[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


 
                   THE NEEDS OF DRINKING WATER SYSTEMS IN 
                         RURAL AND SMALLER COMMUNITIES

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

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 27, 2015

                               __________

                           Serial No. 114-15
                           
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           



      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov
                        
                        
                               _____________
                               
                               
                        U.S. GOVERNMENT PUBLISHING OFFICE
95-493                      WASHINGTON : 2015                      

________________________________________________________________________________________ 
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, [email protected].  
                   
                    
                    
                    
                    
                    
                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                                 7_____

              Subcommittee on Environment and the Economy

                         JOHN SHIMKUS, Illinois
                                 Chairman
GREGG HARPER, Vice Chairman          PAUL TONKO, New York
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               KURT SCHRADER, Oregon
JOSEPH R. PITTS, Pennsylvania        GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
LARRY BUCSHON, Indiana               TONY CARDENAS, California
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
RICHARD HUDSON, North Carolina           officio)
KEVIN CRAMER, North Dakota
FRED UPTON, Michigan (ex officio)

                                  (ii)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     1
    Prepared statement...........................................     2
Hon. Paul Tonko, a Representative in Congress from the State of 
  New York, opening statement....................................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4

                               Witnesses

J. Alfredo Gomez, Director, Natural Resources and Environment, 
  Government Accountability Office...............................     6
    Prepared statement...........................................     9
    Answers to submitted questions...............................    81
Hon. Joe Keegan, Mayor, Castleton-on-Hudson, New York, on Behalf 
  of New York Rural Water Association............................    24
    Prepared statement...........................................    27
Katetra ``K.T.'' Newman, on Behalf of National Rural Water 
  Association....................................................    32
    Prepared statement...........................................    34
Bobby Selman, on Behalf of Mississippi Rural Water Association...    39
    Prepared statement...........................................    41
Robert Stewart, Executive Director, Rural Community Assistance 
  Partnership....................................................    45
    Prepared statement...........................................    47
    Answers to submitted questions...............................    85

                           Submitted Material

Letter of February 27, 2015, from Renee Sharp, Director of 
  Research, Environmental Working Group, to Mr. Shimkus, and 
  report, ``Water Treatment Contaminants: Forgotten Toxins in 
  American Water,'' February 2013, Environmental Working Group, 
  \1\ submitted by Mr. Shimkus...................................    80

----------
\1\ The information has been retained in committee files and also 
  is available at  http://docs.house.gov/meetings/IF/IF18/
  20150227/103031/HHRG-114-IF18-20150227-SD005.pdf.


  THE NEEDS OF DRINKING WATER SYSTEMS IN RURAL AND SMALLER COMMUNITIES

                              ----------                              


                       FRIDAY, FEBRUARY 27, 2015

                  House of Representatives,
       Subcommittee on Environment and the Economy,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:01 a.m., in 
room 2322, Rayburn House Office Building, Hon. John Shimkus 
(chairman of the subcommittee) presiding.
    Members present: Representatives Shimkus, Harper, 
Whitfield, Murphy, Latta, McKinley, Johnson, Bucshon, Hudson, 
Cramer, Tonko, Schrader, Green, McNerney, and Pallone (ex 
officio).
    Staff present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Deputy Communications Director; Leighton Brown, Press 
Assistant; Jerry Couri, Senior Environmental Policy Advisor; 
Dave McCarthy, Chief Counsel, Environment and the Economy; 
Chris Santini, Policy Coordinator, Oversight and 
Investigations; Chris Sarley, Policy Coordinator, Environment 
and the Economy; Jacqueline Cohen, Democratic Senior Counsel; 
and Caitlin Haberman, Democratic Professional Staff Member
    Mr. Shimkus. I would like to call the hearing to order and 
recognize myself for an opening statement.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Today's hearing focuses on challenges facing rural water 
systems. I congratulate and thank the ranking member of the 
subcommittee Mr. Tonko and the vice chairman of the 
subcommittee, Mr. Harper, for their bipartisan work to raise 
the profile of this issue before this subcommittee.
    According to the Census Bureau, approximately 27 percent of 
the U.S. population lives in rural areas. The smallest water 
systems account for 77 percent of all systems. As someone who 
proudly represents communities in small town in rural America, 
I am glad we have bipartisan interest in tackling this subject.
    Under the Safe Drinking Water Act, small and rural drinking 
water supply systems are subject to a number of drinking water 
regulations issued by EPA. These requirements include systems 
monitoring, treatment to remove certain contaminants, and 
reporting. Addressing these matters requires technical, 
managerial, and physical capabilities that are difficult to 
develop and are often beyond the capacity of these towns to 
afford on the same scale as urban centers, particularly when it 
comes to regulatory compliance.
    It is ironic that these communities where residents work 
hard to support their families and their local governments, 
while often earning wages below those of their counterparts in 
the more urbanized area, face per-customer compliance costs and 
demands that are disproportionate to many larger communities. 
Sometimes it is just a matter of having the ability to keep up 
with the red tape.
    While I am sure we will explore the funding mechanisms 
under EPA, the Agriculture Department, and other Federal 
agencies, it is not just a matter of throwing more scarce money 
at the problem. Rather, it is about smartly assessing what the 
needs are for these systems, prioritizing the importance of 
those needs, finding out whether the current system can be 
improved to remove unnecessary burdens and eliminate 
bureaucracy, and examining whether voluntary or other 
collaboratory efforts can aid where Congress cannot.
    I want to thank our witnesses who have put their lives on 
hold to battle the elements and join us. People who live in 
rural communities deserve every bit of the water quality and 
technical resources that folks who lives in densely populated 
urban centers do. We look forward to your wisdom in helping us 
understand these issues.
    Thanks again to Mr. Tonko and Mr. Harper for their work on 
this issue. I know Mr. Tonko has an interest in addressing some 
drinking water issues, and I appreciate the work he and Mr. 
Harper are doing to break the ice with this first effort.
    [The prepared statement of Mr. Shimkus follows:]

                Prepared statement of Hon. John Shimkus

    Today's hearing focuses on challenges facing rural water 
systems. I congratulate and thank the ranking member of the 
subcommittee, Mr. Tonko, and the vice chairman of the 
subcommittee, Mr. Harper, for their bipartisan work to raise 
the profile of this issue before the subcommittee.
    According to the Census Bureau, approximately 27 percent of 
the U.S. population lives in a rural area. The smallest water 
systems account for 77 percent of all systems. As someone who 
proudly represents communities in small town and rural America, 
I am glad we have bipartisan interest in tackling this subject.
    Under the Safe Drinking Water Act, small and rural drinking 
water supply systems are subject to a number of drinking water 
regulations issued by EPA. These requirements include system 
monitoring, treatment to remove certain contaminants, and 
reporting. Addressing these matters requires technical, 
managerial, and physical capabilities that are difficult to 
develop and are often beyond the capacity of these towns to 
afford on the same scale as urban centers--particularly when it 
comes to regulatory compliance.
    It's ironic that these communities, where residents work 
hard to support their families and their local governments, 
while often earning wages below those of their counterparts in 
the more urbanized areas, face per customer compliance costs 
and demands that are disproportionate to many larger 
communities. Sometimes, it's just a matter of having the 
ability to keep up with the red-tape.
    While I am sure we will explore the funding mechanisms 
under EPA, the Agriculture Department, and other Federal 
agencies, it's not just a matter of throwing more scarce money 
at the problem. Rather, it's about smartly assessing what the 
needs are for these systems, prioritizing the importance of 
those needs, finding out whether the current system can be 
improved to remove unnecessary burdens and eliminate 
bureaucracy, and examining whether voluntary or other 
collaborative efforts can aid where Congress cannot.
    I want to thank our witnesses who have put their lives on 
hold to battle the elements and join us. People who live in 
rural communities deserve every bit of water quality and 
technical resources that folks who live in densely populated 
urban centers do. We look forward to your wisdom in helping us 
understand these issues.
    Thanks again to Mr. Tonko and Mr. Harper for their work on 
this issue. I know Mr. Tonko has an interest in addressing some 
drinking water issues and I appreciate the work he and Mr. 
Harper are doing to break the ice with this first effort.

    Mr. Shimkus. With that, I would like to yield to the vice 
chair for the remainder of my time.
    Mr. Harper. Thank you, Mr. Chairman.
    And I appreciate you holding this hearing on the needs of 
drinking water systems in rural and smaller communities.
    Like you and many other members of Congress, I represent a 
rural district where many of my constituents get their drinking 
water from smaller cities, towns, and water associations.
    According to the National Rural Water Association, more 
than 90 percent of the community water systems across the 
United States serve a population less than 10,000 individuals. 
These smaller communities do an incredible job of providing our 
constituents with clean, safe drinking water, but are often at 
a disadvantage because of economics of scale and a need for 
more technical expertise.
    I know that this as an important issue to you, Mr. Chairman 
and the ranking member, and I thank you for the opportunity to 
continue working on legislation to ensure our constituents get 
the help and clean water they need.
    I would like to say welcome to my fellow Mississippians, 
Mr. Newman, Mr. Selman, and thank them for providing their 
insight to the subcommittee today.
    Mr. Chairman, thank you again for your commitment on this 
issue, and I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    And I have a remaining minute left.
    Does anyone seek recognition on my side? If not, the Chair 
now recognizes the ranking member of the subcommittee, Mr. 
Tonko, for 5 minutes.

   OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Tonko. Well, thank you and good morning to our 
witnesses.
    And thank you, Chair Shimkus, for holding this important 
hearing on what is a very vital topic and appreciate the 
opportunity to work in partnership with our Vice Chair Harper 
as we address, again, a very important phenomenon for all of 
our communities across the country.
    We have all heard the often repeated statistics about rural 
and small water systems. More than 94 percent of the 150,000 
public drinking water systems in the United States serve fewer 
than 3300 customers. Although small systems dominate in 
numbers, they serve just about 8 percent of our population 
overall. But to households and businesses across this great 
country, the key feature they are interested in is not the size 
of their water utility. It is reliable, daily delivery of safe 
clean water at an affordable price to their homes and 
businesses that matters.
    We will hear from managers of these small systems here this 
morning. And what we will hear is that they cannot simply pass 
all of their costs for technical assistance, infrastructure 
repairs, tapping into new water sources, or keeping pace with 
drinking water regulations onto their customers with ongoing 
rate increases. The rate bases for these small systems are too 
small to cover the costs of these essential materials and 
services. It is long past time for us here in Congress to 
provide robust financial support for our water utilities.
    In addition to support through traditional funding 
mechanisms, the SRF, and grant programs, we should also examine 
alternative financing mechanisms, new technologies, and 
potential new partnerships that will enable every dollar to go 
forward in reducing the backlog of infrastructure projects and 
in ways reducing operating costs through efficiency, both water 
and energy.
    I am very pleased to have Mayor Keegan here this morning to 
represent the small water utilities that serve people 
throughout our State, New York. Mayor Keegan and our witnesses 
from Representative Harper's district in Mississippi will 
provide us with a glimpse of the challenges they face each and 
every day in their efforts to deliver clean safe drinking water 
to their public. They do a remarkable job in keeping clean 
water flowing to every home, every day.
    Water infrastructure is essential. It is the only way to 
state it. We can afford to do this. We cannot afford to delay 
these investments any longer. Public health, community 
viability, and economic vitality all rest on the foundation of 
a sound infrastructure. We cannot maintain global leadership 
and compete in a 21st century global economy with 20th century 
infrastructure held together with a hope and a prayer.
    We have an excellent panel with us today. Thank you for 
taking time away from your important work and busy schedules to 
be here to do your messaging this morning.
    And thank you, Mayor Keegan, Mayor Newman--Mr. Newman, Mr. 
Selman, and Mr. Stewart for the expertise and dedication you 
will demonstrate to your communities--that you demonstrate to 
your communities each and every day at work. I look forward to 
your testimony and to working with each and every one of you as 
we move forward.
    And I am very pleased to working with the chair of the 
subcommittee and with our vice chair, Representative Harper, 
and other members of the subcommittee on this very important 
issue.
    With that, I thank you.
    And, Mr. Chair, I yield back.
    Mr. Shimkus. Gentleman yields back his time.
    Chair now looks to the Republican side. Anybody seek 
recognition? Seeing no one, the Chair now recognizes the 
ranking member of the full committee, Mr. Pallone, for 5 
minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman, Mr. Tonko.
    Customers of all public water systems, large and small, 
wealth and disadvantaged deserve safe affordable drinking 
water. Unfortunately, public water systems across the country 
are facing staggering infrastructure replacement costs and 
emerging threats, including climate change.
    Resource is essential to any conversation about safe 
drinking water. Much of our Nation's drinking water 
infrastructure is well beyond its useful life and in desperate 
need of replacement. Investing in drinking water infrastructure 
protects public health, creates jobs, and boosts the economy. 
This is particularly important in the case of small and rural 
systems in which even minor projects can be unaffordable. And I 
thank the chairman for calling this hearing to examine some of 
the challenges these systems face.
    In 1996, this committee passed amendments to the Safe 
Drinking Water Act that set a number of programs intended to 
help small and rural water systems. Those programs focused on 
capacity development, operator certification, infrastructure, 
funding, and technical assistance. All of them are designed to 
ensure the customers of small systems receive safe and 
affordable drinking water. The small pot of money set aside for 
technical assistance distributed through grantees, such as the 
National Rural Water Association and the Rural Community 
Assistance Partnership, have been incredibly important for 
small assistance. And I am glad that both NRWA and RCAP 
represented here today to discuss any changes that might be 
needed to strengthen the program.
    I expect we are going to hear that the need for technical 
assistance far outpaces the funding available. And I hope my 
colleagues on the other side of the aisle will join with us to 
ensure that this program is given sufficient funding to meet 
the requirements of small systems.
    But the same is true for the drinking water State Revolving 
Fund or SRF. If we really want to ensure that small and rural 
systems are providing safe and affordable water, we should 
reauthorize the whole SRF, not just the technical assistance 
piece. The technical assistance piece is less than 2 percent of 
the whole pot, so we should not lose sight of the bigger 
picture.
    For disadvantaged communities, the 1996 amendments allow 
States to provide additional support through the SRF and most 
funding from the SRF goes out as loans. But for disadvantaged 
communities, States are authorized to provide zero interest 
loans or even principal forgiveness. For small and rural 
systems with small customers bases, this is incredibly 
important.
    But unfortunately States are not currently required to 
provide this assistance to disadvantaged communities and not 
all do. This assistance may become even scarcer in coming years 
as the overall drinking water infrastructure need continues to 
grow faster than the available funding.
    When this subcommittee moved legislation to address toxic 
algae, I expressed my hope that it would be the start of 
broader drinking water work. And I am pleased that the chairman 
is now addressing another important drinking water issue. But 
as I said at the hearing on the toxic algae, our responsibility 
on drinking water is comprehensive. Small systems serve only 8 
percent of the population. We should absolutely do what is 
necessary to ensure they have safe water, but we should also 
protect the other 92 percent and means reauthorizing the SRF, 
ensuring that fracking is done safely, ensuring source water 
protection, addressing drought and planning, of course, for 
climate change.
    So I look forward to more drinking water hearings and more 
bipartisan conversations about some legislative solutions.
    And thank you, Mr. Chairman.
    Mr. Shimkus. Gentlemen yield backs his time.
    Now, the Chair would like to welcome our panel. I will 
introduce you one at a time. Your full statement is submitted 
for the record. You will have 5 minutes. Again, we expect votes 
between 10:45 and 11:15. I think we will get through the 
opening statements, and then we will see how it goes.
    So, with that, I would like to first recognize Mr. Alfredo 
Gomez, Director of the natural resources and environmental area 
for the Government Accountability Office. Welcome, sir. And you 
are recognized for 5 minutes.

STATEMENTS OF J. ALFREDO GOMEZ, DIRECTOR, NATURAL RESOURCES AND 
ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE; HON. JOE KEEGAN, 
  MAYOR, CASTLETON-ON-HUDSON, NEW YORK, ON BEHALF OF NEW YORK 
RURAL WATER ASSOCIATION; KATETRA ``K.T.'' NEWMAN, ON BEHALF OF 
 NATIONAL RURAL WATER ASSOCIATION; BOBBY SELMAN, ON BEHALF OF 
   MISSISSIPPI RURAL WATER ASSOCIATION; AND ROBERT STEWART, 
   EXECUTIVE DIRECTOR, RURAL COMMUNITY ASSISTANCE PARTNERSHIP

                 STATEMENT OF J. ALFREDO GOMEZ

    Mr. Gomez. Thank you, Mr. Chairman.
    Good morning, everyone, Ranking Member Tonko, and members 
of the subcommittee.
    I am pleased to be here today to discuss the infrastructure 
needs----
    Mr. Shimkus. If you just pull that a little bit closer. 
And, for our other panelists, if you notice, there is a button 
in the middle and so hit that button when it is time to speak. 
And just pull that mike a little bit closer.
    Thank you.
    Mr. Gomez. OK. Thank you.
    So I am pleased to be here today to discuss the 
infrastructure needs facing rural communities across the 
Nation, particularly for drinking water systems. The U.S. faces 
costly upgrades to aging water infrastructure. The demand for 
drinking water and wastewater infrastructure projects in 
communities with populations of 10,000 and fewer is estimated 
to be more than $190 billion in coming decades.
    My statement today summarizes the results of our reports on 
rural water infrastructure. I will focus on two main areas, 
first rural agencies funding for drinking water and wastewater 
infrastructure and issues affecting rural communities abilities 
to obtain funding for this type of infrastructure.
    First, Federal agencies administer programs that can 
provide funding and technical assistance to rural communities 
to help them build drinking water and wastewater systems and 
comply with Federal regulations. EPA's drinking water and its 
clean water State Revolving Fund programs, known as the SRFs, 
provide the most funding, totaling 907 million and 1.5 billion 
respectively in fiscal year 2014. States are required to 
provide at least 15 percent of the drinking water SRF funds to 
water systems that serve 10,000 people or fewer. The Department 
of Agriculture's rural utility service program is the next 
largest program at 485 million in fiscal year 2014, all of 
which goes to rural communities.
    Some of the other agencies that can provide funding to 
rural communities include the Department of Housing and Urban 
Development, the Economic Development Administration, and the 
Bureau of Reclamation. While these agencies can provide funding 
for drinking water and wastewater infrastructure in rural 
communities, they have varying eligibility criteria that may 
focus funding to specific communities on the basis of 
population size, economic need, and geographic location.
    Second, our previous report found several issues that 
affect rural communities' ability to obtain funding for 
drinking water and wastewater infrastructure. These issues 
include financing, technical expertise, and agency 
coordination. And both Chairman Shimkus and Ranking Member 
Tonko and others have already noted some of these challenges.
    Now, with regard to financing, communities typically did 
not have the number of users needed to share the cost of major 
infrastructure projects while maintaining affordable users 
rates. In addition, rural communities generally have limited 
access to financial markets, restricting their ability to use 
bonds to raise capital. As a result, these communities depended 
heavily on Federal and State funding.
    Rural communities also did not generally have the technical 
expertise to rebuild or replace their drinking water and 
wastewater systems. We found they had few staff and often hire 
consultants and engineers to help them design projects, 
including preliminary engineering reports, plans, and 
environmental documents. Agencies provide for some technical 
assistance that communities can use.
    Lastly, we found that Federal communities face potentially 
duplicative application requirements when applying for multiple 
State or Federal programs. This included preparing more than 
one preliminary engineering report and environmental analysis, 
which likely made it more costly and time-consuming for 
communities to complete the application process.
    We recommended several actions to improve coordination 
among the agencies and programs. In response, as of February 
2015, EPA and the Department of Agriculture have developed a 
uniform preliminary engineering report template that applies to 
multiple programs. Seven States have adopted the template for 
their use. EPA and USDA have also begun taking steps to develop 
guidelines to assist States in developing uniform environmental 
analyses.
    In summary, the Nation's drinking water and wastewater 
infrastructure needs are large and funding them will be 
challenging. Rural communities face additional challenges in 
funding their infrastructure needs, given the financial 
technical expertise and coordination challenges they face 
overall. Federal agencies with States should consider how to 
ease communities' efforts to obtain funding, provide technical 
assistance, and better coordinate agency efforts.
    Mr. Chairman, Ranking Member Tonko, that concludes my 
statement. I would be happy to answer any questions.
    [The prepared statement of Mr. Gomez follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Shimkus. Thank you very much.
    Now, I would like to recognize Mayor Joseph Keegan, 
obviously mentioned by my ranking member, Mr. Tonko, from 
upstate New York. I see it is Castleton on the Hudson as a----
    Mr. Tonko. Castleton on the Hudson.
    Mr. Shimkus. And I know the Hudson. I lived in a small 
technical school down south on the river, the West Point school 
for wayward boys. So that is my alma mater and so I know the 
river and the valley real well. So welcome, and we are glad to 
have to you.
    You are recognized for 5 minutes.

                    STATEMENT OF JOE KEEGAN

    Mr. Keegan. Thank you.
    Good morning, Mr. Chairman and members of the subcommittee.
    And my congressman, good morning, Congressman Tonko.
    I am Joe Keegan, the mayor of a charming little village a 
few miles south of Albany, New York, on the banks of the Hudson 
River called Castleton-on-Hudson. We have a population of 
approximately 1,500 of the best people anywhere. My village is 
a member of the New York Rural Water Association, a nonprofit 
organization of small and rural communities throughout the 
State, which is somewhat responsible for my appearance here 
today. I got a call from the association on Monday asking about 
my availability, and I just happened to be traveling back to 
Castleton last night from a trip related to my day job.
    My village is very typical and representative of 
communities that have water supplies in New York and the rest 
of the country. According to the U.S. Environmental Protection 
Agency, the State of New York has 2,305 community water 
systems, 88 percent of those serve populations under 3,300. All 
of the small community and water and sewer utilities have to 
comply with the same regulations, testing, and certifications 
as the biggest cities, but with only our very small rate payer 
base. And we have to operate, maintain, and update our water 
infrastructure with very small budgets.
    As a small community mayor, my number one concern and worry 
is drinking water and number two is wastewater. Everything else 
is a distant third. If there is a problem with the drinking 
water, it has to be addressed immediately, middle of the night, 
middle of the winter. It doesn't matter when. Every citizen and 
especially the most vulnerable depend on the safety of the 
water, including families with infants, schools, our nursing 
homes, and people with compromised immune systems. We can't 
have any contamination of the drinking water. Our sewer system 
also needs to function properly to avoid any possibility of a 
sewage spill or sewage backup into people's homes.
    I would say to you that this really does keep me up at 
night. Congressman Tonko knows that, right now, our part of the 
State is buried in snow. Just last week, the frost penetrated 
the ground so deeply that we experienced two ruptures in our 
water mains that are 5 to 6 feet underground. This forced us to 
issue a boiled water advisory where we have to tell families to 
boil water as well as contact all the schools. They have to 
cover their water fountains, the press, the nursing home, et 
cetera. I actually call as many citizens as I can by robo-call. 
When something like this occurs, we manage the situation around 
the clock, locating equipment to excavate the frozen ground, 
repairing the waterline, getting the tests to the lab, and 
waiting for the all-clear results to lift the boil water order.
    We appreciate the assistance of the subcommittee and 
Congress in helping us protect the public and successfully 
operate the public drinking water and wastewater supply through 
the various funding programs and the on-sight technical 
assistant initiatives. My village relies on this assistance.
    I want to thank Congressman Tonko for sponsoring the 
Assistance Quality and Affordability Act of 2014 in the last 
Congress. Small and rural communities support your legislation 
because it enhanced the current Drinking Water State Revolving 
Fund by further targeting the funding to communities most in 
need. We do need help.
    Everything from financing, regulations compliance, and the 
various programs are very complicated for small communities. We 
don't have financial professionals on staff and often don't 
understand many of the funding processes.
    We currently have needs approaching $3 million for our 
wastewater system. We need new aeration tanks, new sludge 
drying equipment, and new pumps as our facility is over 30 
years old. We need to stop rainwater from leaking into the 
system and overtaxing our capacity.
    My water operator is constantly explaining to me the need 
for these upgrades and his concerns of possible failure. 
However, we don't really have a way to finance it. It would 
triple the sewer rates to take out a loan for that much. You 
can see in the picture at the back of my testimony that we have 
some very old drinking water pipes that need updating or 
replacing at a substantial cost. The one in the picture is 
stamped with a date from the 19th century, and they are still 
in the ground in parts of the village.
    We are concerned that, without more waterline replacement, 
we are vulnerable to more breaks and crisis. And you can see 
the other picture of a tuberculated pipe we recently dug up 
that is loaded with corrosion and deposits to the point it is 
almost occluded.
    In my remaining time, I just want to emphasize the 
essential assistance we receive from the New York Rural Water 
Association and explain why it is so helpful. The association 
has circuit riders that are on call throughout the State that 
will come and assist us immediately, including evenings and 
weekends. The circuit riders are all experts in the technical 
side of water operations. Just a week ago, we called for help 
for locating a water leak from a ruptured pipe that could have 
occurred over any part of 100 foot waterline. The circuit rider 
has specialized equipment that can detect noises and vibrations 
underground to locate the exact location of a break.
    In addition, my operators receive 90 percent of the 
training needed to retain their operator's licenses from the 
New York Rural Water Association. We depend on them just like 
every other small community.
    Mr. Chairman, I have a lot more to say, but you have been 
very charitable with your time and attention to small and rural 
communities.
    And on behalf of every small town elected official, we are 
grateful. Thank you for hearing from us, and I will answer any 
questions later.
    [The prepared statement of Mr. Keegan follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
    
    
    Mr. Shimkus. Thank you very much.
    Since my district mostly has communities below 2,500 
people, I thank you for those thank-you comments because 
hopefully they are paying attention, also.
    Those bells signal that we have been called to vote early. 
I think we will just break here. We, as a Congress, I don't 
think, are going to be in a hurry today. So most of us will all 
get back here and hear the final testimony and then go into 
questions.
    So, with that, I will recess the hearing.
    [Recess.]
    Mr. Shimkus. We will call the hearing back to order, and 
now I will turn to Mr. K.T. Newman on behalf of the Rural Water 
Association.
    Sir, you are recognized for 5 minutes.

              STATEMENT OF KATETRA ``K.T.'' NEWMAN

    Mr. Newman. Good morning, Mr. Chairman and members of the 
subcommittee. Thank you for the opportunity to testify here 
today.
    My name is K.T. Newman, and I have been working for or in 
small and rural community water systems in the Mississippi 
Delta for nearly 20 years. I first started out as a small city 
water manager in my hometown of Vaiden, Mississippi, which has 
about 1,000 homes. I then worked for the Mississippi Rural 
Water Association as a circuit rider for 10 years. In this 
capacity, I visited every one of the Delta's approximately 500 
small communities to help them with their water and sewer 
problems. Currently, I am working for about two dozen small 
Delta communities assisting them with their water and sewer 
utilities.
    I am honored to be accompanied here today by the mayor of 
one of these small towns, Mayor Everette Hill from Como, 
Mississippi. The town of Como has a population of approximately 
1,200 persons. The mayor's challenges are compounded by the 
fact that as a small-town mayor he has a full-time job as a 
truck driver and has to handle much of the city's issues on his 
free time. His community has little professional staff because 
they simply can't afford it.
    In Como, the wastewater system is failing because of its 
age and inability to meet its current EPA treatment. The cost 
to update Como's sewer system to be compliant is approximately 
$2 million. The Como drinking water system needs an additional 
$1 million in upgrades. The town was recently fined by the 
Department of Environmental Quality for failure to comply with 
their wastewater discharge permit. Currently, the Como 
wastewater treatment facility is actually discharging only 
partially treated wastewater due to failure of the current 
treatment works.
    Como is just like thousands of other small communities in 
the Delta and the other States. They need a grant-rich 
infrastructure program like the USDA's rural development 
program, and they need access to someone they can trust for 
technical advice, on-site assistance, and help with managing 
the funding application process.
    Mississippi has 1,234 regulated public water systems. Only 
two serve populations over 50,000 persons, and only 59 serve 
populations over 10,000 persons. More training needs to be 
provided to small town mayors like Mayor Hill so that 
multimillion-dollar upgrades that will most certainly tax the 
ratepayers of these communities can be more readily understood 
and communicated to these residents who will ultimately be 
responsible for bearing the financial burden.
    Recently, many of the small communities in the Delta have 
received violations for a relatively new EPA regulation 
referred to as the disinfections byproduct rule. These 
byproductsare a result of disinfecting their water to make it 
safe to drink. If these small communities limit or reduce the 
disinfective levels of the water, they will most certainly 
comply with this EPA regulation, but the water may no longer be 
safe to drink. Once the disinfection byproduct rule is 
violated, many small communities are forced to spend limited 
resources to report these violations to the consumers.
    In the town of Shaw, population 1,900 persons, the 
community was under a boil water order for over 6 months 
because of a broken chlorinator needed to disinfect the 
drinking water. The local schools had to buy bottled water for 
6 months. After they called the Mississippi Rural Water 
Association's circuit rider, Tom Abernathy, they were able to 
come up with a plan to pay for a new chlorinator, revise the 
town's billing program--able to come up with a plan to pay for 
a new chlorinator, revise the town's billing program to 
accurately assess the water used by citizens, and receive the 
payments, train the new mayor and town council, get the town's 
credit stable and secure some emergency State Revolving Fund 
financing.
    In closing, whenever a small community is facing a 
compliance issue, the complication of a new EPA rule, a line 
break that they can't find that is causing people to lose water 
service, an emergency from a storm or power loss, we all call 
the circuit riders to tell us what it means and what to do. 
They have developed a trust relationship with small communities 
in their State that know how to fix things and are willing to 
come to your town day, night, or weekend.
    Thank you for the opportunity to testify here today. Mayor 
Hill and I are available for questions. Thank you.
    [The prepared statement of Mr. Newman follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]   
    
    
    Mr. Shimkus. Thank you very much, and welcome, Mayor Hill. 
It is good to have you with us also.
    I would now like to turn to Mr. Bobby Selman on behalf of 
the Mississippi Rural Water Association.
    And you are recognized for 5 minutes.
    Thank you.

                   STATEMENT OF BOBBY SELMAN

    Mr. Selman. Good morning, Mr. Chairman and members of the 
subcommittee. It is an honor to appear before you today.
    My name is Bobby Selman. I am a certified drinking water 
and wastewater operator in the State of Mississippi with an 
engineering background from Mississippi State. I have been 
working in the water world for 25 years, starting in my 
hometown in Lawrence County. I still work for the Lawrence 
County Water Authority in addition to 12 other small 
communities and rural water associations.
    I want to thank my Congressman, Gregg Harper, for his 
support and assistance to all the over 150,000 small public 
water systems across the country for sponsoring the Grass Roots 
Rural and Small Community Water Systems Assistance Act. 
Representative Harper's bill directs the U.S. Environmental 
Protection Agency to prioritize the type of technical 
assistance that small communities find is most beneficial.
    The rural water type of on-site technical assistance is 
what all the small communities in Mississippi and the other 
States rely on for help with compliance, operations, 
emergencies, line breaks, loss of water, setting rates, and 
training for operator certification. I am told that Congress 
funds the EPA's internal management budget by hundreds of 
millions of dollars every year. Small and rural communities 
want Congress to know that the only benefit we get comes from 
the small portion of the EPA funding that is directed to on-
site technical assistance provided by what we call circuit 
riders.
    What small communities do when they have a question or 
water issue is call their local circuit rider that they know, 
trust, and know can give them clear answers. These circuit 
riders often come immediately on site to small communities and 
teach them how to fix their problem. There is just no one else 
out in the field at the local level providing this essential 
help.
    After Katrina, two of my small communities in Simpson 
County were devastated. Each served approximately 2,500 people, 
and they were without power and water. People in communities 
can get by without power for a while, but not without water. I 
called the Mississippi Rural Water Association circuit riders 
and they found emergency generators for me and delivered them 
to the communities at no charge.
    Since the circuit riders know everybody in the State, they 
were able to borrow some generators from northern communities 
not impacted by the hurricane and had the generators delivered 
to get the drinking water and sanitation restored immediately. 
The circuit riders also had the technical know-how to rig the 
generator's electrical systems, size the right voltage, and 
even drive a backhoe if needed to clear the streets and dig up 
ruptured lines. All of this type of assistance is essential to 
restore a water supply in an emergency.
    I called a circuit rider out to help me at a Double Ponds 
Water Association, a community of about 1,000 homes to find a 
line break causing a loss of water for many homes. The circuit 
rider came with advanced radar equipment that can precisely 
identify the location of the break, which on this day happened 
to be out in the woods. By funding the circuit riders, Congress 
is allowing all small and rural communities to share this 
technical resource that no one community can afford on their 
own. We think it is the best use of our Federal water 
environmental dollars.
    With the federalization of the operator certification under 
the Safe Drinking Water Act of 1996, State rural water 
associations have become the main source of training for 
operators and the main source of continued education credits 
which are needed every year to maintain this certification.
    Many parts of rural America have seen industry move on, 
leaving behind depressed economies. In my region the garment 
industry moved south after NAFTA. When this happens, raising 
rates becomes overly burdensome. In the town of New Hebron, 
Mississippi, with just over 400 people, we are now being told 
that we need to comply with a new EPA wastewater discharge 
permit that will cost $2 to $3 million.
    I will close with some comments on the Federal water 
infrastructure programs, namely the EPA State Revolving Funds 
and the USDA Rural Development Grant and Loan Program. We are 
very appreciative for Congressional funding of these 
initiatives, and realize the funding constraints in Congress 
and the Nation. Notwithstanding the curtailment Federal 
funding, the regulatory burden continues to increase and become 
more complex.
    We urge you to emphasize grants in these funding programs. 
Low interest loans often don't help the communities facing the 
most severe hardship from Federal compliance, leaving the loan 
funds to be used for compliance with greater ability to afford 
financing. We are very grateful for the funding assistance. It 
has allowed many rural and small communities to have access of 
drinking water and sanitation that would otherwise not have 
been able to afford without the Federal assistance, and we want 
to be partners in the effort to make the initiative as 
efficient and successful as possible.
    Thank you very much, Mr. Chairman, and I am eager to answer 
any questions at the appropriate time.
    [The prepared statement of Mr. Selman follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
    
    
    Mr. Shimkus. Thank you very much.
    Our last but not least panelist is Mr. Robert Stewart, who 
is the Executive Director of the Rural Community Assistance 
Partnership.
    Welcome, sir, and you are recognized for 5 minutes.

                  STATEMENT OF ROBERT STEWART

    Mr. Stewart. Thank you, Chairman Shimkus, Ranking Member 
Tonko, and members of the committee.
    I think the previous witnesses and you all have done a 
excellent job of sort of framing the issue. As someone that has 
worked 20 years with hundreds of communities in Texas, both for 
the Rural Community Assistance Partnership and the Rural Water 
Association, and someone who has directed a national program 
for 10 years, I am here to tell you that the needs of small 
communities are many, the resources are limited, but I tell 
you, the dedication and the determination of small communities 
to provide their citizens with the best possible water is 
strong and undiminished.
    I want to--I am sure everyone knows a little bit about the 
Rural Community Assistant Partnership. It is in my testimony, 
and I won't repeat things that are in my testimony. I just 
wanted to sort of make a few points that have been touched on 
but maybe I could amplify a little bit.
    One is the access to capital. I think there is a real issue 
in small communities in accessing the financial resources that 
they need in order to build the infrastructure, extend lines to 
new customers. I believe Mr. Gomez talked a little bit about 
access to the municipal bond market. For small communities, 
this is just not an option at all. We find that there is 
53,000-some-odd community water systems in the country. Perhaps 
4 percent of them have the ability to access the municipal bond 
market.
    So what they are left with is the two primary Federal 
financing programs, being the Drinking Water SRF and USDA Rural 
Developments Water and Environmental Programs, and so, you 
know, it is really critical that those programs continue to be 
supported in a robust manner. We work a lot with rural 
development and their water environment program. They are the 
primary lender in rural communities. They have some 18,000 plus 
loans out with small water systems, and as you probably know, 
there is virtually no default on these loans. We take these 
matters very seriously in repaying the loans that are made to 
small communities.
    One of the things that RD has going for them is they have 
field staff in every State. They have the ability to work 
directly with the communities. The communities know their local 
folks in the district and State offices, and it is just a more 
cooperative and easier way to get funding through rural 
development.
    Rural Development also funds both the Rural Water 
Association and RCAP to do technical assistance and training. A 
lot of the staff that work for me around the country work 
through the application processes and all the requirements that 
are needed in order to get a loan from Rural Development.
    EPA State Revolving Funds are also a very important part of 
the financing scheme for small communities. I think all of you 
know that as a result of the 1996 amendments to the Safe 
Drinking Water Act the State revolving program was formed, and 
it was mainly to deal with compliance issues, and if you look 
at who is out of compliance or where the most health-based 
compliance issues are, 96 percent of those are from small 
communities. So you would think that, you know, most of the 
money or a big portion of the money would go to the 
communities, whether they are urban, rural, small or large that 
have the compliance issues, but as you can look at EPA's own 
numbers, perhaps 25 percent of the funding actually goes to the 
small communities in this country.
    You know, we would think that a larger amount of money from 
the SRF program should be dedicated to economically 
disadvantaged and small rural communities.
    EPA does have a--has a program as a result of the 1996 
amendments that funds the technical assistance kind of a 
program that both Rural Water and RCAP have advantage of. It is 
not funded at the authorized level that was authorized 20 some 
years ago, and so we would hope that you would consider some 
additional resources for that particular program.
    And I know one of the things you are looking at is what 
else can be done? You know, what else can we do to work with 
small communities. There are a lot of other options. One of 
which both Rural Water and RCAP work on is the sharing of 
services. How can small communities get together, share an 
operator, share a manager, share purchasing. How can we look at 
possibilities that actually--you know, combining systems if 
they are close. It is very difficult, and one of the problems 
the funding agencies have is that it easier for them to make a 
$10 million loan than 10 $1 million loans. So that sort of 
hurts small communities even more. With reduced staffing levels 
in both EPA and RD, there is an emphasis more for the larger 
loans, which I think adversely affects small communities even 
more.
    So I think the regionalization approaches where appropriate 
are important, but the only way those are going to happen is 
that if you have people like the circuit riders and the 
technical assistance providers that work for RCAP that are out 
working with those communities on a day-in/day-out basis to 
sort of work through those kind of issues.
    One of the other things real quickly because my time is 
running out is you talk about tools. I would like to give 
credit to EPA for developing the variety of tools and for 
working with Rural Development on tools. Assess management 
tools, tools to look at sustainability for communities. Again, 
tools are important to be developed for use by small 
communities, but it takes someone in the field like a Rural 
Water or an RCAP person to actually bring those tools out to 
these communities, and if it--I would also--if maybe this could 
be handled in the questions, I know you are interested in WIFIA 
and some of the other alternative financing programs. I would 
be glad to talk about that also.
    My time is up, though, so I really appreciate the 
opportunity to be here with you today.
    [The prepared statement of Mr. Stewart follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
        
    
    Mr. Shimkus. Thank you very much.
    And I will recognize myself 5 minutes for the starting of 
the questioning.
    And just before I start, I am in my 19th year. My first 
district was 19 counties. My second Congressional district was 
30 counties, and now I represent 33 counties out of 102.
    So we have really been able to access and use the USDA 
rural development and rural water, and it has really helped and 
kind of forced a push to regionalism and kind of closing the 
gaps of water or addressing the challenges that small 
communities have because they just--in rural America sometimes 
these communities are shrinking. I mean, they are not growing. 
They are shrinking. So their base to keep up, especially with 
new capital expenses. So that is--in my area it has been a 
very, very successful program, and I just throw that out 
because I have great people work on that, and they have done 
great work.
    I would like to go to Mr. Gomez first, and you have heard 
some of our witnesses claiming that the drinking water State 
Revolving Funds are not being made available to provide safe 
drinking water to the needs of our most needy communities.
    Is there a way to measure across the country whether the 
drinking water State Revolving Fund is meeting its 
Congressionally intended purpose or authorized purpose?
    Mr. Gomez. So that is a really good question. What we are 
aware of is that the drinking water SRFs are required to 
provide 15 percent of the funds to the small communities. Now, 
the extent to which States are doing exactly what you are 
asking, we don't know yet. I mean, that would be a good 
question possibly for GAO to look at.
    There are estimates from EPA, for example, that about 38 
percent of the drinking water SRFs have gone to small 
communities as of 2008. So that is the estimate that is out 
there, but to the extent that it is meeting small communities' 
needs, we don't know that.
    Mr. Shimkus. Great. Well, thank you.
    Are there any reports that show how fast this drinking 
water funding is spent, by whom, and where it goes, including 
distribution to the neediest communities?
    Mr. Gomez. So one of the things that we are doing at the 
moment is we do have ongoing work looking at the financial 
sustainability of the drinking water SRF, and so there we are 
looking at different ways in which States are managing these 
SRFs, and we are hoping to identify best practices that States 
are using. That report should be coming out this spring.
    Mr. Shimkus. Great. Thank you.
    Mr. Stewart, in your testimony you state that EPA State 
Revolving Fund needs to be, and I am quoting, ``better managed 
to meet small system needs.''
    Can you elaborate a little bit more on that?
    Mr. Stewart. Yes. What I would say, when you look at the 
numbers, EPA has a difference in between the number of loans 
they are making and the amount of the loans they are making, 
you know, and so the amount of the loans is not sort of the 
same as the number, and there is not as much actual money that 
is going into there.
    Now, the whole purpose of the SRF was to give the States 
the latitude to run it how they see fit, and I think most of 
the members of this committee would sort of agree with that 
because the conditions are different from State to State, but I 
would think there is some minimum requirements if we are 
looking at the high noncompliance rates of utilities, the 
problems with affordability, the problems with small customer 
bases that, you know, just some great emphasis needs to be paid 
to providing more funding for these disadvantaged and smaller 
communities.
    And, you know, some States, they are really good. My home 
State of Texas has a lot of money now that they are putting 
into water problems as a result of droughts. California has 
done the same thing. So each State runs a different--a lot of 
States put extra money in. Some States don't, you know, but I 
think it is good, and I think GAO has done a terrific job of 
looking at some of these issues, and I would encourage them to 
continue to do so.
    Mr. Shimkus. Thank you.
    My last question for Mayor Keegan, Mr. Newman, and Mr. 
Selman, can you just give us briefly your success on the State 
Revolving Fund versus the RUS, or do you access that? And why 
don't we go with Mr. Keegan first and----
    Mr. Keegan. Sure. We haven't had very much success. We have 
had some limitations due to the average income of our 
community. We have been told it has been too high and our 
average bill doesn't meet the minimum to qualify for the 
funding. We have hired two--we have paid two separate 
consulting firms to search out funds for us, and both reported 
the same thing.
    Mr. Shimkus. Thank you.
    Mr. Newman?
    Mr. Newman. Thank you, Mr. Chairman.
    In my experience, one of the issues with the SRF as 
compared to the rural development has been the paperwork is 
considered to be cumbersome, and the added administrative cost 
in applying often nullifies the low interest which in turn 
makes the SRF an option of last resort, which I don't believe 
was the intended purpose.
    Mr. Shimkus. Mr. Selman?
    Mr. Selman. Yes. Some of my systems I help we have used 
SRF. We are drilling a well right now at one of the systems 
because it depends on what area you are in the State, but we 
were having trouble through Rural Development getting on a 
timely process of getting the money to drill this well and it 
was needed.
    The Town of Monticello we got a State Revolving Fund grant 
for a sewer project right now that we just completed. So in our 
district, in our part of the State, you know, we have used it 
and it has helped, but the USDA seems to be more with the 
grants. Some communities can't afford that much of a loan, and 
the grant helps them that much more over the USDA money.
    Mr. Shimkus. My time is expired, and I know Mr. Stewart 
wanted to answer, but I need to go to Mr. Tonko who is 
recognized for 5 minutes.
    Mr. Tonko. Thank you again, Chair Shimkus, for calling this 
hearing and for inviting the witness from 20th District of New 
York. Mayor Keegan, I appreciate you making the trip here 
today.
    Drinking water systems in the district of that I represent, 
and I think every district across the country, are facing 
significant challenges as they work to ensure that everyone, 
including people in small and rural communities, have access to 
safe water. That is why I introduced the Aqua Act last Congress 
to improve all of the tools EPA currently has to assist these 
systems.
    I appreciate the work that my colleague Mr. Harper from 
Mississippi has done on these issues, and I look forward to 
working with him to get at least some of these changes into 
law. It seems that every week in my district there is another 
water main break. Treated water and the money we have invested 
is being wasted. So it is dollars and water flowing out of 
those pipes.
    Mayor Keegan, can you describe some of the issues you have 
had in your town with water main breaks and the obstacles you 
face in preventing these ruptures?
    Mr. Keegan. Well, we don't really--with the recent frost 
that--when we have a water main break it doesn't always just 
pop up through the pavement because the ground is so frozen. So 
we don't often know where the break is, and we don't have the 
tools or equipment to locate the break. So we have to either 
call a consulting firm, and that could be $1,500 a day to come 
with special tools, or we call the New York Rural Water 
Association. If they are available they will come. So that is--
it is very difficult. We don't always know where the breaks are 
located.
    Mr. Tonko. Thank you.
    And, you know, this is such a serious issue and one that 
will require more significant infrastructure financing, 
including that investment in technology, not just technical 
assistance.
    Mr. Gomez, GAO has studied the range of Government programs 
that provide assistance to rural and small water systems as 
well as the need the systems face.
    What is the funding gap for water infrastructure? I know 
earlier you gave a combined total, I believe, for water and--
drinking water and sewer. What is the funding for the drinking 
water infrastructure and how much money does it entail?
    Mr. Gomez. So EPA has estimated the funding gap, and they 
have estimated it to be $662 billion. That is an estimate from 
2002, and that estimate is a based on the next 20 years.
    Mr. Tonko. Thank you. And, obviously, the water systems 
represented on this panel I would think agree that more 
resources are required.
    So Mayor Keegan, do you support legislation to reauthorize 
the SRF and increase the funding available? You know, you 
mentioned in your testimony the need for grants, not just 
loans, and I think many of you mentioned that. Is it fair to 
say that your village has reached the limit of its ability to 
borrow more for the needed funds?
    Mr. Keegan. Oh, absolutely. We really just can't even 
entertain a municipal bond at this time, and right now we are 
only spending our budget items on repairs. We don't have enough 
money in our budget for replacement of old infrastructure. So 
we are looking for funding, but it has just been a struggle to 
find any that----
    Mr. Tonko. And I assume the SRF is also a favorable thing 
for you?
    Mr. Keegan. Yes. Absolutely. We encourage the refunding of 
that.
    Mr. Tonko. And do you also support efforts to expand 
technical assistance initiatives like the Aqua Act?
    Mr. Keegan. Absolutely. Yes. We call on lots of different--
any technical assistance that can be provided to us is really 
of value.
    Mr. Tonko. And to the other gentlemen on the panel, any 
responses in terms of technical assistance and the relevant 
role it might play?
    Mr. Newman. In my experience, technical assistance is 
absolutely essential in complying with the various rules and 
regulations of the EPA, particularly because many of these 
rules are often complex and require innovative approaches. So 
the training and technical assistance that is provided, for 
example, by our State rural water associations is indeed an 
essential component of compliance.
    Mr. Tonko. And the other gentlemen in terms of technical 
assistance funding and the SRF?
    Mr. Selman. Very essential. We have--you know, we get 
mayors and water board managers and whatever and they need all 
the training they can get. You know, the secretaries, the rural 
water puts on a training for them. They certify them. Every bit 
of assistance we can get is very well needed.
    Mr. Tonko. And Mr. Stewart?
    Mr. Stewart. Yes, sir. The one point I would like to make, 
technical assistance is important also because we need to 
ensure the investment that the Federal Government is making 
through EPA and Rural Development, and that technical 
assistance allows people to go out and work with these 
communities and make sure that those loans are going to be 
repaid, and also to implement like asset management programs so 
that the infrastructure and the materials that the utility has 
is going to be maintained in top operating condition and so we 
don't have to go back repeatedly necessarily to replace things 
that could have been maintained to start with.
    Mr. Tonko. Right. Well, the Aqua Act that I introduced 
would cover some of these costs.
    So I appreciate your comments, and with that I yield back.
    Mr. Shimkus. Gentleman yields back his time.
    The Chair now recognizes the vice chair of the 
subcommittee, Mr. Harper, for 5 minutes.
    Mr. Harper. Thank you, Mr. Chairman, and I can think of few 
topics more important across the country in every Congressional 
district than the one we are on today, and so thanks to each of 
our guests who are giving testimony today, and also welcome, 
Mayor Hill, and also, you know, just to have each of you here 
is something that we greatly appreciate, and my dear friend 
Kirby Mayfield who is here who is CEO of the Mississippi Rural 
Water Association who has been a great contact and person 
sharing information with us. So we are thankful for that.
    If I could, Mr. Newman, ask you, in your testimony you 
talked about the trust relationship that small communities have 
with circuit riders. As we continue discussing this issue of 
how EPA could and should help our small communities comply with 
Federal regulations, among other things, would you please take 
a minute and elaborate on the importance of that trust 
relationship that our water systems have with our circuit 
riders?
    Mr. Newman. Yes, sir. The relationships that have been 
established over the years between the rural water associations 
and the utility managers, the certified water operators, 
mayors, and small town council has been well established over 
many years. Prime example, just last evening a small community 
in Mississippi, their water well was down due to snow and it 
lost power for a significant period of time, and the mayor--of 
course, customers were calling. It was developing into quite a 
situation.
    The mayor contacted me, and I immediately contacted the 
Mississippi Rural Water Association, and they in turn 
immediately began locating a generator for that town, and, 
thankfully, were able to get that generator delivered to 
resolve that situation.
    So, in essence, the experience is if you have got a problem 
and you don't know what to do, then you call the Mississippi 
Rural Water Association, and they are there every time to 
provide the needed assistance.
    Mr. Harper. And I am also glad you explained to some of our 
folks, some of our members, that we actually have snow in 
Mississippi. So that was a surprise to, I think, some.
    Mr. Newman. Yes, sir.
    Mr. Harper. And Mr. Selman, thank you so much for your kind 
words and your testimony, and I look forward to visiting with 
the Double Ponds Water Association folks next month in DC.
    Mr. Selman. Thank you.
    Mr. Harper. You talked about Hurricane Katrina which 
impacted our State and Louisiana greatly. It was the greatest 
most costly natural disaster ever in our State's history, and 
you mentioned two water systems in Simpson County, in my 
district, and the assistance they received after Katrina.
    Would you talk for a minute about some of the tools circuit 
riders have at their disposal that small water systems often 
don't have or have other access to. I think you mentioned radar 
equipment. How important are these tools to the survival of our 
smaller water systems?
    Mr. Selman. Yes. Very important.
    Before Katrina, we hadn't had a natural disaster in south 
Mississippi like that since Camille. I reckon 1969, but we were 
without power, and we are about 120 miles from the coast, and 
we were without power about 20 days, 19, 20 days, and at that 
time some of the water systems had started putting in 
generators, very few, but some had, and, you know, we--like I 
said in the testimony, you can make it without power for a 
while, rig up your generator to get the TV on or something, but 
without water, you can't make it, and we immediately called our 
circuit riders. They found generators in Arkansas, north 
Mississippi, wherever they could get them, brought them to us, 
helped us get them hooked up, and we got water flowing again. 
Same way with the wastewater. We had some lift stations that 
you have to pump wastewater that we hooked into those 
wastewater stations and got water to the lagoon or the 
treatment plant.
    The ground-penetrating radar you mention, they keep one of 
those. Anytime we need to locate a line--a lot of these old 
lines were put in are growing up in trees now. You can't--you 
don't know exactly where the line is. They come out there with 
this machine and locate that line for us and help us tap it, 
help us do whatever we need, and that machine is about $35,000, 
and, you know, most of these little systems don't have the 
money for that. So what we do, we call Rural Water and they 
help us in whatever needs we need.
    Mr. Harper. That is great. Well, thanks to each of you and 
great to have all of you here, and thank you for that, and also 
want to specifically thank Ranking Member Tonko for his 
assistance as we try to work through these important issues.
    Thank you.
    Mr. Shimkus. Gentleman yields back his time.
    Chair now recognizes the gentleman from Texas, Mr. Green, 
for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman for--both you and 
Ranking Member Tonko for holding the hearing on the drinking 
water needs of smaller communities.
    I represent a very urban district in unincorporated and 
incorporated Houston, Texas, and we have some of the same 
problems in our suburban areas that will not be annexed by our 
cities because the property tax could never cover the cost, and 
yet they are literally south of Intercontinental Airport in 
Houston and areas in that district, and over the years in 
Texas, we have received money from the State Revolving Fund. In 
fact, partnered with using it in some of these communities to 
provide fresh water but also partnering with the county 
because--for sewer service.
    But it bothered me that last year Texas received the lowest 
amount of money from the State Revolving Fund of $53 million, 
and that goes back to 1997, and that is not anywhere nearly 
accounting for inflation. The fact is deeply troubling because 
of the significance in growing drinking water infrastructure 
needs of Texas in general, and, like I said, a very urban 
district. If it is in the city, they will get--they will do it, 
but this area is not attractive to be annexed, and it is very 
poor communities, and that is where we need the help. Their 
septic tanks fill, and, again, a very urban area and very 
shallow water wells. That is why this hearingis important.
    My first question is, Mr. Newman, Mr. Selman, and Mr. 
Stewart, do you believe that the Congress should reauthorize 
the drinking water State Revolving Fund this year?
    Mr. Stewart. I will be glad to start off. Yes. I think----
    Mr. Green. I mean, it seems like an easy one----
    Mr. Stewart. Yes, sir. Exactly. It is one of the most 
important funding mechanisms within this country to fund water 
systems.
    Mr. Green. For the other three gentlemen, do all of you all 
agree we ought to reauthorize it?
    Mr. Selman. Yes, sir.
    Mr. Newman. Yes, sir.
    Mr. Green. OK. Do you belive Congress should increase the 
funding provided to States and local communities through the 
drinking--through drinking water for State Revolving Fund? 
Raise the authorization for it?
    Now, I will explain to folks, authorization is we have 
that, but, you know, you can raise the authorization as high as 
you want, you still have to go back every year and beg the 
Appropriations Committee for the money.
    Mr. Shimkus. Yes. If I may interrupt--he is saying, do you 
think that the authorization amount should be raised across the 
country? That is the----
    Mr. Green. If we get asked for appropriations----
    Mr. Shimkus. If we reauthorize----
    Mr. Green. Do you think there are water needs around the 
country, not only in your States, but others?
    Mr. Selman. Yes, sir.
    Mr. Stewart. Well, my opinion is, this is an investment. 
This is to capitalize the revolving funds that the States have. 
So this is not money that is just going away in grants. This is 
to capitalize money that can be revolved again and again for 
use of communities large and small.
    Mr. Green. But should the fund be raised so we can cover 
more communities?
    Mr. Keegan. Absolutely.
    Mr. Green. Mr. Newman?
    Mr. Newman. Absolutely. Yes.
    I would also like to add that in addition to raising the 
funding to cover more communities, take a look at the process 
and make sure that the money is being utilized by the 
communities that it was intended to be beneficial for.
    Mr. Green. You think there is something in the authorizing 
law that we need to change that would make that happen?
    Mr. Newman. I am not so sure about the process of the 
authorization of the law as I am concerned about just the 
implementation of the funds and those things that discourage 
the smaller communities, you know, in Mississippi that I am 
familiar with from pursuing those funds because these funds 
were intended to benefit these small communities, and there is 
a gap, and I think that we all need to just figure out how to 
bridge that gap.
    Mr. Green. You know, the biggest problem we have in my area 
is that these are very poor communities and to have a revolving 
fund and have it paid back, they could hardly afford the 
monthly water bill and sewer bill to be able to pay it back. So 
there is--that is the issue, again, in my area, and I assume it 
is in north Mississippi just like it is in other parts of rural 
Texas.
    Mr. Stewart, you indicated you worked two decades on 
drinking water issues, and we have had--I used--the last few 
years our rain stopped at the Louisiana border, because from 
Beaumont, Texas all the way out west it has been drought. Not 
as much in the last year, though. We have had good rain in the 
Houston area, in southeast Texas, and all the way to Rio Grande 
Valley, but we still have problems out past San Antonio because 
that is still in a drought area.
    How would you describe our current state of drinking water 
infrastructure in Texas?
    Mr. Stewart. I would say for the most part it is pretty 
strong, but I think there are certain disadvantaged communities 
like you are talking about that I really think need some 
additional resources, and there is some hard-hit drought areas 
in north central Texas of my area of central Texas that I think 
just need some support, and fortunately we have--and Texas has 
benefitted because we have river authorities, we have a 
progressive water development board. We have people that are 
looking at this issue from a lot of different angles.
    Mr. Green. Well, and Texas did provide recently the voters, 
voted for a constitutional amendment to provide for it because 
of the problems we have.
    In 2011 Harris County, as much of our State was in the 
grips of the drought, during the height of the drought, due to 
aging water lines, hardening soil, hundreds of water line 
breakage daily, resulting in billions of gallons of lost 
treated water, Mr. Stewart, do you have any sense of the 
economic impact of the 2011 drought had on our State?
    Mr. Stewart. That is something the GAO might be better to 
answer, but I know it has been severe economic impact. Because 
if you don't have the water sources, you are not going to be 
able to support the businesses, the growth that is occurring 
all over Texas. Water is just the foundation of all the economy 
in this country.
    Mr. Green. I know I am over time.
    Thank you. I am sorry.
    Mr. Shimkus. Way over time.
    Mr. Green. We talk a little slower.
    Mr. Shimkus. I thank my colleague.
    Chair now recognizes the gentleman from Pennsylvania, Mr. 
Murphy, for 5 minutes.
    Mr. Murphy. Thank you all. I will talk a little fast. See 
what I can get in.
    This is for Mr. Selman or Mr. Newman, and thank you all for 
being here. Very informative panel.
    Engineers who serve in some of these rural water systems in 
my district, for example, in Greene County in my southwestern 
Pennsylvania, very rural area, but they tell me that States 
oftentimes impose their own drinking water requirements which 
are far more strict than the EPA standards set forth in the 
Drinking Water Act.
    Could you please provide some examples for me where some of 
these State-imposed requirements that you have seen in your 
community or communities go beyond or differ from the EPA 
standards?
    Mr. Newman. In Mississippi, and Mr. Selman can elaborate on 
this or correct me if I am wrong, but I believe in Mississippi 
that our State regulations are exactly the same as the Federal 
guidelines, being no more or no less stringent than the 
language in the Federal act.
    Mr. Murphy. Same for you, Mr. Selman?
    Mr. Selman. Yes, that is correct.
    Mr. Murphy. And does anybody else see differences in their 
communities?
    Mr. Selman. No. That's correct. I don't think our 
regulations could be any more stringent than what the Federal 
act has written. That is the way the State of Mississippi does.
    Mr. Murphy. Mr. Stewart?
    Mr. Stewart. I guess, sir, I might note that some States--
EPA regulates water quality. They don't regulate capacity 
requirements, and some States require that you have a certain 
well production, a surface water treatment plant, storage and 
pumping capacities. In a lot of cases, those adversely affect 
small communities because they are not really. You know, they 
are not engineerily--they are not on an engineering basis 
justified on the basis of how much water is being used.
    Mr. Murphy. So, for example, in my Greene County area where 
they are dealing with things like small dam or water line 
extensions, not necessarily water quality, but that has to do 
with water delivery. Is that what you are saying is that----
    Mr. Stewart. Exactly. The capacity requirements, whether--
again, pumping or storage, you know, elevated ground storage 
tanks, sometimes those capacity requirements are a little bit 
higher than I think would--to what is needed to protect public 
health.
    Mr. Murphy. Well, what this gets into--well, let me come 
back to that.
    So how much could the heightened standards cost rural 
drinking water systems, though, if we make some changes in 
here? Will it affect--I mean, I heard some of you alluding to 
cost issues here. Mr. Keegan, you talked about consulting an 
engineer and what those costs are. What does this vary for 
communities, rural communities? Anybody have any estimates here 
of that cost that you would bear?
    Mr. Keegan. Probably save us on all the consulting fees 
that we spend looking for funding.
    Mr. Murphy. Anybody else have any thought about this?
    Mr. Stewart. Well, I would just say it depends on the 
requirement. You know, if you are having to treat for arsenic, 
then you are probably talking a doubling or tripling of the 
water bill for a small community.
    So it just depends on what kind of treatment that--what 
kind of constituent that EPA is requiring the small community 
to treat for.
    Mr. Murphy. So the question I have, and I know you talked 
about some of these things, but how do rural systems get the 
funds they need to deal with this compliance issue? Any of you 
have any thoughts on this of what we do? I mean, I heard one 
comment, could the Federal Government send more money, and 
certainly where the Federal Government increases or changes 
standards, I sometimes think it is unfair to say: You now must 
do all these things, and you must bear the cost, but it comes 
down to a question, though, of what else--I mean, how are these 
costs borne oftentimes when you may have someone who lives a 
mile from the next person or a half mile from the next person 
and there is huge costs associated with this.
    Anybody have any comments on how that should be set up?
    Mr. Keegan. We just raise our rates. We just had the--the 
DEC required our local school district to be on municipal 
water, and they passed a bond. So they passed that price on to 
the taxpayers, you know, to hook into the system at quite 
considerable expense, and----
    Mr. Murphy. What kind of percentage increase would you say 
that was?
    Mr. Keegan. I am not sure.
    Mr. Murphy. Anybody else have any other thoughts other than 
put it on the ratepayers?
    Mr. Selman. Raising rates is the only way that small 
communities like I work for, that is the only--only option they 
have, and, you know, in the 10 to 20 percent range sometime.
    Mr. Murphy. And we have these grant systems. I know that 
some of my communities are asking for some changes in the way 
that the loans are established, rates, et cetera. Any comments 
on those?
    Mr. Keegan. The paperwork is quite cumbersome, and, you 
know, usually we have to hire a consulting firm to help us 
apply for the loan.
    Mr. Murphy. Can you elaborate on that cumbersomeness, what 
kind of hours and time that adds to your cost?
    Mr. Keegan. We just aren't--we just don't have the staff 
who can understand, you know, what is required in the 
paperwork. We give them the, you know, the data, how much water 
we use every day and that kind of thing.
    Mr. Murphy. So is it safe to say that simplifying paperwork 
and if you are going to be giving--required to have lots of 
paperwork to also provide some assistance in filling that out 
of some sort?
    Mr. Keegan. Absolutely. Yes.
    Mr. Murphy. Thank you so much.
    Mr. Shimkus. For the second time, I am going to try to be 
quicker on the gavel so everyone gets a chance for----
    Mr. Latta is recognized for 5 minutes.
    Mr. Latta. Well, thank you, Mr. Chairman, and to our panel, 
thank you very much for being here.
    This kind of strikes home to me because as a county 
commissioner in Wood County--and from Wood County in Ohio for 6 
years and handled a lot of water and sewer issues, and also we 
created a regional water and sewer district when I was the 
commissioner to put things together because my home county was 
over 600 square miles. We had all or part of five cities, 21 
villages, 19 townships and a lot of unincorporated area.
    And it is important to--and hearing all of you brings back 
memories of over 20 years ago that I used to sit in a lot of 
meetings and hear people talk about because they are really 
very important issues. In Ohio alone, I think we have got about 
$21 billion right now that we are looking at that we need in 
infrastructure improvements from water to wastewater and storm 
water, and so what you are saying here today is very, very 
important, and really appreciate you being here because I can 
commiserate with what you have all said, and I have also been 
working on legislation for at least one session to try to help 
on the wastewater side to help rural communities.
    But if I could, because I take it you all had very good 
testimony today, and again--and appreciate you being here, and 
if I could start with Mr. Gomez, you know, you--I think it is 
important because one of the things that we have been hearing 
out here is there is a shortage of dollars out there that we 
have, especially--and when you are talking about our rural 
areas.
    Could you discuss the relationship between the EPA and USDA 
programs and whether they are--you know, there are overlaps out 
there and what about the efficiencies or synergies that could 
occur if we were really looking at these programs and make sure 
that we didn't have duplication out there or anything like 
that.
    Mr. Gomez. Sure. Thank you.
    So we have looked at those two programs in particular, and 
also at the other agencies that have programs that help our 
rural communities.
    With respect to the USDA rural utility service and the EPA 
drinking water SRF, they are--they do have some similar 
programs. We did not find any areas where they were duplicating 
effort, meaning that they were funding the same project for the 
same purpose. Projects can get funding from both programs, but 
they are usually focusing on different areas.
    Now, the other thing that we have reported on is the 
importance for those two agencies to work together to 
collaborate, but also to encourage the State SRF programs to 
work closely with the USDA rural utility service so that they 
can get efficiencies.
    You know, one of the recommendations we made was that they 
needed to come up with a uniform preliminary engineering report 
so that communities aren't filing multiple engineering reports, 
which cost money, and so those are things that we are tracking. 
We were happy to hear that they have come up with the uniform 
preliminary engineering report and that some States have 
already adopted it.
    So we think those are places where if by working together 
they can better target the monies.
    Mr. Latta. Thank you.
    This is for Mr. Stewart and Mr. Newman because you both 
kind of touched on it. In your testimony you had mentioned, Mr. 
Stewart, about bringing the tools back to the community and the 
cost of that technical assistance because I know what that 
would cost, and, you know, what do you find? Are the tools 
there, are they readily available? Because I know we heard from 
some other of the Members asking the panel about the cost, but, 
you know, do you find that you have that assistance out there 
to be able to get that as soon as you can get it?
    Mr. Stewart. Both RCAP and Rural Water have a variety of 
tools that we bring to bear with small communities. So they are 
readily available, I think, and EPA and RD are working on 
different tools. I think I have touched on them in my 
testimony. I think it is the access to those tools that--that 
is needed. We need the technical assistance to bring those 
tools, you know, whether it is an asset management program, 
whether it is a financial management program, whether it is an 
O&M manuals. Whatever those tools might be, the real expense is 
not just creating the tools, it is bringing it out to the small 
communities that can't access them unless you have a technical 
assistance provider out there working with them.
    Mr. Latta. Thank you.
    Mr. Newman, would you like to touch on that about that 
assistance out there in the communities?
    Mr. Newman. Well, to reiterate the comments that I have 
made, as well as Mr. Stewart, from the perspective of the water 
system manager, then the resources, the assistance is 
invaluable because there are very varied issues that occur 
across a water system or a wastewater system that may be beyond 
the scope of that particular utility and beyond the financial 
capabilities. So utilizing the services of the Rural Water 
Association is absolutely essential.
    Mr. Latta. OK. Thank you.
    Mr. Shimkus. The gentleman's time is expired.
    The Chair now recognizes the gentleman from West Virginia.
    Mr. McKinley. Thank you, Mr. Chairman.
    Going to go in several directions with this, but I have 
got--we have all heard a lot of horror stories, and I have got 
mine in my district. I have got a little town in West Virginia. 
I think we have got a slide, perhaps, of a water line that they 
are--they have been facing--could we get that up? There it is.
    It shows how just colluded the line is, that they can't--
they have applied--however, knowing this, they have applied 10 
times to try to get money, and they have been rejected 10 times 
since 2002. It just isn't--people--we just don't have the money 
in the SRF, and what I was particularly pleased about was the 
President this year actually maintained the--for the most part, 
the funding from the previous year as compared to what we have 
seen in the past where the year before he made a 40 percent 
reduction in the SRF because they said the priority was climate 
change, and we have heard that mentioned from the other side of 
the aisle. They thought climate change was a higher priority 
than funding our water problems in rural America.
    I have got--I am curious. So I hope we--I hope someone has 
seen the light with that, but the--I am confused a little bit 
about the regulatory burden because it--particularly a lot of 
you have been talking--this hearing is about rural America, not 
what has been offered is we got to be concerned about the big 
cities.
    I am worried at this hearing that we stay focused on rural 
America because here is just a listing of some of the rules--I 
don't know whether these people--I have designed a lot of sewer 
and water lines.
    So as an engineer I am quite familiar with this, but we 
have got things that a small city has to take care of is the 
arsenic rule, the chemical rule, lead and copper rules, the 
uranium rule, the Federal backwash rule, the groundwater rule, 
the enhanced surface water rule, the cert, both I and II, the 
disinfect byproduct rule, 1 and 2, the surface water rule, 
total coal--I could go on and on.
    These are rules that small cities have to deal with just as 
well as a larger community of 100,000 or 200,000. So my--and I 
have got three other communities that they are just trying to 
find money for operations, let alone install--this one 
community is--they are working on--like, one of you said up 
there, a 19th century system. They are trying to replace it 
with that water line right there.
    How can we get money for operations? Because we have got 
one community in West Virginia--they are dumping raw sewage 
into the Potomac River because they don't have money to be able 
to do their maintenance work that they have to do. We have got 
others that--I got another community, they are getting their 
water through water buffaloes pouring into a cistern so that 
they have some water with that----
    This is 2015 in America, but yet we have an administration 
that until this year every year for the last 3 years has been 
reducing money to the SRF. What are we failing--how are we 
failing our country when we don't put enough money into the 
SRF? How do--because that is what I have heard many of you say, 
we need to put more money into that program. What do we have to 
do? How much more money?
    Can any of you suggest where we have to go with that? And I 
would also add, should we be prioritizing the SRF money for 
rural communities so that we are weighting them a little more 
heavily than the big cities? Mr. Stewart, does----
    Mr. Stewart. Well, sir, you are preaching to the choir 
here. I mean, I think all of us would agree that a 
significantly greater percentage of the SRF money should go to 
small communities, and they should be able to access it easier.
    One think I would like to say real quickly is you can't 
even have a chance of getting the SRF money unless you get on 
the Intended Use Plan, and for a small community, how do you 
get on the Intended Use Plan? I mean, you know, the--all of us 
can tell you that is difficult to do.
    I mean, do you have the technical assistance? Do you have 
an engineer you are working with? Somebody that is going to 
submit the paperwork so you even have a chance to get on the 
money? And that is a problem. That is one thing I said in my 
testimony. We need some assistance just so these small 
communities could get on the Intended Use Plan, which is what 
they do to prioritize money into the SRF.
    Mr. McKinley. How can we weight--what are some--what would 
be some factors or--that we might be able to weight so that a 
small community putting in will be given better consideration 
than a larger communities? Any of your thoughts? Mr. Gomez?
    Mr. Gomez. Well, generally, what GAO always recommends is 
that you target Federal funds to those communities most in 
need, and so if these are in communities, that is where the--
that is one of the areas that we could target.
    Mr. McKinley. OK. Well, I guess we are running out of time, 
but, again, Mr. Chairman, thank you very much for bringing this 
up.
    I hope we continue to--this is a--for small cities. The big 
cities have their own issues, but they have the resources and 
the critical mass to be able to take care of--our small towns 
of 400, 500 people, we are struggling. We better find it.
    Thank you very much.
    Mr. Shimkus. I thank my colleague.
    The Chair now recognizes the gentleman from Ohio, Mr. 
Johnson, for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    I represent Appalachian, Ohio, and I don't have to tell you 
folks probably how rural that is. I hear the horror stories, 
many of which you have just heard. I could cite similar cases 
that my colleague from West Virginia, Mr. McKinley did.
    Mr. Selman, long before I was elected to Congress, I served 
26 years in the Air Force, and I was stationed in Columbus, 
Mississippi, and you know how rural that area is. So I have 
seen this for a long time.
    Mr. Gomez, does the GAO track and can you tell us in 
regards to all urban and rural systems how many municipalities 
have their systems charge the true cost of providing water to 
their customers? In other words, how many of them are operating 
in the red?
    Mr. Gomez. That is a really good question, and it is always 
one area that is debatable, right, whether people are actually 
paying the true price of what the water costs. I don't believe 
that we have done work on that. But if we have, I would have to 
get back to you on that.
    Mr. Johnson. Yes. Would you take a look at that, please. I 
think the American people would be interested to know how these 
small rural communities are struggling and many of them are 
operating in the red, as it stands right now, because their 
residents can't even afford the cost of providing the water.
    Mr. Gomez. What I can also say is that EPA has estimated 
that, for these rural communities, if they have to undertake 
these water and wastewater infrastructure projects, their rates 
will likely be four times what the urban rate payer would be 
paying.
    Mr. Johnson. Oh, absolutely.
    Mr. Gomez. So that is not affordable.
    Mr. Johnson. Yes. And I have got rural areas that are under 
that exact pressure. They don't have the money. Because of the 
economy, they don't have the money to comply with the EPA's 
clean water mandates and system mandates today. And on top of 
that, they are being leveled with these fines that they also 
can't pay. So, I mean, it is like trying to get blood out of a 
turnip. And I know you guys know what a turnip is. So it is 
tough. It is tough.
    Let me ask you a question, Mr. Newman. Your testimony 
mentions that the town of Como, Mississippi has 2 million in 
wastewater needs and 1 million in drinking water upgrades that 
it needs to undertake. What is the annual operating budget of 
Como?
    Mr. Newman. The annual operating budget in the town of Como 
is approximately 150,000 annually.
    Mr. Johnson. OK. All right. And what is the average income 
of Como residents?
    Mr. Newman. Per capita, about 21,000.
    Mr. Johnson. OK. Is raising local water rates a realistic 
possibility?
    Mr. Newman. It is a realistic possibility from a standpoint 
of operation and maintenance, but not from the standpoint of 
addressing----
    Mr. Johnson. Making these upgrades?
    Mr. Newman. That is correct, yes.
    Mr. Johnson. Yes. OK.
    And even if you raise the rates operationally and 
maintenance-wise, would it be enough to cover the cost of 
providing the service?
    Mr. Newman. No.
    Mr. Johnson. OK. What is their access to or are there 
limits on other funding sources like commercial lending? Now, 
that is a double-edged question because the question itself 
kind of says, ``Well, why don't you go in debt----''
    Mr. Newman. Sure.
    Mr. Johnson [continuing]. ``To provide water?'' And that is 
certainly not a principle that I subscribe to, but are you 
considering other sources?
    Mr. Newman. By and large the primary source is rural 
development primarily because of the grant component. Other 
options, as we have discussed, include State Revolving Fund, 
even commercial lending.
    However, as is the case with SRF, commercial lending is 100 
percent loan and the interest rates on the commercial loan is 
typically going to be higher than the SRF.
    But at either case, because of the low economies of scale, 
a community like Como can't afford to borrow the money 
necessary to make these improvements. They just don't have 
enough customers over which to spread the cost.
    Mr. Johnson. OK. All right.
    Gentlemen, for Mr. Newman, Mr. Keegan, and Mr. Selman, what 
challenges do you have in assessing the drinking water State 
Revolving Funds and how does that compare with accessing rural 
utility service funding?
    Mr. Newman. Well, and I will allow these gentlemen to 
elaborate. But one of the issues--and, I think, we touched on 
it as well--you have got more help in applying with RUS as 
opposed to SRF. The cost of applying for SRF, you may have to 
utilize services from a consultant which adds to the cost and 
that is typically not the case with the rural development 
process.
    Mr. Johnson. OK. Mr. Selman?
    Mr. Selman. Yes. Well, we have been able to use some SRF 
money. Our engineer takes whatever they allow as that 
consultant amount. You know, whatever they allow for an 
attorney, for an engineer or whatever, he does the paperwork 
for whatever that is. And they have got that specified in the 
loan.
    Mr. Johnson. OK.
    Mr. Selman. And we have been able to--I know certain 
regions, maybe not. But we have been able to take advantage of 
some SRF money. We were having trouble getting money through 
rural development.
    Mr. Johnson. Thank you. Mr. Selman. My time has expired.
    But, Mr. Keegan, do you want to respond?
    Mr. Keegan. We have had a lot of trouble just accessing 
funds from either program. In New York State, a lot of the 
funding goes to communities that have some sort of citation, 
some problem with their system. Our engineers work very hard to 
keep our system smooth running. So we are sort of at the bottom 
of the pile. So----
    Mr. Johnson. Thank you very much.
    Mr. Chairman, rural America knows hard it is to get blood 
out of a turnip, and I appreciate you having this hearing so 
that we can shed some light on how difficult it is to do this.
    Thank you very much.
    Mr. Shimkus. Well, thank you very much.
    And I thank my ranking member and my vice chair, who is, 
you know, trying to lead this charge, too.
    Last but not least, Mr. Cramer from a rural State of North 
Dakota.
    So you are recognized for 5 minutes.
    Mr. Cramer. Thank you, Mr. Chairman from Illinois and 
ranking member from New York, for acknowledging rural America 
and for reminding us there are other rural places that are 
better known for their urban centers. It is good to have an 
alliance.
    My colleagues or my constituents with the North Dakota 
Rural Water Systems Association would be very proud of all of 
you. You have done a great job today, and I felt right at home 
even with the unusual accents. But it is a reminder that there 
are some things we work together on and that are very 
important.
    And I won't--you know, I won't delay except to tell you 
that we hear a lot--I hear a lot about the circuit rider 
program from our folks, and I think you raise a very important 
issue. And I think that it is incumbent upon us now, as 
policymakers and eventually appropriators, to look for 
opportunities to prioritize some of the programs you talked 
about within the context of the entire act. And given the 
constraints, the financial constraints we have, we do have to 
be a little bit creative, but certainly we can re-prioritize.
    I want to just ask for maybe a little bit of elaboration on 
one point. I thought the GAO report was fantastic frankly. And 
I think that it was--it is nice to see the alphabet soup, as my 
constituents often refer to it, and see that there is both 
recommendation, findings, and then response by multiple 
agencies that have a tendency perhaps to create extra burden by 
virtue of requiring, you know, sort of uniform processes, but 
not in a uniform way. And so the uniform preliminary 
engineering report template, I think, is a great tool.
    And I think at a time when our constituents really are 
looking for an efficient, effective Government, this is a good 
example. And I raise it because I wonder how many more times we 
could duplicate this throughout the system. One of the 
frustrations I have seen in the last 2 years here is, not just 
with EPA and USDA rural developments, certainly, in fact, you 
know, there are many others have more. I just hope that we 
could, as a House, as a Congress, and as public officials at 
every level, look for more of these types of opportunities 
where the public could go, wow, that makes perfect sense. 
Because right now they look at it--and I am sure you all do and 
say, ``You mean I have to hire the engineering firm to do the 
exact same thing all over again for another agency and pay them 
this same.''
    So, I guess, mainly what I want to say is thanks for that. 
I will want to be monitoring that very carefully to see how it 
works out, and I know you will as well, Mr. Gomez, because I 
think therein lies the nuggets of opportunity to demonstrate 
functionality of Government in a way that people expect of us 
and that we haven't probably done so well.
    Mr. Gomez. Thank you. And we are tracking that, by the way. 
It is part of our tracking that we do every year because we 
want to make sure that those agencies are making progress and 
that it is helping the communities that are in need.
    Mr. Cramer. Well, thank you for that. And again thanks to 
all of you. And I will leave some time on the clock and not--
and just thank you for being so patient to hang around with me 
this long.
    Thank you. I yield back.
    Mr. Shimkus. Gentlemen yields back his time.
    It looks like we are about gone. Do you have anything else 
you want to say and take an opportunity?
    Mr. Tonko. Thank you, Mr. Chair.
    I just want to commend the entire panel. I think what you 
shared with us is not only great insight, but advocacy for what 
is a very high priority, and you have done it through that 
frontline experience. So it provides an extra bit of impact, I 
think, on the decisions that are made here.
    But thank you for reinforcing what we have understood to be 
a problem. And this is a very high priority problem, I would 
think, for the country. So thank you very much. And I was 
impressed by all the statements that you have made and the 
responses that you have provided.
    Mr. Shimkus. Yes. I want to thank the ranking member for 
those comments.
    And, again, thank you for being here. I think it is just 
going to energize us to try to--you know, I have kind of asked 
Mr. Tonko and Mr. Harper to now get together and try to see 
where there are similarities and agreements so that we can kind 
of move forward together.
    And you could see where there is a lot of areas in our 
country that are kind of left behind just because they are 
small. And it is not a political statement. It is just the 
nature of our country.
    So I really appreciated the involvement of my colleagues, 
too. So thank you.
    I need some business to do. I ask unanimous consent that 
all subcommittee members have 5 legislative days to submit 
opening statements for the record. Without objection, so 
ordered.
    Also unanimous consent inserting a letter from Dr. Ralph 
Jones and a letter and a report from the Environmental Working 
Group.
    Without objection, so ordered. \1\
---------------------------------------------------------------------------
    \1\ The information has been retained in committee files and also 
is available at  http://docs.house.gov/meetings/IF/IF18/20150227/
103031/HHRG-114-IF18-20150227-SD005.pdf.
---------------------------------------------------------------------------
    Mr. Shimkus. And remind folks that members of the committee 
have 10 days to submit written questions for the witnesses to 
be included. You may get some as follow-up. We would ask that 
you answer those and return those, if you can.
    And that is, without objection, so ordered.
    And with that, the hearing is adjourned.
    [Whereupon, at 12:08 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
          

                                 [all]