatment. I
think it is clear that we are facing an environmental and public health
crisis in this country when it comes to water infrastructure, and I am
very pleased that this subcommittee has made it a priority by holding
this hearing.
In addition, I would like to thank the witnesses for being here
today. As a former Governor and Mayor, I respect and know firsthand the
enormous challenges you have in addressing this issue in your cities
and states.
As many of my colleagues know, the Clean Water SRF Program is an
effective and immensely popular source of funding for wastewater
collection and treatment projects. Billions of dollars have already
been spent and billions more are needed to upgrade the nation's aging
wastewater infrastructure. I firmly believe the federal government is
responsible for paying its fair share.
That is why I was very disappointed that EPA's 2008 budget proposed
severe spending cuts for the Clean Water SRF Program. I hope the
increased funding levels in both the Senate ($1.1 billion) and House
($887 million) Fiscal Year 2008 Interior Appropriations bills for the
SRF program subsist.
As in many states, Ohio has needs for public wastewater system
improvements which greatly exceed the typical Clean Water SRF funding
levels. According to Ohio EPA, Ohio's capital investment needs for
publicly owned wastewater treatment facilities are $12.9 billion. Of
that amount, almost $6.3 billion of improvements have been identified
as necessary to address combined sewer overflow (CSO) problems in over
100 communities. The City of Akron, for example, has proposed to spend
$426 million over 30 years to fix the City's CSO problems.
That is why I'm an original co-sponsor of Senator Lautenberg's
bill--the Water Quality Investment Act, which would authorize nearly $2
billion in federal grants to fund the repair and replacement of
combined sewer overflows and sanitary sewer overflows. In 2002 and
2004, the EPW Committee adopted my amendments to authorize funding for
this program as part of the Clean Water and Safe Drinking Water SRF
reauthorization legislation. I look forward to working on this issue
once again with Senator Lautenberg to help communities tackle sewer
overflows.
I am also concerned about the impacts of the funding needs for
water infrastructure in our rural communities. In Ohio, many of these
communities are in the Appalachia. Data from EPA surveys show that 47
percent of Appalachian households nationwide are not served by a public
sewer. For many communities, this lack of service is forcing residents
to haul water from springs or rain barrels. A 2003 Appalachian Regional
Commission (ARC) water and wastewater needs study reported that
counties with higher densities of septic systems received less public
funding than counties with lower densities of septic systems.
I am concerned that these communities are not receiving funding
because the SRF process is too cumbersome. I am anxious to hear from
our witnesses today on how Congress can address this problem for our
rural communities as we consider reauthorization for the Clean Water
SRF.
Authorization for the Clean Water SRF expired at the end of fiscal
year 1994, and the failure of Congress to reauthorize the program sends
an implicit message that wastewater collection and treatment is not a
national priority. The longer we wait to reauthorize this program, the
longer it creates uncertainty about the program's future in the eyes of
borrowers, which could delay or in some cases prevent project
financing. In order to allow any kind of substantial increase in
spending, reauthorization of the Clean Water SRF program is necessary.
I am particularly interested in hearing all of your thoughts on the
Clean Water SRF program's benefits and limitations as it currently
stands. I would also like to know what you believe we in Congress can
change during reauthorization to make the program more beneficial to
our nation's cities and states. Again, I want to thank you all for
attending this hearing.
Senator Lautenberg. Thank you very much.
OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR FROM THE
STATE OF LOUISIANA
Senator Vitter. Thank you, Mr. Chairman, for calling this
hearing. It is really important.
As everyone has said, our Nation's wastewater
infrastructure is aging. Most of the system's infrastructure
has been around for 50 to 100 years. It is deteriorating, in
need of replacement, rehabilitation, so it is very important
that we set this as a priority to bring that infrastructure in
to the 21st century.
Representing Louisiana, I certainly know this. In large
parts of our State, our infrastructure is over double that age.
A city like New Orleans, the infrastructure is way older than
50 to 100 years. We have clay pipes and the deterioration is
even more significant. That is not just in New Orleans, it is
around the State.
Then, on top of that, with our experience 2 years ago of
Hurricanes Katrina and Rita, that destroyed a lot of the
infrastructure and further aged, in 1 day, a lot of the
infrastructure. So folks living in those areas really know the
strain of this decaying infrastructure.
I want to welcome all of our witnesses today, certainly Ben
Grumbles with EPA. Thank you for being here, Ben. The entire
second panel.
Of particular note for me, we have Mayor Glenn Brasseaux of
the city of Carencro. Mayor, welcome to you. Thank you for
being here and taking time to come to be part of this important
hearing. Of course, he will talk about wastewater
infrastructure, but in particular from the perspective of small
communities and also as a board member of the Louisiana Rural
Water Association.
Again, I agree with my colleagues, the State Revolving Fund
is very important in this, and we need to figure out how we can
make it even more effective. So I will be very interested in
hearing all of the witnesses' testimony about that.
To oversimplify, it seems to me we need to focus on two big
categories. One is there is enormous demand, so I think we need
to have more funding to meet that demand. In addition, I think,
over the last 20 years in particular, we have created so much
complexity in the system that a dollar goes not nearly as long
as it used to go, and we need to step back and figure out how
we reduce that burden and that complexity so that as we
hopefully increase the dollars, they are able to go a lot
further, which they certainly did 20 years ago, to help bridge
that gap. I look forward to everyone's ideas with regard to
both of those categories.
Thank you again, Mr. Chairman.
Senator Lautenberg. Thank you, Senator Vitter. Senator
Vitter is the Ranking Member on this subcommittee and we look
forward to working together to get many things moving that have
been too long delayed.
I want to now welcome to the witness table Ben Grumbles,
Assistant Administrator of Water from EPA. We look forward to
hearing the Agency's views on this important issue, and I thank
you for joining us, Mr. Grumbles.
STATEMENT OF HON. BENJAMIN H. GRUMBLES, ASSISTANT ADMINISTRATOR
FOR WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY
Mr. Grumbles. Thank you, Mr. Chairman and members of the
committee. It is a real honor to be before you representing the
U.S. EPA.
I hope you will listen to my words, but I trust that you
will be looking behind me, because what you see are the faces
of the clean water campaign across America, the local elected
officials, the advocates of various organizations who are all
rallying behind something that we all share and I think we all
hold in common, and that is working together to change the way
America views and values water and the water infrastructure
system that supports it. The 1.5 million miles of sewer lines,
the 16,000 treatment plants are all part of the lifelines to
the communities' environmental and economic health of America,
so I am very proud to be here.
EPA is very proud of the role we have played with our
partners to develop innovative, sustainable approaches to
meeting the very large array of needs for clean and safe water
across the country. October 18 marks the 35th anniversary of
the Clean Water Act, so it is particularly timely and
appropriate to have this hearing focusing on one of the
greatest challenges.
Administrator Stephen Johnson has articulated to everyone
in the Agency and, just as importantly, to the many partners at
the State, tribal, and local level, and in the private sector
that one of his top priorities is to develop innovative and
sustainable and market-based solutions for water infrastructure
financing and management.
What I am going to say in the brief amount of time I have
is I want to focus in on the three waves of water
infrastructure financing over the years and what EPA is doing
to usher in that third wave of innovative, sustainable, and
market-based approaches.
The first wave, as you know better than anyone, was the
construction grants era, where there were direct grants to
cities. As Senator Voinovich mentioned, it is undisputable that
has led to tremendous, enormous progress in cleaning up the
Nation's waterways.
The Nation evolved into a State Revolving Fund model in the
1987 amendments, and that is the second wave. Greater
sustainability. We embraced the original intent of Congress at
the time, and that was to move toward true sustainability,
after Federal capitalization grants, to get all of those funds
up and running. It is a tremendous, remarkable success story of
the State Revolving Fund model. It is one that we share with
countries around the world. It is one that we are fully
committed to in the sense of providing capitalization grants as
we have, living up to the President's commitment to provide
$6.8 billion in continued capitalization grants through 2011
and working hard and working in a collaborative way to help
States and local fund managers see those funds truly evolve and
be sustainable.
The third wave is the more innovative and sustainable
approach, and it is represented by several things. One is the
four pillars of sustainability that the Agency has been
advocating and acting on over the last several years, which I
will describe, and another one is in the President's budget
request these new Water Enterprise Bonds. We need congressional
help to amend the tax code to remove the State volume caps on
water and wastewater Private Activity Bonds. But we are also
pursuing other aspects of true sustainability.
So this third wave, the first part of it is focusing on the
demand side, as Senator Vitter mentioned, and that is the four
pillars of sustainability, and the first and most important, in
many respects, is asset management. In May of this year, EPA
signed a watershed agreement, a national agreement with water
and wastewater agencies, national organizations, to all work to
improve management of water infrastructure systems to know
those critical assets, these buried assets, if you will, for
many of them that are underground pipes, to inventory them and
to have a more sustainable management approach to reduce the
leaks and the overflows and to increase the productivity of
those systems.
The second is full cost pricing. It is so hard to explain
how cheap water is in so many respects compared to the value of
the service that is being provided. EPA is not going to set the
prices and we are very sensitive to the needs of local
communities and, in particular, local elected officials about
the rate shock that Senator Voinovich is mentioning when we see
big price tags for sewer overflow projects over the years. But
we are fully committed, as one of our pillars of
sustainability, to providing tools and information about
helping communities get the prices right to better reflect the
needs, the investments in their community systems. When
communities invest in wastewater infrastructure, they are
investing in their communities.
Mr. Chairman, I would love to make available to the
committee a video that the Local Government Advisory Committee
produced. This is part of FACA for the Administrator of EPA,
and it is called Water Infrastructure: Successful Strategies
for Local Leadership, and it focuses on in particular on
elected local leaders. So, without objection, I would like to
provide that to the committee.
Senator Lautenberg. Great. Thank you. We will have it
available for distribution for the members who would be
interested in seeing it.
Mr. Grumbles. Thank you, Mr. Chairman.
The other two pillars of sustainability that are really
part of this third wave to help reduce demand on our Nation's
wastewater infrastructure systems, which is a tremendous demand
based on our gap report and the need surveys, is to focus on
water efficiency like never before. That is why I would
encourage the committee and others in Congress to embrace the
WaterSense program, this voluntary public-private partnership
of labeling of water-efficient products and appliances to help
reduce the demand on infrastructure needs.
The fourth pillar is a watershed approach, and that is
where we see----
Senator Lautenberg. Can I ask you?
[inaudible]----
Mr. Grumbles. Mr. Chairman, green infrastructure is a very
important part of that. That, coupled with the Water Enterprise
Bonds, which we believe will bring in $5 billion to $6 billion
in new funds in partnership with the private sector, is an
important way to proceed for meeting America's wastewater
infrastructure needs.
Thank you.
[The prepared statement of Mr. Grumbles follows:]
Statement of Benjamin H. Grumbles, Assistant Administrator for Water,
U.S. Environmental Protection Agency
Mr. Chairman and Members of the Committee, I am Benjamin H.
Grumbles, Assistant Administrator for Water at United States
Environmental Protection Agency (EPA), and I am grateful for the
opportunity to testify before you today on the nation's water
infrastructure needs and the innovative and sustainable solutions the
Environmental Protection Agency and its partners are pursuing.
On October 18, America celebrates the 35th Anniversary of the Clean
Water Act (CWA), one of the world's most successful and enduring
environmental laws. The CWA has dramatically improved water quality
through scientific standards, discharge permits, pre-treatment
requirements, state and local funding, watershed planning and a
wastewater infrastructure system unparalleled in the world.
I am proud of the work EPA is doing and the progress we are making
with our Regions, the States, Tribal communities and other partners to
implement the vital objectives of this milestone legislation. Today, of
the 222.8 million people served by wastewater treatment facilities,
more than 98.5 percent (219.5 million people) are served by ``secondary
treatment'' (or better), a technical but important term of art that
refers to a biological treatment process designed to remove dissolved
organic matter from wastewater. Secondary treatment may remove up to 90
percent of remaining biological matter such as human waste, food waste,
soaps and detergent.
More than 281 million people receive drinking water on a daily
basis from more than 52,000 community water systems throughout the
nation. Advances in wastewater and drinking water treatment constitute
major achievements in modern American public health.
Administrator Stephen Johnson identifies the development of
innovative, market-based, and sustainable solutions for water
infrastructure financing and management as a top priority in his action
plan for the Agency.
Over the past 20 years, communities have spent more than $1
trillion (in 2001 dollars) on infrastructure, operations and
maintenance for wastewater treatment and disposal and drinking water
treatment and supply. But, it may not be enough to keep pace with
America's aging infrastructure systems. Many municipal water
distribution pipelines and sewer systems were constructed in the period
following World War II with an expected design life of 20-50 years.
Deteriorating pipelines can cause releases of water or wastewater that
result in environmental contamination and a net loss of water with
major economic consequences. In addition, numerous treatment facilities
that process water and wastewater are in need of upgrading to meet
capacity and water quality requirements associated with protection of
public health and the environment. There is critical need for
replacing, upgrading, and modernizing these infrastructure systems.
INFRASTRUCTURE NEEDS
With the aging of the nation's infrastructure and the growing
investment need, the wastewater industry faces a significant challenge
to sustain and advance its achievements in protecting public health and
the environment.
In October of 2002, EPA released the Clean Water and Drinking Water
Gap Analysis Report. The report estimated that if capital investments
remained at current levels, the potential gap between spending and
needs between 2000 and 2019 would be approximately $122 billion (in
2001 dollars) for wastewater infrastructure and $102 billion (in 2001
dollars) for drinking water infrastructure. If revenue grows at 3
percent per year, a projection that is consistent with long-term growth
estimates of the economy, the gap is approximately $21 billion (in 2001
dollars) for wastewater infrastructure and $45 billion (in 2001
dollars) for drinking water infrastructure.
The general causes of the infrastructure funding ``gap'' are not
difficult to identify. Much of the projected gap is the product of
deferred maintenance, inadequate capital replacement, and a generally
aging infrastructure. In addition, populations are increasing and
shifting geographically, thus requiring investment in existing or new
infrastructure. The Census Bureau projects the population to grow to
325 million by the year 2020 (an increase of more than 15 percent over
the 2000 population). Lastly, unlike utilities subject to state
regulation such as electric and natural gas service and privately owned
water systems, many public utilities in the United States have not
historically charged their users the full cost of service.
FEDERAL FINANCING FOR WATER INFRASTRUCTURE
At EPA, we think of water infrastructure financing in waves of
progress. If we look back at the innovations of the last generation,
the first wave ushered in the historic Clean Water and Safe Drinking
Water Acts in the early 1970s in response to the degradation of our
waters.
The second wave was another historic moment in transitioning to the
State Revolving Funds used to stretch the federal investment. On
February 4, 2007 we marked the 20th anniversary of the passage of the
Clean Water Act amendments that authorized the Clean Water State
Revolving Fund (CWSRF) program. The creation of the CWSRF in 1987 and
the Drinking Water State Revolving Fund (DWSRF) in 1996 were major
milestones on the path to financial sustainability for our water
infrastructure.
With the help of federal capitalization grants, the States provide
low interest loans for water infrastructure projects through their
individual CWSRFs and DWSRFs. Since loan repayments allow the funds to
``revolve'' over the long-term, the SRFs provide sustainable sources of
financing into the future.
Over the past 19 years, The CWSRF program has played a significant
role in helping to finance water infrastructure, a role that will
continue over the long-term. Over this time period, EPA has provided
approximately $25 billion to help capitalize the state-run programs. In
combination with state monies, bond proceeds, and recycled loan
repayments, the CWSRFs have been able to ``leverage'' the Federal
investment into $61 billion to fund worthy water infrastructure
projects. The newer DWSRF program has accumulated close to $13 billion
in its first 10 years of operation. The year 2006 marked an important
and notable milestone in the CWSRF: it was the first time that over $5
billion in assistance was provided in any one year.
The success of the SRFs can be attributed in large part to the
broad flexibility of the funds and the elimination of overlapping
federal and state requirements. The broad flexibility has allowed
states to implement the SRFs to fuller advantage. An example of this
flexibility is evident in California which, on average, provides over
$250 million in water quantity funding annually. In California, the
CWSRF's flexibility has allowed the state to undertake its most
pressing water quality needs, whether through traditional wastewater
treatment projects, or by reducing nonpoint source pollution from
agricultural runoff. The choice of achieving nutrient reduction through
less-expensive Best Management Practices on farm lands rather than
installing highly advanced nutrient removal at publicly owned treatment
works can be a win-win for the environment and for the sustainability
of our water infrastructure.
At the same time, elimination of overlapping federal and state
requirements has reduced both delay in funding and cost-inefficiencies
we see when direct grants are made, as was the case with construction
grants and remains the case with Special Appropriations Act projects
(earmarks).
EPA is committed to helping our partners sustain progress and
increase opportunities for SRFs through financial stewardship,
innovation, and collaboration. With a focus on promoting investment in
sustainable infrastructure and encouraging greater creativity in
project planning and development, we look forward to working with our
state and local partners to make the program even more effective. The
SRF programs demonstrate the power of partnerships to leverage,
innovate, and excel to meet water infrastructure, watershed protection,
and community health needs.
The SRFs are now and will continue to be a critical tool for
capital financing of our Nation's wastewater infrastructure. But, they
are not the only tool. Other aggressive and innovative actions and
technologies are crucial to solving the Nation's water infrastructure
needs.
WATER ENTERPRISE BONDS
In addition to the successful SRF programs, we believe that other
aggressive and innovative financing and management tools are crucial to
solving the Nation's water infrastructure needs. These innovations are
the upsurge of a third wave--which is bringing in new ideas about
sustainability and encouraging greater private sector participation.
EPA is helping lead this third wave of water infrastructure financing
and investment by proposing an important new tool--Water Enterprise
Bonds--to accelerate and increase investment in the nation's water
infrastructure. Water Enterprise Bonds will enhance access and
flexibility for utilities to issue private activity bonds for public-
purpose drinking water and wastewater facilities.
The objectives of this proposal, contained in the President's FY'08
Budget Request, are to accelerate and increase investment in the
Nation's water infrastructure and to facilitate development of more
sustainable infrastructure projects through innovative market-based
approaches. Specifically, the proposal is to amend the Internal Revenue
Code to remove the State volume cap on the use of private activity
bonds for water and wastewater infrastructure. Providing expanded
access to private activity bonds for communities will allow them to
finance, build, and manage water facilities using public-private
partnerships that deliver the best mix of technology, construction, and
operations with the appropriate transfer of risk to their private
sector partners. To ensure the long-term financial health and solvency
of these drinking water and wastewater systems, communities using these
bonds must have demonstrated a process that will move towards full-cost
pricing for services within 5 years of issuing the Private Activity
Bonds. This will help water systems become self-financing and minimize
the need for future subsidies. This proposal, if enacted, would lead to
a more robust market offering of new solutions to our water
infrastructure investment challenges.
We are also looking aggressively for innovative ways to reduce
costs and increase incentives to foster sustainable water
infrastructure investment and management. This Nation is increasingly
understanding that our goal needs to be not simply spending more on
infrastructure, but investing wisely in efficient utilities that focus
on life-cycle costs, plan for and find asset management and
replacement, and consistently think and act like the enterprises they
should be, for example, seeking to create revenue streams out of waste
streams.
As part of that effort, we held a milestone conference in March
2007, ``Paying for Sustainable Water Infrastructure: Innovations for
the 21st Century.'' This unprecedented forum for idea and actions
underscored the urgency of sustaining our water infrastructure. It
brought together more than 600 of our nation's best and brightest water
experts to discuss, debate, and brainstorm innovative approaches to
reducing costs and increasing investment in drinking water and
wastewater systems and programs.
We are continuing to expand upon this constructive dialogue with
several follow-up meetings with our conference co-sponsors and other
stakeholders. In addition, we have converted the conference website
into an Innovative Financing Forum'' that includes online discussion
boards to share ideas, relevant articles, and other information.
EPA'S APPROACH TO SUSTAINING WATER RESOURCES
The Agency has approached the challenge of keeping pace with
infrastructure needs of the future by developing a comprehensive
strategy built upon what we call the ``Four Pillars of Sustainable
Infrastructure''--better management, full cost pricing, water
efficiency, and the watershed approach. It is an effort to help ensure
that our Nation's water infrastructure is sustained into the future by
fundamentally changing the way America views, values, and manages its
water Infrastructure. It is a collaborative effort involving drinking
water and wastewater utility managers, professional and trade
associations, local watershed protection organizations, private sector
experts in technology, engineering, and finance, and federal, state,
and local officials.
BETTER MANAGEMENT
The Better Management ``pillar'' involves changing the paradigm for
utility management from managing for compliance to managing for
sustainability. We are concentrating our efforts on improved
performance through state-of-the-art management approaches focused on
the entire utility, working with smaller utilities to improve their
capacity to comply with regulatory requirements, and providing
utilities with information on cost-effective technologies.
On May 8, 2007, EPA signed a groundbreaking utility management
partnership agreement with six leading water and wastewater utility
organizations to ensure the long-term viability of our Nation's water
systems through effective utility management. Through this partnership,
we agreed to promote key attributes of effectively managed utilities,
encourage broader use of performance measures by utilities to gauge
their performance, and identity resources to help utilities manage all
of their operations more effectively.
This partnership provides utilities with a common management
framework to help them ensure that their operations and infrastructure
are sustainable in the future. We are now working in partnership with
the signatory organizations to encourage the widespread adoption of the
utility attributes and performance measures, along with other
sustainable management practices like environmental management systems
and asset management across the water sector.
FULL COST PRICING
In many cases, water and wastewater services in this country do not
consistently recover (or even calculate) the full cost of service. Over
the past year, the Agency has been working with drinking water and
wastewater utilities, public utility commissions, academia, and
consultants to discuss issues associated with achieving full cost
pricing. The challenge is significant, because we must work to help
utilities correct market signals that have been distorted by years of
subsidies. This past July, the National Association of Regulatory
Utility Commissioners responded to our efforts by issuing a resolution
calling for economic regulators and public health and environmental
regulators to work together to advance attainment of sustainable public
health and environmental protection.
Full cost pricing will only be possible and successful in an
efficiently structured and managed water and wastewater sector.
Activities carried out under the other pillars will help to address
inefficiencies in management and operations. We are also working with
our industry partners to develop tools and techniques to assist
utilities interested in recognizing and recovering the long-term, full
cost of providing service. To this end, we will be working to convene
training and workshops in 2008 that will help communities find
appropriate options for cost allocation and rate design.
WATER EFFICIENCY
Managing water is a growing concern in the United States. Due to
increases in both population and per capita water usage, communities
across the county are starting to face challenges regarding water
supply and water infrastructure. Improved water efficiency reduces the
strain on aging water and wastewater systems, makes better use of
existing resources, and can delay or even eliminate the need for costly
new infrastructure investments. It also diverts less water from rivers,
bays, and estuaries, which helps keep the environment healthy. Improved
water efficiency also translates into cost and energy savings by
reducing the amount of energy used to treat, pump, and heat water.
Under the Water Efficiency ``pillar'' we are working to foster a
national ethic of water efficiency, so that water is valued as a
limited resource that should be used wisely. In June 2006, EPA
announced WaterSense, an innovative partnership program that helps
American consumers and businesses make smart water choices that save
money and maintain high environmental standards without compromising
performance.
WaterSense features a label that will make it easy to find products
and services that save water. In order to ensure product quality and
performance, WaterSense labeled products must be third-party certified
to meet strict efficiency and performance criteria. To date, WaterSense
has signed agreements with over 160 promotional, manufacturer,
retailer, and certifying organization partners.
In October 2006, WaterSense began labeling programs that certify
irrigation design and installation professionals. Nationwide, landscape
water use is estimated to account for nearly one-third of all
residential water use, totaling more than 7 billion gallons per day and
up to 50 percent of that goes to waste due to factors such as
evaporation and runoff caused due to improper system design; these
certified professionals can make a big impact. Four irrigation programs
qualified for the WaterSense label and over 250 certified irrigation
professionals have partnered with the program.
In January 2007, WaterSense issued a final specification for a new
generation of high efficiency toilets that use only 1.28 gallons per
flush but still perform as well as, or better than, conventional models
that use as much as 5.0 gallons per flush. If only 10 percent of the
existing 222 million toilets in the United States were replaced with
WaterSense labeled toilets the total savings potential is approximately
246 million gallons per day. This equates to more than 89.7 billion
gallons each year. Already, seven manufacturers have labeled 64
different HET models. In the coming weeks, WaterSense expects to
finalize a specification for high-efficiency bathroom sink faucets and
faucet accessories that could potentially save 61 billion gallons
annually.
WaterSense is also developing voluntary specifications for water-
efficient new homes and is working with building rating systems such as
the U.S. Green Buildings Council Leadership in Energy and Environmental
Design (LEED) Green Building Rating System to adopt water-efficiency
components to their rating systems. Looking ahead, WaterSense will
focus on other commercial and residential plumbing products, as well as
irrigation system technologies, such as soil moisture sensors and
weather-based controllers.
Other important activities under this pillar include implementing a
Water Efficiency Leader program to inspire, motivate, and recognize
organizations and individuals who are working to improve water
efficiency beyond the labeling of products. We are also supporting the
formation of a national organization called the Alliance for Water
Efficiency (AWE), which initially will establish a water-efficiency
information clearinghouse and website. In the future, AWE's activities
will expand to work with and complement WaterSense's activities
including monitoring national plumbing and appliance standards and
codes. One of EPA's newest and most impressive facilities, the Region 8
Headquarters, will save water through the use of high efficiency
plumbing fixtures such as waterless urinals and dual-flush toilets. It
also has a green roof.
We are also beginning to collaborate with public officials and
utility managers to identify strategies and tools for reducing water
loss from systems. Making water distribution more efficient will not
only save water and reduce costs, but it will save energy and
significantly improve sustainability and increase capital available for
infrastructure investment.
WATERSHED APPROACH
The goal of this ``pillar'' is to integrate watershed-based
approaches into decision making at the local level so that communities
can make the most informed and cost-effective infrastructure decisions
that also help to ensure the overall health of the watershed. In many
cases, adoption of watershed-based approaches, such as source water
protection, ``green infrastructure,'' water quality trading, and
watershed permitting, in conjunction with traditional ``hard
infrastructure'' approaches, can help reduce overall infrastructure
costs.
EPA will continue to advance the President's vision of
``Cooperative Conservation'' through grassroots, community-driven
efforts to protect local watersheds and waterbodies of natural
significance. Last December, we convened a group of drinking water,
wastewater, and stormwater utility managers to discuss watershed
approaches to utility management. Building off the success of that
effort, we asked The National Advisory Council on Environmental Policy
and Technology to provide EPA with recommendations on how to advance
our efforts in this area. We received initial recommendations from the
group in July and they are currently engaged in the second phase of
their project.
GREEN INFRASTRUCTURE
The Agent's approach to sustainable infrastructure does not rely
solely on the four pillars strategy. In April 2007, EPA Administrator
Stephen Johnson signed onto a partnership with four national
organizations to promote the use of ``green infrastructure'' to lessen
sewer overflows and runoff after storms. A primary goal of this new
partnership is to reduce stormwater runoff volumes.
Green infrastructure represents a new approach to stormwater
management that is cost-effective, sustainable, and environmentally
friendly. Green infrastructure techniques utilize natural systems, or
engineered systems that mimic natural landscapes, to capture, cleanse
and reduce stormwater runoff using plants, soils and microbes.
On the regional scale, green infrastructure consists of the
interconnected network of open spaces and natural areas (such as
forested areas, floodplains and wetlands) that improve water quality
while providing recreational opportunities and wildlife habitat. On the
local scale, green infrastructure consists of site-specific management
practices (such as rain gardens, porous pavements, and green roofs)
that are designed to maintain natural hydrologic functions by absorbing
and infiltrating precipitation where it falls.
EPA and the Federal Highway Administration have teamed up to engage
a variety of public and private partners in creating a national model
for green infrastructure and sustainable transportation--the Green
Highways Partnership. The Partnership, with its growing network of
diverse partners, is a model for promoting sustainable infrastructure
and environmental protection through low-cost and low-impact solutions
such as: permeable materials and state of the art technologies that
cost-effectively reduce or eliminate stormwater flows and pollutants;
construction with recycled materials; and integration of planning,
practices and incentives to protect critical habitats, waterways, and
ecosystems.
The Green Highways Partnership is actively benchmarking, developing
and demonstrating these approaches and actions throughout the Mid-
Atlantic. We are planning to share the lessons learned and innovative
technologies from these studies and projects. The outcome of these
efforts is sustainable transportation infrastructure that is ``beyond
compliance'' and leaves the environment and communities ``better than
before.''
RESEARCH
The Agency's Office of Research and Development received nearly $7
million this year for a new research program to generate the science
and engineering to improve and evaluate promising innovative
technologies and techniques to reduce the cost and improve the
effectiveness of operation, maintenance, and replacement of aging and
failing drinking water and wastewater treatment and conveyance systems.
The initial focus of the program will be on ``underground''
infrastructure--America's ``buried assets'' that provide a foundation
for environmental protection and economic growth. The initial plan
primarily identifies research, demonstration and technology transfer
activities for wastewater collection systems and drinking water
distribution systems. Products will be provided to drinking water and
wastewater utilities to help them adopt and implement new and
innovative technologies and methods for cost-effectively operating,
managing, rehabilitating and extending the life of their systems.
WATER SECURITY
The security of our water and wastewater infrastructure continues
to be an important priority for the EPA and the National Water Program.
EPA has worked hard to ensure that drinking water systems fulfill their
obligations under the Bioterrorism Act. We have also provided voluntary
guidance and training to wastewater utilities on how to conduct
vulnerability assessments, prepare emergency response plans, and
address threats from terrorist attacks. To be sustainable, water and
wastewater systems must be secure. We are working with the Department
of Homeland Security to advance efforts on a variety of fronts.
CLIMATE CHANGE
EPA and its partners are learning more and doing more to confront
another serious challenge for our water resources--climate change.
Increasingly, we understand climate change may have impacts on water
infrastructure and watersheds that will affect our actions under the
Clean Water Act, Safe Drinking Water Act, and various ocean and coastal
laws.
While there remains some uncertainty on the scope, timing and
potential regional impacts of climate change related effects, EPA and
its partners are taking prudent steps now to assess emerging
information, evaluate potential impacts of climate change on water
programs, and identify appropriate response actions. The National Water
Program recently established an intra-agency Climate Change Workgroup,
made up of senior managers from EPA headquarters and regional water
offices. The Water Program Climate Change Workgroup is working to
improve understanding of climate change impacts on water resources and
is finalizing a Climate Change Strategy for the National Water Program.
CONCLUSION
Taken together, all of these initiatives, innovative tools, and
funding resources will help EPA and its partners continue to build on
the gains in water quality that we have worked so hard for and enjoyed
over the past 35 years.
As the Committee continues to study water infrastructure needs, the
Administration would like to encourage a constructive dialogue on the
appropriate role of the federal government in addressing these needs
and on innovative new tools such as Water Enterprise Bonds. Mr.
Chairman, I look forward to working with you and your colleagues and
answering any questions you may have.
______
Responses by Benjamin H. Grumbles to Additional Questions from
Senator Lautenberg
Question 1. When will the 2004 Clean Watersheds Needs Survey be
released? What is the current status of the Needs Survey? Is it under
review at the Office of Management and Budget? If so, how long has it
been under review? If it is not under review, please describe where it
is in the process, and EPA believes remains to be done before it can be
released.
Response. We anticipate that the 2004 Clean Watersheds Needs Survey
will be released shortly. It is currently undergoing final review at
the Office of Management and Budget (OMB).
Question 2. I understand the National Water Quality Inventory
report was cleared for release by the Office of Management and Budget
(OMB) last spring. Why has this report not been released? When will it
be released? Please provide the Committee with all versions of the
report that EPA submitted to OMB and any changes to the report
recommended by OMB.
Response. The National Water Quality Inventory Report to Congress
for the 2002 Reporting Cycle was released by EPA on October 11, 2007.
It was undergoing EPA's final clearance and approval process during the
interval between its approval by OMB and its final release to Congress.
The final draft is available on-line at http://www.epa.gov/305b/
2002report.
Responses by Benjamin H. Grumbles to Additional Questions from
Senator Cardin
Question 1. EPA's ENERGY STAR Program has proven effective as a
tool in reducing energy usage in America. Do you envision a similar
program for WaterSense? If so, can you give us examples of the savings
that can be realized as well as the marketing plans EPA has to realize
the full potential of this effort?
Response. Launched in June 2006, EPA's WaterSense program was
designed to reduce water use across the country by creating an easy-to-
identify label for water-efficient products that is backed by strict
criteria and independent certification. Generally speaking, WaterSense
labels products that use 20 percent less water and perform as well as--
or better than--conventional models. To earn the WaterSense label,
products must be independently tested and certified to meet EPA's
criteria for efficiency and performance.
In less than 2 years, WaterSense has already become a national
symbol for water efficiency among utilities, plumbing manufacturers,
and consumers. Awareness of the WaterSense label is growing every day.
More than 80 different models of high-efficiency toilets have earned
the label, and WaterSense labeled faucets should be available by next
year. In addition to manufacturers, EPA is working with utilities.
retailers, distributors, and the media to educate consumers on the
benefits of switching to water-efficient products.
For example, toilets account for about 30 percent of the water used
in the home and Americans waste 900 billion gallons per year by
flushing old, inefficient toilets. A family of four can realize a net
savings of $1,200 from retrofitting their home with WaterSense labeled
toilets over the product's lifetime or a net annual savings of $60 per
year after accounting for the cost of purchasing the new WaterSense
labeled toilets. Furthermore, WaterSense labeled toilets save nearly
$300 over the product's lifetime when compared to other widely
available toilets today with little to no significant difference in
cost compared to a standard model.
If every home replaced just one old toilet with a WaterSense
labeled toilet, the water savings would be enough to supply nearly 10
million U.S. households with water for a year. Savings at the tap also
result in energy savings. If just 1 in every 10 homes in the United
States were to install WaterSense labeled faucets or aerators in their
bathrooms, in aggregate they could save 6 billion gallons of water, and
more than $50 million in the energy costs to supply, heat, and treat
that water.
The potential for preserving our water supply for future
generations through this voluntary program is great, and WaterSense
will continue working on new product areas in the future. The average
home, retrofitted with water-efficient fixtures, could reduce water
waste by 30,000 gallons per year. If one out of every 10 homes in the
U.S. upgraded to water-efficient fixtures (including ENERGY STAR
labeled clothes washers), it could reduce water use by more than 300
billion gallons and save nearly $2 billion annually on utility bills
alone (not including the cost of the new fixtures.)
EPA realizes that water-efficient products are just the start of a
new wave of water conservation. We are working with utilities to
incorporate WaterSense promotion as part of their broader conservation
efforts, which include behavioral changes as well. We are asking our
retail and distributor partners to stock WaterSense labeled products
and make it easy for their customers to find water-saving options. We
have also employed public service announcements, articles, promotional
materials, and other cost-effective marketing tactics to educate
consumers about the availability of WaterSense labeled products. By
promoting this easily recognizable, consistent national brand, EPA
hopes WaterSense will make water-efficient products the clear and
preferred choice among consumers.
Question 2. What is the relationship between the WaterSense program
the Green Buildings' LEED program?
Response. WaterSense is very supportive of the work the U.S. Green
Building Council is doing through its LEED rating systems. WaterSense
is actively engaged in improving the water-efficiency components of
those systems. At this time we work with LEED in two ways. First, a
staff member is a member of the Water Efficiency: Technical Advisory
Group (WETAG). The WETAG advises LEED on water efficiency in general,
reviews credit interpretation requests and helps integrate water
efficiency into new and revised rating systems. Second, EPA has a Green
Buildings Working group that provides a conduit for EPA review of LEED
rating systems and other green marketplace activities. A WaterSense
staff member is an active participant on this EPA workgroup and
coordinates with them when appropriate.
Senator Lautenberg. Thank you very much. Mr. Grumbles, in
the year 2000, EPA estimated States needed $181 billion for
wastewater infrastructure, but the Administration has proposed
cutting the annual funding for the State Revolving Fund in
half, from its longstanding funding level of $1.35 billion to
$6.87 million. Now, is it possible that we can fulfill our
wastewater needs for infrastructure while cutting the level of
funding that much?
Mr. Grumbles. When the Agency developed the needs survey
and is working on the ongoing needs survey, and when we also
issued the 2002 gap report, we made it clear that the overall
gap or the needs are not the Federal role. Some of those needs
are operation and maintenance. So the answer is that we believe
that we can narrow that gap, over time even close the gap, if
we ensure that the State Revolving Funds are more sustainable,
not relying on continued or increased levels of Federal seed
money, but that we reduce red tape through the SRF program,
that we embrace Water Enterprise Bonds----
Senator Lautenberg. Mr. Grumbles, forgive me, but let's not
look back to what we thought might happen. Can we do the job
that we have to do while we cut the funding for the State
Revolving Fund in half? Do you really think that is adequate to
deal with the problems that we have now?
Mr. Grumbles. I think we can make progress on that front.
When you look----
Senator Lautenberg. That is not making progress. The
progress can be made an inch at a time and never getting to a
point when we have done the work that we have to.
Mr. Grumbles. Mr. Chairman, I think the President's budget
request moves us in the continued direction where we will make
progress. EPA's budget request for the Clean Water SRF is a
very important part of the overall picture, but it is not the
only part of the picture, and the SRF is not the only tool----
Senator Lautenberg. The answer is no. Thank you. Mr.
Grumbles, I know you are very capable, professional, and we
respect the work that you do, but how we can find ways to
justify reducing the funding available in half in this program,
there are other things that also can be done, but we are deep
in trouble with contaminated, polluted water.
Senator Voinovich, who comes with a unique experience of
having been a mayor and a Governor, and I have a bill to
substantially add to the wastewater improvement problem, the
cleanliness problem, and we are looking for far more funding.
On the other hand, I hear you justifying this cut and, frankly,
it is disappointing.
When will the 2004 Clean Watershed Needs Survey be
released?
Mr. Grumbles. Mr. Chairman, we are working on the final
stages of interagency review, and I am estimating that it would
be in the next couple of months, before the end of the year.
Senator Lautenberg. What has taken so long?
Mr. Grumbles. It has taken quite a bit of time, and I think
one of the reasons is looking at the various numbers,
documenting, verifying the State data. Also----
Senator Lautenberg. Isn't that the normal routine that you
would go through when you have a program like this, you take
the steps necessary to evaluate and conclude?
Mr. Grumbles. It has taken longer than I would like, and I
think part of the reason is not just the size of the numbers
and the complexity of the different categories, but it is also
the assumptions in analyzing what aspects of the Clean
Watershed Needs Survey we need to focus in on. So I recognize
it is an extremely important document, and we are working to
get it to you as soon as we can.
Senator Lautenberg. Would it be your guess that the report
will show that State needs have grown or fallen?
Mr. Grumbles. I think it is a mixed bag, and I don't feel
comfortable going into great detail, but I would agree with
every member who has spoken so far, that the needs continue to
grow in many respects due to the nature of the aging of the
systems and the----
Senator Lautenberg. How about the growth in the population?
Mr. Grumbles. The growth in the populations.
Senator Lautenberg. How about the severity of storms that
dump far----
Mr. Grumbles. I think that will have great impacts in some
areas of the country, but that is something that is----
Senator Lautenberg. Will that be considered in the final
report?
Mr. Grumbles. Well, we will certainly make sure that the
Clean Watershed Needs Survey reflects the needs due to wet
weather flows, storm, combined or sanitary sewers and
stormwater needs to the Stormwater Permitting program. Mr.
Chairman, it is a priority for me to be gathering the best
information we have to look to see what adaptation should be
made in managing the Clean Water Act and Safe Drinking Water
Act programs in light of climate change. So we have an intra-
agency task force on that specifically focused on water-related
implications. It is a very good question and it is an area that
we want to get all the information we can and adjust
accordingly.
Senator Lautenberg. We will come back.
I now would ask the former Chairman of the committee, the
Ranking Member on the full committee, for his questions,
please, Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
You had said, Ben, that there are other things, or the
Chairman said, that also can be done, and I would ask you the
question how is the Administration using the flexibility of the
SRF to promote new financing mechanisms.
Mr. Grumbles. The SRF has been so successful because of the
ability to leverage the Federal funds and other State funds.
The flexibility that States have to use innovative and creative
approaches that are consistent with our overall guidelines.
There are several items that we are very interested in pursing
further and have gotten advice from our Environmental Financial
Advisory Board. One is increased use of loan guarantees.
Another one is link deposit loans, in particular in areas where
the septic systems or other types of non-point sources, where
the recipient of the loan wouldn't be necessarily a community,
but an individual using local banks with the SRFs. That is an
important one. We are committed to keeping the SRFs flexible
and sustainable because we view that as one of the major tools
for meeting clean water needs.
Senator Inhofe. I know you are doing a lot of things, and
that is why I wanted to get into this discussion. The one thing
we all agree on here is that more money is needed to get into
the SRF. The SRF is a program that since 1987 has been working
very well, certainly in my State of Oklahoma it has been
working well, and there are many creative things that are being
done in terms of bond issues to try to accommodate the match,
but it is a difficult thing. It is kind of like the problem
that you and I have talked about before on the transportation
reauthorization bill. Two years ago, when we passed our
reauthorization, I think it went down as the largest non-
defense spending bill in history, and yet all it did is just
sustain what we have now. So in that bill we are looking for
new ways to finance roads, instead of doing it the same way we
have done it since the Eisenhower administration.
Now, I would challenge you to be as creative as possible.
Maybe I am the only one up here who feels this way, but
sometimes you just can't pour more money in; there are other
more creative ways, and I ask you to use the flexibility that
you have been studying to come up with something that will
resolve a program that has been very successful.
Now, you mentioned the four pillars. You got through asset
management and the full cost pricing and sustainability and
then the watershed approach. You were cut a little bit short on
points three and four, the third and fourth pillar, and I want
to give you the opportunity to elaborate a little bit more on
those because I know you have more to say about that.
Mr. Grumbles. Thank you, Senator. Water efficiency is one
of the other pillars. In that one, all of us, particularly now,
when the Nation and the country and the world are focused on
climate change or on energy security, the Administrator is
focused on clean energy and energy efficiency, and the
connection to water and wastewater is undeniable and is
inextricable. So we see that one of the great opportunities to
reduce the demand, to save money and save energy for wastewater
utilities in communities across the country is to encourage and
provide information on water efficiency.
We see connecting the dots or, frankly, connecting the
drops and the watts, people will be able to save money and also
mitigate greenhouse gas emissions, and the WaterSense program
is a very exciting one. We are modeling it on the Energy Star
program; we work very closely with the Energy Star program.
This one is focused solely on water and WaterSense is committed
to the principle of providing information so that consumers can
choose water-efficient products such as high-efficiency toilets
or faucets or outside residential irrigation systems to reduce
the waste and to save money. That is one.
The other pillar is a watershed approach, which really
means, Senator, helping to fund the most cost-effective ways to
deal with stormwater or wet weather flows in a watershed
context so that there is not an unnecessary expenditure by a
utility, if they can work with other partners, voluntary
partners in the agricultural community or others. That, to us,
is the key to sustainability and reducing costs downstream to
the wastewater treatment plant.
Senator Inhofe. That is good. Well, thank you very much,
Mr. Grumbles.
Thank you, Mr. Chairman.
Senator Lautenberg. Senator Vitter.
Senator Vitter. Thank you, Mr. Chairman. Ben, in the
ongoing needs survey process--I know that is being finalized--
folks from Louisiana identified about $4.7 billion of needs,
and the word back from EPA was, well, we only agree or
recognize $2.7 billion of that. Now, that is a pretty big
delta, that is a big gap. I wouldn't expect there to be
complete agreement immediately, but that is an awfully big gap.
How do you explain that size discrepancy?
Mr. Grumbles. Senator, I would welcome the opportunity to
learn more about the details of that discrepancy. As Chairman
Lautenberg was asking me about the amount of time it has taken
to complete this needs survey, one of the obvious reasons for
that is understanding and making decisions about eligibilities.
There are some new areas that are under discussion. So I would
very much like to get more of the details about what Louisiana
is saying the difference is between the two numbers.
I would say we recognize that sometimes States have a
different view of what is the Federal role or what is
appropriate to submit in terms of their needs, clean water
needs, over a 20-year period, so that is probably at the heart
of it, Senator. I look forward to working with you and
understanding what the difference of opinion is.
Senator Vitter. OK. We will make sure the Agency has that
input from the State. But in terms of Federal role, I mean, I
think we are talking about need, before we get to the issue of
Federal role, so that is not part of the discrepancy in the
sense that the State was asked to identify the need. It is a
later discussion about who pays for it and what ratio, and the
EPA was similarly responding to identification of the need, not
just the Federal role. But we will make sure the Agency has all
that information.
Ben, I am very concerned that in almost all phases of
government up here, in the last 20, 30 years, we have increased
complexity and paperwork and regulation so much that a dollar
goes a whole lot less far than it used to. That is true whether
it is building highways or whether it is building Corps of
Engineers projects, certainly important to Louisiana, or
whether it is doing this wastewater infrastructure work. What
can EPA propose specifically to reverse that trend so that
whatever dollars we come up with gets more done?
Mr. Grumbles. Your question is a very good opportunity to
talk about streamlining and reducing red tape and process, and
making sure we focus on the environmental priorities. The key
is having a results-oriented approach. A couple things. One is
continued vigilance and commitment to reducing red tape and
trying the best we can to streamline the process in getting
assistance or getting approval for clean water projects. I
think that is very important as the committee considers
reauthorization of the SRF and other programs to do the best to
provide flexibility to States and also keep at a minimum the
cost-cutting requirements. They are important concepts in many
respects, but sometimes that can increase the cost of the
project.
Environmental results is the key, and that is why we
embrace a watershed approach: water quality trading,
encouraging innovative partnerships so that that little bit of
money goes a lot further and tackles the greatest environmental
priorities. That is one of the reasons why the Administration
is enthused, why the mayors and why utility rate commissioners
are enthused about the new proposal to bring in $5 billion to
$6 billion in new money over time through amendments to the tax
code and remove the Private Activity Bond, annualize State
volume cap on Private Activity Bonds.
We feel that that will encourage local choice and also
public-private partnerships where the private sector--it
doesn't mean privatization, Senator. What it means is
partnerships for progress. If a community is comfortable with
new funding through partnerships with the private sector in
combination with the public, with public accountability, we
think removing barriers that are in the tax code, that is a
very important step to take to get more out of our limited
dollars and also to get environmental results.
Senator Vitter. Well, I look forward to those specific
proposals and any others, because I think that is a huge part
of the problem.
Mr. Chairman, I hope we can partner. I agree we need more
Federal resources, but I hope we can combine that with, at the
same time, less Federal burden or paperwork, because I think we
need to attack the gap from both of those directions to ever be
able to close it.
In closing, let me just say I think it is a problem
overall. I think it is a particularly onerous problem for
smaller communities. We are going to hear from Mayor Brasseaux,
the mayor of Carencro, who can give some unique perspective on
that.
Thank you, Mr. Chairman.
Senator Lautenberg. Thank you.
Senator Voinovich.
Senator Voinovich. Mr. Chairman, I apologize that I had to
skip out.
Senator Lautenberg. Well, we are anxious to hear your
comments.
Senator Voinovich. Thank you.
If I were you right now, I would sit down with the National
League of Cities, U.S. Conference of Mayors, the National
Association of County Officials to talk about a way of
streamlining the paperwork that is involved in making
application for these loans. I really believe a lot of smaller
jurisdictions just can't do it. From what I understand from my
people as I travel in Ohio, we have 100 communities that are up
in arms right now about the demands coming out of EPA, but to
put salt into the wound is the stack of papers that they have
to fill out in order to do this. If part of it is because you
have been loaded up with stuff that we have put on your
shoulders because we think we are going to micro manage your
operation, then I think you ought to come back to this
committee and say, look, the reason why we are doing a lot of
this ridiculous stuff is because you pass these ridiculous laws
that make us do it. OK? That is No. 1.
No. 2, you have to face up to the fact that we don't have
enough money. I mean, you go up to the Office of Management and
Budget, and what do they tell you? What do they tell you? The
bottom line is we have the 2000 survey, right?
Mr. Grumbles. Yes, sir.
Senator Voinovich. We don't have the 2004 survey. I
understand the reason why is because OMB doesn't want us to
have the information about the needs that we have out in the
country because it would embarrass them. Thank God the Senate
passed legislation that is going to study the complete
infrastructure needs of this country it will take us a couple
years and we will convey to the American public just how we
have ignored infrastructure needs in America today, whether it
is in sewer and water, highways, Army Corps of Engineer
projects, you name it. We just haven't done the job. Our heads
have been in the sand.
So what do you say to them when you go up there to OMB?
What does Administrator Johnson say to them when they say to
you that we are going to cut the budget? How ridiculous is it
if we have this problem that we are talking about now while you
are cutting the budget for the funds?
Mr. Grumbles. Well, Senator, there are budgetary
constraints across the board in various programs. When it comes
to water infrastructure----
Senator Voinovich. Almost $600 billion for the Iraq war.
OK? No request to pay for the war. So, as a result of that, a
lot of stuff that we should be doing here in the United States
of America isn't getting done. So what do you tell them?
Mr. Grumbles. Well, what we focus on is meeting the needs
under the Clean Water Act, the domestic needs, and coming up
with innovative approaches, and what that means, it means
advancing full cost pricing and encouraging providing
communities with the leeway and the opportunity to do that, to
set rates that better reflect the true value of the services of
those infrastructure systems, because we prefer not to be in a
Department of Justice enforcement action consent decree
situation. We think the better approach is to set the rates, to
get the support from--and Mayor Shirley Franklin of Atlanta
really focused in on infrastructure as a priority for her and
got rate increases to reflect the needs in the community----
Senator Voinovich. Yes, but can I tell you something? I was
there, OK? I did it as mayor of Cleveland. Our water rates were
way down. We increased them 130 percent, OK? We have realistic
water and sewer rates in Cleveland and the Northeastern Ohio
Regional Sewer District. But the demands that you have made in
order to take care of the overflow problem, it is impossible
for them to do it. You are saying you have to do it in 15
years, so now they are with the Justice Department. Why can't
you allow them to do it in 30 years? If you are going to say to
the local communities we ain't gonna give you any money and, by
the way, when you try to do it on your own, we're not going to
give you enough time to get it done, that is ridiculous.
Mr. Grumbles. Well, we recognize the need, and I know the
Administrator does and I do. We recognize the need for
flexibility, not have a cookie cutter approach to what is the
proper number of years for a long-time compliance strategy or
plan when it comes to the CSOs and catching up on neglected
infrastructure over the years, but we are very sensitive to the
public health and environmental needs.
I think that America demands clean water, not clean water
eventually, so we get into the situation where we have to do a
better job, Senator, of removing the red tape; providing
increased funding opportunities; if we stand in the way as a
barrier, removing those barriers through tax code amendments,
which is what the Water Enterprise Bonds proposal does; but
also providing greater freedom for innovative State fund
managers to use leveraging, to use the linked deposit loans
approach or other approaches to try to meet the needs, and the
needs grow.
Senator Voinovich. Well, what you are basically saying is
you want to use some Rube Goldberg ideas in order to take care
of the problems that the local communities have and patch this
together with this over here, and, you know, in our State,
frankly, we will do that. We will go to the Appalachian
Regional Commission or we will go to Rural Development. We will
go to anything else besides going to the EPA and going through
the imaginable line, the paperwork that is involved. A lot of
times people say I am not going to do it because, you know
what, there is no money there, why bother with it, Senator? I
am not going to do it.
I am just saying I don't think you are being realistic. I
think that third initiative, I don't believe it; it is not
realistic. Somebody has to look at this thing forthrightly and
say, you know, it isn't working. We do need more money. We need
to look at the amount of time we are going to give these folks
to pay back their bonds and to start to work with the
communities, and just not say, well, I am sorry, you are not
doing what you are supposed to do and, bam, it is in the
Justice Department. You know what? They are all spending money
now on paying for lawyers to take care of the situation.
So I am saying to you that I think you ought to go back to
the Department and tell them this Senator thinks their
proposals don't make sense and that they ought to go to the
Administration and tell them that they ought to put some money
where their mouth is, instead of this third initiative that
they have that really isn't making a heck of a lot of
difference.
Mr. Grumbles. Well----
Senator Lautenberg. Thank you, Senator Voinovich. Thank you
very much for your not unusual candor.
[Laughter.]
Senator Lautenberg. Since my name is Frank and I am, we are
quite a twosome up here.
What I am going to do is have a 10-minute recess while we
go to vote, and I would ask the patience of the second panel,
please, to excuse us, but that we have to do.
But I would ask you a question. Are there real threats
posed to public health, to the environment, parts of our
economy from sewage spills and combined sewer overflow? Are
there serious threats there?
Mr. Grumbles. There are serious threats, Mr. Chairman----
Senator Lautenberg. There are. Well, I just wanted to be
sure, because to follow on to what my colleague from Ohio said,
you know, the war represents a terrible threat; we want to take
care of our troops and we want to reduce not only the anguish
and the danger to our----
Mr. Grumbles. Senator, it is an enforcement priority for
the Agency, specifically the sewer overflows; it is a
compliance assistance priority for us as well. I----
Senator Lautenberg. Mr. Grumbles, I respect you, I really
do, but the fact of the matter is there isn't enough money to
do this. We have been through this and several times you have
explained how well off we are because the funds being
replenished and so forth. But you also suggested that cost
pricing ought to be----
Mr. Grumbles. Full cost pricing.
Senator Lautenberg. Full cost pricing. So you are
advocating an increase in the cost to all the communities and
all the people that they ought to pay more.
Mr. Grumbles. Not all. It is a community decision, and some
communities are showing great leadership.
Senator Lautenberg. OK. But the word goes out. It is pretty
simple. The word goes out, hey, pay more. Don't call it a tax,
whatever you do, maybe call it a fee or something else, but
that we want to pass along more of the cost to the communities.
You know, this is not a hearing on clean water, but when
you look at the cost of what people pay to get water in bottles
or jugs or whatever, something like $50 billion to $100 billion
a year. Here you are trying to make excuses for the inadequacy
of the funding by the Federal Government for the State
Revolving Fund, and you are glib with your language, Mr.
Grumbles, and I don't want to be too tough, but I would tell
you that is really--Senator Voinovich described it as Rube
Goldberg, but I would say smoke and mirrors. We get to the same
thing.
Thank you very much. The record will be kept open; you will
get further questions.
Once again, we will take a 10-minute recess. I want
everybody to note the clock while we run down, vote, and come
back. We look forward to hearing from the next panel.
[Recess.]
Senator Lautenberg. As the committee returns, please, to
order, I invite the second panel to take their places, please.
Welcome, all of you, and my apologies for leaving. We took a
couple more minutes than 10. We welcome the testimony that each
of you brings, the knowledge that you bring. I can't greet this
panel without saying that the mayor of my capital city, our
capital city, also president of the U.S. Conference of Mayors,
Mayor Palmer, is here. He and I have worked together arduously
on all kinds of things, including gun violence, et cetera. So
we are glad to see you here, Mayor Palmer, and invite your
testimony.
We will introduce the other witnesses at this time: Mr.
Glenn Brasseaux, mayor of Carencro, LA, Board Member of the
Louisiana Rural Water Association; Joe Freeman, chief of the
Financial Assistance Division from the Oklahoma Water Resources
Board, also vice president of the Council of Infrastructure
Financing Authorities; Mr. Chris Westhoff, president of the
National Association of Clean Water Agencies; and Nancy Stoner,
director of the Clean Water Programs at the National Resources
Defense Council. Thank all of you for joining us.
Now I would call on Mayor Palmer. You have 5 minutes,
Mayor, each one of you, by the way, and we would hope that you
could complete your testimony in that time. We are fairly loose
for about 20 or 30 seconds, but beyond that it gets tough.
Mayor Palmer.
STATEMENT OF HON. DOUGLAS H. PALMER, MAYOR OF TRENTON, NJ,
PRESIDENT OF THE U.S. CONFERENCE OF MAYORS
Mr. Palmer. Thank you, Mr. Chairman. It is indeed a
pleasure to see you again. Just 48 hours ago we were together
at the site of the Brooklyn Bridge with myself, you, and Mayor
Bloomberg and other mayors related to guns and terrorism, and
now we are here talking about water and wastewater. So, suffice
it to say we have to keep meeting like this.
Senator Lautenberg. Yes, indeed. Protecting the public is
our mission.
Mr. Palmer. Absolutely.
Mr. Chairman and members of the committee, my name, as was
stated, is Douglas H. Palmer. I am the mayor of Trenton, NJ and
president of the U.S. Conference of Mayors. I also would like
to thank the members of the subcommittee for inviting me to
testify and ask that my full testimony be submitted for the
record.
As president of the Conference of Mayors, my responsibility
is to represent the Nation's mayors on national and local
priorities. In January, we developed a 10-point plan entitled
``Strong Cities . . . Strong Families . . . for a Strong
America.'' One of our 10 points re-emphasized a point that
mayors have been focusing on for years, and that is improving
our Nation's infrastructure, which includes our water and
wastewater systems. In our plan, we call for tax incentives,
bonds, and other measures to support local and State efforts
and stimulate private sector participation to improve our
Nation's infrastructure. These incentives and bonds would help
create thousands of jobs and revitalize critical infrastructure
that is necessary to keep the United States competitive.
In my past role at the Conference, I also served as chair
of the Mayors Water Council, which was created to focus on
water resource issues. The Mayors Water Council has conducted
numerous surveys and reports regarding water issues that face
our cities, and I would like to outline some of our findings.
The Mayors Water Council conducted a survey that identified
the three most important water resource priorities facing the
Nation's cities: No. 1, rehabilitating aging water and
wastewater infrastructure; No. 2, security and protection of
water resources infrastructure; and No. 3, water supply
availability.
A 2007 report summarized how much money is being spent by
local governments on water and sewers. In Fiscal Year 2005,
local government spent $82 billion to provide sewer and water
services and infrastructure, which is up from $45 billion in
Fiscal Year 1992. Total spending on sewer and water from 1991
to 2005 was $841 billion. We estimate increased spending by
local government at $110 billion annually by the year 2010.
Local financing of water and wastewater infrastructure
varies, but is limited to a few general approaches: cities
typically use more than one financing source for major capital
investments; the pay-as-you-go approach stands out as the most
common financing tool; revenue bonds are the second most
frequently used; slightly more than a third of cities use the
SRF; and Private Activity Bonds, which was mentioned earlier,
are seldom used due to a Federal tax code impediment imposing
State volume caps.
Cities generally prefer to use municipal bonds and pay-as-
you-go cash rather than the SRF loans. Cities find rate
increases in government bonds are often more cost-efficient due
to better finance terms and because of the greater time
certainty in the finance process. About a third of the larger
cities rely on the CWSRF because they may not have the access
to favorable borrowing terms.
Also, when we talk about Federal financial assistance and
municipal water infrastructure investments, you would think if
two-thirds of the Nation's principal cities are not attempting
to use the SRF loan program, in favor of other financing
mechanisms, then why is the water infrastructure needs gap
growing. As municipal spending on water infrastructure has
increased over the last two decades,--and I know Senator
Voinovich and Mayor Voinovich, as I like to refer to him--so
have the number of unfunded Federal mandates. Local government
cannot completely satisfy spending requirements because of the
growing costs in this area and for other competing and worthy
public services.
Unlike the Federal Government that plans on deficit
spending, cities are required to balance our budget every year.
Our priorities are the cost for water infrastructure has been
squarely on the shoulders of local government and rate payers.
Local government pays for 99 percent of drinking water and 95
percent of clean water services and infrastructure. At present,
States play a minor but important role in helping local
government provide these services and infrastructure. The
Federal-State Revolving Fund Loan program plays a minor but a
very important part in financing clean water infrastructure. As
local government costs increase to keep pace with additional
Federal and State mandates, and to adapt the climate change
impacts, it is clear that increasing rates and the full use of
the SRF will fail to satisfy our water needs.
Unless Congress modifies the tax code to make access to
private capital and expertise for public purpose water and
sewer services and infrastructure, the outlook is indeed
gloomy. The Mayors Water Council has identified some basic
approaches, including grants, 30-year no-interest loans, and
greater use of the private activity bonds; providing grants to
municipalities either directly or through States for water and
wastewater infrastructure where there is an affordability issue
or when a community faces severe environmental problems,
including communities that have combined sewer overflow
problems; expanding some portion of the current 20-year loan
category to include a 30-year no-interest category or a 30-year
low-interest loan payback period under the State Revolving Fund
loan program for water and wastewater investment; and modifying
current tax law by removing the Private Activity Bonds used for
water and wastewater infrastructure from State buy-in caps.
We call on Congress to annually appropriate the Clean Water
SRF at $1.355 billion or more and the Drinking Water SRF at
$850 million or more to extend eligible SRF activities to
include more competitive.
I know my time is up, but I would be glad to answer
questions later.
[The prepared statement of Mr. Palmer follows:]
Statement of Hon. Douglas H. Palmer, Mayor of Trenton, NJ and President
of the U.S. Conference of Mayors
Mr. Chairman and Members of the Committee, my name is Douglas H.
Palmer. I am the Mayor of Trenton, NJ and President of the U.S.
Conference of Mayors.
I would like to thank the members of the Committee for inviting me
to testify here today.
The Conference of Mayors is a national nonpartisan organization
that represents cities with populations of 30,000 or more of which
there are over 1,200 in the United States.
As President of the Conference of Mayors, my responsibility is to
represent the mayors of the United States on priorities for our cities
and our nation. In January we gathered together to outline our
priorities for the new Congress. We created a 10--Point Plan entitled
``Strong Cities . . . Strong Families . . . for a Strong America.''
One of our 10 points reemphasized a point that Mayors have been
focusing on for years--improving our nation's infrastructure which
includes our water and wastewater systems. In our plan we call for tax
incentives, bonds, and other measures to support local and state
efforts and stimulate private sector participation to improve our
nation's infrastructure. These incentives and bonds would help create
hundreds of thousands of jobs and revitalize critical infrastructure
that is necessary to keep the United States competitive.
In my past role at the Conference, I also served as a Chair of the
Mayors Water Council (MWC) which was created to focus on water
resources issues, particularly on water and wastewater infrastructure
development, financing, and most recently on water supply, conservation
issues, and climate change adaptation.
The Mayors Water Council has also conducted numerous surveys and
reports regarding water issues that face our cities. We have asked
cities what are their most critical water issues, the financing tools
they use to pay for water and wastewater infrastructure, and research
on how much money is being spent.
I would like to outline some of the highlights of these findings
and recommendations and submit the rest of my testimony into the
official record.
NATIONAL CITY WATER SURVEY
The MWC conducted a survey of the nation's largest cities in 2005
that, for the first time ever, asked cities to identify the most
important water resources issues they face. The three most important
water priorities facing the Nation's cities are:
(1) Rehabilitating aging water and wastewater infrastructure (60.6
percent);
(2) Security/Protection of Water Resources Infrastructure (54.6
percent); and
(3) Water Supply Availability (46.5 percent)
In 2007 we did follow research and determined how much money is
being spent by local governments on water and sewers.
In Fiscal Year 2005 alone, local government spent $82 billion to
provide sewer and water services along with infrastructure, up from $45
billion in FY 1992. This translates that local government share of
spending on sewer is over 95 percent and the state share is just under
5 percent. The local government share on spending on water supply is
over 99 percent. Total spending on sewer and water from 1991-2005 was
$841 billion.
The trend is for even greater spending levels. Factors contributing
to the increased need for investment include: population growth and
land use development; an aging water infrastructure that needs constant
maintenance; changing environmental mandates; and climate change
impacts that threaten water supplies from drought; reduced snow-pack;
salt water intrusion on coastal aquifers; and increased storms,
hurricanes and flooding that will require infrastructure hardening.
Local financing of water and wastewater infrastructure varies, but
is limited to a few general approaches, (see Table 1). The columns in
this Table do not add to 100 percent because cities typically use more
than one financing source for major capital investments. The ``Other''
category, however, stands out because it is comprised of ``pay-as-you-
go'' finance approaches. It is commonplace for cities identifying this
approach to raise user fees and rates to finance new construction,
replacement construction and rehabilitation of existing water
infrastructure.
Other important findings from the survey indicate that:
Revenue bonds are the second most frequently used form of
financing after ``pay-as-you-go''
Private Activity Bonds are seldom used (primarily due to
the state volume caps limiting such use)
Slightly more than a third of cities use the CWSRF as a
financing tool
Table 1.--Frequency of Multiple-Source Financing of Major Capital Investments in Water Infrastructure
----------------------------------------------------------------------------------------------------------------
Type of Financing 2000-2004 (% of Cities) 2005-2009 (% of Cities)*
----------------------------------------------------------------------------------------------------------------
General Obligation Bonds.................................... 28.8 28.0
Revenue Bonds............................................... 46.1 50.8
Private Activity Bonds...................................... 0.8 1.4
State Revolving Fund........................................ 38.3 38.6
Other....................................................... 51.7 53.5
----------------------------------------------------------------------------------------------------------------
*Planned major capital investments in water infrastructure.
The 38 percent of cities that use the SRF do so because they have
no other means of financing needed water infrastructure improvements,
or would have to delay investments until financing capabilities match
demand for investment.
CITY PRACTICES AND ATTITUDES CONCERNING THE STATE REVOLVING
FUND LOAN PROGRAM
The MWC prepared a report in July 2006 on city attitudes about the
Clean Water State Revolving Fund loan Program (CWSRF) and the Safe
Drinking Water State Revolving Fund loan Program (DWSRF). This Report
sheds light on why cities do or do not prefer to use the SRF financing
approach. The summary findings indicate:
Cities generally prefer to use municipal bonds--revenue
and general obligation bonds (35.2 percent of cities); and, Pay-As-You-
Go--cash (26.0 percent of cities) rather than SRF loans. The primary
reason for this is because it is more cost-efficient due to better
finance terms and the greater time-certainty in the finance process.
This preference also reveals that cities with healthy bond ratings and
user fees and charges that anticipate the need for reinvestment in
water infrastructure play a strong role in finance decisions.
Red Tape, burdensome paperwork and SRF loan conditions and
strings were identified by 15.1 percent of the survey cities as the
critical reason why they did not turn to the SRF program for water
projects.
Another 11 percent of survey cities indicated that they
applied for an SRF loan but were either rejected or did not receive a
response to their application; or, they did not apply because they had
knowledge that they would not qualify either because of the type of
water project involved or because the state priorities would not favor
their applications.
A small percentage of survey cities (5 percent) stated
that they prefer to seek grants over the use of SRF loans.
A small percentage of cities (6.8 percent) indicated that
they had used the SRF loan program in the past, and they ``might'' or
``will'' consider using it for water projects scheduled between 2005
and 2009.
About 10 percent of the survey cities stated that they did
not investigate the use of the SRF loan program for water projects; or
that they did not need to use the SRF; or that they were not
responsible for capital investments in water infrastructure (3.2
percent for this latter group).
FEDERAL FINANCIAL ASSISTANCE AND MUNICIPAL WATER
INFRASTRUCTURE INVESTMENTS
If two-thirds of the nation's principal cities are not attempting
to use the SRF loan program because they have other viable financial
resources for water projects, why is the water infrastructure ``Needs
Gap'' growing instead of closing?
The transfer of financial responsibility for water infrastructure
investments from federal and state governments to local government is
firmly entrenched. Simultaneously, major capital investments have
shifted from federal and state grants to local lending by way of
municipal bonds, user charges and low interest SRF loans. The U.S.
Bureau of the Census reports that combined municipal expenditures for
water and wastewater infrastructure are second only to educational
expenditures. We are experiencing enormous investment, but a growing
or, at best, stable water infrastructure investment ``Needs Gap''.
As municipal spending on water infrastructure has increased over
the last two decades so has the number of unfunded federal mandates.
The ``Needs Gap'' itself is measured in terms of what it will take to
comply over a 20-year term with existing law. As new environmental
requirements are set for water quality the cost to reach or maintain
the compliance point is adjusted upward.
Local government also cannot completely satisfy spending
requirements in this area because the costs will continue to grow along
with competing needs for public capital. Mayors face the daily
challenge of balancing the multitude of needs in the community for
worthy public-purpose spending with limited financial resources. And
we, unlike the federal government, are required to balance our budgets
every year.
THE U.S. CONFERENCE OF MAYORS WATER INFRASTRUCTURE POLICY PRIORITIES
The Conference of Mayors and the Water Council has passed numerous
policies, recommendations, and encouraged best practices that will
enhance city efforts to provide and pay for clean and safe water for
our citizens while protecting our water supplies.
In the area of financing, we continue to encourage cities to
conduct full cost accounting and utilize asset management techniques to
determine the true cost of providing and maintaining water systems as
well as educating the public on the true cost of water. But as I
mentioned before, with the ever growing needs, cities can not do it
alone and therefore we need additional financing tools to assist us
with our efforts.
The Mayors Water Council has identified some basic approaches
including: grants; 30-year no-interest loans; and, greater use of
Private Activity Bonds (PABs).
Providing grants to municipalities, either directly or
through states, for water and wastewater infrastructure where there is
an affordability issue or when a community faces severe environmental
problems including communities that have combined sewer overflow
problems;
Expanding some portion of the current 20-year loan
category to include a 30-year no-interest loan category, or a 30-year
low-interest loan payback period, under the State Revolving Fund loan
program for water and wastewater infrastructure investment; and
Modifying current tax law by removing Private Activity
Bonds (PABs) used for water and wastewater infrastructure from state
volume caps. The increased use of private activity bonds for public
water infrastructure can boost aggregate spending on water
infrastructure and help cities make progress in closing the ``Needs
Gap''.
In our opinion, these approaches are necessary to help us meet our
water infrastructure needs.
Increased Funding and Flexibility of the SRF
Regarding the traditional SRF programs, the Conference of Mayors
resolution adopted in June 2006 calls for Congress to annually approve
recapitalization authorization to the CWSRF at $1.355 billion or more,
and the DWSRF at $850 million or more. The resolution ``. . . strongly
urges the Congress to approve legislation to substantially increase the
authorized levels for both Funds to help reverse the continuing decline
of the federal share of financing these federally mandated
improvements.''
The Conference of Mayors water resources policy supports
reauthorization and recapitalization of the CWSRF. While the CWSRF is
not perfect, it has proven to be a valuable financing resource to the
nation's cities. The state SRF programs and the U.S. EPA have much
experience with this program, and the Conference of Mayors would rather
improve on the current program than implement a new initiative.
Some additional improvements that we would recommend based on the
results of our 2005 National City Water Survey results would be to
extend eligible SRF activities to include replacement or major
rehabilitation would be a step in the right direction. Similarly, the
Conference of Mayors adopted policy in June of 2005 calling on Congress
``. . . to approve legislation that would complement the Drinking Water
State Revolving Fund and the Clean Water State Revolving Fund by
providing more targeted and direct federal resources to help the
nation's communities deal with other water infrastructure-related
issues, including $50.6 billion for combined sewer overflows, and $88.5
billion for sanitary sewer overflows and stormwater management;''.
Other eligible activities that could be funded under the SRF
include: development of a conservation and management plan,
implementation of lake protection programs, programs to reduce
municipal stormwater runoff, and watershed protection including the
encouragement of green infrastructure programs. We would like to see
even greater encouragement to fund such comprehensive efforts to
improve water quality.
The Conference of Mayors is supportive of legislation that includes
a program, even if it began as demonstration program, for water quality
enhancement and management. One of the most difficult problems cities
face involves achieving state water quality objectives and total
maximum daily loads (TMDLs) in the face of the virtually unregulated
nonpoint pollution sources that are usually outside our jurisdictions.
The U.S. Environmental Protection Agency (EPA) has recognized that
agricultural and livestock land uses contribute a major portion of
nonpoint source pollution in many areas. Many of our cities are engaged
in watershed management efforts to deal with nonpoint sources
(including urban runoff). Yet there is a critical lack of regulatory
drivers forcing the agricultural and livestock land users to contribute
to the solution. In some cases, the timing of pending TMDL requirements
will force cities to pay for water treatment caused in large part by
the upstream, non-urban land users. EPA's Water Quality Trading Policy
requires the non-urban polluter to voluntarily participate in a trading
scheme.
The Conference of Mayors adopted an action plan for sustainable
watershed management nearly 10 years ago. One of the five principles of
that plan is to focus on non-urban, nonpoint source water pollution,
and pursue public policy that would assign responsibility to pay for
the treatment of polluted water commensurate with the contribution of
the pollutant loadings. The action plan also clearly calls for allowing
the agricultural and livestock land users to employ best practices and
least cost approaches that are effective in lieu of stringent and
costly regulations. Mayors fully recognize that these land users,
although they may or may not be part of our cities, are important
contributors to our regional economies. While we prefer to use the
powers of persuasion to convince them to participate in the water
pollution solutions, such as the Water Quality Trading Policy approach,
we have begun to experience failure in cooperative efforts.
The Conference of Mayors also adopted a comprehensive watershed
organics management policy in 2002. This policy calls for Mayors to
take an active, and leading, role in watershed planning to control
organics and their nutrients which pollute streams and lakes, that
subsequently require more costly treatment at water facilities.
Demonstration project could provide some of the appropriate
financial incentives necessary to bring voluntary cooperative efforts
to bear to solve the water quality designation/TMDL problems that we
are facing. The Conference of Mayors supports this type of innovative
approach and we would encourage this subcommittee to consider this
approach.
Analyzing and encouraging the cost and effectiveness of alternative
management and financing approaches
The Conference of Mayors supports encouraging but not mandating SRF
applicants to explore cost-effective measures in their wastewater
infrastructure solutions. Congress should encourage communities to
consider regional alternatives, consolidation and public-private
partnerships. It has been our experience that alternative approaches to
planning, financing and operating wastewater facilities can yield
significant public benefits for the amount of money invested. While
choosing a public-private partnership approach should not be
prescriptive, but it should be made possible for those cities that want
to take advantage of such an approach.
A number of case studies were prepared by the Mayors Water Council
on long-term Operations & Maintenance agreements between cities and
private water companies. These projects have been able to produce cost-
savings of 10 to 30 percent, as well as provide additional public
benefits.
The ability of private water companies to competitively bid for
``design, build and operate'' (DBO) projects in wastewater is another
important dimension to explore. The Conference of Mayors adopted policy
encourages competition in the design-build-operate phases of new and
refurbished water and wastewater infrastructure. This policy was
adopted once it was determined that competition can lead to less costly
projects than the traditional design-build methods employed in the
past.
CONCLUSION
On behalf of the Conference of Mayors and the Mayors Water Council
I wish to thank you again for this opportunity to speak before this
subcommittee. We look forward to working with you as you move forward
on important water resources legislation.
Senator Lautenberg. Thank you very much.
Mr. Brasseaux.
STATEMENT OF HON. GLENN BRASSEAUX, MAYOR OF CARENCRO, LA, BOARD
MEMBER, LOUISIANA RURAL WATER ASSOCIATION
Mr. Brasseaux. Good morning, Mr. Chairman and members of
the committee, and a special greeting to my Senator, Mr.
Vitter, who is personally familiar with my small town in
Carencro.
I am the mayor of the city of Carencro, just outside of
Lafayette, LA. We have about 2,100 homes and businesses that we
provide water and sewer service. We are a typical small city
struggling to comply with Federal mandates, take care of our
infrastructure, finance the cost of running water and sewer
systems, and at the same time keeping water rates from
overwhelming our citizens, especially our low income
populations.
In Carencro and thousands of similar cities, we are barely
getting by. Two years ago, the city self-financed with tax
exempt municipal bonds a $1.5 million upgrade to the wastewater
treatment system to comply with our sewer permit and handle new
growth, which has been dramatic since the hurricanes have
pushed numerous families into our community.
Recently, we were grateful to receive a $500,000 grant from
the CDBG program to buy a new lift station, which was needed
because, whenever we had more than a 2-inch rainfall, we had
sewage overwhelming the distribution system and flowing out of
our manholes into the ditches, an unacceptable situation. Keep
in mind we have 13 more lift stations that need replacing or
upgrading, some that are currently overwhelmed in significant
rain events and release sewage in the streets.
In addition to the pumping and treatment issues, we have
hundreds of feet of old truss pipe that is failing, which means
it collapses without warning. Also, these old sewer lines
result in too much water getting into the system and
overwhelming the new treatment plant. This is the treatment
plant that we just upgraded for $1.5 million. The engineers
tell us in order to stop overwhelming the treatment plant, we
need to spend another $300,000 to $400,000 to build a storage
reservoir to hold excess water until it can treat it. The same
engineers estimate that it would take about $7 million to fix
old pipes, lift stations, crumbling manholes, and treatment
plants.
It gets worse, Mr. Chairman. On the drinking water side of
our city's operation, we just sold an estimated $3 million in
city bonds to finance a new drinking water treatment plant and
rebuild one of our five wells that was pumping sand. As I
stated, we have recently self-financed the two largest upgrades
for $4.5 million. We had attempted to finance these projects
through the State Revolving Loan Funds, however, there was too
much red tape involved with going through the State programs. I
keep asking the city auditor if we can sell more bonds, and
they tell me, with our existing debt, that we are maxed out on
additional loans. No one thinks that rates can rise on low
income households without causing economic hardship on these
families. The city has reduced our emergency reserve account by
more than 40 percent over the last few years.
My situation is common in all the States because small
communities make up the overwhelming percentage of water and
wastewater utilities, over 90 percent of regulated communities.
Small town consumers often pay high water and sewer rates.
Simultaneously, the rural areas have a greater percentage of
low income families and a lower median household income. This
results in a very high compliance cost-per-household in rural
systems coupled with a lesser ability to pay.
As the committee looks at new policy and legislation for
assisting small and rural communities, please know that on the
onsite rural water technical assistance is what the Nation's
small communities depend on for compliance and expertise in
maintaining our water and sewer supplies. In Carencro, when our
manhole covers were overflowing with sewage, Louisiana Rural
Water had a fuel technician onsite to provide us help,
direction, and a plan within 3 hours. We called the State to
report the problem; however, the State is not in a position to
tell us how to fix the problem, and advised us to call
Louisiana Rural Water.
Another key principle we would like for you to consider is
to target Federal subsidies to communities exhibiting the
greatest need, both economically and environmentally. They
should receive funding first. A significant portion of the
funding should flow toward small systems because, generally,
they need it more.
Our last point is that we believe State Revolving Funding
should not be limited to making loans because, in many
situations, small communities will not have the ability to pay
back a loan.
In closing, Mr. Chairman, I would like to thank the
committee for this opportunity. All of rural and small town
America is grateful for your assistance and interest in
helping.
I am happy to answer any other questions.
[The prepared statement of Mr. Brasseaux follows:]
Statement of Hon. Glenn Brasseaux, Mayor, Carencro, LA, Board Member,
Louisiana Rural Water Association
Good Morning Mr. Chairman and Members of the Committee--and a
special greeting to my Senator; Mr. Vitter who is personally familiar
with my little town of Carencro.
Thank you for allowing me to testify today on behalf of the over
50,000 small and rural communities with federally regulated public
water and wastewater supplies. I am also testifying on behalf of my
small city in Louisiana--the City of Carencro, the Louisiana Rural
Water Association and the National Rural Water Association.
In order to focus my remarks, I would like to tell you about the
water and funding challenges my community is facing--and then relate my
situation to our key policy points that we would like the Committee to
consider in any new state revolving funding legislation and in
Congressional water appropriations.
I am the mayor of the city of Carencro, just outside of Lafayette
Louisiana. We have a population of about 7,500 people--which means we
have about 2,100 homes and businesses that we provide water and sewer
service. We are a typical small city struggling to comply with federal
mandates, take care of our infrastructure, finance the cost of running
water and sewer systems, and at the same time keep water rates from
overwhelming our citizens--especially our low income populations.
In Carencro, and thousands of similar small cities--we are just
making it. Two years ago, the city self-financed, with tax-exempt
municipal bonds, a $1.5 million upgrade of a portion of the wastewater
treatment system to comply with our permit and handle new growth, which
has been dramatic since the hurricanes pushed numerous families north
in Louisiana. We have been spending thousands of dollars, from our
operating budget, to retrofit another part of the wastewater system--
our old lagoon that is about 50 years old, to meet our permit. Recently
we were grateful to receive a half million-dollar grant from the CDBG
program to buy a new lift station, which was needed because whenever we
had more than a 2-inch rainfall, we had sewage overwhelming the
distribution system and flowing out of manholes into the ditches--an
unacceptable situation. Keep in mind we have 13 more lift stations that
need replacing or upgrading--some that are currently overwhelmed in
signification rain events and release sewage in the streets. In
addition to the pumping and treatment issues, we have hundreds of feet
of old truss/cast-iron pipe that is failing--which means it collapses
without warning. We have to call in a contractor to repair collapsed
lines at typical $5,000-$10,000 an incident. Also, these older sewer
lines result in too much water getting into the system--and
overwhelming the new treatment plant--this is the treatment that we
just upgraded for $1.5 million. The engineers tell us, in order to stop
overwhelming the treatment plant, we need to spend another $300,000-
$400,000 to build a temporary storage reservoir to hold excess water
until we can treat it. The same engineers estimate it would take about
$7 million to fix all the old pipes, lift stations, crumbling manholes,
and treatment plants--however that would take a long-time, so we would
still need the temporary reservoir. It gets worse Mr. Chairman. On the
drinking water side of the city's operation --we just sold an
additional $3 million in city bonds to finance a new drinking water
filtration treatment works and rebuild one of our five wells that was
pumping sand. Our old drinking water treatment works was over 50 years
old and was literally rusting away. We had to backwash our filters
every four hours, where a new plant would only have to backwash once a
day. Our energy and chemical costs have risen precipitously to comply
with standards and meet the water demand of the community. And at
times, our local courts will force small communities, like mine, to
takeover very small failing sewer systems in our proximity to ensure
public health protection, however, we often have to pay for the line
extensions.
As I stated Mr. Chairman, we self-financed the two largest, and
most recent funding proposals to finance the $1.5 million for the
wastewater upgrade and $3 million for the water upgrade. We had looked
at attempting to finance their project through the state revolving loan
funds, however, the experts and engineers assisting us on these
projects thought there was too much red tape involved with going
through the state programs--and that it would be most effective and
economical for the city to sell bonds to move these projects forward.
As mayor, I recently supported a city sales tax increase just to
pay for the increases in the cost of running the water and sewer. This
initiative failed on a ballot measure by a 60 percent-40 percent vote
of the citizens. I don't think our current rates are unreasonable,
however my view is not shared by a large percentage of the city--and no
one thinks that rates can rise on the low-income households without
causing economic hardship on these families. We are constantly looking
for new sources of financing and grants. The city has reduced our
emergency reserve account by about 40 percent over the last few years
to funding water projects. I keep asking the city auditor if we can
sell more bonds--and they tell me with our existing debt that we are
getting on shaky ground. I am primarily here to talk about water,
however, we are other challenges to the city has to deal with
including: roads, social spending, police, schools, competitive city
salaries, etc. And I just learned last month that we could become a
non-attainment area for ozone under the Clean Air Act.
My situation is common in all the states because small communities
make up the overwhelming percentage of water and wastewater utilities--
over ninety percent of regulated communities. Due to a lack of
economies of scale, small town consumers often pay high water and sewer
rates. Water bills of $50-$100 for water are not uncommon in rural
areas. This dynamic often results in very high compliance costs per
household in rural systems. Simultaneously, the rural areas have a
greater percentage of the nation's poor and a lower median household
income. This results in very high compliance cost-per-household in
rural systems coupled with a lesser ability to pay. Small communities
often have limited technical and administrative resources to deal with
compliance and navigate through funding programs. In the smallest
systems, one person may run both the water and sewer system and in some
cases communities can only afford a part-time or volunteer operator.
This lack of resources makes small systems a challenge for state
agencies--the more complicated we make funding programs the more likely
the small communities, which need the funds most, will not be able to
participate.
As the Committee looks at new policies and legislation for
assisting small and rural communities with water quality, financing,
and compliance, please consider the following priorities of small
communities that we believe need to be recognized in federal
legislation. Most of these provisions were included in some manner in
the drinking water SRF--balancing the federal priorities with the
state's flexibility to tailor individual programs and discretion on
implementation of each these programs.
1. On-site rural water technical assistance is what the nation's
small communities depend on for compliance with the Clean Water Act and
expertise in maintaining our water and sewer supplies. Carencro, and
all the other small towns across the state and the Nation depend on the
technical assistance provided by their state association for most all
water issues. Whenever we have a problem in Carencro we call Louisiana
Rural Water and they send someone immediately. When our manhole covers
were overflowing with sewage--rural water had a field technician on-
site to provide us help, direction, and a plan within 3 hours. We
called the state to report the problem, however, the state is not in a
position to tell us how to fix the problem. Regulators can tell us that
we must fix the problem, but only the rural water technicians will tell
us how to fix it, and in the most economical manner. For that
particular crisis, our engineers told us what we needed to do three
weeks later with a consulting fee. There is nothing wrong with that,
however, with all the complexity and constant pressure to comply with
new and changing federal rules, we need access to rural water
associations' free and common-sense technical assistance. When Congress
passed the mandate for all small communities to conduct a vulnerability
assessment (under the 2002 Bio-Terrorism Act), the rural water
association staff showed us how to complete this assessment without
charge. Some consultants were charging thousands of dollars to assist
communities in the same manner. Every community wants to provide the
best possible water quality to their consumers. Rural Water provides
the resources and training to achieve this objective in a common sense,
hands-on manner systems can use. Please make funding for rural water
technical assistance the key component of federal assistance under the
Clean Water Act.
2. Communities exhibiting the greatest need should receive funding
first. A significant portion of the funding should flow toward small
systems because, generally, they need it more. Rates are often much
higher per household in small communities--often from compliance
requirements. EPA rules on the horizon will significantly increase
water rates in rural systems. Also, rural communities often have lower
median household incomes. The CWA and SDWA axiom in rural areas is:
much higher cost per household with much lower income. No large system
is facing cost increases on a per household basis comparable to what is
facing small systems. It only makes sense that federally subsidized
funding would flow toward the communities with the greatest need--that
is to small systems.
3. Programs should not be limited to making loans because in many
situations, small communities will not have the ability to pay back a
loan--even with very low interest rates.
4. A minimum portion of the funds should be set-aside for small
systems. This ensures that a state must set up a process for dealing
with small communities. Once established, local pressures and
priorities will determine the actual portion directed to small systems,
which we expect will often be greater than the minimum prescribed. We
urge the Committee to include, at least, the same set-aside amounts for
the wastewater and drinking water programs; 15 percent minimum for
small systems as like the drinking water program and 30 percent
disadvantaged community subsidy like in the drinking water programs.
This parity will ensure states have the tools to help the systems most
in need and will be especially important if the two funds have transfer
authority between them.
5. Corporate water systems should not be eligible for state
revolving funding. Taxpayer subsidies should be prohibited from profit
generating companies or companies paying profits for shareholders/
investors. Private companies argue that they have to comply with the
same regulations. However, they voluntarily chose to get into this
``business'' and compliance is not the over-riding principle that
should be considered in this discussion. We believe that the
distinction in mission between public and private is the core principal
that should be considered. Private systems are in the business to
maximize profit. Public water utilities were and are created to provide
for public welfare (the reason why public water continues to expand to
underserved and non-profitable populations). This is a significant
difference. And while we believe that maximizing profit is a noble
virtue and as American as safe water, we do not think that taxpayers
should help the cause of privately owned systems. In addition, the
needs of less affluent public water systems and families with no piped
water dwarf the current SRF allocations. The state of Florida has a
novel compromise to this issue. Florida limits SRF funds to private
water systems less than 1,500 people--ensuring funds are limited to the
class of private water systems that did not get into the business as a
corporate enterprise.
6. Consolidation and privatization are limited solutions for small
systems. Consolidation can work in some situations, but only for a
small portion of small systems and only when the systems are in dose
proximity and the economics make sense. Rural water associations are
the lead proponents of consolidation when it makes sense--when it
results in better service for the consumer, and we have consolidated
numerous communities in all the states. Consolidation and
regionalization that is in the consumers' best interest will happen
naturally at the local level regardless of federal policy on issue.
Privatization is rarely a less costly solution for very small
communities. In the very small communities it is, perhaps, more common
to see private systems being transferred to public bodies so they can
obtain better financing and local governmental control. The missions of
private water and rural water systems are fundamentally different, the
reason being the lack of profitability in sparse rural populations.
7. The 1996 Safe Drinking Water Act State Revolving Fund made a
significant policy change in the Safe Drinking Water Act funding by
including as much flexibility as possible. Nowhere is this more
apparent than in the state revolving fund section. Under this approach,
states were given all sorts of discretion on how to spend the money to
meet their local priorities. For example, a state can make grants, can
fund set-asides, expand technical assistance efforts, create new
prevention programs, increase state staff, or choose to do none of
these and retain the traditional low interest loan focus. Small
communities' message here today is that this was a monumental step in
the right direction. This flexibility has made state SRFs better and
more responsive to nearly every stakeholder. Small systems have seen a
level of inclusion and benefits from the drinking water SRF that we
could not imagine based on our experience with the wastewater SRF that
does not include these flexible provisions.
8. Local Responsibility and Growth.--The amount of the
``appropriate'' federal contribution to local water supplies depends on
what one considers the local responsibility to provide and pay for that
service. The more you place responsibility on the locals for paying for
service, the lower the federal obligation and cost. Rural water
associations believe that local governments have the primary
responsibility for providing water and sewer service. We believe that
the federal government should subsidize the local community when there
is a clear federal welfare interest to increase public health, assist
low-income communities, protect the environment, or create economic
development. Public health and environmental protection interests are
often tied to a federal unfunded mandate, which should also be a
priority of federal funding. However, we do not believe that the
federal government is responsible for all water funding--and this is
why we believe it is critical to target federal funding towards well-
defined federal priorities. Due to the unique realities and
characteristics of small communities, they arc often in greater need of
federal subsidies to accomplish federal objectives.
9. Small communities are experiencing water problems due to aging
infrastructure. We commonly see pipes that are decades old that contain
outdated asbestos and cement materials that are failing and resulting
in public health and environmental threats. Ruptures in wastewater
pipes can lead to sanitary sewer overflows in varying degrees of
environmental risk and possibly contaminating water supplies. Inflow
and infiltration (I&I) of sanitary sewer systems is a widespread
problem in rural and small communities. This can result in communities
violating their NPDES permits, especially in wet weather, and cause
mechanical facilities to need replacing more often. Aging water
distribution lines can leak and cause significant loss of water and
energy. In 2006, rural water associations assisted over 6,000
communities with problems of aging infrastructure directly resulting in
water loss or I&I problems.
10. Complexity of the Application Processes.--In the smallest
systems, one person may run both the water and sewer system and in some
cases communities can only afford a part-time or volunteer operator.
This lack of resources makes small systems a challenge for state
agencies--the more complicated we make funding programs the more likely
the small communities, which need the funds most, will not be able to
participate. We urge you to exercise caution for increasing demands on
applicants as each new demand makes the process tow complicated for
small systems and therefore less attractive. We believe that the
current review process is fully adequate to ensure repayment of loans,
progressive environmental planning, and long-term capacity of
applicants.
Senator Lautenberg. Thank you very much.
Mr. Freeman.
STATEMENT OF JOE S. FREEMAN, CHIEF, FINANCIAL ASSISTANCE
DIVISION, OKLAHOMA WATER RESOURCES BOARD, VICE PRESIDENT,
COUNCIL OF INFRASTRUCTURE FINANCING AUTHORITIES
Mr. Freeman. Good morning. I am Joe Freeman. I am chief of
the Financial Assistance Division of the Oklahoma Water
Resources Board, and I serve as vice president of the Council
of Infrastructure Financing Authorities.
We welcome today's focus on the issue of financing water
quality improvements. Hopefully, this hearing will signal a
renewed effort to move forward in cleaning up our Nation's
water bodies and protecting drinking water sources.
While the progress made by States and the Federal
Government, working in partnership, address water quality
challenges has been considerable, it is hardly sufficient to
meet the overwhelming need. All evidence points to a gap that
is large and growing. A survey of State Clean Water SRF
programs undertaken by my organization in 2005 identified over
2,000 projects seeking loans requiring almost $9 billion in
funding. In my State, the city of Tulsa alone has needs of an
estimated $194 million over the next 5 years. It is clear that
at current funding levels a great many needed projects are not
going to move forward anytime soon.
The State Revolving Fund programs are at a crucial
juncture. The Congress has an important choice to make in the
future. We believe the State Revolving Fund model remains the
most effective and efficient means to provide assistance to
communities to provide safe drinking water and achieve water
quality goals. In order for this very successful State-Federal
partnership to continue to succeed, the Federal commitment must
be clear and sustained.
Since its inception, the Clean Water SRF has achieved an
impressive record of success in restoring this country's lakes,
rivers, and streams, and protecting the health of citizens.
Since 1990, in Oklahoma, the Clean Water SRF has loaned over
$665 million for projects, and I am proud to say provides over
65 percent of Oklahoma's wastewater financing. Nationally, over
$60 billion in low interest loans have been awarded to finance
the construction of thousands of projects across the country.
These projects serve millions of people and treat billions of
gallons of wastewater every day, wastewater that would
otherwise destroy precious water resources and threaten the
health of millions of people.
Let me turn to a few specific examples of what is being
accomplished in my State of Oklahoma.
Since 1999, Oklahoma has made over $324 million in Drinking
Water SRF loans. Our $45 million loan to the city of
Bartlesville was used to construct a 26 million gallon per day
water treatment plant, which allowed the city to realize cost
savings of almost $14 million, or a third of the cost of the
total project.
Our largest borrower is the city of Tulsa, which is using
the Clean Water SRF program to implement a comprehensive
wastewater plan to rehabilitate aging infrastructure, meet
capacity needs, and comply with discharge permit requirements.
By using the Clean Water State Revolving Fund loan program, it
is estimated Tulsa will save about $59 million in just 5 years.
As these projects illustrate, the State Revolving Funds are
playing a vital role in helping Oklahoma communities improve
water quality.
As the committee develops SRF reauthorization legislation,
we hope you will be mindful of the perspectives of State
program managers. We are very concerned that reauthorization
could end up adding more burdens to the SRF program than
improvements.
State SRF managers who participate in the State-EPA
Workgroup that oversees the program wrote the Chair and Ranking
Member of this committee this summer to express exactly that
concern. Making a reference to the House-passed reauthorization
bill, H.R. 720, they warned, ``This bill contains provisions
that will make the program considerably less effective and
efficient for potential applicants. The large number of
additional program and project requirements proposed by H.R.
720 will result in additional work, time and expense, making it
less likely that municipalities, especially small communities,
will be able to afford to seek financing through the Clean
Water SRF. We ask that you carefully avoid provisions that
would impose restrictions on State program flexibility or will
add new burdensome requirements on potential applicants.'' CIFA
echoes these concerns.
We have long sought reauthorization legislation. We feel
funding levels and program operations have suffered from the
failure to reauthorize the Clean Water SRF and Drinking Water
SRF, and believe that reauthorization will deliver a strong
message that Congress remains committed to the State Revolving
Funds. However, we see little benefit from the legislation that
would hamper our flexibility and burden communities we serve
with barriers to their participation.
The success of this program derives from the flexibility of
the SRF model, allowing each State to determine the most
effective means to address individual local water quality
issues. Efforts to mandate certain approaches or restrict the
use of funds to particular types of projects fail to recognize
that water quality needs vary and each State is in the best
position to decide how best to meet those needs.
Mr. Chairman, we appreciate the opportunity to share our
views and we look forward to working with the committee. Thank
you very much.
[The prepared statement of Mr. Freeman follows:]
Statement of Joe S. Freeman, Chief, Financial Assistance Division,
Oklahoma Water Resources Board, Vice President, Council of
Infrastructure Financing Authorities
I am Joe Freeman, Chief of the Financial Assistance Division of the
Oklahoma Water Resources Board. I am testifying today on behalf of the
Council of Infrastructure Financing Authorities in my capacity as Vice
President. CIFA is the national organization of state officials
involved in the financing of water and wastewater pollution control
projects. CIFA members are responsible for management of the Clean
Water and Drinking Water State Revolving Funds.
We welcome today's focus on the issue of financing water quality
improvements. Hopefully, this hearing will signal a renewed effort to
move forward in cleaning up our nation's water bodies and protecting
drinking water sources.
While the progress made by States and the Federal government
working in partnership to address water quality challenges has been
considerable, it is hardly sufficient to meet the overwhelming need.
All evidence points to a ``Gap'' that is large and growing. A survey of
state CWSRF programs undertaken by CIFA in 2005 identified over 2,000
projects seeking loans requiring almost $9 billion in funding. In my
state the city of Tulsa alone has needs of an estimated $194 million
over the next 5 years. It is clear that at current funding levels a
great many needed projects are not going to move forward anytime soon.
The past 5 years have not provided much encouragement in terms of
the federal commitment to preserving and improving our water resources.
Both House and Senate committees developed comprehensive legislation to
reauthorize the State Revolving Funds, providing significant funding
increases and program enhancements, only to see these efforts end in
stalemate. Appropriations levels, at least with respect to the CWSRF,
have been in a steady decline until that trend was reversed somewhat in
the current fiscal year.
The State Revolving Fund programs are at a crucial juncture. The
Congress has important choices to make as to their future. We believe
the State Revolving Fund model remains the most effective and efficient
means to provide assistance to communities to provide safe drinking
water and achieve their water quality goals. In order for this very
successful State-Federal partnership to continue to succeed, the
federal commitment must be clear and sustained.
Since its inception, the CWSRF has achieved an impressive record of
success in restoring this country's lakes, rivers and streams and
protecting the health of its citizens. Since 1990 in Oklahoma, the
CWSRF has loaned over $665 million for projects, providing over 65
percent of Oklahoma's wastewater financing. Nationally, over $60
billion in low interest loans has been awarded to finance the
construction of thousands of projects across the country. These
projects serve millions of people and treat billions of gallons of
wastewater every day--wastewater that would otherwise destroy precious
water resources and threaten the health of millions of people.
The CWSRF produces these environmental and economic benefits in an
affordable way for the customers who use these projects. The low
interest loans offered by the CWSRF significantly reduce the user rates
customers have to pay and bring these rates in line with their ability
to pay. The low interest rates offered by CWSRF loans funded over the
life of the program translate into $18 billion in savings, compared
with what they would be paying had these projects been funded with
market rate borrowing. For a typical $10 million project with a CWSRF
loan, the saving is $3.2 million. Since these interest savings are
typically targeted at the most financially distressed borrowers, they
represent a vital mechanism for bringing public health, environmental
and economic development benefits to needy communities.
The Drinking Water State Revolving Fund, while a less mature
program, has been a critical factor in bringing improved public health
protection to close to 100 million Americans. Over $11 billion in loans
and other assistance has been allocated to nearly 5,000 projects.
Almost three-fourths of these loans have been to communities serving
10,000 or fewer people and over one-fourth have been to disadvantaged
communities.
Let me turn to a few specific examples of what is being
accomplished in my State of Oklahoma:
Since 1999, Oklahoma has made over $324 million available in DWSRF
funding. Our DWSRF loan to Bartlesville, used to construct a 26 million
gallon per day treatment plant, allowed the city to realize cost
savings of almost $14 million, nearly a third of the total project
cost. The Lawton Water Authority will experience similar savings as it
constructs a water treatment plant with a capacity of 40 million
gallons per day.
Our largest borrower is the City of Tulsa which is using the CWSRF
program to implement a Comprehensive Wastewater Plan to rehabilitate
aging infrastructure, meet capacity needs and comply with discharge
permit requirements. By using the CWSRF, it is estimated Tulsa will
save $59 million over 5 years.
As these projects illustrate, the State Revolving Funds are playing
a vital role in helping Oklahoma communities improve water quality.
CIFA strongly supports maintaining the State Revolving Loan Funds
as the foundation for future progress in meeting water infrastructure
needs. Innovation, new approaches and new priorities can be addressed
in the context of the SRF. We also believe restoring funding to at
least pre-2004 levels is essential if we are to continue forward
progress in meeting our nation's water quality goals. Hopefully,
passage of SRF reauthorization will lay the groundwork for more
realistic SRF funding levels.
As the Committee develops SRF reauthorization legislation, we hope
you will be mindful of the perspectives of State program managers.
Ultimately, it is up to each State to deliver on the goals of the Clean
Water Act and it is vital that federal legislation help us do our job.
We are very concerned that reauthorization could end up adding more
burdens to the SRF programs than improvements.
State SRF managers, who participate in the State/EPA Workgroup that
oversees the program, wrote the Chair and Ranking Member of this
Committee this summer to express exactly that concern. Making reference
to the House-passed reauthorization bill, H.R. 720, they warned,
This bill contains provisions that will make the program
considerably less effective and efficient for potential
applicants. The large number of additional program and project
requirements proposed by H.R 720 will result in additional
work, time and expense, making it less likely that
municipalities, especially small communities, will be able to
afford to seek financing through the CWSRF. . . We ask that you
carefully avoid provisions that would impose restrictions on
state program flexibility or will add new burdensome
requirements on potential applicants.
CIFA would certainly echo those concerns. We recognize the
obligations and responsibilities of states in the SRF partnership. We
must manage the funds in a fiscally responsible manner and be
accountable. We must give priority in our loan decisions to the water
quality benefits that will result and the urgency of environmental
problems needing resolution. We need to give particular attention to
the challenges faced by small, rural and disadvantaged communities.
And, we must be creative financial stewards looking for innovative
solutions to solve water quality problems.
We have long sought SRF reauthorization legislation. We feel
funding levels and program operations have suffered from the failure to
reauthorize the CWSRF and that reauthorization will deliver a strong
message that Congress remains committed to the State Revolving Funds.
However, we see little benefit from legislation that will hamper our
flexibility and burden the communities we serve with barriers to their
participation.
Certainly States must be fully accountable for their use of federal
dollars but an excessive statutory overlay of mandates and set aides
and operational requirements will only serve to stifle innovation and
interfere with the ability of States to best respond to local needs.
The success of this program derives from the flexibility of the SRF
model allowing each State to determine the most effective means to
address individual local water quality issues. Efforts to mandate
certain approaches or restrict the use of funds to particular types of
projects fail to recognize that water quality needs vary and each State
is in the best position to decide how best to meet those needs.
I also want to note legislation recently introduced, S 1910, to
provide for a change in arbitrage rebate rules that will make available
significant additional funds for States that operate leveraged SRF
programs. These States are currently forced by the arbitrage rules to
limit and pay rebate on their earnings on those portions of the SRF
funds which are considered under these rules to be bond proceeds. This
reduces the resources available to provide financial assistance to
communities. Applying the arbitrage rules in the case of SRFs does not
make sense since by law these funds can only be used for the purpose of
financing water and wastewater facilities and prompt lending is ensured
by oversight and program audits by the EPA. Fixing this could mean a
good deal more money for water infrastructure without additional
appropriations and I hope members of this Committee will support that
effort.
We very much appreciate the opportunity to share our views and look
forward to working with the Committee.
______
Response by Joe S. Freeman to an Additional Question from
Senator Lautenberg
Question. Your testimony expressed concern about excessive
mandates, set-asides, and operational requirements in reauthorization
legislation. Please specify which mandates, requirements and set-asides
in the House bill CIFA opposes.
Response. At the outset I want to make clear that CIFA supports the
effort to reauthorize the Clean Water State Revolving Fund and increase
the authorized level of funding for the CWSRF. The House bill. H.R.
720, contains many elements that we support including the continued
reliance on the CWSRF as the primary funding mechanism for water
infrastructure; expanded eligibilites for SRF funding; extended loan
repayment periods; increased support to cover State administrative
costs and more flexible financing to address affordability issues.
H.R. 720, however, has a number of provisions that would in our
view work an unnecessary burden on State SRF programs and pose
significant barriers to potential borrowers, especially smaller
communities. They are as follows:
Section 302 (b) includes several ``additional requirements'' that
are burdensome:
Innovative and alternative processes.--States are directed to
require loan applicants to evaluate innovative and alternative
processes, materials, techniques and technologies as well as
alternative ways to finance and manage water infrastructure
projects. This set of requirements will increase the cost of
projects and is likely to drive potential borrowers away from
using the CWSRF. It would be a particular burden for small
communities who lack professional staff and would need to hire
engineering/consulting services to do such evaluations.
CWSRF funded treatment works must comply with Clean Water Act
Title II grant requirements.--A number of requirements in place
prior to 1995 would again be imposed on the States. There is no
evidence of adverse effects resulting from the absence of these
requirements which would argue that they are not necessary.
They would be costly, significantly encumber the efficient
management of the SRFs and for the most part duplicate State
standards already in place to accomplish the aims of Title II.
Procurement of engineering services by SRF borrowers to
follow federal procurement rules.--States already have laws in
place governing procurement of professional services. Since
engineering services are usually obtained before financing,
this requirement would likely only serve as an impediment for
potential SRF borrowers.
Fees.--States would be inquired to use any fees charged
either for the cost of administering or for the eligible
purposes. This would place a new restriction on the use of
fees, removing a key flexibility of the program. Presently,
fees can be used for a range of water quality activities such
as technical assistance to small communities, preplanning and
application assistance, small grants for remediation of septic
systems and pollution control. EPA guidance makes clear the use
of fees is limited to activities furthering the goals of the
Clean Water Act.
Section 303(c) As a loan condition require recipients to develop
and implement a fiscal sustainability plan:
Fiscal Sustainability Plan.--While such plans can be useful
tools for improving efficiency and reducing costs, CIFA is
concerned as to what EPA may require of States to demonstrate
compliance and whether this will significantly increase costs
for borrowers. The provision fails to address the type or size
of projects and whether such a plan would be appropriate for
some projects.
Responses by Joe S. Freeman to Additional Questions from Senator Inhofe
Question 1. How would the application of Davis Bacon to projects in
Oklahoma affect the cost of administering the SRF as well as the cost
of completing infrastructure projects?
Response. The application of Davis Bacon would significantly
increase costs of administering the program and the costs of completing
infrastructure construction projects as well as place the SRF program
on non-competitive footing with other funding sources.
The implementation of Davis Bacon would greatly impact the OWRB
administrative process and Oklahoma communities. When Davis Bacon was
previously a part of the Construction Grants Program and the CWSRF, the
wage rate was updated on a monthly basis. It was necessary to purchase
a subscription to this monthly publication. Davis Bacon implementation
would require that every plan and specification for a construction
project have a continuously updated wage rate. If a project had gone
out into the bid phase and the wage rate changed before bids were
opened, an amended bid would be required to be sent to replace the
previous wage rate. If a bid was accepted with non-current wage rates
then the bid would be voided and a new bid process would be required.
Both of these delays in construction are very costly to the community
and to the OWRB. With the current trends in construction prices
nationwide, delays of any kind greatly increase the total project cost.
According to past experience with Davis Bacon, the OWRB would be
required to have a full time employee spend 50 percent of their time
just on Davis Bacon administration including complaints, compliance,
and contesting records.
The inclusion of the labor wage rate in the construction bids would
also impact which contractors bid on CWSRF projects. Small contractors
would realize a significant negative impact from the implementation of
Davis Bacon in terms of employee payroll costs. Small contractors and
large contractors would realize negative effects in terms of projects
that were delayed due to compliance issues with Davis Bacon.
Question 2. Can you describe for the Committee Oklahoma's
application process, including any state requirements with which an
applicant must comply? Does this bundling of funds in any way add to
the applicant's paperwork requirements?
Response. The bundling of funds does not increase the applicant's
paperwork for an OWRB loan. The applicant will have to submit the
correct documents for other Oklahoma funding agencies such as Community
Development Block Grants, USDA Rural Development Grants, and other
funding sources. However, we are very cognizant of this and try to use
similar language and process in order to ease the application process.
Enclosed is ore checklist and review of documents required for a loan
application.
The only added state requirements for an applicant would be
compliance with the Oklahoma Completive Bidding Act and Open Meeting
Act.
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[GRAPHIC] [TIFF OMITTED] T3569.002
Senator Lautenberg. Thank you very much.
Mr. Westhoff.
STATEMENT OF CHRISTOPHER M. WESTHOFF, ASSISTANT CITY ATTORNEY,
PUBLIC WORKS GENERAL COUNSEL FOR THE CITY OF LOS ANGELES,
PRESIDENT OF THE NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES
Mr. Westhoff. Thank you. Good morning, Chairman Lautenberg
and members of the subcommittee. My name is Christopher
Westhoff. I am an assistant city attorney and public works
general counsel for the city of Los Angeles. I am president of
the National Association of Clean Water Agencies and a member
of the Water Infrastructure Network. NACWA represents the
Nation's public wastewater treatment agencies, environmental
stewards who treat and reclaim more than 18 billion gallons of
wastewater each day.
Thank you for holding this important hearing. With the 35th
anniversary of the Clean Water Act just around the corner, this
hearing and your leadership on environmental issues are both
timely and fitting as we face some serious challenges moving
into the 21st century. In order to meet these challenges, all
levels of government--Federal, State, and local--must develop a
lasting partnership that recognizes the need for more
investment in our Nation's clean water infrastructure.
While the Clean Water Act has been hugely successful in
helping us meet our clean water objectives, we must not stop
and pat ourselves on the back for a job well done. The job is
far from finished. In 1972, Lake Erie was declared dead by
``Time'' magazine, and the burning Cuyahoga River became a
poster child for Federal action in the form of a tougher
Federal law and unprecedented infusion of Federal money which
helped cities begin to meet the Nation's water quality
challenges. Today, our rivers, lakes, and estuaries are much
cleaner as a direct result.
In the formative years of the Clean Water Act, the Federal
Government invested more than $72 billion to help cities treat
their wastewater. Federal assistance for wastewater
infrastructure has declined more than 70 percent since 1980.
This has contributed to a funding gap of between $300 billion
and $500 billion over the next 20 years. Local communities now
pay more than 95 percent of the cost of meeting their Clean
Water Act obligations and, in effect, are on their own to
address the ever-increasing challenges of aging infrastructure,
population growth, demands for better service, and more
expensive Federal regulations. Clean Water ranks second only to
education in terms of how local governments spend their money.
In the 1990s alone, the city of Los Angeles spent over $1.6
billion on the upgrade of the Hyperion Treatment Plant to full
secondary treatment. This is only one plant, and only a small
portion of this expenditure was funded through the Federal
Clean Water Grant Program. In this decade, Los Angeles will
spend more than $4 billion to address the physical needs of its
aging 6,500 mile long sewage collection system and other
wastewater infrastructure, and there is no Clean Water Grant
Program to help. To cover these costs, rates have been raised 7
percent per year for each of the past 5 years, and in 2008 we
will ask our city council for a nearly 9 percent increase for
each of the succeeding 5 years.
This financial situation is untenable. EPA has stated that
if the infrastructure funding gap is not addressed soon, the
water quality gains we have seen over the past 35 years could
be erased by 2016.
To address this funding crisis--and this is a crisis--NACWA
and WIN believe the Federal Government should recommit itself
to clean water and the ideals that led to the passage of the
Clean Water Act in 1972. We believe this involves a viable,
long-term dedicated source of revenue to bridge the ever-
growing funding gap. The best way to accomplish this is through
a Federal Clean Water Trust Fund. Clean and safe water is no
less a national priority than a safe and efficient system of
highways and airports, both of which enjoy sustainable, long-
term sources of Federal investments.
As a first step, NACWA and WIN strongly recommend that the
Senate introduce and pass legislation similar to the Water
Quality Financing Act of 2007. This bill passed the House in a
vote of 303 to 108, and would provide $14 billion over 4 years
for the Clean Water State Revolving Fund and would require the
GAO to study revenue sources for Clean Water Trust Fund. NACWA
and WIN also support the inclusion of funding for pilot
projects that incorporate green infrastructure as a cost-
effective way to address the challenges of wet weather. We
would hope that Congress would pass such legislation by October
18 to commemorate the passage of the original Clean Water Act
35 years ago.
Cities cannot meet these financial challenges alone.
Municipalities have already raised fees on average by more than
twice the rate of inflation for the past 5 years.
Mr. Chairman, if you ask some of our members, they will
tell you they have to increase their rates by more than 15
percent per year to meet the growing demand for wastewater
infrastructure funding.
The world around us has changed significantly since 1972,
from growing and shifting populations to the emergence of new
pollutants. NACWA and WIN encourage the committee to seek
innovative approaches and appropriate funding to help achieve
water quality goals in the face of these new challenges.
``Water is water'' is what we hear from many of our
stakeholders. The result of this very real concept certainly
signals the need for a new watershed based approach to dealing
with this invaluable resource that better equips us to meet
head-on new complicated and expensive challenges in the water
quality arena.
During deliberations of the original Clean Water Act,
Congress decided that water infrastructure was a national asset
that demanded Federal investment. Without this investment, we
seek a perfect storm brewing at the local level. We must not
allow this storm to push gains made in water quality back to
pre-1970 levels.
The image of the Cuyahoga River on fire is forever etched
in our collective memory. We must not allow the Nation's great
waterways to again become the poster children for a Nation's
water quality in crisis. Whether it is the Potomac, the
Chesapeake Bay, the Mississippi River, the Great Lakes, or my
own California coastal waters, the point is simple: the Federal
Government must join States and municipalities as full-fledged
long-term partners in funding the Nation's clean water
infrastructure. Your leadership, Mr. Chairman, and the
foresight of this committee's members can make such a
partnership a reality again.
Thank you for your time and allowing NACWA and WIN to share
their views on clean water funding, and I would be happy to
answer any questions.
[The prepared statement of Mr. Westhoff follows:]
Statement of Christopher M. Westhoff, President, National Association
of Clean Water Agencies (NACWA)
INTRODUCTION
Good morning, Chairman Lautenberg and Members of the Subcommittee.
My name is Christopher Westhoff and I am an Assistant City Attorney and
public works general counsel for the City of Los Angeles. I am
testifying today on behalf of and as the President of the National
Association of Clean Water Agencies (NACWA) and as a member of the
Water Infrastructure Network (WIN). NACWA is the only organization
dedicated solely to the interests of the Nation's public wastewater
treatment agencies. Our members are dedicated environmental stewards
who work to carry out the goals of the Clean Water Act and to treat and
reclaim more than 18 billion gallons of wastewater each day. WIN is a
broad-based coalition of local elected officials, drinking water and
wastewater service providers, state environmental and health
administrators, engineers, environmentalists, and labor advocates
dedicated to preserving and protecting the health, environmental and
economic gains that America's drinking water and wastewater
infrastructure provides.
I am pleased to be here and thank you for holding this important
hearing examining the state of our nation's critical water
infrastructure, which protects our vital water resources, improves
public health, and provides recreational enjoyment for all Americans.
With the 35th anniversary of the Clean Water Act just around the
corner, this hearing and your record of leadership on environmental
issues are both timely and fitting as we face some serious challenges
moving into the 21st century. In order to meet these challenges and
ensure continued water quality improvements, all levels of government--
federal, state, and local--must develop a lasting partnership that
recognizes the need for more investment in our nation's clean water
infrastructure.
AS FEDERAL FUNDS DECLINE, THE LOCAL COST OF CLEAN WATER RISES
While the Clean Water Act has been hugely successful in helping us
meet our clean water objectives, we must not stop and pat ourselves on
the back for a job well done. Unfortunately, the job is far from
finished. There is no doubt about the record of environmental
achievement in the 35 years since the Clean Water Act became law. In
1972, Lake Erie had been declared dead by ``Time'' magazine, and the
burning Cuyahoga River became the poster child for federal action--
action in the form of a tough federal law and an unprecedented infusion
of federal money which, together with state and local contributions,
helped POTW's across America begin to meet the Nation's water quality
challenges. Today our rivers, lakes, and estuaries are much cleaner as
a result.
The federal government has invested more than $72 billion since
1972 to help cities build publicly owned treatment works (POTWs). This
investment in clean water has not come at the expense of economic
growth. Quite the contrary. Economic growth has gone hand in hand and,
indeed, has been enhanced by this investment. However, despite the huge
sums spent to meet our clean water goals, our Nation now faces serious
long-term funding shortfalls to meet its vital water and wastewater
infrastructure needs.
Federal assistance simply has not kept pace with needs, declining
more than 70 percent since 1980. The Nation now faces a funding gap of
$300 billion to $500 billion over 20 years between current levels of
spending for wastewater infrastructure and total funding needs,
according to the U.S. Environmental Protection Agency (EPA),\1\ the
Congressional Budget Office,\2\ and WIN\3\. Little has been done since
these estimates were released, and the picture has not improved with
the passage of time.
---------------------------------------------------------------------------
\1\ U.S. Environmental Protection Agency, The Clean Water and
Drinking Water Infrastructure Gap Analysis (2002) http://www.epa.gov/
safewater/gapreport.pdf.
\2\ Congressional Budget Office, Future Investment in Drinking
Water and Wastewater Infrastructure (November 2002); http://
www.cbo.gov/ftpdoc.cfm?index=3983&type=0&sequence=0
\3\ Water Infrastructure Network, Clean and Safe Water for the 21st
Century (2000); http://www.win-water.org/reports/winreport2000.pdf.
---------------------------------------------------------------------------
Local communities now pay more than 95 percent of the cost of
meeting their Clean Water Act obligations, according to a recent report
by the U.S. Conference of Mayors\4\. In effect, these communities are
on their own to address the ever increasing challenges of aging
infrastructure, a growing population, expectations of higher quality
service, and more expensive federal regulations to address wet weather,
emerging contaminants, nutrient removal, total maximum daily loads
(TMDLs), and other demands for limited resources. Clean water ranks
second only to education in terms of how local governments are spending
their money.
---------------------------------------------------------------------------
\4\ U.S. Conference of Mayors, Who Pays for the Water Pipes, Pumps
and Treatment Works?--Local Government Expenditures on Sewer and
Water--1991-2005 (http://www.usmayors.org/urbanwater/
07expenditures.pdf)
---------------------------------------------------------------------------
In the 1990's alone, Los Angeles spent over $1.6 billion on the
upgrade of the Hyperion Wastewater Treatment Plant to full secondary
treatment. This was only ONE plant, and only a small portion of this
expenditure was funded through the Federal Clean Water Grant Program.
In this decade, Los Angeles will spend more than $4 billion dollars to
address the physical needs of its aging 6,500 mile long wastewater
collection system and other wastewater infrastructure. To meet this
aggressive expenditure program, rates have already been raised 7
percent per year for each of the past 5 years, and in 2008, our
infrastructure team will ask our City Council for a nearly 9 percent
rate increase for each of the succeeding 5 years.
This financial situation is untenable. With local governments
shouldering so much of the financial burden and having limited options
for further financing, we risk losing ground in the battle for clean
water. In fact, EPA has stated that if the infrastructure funding gap
is not addressed soon, the water quality gains we have seen over the
past 35 years could be erased by 2016. Already, the physical condition
of our treatment plants, equipment, and other capital improvements in
many of the nation's 16,000 wastewater treatment systems has suffered
because of the lack of resources to pay for upgrades and the
replacement of pipes and treatment systems.
The EPA also reports that more than 40 percent of the Nation's
assessed waters remain impaired, with the majority of this impairment
caused by nonpoint sources of pollution. Furthermore, our growing
population, which is expected to add another 100 million people over
the next three decades, coupled with increasing industrial output
further stresses our aging clean water infrastructure.
FUNDING THE CLEAN WATER ACT
To address this funding crisis--and this is a crisis--NACWA and WIN
believe the federal government should recommit itself to clean water
and the ideals that led to the passage of the 1972 Clean Water Act. We
believe such a recommitment should involve a viable long-term,
dedicated source of revenue to bridge the clean water infrastructure
funding gap. In short, we think the best way to accomplish this is
through the establishment of a federal clean water infrastructure trust
fund that would provide a reliable source of financial assistance for
the construction and repair of water and wastewater infrastructure.
Clean and safe water is no less a national priority than an adequate
system of interstate highways and a safe and efficient aviation system.
If these other highly important infrastructure programs enjoy
sustainable, long-term sources of federal investment, water and
wastewater infrastructure should as well.
As a first step toward a long-term funding solution, however, NACWA
and WIN strongly recommend that the Senate introduce and pass
legislation that mirrors the Water Quality Financing Act of 2007. This
bill, which passed the House in an overwhelming 303-108 vote, would
provide $14 billion over 4 years for the Clean Water State Revolving
Fund (CWSRF) and would require a GAO study of revenue sources for a
clean water trust fund. We would hope Congress would pass such
legislation by October 18 to commemorate the passage of the original
Clean Water Act 35 years ago.
The need for additional, viable revenue streams is even more
important when considered in the context of the Administration's
approach for overcoming the funding gap. This approach, referred to as
the ``Four Pillars,'' includes better utility management, water
conservation, full-cost pricing, and the reliance on watershed
planning. While NACWA believes these practices are beneficial, they
ultimately boil down to the federal government washing its hands of the
matter and putting the burden entirely on the shoulders of local
governments. In essence, the Administration's approach assumes the
federal government has no role, and if local governments charge more
and implement the other elements of the Four Pillars, the funding gap
vanishes. This is simply not the case.
According to NACWA's annual Rate Index, municipalities have already
been forced to raise the average residential user service charge at
twice the rate of inflation for the past 5 years, and many utilities
are raising their rates by double-digits. Mr. Chairman, if you ask some
of our members, they will tell you that they are having to increase
their rates by more than 15 percent per year to meet the growing
demand.
NACWA, through its Clean Water Funding Task Force, has done
extensive research regarding public perception on clean water funding
and how best to overcome the gap. More than 91 percent of Americans,
when made aware of this gap, overwhelmingly support federal legislative
action to guarantee the water quality of the Nation's rivers, lakes,
streams, and bays. Polling data also show that the vast majority of
Americans would support a dedicated revenue source for clean water
infrastructure structured similarly to those that exist for highways
and airports and that Americans are willing to pay out of their own
pockets to do so.
NEW CHALLENGES IN THE 21ST CENTURY
The world around us has changed significantly since 1972, from
swelling and shifting populations to the emergence of new pollutants
that have the power to change the course of nature. NACWA and WIN
encourage the Committee to seek innovative approaches, with appropriate
funding, to achieving water quality goals in the face of these emerging
challenges. The federal government currently supports technology
research and development through EPA programs and Congressional
appropriations to non-profit research foundations. Yet, none of these
programs focuses specifically on infrastructure and non-traditional
solutions. Innovative and alternative approaches are needed to reduce
nutrient pollution, improve methods for conserving and reusing water,
improve monitoring and data analysis, reduce nonpoint sources of water
pollution, reduce municipal stormwater pollution, reduce sanitary sewer
and combined sewer overflows, address new water resource management
issues presented by climate change, and develop more effective methods
for treating wastewater--including ``green technology,'' conservation
easements, stream buffers and wetlands.
Integrated strategies to managing drinking water, wastewater and
stormwater issues such as water reuse, water conservation, and energy
efficiency through a meaningful watershed management approach are
critical to achieving sustainability. Green technologies too are
becoming increasingly accessible and commonplace. ``Water is water'' is
what we hear from many of our stakeholders. The ramifications of such
thinking are many and broad, signalling the need for a new approach to
water quality that better equips us to deal with new, complicated, and
expensive challenges.
CONCLUSION
During deliberations of the original Clean Water Act, Congress
decided that water infrastructure was a national good that demanded
federal investment. The American people agreed as more than 20 million
participated in the original Earth Day activities in 1970. Although
consensus still exists in the form of broad public support for federal
action, the federal commitment to clean water investment continues to
wane. This trend is inexplicable in light of the ever-increasing costs
to comply with new federal requirements and enforcement actions. On top
of it all, the escalating cost and unanticipated price increases for
materials, experienced consultants, engineers, and utility staff are
creating the ``perfect storm'' for wastewater utility managers at the
local level. We must not allow this storm to push gains made in water
quality back to pre-1970 levels.
The image of the Cuyahoga River on fire is forever seared in our
collective memory. It helped illuminate the plight facing our precious
waterways and inspired our Nation to act and act decisively. We must
not allow the nation's great waterways to again become the poster-
children for a Nation's water quality in crisis. Whether it is the
Potomac, the Chesapeake Bay, the Mississippi River, the Great Lakes or
California's coastal waters, the point is simple: the federal
government's failure to join states and municipalities as a full-
fledged, long-term partner in funding the Nation's clean water
infrastructure will have unacceptable consequences. Your leadership,
Mr. Chairman, and the foresight of this Committee's members can make
such a partnership a reality again. Thank you for your time and for
allowing NACWA and WIN to share their views on clean water funding for
the 21st century. I would be happy to answer any questions.
______
Response by Christopher M. Westhoff to an Additional Question from
Senator Inhofe
Question. In the 107th Congress, bipartisan legislation was
introduced to reauthorize both SRFs. NACWA (NA-CWA), then the
Association of Metropolitan Sewerage Agencies, testified about that
bill stating ``They [the bill authors) suggest that . . . Congress does
not have confidence in our management skills and believes we are not
charging Americans enough for their water, and that the states and EPA
need to micromanage our operations.'' Many of the provisions in H.R.
720 said the same message and yet, NACWA has urged us to pass that
legislation. Does your organization believe we should place additional
requirements to be met by applicants for loans?
Response. When NACWA, then the Association of Metropolitan Sewerage
Agencies (AMSA), made the statement quoted in this question, the
legislative language at issue in the 107th Congress's SRF funding bill,
S. 1961, was much broader than in H.R. 720. Specifically, S. 1961
required municipalities to prepare, as a condition to SRF funding, new
asset management repair and replacement plans; new and potentially far-
reaching physical and operational analyses of systems; as well as an
analysis of the cost-effectiveness of alternate financing approaches,
including a plan to have rate structures reflect the actual ``cost of
service''--a term that S. 1961 did not define. The breadth and details
of these plans were left largely up to EPA and State authorities and
centered on decisions that by their nature should remain at the local
level.
H.R. 720 scales these requirements back significantly, clarifying
that municipalities need to certify that they have ``studied and
evaluated innovative and alternative processes, materials, techniques,
and technologies for carrying out the proposed project.'' This
provision seeks to ensure that new 21st century approaches, such as
green infrastructure and energy saving techniques, are considered in
the SRF funding process--a goal NACWA supports. H.R. 720 also contains
a certification requirement that municipalities must have ``considered
the cost and effectiveness of alternative management and financing
approaches for which assistance is sought.'' Unlike S. 1961, this
provision does not specifically call on utilities to perform costly
analyses or open municipal decisions up to a time-consuming and
unnecessary State and/or EPA review process, which could significantly
hamper the very purpose of the SRF program--to get money to
municipalities as quickly as possible to perform much-needed wastewater
infrastructure projects.
NACWA's public agency members are the leaders in implementing
competitive asset management techniques and strongly believe asset
management involves site-specific considerations that ought not to be
the subject of federal legislation. The approach taken in H.R. 720,
however, takes a sensible approach. It balances the needs to get funds
as swiftly as possible to municipalities to perform much-needed
infrastructure projects with the understandable objective of ensuring
that these funds are going to go, as H.R. 720 states, to projects that
``result in greater environmental benefit.''
Response by Christopher M. Westhoff to an Additional Question from
Senator Cardin
Question. The EPA Inspector General recently released a report
about the effects of sprawl development on the restoration efforts in
the Chesapeake Bay. In summary, the report suggests that the increase
in polluted stormwater runoff that accompanies the influx of new
residents in the watershed is overwhelming the gains being make in
other areas to improve water quality. What steps is Los Angeles taking
to make sure that investments in wastewater infrastructure are actually
resulting in a net gain in water quality? Do you direct development
into areas already served by existing wastewater infrastructure, or do
your give priority funding to such areas? Should EPA or the State
require such a condition on the use of federal or state money?
Response. NACWA believes that local governments are in the best
position to determine their own development and balance that with
environmental concerns. Usually, areas that are growing can pay for
their own growth so federal funds are able to be delivered to those
areas that need it to upgrade existing wastewater infrastructure. NACWA
believes the delivery system for federal funds, namely through state
priority lists, works well and is not in need of major changes at this
time.
Los Angeles, for better or worse, does not have a large amount of
undeveloped land suitable for large developments within its borders.
However, any development of multiple single family homes, muti-family
residences or commercial property, whether constructed as an ``in-
fill'' development or built on previously undeveloped land, requires an
analysis of existing wastewater infrastructure (sewer pipes) for
available capacity to service the new construction. If deemed
necessary, the developer is required to provide ``off-site'' mainline
sewers to connect to other existing collection system pipes where
sufficient capacity exists to take the sewage to the City's treatment
plants. Where sufficient sewer capacity already exists, the developer
still pays a fee for that capacity. When the development is finished
and the individual properties are sold to new owners, those new owners
will continue to pay fees on a monthly basis to cover their portion of
the O and M and future capital costs of the City's entire wastewater
collection and treatment system.
Los Angeles as co-permittee under a County-wide Stormwater permit
has a comprehensive Standard Urban Stormwater Mitigation Program
(``SUSMP'') where each new development is reviewed and required to
``mitigate'' any additional urban runoff contributed by the new
development. The development must be designed to keep at least the
first \3/4\ of an inch of rainfall onsite (``first flush'') and also
mitigate potential pollutants exiting their site by the use of catch
basin inserts or other filter type devices.
Senator Lautenberg. Thank you very much.
Ms. Stoner.
STATEMENT OF NANCY K. STONER, DIRECTOR OF THE CLEAN WATER
PROJECT AT THE NATURAL RESOURCES DEFENSE COUNCIL
Ms. Stoner. Good morning, Mr. Chairman and members of the
subcommittee. My name is Nancy Stoner, and I am the director of
the Clean Water Project at the National Resources Defense
Council. I am delighted to be invited to testify here today and
to hear the broad bipartisan support we have among the
committee and subcommittee members who have been here today for
clean water funding.
I would like to ask to have my full statement be put in the
record, but I did bring a few photos that I wanted to share
with you today, and hope you would appreciate the informal
approach.
Senator Lautenberg. Without objection, they will be
included.
Ms. Stoner. Thank you.
The first point has been made already and well recognized
by the members of the committee and subcommittee here today,
that there is a Federal role for clean water funding. Water
pollution, of course, knows no political bounds, and it is not
fair to downstream communities to have to pay for upstream
pollution that those communities choose not to address.
Americans need to be able to go across the country and know
that the tap water is safe to drink everywhere, the waters are
safe to swim in everywhere, and the fish is safe to eat.
Congress has looked at this question many times and viewed it
the same way every time. There is a Federal role complimentary
to those of State and local entities in funding wastewater
infrastructure.
Of course, it is an excellent investment. Again, several
speakers have spoken on this already today. The investments we
have had over the past 20 years in the State Revolving Fund
have improved the environment, have protected public health,
and added to local economies. The photograph there is the
installation of permeable pavement by construction workers in
Portland. I put that up to emphasize the fact that green
infrastructure, like the more traditional ways of controlling
wastewater that have been used, provide jobs for small
businesses, for entrepreneurs, for architects, for maintenance
workers, for construction workers, landscape architects. It is
part of the fabric of our economy that we need to support.
Despite the investments that we have made and the progress
that we have made, water pollution problems are growing. There
are a number of indicators that are showing negative trends,
including beach closings, red tides, dead zones, and the like
here. As several witnesses have also mentioned, global warming
is projected to exacerbate those negative trends. The chart
here shows EPA's predictions of what would happen in terms of
sewage pollution. If we stay on the current path, it shows that
those levels of oxygen-depleting substances from sewage would
reach the same levels in 2025 that they were in 1968, before
the passage of the Clean Water Act, which is obviously very
disturbing.
Even though the problems are growing the Federal funding is
shrinking. The two lines there, the blue one is one that we
discussed earlier today, about the Presidential budget for
green infrastructure. The red line is the funding that has been
provided by Congress. Am very pleased to see earlier this year
that Congress did increase the funding for the SRF for Fiscal
Year 2007, and there is a choice pending now before the Senate
whether to continue that increase or to adopt a number closer
to the President's budget. We, of course, would urge you to
speak with your appropriations colleagues and other colleagues
to fund at the $1.125 billion that is the House number for this
year.
So the solution that we see is basically more money better
spent. The photo there is of a restored wetland in Houston, TX.
This is one form of green infrastructure. We would like to see
substantially increased funding in general for the SRF over the
next 10 years and better targeting of the resources to achieve
water resource protection goals, as well as an increase in
research and develop funding to move us to the new plane where
we will have the technologies that can best address the
Nation's problems.
To increase efficiency of SRF spending, there are several
different things that we suggest: funding existing needs, not
sprawl; funding green infrastructure that achieves more for
each dollar spent; funding the highest priorities, looking at
those from an integrated water resource perspective; as I
mentioned, increased R&D funding; and increased public
involvement and transparency to get better results.
The photo there is from the Navy Yard here in D.C., and it
shows what can be done even with a very small amount of space
to capture and treat the stormwater runoff from parking lots.
One of the pieces of this is increasing the funding for
green infrastructure. What it does is use soil and vegetation
to manage urban and suburban runoff. It is essentially
mimicking the functions that are provided by mother nature in a
natural environment for free, and it is a compliment to the
pipes and pumps and treatment plants that are, of course, also
essential and part of the hard infrastructure. The photo is of
a street edge alternative in Seattle. This is not just
beautiful, it captures 99 percent of the stormwater runoff. It
actually has not discharged from this area since December 2002.
It is very popular. The people in the neighboring neighborhoods
want this in their neighborhood as well. It increases property
values and beautifies the neighborhood.
One of the things about green infrastructure is that the
benefits are multimedia, which makes it a little difficult to
fit within the regulatory system that we have, but there are a
wide range of benefits, including the economic benefits that I
mentioned earlier. This is a picture of a rain garden in
Maplewood, MN.
As I mentioned, another priority is not just funding things
that need to be funded, but not funding things that do not make
water pollution better. It is very well documented at this
point that development and the payment associated with it
increases runoff, decreases water quality, and reduces
groundwater recharge. So it actually adds to the long-term
pollution burden to fuel greenfield development. Yet, we spent,
last year it was 19 percent of the SRF, on new sewers. We are
not saying that development won't happen, but we are saying it
should not be a priority in terms of Federal funding and should
not be subsidized by the Federal Government through the SRF.
In summary, our recommendations are substantially increased
funding for the next 10 years; clarify the eligibilities to
ensure that we can fund everything we want to fund at the
highest priorities; provide incentives for the most beneficial
approaches, including green infrastructure in subsidies for
sprawl; increase public involvement; increase funding for
research and development.
The last photo there is a green roof in Irvine, CA.
I thank you.
[The prepared statement of Ms. Stoner follows:]
Statement of Nancy K. Stoner, Director, Clean Water Project, Natural
Resources Defense Council
Good morning, Mr. Chairman, and members of the Subcommittee. I am
Nancy Stoner, Director of the Clean Water Project at the Natural
Resources Defense Council (NRDC). Thank you for holding this hearing
today on meeting America's wastewater infrastructure needs. This is a
tremendous opportunity for the Congress to step up federal investment
in wastewater infrastructure and to spend smarter so that the U.S. will
ensure that there is clean, safe, usable water for the next generation.
The federal government's investment in wastewater treatment and
water resource protection over the 35 years since the Clean Water Act
was passed in 1972 has brought tremendous progress in cleaning up our
waterways. Yet, the issue of whether there is a federal role in
wastewater infrastructure investment is a recurring question. I believe
that issue was resolved appropriately by Congress in 1972. Water
pollution knows no political bounds. Failure to protect water resources
in one state pollutes downsteam surface and groundwater resources in
neighboring states. That's why Congress passed the Clean Water Act in
the first place and why the federal role is so important. For example,
for the past 17 years, NRDC has prepared a report analyzing beachwater
quality in coastal states across the U.S., called Testing the Waters.
In 2006, there were more than 25,000 beach closings and advisories in
the U.S., and the largest known causes were contaminated stormwater and
sewage, two of the pollution sources the remediation of which is
eligible for funding by the Clean Water SRF.\1\ It would be unfair for
coastal communities to have to shoulder the cost of cleaning upstream
sources of beachwater contamination because there is no federal funding
to assist upstream communities to make investments in controlling those
sources.
---------------------------------------------------------------------------
\1\ NRDC, Testing the Waters-A Guide to Water Quality at Vacation
Beaches, p. 1 (August 2007), available at http://www.nrdc.org/water/
oceans/ttw/ttw2007.pdf.
---------------------------------------------------------------------------
The Clean Water SRF has always been and continues to be a good
investment. Projects funded by the Clean Water SRF provide water
quality and community benefits, such as reduced discharges of raw
sewage into rivers and lakes, less waterborne illness, enhanced
wildlife habitat biodiversity, and more plentiful and safer drinking
water sources.\2\ It also protects businesses that are dependent upon
clean water, such as tourism, fish and shellfish harvesting, the
beverage industry, and high tech manufacturing. SRF funded projects
create more than 400,000 jobs each year throughout the Nation while
providing other economic benefits for local communities.\3\ Very little
current Clean Water SRF funding goes to green infrastructure, which
applies natural systems or designed or engineered systems that use soil
and vegetation to mimic natural processes to protect and enhance
environmental quality and provide utility services. However, where it
is being employed, green infrastructure creates jobs for architects,
designers, engineers, construction workers, maintenance workers, and a
variety of small businesses engaged in designing and building green
roofs, rain gardens, tree boxes, and other types of green
infrastructure.\4\ And both the clean waterways themselves and the
green infrastructure that keeps them clean increase property values,
revitalize blighted neighborhoods, enhance street life and community
aesthetics, and provide free recreation.\5\ Because it is matched at
the state and local levels, the Clean Water SRF leverages non-federal
investment at a rate of 2.23 times the federal dollar.\6\
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\2\ http://www.epa.gov/owm/cwfinance/cwsrf/factsheets.htm; U.S.
EPA, Financing America's Clean Water Since 1987: A Report of Progress
and Innovation, EPA-832-R-00-011, pp. 9-10 (May 2001), available at
http://www.epa.gov/ownitnet/cwfinance/cwsrf/progress.pdf.
\3\ AFSCME, et al., All Dried Up: How Clean Water is Threatened by
Budget Cuts, p. 1 (2004). Available at http://www.nrdc.org/media/docs/
040915.pdf.
\4\ http://www.treepeople.org/trees/default.htm (projects creation
of 50,000 new jobs from green infrastructure initiative)
\5\ NRDC, Rooftops to Rivers: Green Strategies for Controlling
Stormwater and Combined Sewer Overflows (June 2006).
\6\ U.S. EPA, Clean Water State Revolving Fund Programs-2006 Annual
Report, p.18, available at www.epa.gov/owm/cwfinance/cwsrf/2006-annual-
report.pdf.
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But it is clear that the level of U.S. investment in clean water is
inadequate. There is an upward trend for beach closings, red tides,
dead zones, droughts, flooding, coral reef damage, nutrient pollution,
and sewage pollution.\7\ At our current rate of investment, U.S. EPA
has projected that sewage pollution will be as high in 2025 as it was
in 1968--before the passage of the Clean Water Act--that is, when Lake
Erie was declared dead and the Cuyahoga River was on fire.\8\ In
addition, global warming is anticipated to have adverse effects on
available freshwater resources. For example, NRDC's recent report, In
Hot Water, projects that global warming will decrease snowpack in the
West, reduce water supplies, increase the magnitude and frequency of
floods and droughts, and degrade aquatic habitat by reducing stream
flows and increasing the temperature of waterways.\9\
---------------------------------------------------------------------------
\7\ NRDC, Testing the Waters, pp. 1-2 (reporting annual percentage
increase in beach closing and advisory days); Woods Hole Oceanographic
Institute, Harmful Algal Research and Response: A National
Environmental Science Strategy 2005-2015, available at www.esa.org/
HARRNESS/harrnessReport10032005.pdf (``Whereas 30 years ago the US
harmful algal bloom problem was scattered and sporadic, today virtually
every state is threatened by harmful or toxic algal species.'');
Raloff, Dead Waters, Science News Online June 5, 2004 (the number of
major dead zones has been roughly doubling every decade since the
1960s); NRDC, In Hot Water: Water Management Strategies to Weather the
Effects of Global Warming pp. 4-16, (July 2007), available at
www.nrdc.org/globalWarming/hotwater/hotwater.pdf (experts predict that
the frequency of damaging events such as droughts and flooding will
increase in many areas due to climate change); An Ocean Blueprint for
the 21st Century, Final Report of the U.S. Commission on Ocean Policy,
p.22 (Sept. 2004) available at http://www.oceancommission.gov/documents
(The world's coral reefs are increasingly showing signs of serious
decline, with pristine reefs becoming rare and up to one-third of the
world's reefs severely damaged according to some estimates); NOAA,
National Estuarine Eutrophication Assessment: Effects of Nutrient
Enrichment in the Nation's Estuaries, pp. vi-vii (Sept. 1999),
available at http://ian.umces.edu/neea/pdfs/eutro--report.pdf (The
severity and extent of nutrient pollution are expected to worsen in
more than half of the nation's estuaries and coastal waters by 2020).
\8\ U.S. EPA, The Clean Water and Drinking Water Infrastructure Gap
Analysis, EPA-816-R-02-020 (Sept. 2002).
\9\ In Hot Water, pp. 4-16.
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Even while the problems are growing, federal contributions to the
SRF are shrinking, the funding gap is almost $20 billion annually, and
both public and private investment in wastewater technology research
and development that could save money in the long run is less than half
of what it was in the 1970s.\10\ This year, after a promising start by
restoring SRF funding to more than $1 billion for FY07, the Senate
appears poised to adopt a funding cut of more than $200 million from
last year's enacted level. We request that the Senate adopt the House
funding level of $1.125 billion.
---------------------------------------------------------------------------
\10\ U.S. EPA, A Retrospective Assessments of the Costs of the
Clean Water Act, 1972 to 1997 (Oct. 2000).
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The picture is bleak. The sewer systems are getting older, more
antiquated, more likely to fail,\11\ and they have more work to do, due
to increasing population, land development that occurs at a rate more
than twice the rate of population growth, and, as I mentioned, the
projected impacts of global warming on water resources.
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\11\ U.S. EPA, The Clean Water and Drinking Water Infrastructure
Gap Analysis, EPA-816-R-02-020 (Sept. 2002) (projects that 47 percent
of sewer pipes will in poor, very poor, or life elapsed condition by
2020, up from 10 percent in 1980 and 23 percent in 2000).
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NRDC's key recommendations are that you address this situation by
(1) substantially increasing funding over at least the next 10 years,
(2) expand the eligibilities and improve the targeting of water funding
so that it can be used to address a broad range of threats to U.S.
water resources and so it achieves more per dollar spent; and (3)
accompany the SRF with long term investment in research and development
in new technologies that will allow the U.S. to find even smarter,
cheaper ways to protect and enhance our water resources in the future.
MIND THE GAP
The funding gap between water infrastructure needs and available
resources is very large and continues to grow. Yet, the current Clean
Water SRF is grossly insufficient to meet our nation's water quality
needs, which include repairing and replacing aging sewer plants and
collection systems, controlling contaminated stormwater, minimizing
polluted runoff, and ensuring adequate and clean flows in our nation's
rivers, lakes, and estuaries. We need to authorize substantially more
SRF funds to close the gap between our water needs and available
federal funding. While there are differing estimates of the amount of
additional funding needed,\12\ the need for greater investment in clean
water infrastructure is clear and undisputed. Any reauthorization of
the Clean Water SRF must substantially raise SRF funding levels for
those programs, and EPA's own estimate of funding gaps should be a
starting point. We should begin to plan now to meet future needs by
authorizing funds to address them for at least the next 10 years.
---------------------------------------------------------------------------
\12\ Estimates collected at http://waterislife.net/Documents/
FactSheet.pdf.
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FUND THE SMARTEST, MOST BENEFICIAL PROJECTS
The growing funding gap suggests not just the need for more
funding, but also the need to begin to spend that funding more wisely
to obtain the greatest amount of environmental benefit per taxpayer
dollar invested in water infrastructure. There are several components
of this: (1) clarifying that all types of municipal water resource
protection needs are eligible for funding, not just construction of
hard infrastructure pipes and treatment works, (2) funding the highest
priority projects first, (3) providing substantially increased funding
for green infrastructure, and (4) ending subsidies for sprawl
development.
ELIGIBILITY AND PRIORITY
U.S. EPA has interpreted the Clean Water Act to allow the SRF to be
used to fund a variety of types of water resource protection projects,
including municipal drinking water source protection and municipal
stormwater controls.\13\ NRDC urges you to clarify these eligibilities
and to encourage the use of integrated water resource management,
watershed management, and other integrated and multimedia tools to
choose priorities for funding based on expected environmental results.
Greater transparency and involvement of the public in the priority
setting process would also increase the likelihood that the most
environmentally beneficial projects would be selected for funding.
---------------------------------------------------------------------------
\13\ U.S. EPA, SRF fact sheets, available at http://www.epa.gov/
owm/cwfinance/cwsrf/factsheets.htm.
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EXPAND FUNDING FOR GREEN INFRASTRUCTURE PROJECTS
The U.S. should not merely rebuild our wastewater and stormwater
systems using the hard infrastructure technologies of the past. We must
become smarter about stretching our federal investment in water
infrastructure by spending more on ``green infrastructure''--non-point
and non-structural solutions that are more efficient and more
environmentally effective than traditional concrete and pipe solutions.
Green infrastructure includes a variety of emerging technologies that
can be used to restore urban and suburban waterways. Green
infrastructure approaches include both engineered approaches that mimic
natural functions, such as green roofs and rain gardens, and protection
of natural areas (wetlands, stream buffers, forests) to provide water
capture and purification functions naturally. They are often
accompanied by rain barrels, cisterns, and other approaches that
``harvest stormwater'' for re-use. Green infrastructure benefits
include improved water quality, expanded wildlife habitat, enhanced
drinking water supplies, protected open space and parks, energy
savings, smog reduction, decreased flooding, improved aesthetics, and
higher property values. Green infrastructure often saves taxpayers
money as well by not only reducing sewage and stormwater pollution, but
also by reducing the amount of water that needs to be conveyed to
centralized treatment facilities, thereby reducing the cost of
operating those facilities. Use of green infrastructure approaches in
addition to modernization of aging, decaying treatment plants,
collection systems, and distribution systems can forestall the need for
even more costly approaches and investments in the future.
Earlier this year, 42 members of the Senate recognized that green
infrastructure can be more cost effective than traditional pipe and
mortar solutions to stormwater management.\14\ In April 2007, NRDC,
U.S. EPA, the Low Impact Development Center, the National Association
of Clean Water Agencies, and the Association of State and Interstate
Water Pollution Control Administrators pledged to work together to
promote use of green infrastructure in stormwater and sewer overflow
control programs.\15\ NRDC's 2006 report, Rooftops to Rivers, reported
on the green infrastructure strategies already employed by forward-
thinking communities across the U.S. that are already stretching
wastewater infrastructure investments to achieve more by focusing on
multi-benefit approaches, by leveraging private as well as public
investment, and by weaving green infrastructure controls into a broad
range of ongoing municipal activities, such as repair and
rehabilitation of roads. Green infrastructure approaches can achieve
cleaner bodies of water, a greener environment, and better quality of
life.
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\14\ Letter from 42 Senators to the Honorable Dianne Feinstein
(March 30, 2007).
\15\ Green Infrastructure Statement of Intent (April 17, 2007),
available at http://www.epa.gov/npdes/pubs/gi--intentstatement.pdf.
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FUND EXISTING NEEDS, NOT SPRAWL
Better targeting of SRF funds not only means funding new types of
projects that provide enhanced results, it also means discontinuing
funding for projects that cause environmental degradation. Despite the
fact that subsidizing new sewer lines and excess capacity often fuels
development that makes pollution worse in the long run, a substantial
amount of SRF funding (and earmarks) goes to funding these projects
every year. Development significantly increases runoff volume and
velocity, decreases water quality, and reduces groundwater discharge.
The more pavement, the more pollution--that is extremely well
documented by now--included in multiple reports by U.S. EPA.\16\ Yet,
the SRF still funds new collection systems, new treatment plants, and
excess capacity--all of which can fuel greenfield development.
According to EPA's 2006 report, about 19 percent of the SRF was used to
fund ``new sewers.''\17\ Given its adverse water quality impacts,
development must pay for itself--it should not be subsidized by the
American taxpayer--and should particularly not be paid for out of the
very limited federal funding available to protect water resources.
---------------------------------------------------------------------------
\16\ U.S. EPA, Using Smart Growth Techniques as Stormwater Best
Management Practices (Dec. 2005), U.S. EPA, Growing Toward More
Efficient Water Use: Linking Development, Infrastructure, and Drinking
Water Policies (Jan. 2006); U.S. EPA, Protecting Water Resources With
Higher Density Development (Jan. 2006), available at http://
www.epa.gov/smartgrowth.; U.S.
\17\ U.S. EPA, Clean Water State Revolving Fund Programs--2006
Annual Report, p. 16, available at http://www.epa.gov/owm/cwfinance/
cwsrf/2006-annual-report.pdf.
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SUBSTANTIALLY INCREASE FUNDING FOR RESEARCH AND DEVELOPMENT
While green infrastructure approaches already have demonstrated
performance results in some cities, most of the data is site specific
and needs to be scaled up in order to be used at the watershed or
subwatershed scale to achieve regulatory objectives, such as combined
sewer overflow reduction, total maximum daily load implementation,
streambank stabilization, drinking water source protection, and
municipal stormwater compliance. Clarifying that green infrastructure
projects are eligible for SRF funding is not sufficient. NRDC supports
creation of a dedicated fund for wastewater infrastructure research
needs, including those for green infrastructure technology development
and transfer. For green infrastructure, those needs include work to
further develop green infrastructure models and integrate them into
existing watershed models, sewer system models, and even global warming
and air quality models. We also need to help those communities that are
pioneering green infrastructure approaches to perform multi-media
monitoring of the results that can then be compared with model
projections and with results obtained from hard infrastructure
investments. This is the kind of research expense that we cannot expect
cities to fund solely on their own.
Broader research and development funding is required as well.
Public and private investment in research and development in wastewater
technologies has shrunk significantly since the 1970s. The U.S. is
falling behind in terms of its ability to compete with those overseas
for developing and marketing innovative wastewater treatment
technologies. The American taxpayer is also denied the environmental
and financial benefits of employing improved technologies. Instead of
developing and implementing new approaches that will ensure improved
protection of resources for the future, we continue to argue about
whether our waterways need to be safe for swimming, drinking, and
aquatic habitat. Instead, we need to focus on developing the approaches
that will ensure their safety, and we need to begin to look at those
questions in a holistic way through integrated water resource planning.
I look forward to working with you to ensure that Senate legislation
not only improves funding for existing wastewater needs, but also puts
in place funding for long range investments so that Americans will have
enough clean, safe water for decades to come.
Thank you for providing me with the opportunity to testify today. I
look forward to working with you to address these issues in your
reauthorization bill. I would be happy to answer any questions you may
have.
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Responses by Nancy K. Stoner to Additional Questions from Senator Boxer
Question 1. In your testimony, you discuss prioritizing projects
eligible for funding under the SRF. Can you discuss who you would
recommend do the prioritization and what criteria you would recommend
for determining policy?
Response. Prioritization should be done by the state through a very
public process with multiple opportunities for outside stakeholder
participation, not just a formal comment on the draft intended use
plan. Priorities should include projects that provide the most
environmental benefit for dollar spent, projects that would address
needs of underserved and disadvantaged communities, and projects that
would contribute significantly to water resource infrastructure
research needs. Specific priority, and more favorable loan terms,
should be given to projects that use green infrastructure to reduce
sewer overflows or stormwater pollution and projects that implement
integrated water resource management. The SRF should not be used to pay
for construction of new sewage treatment plants or new collection
systems.
Question 2. One of this committee's top priorities is combating
global warming. Indeed, the effects of global warming are profound and
will impact snow pack melt, rivers and other waterways. This will put
more of a strain on our nation's already strained wastewater
infrastructure. How can the SRF program help communities plan for the
upcoming effects of global warming on their infrastructure?
Response. Global warming is anticipated to have adverse effects on
available freshwater resources. For example, as NRDC recently reported,
experts project that global warming will decrease snowpack in the West,
reduce water supplies, increase the magnitude and frequency of floods
and droughts, and degrade aquatic habitat by reducing stream flows and
increasing the temperature of waterways.\1\ As stewards of one of the
most valuable and scarce resources, water, Congress can lead the
response to ongoing climate changes and help stave off further damage.
The most important step that Congress can take, of course, is to
address global warming directly by enacting the Climate Security Act;
however, there are also a number of steps that Congress can take to
mitigate the adverse effects of climate change on water resources.
Below we include only those that we would encourage Congress to include
in wastewater funding legislation:
---------------------------------------------------------------------------
\1\ In Hot Water, pp. 4-16; see also id. at 12 (``The USGS modeled
the effects of climate change on increased storm intensity and found
that the risk of a 100-year flood event will grow larger in the 21st
century. Instead of a 1 percent chance that in any year there will be a
100-year flood event, the likelihood in a single year could become as
high as one in seventeen.'').
---------------------------------------------------------------------------
Provide funding for state and local water and wastewater
agencies to work together to perform vulnerability analyses addressing
the impacts of climate change on existing flood management and water
storage facilities and systems. This analysis should include changes in
surface runoff, riverine hydrology, changes in watershed
characteristics, sea level rise, etc.
Provide funding for state and local water and wastewater
agencies to integrate climate issues into ongoing planning (e.g. flood
management, levee construction, flood conveyance and surface storage
projects), operations, funding and regulatory work (e.g. sewer
overflows, stormwater controls, total maximum daily loads, wetlands
protection).
Provide funding for state and local water and wastewater
agencies to evaluate the energy-related impacts of water management
decisions and the water resource implications of energy choices, to
save both water and energy and reduce their contribution to global
warming.\2\
---------------------------------------------------------------------------
\2\ For a report exploring the very significant linkage between
water and energy, see http://www.nrdc.org/water/conservation/edrain/
contents.asp.
---------------------------------------------------------------------------
Provide funding for state and local water and wastewater
agencies to analyze the water quality impacts of climate change. Three
of the primary mechanisms are increases in runoff and infiltration from
higher peak rain events, lower summer surface and groundwater flows
(thus concentrating pollutants and depleting available water supplies)
and higher temperatures (reducing species diversity and increasing the
need for trees, stream buffers, and other means of cooling waterways
and the discharges into them).
Provide funding for state and local water and wastewater
agencies to evaluate surface storage re-operation opportunities--
combined with explorations of potential increases in downstream
floodways.
Provide funding for state and local water and wastewater
agencies to encourage integrated water resource management--analysis of
long-term trends in needs and uses of water resources for the next 50
to 100 years in light of global warming and steps to maximize the
availability of those resources for human and ecological needs.
Provide funding for state and local water and wastewater
agencies to analyze 100yr floodplain designations to provide for
increases in the size, frequency, and timing of peak flows related to
future climate change.
Provide incentives in the SRF funding structure for
protection of existing green infrastructure, such as for wetlands,
headwaters, and forests, and for retrofitting the built environment
with green roofs, rain gardens, tree boxes, vegetative planters,
vegetated swales, and other green infrastructure because of the climate
change protection and surface temperature reduction they provide along
with their other benefits.
Question 3. In addition to the direct impacts of untreated
wastewater on human health, there are other considerable impacts on our
nation's fish and wildlife. A part of America's natural heritage, fish
and wildlife also contribute greatly to our nation's ``recreation
economy.'' What are the impacts of untreated wastewater on wildlife and
how do the SRF programs help address these problems?
Response. Discharges of sewage into waterways have a number of
adverse impacts on fish, shellfish, and other aquatic wildlife
populations, including removing the oxygen they need to sustain life,
smothering or blocking light to the plants that they eat, fueling algal
blooms that contain toxins that cause disease, altering their hormonal
balance, and changing the balance of species within a water body so as
to be detrimental to some.
Many of the pollutants found in sewage discharges are not
adequately treated by the existing wastewater treatment system. For
example, sewage effluent contains several dozen chemicals--both natural
and man-made--that can alter animal hormones. Endocrine disruptors,
which mimic hormones, are found in pharmaceuticals, industrial
chemicals, pesticides, and a number of household compounds. Excessive
amounts of estrogens or estrogen mimics can feminize fish or create so-
called intersex animals with both male and female genitals, such as a
male fish with eggs. Scientists have shown that some fish with the
altered organs are infertile. Sewage treatment plants are not designed
to remove estrogen mimicking chemicals. http://
www.environmentalhealthnews.org/newscience/2007/2007-
1008labadieetal.html
In addition, most sewage treatment plants fail to remove nutrient
pollution even though technologies to do so are available. Secondary
treatment standards, which have not been updated since 1984, were based
on technology from the early 20th century and focus primarily on
removal of sediments and oxygen-demanding substances. Dorfman, Swimming
in Sewage, pp. 15-16 (NRDC, 2004).
The SRF should provide additional funding for advanced wastewater
treatment approaches to remove excessive nutrients from wastewater. It
should also provide grant funding for research necessary to develop
technologies for removal of endocrine disruptors and safer substitutes
for endocrine disrupting chemicals that end up in our sewers.
Responses by Nancy K. Stoner to Additional Questions from
Senator Lautenberg
Question 1. What incentives or other legislative approaches could
be used by Congress to encourage the use of green infrastructure to
meet wastewater and stormwater management needs, as well as improve
water quality?
Response. There should be both grant funding and incentives within
the SRF funding for green infrastructure projects. Grant funding should
apply to the research components of green infrastructure projects, such
as development of models and monitoring for the multimedia
environmental and community and economic benefits that they provide.
There should be more favorable loan terms, funded through additional
subsidization, and priority given to green infrastructure projects in
the SRF program because of their broader environmental benefits.
Question 2. Please elaborate on your testimony on the cost
effective of green infrastructure.
Response. There are several different ways in which green
infrastructure projects are more cost effective than other means of
controlling stormwater and combined sewer overflows. For new
development and redevelopment, the cost of using green infrastructure
or low impact development techniques often saves money directly for the
developer because it is cheaper to install than the stormwater pipes
and ponds that it replaces. It often also produces a premium in terms
of sales price for homes and the speed at which they are sold. This is
all quite well documented at this point in numerous publications,
including U.S. EPA, Economic Benefits of Urban Runoff Controls (Sept.
1995) (new development case studies), available at http://www.epa.gov/
OWOW/nps/runoff.html; U.S. HUD and Partnership for Advancing Technology
in Housing, The Practice of Low Impact Development (July 2003),
www.huduser.org (``[Use of LID has] resulted in rapid home sales,
enhanced community marketability, and higher-than-average lot
yields.''); Aponte-Clarke, et al, ``Stormwater Strategies: The Economic
Advantage, Stormwater Magazine, available at https://www.forester.net/
sw_--0101stormwater.html.
In already developed areas, green infrastructure retrofits are most
likely to pay for themselves directly in terms of cost savings for the
building owner when they are integrated into an existing need for
rehabilitation. For example, while it may not be cost effective for a
building owner merely to install a green roof on an existing building,
if the roof needs replacement anyway, the cost differential is such
that payback from the insulating value of the green roof, which reduces
energy costs, and the reduction in stormwater utility fees often cover
the additional cost. Great Lakes Wisconsin Aquatic Technology and
Environmental Research Institute Green Roof Project website, http://
www.glwi.uwm.edu/research/genomics/ecoli/greenroof/roofinstall.php.
Another perspective from which to evaluate costs is that of the
city, county, or stormwater and wastewater utility. From this
perspective, green infrastructure is often more cost effective for
several reasons. First, per gallon of combined sewer overflow reduced
or stormwater retained, it is often less expensive than surface
reservoirs, tanks, or underground storage tunnels, which are not only
very expensive, but also very difficult to fund because the public
never sees them or knows that they are there. Second, the cost of
construction and maintenance for those centralized, hard infrastructure
approaches are borne almost entirely by the utility through the rates
it charges its customers. On the other hand, green infrastructure is
often installed and maintained by private entities, sometimes at no
cost, but usually at least at a reduced cost, to the utility though the
use of stormwater or wastewater fee rebates, credits, or offsets. In
this way, communities can leverage private investment in tasks that
would otherwise be borne entirely by the utility. Third, green
infrastructure provides a whole host of non-water quality benefits that
improve the cost/benefit ratio, such as improved air quality, peak
temperature reduction, wildlife habitat, expanded green space, restored
degraded urban lands, increased real estate values, capture of global
warming pollution, reduced heat deaths, conserved water and energy,
controlled floods, improved aesthetics, enhanced recreational
opportunities, etc. Thus, per dollar spent, green infrastructure is a
very good deal. Kloss, et al, Rooftops to Rivers (NRDC, 2006). The
Center for Neighborhood Technology has developed a green infrastructure
calculator that is available to the public free of charge on its
website and can be used to estimate the costs and benefits of a variety
of green infrastructure approaches. http://greenvalues.cnt.org/
calculator
Responses by Nancy K. Stoner to Additional Questions from Senator
Cardin
Question 1. In your view, what pilot projects or research efforts
still need to take place to demonstrate the full range of effectiveness
of these green infrastructure strategies?
Response. There is a growing body of literature demonstrating the
positive environmental results attainable through the use of green
infrastructure for stormwater and sewer overflow controls, but there is
a lot of work that still needs to be done, particularly to aggregate
the environmental benefits over a neighborhood, sewershed, or
subwatershed. EPA has organized a research forum for Jan. 17-18, 2008,
to develop an action plan for:
(1) evaluating water quality and water quantity
performances of management practices, including standardizing protocols
for those evaluations;
(2) improving the capacity/ability of standard models and
modeling approaches to provide reasonable estimates of management
practices performance for predictive and design purposes;
(3) evaluating economic costs of green infrastructure
technologies, including comparisons to more traditional wet weather
management approaches.
NRDC agrees with those research needs, but would suggest a few
others for research and demonstration projects on a neighborhood,
subwatershed or sewershed, or other community-wide level including:
reduction in peak summertime temperatures and associated
anticipated reduction in energy savings, impacts on global warming,
stream temperatures, etc.
reduction in ground level air pollution and carbon
capture from widespread use of green infrastructure in a community or
specific neighborhood
quantitative analysis of enhancement of groundwater and
surface water resources, including base flow, and associated cost
savings
reduction in stream scouring and erosion and associated
water quality benefits and habitat benefits
reduction in flooding, basement backups, and sewer
overflows and associated environmental and economic benefits
increase in property values, including sales prices,
marketability, rental value, and other location sensitive changes, such
as hotel room rate, associated with use of green infrastructure on the
property and within view
number and value of jobs created through use of green
infrastructure
increase in various measures of community cohesiveness and
empowerment, such as reduction in violence, reduction in crimes,
reduced teen pregnancy rates, reduced dropout rate, etc.
Question 2. Can you provide the Committee with some examples of
successful, cost-effective projects that have demonstrated the benefits
of green infrastructure projects?
Response. NRDC's report, Rooftops to Rivers (July 2006) contains a
number of case studies from the U.S. and Canada that may interest you.
Subsequent to its publication, the Riverkeeper in New York City, issued
a report, Sustainable Raindrops, based on a study that it commissioned
that found that if instead of spending $2.1 billion on additional
underground storage tunnels, NY city were instead to spend those funds
on green infrastructure, it could capture 2.1 billion gallons more
stormwater, save $1.4 million per year in avoided stormwater treatment
costs, remove 60 tons of air pollution and 340 tons of carbon dioxide
as opposed to adding 6,481 tons of carbon dioxide and 37.8 tons of
other air pollutants associated with water treatment, save $67 million
per year in energy savings, and increase property values between 3
percent and 20 percent. Plumb, Mike, Sustainable Raindrops (2006),
http://riverkeeper.org/special/Sustainable_Raindrops_FINAL_2007-03-
15.pdf.
In addition, EPA has prepared a new report, Reducing Stormwater
Costs through Low Impact Development (LID) Strategies and Practices,
for which NRDC served as a peer reviewer. NRDC has prepared a chart
outlining a number of the case studies from that report below.
----------------------------------------------------------------------------------------------------------------
No. Site Cost Savings Notes
----------------------------------------------------------------------------------------------------------------
1.................................... 2nd Avenue SEA Street, $217, 255 (25%)........ Ninety-nine percent
Seattle, WA1. reduction in runoff.
No runoff since
December 2002.
2.................................... Auburn Hills, $761,396 million (32%). Forty percent of
Southwestern WI. development saved as
open space.
3.................................... Bellingham City Hall $22,000 (80%).......... Used rain gardens
Retrofit, WA. instead of underground
vault to capture
parking lot runoff
4.................................... Bellingham Bloedel $40,000 (76%).......... Used rain gardens
Donovan Park Retrofit, instead of underground
WA. vault to capture
parking lot runoff
5.................................... Gap Creek, Sherwood, AR $678,500 (15%)......... Over 20 acres preserved
as open space.
Developer saved $4,800
per lot to develop and
sold each lot for an
additional $3,000,
resulting in $2.2
million in additional
profit.
6.................................... Garden Valley, WA...... $63,700 (20%).......... Reduced road width,
used some pervious
paving, and used
swales and
bioretention with soil
amendments
7.................................... Kensington Estates, WA. $89,400 (12%).......... Study projected use of
LID to eliminate need
for detention pond and
make more lots
available for
development
8.................................... Laurel Springs, $504,469 (30%)......... Conservation design
Jackson, WI. with bioretention and
vegetated swales
9.................................... Mill Creek, Kane $3,411 per lot (27%)... Cluster development
County, IL. with about 40% of the
site saved as open
space. In addition to
cost savings, lots
adjacent to open space
sold at a premium.
10................................... Poplar Street Apts, NC. $175,000 (72%)......... Conventional storm
drains replaced with
bioretention,
depressions, grass
channels, swales, and
stormwater basins in
270-unit building
11................................... Portland Downspout $241.5 million......... Downspout disconnection
Disconnection Program, program costing $8.5
OR. million is expected to
save $250 million in
avoided costs for
underground pipe to
store CSOs
12................................... Prairie Glen, $405,312 (40%)......... Nearly 60% of the site
Germantown, WI. saved as open space.
13................................... Somerset, MD........... $785,382 (32%)......... In ground test found
LID to compare
favorably on both
costs and
environmental results
to conventional design
14................................... Tellabs Corporate $461,510 (15%)......... Open space design for
Campus, IL. office complex saves
not only initial
construction costs but
also maintenance costs
----------------------------------------------------------------------------------------------------------------
Source: U.S. EPA, Reducing Stormwater Costs through Low Impact Development (LID) Strategies and Practices (Sept.
2007), soon to be available at www.epa.gov/nps/lid
Senator Lautenberg. Thank you all very much for your
testimony. I think each of you was here during the EPA
testimony.
By the way, for my fellow subcommittee members, the fact is
that we went from a relatively tiny community in Louisiana to
Los Angeles, so we covered the scope.
I didn't hear either of you saying that things were hunky-
dory and not to worry about them.
What can be the response to the acceptance by EPA of the
President's budget as presented by Mr. Grumbles as being OK,
cutting the funding approximately in half, that we manage to
work our way through because of the other ways that we have of
attending to the water quality problem? Anybody make sense of
that? I shouldn't say that. Anybody understand that fully?
Mr. Westhoff. Well, Senator, I can tell you that, on behalf
of NACWA and certainly the city of Los Angeles, we think it is
going in the wrong direction. The needs of all segments of
infrastructure in this country need money, and we need money
from the Federal Government, States, and local. So we think it
is going in the wrong direction to be cutting, at this point in
time, the money that would go into the State Revolving Fund.
Senator Lautenberg. Mayor Palmer, what do you and your
colleagues or mayors across the country think about a 50
percent cut in the State Revolving Fund might do to them?
Mr. Palmer. Not to be political, but Senator Voinovich said
this, and it is a question of residents in my city of Trenton,
NJ and residents all across this Nation are saying, you know,
my mom always told me to take care of home first. If your house
isn't clean, you can't go and try and clean somebody else's up.
If we are spending billions of dollars in infrastructure over
in Iraq--which I am not saying we shouldn't do; we should--we
have to take care of our own infrastructure here, whether it is
water, wastewater, whether it is bridges.
We have seen what has happened in Minneapolis. We saw the
water main break, steam pipe burst in New York City. Quite
frankly, our infrastructure, whether it is water or whether it
is bridges, is falling apart, and we recognize that. We are not
just throwing money at a problem, but we are investing in
America's future, because if we don't have roads that can take
us back and forth, our businesses are going to be suffer, we
are not going to be globally competitive. If we don't have
clean water to drink, the same for us there as well.
So I think that we have to look at this as investments. I
think that cities have had you-go approaches and other things,
while using the State Revolving Fund as well. But we don't have
time to debate it or work on it; we have to get the job done,
and we use whatever resources we have. But we are saying that
we need to invest more so that America can be stronger and
globally competitive.
Senator Lautenberg. The idea that lies behind the State
Revolving Fund is a pretty good one. The only thing is that it
has to keep up to the volume of need that occurs as the country
grows and as the systems that are in place show the wear and
tear that one would expect. So is it possible that the
communities, the cities can finance their own wastewater
treatment, that the citizens in these cities can afford to do
the price costing that is called for without an expansion of
the State Revolving Fund? Anybody think that?
Mr. Freeman. Senator, the full cost approach, as presented
and things, such as in Oklahoma--first, let me say on behalf of
Oklahoma and the Council of Infrastructure Financing
Authorities, we are not hearing anyone who says the dollar
amount should be cut. It should be increased. So I would like
to State that.
On the full cost pricing, such as in Oklahoma--and it is
the same in many other States, and those who have been mayors
know that--there is more than one way to finance a project. In
Oklahoma, for instance, in most of the communities, most of the
loans we make are not just totally secured by repayment from
water and sewer rates; there are also other techniques that
cities use to pay their loans, sales tax proceeds, things of
that nature. So we think that EPA needs to look at those type
of avenues for repayment.
In Oklahoma we also see, because of the cuts and things, we
have been fortunate enough to partner with other funding
sources. Just this last week we worked on a very important
project that was in the Illinois River Watershed, where we were
using rural development funds with loans and grants, SRF
funding, State funding. It really took a lot of work to get it
done, but it was a push, and without the SRF, it couldn't have
been done.
Senator Lautenberg. So now that you've kind of squeezed
much of the water out of the sponge, is there any room left for
additional projects?
Mr. Freeman. It is getting tighter and tighter, sir.
Senator Lautenberg. Yes.
Mr. Freeman. If I could, Senator, that is why it is
important to know and I was glad to hear the Administration
saying this, because the Conference of Mayors have bene pushing
and the Mayors Water Council have been pushing to remove the
volume cap for Private Activity Bonds for water and wastewater
infrastructure as one tool in terms of helping our aging
infrastructure, and that is one tool. There is no cookie-cutter
approach, there are different mechanisms, but the more
flexibility that we can have and the less mandates we can have,
the better cities and our infrastructure will be.
Senator Lautenberg. But I think it all boils down, doesn't
it, Mayor, to the fact that you can't simply pass off these
funds to the citizenry without, Mr. Freeman, with what you just
said, calls for an increase in revenues from other sources.
Well, that sounds like taxes to me. Call it what you will. The
fact is in this place, where there is constant railing against
asking the Nation to pay more for the things that it owes the
population--and the war is one glaring example--but there is no
free lunch and you can't get it done without asking for more
money from the citizens. If the Federal Government can't find
it in its revenue stream, then we have a serious problem. But
the notion that we could cut in half the Revolving Fund is
almost, if I might say, insulting.
Mr. Brasseaux, I was thinking, as I listened to your
testimony, it was very vivid. You talked about 7,100 residents,
if I am not mistaken. Is that the right size?
Mr. Brasseaux. It is 2,100.
Senator Lautenberg. Twenty-one hundred.
Mr. Brasseaux. You are correct, it's 2,100 homes.
Senator Lautenberg. That's what I thought.
Mr. Brasseaux. We have had a tremendous growth, but we
continue to raise our utility rates. Our problem--and I am sure
it is not only in South Louisiana, but across much of the
South, at least--we have a large population of low income
families, and every time you raise a utility rate by $1, it is
really affecting a lot of people.
Senator Lautenberg. I am sure it does. Well, it highlights
the problem.
Ms. Stoner, thanks for your presentation, it was excellent.
You know, I had a meeting with my staff before the hearing, and
we talked about the green approach to things, the green
infrastructure, and was wondering what happens when you try to
grow vegetation up on your roof; who takes care of that. Well,
what we saw was wonderful examples in yours of cities that have
done it and it is hard to believe, but nature will treat its
own ills, given the chance to do it. But if you take away one
part, one element of the total ecology, then the rest pays for
it.
So we thank you for the commentary that each of you
offered. I am going to call on Senator Vitter, but would also
remind everybody that the record will be kept open and
questions will be submitted to you in writing and would ask
that you respond as promptly as you can.
Senator Vitter.
Senator Vitter. Thank you, Mr. Chairman.
Mayor Brasseaux, thank you again for your leadership and
for being here. In your testimony, which was very compelling,
you talked about how, in a significant project in Carencro, you
basically abandoned trying to fool with the State and Federal
Government in terms of the Revolving Loan Fund because of the
bureaucratic obstacles and red tape and paperwork. Could you
talk about that a little bit and what specific steps are
necessary to change that situation so it is much less of a
burden, particularly for smaller communities?
Mr. Brasseaux. Well, Senator Vitter, it goes back about 3
years ago, and at the time I was a part-time mayor and relied a
lot on an engineering firm to kind of guide me. They looked at
it, the Revolving Loan Fund, for a good while and I met with
some State people, and when it was all said and done, the
recommendation from our engineer and other consulting engineer
was that we are not going to mess with it, it is just too much
red tape. I didn't get into the details of that, I just went on
their recommendation.
But I am also a vice president with the Louisiana Municipal
Association, and I hear that across the State, that, based on
things that they have heard and some past experiences, they
won't even go in there and really try anymore.
Senator Vitter. Well, I would really welcome any very
specific ideas about cutting through that red tape and making
it much more attractive to local communities. Maybe you can
work through the Rural Water Association, the Municipal
Association, anything else like that to give us--and from my
perspective, the more specific the better about how we change
that application and of a process. I look forward to that.
Also, you know, one pretty unique Louisiana experience you
touched on in the last couple years because of the hurricanes
is an enormous population growth overnight in some communities
because of displacement from other areas for the hurricanes.
Maybe you can touch on that a little bit, because I think--I
don't think; I know in Louisiana that is a huge phenomenon that
impacts all sorts of infrastructure in communities like yours,
which is on the receiving end of that.
Mr. Brasseaux. Well, Senator, I would say our community has
grown by at least 1,000 to 1,500 residents since the
hurricanes. One of the reasons they are coming toward us is we
are north of InterState 10, and because of insurance problems,
having trouble getting insurance, they want to move a little
further inland, away from the coastline. I guess we are about
not quite an hour from the coast; mainly, we get winds.
But our infrastructure is suffering because of new
subdivisions that are popping up. Right now we have, I would
say, in the planning stages or have started construction, 800
new residential lots, not counting probably, the last couple of
years, 400 that have been actually homes built on it. Our
problem is it is in our city limits and just running the lines,
the infrastructure to try to meet those needs, it is a
tremendous burden on us.
Senator Vitter. I want to underscore something. That 1,000
residents, virtually overnight, to a community your size is a
huge percentage growth overnight. Again, that is pretty unique
to the hurricane experience, and I hope that we can make sure
that the Federal programs recognize that enormous overnight
growth, because that is very unusual. They probably aren't set
up to recognize that very quickly.
Then, in closing on my time, Ms. Stoner, I was very
interested in your presentation, including the green
infrastructure. I know that carries a lot of different things,
but if you could generalize in terms of where that technology
sits today, how does that cost compare to handling the same
amount of water through more conventional needs and, in terms
of policy, how should we compare it? In other words, if it is
more expensive, should we not move ahead with it? How should we
compare it in terms of cost? I assume, over time, that cost
will come down.
Ms. Stoner. I appreciate that question. First of all, it is
a lot of different types of approaches, some which can be used
in urban areas, suburban areas, rural areas. There are actually
different green infrastructure techniques that can be used all
across the landscape.
As far as the costs go, one of the benefits that you get
from green infrastructure is the ability to leverage private
investment, so you have to look at the costs in a little bit
different way. Instead of having the utility own, construct,
and maintain all of the infrastructure itself, one of the
benefits of green infrastructure is that you set up incentives
to get landowners, property owners to have really part of what
turns out to be the wastewater infrastructure on their property
itself.
As Senator Lautenberg mentioned, one of these things is
green roofs, so that the building owner gets, say, an
incentive, a credit on water and sewer fee or on the stormwater
fee every month. They are actually retaining the stormwater
onsite. They do use very low maintenance types of plants, sedum
and other kinds of desert plants that can bake in the sun every
day and don't need to be watered. But the maintenance that is
required is then done by the building owner. When you look at
it altogether, in terms of what the costs are for the utility
and what the benefits are, the multimedia benefits that include
air pollution, global warming, the rate comes out very
favorable comparison for most communities.
I think that we are currently generating those numbers
across the country, looking at widespread application of green
infrastructure and what we can expect to see in terms of
sewershed and watershed reductions, and what the costs are. But
often they come out so that the green infrastructure is
actually very affordable and often cost-effective for
communities, which is one of the reasons why it is so widely
supported by so many different groups.
Senator Vitter. Thank you.
Senator Lautenberg. I want to put a question to you, Mayor
Palmer, Mr. Freeman and Mr. Westhoff, because each of you has
significant organizational affiliations. Are you aware in your
organizations, Mayor Palmer, in the Conference of Mayors, how
many communities would reject use of the State Revolving Fund
because there is red tape attached? Or, Mr. Freeman, do you
know from your organization?
Mr. Freeman. The actual statistic answer to that, no, sir.
We can find the answer out to that. I can speak on behalf of
Oklahoma. As I mentioned in my testimony, we have been very
fortunate in that we have been able to provide approximately 65
percent of the financing to communities for wastewater through
Clean Water State Revolving Fund loan program.
Senator Lautenberg. Sixty-five percent.
Mr. Freeman. Yes, sir, State Revolving.
Mr. Westhoff. Senator, I can honestly tell you, and to
followup on actually the question that Senator Vitter placed,
the problems with red tape are not limited to small agencies. I
can tell you that the city of Los Angeles has, in the past,
decided not to participate at various times because of the red
tape.
I think what happened when we transitioned from the
Construction Grant program over to the SRF, they took all of
the baggage, and I can tell you that the Clean Water Grant
program was burdened with a lot of details and a lot of
followup and a lot of post-construction audit problems that
existed. Ten years, maybe, after the project was already built,
they were coming in, asking you to provide justification. So
that baggage sort of followed the SRF.
Senator Lautenberg. Does it eliminate the value of the
Fund?
Mr. Westhoff. Senator, I don't think it eliminates it,
because I can tell you there are many organizations or many
members of our organization, of NACWA, who take advantage of
the SRF. But for the city of Los Angeles, as a large agency, a
decision was made that it was easier for us to go out into the
private investment market because of a high bond rating and
seek investment, rather than utilizing a large amount of the
SRF. We have used some SRF money, but there is a lot of red
tape and, in our minds, a lot of unnecessary red tape.
So second to increasing the amount of money in the SRF, the
next most important thing would be to reduce the amount of red
tape and make it easier for municipalities.
Senator Lautenberg. We can always agree that we ought to
minimize red tape.
When you have questions that involve transfers of huge sums
of money, when the competition for those funds is so keen that
everybody is trying to get their hands in the largesse, you are
going to have some red tape. We have heard complaints over the
years that the IRS forms too much red tape. Well, at some point
living has its difficulties, and you have to obey the rules,
whether it is as simple as red lights or red tape.
Mayor, do you have----
Mr. Palmer. Mr. Chairman, we just wanted to make sure. We
did a survey of 440 cities, and 15 percent said they would not
use the SRF program because of the red tape.
Senator Lautenberg. And 85 percent were happy to take it,
red tape and all?
Mr. Palmer. Well, some of the larger cities don't have to,
but some of the smaller cities need it as well, but it is a
combination.
Senator Lautenberg. Well, the public is paying a terrific
price and, again, I use the reference to drinking water,
running somewhere between $50 billion and $100 billion a year
spent on buying water in a container. So we passed along that
cost.
When I was a kid--and I don't want to tell you about age
because it is a sensitive subject with me, but the fact is we
went to the tap and whatever you needed came from the tap.
So we have abused the system either innocently by growth,
by expansion, now by--Mr. Freeman, I was happy to listen to
your recount of what the excessive rainfall, et cetera, does
and the burdens it places on the communities to fight harder to
be able to treat their wastewater easily. So things have
changed and they will continue to change, but I haven't heard
anybody solute the need to cut the funding in half for the
State Revolving Fund.
With that, I thank each of you. Your testimony today was
especially significant because usually when we get the panels,
there is a certain pandering to the committee and the Senate
and so forth, but here, I would say, for the most part you said
it like it was, and I am happy to hear that.
Just as a formality here, I ask unanimous consent that the
written statements from the following organizations be included
in the record of today, and that is the Clean Water
Construction Coalition, the American Society of Civil
Engineers, National Association of Water Companies, Great Lakes
and St. Lawrence Cities Initiative, National Utility
Contractors Association.
[The referenced information follows:]
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Senator Lautenberg. With that, once again, my thanks. This
hearing is adjourned.
[Whereupon, at 12:14 p.m., the committee was adjourned.]
[Additional statements submitted for the record follow.]
Statement of Hon. Benjamin L. Cardin, U.S. Senator from the
State of Maryland
Mr. Chairman: Thank you for holding this hearing today.
We have a number of important witnesses to hear from, so I will
keep my opening statement brief.
This hearing is especially timely. Earlier this week the Chesapeake
Bay Foundation released its report entitled ``Bad Waters: Dead Zones,
Algal Blooms, and Fish Kills in the Chesapeake Bay Region in 2007.''
This disturbing report details the many problems that are associated
with excess nitrogen and phosphorus that finds its way into the
Chesapeake Watershed annually. The report also takes note of the
numerous beach closures that hit the Chesapeake region in 2007, most of
which result from faulty treatment of sewage waste.
Mr. Chairman, about 20 percent of the excess nitrogen and
phosphorus that pollutes the Bay comes from wastewater treatment
plants. And virtually 100 percent of the Maryland beach closures on the
Bay are the result of failing sewage treatment facilities.
These startling statistics about the Chesapeake Bay are not unique
to our part of the country. Coastal `dead zones,' where too little
dissolved oxygen exists for fish and other aquatic species to survive,
are a tragic and all too common phenomenon from your own Barnegat Inlet
in New Jersey to the Hood Canal in Washington State.
We will hear testimony today about the major health effects that
are associated with improperly treated sewage. Coupled with the
ecological devastation that I have outlined, these problems will
continue to grow until we take a much more aggressive approach to the
aging and often failing wastewater treatment plants in America.
The total cost associated with meeting wastewater infrastructure
needs that the states have already inventoried amounts to hundreds of
billions of dollars. When drinking water infrastructure is added to the
calculation, the total approaches $1 trillion in water infrastructure
needs over the next 20 years.
In the Chesapeake region, the states have identified more than 450
wastewater facilities that require state-of-the-art treatment to remove
excess nutrients from their effluent. The total price tag for these
upgrades is in the neighborhood of $6 billion.
In Maryland alone the cost of this advanced level of treatment is
estimated at $2.2 billion. And that does not include other pressing
costs:
$850 million for secondary treatment
$164 million to correct Inflow and Infiltration problems,
$868 million for sewer replacement and repairs,
$960 million for new sewer interceptors and collectors,
$430 million to repair Combined Sewer Overflows,
$431 million for Stormwater controls, and
$247 million for other non-point source pollution
controls.
Maryland's bill tops $6.1 billion in identified wastewater
treatment needs.
During today's hearing we will learn about some innovative efforts
to address this funding shortfall. Clearly a major new investment of
federal dollars will need to be part of this effort. Water efficiency
programs will play a major role, and so will innovative financing
tools. But I want to express my hope that we will also focus a
considerable portion of our attention on the use of ``green
infrastructure'' to reduce stormwater runoff.
Green infrastructure takes advantage of the natural filtering and
water capture capacity of natural landscapes to reduce the amount of
stormwater that is such a huge part of the pollution problem facing
America's waters.
These efforts have multiple benefits beyond their amazing water
quality benefits. Trees, for example, can be used to intercept
stormwater before it enters collection systems. They also filter air
pollutants from our skies, and lower the ``heat island'' effect that we
see in major urban areas. And these Green Infrastructure investments
are often dramatically less expensive than traditional concrete and
mortar treatment facilities.
Clearly, the Nation is facing a wastewater infrastructure crisis.
The Clean Water Act promised America swimmable, fishable, drinkable
water more than a generation ago. In spite of major investments and
consistent efforts, that is a promise that has not been realized. An
earlier generation of investments has now reached its engineered
lifetime. We need a new investment in America's aging infrastructure. I
trust that today's hearing will start us on that path.
Thank you, Mr. Chairman.
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