[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                         RECOVERY ACT: PROGRESS
                       REPORT ON WATER RESOURCES
                       INFRASTRUCTURE INVESTMENT

=======================================================================

                                (111-75)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            November 4, 2009

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           ROBERT E. LATTA, Ohio
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
JOHN J. HALL, New York               ANH ``JOSEPH'' CAO, Louisiana
STEVE KAGEN, Wisconsin               AARON SCHOCK, Illinois
STEVE COHEN, Tennessee               PETE OLSON, Texas
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
VACANCY

                                  (ii)







            Subcommittee on Water Resources and Environment

                EDDIE BERNICE JOHNSON, Texas, Chairwoman

THOMAS S. P. PERRIELLO, Virginia     JOHN BOOZMAN, Arkansas
JERRY F. COSTELLO, Illinois          DON YOUNG, Alaska
GENE TAYLOR, Mississippi             JOHN J. DUNCAN, Jr., Tennessee
BRIAN BAIRD, Washington              VERNON J. EHLERS, Michigan
TIMOTHY H. BISHOP, New York          FRANK A. LoBIONDO, New Jersey
RUSS CARNAHAN, Missouri              GARY G. MILLER, California
STEVE KAGEN, Wisconsin               HENRY E. BROWN, Jr., South 
DONNA F. EDWARDS, Maryland Vice      Carolina
Chair                                TODD RUSSELL PLATTS, Pennsylvania
SOLOMON P. ORTIZ, Texas              BILL SHUSTER, Pennsylvania
PHIL HARE, Illinois                  MARIO DIAZ-BALART, Florida
DINA TITUS, Nevada                   CONNIE MACK, Florida
HARRY TEAGUE, New Mexico             LYNN A WESTMORELAND, Georgia
ELEANOR HOLMES NORTON, District of   CANDICE S. MILLER, Michigan
Columbia                             ROBERT E. LATTA, Ohio
MICHAEL E. CAPUANO, Massachusetts    ANH ``JOSEPH'' CAO, Louisiana
GRACE F. NAPOLITANO, California      PETE OLSON, Texas
MAZIE K. HIRONO, Hawaii
HARRY E. MITCHELL, Arizaon
JOHN J. HALL, New York
PARKER GRIFFITH, Alabama
BOB FILNER, California
CORRINE BROWN, Florida
VACANCY
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)











                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                               TESTIMONY

Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army for Civil 
  Works, U.S. Corps of Engineers.................................    11
Gelb, Nanci, Deputy Director, Office of Ground Water and Drinking 
  Water, Office of Water, United States Environmental Protection 
  Agency.........................................................    11
Gritzuk, Michael, Director, Pima County Regional Wastewater 
  Reclamation Department.........................................    11
Hanger, Secretary John, Pennsylvania Department of Environmental 
  Protection.....................................................    11
Nunley, Mayor L. Ray, City of Ruidoso, Ruidoso, New Mexico.......    11

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    84
Johnson, Hon. Eddie Bernice, of Texas............................    85
Mitchell, Hon. Harry E., of Arizona..............................    92
Oberstar, Hon. James L., of Minnesota............................    93

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Darcy, Hon. Jo-Ellen.............................................    99
Gelb, Nanci......................................................   105
Gritzuk, Michael.................................................   117
Hanger, Secretary John...........................................   121
Nunley, Mayor L. Ray.............................................   126

                       SUBMISSIONS FOR THE RECORD

Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army for Civil 
  Works, U.S. Corps of Engineers:................................
      Response to question from Hon. Oberstar, a Representative 
        in Congress from the State of Minnesota..................    46
      Response to question from Hon. Boozman, a Representative in 
        Congress from the State of Arkansas......................    82
Edwards, Hon. Donna F., a Representative in Congress from the 
  State of Maryland, letter on the revised guidance for the State 
  Revolving Fund ``Green Reserve'', Peter S. Silva, Assistant 
  Administrator for the Office of Water, U.S. Environmental 
  Protection Agency..............................................    24
Committee on Transportation and Infrastructure, Majority Staff:..
      Report entitled: ``The American Recovery and Reinvestment 
        Act of 2009 Transportation and Infrastructure Provisions 
        Implementation Status as of October 16, 2009''...........  xiii
      Chart entitled: ``T&I Committee Transparency and 
        Accountability Information by State and Formula Funding 
        under the American Recovery and Reinvestment Act of 2009 
        (P.L. 111-5) (Recovery Act) Submissions Received by T&I 
        Committee (Data Reported as of September 30, 2009''......    lx
      Chart entitled: ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions by T&I Committee (Data 
        Reported as of September 30, 2009) Percentage of 
        Allocated Funds Associated with Project Stages Clean 
        Water State Revolving Fund,'' chart...................... lxvii
Oberstar, Hon. James L., a Representative in Congress from the 
  State of Minnesota:............................................
      Letter, Associated General Contractors of America..........    50
      Letter, Water and Wastewater Equipment Manufacturers 
        Association, Inc.........................................    58
      Letter, American Iron and Steel Institute, the Committee on 
        Pipe and Tube Imports, Municipal Castings Association, 
        Special Steel Industry of North America, and the Steel 
        Manufacturers Association................................    61

                        ADDITIONS TO THE RECORD

International Boundary and Water Commission United States and 
  Mexico, C.W. ``Bill'' Ruth, United States Commissioner, written 
  testimony......................................................   130
National Resources Conservation Service, U.S. Department of 
  Agriculture, Dave White, Chief, written testimony..............   132




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
      PROGRESS REPORT ON WATER RESOURCES INFRASTRUCTURE INVESTMENT

                              ----------                              


                      Wednesday, November 4, 2009

                  House of Representatives,
   Subcommittee on Water Resources and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Eddie Bernice 
Johnson [Chairwoman of the Subcommittee] presiding.
    Ms. Johnson. Good morning. The Committee will come to 
order. Today's hearing will focus on implementing the American 
Recovery and Reinvestment Act of 2009. More specifically, we 
will review how water-related infrastructure investments have 
already succeeded in placing workers back on the job all across 
the Nation. We will also emphasize how Federal agencies, States 
and their local partners can do more to ensure that these funds 
are used quickly, efficiently, and in harmony with the job-
creating purposes of the Recovery Act.
    Successful implementation of this legislation is essential 
to our collective efforts to turn our economy around and create 
good, well-paying jobs in America.
    Today, we will hear from Federal, State and local officials 
charged with the implementation of the Recovery Act programs 
that utilize water infrastructure-related funding. I am 
particularly pleased that we will be hearing today from the 
newly confirmed assistant Secretary of the Army for Civil 
Works, Ms. Jo-Ellen Darcy. Ms. Darcy has a long history of 
working with this Committee as well as a staffer on both the 
Senate Finance Committee and Senate Environment and Public 
Works Committee. She also is integral to efforts by the other 
body to move several water resources development acts through 
the process over the years.
    Let me congratulate you for your confirmation and look 
forward to working with you.
    I am happy to report today that the $4 billion provided by 
the Recovery Act for clean water State revolving fund programs, 
the Environmental Protection Agency has awarded $3.98 billion 
in capitalization grants to States. This represents nearly 100 
percent of the total available funds. These important funds are 
allocated to individual States to construct, rehabilitate and 
modernize our Nation's wastewater infrastructure. And further, 
I would like also to report that as of September 30, 2009, a 
total of 873 clean water State revolving fund projects in 43 
States have been put out to bid, totaling $1.8 billion. That is 
48 percent of the total available funds for clean State 
revolving fund projects.
    Of these 873 projects that have been put out to bid, 530 
clean water fund projects in 40 States are already under 
contract. Work has begun on 394 projects in 36 States totaling 
$872 million. Monitoring the amount associated with projects 
out to bid, under contract, and underway helps us measure the 
Recovery Act's progress. Unfortunately, critics of the Recovery 
Act focus exclusively on the amount of outlays of Federal 
funds. This approach does not provide a good sense of Recovery 
Act progress because infrastructure projects primarily operate 
on a reimbursement mode.
    For instance, States seek reimbursement for wastewater 
infrastructure projects only after construction is underway. 
Since Federal outlays may come months after jobs are actually 
created and construction has begun, outlays are a lagging 
indicator of Recovery Act progress.
    While the numbers are promising, I encourage EPA to 
continue to take a greater role in facilitating further 
expenditures of clean water State revolving funds by individual 
States. I also would like to hear about the steps EPA and 
individual States are taking to ensure that all States meet the 
February 17, 2010 deadline for awarding contracts or proceeding 
to construction on their clean water State revolving fund 
projects. EPA has achieved greater success at implementing the 
Superfund program and comprehensive initiative to clean up the 
Nation's hazardous waste sites, of the $600 million provided 
for the Superfund program, EPA has provided $573 million to 
existing contracts for 56 projects in 28 States. That is 98 
percent of the total funds for the Superfund cleanup.
    And finally, the $100 million provided for the Brownfields 
program EPA has awarded grants, or provided funds for existing 
grants or contracts worth $79 million for 176 Brownfields 
projects in 39 States. This represents 79 percent of the total 
funds for Brownfields.
    The Recovery Act also provided $4.6 billion to the Corps of 
Engineers. As of September 30, 2009, the Corps has begun work 
on 731 Recovery Act projects all across the country totaling 
over $2.2 billion. This represents nearly 50 percent of the 
total amount of funds allocated to the Corps. My assumption is 
that all of the Members of this Committee want the Recovery Act 
to succeed. Every Member of this Committee should want the 
infrastructure investment made by this Act to improve the 
economy, to help create and sustain good-paying jobs and to 
begin the long-forgotten need to invest in our Nation's 
infrastructure.
    I see hopeful signs in today's testimony, but I remind all 
of our witnesses that more must be done to ensure these funds 
have their intended effect. I now yield to my Ranking Member, 
Mr. Boozman, for any statement he might have.
    Mr. Boozman. Thank you, Madam Chair, for holding this very 
important hearing. Whether you voted for the American Recovery 
and Reinvestment Act or opposed the legislation, we in Congress 
have the responsibility to ensure the money is spent for its 
intended purposes.
    Some of the stimulus expenditures are of concern. For 
instance, the administration has sent more than $2.5 million in 
stimulus checks to the deceased, spent $1 million to build bike 
lockers and a bike garage in Portland Oregon, and 1.3 million 
in Maine for basket makers, storytellers and a music festival 
and spent more than $9 million to restore an abandoned train 
depot in Lancaster, Pennsylvania.
    Some might try to rationalize these expenditures, but it is 
hard to see how they can be as beneficial as investment in 
harbor maintenance, locks and dams, levee repairs and 
wastewater treatment plants. While some have credited the 
stimulus package for the 3.5 percent grown in GDP for the last 
quarter, for many families in America, the recession is far 
from over as unemployment continues to rise. The national 
conference on State Legislatures recently reported that 27 
States are forecasting shortfalls for fiscal 2011, the total at 
least $61 billion with five more States predicting unspecified 
budget shortages.
    Given the fact that the transportation projects and other 
infrastructure projects like flood damage reduction projects, 
wastewater treatment projects provide economic benefits to the 
Nation, the administration and the Congress should have placed 
a higher interest in the work of the Army Corps of Engineers' 
and EPA's clean water State revolving loan fund and Brownfields 
programs. All these projects put people to work which is 
another reason to put these investments high on the priority 
list.
    Since the stimulus bill shortchanged infrastructure 
investment, we have to conduct rigorous oversight on the 
allocation of these scarce resources and make sure that 
taxpayers' moneys are spent wisely. And I commend Chairman 
Oberstar, the Chairman of this Committee, again for having an 
important hearing such as this so that we can do that.
    On a very positive note, I want to thank the Corps for 
working in a way I think that has really been exemplary. We had 
a situation that the Corps and the USDA needed to get together 
and expedite some things, and I think that is the kind of model 
that we desperately need. Those kind of things, as we seek to 
work together, the different agencies, cut through the red tape 
so that we can get these projects moving is so important.
    And I am very familiar with the specific situation where 
again the Little Rock Corps, the Corps has acted very, very 
well, USDA has done a tremendous job. So those are the kind of 
things that I think we are looking for. So with that I yield 
back the balance of my time. Thank you, Madam Chair.
    Ms. Johnson. Thank you very much. The Chair will now 
recognize Mr. Teague. Mr. Teague was instrumental in getting 
his mayor here today. So, he will probably have some words 
about him as well.
    Mr. Teague. Thank you very much, Madam Chairwoman, for 
holding this meeting and you know bringing to light the good 
things that have come from this bill and everything, and I 
appreciate the recognition, and I am also very proud today to 
welcome my friend and my fellow New Mexico elected official and 
my constituent, Mayor Ray Numbly of Druids to the House 
Transportation and Infrastructure Committee to testify about 
the impact that wastewater infrastructure funds and the 
American Recovery and Reinvestment Act have had in my district.
    I ran for Congress not to be a voice at one of the 
political extremes, but to be a can-do worker, problem solver 
and representative for the communities in my district. Well, as 
soon as I was elected, Mayor Nunley came to me with a problem 
that needed solving. His town, Ruidoso, had been ordered to 
complete a wastewater project that would cost $36 million. And 
that might not seem so extraordinary to many of my colleagues 
who represent larger population centers, but Ruidoso has a 
population of approximately 10,000 permanent residents. How are 
10,000 people, along with the residents of Ruidoso Downs 
supposed to finance a $36 million wastewater project? The 
answer, in this case, is to work in concert with the Federal 
and State officials to take full advantage of the American 
Recovery and Reinvestment Act.
    Earlier this year, the Ruidoso project received $6.6 
million in ARRA funds which the mayor and his colleagues pooled 
with local, State and other Federal money to get the project 
off the ground. There are men and women in hard hats building 
that facility as we speak. It is one of six ARRA wastewater 
projects that we hope to see in my district. Mayor Nunley 
represents the kind of responsible, can do, small town local 
officials we have many of in my district. I am proud to be here 
with him today and look forward to his testimony.
    Thank you. And I yield back.
    Ms. Johnson. The Chair now recognizes Mr. Cao.
    Mr. Cao. Once again, on behalf of my constituents in 
Orleans and Justin parishes, I would like to extend my thanks 
to the Chairwoman and also to the Ranking Member for holding 
this important hearing today. My district is still contending 
with the aftermath of Hurricane Katrina, especially in regards 
to the issue of storm protection. As you know, my district has 
been waiting for almost 4 years for the Army Corps of Engineers 
to install storm protection mechanism as mandated by Congress.
    In June of 2006, temporary hydraulic pumps with gates were 
constructed at Lake Pontchartrain. Critics say these are not 
the most reliable options and would question their ability to 
pump and protect the city. Others say we can do an adequate 
enough job over the next 3 to 5 years. In June, 2007, I-walls 
were replaced at the points of breach after Katrina, the 17th 
Street, Orleans Avenue and the London Avenue canals.
    On June 15, 2006, congressional funding for 100-year-storm 
protection was signed into law with the Emergency Supplemental 
Appropriations Act For Defense, the global war on terror and 
the Hurricane Recovery of 2006. Specifically, Congress 
appropriated $804 million for the Army Corps of Engineers to 
build pumping stations at the 17th Street Orleans Avenue and 
London Avenue canals. Additionally, supplemental spending were 
authorized and funded fortifications of existing, internal 
pumping stations systems city wide.
    Under this authorization, the Corps studied three options 
for delivering this increased storm protection, options 1, 2 
and 2(a).
    Option 1 would create a pump at Lake Pontchartrain and no 
other engineering or buildout of walls. Option 2 would build a 
new pump at Lake Pontchartrain deepening and widening the 
canals and thickening out the internal pumping stations. This 
pump would have to lift water up extra 5 feet from the outfall 
canal due to it being widened and deepened. The pump 
specifications would require more horsepower and would provide 
pumping capacity of 12,500 cubic feet per second. Option 2(a) 
would be the same as option 2 with an additional pumping 
station to pump areas of Old Metairie to the Mississippi River.
    I know that this is a contentious issue between the Army 
Corps of Engineers and the State of Louisiana. I hope that 
through this hearing as well as through my questioning, we can 
address some of the issues that I am concerned with; one, the 
controversy between option 1, options 2 and 2(a), as well as 
some of the delays that I have seen in regard to with the Army 
Corps of Engineers and some of the other issues that would I 
like for the panel to discuss in connection with hurricane 
protection as well as other projects that are water related.
    So again, I would like to thank the Chairwoman and the 
Ranking Member for holding this hearing, and I hope that the 
Recovery Act money will be implemented in a way that will 
provide greater protection for my people in the Second District 
of Louisiana. So thank you very much.
    Ms. Johnson. Thank you very much. The Chair will now 
recognize the distinguished Chair of the Full Committee, Mr. 
Oberstar.
    Mr. Oberstar. Thank you, Madam Chair, for holding this 
hearing, and Mr. Boozman for continuing on the commitment that 
I made and my colleagues on our side made at the outset of the 
year in supporting and advancing the stimulus as we did through 
programs under the jurisdiction of our Committee.
    We have held, as promised, hearings starting 60 days from 
signing into law every 30 days hearing on the progress made by 
the various agencies and the State administrators of programs 
such as DOT, metropolitan planning organization, State 
revolving loan funds and aviation authorities, and I can say 
that we have a very good track record to point to. I keep a 
report card in my pocket. Any time anybody asks me, I have it 
right here, it is 30 days behind time right now, but we are 
updating that. February 17 seems like 2 years ago, but it was 
February 17 the President signed the bill into law.
    Thirteen days later, State DOTs are notified of their 
formula funding allocations. Federal Highway Administration on 
that very day approved its very first project out here in the 
Maryland suburb of Silver Spring. Sixteen days later, State 
DOTs, cities and public transit agencies were notified of their 
transit formula funding allocations. And 27 days after signing, 
the first transit project was approved in rural Kentucky and 
the second in Missouri.
    Since then, we have 6,700 highway and transit projects on 
which work is underway, under contract, on the job, people 
working, 165,496 direct jobs that are accounted for, that have 
been paid $6.5 billion in payroll. Those are workers getting a 
paycheck not an unemployment check. They have paid so far $900 
million in Federal taxes alone. So they are not tax eaters, 
they are taxpayers. They are not unemployment check recipients, 
they are payroll check recipients.
    In addition to those 165,496 direct jobs, there are another 
125,000 jobs in the supply chain, in the sand and gravel pits, 
that are supplying aggregate to the contractors, the cement 
plants that are supplying cement for ready mix facilities and 
asphalt suppliers to the asphalt cement sector and rebar for 
reinforcing rods in the concrete highway work being done.
    In fencing, in fence posts, in guard rails, in I beams for 
the bridges, all of that is supply chain jobs being produced in 
this country at the steel mills. In my district alone, let's 
say a tertiary effect is that when the steel mills go back into 
operation and begin producing steel, they need iron ore to make 
the steel. So the iron ore mines in my district, which have 
been shut down since summer of 2008, have called people back to 
work, have called all but one mining operation.
    And that has meant in addition railroad jobs to haul the 
iron ore from the mines to the Port of Duluth-Superior and 
that, in turn, means every shipload that goes out is 21 
additional mariner jobs who were laid off since last summer.
    So we have, I think, a very, very positive story to tell: 
67 percent of the total funding is out to bid, as the charts 
show; 33 percent is committed to contracts, 11-1/2 billion, not 
yet out to bid, but under the provisions of the Act, still 
within the timeframe.
    The numbers don't show up in the waste, in the subject of 
today's hearing, the numbers don't show up as quickly because 
States do not seek reimbursement until, for their clean water 
State revolving loan fund projects until after construction is 
underway, similar for the highway program. It is a 
reimbursement program. States, State DOTs advertise for bids, 
award bids, they have a time delay for bid contests, there 
haven't been any that I know of, and then they award the 
contract, work gets underway.
    The contractor bills the State. The State then submits its 
voucher to the Federal Government. The same with the State 
revolving loan fund. Projects out to bid, under contract, 
underway those are the better measurements of progress.
    In our State of Minnesota, where the State public 
facilities authority under the direction of Terry Coleman and 
Jeff Freeman, who have been doing this work for 25 years, they 
took their $73 million in wastewater treatment funds and 
additional monies in the drinking water funds and leveraged it 
into a $502 million program. They have virtually every project 
under contract, and I have looked at the list, they are small 
towns, 2,500 under population who only had primary treatment, 
settling ponds that are 40 or 50 years old in some cases.
    In one case, a city didn't have any sewer system at all. 
All they had were mound systems and septic tanks leaking into 
groundwater. They are not getting sewer, sewage treatment 
plant, cleaning up the groundwater, cleaning up the surface 
water, huge benefits for future generations.
    So, of the roughly $4 billion for the SRF program, total of 
873 clean water projects in 43 States have been out to bid for 
a total of $1.8 billion. And that is 48 percent.
    Now there was a delay and I was unhappy with this getting 
underway because of the Buy America provision. And I am happy 
to report, I have had some conversations, some of you may have 
had with our members of the Canadian Parliament, the minister 
of trade for Canada came in, the prime minister was here for a 
visit, and I said [speaking French].
    I said we are one country in North America, we are a single 
economy, but we have different systems. And those issues have 
now been to resolved. The result has been that new American 
manufacturers have taken hold. There is a process of treating 
waste with ultraviolet lighting, they said oh, we don't have 
such systems. And do you know what? Within 30 days, there was 
an American company that perfected the process, got up and 
running. They are operating and they are making the equipment. 
And those are additional jobs created by stimulus by the Buy 
America provision.
    Pushed American ingenuity rises to the challenge.
    And, we have seen the--just in summary--and I also want to 
say that the bids are coming in lower, 25 percent lower on 
highway and transit projects and on wastewater treatment prices 
so that Minnesota's $500 million may reach to $600 million and 
the same with other States.
    We have overall, in the GSA, the aviation projects, most of 
which are that is 100 percent of the aviation funds are under 
contract and about half of those have been completed already 
because airport authorities can move faster, those of you, 
Mayor, I am sure you would welcome such an opportunity, they 
can advertise for bids, take the bids, award the bids and hold 
the contract for up to a year, while all of a sudden the money 
appeared like manna in the desert for the Israelites in the Old 
Testament.
    And now they have got the money and they awarded the 
contract and work was underway and completed. Completed. And 
they go on to the next project. So aviation funds have been 
very expeditiously committed, total, 13,313 transportation, 
nontransportation, projects, $42.5 billion, 66 percent, over 
two-thirds of all the money is under contract, underway, jobs, 
and as I said earlier, they are not only working, $6.5 billion 
in payroll has been paid out, but those workers have paid $900 
million in Federal taxes so far.
    Not only are they not drawing an unemployment check, they 
are getting a payroll check and they are paying taxes on it and 
they are contributing, and they are buying.
    I tell a touching story of Joyce Fisk, a truck driver for a 
contractor in Minnesota, working on Interstate 35, in the 
southern end of my district. I went up to the job site. The 
foreman called the truck over. It was one of the great big 
belly dumpers. And Joyce was driving that truck. She jumped 
out, she said "Oh, you're Jim Oberstar, oh." She gave me a big 
hug and said "Thank you, I am back at work. Six weeks ago, my 
husband and I were sitting across the dinner table looking at 
each other, where do we go now? Our unemployment checks are 
gone. Our health insurance ran out in December. Thankfully we 
haven't had an illness in the family. We have got 2 months 
savings to pay the mortgage for the next 2 months. What are we 
going to do with the boys? We have two boys." They usually send 
them to summer camp.
    We hugged each other, cried, and just sat there. And the 
next day, Knife River construction called and said report for 
work next Monday. We won a stimulus bid. And now, she said, if 
I can get 1,200 hours on the job, I will have my health 
insurance restored. My husband will have his restored. We are 
paying the mortgage out of our earnings. And yes the boys went 
to summer camp.
    There are thousands of these human interest stories all 
over America. Putting people back to work. And while I have 
been patient with some of the slowness of getting started, some 
of the difficulty that States have had, not the Federal, 
Federal funds all went out. States have dragged their feet on 
it. We have had a report card, and we have reported on those 
States, and we have called them to account. And within 30 days 
they turned around. They got projects out to bid and on the 
job. That is the way this program is supposed to work.
    I called the county engineers in my district together and I 
said, I expect you to get this program working. All of you have 
a job. You have got a payroll. There are 30,000 construction 
workers in Minnesota who don't. Your job is to put them to 
work. By damn, they got the message and they are doing it. And 
we are going to stay on this all the way through this program. 
That is the purpose of this hearing.
    And Mr. Cao, I understand your frustration. But those are 
100 percent Federal funds. They should be put out, they have 
been awarded under the disaster relief program, those projects, 
Lake Pontchartrain and the pumps and all the rest that you're 
talking about that is vital, there is no reason that work 
shouldn't be underway and we will work with you to make sure 
that that happens.
    I thank my colleagues for their indulgence for my 
enthusiasm this morning.
    Ms. Johnson. Thank you very much. The Chair recognizes, Mr. 
Brown.
    Dr. Ehlers.
    Mr. Ehlers. Thank you, Madam Chair. Just a quick question, 
I know this is not appropriate during an opening statement but 
I am very concerned about how much of the money is going to the 
Great Lakes and I hope you will cover that issue from both 
standpoints obviously. One concern, the Corps of Engineers 
project, is the pole-sized log which we have authorized, close 
to a decade ago in this Committee, and I understand that still 
not, no action is being taken out of the funds that have made 
been made available to start getting construction on that job. 
Michigan has the highest unemployment rate of any State of the 
Nation. I would think that it would be a high priority to steer 
money to Michigan. And there isa golden opportunity, a project 
waiting to go as far as I know. And I would hope the Corps 
would get to ball in that point and take action soon.
    Also, the Great Lakes issue has continued to affect a lot 
of people. And, I know we have some visitors here from Arizona 
and New Mexico who would love to have part of the Great Lakes, 
and would love to have the problems we are having. But clearly, 
the pollution problems that are there have to be addressed. And 
I would hope that some of the stimulus money is going there as 
well.
    And so, I hope the EPA, I know you have allocated 
additional funds for the Great Lakes, but I hope they 
accomplish two things, one is to improve the environment, and 
the other is to put people back to work, which is sorely needed 
in our State.
    So, since I probably won't be able to stay long enough to 
ask you those questions, I, at least, wanted to make those 
points. And if you wish to respond in writing, I would very 
much appreciate it. Thank you very much, and I yield back.
    Ms. Johnson. The Chair recognizes, Mr. Hare.
    Mr. Hare. Thank you, Madam Chair. I want to thank you and 
Ranking Member Boozman for holding this important briefing 
today, and I want to commend you for the sense of duty you have 
in leading this Committee in effective oversight of the 
implementation of this landmark legislation, the American 
Recovery and Reinvestment Act, and its funding of crucial water 
resources and infrastructure projects. As we all know, the 
current economic slowdown has caused the loss of many jobs and 
the downturn of many sectors. These factors and others have 
caused many economists to call the current situation the worst 
since the Great Depression.
    While we are still battling the causes and effects of the 
slowdown, the American Recovery and Reinvestment Act of 2009 
has provided crucial funds to strengthen the infrastructure and 
workforce of this Nation. Included in the Recovery Act is $13.5 
billion for existing Federal programs that invest in water 
infrastructure programs or provide assistance to States for 
such projects.
    Five Federal agencies and one commission have been provided 
with funds from the Recovery Act for water resources and 
infrastructure projects. U.S. Army Corps has received $4.6 
billion, the Bureau of Reclamation $1 billion, U.S. Department 
of Agriculture, natural resource conservation service, 
agricultural watershed program has received $340 million, and 
$220 million has been allocated for the Department of State's 
international and water boundary commissions levee and damn 
upgrades.
    As I speak, these Recovery Acts are delivering 
infrastructure improvements that are creating jobs and 
strengthening this economy. I am proud to say that my home 
State of Illinois is currently benefiting from the numerous 
Recovery Act investments. As of late August of this year, the 
State has been allocated $179 million from clean water State 
revolving fund, $79.5 million from the drinking water revolving 
fund, and these Recovery Act funds are improving the water 
infrastructure and resources of the 17th District of Illinois 
and will continue to invest even more in the economic 
development of west central Illinois and across this country.
    It is now upon the Subcommittee to ensure that these 
crucial Recovery Act funds are being used effectively. I look 
forward to hearing from our witnesses this morning. I would 
like to again thank Chairman Oberstar, our Chair and Ranking 
Member Boozman for holding this important and educational 
hearing. I look forward to our testimony. Thank you very much, 
Madam Chair, and I yield back.
    Ms. Johnson. Thank you very much. Mr. Hall.
    Mr. Hall. Thank you, Madam Chair and Chairman Oberstar for 
being here as well, and the Ranking Member for holding this 
hearing. Thanks to all of our witnesses on this distinguished 
panel today.
    And before I say anything else, I must say as a 
representative from New York, we don't have a witness from New 
York here, so perhaps Director Gritzuk from Arizona could help 
explain to our State authorities in New York how--I am sorry, 
in Arizona, how Arizona could have 88.8 percent of their clean 
water projects out to bid, whereas we in New York at this point 
only had 17.3 percent of these projects out to bid.
    This project, the stimulus dollars, the bill itself, and 
especially the clean water revolving loan fund, was intended to 
create jobs as well as to clean up our water. And this is not a 
time to take your time with contracting processes. We should 
get these jobs started.
    I have seen in the last year the requests to my offices in 
the district go to well more than the majority water requests 
from the 43 municipalities I represent, either problems with 
wastewater facilities or drinking water facilities and drinking 
water quality.
    I am also concerned that we see a more robust investment in 
renewable sources of energy that do not emit CO2 and that 
increase our energy efficiency, an issue I pursued since coming 
to Congress.
    When we passed the Recovery Act last winter, I was pleased 
to see the green reserve as part of the clean water and safe 
drinking water State revolving loan funds. The eligible 
activities under this section include allowing water utilities 
and local governments to invest in energy efficiency upgrades. 
I am pleased that in my district, the city of Beacon, will use 
recovery funds to install 400 noise logging leak detectors 
along 60 miles of distribution mains saving energy and water. 
These will help the city to identify and reduce their losses of 
water and save the energy that is required to run pumps.
    In Duchess County, the county will use Recovery Act funds 
to redirect storm water to bioretention and filtration areas 
from interior roads and parking lots that would otherwise just 
run off into storm drains and cause flash flooding, which we 
have experienced more and more of in recent years.
    At the Beakman and east Fishkill town halls, projects like 
this are being done to reduce storm water impacts to the 
Fishkill Creek, which is flooded. By the way, the Corps of 
Engineers is doing a study on that and the other creeks in 
Duchess County to see what can be done to prevent these small 
but quick rain events resulting in flash floods. So I am 
curious as to how many of the projects are that funded under 
the SRF Green reserve were directly related to energy 
efficiency as well as water efficiency and how those projects 
benefit clean water and increase the safety of our drinking 
water in the communities I represent.
    I look forward to your testimony, and especially look 
forward to hearing from Arizona as the Number 3 State as how 
they could instruct New York, which is ranked number 36 in 
terms of the speed with which we have gotten these funds out, 
put people to work and started to fix our drinking water 
problems. I yield back.
    Ms. Johnson. Thank you very much. We will now go to our 
witnesses. We have one panel, the Honorable Jo-Ellen Darcy, 
assistant secretary of the Army for Civil Works, U.S. Corps of 
Engineers of Washington, Ms. Nanci Gelb, deputy director, 
Office of Ground Water and Drinking Water, Office of Water, 
U.S. Environmental Protection Agency, Washington, Secretary 
John Hanger, Pennsylvania Department of Environmental 
Protection, Harrisburg, Pennsylvania; Mayor L. Ray Nunley, City 
of Ruidoso, Ruidoso, New Mexico, and Mr. Michael Gritzuk, 
director of the Pima County Regional Wastewater Reclamation 
Department, Tucson, Arizona.

 TESTIMONY OF HON. JO-ELLEN DARCY, ASSISTANT SECRETARY OF THE 
  ARMY FOR CIVIL WORKS, U.S. CORPS OF ENGINEERS; NANCI GELB, 
  DEPUTY DIRECTOR, OFFICE OF GROUND WATER AND DRINKING WATER, 
OFFICE OF WATER, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; 
SECRETARY JOHN HANGER, PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL 
PROTECTION; MAYOR L. RAY NUNLEY, CITY OF RUIDOSO, RUIDOSO, NEW 
  MEXICO; AND MICHAEL GRITZUK, DIRECTOR, PIMA COUNTY REGIONAL 
               WASTEWATER RECLAMATION DEPARTMENT

    Ms. Johnson. You will be recognized in the order which your 
names were called. And I now recognize Secretary Darcy.
    Ms. Darcy. Thank you, Madam Chairwoman, Ranking Member 
Boozman, Chairman Oberstar and distinguished Members of the 
Subcommittee. I am Jo-Ellen Darcy, the Assistant Secretary of 
the Army for Civil Works. Thank you for the opportunity to 
testify before the Subcommittee today to discuss the 
implementation of the civil works appropriations in the 
Recovery Act. I will summarize my statement here and ask that 
my full statement be entered into the record.
    The Recovery Act provides funds to meet the intent of the 
President and Congress to quickly put our fellow citizens to 
work and to help in the recovery of the Nation's economy. Using 
Recovery Act funds to carry out work on Corps of Engineers 
civil works projects already has begun to contribute to the 
Nation's economy, environment, safety and the quality of life. 
The Recovery Act provides funding to the Corps to accomplish 
these goals through the development and restoration of the 
Nation's water and related resources. There is also funding to 
support permitting activities for protection of the Nation's 
regulated waters and wetlands and cleanup of sites contaminated 
as a result of the Nation's early efforts to develop atomic 
weapons.
    Total Recovery Act funding of $4.6 billion for civil works 
is provided in six accounts. We have $2.075 billion for our 
Operation and Maintenance account, $2 billion in the 
Construction account, $375 million in the Mississippi River and 
Tributaries account, $25 million in the Investigations account, 
$25 million in our Regulatory account and $100 million in the 
Formerly Utilized Sites Remedial Action Program.
    The Corps is following the Recovery Act's general principle 
to manage and expend funds to achieve the Act's stated 
purposes, including commencing expenditures and activities as 
quickly as possible consistent with prudent management and 
consistent with the President's direction to agencies to ensure 
that Recovery Act funds are spent responsibly and transparently 
and that projects are selected on merit-based principles.
    Nearly all of the $4.6 billion appropriated for civil works 
has been identified for specific civil works projects and 
activities. As of October 30, 2009, and this number I am going 
to give you, is updated from my submitted testimony because 
that was the September 30th number, but this is the October 
30th number, the financial obligations total $2.38 billion 
which is nearly 52 percent of Recovery Act funds available. As 
of that same date, outlays had risen to $428 million.
    There are 731 civil works projects with Recovery Act funded 
work underway across 49 States and in Puerto Rico and here in 
Washington, DC.
    Eight recovery projects have been completed to date, 
including the navigation channel for the Oakland Harbor 
Deepening Project in California.
    Under the environmental infrastructure program, 50 project 
partnership agreements have been executed around the country 
for projects with a total Federal cost of $66.3 million. 
Seventy-five percent of all Recovery Act contract actions have 
been awarded to small businesses. Of the $2 billion in 
contracts awarded, 48 percent of the total dollar value was 
awarded to small businesses.
    In addition, larger companies receiving civil works 
contracts are encouraged to hire local small business as 
subcontractors.
    In addition to selecting civil works projects that will 
produce long-term benefits to receive Recovery Act funding, 
projects were selected in part to maximize private sector 
employment impacts by achieving most work through contracts and 
by awarding the contracts in a short period of time.
    In the Civil Works program where the Corps contracts 
directly with private firms, the stimulus effects begin with 
the contract award. This is when the contractor begins to hire 
workers, order materials and equipment and take other steps to 
complete the work creating ripples through the economy. As a 
result, stimulus impacts on the Civil Works program are more 
closely related to obligation of Recovery Act funds primarily 
through contract awards rather than through the subsequent 
outlays which provide payments to contractors only for work 
they already have completed or for supplies and equipment they 
already have purchased.
    Overall, the investment of civil works Recovery Act funds 
will directly support approximately 50,000 jobs, although job 
impacts vary depending on the type of work. In addition to the 
direct jobs supports, these investments will support numerous 
indirect jobs in industries supplying material and equipment.
    Finally, additional jobs will be supported as the direct 
and indirect income from Corps contracts generates increased 
consumer spending.
    Just recently I spoke at the opening of a Recovery Act 
funded project, the Corps' first veterans curation project 
laboratory in Augusta, Georgia. The Augusta site is the first 
of three veterans curation project laboratories that the Corps 
will open with $3.5 million in Recovery Act funding. The labs 
are an innovative approach to supporting returning and disabled 
veterans of all branches of the military service with jobs and 
training in a variety of technical skills. At the same time, 
the labs will advance the curation of archeological and 
historic properties that have come into the Corps' possession 
over the years as a result of construction at its water project 
sites around the country. Veterans working at the three labs 
will be trained in computer, photographic and scanning 
technologies that will be applied to the rehabilitation of 
Corps archeological collections and their associated records. 
The technical skills learned at the labs also will be 
transferable to potential future jobs outside the labs, 
improving job opportunities for the veterans who work in these 
labs.
    I thank you, Madam Chairwoman, and Members of the 
Subcommittee for the opportunity to testify, and I would be 
happy to answer any of your questions.
    Ms. Johnson. Ms. Gelb.
    Ms. Gelb. Chairman Johnson, Ranking Member Boozman, 
Chairman Oberstar and distinguished Members of the 
Subcommittee, thank you for the opportunity to appear before 
you today to discuss the progress and accomplishments that the 
U.S. Environmental Protection Agency has made in the 
implementation of the American Recovery and Reinvestment Act of 
2009.
    I am here today instead of Craig Hooks EPA's senior 
accountable official for ARRA, who is home with the flu. My 
name is Nanci Gelb, and I am EPA's Office of Water, and I have 
served as the senior official for the Recovery Act overseeing 
the $6 billion provided to water infrastructure programs.
    The Recovery Act provided $7.22 billion for specific 
programs administered by EPA, the clean water State revolving 
fund, the drinking water State revolving fund, Superfund, 
Brownfields, underground storage tanks and the clean diesel 
programs. The majority of these funds totaling $4.7 billion are 
specified for programs under the jurisdiction of this 
Subcommittee, the clean water State revolving fund, Superfund 
and Brownfields.
    Since Mr. Hooks appeared at the Full Committee hearing in 
July, EPA has made progress and has had significant 
accomplishments in its implementation of the Recovery Act in 
distributing funding and in providing support and assistance to 
recipients working on Recovery Act funded projects.
    As you will see in the written testimony, we have several 
success stories to tell. We have obligated more than $7 billion 
over 99 percent of the $7.22 billion made available to EPA thus 
far, and many projects are well underway. As the Agency senior 
accountable official Mr. Hooks is responsible for meeting the 
Recovery Act's requirements for oversight, results and 
unprecedented transparency. And in this role, he leads a 
stimulus steering committee comprised of senior managers from 
across the agency to monitor Recovery Act implementation on a 
weekly basis.
    I am pleased to report that this committee has been 
successful in navigating a number of critical issues including 
providing guidance on Davis Bacon and Buy America requirements.
    To date, EPA has issued three national public interests and 
23 project specific Buy America waivers. We expect additional 
project-specific waiver requests in the coming months and will 
continue to closely monitor implementation of the Act.
    In addition to ensuring appropriate oversight and 
accountability, EPA has been proactive in providing assistance 
to States in Recovery Act implementation. For example, EPA's 
staff is actively involved in reviewing every State SRF program 
and have already visited 49 States to assess individual project 
status. We have also made EPA contractors support available to 
States in order to directly assist communities in need.
    Personally, Mr. Hooks and I have reached out to States to 
offer guidance and assistance in implementing the Recovery Act. 
Last month, he met with representatives from the National 
Governors Association to listen to their concerns about the 
challenges they face in accomplishing the goals of the Recovery 
Act. He also sent an e-mail to Recovery Act leads in each State 
regarding the funding requirements associated with the drinking 
water and clean water State revolving funds and offered 
assistance from EPA in answering their questions or in 
overcoming any issues in order that the States are able to meet 
the February 17, 2010, deadline.
    I have concern about the ability of some States to meet 
this deadline. Mr. Hooks and I have placed personal calls to 
officials in several States that appear to be facing challenges 
in meeting the deadline. During those calls, we explain the 
process for meeting the requirement and listen to their 
concerns.
    In addition, we have provided guidance and offered 
additional assistance to each State. We are working diligently 
to assist States in meeting the deadline in order to avoid 
having to reallocate funds. However we know that States are 
working hard to meet this deadline. The State of Minnesota 
provides an excellent example of States' efforts, Minnesota's 
public facilities authority and pollution control agency have 
worked aggressively and today have 88 percent of their 
available clean water State revolving funds under contract for 
construction equal to over $70 million. Construction has begun 
on 18 different projects around the State. This work not only 
with provide significant improvements to Minnesota's water 
infrastructure, but provides jobs for its citizens.
    Another challenge has been the requirement that States 
allocate 20 percent of their SRF dollars to promote the 
implementation of green infrastructure projects. These types of 
projects support the development of a green workforce and can 
provide long-term benefits that exceed those associated with 
traditional environmental infrastructure projects. To date, 14 
States have met this requirement totalling more than $355 
million. We further expect that the rest of the States will 
meet the requirements by February 17, 2010.
    We look forward to continuing to work with this 
Subcommittee, our Federal, State and tribal partners and 
members of the public as we continue to assist our State 
partners and other recipients to fulfill the goals of the 
Recovery Act in an efficient and timely manner. Thank you again 
for inviting EPA to testify here today, and I look forward to 
answering your questions.
    Ms. Johnson. Thank you very much.
    Mr. Hanger.
    Mr. Hanger. Thank you. Madam Chair. I appreciate the 
opportunity to appear before the Committee. Pennsylvania is 
certainly being buffeted by the economic storms that started in 
December 2007 and then took a turn with the worse with the 
Lehman bankruptcy that threatened a depression in September 15, 
2008. A lot of people in Pennsylvania are suffering. We have 
lost 200,000 jobs. Our unemployment rate is at 8.8 percent, 
which is actually a full point below the national unemployment 
rate, but again, a lot of Pennsylvanians are hurting and 
suffering through no fault of their own.
    One Pennsylvania company, USX, an icon of the U.S. economy, 
for example, went from 100 percent of capacity in the summer of 
2008 to 40 percent of capacity by December of 2008. Again, the 
people who work at USX had nothing to do with that tremendous 
loss of demand for their product and the thousands of people 
that suffered as a result.
    Pennsylvania, like virtually every State, has a substantial 
backlog of water and wastewater projects that need funding. Our 
infrastructure is aging and needs repair. And investing in 
water and sewer infrastructure creates so many wins that it is 
hard to count them all. Water and sewer investments puts people 
to work right now in manufacturing materials like concrete and 
steel, water and sewer investment requires engineering and 
other professional services, water and sewer investment 
requires construction work, and once completed, water and sewer 
investments creates facilities that then must be operated 24 
hours a day, 7 days per week and 365 days per year.
    ARRA specifically has specifically provided $220 million to 
Pennsylvania for drinking and wastewater infrastructure 
improvement projects that will help create more than 5,500 jobs 
throughout the Commonwealth. In addition, in July 2008, the 
Pennsylvania General Assembly provided $800 million for water 
and sewer investments and then the voters of Pennsylvania in 
November of 2008 approved another referendum of $400 million 
for further investment.
    In combination with the ARRA funding, Pennsylvania has 
already awarded funding for nearly 170 projects. We started 
doing that in April of 2008. The ARRA money with the State 
funds is producing an incredible range of good outcomes in 
Pennsylvania; $38.4 million for seven projects to eliminate 
direct, discharges of raw sewerage to our streams, $34 million 
to eliminate 1,216 malfunctioning on-lot systems, including a 
community in Adams County, where a $5.1 million loan is 
creating a new wastewater treatment plant; $179 million for 17 
projects to eliminate or reduce combined sewer overflows; $105 
million for 17 projects to reduce nutrients and sediments to 
the Chesapeake Bay, like the $5.9 million grant awarded in 
Huntington County to install improvements to the wastewater 
treatment plan that will reduce both nitrogen and phosphorus.
    In addition, the ARRA required 20 percent of all funds be 
directed to green infrastructure projects. We have already 
authorized 62 green infrastructure projects. These projects 
will save energy, 15 million kilowatt hours, $1.5 million of 
annual savings; it will save water, 1.5 million gallons of 
water, it will save reduce pollution 1.3 million pounds of 
nitrogen, 4 million pounds of phosphorus, reduce carbon 
emissions 36 million pounds of carbon emissions, it will plant 
29 miles of forested buffers to protect our rivers and so on.
    In summary, to date, Pennsylvania has put out to bid 85.8 
percent of the clean water State revolving fund, we are under 
contract 61.2 percent of all funds, and we have 48.8 percent of 
projects underway.
    The money that Federal taxpayers have paid is precious 
money, and Governor Rendell has made it very clear that it is 
our responsibility to make sure that every single cent do as 
much good as possible as quickly as possible. And that is what 
we are working on Pennsylvania every day. We understand that 
this is an opportunity on, in fact, invest in our future and 
deliver to our children and grandchildren valuable assets and 
not simply a debt. This is a real investment in the future of 
Pennsylvania and the future of the United States.
    We in Pennsylvania are very thankful to you, Madam 
Chairwoman, and to the Congress for making these funds 
available, and we are doing our very best to be good stewards 
of these funds. Thank you Madam Chairman.
    Ms. Johnson. Thank you very much.
    Mr. Nunley.
    Mr. Nunley. Madam Chairman, Members of the Subcommittee, 
distinguished Members of the House, thank you for inviting me 
here. I thank you for inviting me to come and be before you 
today.
    On behalf of the citizens of the Village Ruidoso and the 
city of Ruidoso Downs, I would like to thank you and your 
colleagues in the U.S. House for your assistance in securing 
approximately $6.6 million for the American Recovery and 
Reinvestment Act for construction of a new wastewater treatment 
plant. This issue of building this facility has dominated our 
lives in the upper Rondell Valley for a number of years, and I 
would like to say that we are now under construction.
    The following is a short discussion of this project and the 
challenges that we faced dealing with the issue. The project is 
intended to replace an existing regional wastewater treatment 
plant with a new facility that meets all of the requirements of 
our various stringent EPA NPDES permit. This facility currently 
provides services to the village of Ruidoso, the city of 
Ruidoso Downs and the Mescalero Arrow Apache Indian 
reservation.
    Mr. Nunley. I currently provide services to the Village of 
Ruidoso, the City of Ruidoso Downs and the Mescalero Apache 
Reservation. The current wastewater treatment plant is 
approximately 30 years old and has a limited capacity of .54 
million gallons per day. The proposed new plant will have a 
capacity of 2.5 million gallons per day in Phase I and an 
ultimate processing capacity of 3.75 million gallons per day in 
Phase II. Phase I is scheduled to be operational through 2015, 
Phase II through 2030.
    More importantly, the new plant will have a capacity to 
meet the EPA standards--very strict standards by the way--of .1 
milligrams per liter of phosphorous and 1.0 milligrams per 
liter of nitrogen. We are not aware of any other local 
government, State, or Federal jurisdiction that has both of 
these standards included in its NPDES permit. The plant is 
being built to those capacities in order to meet the nutrient 
requirements of the permit, as well as it being able to provide 
sewer service to the significant number of tourists and part-
time residents that visit during the summer months and other 
holiday times.
    As a result of two lawsuits, the village is required to 
finish construction by December 2010. And I would like to say 
that at this point, we are on time with our construction and we 
are on budget. Phase 1A is a sludge handling facility and was 
completed October 2009. Phase 1B is a filtration part of the 
treatment facility and is also under construction. And we also 
will have a UV operational piece of equipment at the end of the 
plant whenever it is finished.
    The total cost of the project will be 36 million. The cost 
is being borne by a total population of approximately 10,000 
permanent residents that can increase to over 35,000 on 
specific holidays and weekends.
    In order to meet this very stringent funding requirement to 
build a facility, the village and the city need to rely on a 
number of funding sources. The first major funding source was 
obtained in a series of grants from both EPA and the State of 
New Mexico appropriations, totaling about 8.5 million from both 
communities. The second funding source has been general 
obligation bonds in the amount of 12.6 million for Ruidoso and 
$500,000 for Ruidoso Downs. As a result, the total bonding 
capacity of each jurisdiction has now been completely utilized.
    The third funding source has been loans obtained through 
USDA in the amount of 8.7 million for Ruidoso and 1 million for 
Ruidoso Downs. The final component and most important component 
has been the $6.6 million allocated through the ARRA program.
    In order to repay these bonds and loans, the residents of 
the village of Ruidoso have added a wastewater fee that is 
dedicated to repayment. These fees are financially significant 
and represent approximately a 34 percent increase for a typical 
residential water and sewer bill. Given the general state of 
the economy, these additional fees are a burden to many of our 
residents. But we have also created 85 new jobs to date, going 
to about 150 when we are in full swing with the construction.
    This project included a number of issues which needed to be 
addressed in order for the project to be commenced. The first 
issue was completion of the actual design, the PER. The project 
initially was designed to address phosphorous only. And when we 
were about halfway complete through that engineering process, 
we got a note from EPA that we needed to also address our 
nitrogen standard. Both of these are very strict standards.
    The project included a number of issues which needed to be 
addressed in order for the project to be commenced. The first 
issue was completion of the actual design. The project 
initially was designed to address phosphorous only. And when 
design was--I read that already. I am sorry, Madam Chairman.
    Other issues included having to purchase a large portion of 
the site from the U.S. Forest Service. This action was 
unanticipated, but completed successfully within the 
construction time line needed to be in full cooperation and 
assistance of the Lincoln National Forest.
    While there are unforeseen problems, the project has 
created potential opportunities that may provide long-term 
solutions to water availability in this part of the Hondo 
Valley; namely, water reuse. In this type of program, effluent 
is intercepted along the main interceptor line via scalping 
plants. The solids are sent to the regional wastewater 
treatment plant and the grey water directed to a series of 
potential users and uses, including a recharge of our two 
lakes, aquifer recharge, irrigation of golf courses and other 
open spaces. This type of system will allow the village to use 
the same gallon of water multiple times versus single use that 
is in place now.
    This type of strategy also helps to minimize the impact of 
the current and any future NPDES permits by reducing the amount 
of effluent being piped into the river, the Ruidoso. Limiting 
outflows of the Ruidoso will make it easier to comply with 
these discharge standards. Eliminating flow would eliminate the 
need for a permit altogether.
    We, the village of Ruidoso and the City of Ruidoso Downs, 
would like to let the membership of the House of 
Representatives know how much the residents of the valley 
appreciate their assistance and support for the funding 
provided by the ARRA program. We also want to tell the 
membership that the residents here appreciate the value of 
water and its conservation and that we are working diligently 
to maximize the sustainability of its value to our communities.
    If anyone has any questions, they should feel free to call 
me. My number is on here. I will stand for questions today. And 
without reading any further, I would like to say that I 
appreciate, Mr. Oberstar, your exuberance. It was very good. 
And I want to tell you how much we all appreciate you down in 
southern New Mexico. Water is a priority down there. And if I 
had the ability to annex the Potomac, I would do it. Thank you 
very much.
    Ms. Johnson. Thank you very much.
    Mr. Gritzuk.
    Mr. Gritzuk. Chairwoman Johnson, Chairman Oberstar and 
Ranking Member Boozman and Members of the Subcommittee, thank 
you for your leadership and commitment to providing increased 
water infrastructure funding through the American Recovery and 
Reinvestment Act. It is a great pleasure for me to be here to 
testify on behalf of the benefits of this program to my utility 
and to our community of the funding that Congress and the 
administration provided by passing ARRA. It is also my pleasure 
to be testifying on behalf of the National Association of Clean 
Water Agencies.
    I would like to begin by thanking Chairman Oberstar, 
Chairwoman Johnson, and the Members of the Committee and the 
Subcommittee for their leadership in ensuring that the stimulus 
bill contained approximately $6 billion for the State revolving 
loan funds, 4 billion for the Clean Water Revolving Fund and 2 
billion for the Drinking Water Fund. So we thank you for that.
    As this Subcommittee know, according to the EPA, the CBO 
and GAO, the Nation's wastewater and water infrastructure faces 
a daunting funding gap of approximately $500 billion over the 
next 20 years. When discussions regarding a stimulus package 
started, NACWA performed a survey of its members, demonstrating 
that the nation's POTWs had approximately $17 billion in 
shovel-ready projects that would stimulate the economy and, at 
the same time, improve the Nation's environment.
    The need for funding was further underscored by the impacts 
to utilities from the most severe economic downturn since the 
Great Depression, impacts that are still resounding at my 
utility and utilities across the country.
    Given these challenges, funding from the ARRA that my 
department received has been very, very helpful to us. ARRA 
funding strongly supported our plant interconnect project, 
which is a key component of our regional optimization master 
plan, which primarily is a regulatory driven program. This 
project connects the department's two major water reclamation 
facilities for optimal utilization of treatment plant capacity 
and meets the wastewater needs or wastewater growth needs in 
Pima County through the year 2030. This is no small 
accomplishment, taking into account the fact that Pima County 
has grown by more than 50 percent since 1990.
    Funding provided by ARRA made it possible to move forward 
more expeditiously with this project that includes constructing 
5 miles of large-diameter intercepter sewer lines between the 
two treatment facilities. The project will greatly increase 
operation flexibility and will have a significant impact on the 
local economy while improving Pima County's wastewater 
infrastructure. In fact, the combination of the $8 million in 
low-interest loans and the $2 million in principal forgiveness 
provided by the ARRA will result in savings of over $3.2 
million in financing costs alone over the 15-year term of the 
loan, and will supplement an additional $33.1 million in 
funding that is expected to create approximately 170 to 200 
jobs.
    The additional subsidization and grant component of the 
stimulus bill, and grant funding more generally, constitutes 
sound national policy because it does not require local 
governments to assume new debt as part of the Federal program 
to stimulate the national economy. The stimulus funding is a 
welcome benefit in Pima County where we are experiencing a 
general unemployment rate of approximately 8.2 percent, an 
unemployment rate in the construction sector of nearly 17 
percent.
    While critics might point out that our project would have 
been completed over time without stimulus funding, which is 
true, immediate funding contributed to the benefit of increased 
employment for one of the hardest-hit unemployment areas of the 
Nation. In addition, the ARRA funding is helping Pima County to 
put municipal dollars that it saved towards other water quality 
projects that would have otherwise been delayed, adding 
additional economic and environmental benefits to our 
communities.
    States are doing everything they can today to get the money 
out quickly. But it is critical that these efforts be guided by 
the goals of job creation and shovel readiness rather than just 
on their preexisting priority criteria or single indicators 
such as affordability and median household income.
    In conclusion, there is little doubt that the investments 
provided by the ARRA were a good first step in reversing the 
years of declining Federal investment in our Nation's water 
infrastructure. Again, I would like to thank this Subcommittee, 
the Committee for its leadership, and look forward to any 
questions you may have. Thank you.
    Ms. Johnson. Thank you very much.
    We will start the first round of questions. I would like to 
say to the Members that we are looking forward to four votes 
coming up in the next 15 minutes or so. So we might want to 
speed up our questions so we won't have to have our witnesses 
wait so long.
    I have a question for Ms. Gelb, as well as Secretary 
Hanger. According to information that has been provided to the 
Committee by the States, there is a wide range of success among 
States in getting Recovery Act funding out of the door and 
getting the projects underway.
    In the State of Pennsylvania, for example, over 80 percent 
of the State Revolving Loan Fund projects are out for bid, and 
almost 50 percent out for contract, and yet in my own State of 
Texas, only 4 percent of the projects designated for the 
revolving fund monies are underway. And, similarly, in the home 
State of our Ranking Member, Mr. Boozman, I understand no 
projects are yet underway.
    I applaud EPA's role in making sure that these funds move; 
however, I would like your opinion on why the States are having 
such a difficult time. I don't know if it is the red tape or 
whatever. Your testimony notes that EPA has offered assistance 
to States to help get the money out of the door and States 
willing to utilize--are the States willing to utilize your 
assistance?
    Ms. Gelb. Thank you, Madam Chair. Yes, the States have 
assisted in a number of ways through Webcasts, through State 
visits and a number of opportunities. What we are learning is 
that the numbers may not tell the entire story. The States are 
in various levels of progress. The numbers right now, while we 
are not seeing much success in the number, what we are learning 
from the individual State visits and from my personal calls to 
States is that many States are in the last months of reviewing 
and opening bids. And as soon as those bids are opened, they 
will be putting their dollars under assistance, dollars in 
contract. And they assure us that they will be able to meet the 
February 17th deadline.
    Mr. Hanger. Madam Chairwoman, in Pennsylvania--I really can 
only speak to Pennsylvania. I have no knowledge about what is 
going on in other States. But in Pennsylvania, we have, I 
think, a number of things that have enabled us to move the 
money through what is and should be a serious process.
    I mean, this is a lot of money, it is public money and it 
requires proper bidding processes, awarding processes and the 
like. But in Pennsylvania, we have institutions in place that 
have a lot of experience, moving water and wastewater projects. 
Every year we do, in a typical year, around $300 million of 
wastewater and water projects with State money. So we have an 
administrative infrastructure in place that is expert at moving 
projects.
    And certainly the stimulus money then was added to the 
normal course of business in Pennsylvania. And I think that is 
the main reason why Pennsylvania has been successful in getting 
a significant number of projects out to bid and under contract.
    The second reason is leadership. Governor Rendell has made 
it very, very clear that Pennsylvania State government, with 
the Clean Water State Revolving Fund, must do everything that 
we can to move this money. It is very precious money. We have a 
lot of Pennsylvanians hurting through no fault of their own. 
And we also have aging infrastructure. And this is actually a 
tremendous opportunity to put people to work in our steel and 
concrete industries and our construction industries and, at the 
same time, make a significant dent in the backlog of aging 
infrastructure and pass to our children, again, valuable assets 
that are going to continue to deliver tremendous public health, 
environmental, and economic benefits for decades, decades, long 
after this economic crisis is overcome. And we will overcome 
this economic crisis in part because of the Recovery Act.
    Ms. Johnson. Thank you very much.
    Mr. Boozman.
    Mr. Boozman. Madam Chair, I would yield--let Mr. Brown go 
ahead and proceed.
    Mr. Brown of South Carolina. I thank my friend for 
yielding.
    Madam Secretary Darcy, I guess my question would to be you. 
I represent the coast of South Carolina which has two ports, 
Charleston and also Georgetown. And we met with Secretary 
Woodley during the stimulus debate and we were able to get 
funding for the Charleston Harbor, which is a pretty viable 
port, but we weren't able to get any money for Georgetown. And 
Georgetown is a rural--part of Beaufort County, although it--
part of South Carolina, but it is a vital port.
    We are in a Catch-22 now. In fact, we just had a discussion 
with the port yesterday, the Governor who came down. And the 
headlines in the news was "Port Needs 8.3 Million Plus to 
Dredge Channel." Governor Sanford and this port discussed 
funding.
    The problem we have had with Georgetown is that it is one 
of those ports that it is almost a Catch-22. We don't have 
enough tonnage being shipped out to equal a million-ton 
requirement, I guess, for some of the other ports. But we are 
in a situation--and I would like to read you a quote from this 
article that said, "The shipping channel needs more depth to 
handle large cargo ships asking to come to Georgetown, said 
port director, David Schronce. The depth in the channel in some 
areas is now only 22 feet. Carolina Pacific, a company that 
makes wood chip briquettes is using smaller ships to get into 
the Georgetown until they can get the depth they need to grow 
their tonnage. Schronce said four companies have pending 
contracts to ship their products out of the Port of Georgetown, 
could mean about 4.4 million tons of cargo."
    We are dealing with a community that has probably got 
almost 13 percent unemployment and the port is certainly the 
nucleus that drives the economy for that community. Is there 
anything that we could do to be able to round up some funding 
for that port so that we could create those jobs that are so 
necessary for that community?
    Ms. Darcy. Congressman, I am not familiar with the 
specifics of your particular port, but I expect that in 
evaluating the projects for the ARRA funding, it probably did 
not meet the criteria that we had to use in order to select 
those. But I will look further into it for you.
    Mr. Brown of South Carolina. I appreciate that because I 
recognize we don't have the tonnage in order to qualify for the 
funding. But if we don't get to the 27 feet back again, we 
won't be able to attract those industries that come in. And 
could you tell me whether the Corps made the decision or OMB 
made the decision not to fund that port?
    Ms. Darcy. Sir, it would have been a Corps decision, but we 
followed the criteria that were given administration-wide on 
the kinds of projects that would qualify under the law.
    Mr. Brown of South Carolina. I would certainly appreciate 
you looking into it, because it is like the chicken or the egg. 
If we don't have the deep--the depth there, the ships can't 
come and the jobs can't be created. So I certainly appreciate 
you looking into that for us.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Brown of South Carolina. Yes, sir.
    Mr. Oberstar. Following up on the gentleman's question, I 
would like to know whether this project, the channel deepening, 
is an already authorized project. Do you know that offhand?
    Ms. Darcy. I don't. I don't know offhand. I don't want to 
tell you the wrong answer.
    Mr. Oberstar. If it is an authorized project and it is not 
at the depth authorized in current law, then it could have been 
eligible for funding under the Recovery Act. If not, it would 
have been considered a new start, and new starts were 
eliminated from consideration in the Recovery Act. The Recovery 
Act was to fund only those that had already been authorized and 
underway. So I will work with the gentleman on this issue, and 
with the Corps, and we will get to the bottom of his concern.
    Mr. Brown of South Carolina. I thank the Chairman. The only 
thing I have to support it is this article from the newspaper 
that said, if dredging is done, the shipping channel could be 
brought back to the required depth of 27 feet. So I would 
assume this has got an authorized depth of 27 feet. So I assume 
it would not be a new start.
    Thank you, sir. And thank you, ma'am, too.
    Ms. Johnson. Thank you very much. We might have to recess 
and return because of the number of questions. Congresswoman 
Edwards.
    Ms. Edwards. Thank you, Madam Chairwoman. I wasn't certain 
I would get in. My question actually goes to Ms. Gelb, and it 
is actually about the green reserve. And I am curious as to 
whether in the green reserve that you are familiar with a 
letter that was actually sent to the EPA by a coalition of 
environmental groups asking about some of the criteria around 
the use of the funding and selection and prioritization of the 
projects.
    So I wonder if you could tell me whether you have some 
thoughts about the criteria for ranking green-reserve projects 
and the financing of stand-alone green projects, because they 
might not be eligible, then, to receive full financing under 
the Recovery Act.
    And also one of the questions goes to using the water 
efficiency as a priority for actual water savings rather than 
some of the projects which don't seem to prioritize water 
efficiency.
    And then lastly, linking energy efficiency directly to the 
goal of clean water. So for example, not funding projects like 
getting sort of efficient vehicles as part of the funding, 
because funding is so limited for these kinds of projects. And 
I wonder if you could just speak to this.
    Ms. Gelb. Thank you, Congresswoman. Actually I am not sure 
which letter you are referring to. But if I could talk for just 
a minute about what EPA is doing to ensure that the green 
project reserve is used as intended, the ARRA, as you know, 
requires at least 20 percent of each capitalization grant be 
spent on green infrastructure projects, so long as there is 
sufficient applications and we are assured that most States are 
able to do that part. Our goal is for all States to utilize the 
funding and, as such, we have set out clear definitions in our 
March 2nd program guidance of what energy efficiency, water 
efficiency, green infrastructure and innovative projects are.
    Additionally, we have issued guidance explaining the type 
of solicitation that is needed in order to meet our 
requirements in the event that a State has difficulty finding 
such projects. Our guidance provides detailed examples of 
projects that meet the definitions, and we are working with 
States when there are any questions about particular projects 
on the list. Only the portion of a project that actually meets 
the definition counts toward the 20 percent reserve. If a 
project is not on the categorical list that we have, the State 
must present a business case that would explain how the program 
meets one of our goals. And then we review that business case, 
in concert with the State, in order to count it towards the 20 
percent requirement.
    We know this is a new business model. As such, are working 
with the States and hoping to make it a success. As I said, I 
am not familiar with the particular letter you are referring 
to, but would be glad to look into that and get back to you.
    Ms. Edwards. That would be great. What I would like to do 
is actually, Madam Chairwoman, submit for the record--it is a 
letter dated September 25th that actually salutes you for what 
you are doing on the fund but looks into----
    Ms. Johnson. We need to have a recess and return, so we can 
all get over in time to vote. You will be recognized as soon as 
we----
    Ms. Edwards. Thank you. But I would like to submit this for 
the record. Thank you. Then you will have it.
    [The information follows:]

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    Mr. Teague. [presiding.] Okay. We will go ahead and 
reconvene our meeting here. Some people may still be coming 
back from voting and come in, and some have other meetings to 
go to. So we will just get right in here.
    I would like to ask a couple of questions, if I could, of 
Mayor Nunley from Ruidoso. A couple of questions. How many jobs 
do you think were created and/or saved with the project for 
Ruidoso and Ruidoso Downs? And also where do you think that the 
project of the wastewater treatment facility would be if it 
wasn't for the ARRA funds?
    Mr. Nunley. There are approximately 75 people working down 
there now that are new jobs. When we get into full swing with 
the project and they start putting the filters in and building 
a building for the filters and everything, I think probably 
around 125 to 150 jobs would be tops.
    Your second question?
    Mr. Teague. Yes. The second question is where would the 
project be if it had not been for the ARRA funds?
    Mr. Nunley. We were prepared to borrow the money from the 
environment department, New Mexico Environment Department. And 
it was a little out of our price range, but we were going to 
have to do it anyway. And the stimulus package kind of saved 
our bacon, to tell you the truth, Mr. Teague. I thank all of 
you for that.
    Mr. Teague. Thank you. And I also thank you for the 
testimony you have given us here today. I think it is 
encouraging to everybody on this Committee to know that we are 
having some success with these programs and they are working.
    I did have one more question for Ms. Gelb. As you know, the 
outlays are a lagging indicator of the water infrastructure 
construction. The Clean Water Revolving Funds operate on a 
reimbursement basis. But do you have an idea of how we are 
progressing with that and what some of the results are?
    Ms. Gelb. Thank you, Congressman. Yes, as you said, outlays 
are an indicator to date. The clean water SRF has issued $170 
million in outlays. But again, that is not necessarily our 
measure of success. What we are seeing is that as of the end of 
October, there are 797 assistance agreements executed with 
States for about $1.7 billion. We have 740 million, or 20 
percent, of our projects totally under contract. So we are 
seeing some success as interim milestones.
    Mr. Teague. Thank you. And now I will turn to the Ranking 
Member, Mr. Boozman.
    Mr. Boozman. Thank you very much. I guess the question I 
have, Ms. Gelb, is we have had a sheet and we have heard 
testimony that some of the States are having trouble spending 
their money and things. Can you help us understand some of the 
problems that they are having in that regard? And perhaps 
whatever solutions that we can come up with to help our States 
in getting this money obligated and spent? Yes, ma'am.
    Ms. Gelb. Thank you. Yes. There are some new requirements 
within ARRA that our State programs were not as familiar with, 
as I think you know. While the States may have been familiar 
with Davis-Bacon, it has not been applicable to this program 
before. So this is a new requirement that the States had to 
learned.
    Similarly, Buy America requirements were new to the 
program, new to us here in headquarters, and we were able to 
work with the States, providing them information and guidance 
and assistance through Webcasts, through personal site visits 
and training. That is just an example of some of the new 
requirements in a very longstanding program.
    The States, as I think was mentioned earlier, have a lot of 
history and a lot of success with the State Revolving Fund 
programs. But with these new requirements, it did take a little 
bit of a learning curve.
    Mr. Boozman. At EPA, how many jobs do you feel like have 
been created?
    Ms. Gelb. Job reporting was done through recovery.gov. 
States had to provide their information by October 10th. We 
were analyzing that information for a couple of weeks after 
that period of time. We have preliminary numbers that we have 
not scrubbed yet and they are certainly not broken down by 
programs. So I am not exactly sure yet what the State Revolving 
funds would be. And I would be happy to get back to you when we 
have that information. It should be shortly.
    Mr. Boozman. Mr. Nunley, why such a strict permit on your 
community?
    Mr. Nunley. I cannot answer that definitively.
    Mr. Boozman. You would be in one of the top 17, 18--I guess 
really one of the most stringent--with both of the requirements 
in the country.
    Mr. Nunley. We have been told that we are the most 
stringent in the country.
    Mr. Boozman. So you have the increased cost of putting the 
system in. And then how much more will your operating costs be 
as a result?
    Mr. Nunley. About double.
    Mr. Boozman. So you have got those ongoing costs that are 
going to----
    Mr. Nunley. Yes. We started out with just phosphorous, and 
that was a pretty low limit at .1, and then halfway through the 
project, when we were engineering the thing, they said, no, we 
want nitrogen, too, at 1 milligram per liter. And that just 
doubled it, because all the technology and all the engineering 
that is available today says that we can't reach that limb. But 
we are going to make every effort to get there and do that.
    And the Environment Department in New Mexico is working 
with us on that issue. And I cannot tell you that they said we 
are going to work with you if you don't meet that limit, but 
they have indicated that they are going to do everything they 
can to see that we meet it; and if we don't meet it, they are 
going to work with us on that issue. So it is difficult, but we 
are going to try to do it.
    It is hard. I am concerned about the very, very stringent 
limits like that that appear to be coming more and more--that 
is a tremendous unfunded mandate, and you are blessed you are 
able to benefit from the stimulus and some of this other 
funding. The reality, though, is that you would have had to do 
that anyway, and the cost to your taxpayers would have had to 
have borne all of that which in some cases--well, you would an 
great example. It would be questionable as to if you could 
actually do that with your ratepayers.
    Mr. Nunley. We have been told by our engineer, who is a 
very good firm, that the normal limits for nitrogen is about 10 
milligrams per liter and they are putting us at 1. And I think 
part of the problem is that the previous administration, maybe 
the previous two administrations, tried to pick a fight with 
EPA and tell them they were unreasonable and they were fighting 
with the wrong people.
    And when I got elected mayor--I have been in politics for 
18 years in Ruidoso, but just 4 years as mayor. But when I got 
elected mayor, I knew right away that I had to mend some fences 
and get this thing on the road because we were under a court 
order to finish it up.
    Mr. Boozman. One last question, Ms. Darcy. Can you give us 
an estimate on the jobs created? And, again, I do--Mr. Oberstar 
and I were talking on the way over here about the bridge that 
was completed in record time after it failed and things. That 
was due to agencies cooperating together instead of having an 
adversarial relationship or just not really having a 
relationship.
    So I do appreciate the work that the Corps is doing with 
USDA in Arkansas, and it appears that you are doing a good job 
of doing that throughout the country. Do you have an estimate 
on job creation?
    Ms. Darcy. I think by the end of the entire ARRA program, 
it is estimated that we would probably have 50,000 jobs as a 
result of the 4.6 billion that the Corps was appropriated.
    Mr. Boozman. Very good. Do you have similar problems--I 
asked Ms. Gelb about the end users not being able to spend the 
money and stuff. Are we having similar problems like that 
within the Corps structure?
    Ms. Darcy. No, sir. What we do is obligate the money and 
give it to contractors right at the beginning of the contract. 
So we don't give grants or loans, as the EPA and some other 
agencies do. We do direct contracting.
    Mr. Boozman. Good. Thank you, Mr. Chair.
    Mr. Teague. Next I would ask Congresswoman Napolitano from 
California.
    Mrs. Napolitano. Thank you, Mr. Chairman. And I am very 
glad that we have today's meeting. So thank you for this very 
interesting conversation on some of our more important 
projects.
    For Ms. Gelb--and I have already spoken to you briefly 
because California's environmental review did not--many of the 
projects didn't receive the funds because they didn't have the 
NEPA clearance. Well, California's CEQAis more stringent that 
NEPA, and we have been trying to figure out how do we allow 
those projects to be certified, because they are, in fact, more 
stringent that our own Federal requirements.
    And I would love to have--I know you don't have an answer. 
If you would look at it, I would love to have you either come 
back to some of us that have an interest in it.
    Ms. Gelb. Thank you, Congresswoman. I would be happy to do 
that.
    Mrs. Napolitano. Thank you. And I can tell you that I have 
been pleased to work with the Western Region for at least 15 
years, and they were the best. So I really thank the agency for 
all the work they have done.
    I would like to have an idea if there is any way of being 
able to find out if you have a backlog on some of these 
contaminated sites, because we seem to find them and then, all 
of the sudden, we have to go through a whole sequencing to be 
able to clear them up.
    My concern is for water contamination because we have the 
drought in the west--Western States for that matter--and any 
water that we have that we are able to identify and be able to 
see how it stands, we need to be able to clean it up and find 
the PRPs, those potential responsible parties, so that we can 
be able to assure our communities that they may have additional 
sources of water, because there is no new water.
    Ms. Gelb. Congresswoman, I would be happy to get back to 
you on that issue as well. There are a number of issues 
associated with that, and I think it would be helpful to have a 
fuller answer. Thank you.
    Mrs. Napolitano. I really appreciate it.And, Ms. Darcy, I 
really have a great respect for the Army Corps. We have worked 
with them on several projects in my area and my surrounding 
community. And currently as I have mentioned, we are working on 
the Whittier Narrows Dam that the Corps is hoping to be able to 
do an update of a feasibility study.
    The water replenishment district, the local water 
replenishment district is offering to pay for an interim 
deviation report for 3 years to allow us to get the funding to 
be able to do the feasibility study, a full study. Again, a 
renewal of the study. Again, we were able to get 134,000 this 
budget year. We hope to get the rest of it next year. And we 
would like to be able to see how we can get somebody to say yes 
to these people who are offering to pay for this interim study 
so the Corps can then continue their work. And that is 
something that I would very much like to see results on that. I 
look forward to responding to you.
    Mrs. Napolitano. Thank you so very much.
    And then we can get back to Ms. Gelb on groundwater and 
drinking water. Again, the major focus is to be able to 
identify those areas, and if there is a way to be able to have 
EPA relate to us so we can then work with all the other water 
agencies--the Committees or Subcommittees that have water 
jurisdiction--because we need to start looking in the future 
about being able to identify those bodies of water that we need 
to be sure are cleaned up, and that we help our communities 
prepare for oncoming drought that we know climate change is 
bringing upon us.
    Ms. Gelb. Thank you. And we will look forward to working 
with you further on that.
    Mrs. Napolitano. Thank you. The Clean Water State Revolving 
Fund, Ms. Gelb, operates on the reimbursable basis. What other 
ways can we track construction on these if some of those 
funds--since you don't outlay until the work has already been 
performed and the State seeks reimbursement? Are there any 
number of projects that have been put out to bid on contracts 
underway? Is there a better way to measure the progress?
    Ms. Gelb. Thank you. Yes. With two State Revolving Funds, 
the Clean Water State Revolving Fund and the Drinking Water 
State Revolving Fund, we were looking at ways to measure 
interim success for the States in advance of recovery.gov where 
the States would then provide information on a quarterly basis.
    We went out with a pilot program to collect information for 
both of those systems, and it allows us to assess progress with 
dollars and assistance agreements, dollars where--and projects 
where all contracts are executed, which is the lead indicator 
for us on whether the State is able to meet the February 17th 
deadline. It allows us to assess whether funding has been 
provided in projects for green infrastructure. And a number of 
other indicator measures that let us know the interim success 
of the program.
    Mrs. Napolitano. I am assuming it also helps you help those 
States that are lagging behind?
    Ms. Gelb. Absolutely. In fact, based on the information we 
received in our reporting system, which is updated on a very 
regular basis--I get weekly reports--we made contact with 14 
individual States over the last couple of weeks. Mr. Hooks and 
I personally made phone calls to the Governor's Offices of 14 
States to make sure they understood that EPA is there to help 
them with any issues or any concerns that they might have.
    We want to ensure that those States get over the finish 
line and we want to make sure they expend all of their 
dollars--get all of their dollars under contract by February 
17th.
    Mrs. Napolitano. Thank you, Mr. Chairman. And I would 
submit other questions for the record.
    Mr. Teague. Thank you, Congresswoman Napolitano.
    And at this time, one of the things that I have really come 
to appreciate my first year here is the knowledge and the 
insight of the next man that is going to speak, Chairman 
Oberstar.
    Mr. Oberstar. Thank you very much, Mr. Chairman. I 
understand that you have another obligation to attend to. So 
please feel free to leave at this time.
    Mayor Nunley, I heard your plaintiff appeal early on that 
caught Ms. Edwards quite by surprised, that you are looking to 
annex the Potomac River. I think there would probably be some 
objection out here. But I thought we might look for a lake in 
northern Minnesota that no one is using right now. Maybe we 
could loan it to you.
    Mr. Nunley. It is my plan to just annex the right-of-way, 
the road coming up here, and then we can take the lake in when 
we get there. That would be fine.
    Mr. Oberstar. We want to help you out, because I know New 
Mexico is a little short on those things, water. So is Arizona.
    Mr. Nunley. Can I put that in the paper when I get home, 
Mr. Oberstar?
    Mr. Oberstar. Ms. Darcy, the Corps typically, in the 
ordinary course of events on projects, holds funds back on--at 
the outset of a project until the project is completed. And I 
know that the Corps has done the same with the stimulus funds.
    Second, the bids are coming in about 25 percent, on 
average, lower than the final design estimates, not only for 
Corps but for clean water, drinking water, for the highway and 
transit projects as well. We are finding that these dollars are 
stretching farther than we anticipated because of economic 
conditions and a number of other factors we don't need to go 
into here.
    So the question I have is, does the Corps have a plan? Are 
you working on a plan for what you are going to do with those 
additional dollars?
    Ms. Darcy. Yes, sir. As you know, we had a list of 826 
projects that we anticipate spending our funds on. But as you 
rightfully point out, some of these contracts are coming in 
lower because of the current economic situation. So we are 
going to evaluate, probably on a monthly basis, what kinds of 
other projects might be able to now become eligible for those 
funds that we will have--not left over, but we will be 
expending in the next several months.
    Mr. Oberstar. So we can anticipate that sometime in January 
or February making a reassessment of where the budget or how 
the budget looks at that point, and go back to those 800--well, 
was it 826 at the start of this and you have committed to some 
4- or 500?
    Ms. Darcy. No, so far we have work on the ground ongoing at 
731.
    Mr. Oberstar. 731. Oh, sorry. I missed that.
    Ms. Darcy. We will be evaluating maybe even more quickly--I 
hope my staff doesn't tell me otherwise--more quickly than 2 or 
3 months from now. I think we will be constantly reevaluating 
what money we do have, especially money that comes from 
contracts coming in under bid.
    Mr. Oberstar. Then when we have our December hearing on 
stimulus, we are doing it every 30 days.
    Ms. Darcy. I am putting it on the calendar, sir.
    Mr. Oberstar. And it is working. I don't know about the 
rest of the stimulus, but I know the part that is under the 
jurisdiction of this Committee we can account for. We know 
where the dollars are going, where the projects are, how many 
jobs have been created, and what the payrolls are. So we will 
look forward to seeing that.
    I want to come back to the issue Mr. Brown raised; it is 
not because he raised it as such, but because it represents a 
category of issues that I have heard from colleagues on the 
floor. You have Georgetown Harbor with an authorized depth of 
27 feet; it is not operating at that depth. What were the 
considerations that led to not awarding funds for channel 
improvement in Georgetown Harbor?
    Ms. Darcy. Sir, my understanding is that there were many, 
many harbors, that were in the same situation as Georgetown 
Harbor, meaning that they had not received operation and 
maintenance funding in recent years. And Georgetown Harbor was, 
I think, one of many that, when we got through our list of the 
amount of money we had for operation and maintenance, we had 
many more projects than we had money.
    Mr. Oberstar. So there was a triage of sorts, not in the 
medical sense, but you had to make decisions. What were the 
factors and why did Georgetown and others fall out?
    Ms. Darcy. As I say, I think we had a list of projects that 
were eligible for the operation of maintenance funding----
    Mr. Oberstar. Meaning ready to go under the terms of the 
Recovery Act? What does "ready to go" mean in Corps terms?
    Ms. Darcy. It means that they were able to execute a 
contract in a timely manner to do the----
    Mr. Oberstar. Within 120 days?
    Ms. Darcy. I believe it was 90. I am not sure if it was 
120.
    Mr. Oberstar. It was 90 days when it left this Committee. 
It got extended when it got to 120 days in conference; 120 days 
to obligate funds. That was not my first preference. I wanted 
these projects under contract. So you will get back to us with 
a response?
    Ms. Darcy. Yes. I think the case here is that we had a 
number of projects that were eligible and in going down the 
list we had X amount of dollars, for--not enough dollars for as 
many projects that we had.
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    Mr. Oberstar. That is right. If the House bill had 
prevailed, we would have a whole lot more. And while--I am 
sorry to repeat myself for those who heard it before, but I 
think it was a mistake to put the tax cut in this recovery 
package, although economists with a broader view of the picture 
are saying, oh, yes, that has helped put money in people's 
pockets. But I have never received a letter, an e-mail, or a 
handshake from anyone-- Mr. Boozman, did you?
    Mr. Boozman. No.
    Mr. Oberstar. You didn't get any thank-yous either.
    Mr. Boozman. But that is generally the case.
    Mr. Oberstar. No, no, no. People, when they see the road 
built, they see the street dug up and the sewer going in, they 
say, gee, that is great, thank you; we are seeing results, we 
are not seeing any results from that thing, the tax cut thing.
    I have been told to keep quiet, the President wanted a 
campaign, he won the election, he gets what he asked for. So, 
all right.
    Reconnaissance. Can you tell us how many reconnaissance 
projects have been--how much reconnaissance work has been 
funded with the Recovery Act?
    Ms. Darcy. The Recovery Act dollars, I don't know offhand.
    Mr. Oberstar. But it is an eligible item, isn't it?
    Ms. Darcy. I believe it was, yes.
    Mr. Oberstar. Would you get back to the Committee?
    Ms. Darcy. As long as it wasn't new, right?
    Mr. Oberstar. Yes. If there were a levee that is way 
outdated and really needs to be restored, all it needed was 
reconnaissance work done to evaluate the condition, potential 
costs, potential benefits that--just get back to us with that.
    Ms. Darcy. I will, sir.
    Mr. Oberstar. There are a number of those that Members have 
asked about now that the Recovery Act is maturing and questions 
are being raised. So I would like to have that information.
    Ms. Darcy. Yes sir.
    Mr. Oberstar. Ms. Gelb, thank you very much for being here. 
Didn't you apologize for somebody, some senior person who 
couldn't be here?
    Ms. Gelb. Mr. Hooks is home with the flu. And I think we 
are all grateful----
    Mr. Oberstar. We don't want him in the room with that. You 
are a wonderful representative for EPA. Thank you.
    We have, if I recall the numbers rightly from my 
presentation at the Rules Committee yesterday on the security 
for chemicals used in wastewater treatment facilities, 600,000 
miles of sanitary sewer, 200,000 miles of storm sewer 
nationwide; 16,000 publicly owned treatment works.
    How much of that mileage and how many of these treatment 
works are being touched by Recovery Act requests from the 
States? And I ask that because EPA doesn't make those 
determinations. EPA sends the money out to the States, they do 
the implementing. All this stuff about paperwork and delay, red 
tape--there was no red tape. The money all went out.
    I read those numbers off at the beginning of this hearing. 
Those projects, the dollars went out to the States. They were 
notified, and then it was up to them to act on it. Did you have 
any--do you keep track of how much of this work is being 
addressed?
    Ms. Gelb. Sir, no. Mr. Chairman, I don't think that we have 
on a national level an accumulation of the number of miles that 
is being funded through----
    Mr. Oberstar. That may not be the best way, but it is one 
way of evaluating. So it would be good to ask your State 
agencies to tell us what work is being--how many miles are you 
addressing.
    Ms. Gelb. We will see what information we can get and then 
we will get back to you on that.
    Mr. Oberstar. It would be interesting to address that 
issue. We passed legislation in the 110th Congress and again in 
this Congress to reauthorize the State Revolving Loan Fund 
program at $15-plus billion dollars. It hadn't been 
reauthorized in 13 years. At that time in the course of the 
hearings leading up to the bill, we had testimony about the 
vast number of treatment works that are well over 40 years old, 
those that were built in the immediate aftermath of the Clean 
Water Act of 1972. When I was sitting down there at that staff 
table, an administrator, crafting the Clean Water Act of 1927, 
we had $6 billion a year in grants, 80 percent Federal grants; 
built a lot of treatment works, the big ones for the big 
metropolitan areas.
    And then Ronald Reagan came in in 1980, and in his budget 
in 1981 in the Reconciliation Act, converted the $6 billion--
cut 4 billion out and converted the remaining $2 billion to a 
State Revolving Loan fund, which we have today.
    That was right at the time when the program was to shift 
from 70 percent of the money going to the big metropolitan 
areas--Mayor Nunley, Mr. Gritzuk--to smaller jurisdictions, 
those under 50,000 populations, smaller tax base, less revenue 
to address their wastewater needs. And right at that time, 
shifted the burden of cost to smaller jurisdictions and then 
didn't fully fund the program. And we are way behind.
    Now, this stimulus money was to help us catch up on some of 
that work. How much of that work do you think we are catching 
up on?
    Ms. Gelb. Mr. Chairman, as you know, the gap in the clean 
water infrastructure program is quite extensive. We know that 
the ARRA funds were very successful in helping States meet some 
of their unmet need up until this point. As you mentioned 
earlier, many of the projects are coming in at a bid less than 
what had been anticipated, and so luckily the States have had 
deeper project lists on their intended use plans. They are able 
to go further along in meeting some of the need, being able to 
stretch their dollars a little bit further. How much further 
has yet to be seen. We are still working with the States on 
gathering that information. And in terms of how that addresses 
the gap, we would be happy to get back with you with a 
particular number later on.
    Mr. Oberstar. I want you to do a calculation for the 
Committee on the estimate of what--we know what the backlog is 
of POTWs, of sanitary sewer, storm sewer, combined sewer. And 
we have passed legislation to deal with it, but the Senate 
hasn't acted on it. It is like the dead letter office. You 
might as well land it on the Moon, and nothing happens because 
you have to have 60 votes to blow your nose over in that body. 
And the needs continue to grow.
    So I would like you to do an updated calculation of those 
facilities that are almost as old as I am, that need updating, 
the systems with combined sanitary and storm sewer that need to 
be separated. How much of that is being addressed in the 
funding and Recovery Act and how much more could be addressed 
if we have a second round, which I am working on doing that?
    Ms. Gelb. Thank you, sir. We will get back to you on your 
request.
    Mr. Oberstar. Now, we have had a request from the 
Associated General Contractors to submit a statement for the 
record, from the Water and Wastewater Equipment Manufacturers 
Association, and from the American Iron and Steel Institute to 
submit their statement for the record, which, without 
objection, we will do.
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    Mr. Oberstar. But the central issue raised in these two 
letters deals with the Buy America provision. And the equipment 
manufacturers say, quote, "Inclusion of Buy America policy has 
had a devastating impact on municipal procurement and the U.S. 
water and wastewater industry in particular."
    They don't submit any specifics in support of that 
statement, but they do raise the issue. Now, I know that in 
preparation for the stimulus, EPA issued three nationwide 
waivers on equipment that is not manufactured in America--under 
the provisions of the Buy America Act, which EPA is authorized 
to do--to issue three nationwide waivers for items that can't 
be purchased in--made exclusively elsewhere-- and three 
regional waivers, certain regions of the country; and third, a 
de minimus waiver for incidental components to pumps, lift 
stations, hydrants and so on that are part of the machinery of 
infrastructure.
    For example, Auburn, Maine, the sewerage district requested 
a waiver for ductile iron, spring-loaded hinged manhole covers 
and frames. And the waiver was granted in May. I don't know 
what they are complaining about. They are just making a general 
complaint.
    So I want you to review these letters and give a response 
to the questions raised. I can go on, and I won't, although I 
do want to signal--I just wanted to--Bristol, Vermont, for 
their water system and the Otter Valley Union High School in 
Brandon, Vermont, requested a waiver for certified ultraviolet 
disinfection equipment. I mentioned this generally in my 
opening remarks. That waiver was granted. But what we learned 
subsequently is that U.S. manufacturers who are making 
ultraviolet disinfecting equipment for air pollution equipment 
said we can do it for water. If we do it for air, we can do it 
for water. And a whole new manufacturing sector sprang up as a 
result of the Recovery Act.
    Now there are 50 or 60 jobs in this plant producing 
ultraviolet equipment. It would be good for you to--your staff 
and all to review these waiver requests, how many have 
subsequently stimulated U.S. production, and just generally 
respond.
    Of course, I will respond to the manufacturers' claim that 
of $6 billion in stimulus funds for a State Revolving Loan Fund 
program, only 225 million has been paid out to date. You have 
to do the work first and then get paid. The same thing in their 
business. They don't get paid first and then deliver the 
equipment. It is only when the contracts are under performance 
and the State is paying the contractor--I mean, the 
municipality is paying the contractor, and then they come back 
and ask for the reimbursement. All right? Okay.
    Secretary Hanger, several States have told us that recovery 
funds have been helpful for communities to address their 
noncompliance issues. We had a requirement in the act also, it 
was my--I will take credit for it, or blame, whichever it may 
be, but I insisted that in all of the recovery funds under the 
jurisdiction of this Committee, the funding be allocated on a 
priority basis to those areas of the State that had the highest 
unemployment, as recorded and certified by the U.S. Economic 
Development Administration of the Department of Commerce. EDA 
makes those determinations every month. And this is a job-
creating program. Funding ought to go to the places that have 
the highest unemployment.
    So, generally, States have done a good job of complying 
with that requirement. So can you address that issue, your 
distribution of dollars according to highest unemployment, and 
how many of those who were out of compliance have also been 
helped?
    Mr. Hanger. The recovery dollars have been often completely 
vital to communities facing serious noncompliance issues. 
Recovery dollars have allowed us to provide grants in cases 
where grants alone really can meet the need because the 
communities, they have a very low tax base; B, seriously 
decrepit infrastructure, quite literally. In some instances we 
have found 100-year-old lines--wood--we have taken out some 
wood. And often those two circumstances coincide with very high 
unemployment, local unemployment.
    So offering a loan to some of those communities, even at a 
very low interest rate in some instances won't enable the 
project to get built and--because there is not enough money to 
pay back a loan, even at a very low interest rate. So those 
dollars have dealt with serious environmental and public health 
impacts.
    These noncompliance issues, at least in my State, are 
serious ones. We are talking about raw sewerage in some 
instances entering water. We are talking about substantial 
loads of nitrogen and phosphorous entering water that then 
causes waterways to be unable to be fishable or swimmable, the 
Clean Water Act goals.
    So the dollars have been a blessing. It has allowed 
probably--it is at least a four-time increase over what the 
State Clean Water Revolving Fund could have done in a normal 
year. And we have also--the State taxpayers have also put a 
considerable amount of dollars on the table to further increase 
the work that we are doing at----
    Mr. Oberstar. Thank you for that response. That is very 
good. And I would like you to submit for the record information 
on a number of communities who were in noncompliance, who have 
been helped to come into compliance with Recovery Act funds. 
That would be very beneficial.
    Mr. Oberstar. And then we will ask EPA to do that 
nationwide and quickly survey the State SRFs and ask them to 
respond to that question. If we can do a 2-for-1, create jobs, 
bring communities into compliance, maybe three, and then you 
clean up receiving bodies of water to be closer to the goal of 
fishable, swimmable, we are doing a really great long-term 
service for the country.
    Do you have a rating system in Pennsylvania? In Minnesota, 
the SRF has a list of 263 projects. They have them 1 through 
263, towns that have no treatment system at all. They have 
septic systems or mound systems. And here is Minnesota's 
listing. It just goes 1 through 263 where is the other thing 
here, that page? It goes from 1 to 263 and they just went down 
that list. These towns have all been waiting for funding for 
years, and there was no second-guessing except--here is my 
list.
    Thank you, Ryan. For the record, Ryan Seiger. This is the 
list that Minnesota used. So they didn't have to do any second-
guessing or--and there were no complaints from the communities, 
Oh, I didn't get mine. They all knew where they were. That list 
has been available for years, every year, with the available 
funds, meager funds that Minnesota has had, meager funds that 
you have had in Pennsylvania. They have doled it out according 
to this.
    Do you do the same kind of thing?
    Mr. Hanger. Yes, but in a slightly different way. We 
certainly keep track of those communities that are in 
noncompliance. We have permits and we are well aware of what 
communities are in noncompliance and what communities have 
significant financial problems as a partial explanation for the 
noncompliance.
    And what we do is work with communities and, as you say, we 
have a backlog of projects. We always have a backlog of 
projects. And we did require the communities to apply for these 
funds. We didn't simply go through a preexisting list and say--
we can go down to the 30th on the list. We did have an 
application process. But we have a lot of information and 
relationships with these communities because in many instances 
the problems are longstanding, and we have been struggling with 
those communities to sort of put Band-Aids when really a Band-
Aid won't fix it.
    Mr. Oberstar. That is a very good description. Exactly what 
it is. Did you have experienced communities in Pennsylvania 
that had trouble with the Buy America Act?
    Mr. Hanger. I have not received a lot of complaints about 
that. And as you can see, we have already got a lot of projects 
out to bid and under contract and even underway. And I think, 
further, in Pennsylvania there is a lot of support for the 
notion of making these dollars stay in the United States and 
stay in Pennsylvania.
    So I think there is a lot of understanding for the purpose 
of that requirement where these dollars--I mean, this is about 
the American economy, our crisis, our workers. And in our 
experience, it has been a workable provision, as you pointed 
out eloquently. There are waivers so that when we are in a 
situation which I would call a tragedy, where you just can't 
find something made in the United States any longer in order 
to--that is necessary for a project--there is a waiver that is 
possible.
    Mr. Oberstar. Thank you. Thank you for that response.
    I found that where we are underinvesting, we as a Nation, 
cities, States, underinvesting in an economic sector, that the 
production to support that sector dries up. And often the 
industry itself moves offshore, moves to Europe, China, Korea, 
Taiwan, Japan. That is what happened with transit all through 
the 1950s and 1960s and 1970s. Then we started putting some 
money into transit agencies in America. I held hearings--did 
you know Bill Clinger from Pennsylvania, Member of Congress, 
State College District?
    Mr. Hanger. Yes.
    Mr. Oberstar. He and I on this very dais held hearings on a 
Buy AMERICA provision. We found that the Federal Highway 
Administration was 100 percent in compliance, all the steel 
going into the Federal aid highway programs, American steel. 
That meant the steel works in Pennsylvania, Ohio, Indiana, 
Illinois were pouring raw steel, and iron ore mines in my 
district were making the iron ore to supply the steel mills.
    We got to the transit agency and more than 50 percent of 
all the work was offshore. All the major components for 
streetcars, light rail, commuter rail, intercity--other 
intercity passenger rail, bus systems, had dried up in the 
United States. Allied-Signal was the only one left in the 
United States, and they were buying a lot of their components 
from foreign suppliers. Why? Because there was no market in the 
United States.
    But then in 1982, we committed a penny out of the Highway 
Trust Fund revenues, penny of the gas tax to transit. And that 
now is about 8- $9 billion a year. And we have had two foreign-
owned bus producers relocate into the United States. We have 
all these suppliers for rail transit, for streetcar, for light 
rail systems and all the rest, all coming back to the United 
States. They found a way to relocate in the U.S. marketplace 
and build product for the U.S. marketplace, because there is a 
demand for it there is a need for it and there is money to buy 
it.
    That is what we are doing with this stimulus program. If it 
has the ancillary effect of stimulating U.S. manufacturing 
jobs, so much the better.
    Now, I want to thank Mayor Nunley and Mr. Gritzuk for 
making the long trek to Washington. It is a long haul to come 
out here from your part of the world. But you are on mountain 
time zone? You as well, Mr. Gritzuk. That is a 2-hour 
difference in time. Awfully good of you to participate in this 
hearing.
    Do you have some lessons learned that we can apply to the 
program from here on out, and for a second round, if we do a 
second round of stimulus?
    Mr. Gritzuk. Can I?
    Mr. Oberstar. Please.
    Mr. Gritzuk. We very much appreciated receiving the 
stimulus funding. In fact, it was an incentive to move ahead 
with the project that I described. And what it also did for us 
is that with the funding that we received, we took that funding 
and we will apply it to an unfunded project. And in this case 
it would be a project, a sewer line that needs rehabilitation.
    The advice that we could give is that you have to be 
aggressive in this program. I think we were in Arizona. I think 
that Arizona demonstrated that it could move ahead 
aggressively, utilize stimulus funding, and get the jobs 
awarded and so forth.
    The problem we are suffering from is that we would sure 
love to see more it of. Overall, our program at Pima County, 
our regulated program has a value of $720 million. Much of this 
is a regulated program. Much of this is to increase the 
treatment of effluent that we discharge to the Santa Cruz 
River, similar to New Mexico. And this is a very, very 
expensive program.
    And to date, of the $720 million that is budgeted for this 
program, the ratepayers will have to pay for all of that in 
their rates, with the exception of the $2 million that we 
received from stimulus funding so far. So it is all locally 
funded.
    And as you move into the future, how much more can 
ratepayers tolerate on a lot of this unfunded mandate type of 
regulations that we are having? So any type of stimulus 
funding, water trust fund, would be extremely helpful to us.
    Mr. Oberstar. Thank you. Mayor Nunley, do you have some 
thoughts?
    Mr. Nunley. I had some experience with Buy America issues 
and I am going to have to say that EPA did a marvelous job for 
me. We purchased some filters, there are only two manufacturers 
of the type of filter that we had to try to make this limit 
work, and one was by Kubota and another was by G.E. Kubota is 
made in Japan and assembled in the U.S. And G.E. Is made in 
Canada. So a year and a half ago, we went out for bid to try to 
buy those things to beat inflation a little bit, and we used 
Kubota. And when Buy America popped up, we immediately got on 
our little horse and contacted EPA and got the proper paperwork 
submitted to get a waiver on that.
    And I have to tell you that it only took about 6 weeks. 
They did a great job for us and it didn't slow us down one bit. 
So I appreciate that.
    And I also appreciate the stimulus monies. And I think that 
my town is no different than most towns in America in the fact 
that our infrastructure is wearing out. We are using 50-year-
old pipes to deliver water and sewer. And any help that the 
House can give us, any help that Congress can give us in the 
way of a stimulus package, whatever the name of it is, is 
something that is an investment in our future. And I think that 
investing in America is a good idea today.
    Mr. Oberstar. Music to my ears and music to most of the 
Members of this Committee. I think Mr. Boozman would agree with 
that. Was that the membrane bioreactor filtration system?
    Mr. Nunley. That is correct.
    Mr. Oberstar. That is the one you are talking about. And 
you got a 6-week turnaround on that?
    Mr. Nunley. Yes, sir, we did.
    Mr. Oberstar. Mr. Gritzuk, you are here on behalf of NACWA 
and you caught got my attention with your reference to trust 
fund for water and wastewater treatment. When President 
Eisenhower vetoed the clean water--the Federal Water Pollution 
Control Amendments of 1960 after my predecessor, that gentleman 
in the corner portrait, John Blatnik, was the author of the 
first Federal Water Pollution Act of 1956. And there had been 
nothing before that. There was a small little kind of a 
research, but nothing significant. This was a first effort.
    And as part of the FWPCA program, we had researched to 
understand the causes of pollution, what factors in the 
wastestream were causing plant growth and algae and so on. 
Second, grants to build sewerage treatment facilities, $30 
million program of 30 percent Federal funds and an enforcement 
program that consisted of States getting together and talking 
about their pollution and deciding we should do something about 
it. That was totally ineffective. That was all you could get 
through.
    I came back after 4 years of experience with the program 
and wanted to upgrade it and make it $50 million and 50 percent 
Federal funds, and President Eisenhower vetoed the bill with a 
veto statement that concluded pollution, quote, "Pollution is a 
uniquely local blight. Federal involvement will only impede 
local efforts at cleanup," closed quote. I remember it very 
well. I memorized it. I wasn't on the staff at the time, but 
subsequently I was.
    The person who wrote that veto message was Bryce Harlow. He 
later went to work for Procter & Gamble, a soap maker. 
Pollution is not a uniquely local blight. The water goes into 
streams that pass among many communities, among many States. 
Federal involvement is necessary to have a national program, 
national treasure, and a national resource. And we established 
an authorization level, and there was a will to fund these 
programs in the early going when soapsuds floated down the Ohio 
and Illinois Rivers, when people turned on their faucets and 
soapsuds instead of clean water came out, and when the Cuyahoga 
River caught on fire in 1969 and it was a national calamity.
    But it seems that the will to fund has dissipated, and the 
idea of a trust fund is a very appealing idea. What is the 
revenue stream for it? How do you get a dedicated source of 
revenue to sustain the funding year to year? Do you model it 
after the Superfund program, as we did with going back to the 
generators of the toxic substances that go--the chemicals that 
go into the products that wind up in our landfills? Or what 
other sources do you find? I expect--I don't expect you to be 
exhaustive in responding to the question, but I raise the issue 
because you intrigued my attention.
    Mr. Gritzuk. Okay. The primary driving force for a trust 
fund is basically have those people pay for the benefits that 
they get out of clean water and wastewater disposal, and also 
for a fund like this to be revenue-neutral. And maybe more so, 
it will model the highway Trust Fund.
    So, several examples. Beverage producers who need clean 
water for their product, perhaps add a penny to a bottle of 
soda or a can of soda. And products that are disposed down the 
sewer, add a couple of pennies to what you dispose of. 
Individuals call it a tax. I don't think that is a proper term. 
I really do think it is a minimal fee on the benefit that the 
individuals get from clean water and environmental control.
    Mr. Oberstar. It is a fee for use of a system.
    Mayor Nunley, do you have some thoughts about this? You are 
on the firing line there at the community level.
    Mr. Nunley. Yes, sir. We have--we don't call it a trust 
fund, but we have established a wastewater fee to help pay for 
the plan. And it started out at $35 a month for our customers, 
and it was pretty burdensome when you add water and trash 
pickup and all that on there. But we have--I have convinced the 
legislature last term that it would be beneficial for them to 
pass and grant us to have a half percent gross receipts tax 
that was dedicated to water, wastewater. They did that. And 
that knocked that fee down to about $10. So that is more than 
we need to pay for the plant. But the $10 is going to go into a 
trust fund or savings account, so when the time comes for us to 
update our plan in 2015, We will have some money in the bank to 
do it.
    Mr. Oberstar. So you think that that approach is an 
attractive way of creating a dedicated revenue stream on which 
future--which can fund the future investment needs?
    Mr. Nunley. That is our plan.
    Mr. Oberstar. Secretary Hanger, what do you think about 
this idea?
    Mr. Hanger. Well, it is an attractive idea and, as you are 
wrestling with, there is no free lunch. Somebody has got to pay 
to create the fund. And I personally would believe that a small 
fee, either on existing water and sewer bills or perhaps some 
other way to generate a trust fund that would then address 
these problems. It would be a tremendous return on investment.
    And I think the key is really convincing the American 
people, at least people in Pennsylvania, that the money is 
dedicated for this purpose, and making sure that they see 
tangible results and get tangible results for the dedication. 
Unfortunately, there is a fair amount of skepticism about 
whether folks get a return on investment. And I think you have 
to address that very directly.
    Every community has to have a sewer system. Every community 
has to have a water system. Every community, I think, has 
actually a majority of citizens that understand that we have 
deferred investment in this area too long. And maybe the 
current economic problems of the country caused a little bit of 
reflection and sort of a return to some basics in a number of 
different ways. And there is nothing more basic than this.
    So perhaps this is the time to say a small fee, leveraged 
across the country, put into a trust fund, with a real 
commitment to excellence in distributing the money and 
overseeing the money, like both of you gentlemen are doing here 
today, maybe we could get that done. It would be a great thing 
for the future of the country.
    Mr. Oberstar. Thank you very much. I think if it were left 
to Mr. Boozman and me, we would get it done probably in an 
afternoon. But we would get it done.
    Before I hand the mike over to Mr. Boozman, I just want to 
observe that there are a lot of other needs of this country 
that can be deferred. We can delay this. We can delay the other 
thing. But water, water is essential to life itself. Of all the 
water, of all the million cubic miles of water on the face of 
the Earth, 3 percent is fresh water. Two-thirds of that is 
locked up in the ice caps. That is 1 percent--less than 1 
percent fresh water is available in surface water. There is 
some left in the Ogallala Aquifer. There is some left in the 
Jordan Aquifer under the Twin Cities from the last glacier of 
15,000 years ago. But that is being drawn out. That is being 
withdrawn. When that is out, that 15,000-year-old water is 
gone; it will never be replenished. That is all we have. We 
cannot poison it and hand this onto the next generation.
    Mr. Boozman, take whatever time you----
    Mr. Boozman. Oh, no. Thank you, Mr. Chairman. I have 
enjoyed the discussion, and the other thing is I really do want 
to compliment you. I think the Transportation Committee can be 
very proud not only in the area of water resources, but our 
roads. All of the things that we have oversight, that through 
your leadership we really are exercising the oversight.
    We are talking about a lot of money at stake and with the 
Transportation Committee doing its very best to make sure that 
that is spent wisely is certainly a very, very good thing. And 
I think that we really have been the lead and probably are the 
model Committee in that regard. So I appreciate your leadership 
very, very much in that regard.
    As I was listening to the user fees, taxes, trust fund, 
whatever you want to call it, and there are different--there 
are differences somewhat in some of those things, and I am not 
going to argue that. One of my concerns, though, is that I see 
as I sit here--and I have really enjoyed this Committee, I have 
been on it since I have been in Congress and now the Ranking 
Member. But I see a lot of uniform--I am sorry--a lack of 
uniformity in how we administer the requirements in different 
areas.
    I sit here and I hear of areas that are out of compliance 
90 days out of the year and this and that. Not a lot seems to 
be happening to them.
    You, Mayor Nunley, have the strictest requirement of 
anybody in the Nation. And I can't believe that there aren't 
other areas that are every bit as bad as you. In fact, I can't 
believe there are a lot of areas that are worse. But somehow 
you have gotten on that list.
    And so my concern is until--and the IG was in the other day 
and testified to that effect-- my concern is until we get some 
uniformity and get that straightened out, that as we create 
these trust funds, all we are going to do is have the ability 
for EPA or whoever to rachet down the requirements even more, 
and you are going to be behind the gun again. You are still 
going to--we are going to be spending more time than ever.
    So I really do think we need to make sure that as we make 
these decisions that truly are tremendous unfunded mandates 
that really impact populations, impact growth, impact the 
economy, that we do that; that we make sure that we are doing 
that in a uniform way, and that we make sure that we have got 
good science behind that.
    So I just have one question for you, Ms. Darcy, and then we 
can adjourn. And this is just kind of something that we have 
been concerned about now for quite a while. The Congress has 
received two Army Corps of Engineers Chief Reports in 3 years. 
Are stimulus funds being used to complete the Chief reports? 
Can we expect any at the end of 2009? Can we expect any during 
2010?
    Ms. Darcy. I know that we currently have some Chief reports 
in the works, and some that are on their way to my office for 
my signature before the end of this fiscal year-- this calendar 
year, excuse me.
    Mr. Boozman. Okay. So we will go ahead and submit that in 
writing and then maybe you can visit and give us some numbers.
    Ms. Darcy. I will sir.
    Mr. Boozman. Okay. Thank you very much. And I again I thank 
you, the panel, for you being here. This has been a very, very 
good hearing and we appreciate your being here. Thank you, Mr. 
Chairman.
    Mr. Oberstar. At the request of the gentleman from 
Arkansas, it will be submitted to the Committee and included in 
the Committee record at this point and available to all 
Members.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Oberstar. We appreciate your participating. Secretary 
Hanger, think further about this idea of trust fund and how it 
would be set up, how it would be funded--Mayor Nunley, Mr. 
Gritzuk.
    We are going to be confronting this--we have had a hearing 
on financing of modern wastewater treatment systems this 
summer. We will have an additional hearing on the current idea 
of an infrastructure bank of some sort or Infrastructure Trust 
Fund. So give us your ideas on revenue source, sustainable 
revenue stream, the distribution of those dollars, how you--
what kind of formula you could establish to ensure the 
equitable distribution of those dollars as we do the Highway 
Trust Fund, the Aviation Trust Fund, the Inland Waterways Trust 
Fund. There aren't very many others. We used to have a lot of 
them. They have all gone their way.
    But there is an urgency and a sense of urgency, of need, to 
address the problems of clean water, but also an awareness that 
we don't have available general revenue dollars to sustain 
these programs, and a rising call from cities, counties, State 
agencies to develop this revenue stream.
    So help us with your thoughts. We will include them as we 
prepare for a future hearing on this subject.
    And secretary Darcy, we thank you for your contribution. 
Ms. Gelb from EPA, keep working and keep in mind there are 
people--you are all employed, we are all employed--there are 
people out there who aren't. Our job is to do two things at 
once: improve our environment, but create jobs for people.
    Mr. Oberstar. The Subcommittee is adjourned.
    [Whereupon, at 1:12 p.m., the Subcommittee was adjourned.]



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