[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: WATER STAKEHOLDERS' 
                              PERSPECTIVES

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

                                (115-25)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                      COMMITTEE ON TRANSPORTATION
                           AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 26, 2017

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure






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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                         Columbia
FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania            Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                   Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota

                                  (ii)

  


            Subcommittee on Water Resources and Environment

                   GARRET GRAVES, Louisiana, Chairman

ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      LOIS FRANKEL, Florida
DANIEL WEBSTER, Florida              FREDERICA S. WILSON, Florida
THOMAS MASSIE, Kentucky              JARED HUFFMAN, California
RODNEY DAVIS, Illinois               ALAN S. LOWENTHAL, California
MARK SANFORD, South Carolina         EDDIE BERNICE JOHNSON, Texas
ROB WOODALL, Georgia                 JOHN GARAMENDI, California
TODD ROKITA, Indiana                 DINA TITUS, Nevada
JOHN KATKO, New York                 SEAN PATRICK MALONEY, New York
BRIAN BABIN, Texas                   ELIZABETH H. ESTY, Connecticut
DAVID ROUZER, North Carolina         CHERI BUSTOS, ILLINOIS
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           BRENDA L. LAWRENCE, Michigan
DOUG LaMALFA, California             PETER A. DeFAZIO, Oregon (Ex 
A. DREW FERGUSON IV, Georgia         Officio)
BRIAN J. MAST, Florida, Vice Chair
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)























                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Hon. Joy Cooper, Mayor, City of Hallandale Beach, Florida, on 
  behalf of the U.S. Conference of Mayors........................     5
James M. Proctor II, Senior Vice President and General Counsel, 
  McWane, Inc....................................................     5
David Pedersen, General Manager, Las Virgenes Municipal Water 
  District, on behalf of the Association of California Water 
  Agencies and the California Association of Sanitation Agencies.     5
David St. Pierre, Executive Director, Metropolitan Water 
  Reclamation District of Greater Chicago, on behalf of the 
  National Association of Clean Water Agencies...................     5
Hector Gonzalez, Government Affairs Manager, El Paso Water 
  Utilities, on behalf of the Association of Regional Water 
  Organizations..................................................     5
Christopher Franklin, President and CEO, Aqua America, on behalf 
  of the National Association of Water Companies.................     5
Lawrence M. Levine, Senior Attorney, Natural Resources Defense 
  Council........................................................     5

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Joy Cooper..................................................    45
James M. Proctor II..............................................    52
David Pedersen...................................................    67
David St. Pierre.................................................    79
Hector Gonzalez..................................................    84
Christopher Franklin.............................................    91
Lawrence M. Levine...............................................    98

                       SUBMISSIONS FOR THE RECORD

Hon. Garret Graves, a Representative in Congress from the State 
  of Louisiana, submission of the following:

    Letter of September 26, 2017, from Diane VanDe Hei, Chief 
      Executive Officer, Association of Metropolitan Water 
      Agencies, to Hon. Garret Graves, Chairman, and Hon. Grace 
      F. Napolitano, Ranking Member, Subcommittee on Water 
      Resources and Environment..................................   122
    Written statement of the American Public Works Association...   126
    Letter of September 26, 2017, from American Rivers et al., to 
      Hon. Garret Graves, Chairman, and Hon. Grace F. Napolitano, 
      Ranking Member, Subcommittee on Water Resources and 
      Environment................................................   131
    Letter of September 25, 2017, from Elizabeth Hyman, Executive 
      Vice President, Computing Technology Industry Association 
      et al., to Hon. Garret Graves, Chairman, and Hon. Grace F. 
      Napolitano, Ranking Member, Subcommittee on Water Resources 
      and Environment............................................   137
    Letter of September 26, 2017, from Kim Glas, Executive 
      Director, BlueGreen Alliance, to Hon. Garret Graves, 
      Chairman, and Hon. Grace F. Napolitano, Ranking Member, 
      Subcommittee on Water Resources and Environment............   138
Adam D. Link, Director of Government Affairs, California 
  Association of Sanitation Agencies, supplement to hearing 
  testimony......................................................   141
Lawrence M. Levine, Senior Attorney, Natural Resources Defense 
  Council, supplement to hearing testimony.......................   144

                        ADDITIONS TO THE RECORD

Written statement of the National League of Cities...............   147
Written statement of Piedmont Municipal Power Agency.............   156
Written statement of Ben Cote, Vice President, Sanexen 
  Environmental Services, Inc....................................   157
Written statement of Bruce Hollands, Executive Director, Uni-Bell 
  PVC Pipe Association...........................................   163
Written statement of WateReuse Association.......................   166


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BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: WATER STAKEHOLDERS' 
                              PERSPECTIVES

                              ----------                              


                      TUESDAY, SEPTEMBER 26, 2017

                  House of Representatives,
   Subcommittee on Water Resources and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m., in 
room 2167, Rayburn House Office Building, Hon. Garret Graves 
(Chairman of the subcommittee) presiding.
    Mr. Graves of Louisiana. The subcommittee will come to 
order.
    Good morning and thank you all for being here. I want to 
welcome everyone to our hearing today on ``Building a 21st-
Century Infrastructure for America: Water Stakeholders' 
Perspectives.''
    But before we begin, I would like to extend our thoughts 
and prayers to victims of Hurricane Irma, Hurricane Harvey, and 
Hurricane Maria. I know that we have millions of Americans that 
are continuing to suffer and struggle through recovery efforts 
across the United States.
    And I also know that there has been extraordinary 
generosity from members of the public across the United States 
and across the world, reaching out and offering resources and 
help, and many donations and services to a lot of our victims. 
But I ask that we all continue to keep the victims in our 
thoughts and prayers. And Mexico. Thank you very much.
    As the chairman of the subcommittee with oversight over the 
Army Corps of Engineers and the Environmental Protection 
Agency, I can assure everyone that we are working closely with 
our Federal agencies to ensure a speedy recovery for the States 
and communities that have been impacted by these awful storms.
    Since the subcommittee's first hearing in March, we have 
explored a variety of potential ideas for inclusion in an 
infrastructure package, and of course our water needs. Water 
and wastewater are an important component of that. But I am 
happy that today we have a diverse panel that is very well-
invested into water and wastewater infrastructure to help 
inform some of our efforts moving forward.
    We are all well aware of the needs for communities to 
address water and wastewater infrastructure, that they are 
substantial, and that these needs are going to continue to grow 
moving forward. In many communities, the water and wastewater 
infrastructure is long past its design life, its intended 
service life. It is in need of urgent repair, replacement, and 
upgrading.
    As a result, leaks and blockages are all too familiar an 
experience across the United States and represent a massive 
waste of vital, and sometimes scarce, resources. We have many 
needs in regard to combined sewer overflows, sanitary sewer 
overflows, and other challenges that are affecting the 
performance and environmental impacts and of course, 
ultimately, the impacts on the end user of many of these 
systems.
    Shrinking municipal budgets, insufficient independent 
financing capabilities, and increasingly burdensome regulations 
without commensurate Federal support have compounded these 
problems and the communities' efforts to address them across 
the United States.
    According to the EPA, the documented needs for sustainable 
wastewater infrastructure, CSO [combined sewer overflow] and 
SSO [sanitary sewer overflow] correction, and stormwater 
management are over $270 billion over the next 20 years, an 
extraordinary figure. I will say that again. The needs over the 
next 20 years are estimated to be approximately $270 billion. 
The needs for drinking water infrastructure drive this figure 
to over $600 billion. And these are very conservative 
estimates.
    So with talk of a major infrastructure package, today we 
ask the not-so-simple question: What can we do? We ask the 
question: What should we do? What is the role of the Federal 
Government in these infrastructure investments moving forward? 
And how do we best invest these scarce resources to efficiently 
achieve the objectives that we all share in regard to water and 
wastewater infrastructure?
    I believe it is going to take an all-hands-on-deck approach 
to reverse the decline of our Nation's infrastructure. Federal, 
State, and local investment will be necessary but cannot be 
relied upon to solve all our problems.
    Instead, we need to move away from business as usual and 
utilize every tool that is in our toolbox. This means searching 
for new sources of funding. This means increasing collaboration 
between public and private entities. This means doing a better 
job more efficiently investing the scarce resources that we 
have available.
    Earlier this year we had a hearing on improving water 
quality through integrated planning, talking about 
opportunities for efficiency there, and ensuring that we are 
actually investing dollars to achieve the problems rather than 
spending dollars on process.
    We need smarter asset management and increased efficiencies 
in our water systems, and to do so, we need to incentivize the 
adoption of new and innovative technologies that will cut costs 
and improve water quality.
    And as Hurricanes Harvey, Irma, and Maria showed us this 
past month, we need to build resiliently. Treatment plants in 
Texas, Louisiana, Florida, and elsewhere have been unable to 
cope with the influx from Harvey, Irma, and Maria, causing 
poorly treated wastewater and raw sewage to flow into city 
streets and nearby waterways. This has not only caused numerous 
public health and environmental concerns, but also challenges 
our national security.
    We need to carefully prioritize our investments in water 
infrastructure to ensure that we are adequately protecting the 
public health, promoting the economic growth of our 
communities, and preventing the degradation of the environment.
    I look forward to hearing thoughts from our witnesses 
today. And I now recognize Ranking Member Napolitano for an 
opening statement.
    Mrs. Napolitano. Thank you, Mr. Chairman Graves, because 
you are highlighting this critical need to address all of our 
drinking water-related infrastructure.
    Next month is the 45th anniversary of the enactment of the 
Clean Water Act, the main reason why our Nation's waterways 
experienced historic improvements in water quality even as the 
population increased by over 50 percent. To a large degree, the 
success of that act resulted from a strong Federal commitment 
to invest in its wastewater infrastructure improvements around 
the country.
    In recent years, States and communities have started to 
question whether the Federal commitment to invest in our water 
and wastewater continues or whether Congress now believes, as 
former Presidents Nixon and Reagan highlighted in their vetoes 
of prior clean water bills, that the construction of wastewater 
infrastructure is ``properly the responsibility of States and 
local governments.''
    Today trends on the Federal investment in the Nation's 
water-related infrastructure are, in my opinion, going the 
wrong direction. Recently the Congressional Budget Office 
issued a report highlighting how the Federal contribution 
towards addressing our Nation's infrastructure was declining, 
and how State and local governments are forced, where possible, 
to make up the difference.
    This trend on a decreasing Federal commitment to addressing 
our water infrastructure challenges reflects the trend on how 
the Federal Government provides its contribution to address 
these challenges.
    For example, in 1972 the Clean Water Act Construction 
Grants Program covered 75 percent of the cost of constructing 
water infrastructure for all our needs. However, when President 
Reagan proposed to substitute the Construction Grants Program 
for the Clean Water State Revolving Fund Program, the result 
was that the Federal contribution towards individual projects 
was reduced. This again compelled local communities to shoulder 
a greater share of the costs of individual projects.
    More recently, when Congress created another financial 
mechanism, the Water Infrastructure Finance and Innovation Act, 
WIFIA, again the Federal contributions toward the construction 
of individual projects was further reduced and communities were 
again forced to look elsewhere to make up the difference.
    To be clear, each of these mechanisms for infrastructure 
investment grants, SRF loans and federally leveraged private 
capital, have a place in solving our water-related 
infrastructure crisis. Yet I spot a trend and make this point: 
As the administration and Congress continue to discuss 
potential mechanisms to address our crumbling infrastructure, 
we recognize that the Federal Government already is 
contributing less towards the cost of individual projects today 
than just a few decades ago.
    Yet there is no free lunch when it comes to solving our 
infrastructure crisis. When the Federal Government contributes 
less to the cost of these projects, somebody has to pick up the 
difference, and often that somebody is local government or 
municipality or the individual ratepayer that is already 
struggling to make ends meet.
    If we are serious about closing our water infrastructure 
needs gap, we must recognize the unique challenges facing all 
our individual communities. For those communities with 
financial capability to use the WIFIA program or private 
capital, that may be the appropriate mechanism of addressing 
their local needs.
    However, we know that other communities continue to rely on 
mechanisms such as the Clean Water State Revolving Fund to 
obtain the financial assistance. To that end, the committee 
should quickly approve the legislation such as the bipartisan 
Water Quality Protection and Job Creation Act, which I 
cosponsor with Ranking Member DeFazio and Mr. Duncan of 
Tennessee, to reauthorize increased funding levels for this 
important program.
    For those communities that still have the affordability 
challenges using these existing mechanisms, we need to explore 
ways to target Federal assistance to the neighborhoods or 
households least able to afford water and wastewater services. 
This will help communities meet their local infrastructure 
challenges in a way that does not disproportionately impact 
those least able to afford the cost.
    In addition, I am concerned that any forthcoming 
infrastructure proposal from this administration will be light 
on real infrastructure spending and heavy on gimmicks such as 
environmental streamlining that would do nothing to solve our 
infrastructure needs. That would be a significant missed 
opportunity.
    We will not be able to address our local water 
infrastructure with slogans that may sound like we are doing 
something but in fact we are not. Without question, our 
communities expect and demand safe and desirable water 
resources for their consumption, use, and enjoyment. It is our 
responsibility to ensure that these communities have adequate, 
affordable resources to address these needs, and that is that.
    Thank you, Mr. Chair.
    Mr. Graves of Louisiana. Thank you, Mrs. Napolitano.
    Before I begin introducing our witnesses this morning, 
allow me to dispense with some unanimous consent requests.
    I ask unanimous consent the written testimony submitted on 
behalf of the following be included in the hearing's record: 
the Association of Metropolitan Water Agencies; the American 
Public Works Association; a letter from the American Rivers and 
other conservation organizations; a joint letter from Computing 
Technology Industry Association, Smart Cities Council, and 
Smart Waters Network Forum; and a letter from BlueGreen 
Alliance. Is there any objection?
    [No response.]
    Mr. Graves of Louisiana. Without objection, so ordered.

        [The aforementioned letters are on pages 122-140.]

    I ask unanimous consent the record remain open 15 days for 
additional comments and information submitted by Members or 
witnesses to be included in the record of today's hearing. Is 
there any objection?
    [No response.]
    Mr. Graves of Louisiana. Without objection, so ordered.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as the witnesses have provided 
answers to any questions that may be submitted to them in 
writing. Without objection, so ordered.
    I am going to have to leave this hearing early today and I 
have asked the vice chair, Mr. Mast, to take over the chair at 
some point. I want to apologize to you for that. We have some 
conflicting committee business today. But I want to thank you 
all very much for being here.
    The first witness today is the Honorable Joy Cooper, the 
mayor of the city of Hallandale Beach, Florida. Mayor Cooper, I 
am going to break, I am sure, rules, protocol, and everything 
else. I just want to ask you very quickly, could you just give 
a quick update on how things are in your community from the 
impacts of Hurricane Irma?
    Ms. Cooper. Thank you very much, Mr. Chair. Thankfully, 
Hallandale Beach is 98 percent recovered. We were very, very 
fortunate. We were on the brink on flooding, but were not, and 
we are very fortunate, unlike Brickell. The Keys will be 
hopefully up and running for business, believe it or not, in 
November. And we are recovering.
    Certainly many communities still need assistance. You are 
right on point. Thank you very much for kind comments to those 
that are suffering.
    Mr. Graves of Louisiana. You bet. Look, I think I speak on 
behalf of every member of this committee on both sides when I 
say that we all stand ready to continue assisting to find ways 
to help improve the efficiency of recovery efforts, and 
certainly continuing to keep your community and many others in 
our thoughts and prayers.
    But with that, please move forward with your testimony.

TESTIMONY OF HON. JOY COOPER, MAYOR, CITY OF HALLANDALE BEACH, 
 FLORIDA, ON BEHALF OF THE U.S. CONFERENCE OF MAYORS; JAMES M. 
PROCTOR II, SENIOR VICE PRESIDENT AND GENERAL COUNSEL, MCWANE, 
 INC.; DAVID PEDERSEN, GENERAL MANAGER, LAS VIRGENES MUNICIPAL 
  WATER DISTRICT, ON BEHALF OF THE ASSOCIATION OF CALIFORNIA 
  WATER AGENCIES AND THE CALIFORNIA ASSOCIATION OF SANITATION 
 AGENCIES; DAVID ST. PIERRE, EXECUTIVE DIRECTOR, METROPOLITAN 
WATER RECLAMATION DISTRICT OF GREATER CHICAGO, ON BEHALF OF THE 
NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES; HECTOR GONZALEZ, 
GOVERNMENT AFFAIRS MANAGER, EL PASO WATER UTILITIES, ON BEHALF 
OF THE ASSOCIATION OF REGIONAL WATER ORGANIZATIONS; CHRISTOPHER 
  FRANKLIN, PRESIDENT AND CEO, AQUA AMERICA, ON BEHALF OF THE 
   NATIONAL ASSOCIATION OF WATER COMPANIES; AND LAWRENCE M. 
   LEVINE, SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

    Ms. Cooper. Thank you. Good morning, Chairman Graves and 
Ranking Member Napolitano and members of this committee. My 
name is Mayor Joy Cooper. I am the mayor of Hallandale Beach. I 
would like to thank you for having this hearing today and 
inviting me to provide you with my city's perspective, as well 
as recommendations of the U.S. Conference of Mayors, on 
rebuilding our water infrastructure.
    Hallandale Beach is a 90-year-old community in southeast 
Florida. We are 4.4 square miles, with a population of 38,000 
that swells to 50,000 during our winter season. Our annual 
budget is $110 million, with a general fund of $70 million.
    A full evaluation of our infrastructure needs was 
constructed in 2014. That included underground and aboveground 
infrastructure. The price tag is well over $200 million. We 
have committed over $12 million in our water supply and 
treatment systems, $30 million in the next 5 years on our 
sanitary sewers, and we plan on spending approximately $1 
million per year to deal with sea level rise and associated 
flooding.
    The proposed city budget has increased various service fees 
from 10 to 51 percent to cover projected expenditures. In the 
case of stormwater management, the increase is 220 percent. 
With a median income of $24,000 and 15 percent of our residents 
living on $15,000 a year, the rising fees are difficult to 
afford. And there is a growing concern that those households 
unable to make payments will place a significantly greater 
burden on those that can.
    While we are committed to invest substantial amounts on 
public water and sewer services, we have a glaring need to 
invest in resiliency measures. Hurricane Wilma-related floods 
impacted numerous main roads in our community and resulted in 
damages to many homes.
    In response, an extensive pumping system for two targeted 
areas with repetitive flood-related losses had to be designed 
and constructed at a cost of more than $25 million. We are 
currently constructing phase 2 of the project. To complete the 
project and maintain it required the 220-percent increase in 
fees I mentioned earlier.
    This project would not have been possible without the help 
of FEMA both in financial and technical consultation. This is 
the type of model of intergovernmental partnership that works 
best.
    Overall, local governments in Florida have invested over 
$88 billion in water and sewer from 2000 to 2014, $7.1 billion 
in 2014 alone. This amounts to investing $19.5 million every 
day. Sewer revenues increased 116 percent from 2000 to 2013, 
and water revenues increased 80 percent over the same time 
period.
    I just described my city and Florida's experiences and 
investments. In my written testimony, there is an outline of 
national needs, along with how they should be determined, along 
with specific actions that would boost spending. But a majority 
point is--the major point, pardon me--is for local governments, 
by far the main investments in water and sewer, around 95 to 97 
percent.
    We are trying to do our part, but it is clear that we are 
not--but clearly it is not adequate to meet our Nation's 
infrastructure needs without unduly burdening our citizens. We 
need a more robust infrastructure plan with more resources and 
tools. The Conference of Mayors has recently released a 
framework for addressing the Nation's local infrastructure 
needs.
    We ask you to do the following:
    Prevent any efforts to cap or limit tax-exempt municipal 
bonds;
    Allocate resources directly to cities and counties for 
priority water and sewer infrastructure projects that will 
support low- and moderate-income neighborhoods;
    Support the use of public-private partnerships;
    Amend the Internal Revenue Code to remove the State volume 
caps for private activity bonds used to finance public purpose 
water and sewer facilities;
    Direct at least $5 billion in additional funding to low- or 
no-interest grants, to State Revolving Funds;
    Codify integrated planning and affordability legislation in 
Mr. Gibbs' bill, H.R. 465;
    Build infrastructure that increases resiliency; and
    Increase Army Corps of Engineers funding and spend the full 
amount of the annual Harbor Maintenance Trust Fund on its 
intended use.
    I again want to commend this committee for addressing this 
important issue, and I hope you are successful in passing a 
comprehensive infrastructure bill. Thank you.
    Mr. Graves of Louisiana. Thank you, Ms. Mayor.
    The next witness is James Proctor, from McWane, 
Incorporated.
    Mr. Proctor?
    Mr. Proctor. Chairman Graves, Ranking Member Napolitano, 
and members of the subcommittee, good morning. My name is Jim 
Proctor with McWane, and thank you for the opportunity to 
testify about an issue vital to our Nation's health, economy, 
and security.
    Water is our most precious resource, one that is essential 
to human health and life. Access to water depends upon a 
reliable water infrastructure system that preserves, treats, 
and delivers safe drinking water to our Nation's communities. 
For almost 200 years, our team members at McWane have proudly 
provided the building blocks for our Nation's water 
infrastructure, supplying products that transport clean water 
to communities and homes across the country.
    Despite its obvious importance, ``out of sight, out of 
mind'' best describes the Nation's attitude toward water 
infrastructure. But the reality is that much of America's 
wastewater and water infrastructure is nearing the end of its 
useful life, and over $1 trillion is needed over the next 20 
years to rebuild and rehabilitate these systems.
    However, our water infrastructure challenges cannot be 
solved simply by providing more Federal funding. Rather, a 
fundamental shift away from the traditional approaches must 
occur, through a combination of new sources of funding, greater 
accountability, and improved governance.
    For the past 9 months, an inclusive group of prominent 
associations in the water infrastructure sector have been 
working together to discuss and develop a set of ideas that can 
provide this positive and transformative change. The 
participants in these discussions include the spectrum of 
publicly and privately owned systems, rural and urban 
communities, and drinking and wastewater systems.
    This package of ideas the group has discussed is broadly 
organized around three themes: first, removing barriers to 
investment and better management; second, funding; and third, 
innovation. I will discuss each of these in turn.
    Removing investment barriers: Water and wastewater services 
in the United States are delivered by more than 70,000 
entities, over 80 percent of which serve fewer than 10,000 
customers. In fact, 50 percent serve fewer than 500 customers. 
These small operators sometimes struggle to achieve the scale 
of operations and expertise necessary to meet the challenges 
that they face.
    Voluntary partnerships with other entities can help them 
scale up to develop the necessary financial, operational, and 
technical capacity to solve this problem. There are many paths 
to such partnering arrangements, including public to public, 
public to private, private to private, and private to public 
partnerships, as well as concessions, operating agreements, or 
even the consolidation of assets or services.
    But let me emphasize, nothing I say today should be 
construed as favoring one path over another. Rather, all paths 
should remain available at the discretion of the local entity.
    Such partnerships should be encouraged by, among other 
things, more financial incentives, a regulatory safe harbor, 
removing the defeasance penalty, encouraging effective utility 
management and best practices, including requiring full-cost 
accounting, and empowering local decisionmaking.
    Congress should also increase Federal funding for the water 
sector. Since the recession, annual appropriations for water 
infrastructure have been decreasing while the funding need has 
been increasing.
    To correct that unfortunate trend, Congress should extend 
WIFIA and increase its funding to $45 million, increase funding 
to the State SRFs to $3 billion for each program, provide more 
technical assistance to small and rural systems, remove the 
volume cap on private activity bonds for water projects, retain 
tax exemptions for municipal bonds, and expand eligibility for 
SRF loans to private water providers.
    In addition to funding, Congress should help increase 
innovation by authorizing and funding the creation of a 
national water infrastructure test bed network, and establish a 
national program for collaboration in the sharing of best 
practices among utilities. Congress should also task the 
Department of Labor with developing a workforce development 
program for water and wastewater systems of tomorrow.
    These ideas have all been discussed by the various water 
constituencies mentioned above, and in concept they all enjoy 
the unanimous support of the group, subject to agreement on the 
actual legislative language. But I should point out that the 
consensus is a product of compromises that balance diverse 
perspectives and the resulting premise that all the various 
components are linked.
    These are only a few of the issues and solutions that merit 
discussion. The key takeaway, however, is that the scope and 
scale of America's water infrastructure needs require a 
forward-looking and creative response. Reform and 
reauthorization of the Clean Water Act programs like the SRFs 
and WIFIA are crucial to that effort, and we at McWane are glad 
to have the opportunity to contribute to that process.
    Thank you very much.
    Mr. Graves of Louisiana. Great. Thank you.
    Our next witness is David Pedersen from Las Virgenes 
Municipal Water District.
    Mr. Pedersen.
    Mr. Pedersen. Good morning, Chairman Graves, Ranking Member 
Napolitano, and members of the subcommittee. My name is David 
Pedersen, general manager of Las Virgenes Municipal Water 
District in Calabasas, California. We are a municipal water/
wastewater agency that serves about 100,000 people in western 
Los Angeles County.
    Thank you for the opportunity to testify on behalf of the 
California Association of Sanitation Agencies and the 
Association of California Water Agencies. CASA and ACWA 
represent hundreds of local agencies in California on water 
quality issues and drinking water needs. Today I will summarize 
four important issues that are described in more detail in my 
written testimony, which I ask be accepted for the record.
    First, CASA and ACWA ask the subcommittee to support a 
robust infrastructure funding partnership between the Federal 
Government and local communities, including both grants and 
loans. California and much of the Nation face deteriorating 
infrastructure, increased regulatory compliance costs, 
unpredictable weather conditions, and general population 
growth.
    The U.S. EPA State revolving loan fund program right now is 
currently the most important and effective water infrastructure 
financing program available to local agencies. In fact, 
projects that were constructed with SRF funds, including and 
especially those for water recycling, were key and instrumental 
in reducing the impact of the statewide drought that we 
experienced in California.
    In addition to robust funding, we recommend that the 
subcommittee update the formula that is used to allocate those 
limited funds to States.
    Moving to our second issue, we ask that the subcommittee 
extend National Pollutant Discharge Elimination System permit 
terms from 5 to 10 years. We believe this change would provide 
significant benefits to States and to the local public and 
wastewater agencies.
    In the 45 years that the program has been in place, NPDES 
permits have become increasingly complex, and the treatment 
technologies have become substantially more expensive and time-
intensive to implement. As a result, many local agencies are 
faced with negotiating the terms for a new permit while they 
are still working to implement the improvements for their 
current permit.
    The 5-year term that was established in 1972 no longer 
reflects today's clean water challenges, and it is an obstacle 
for long-term planning. My agency is a prime example of the 
advantages of a 10-year permit. In July of 2013, the U.S. EPA 
established a TMDL for our watershed that created some of the 
toughest nutrient standards in the country. Upgrades to our 
treatment plant were estimated to be in the neighborhood of 
$160 million.
    Through a stakeholder-driven process, we developed the Pure 
Water Project Las Virgenes-Triunfo, a surface water 
augmentation project that provides a new source of drinking 
water for us and also meets our regulatory needs. The $95 
million project is estimated to take 13\1/2\ years to complete, 
yet we will be faced with renewing our NPDES permit every 5 
years during that process. Sacramento Regional County 
Sanitation District experienced a similar challenge in that 
they were making over $1 billion in improvements to their 
treatment facilities when they were faced with a 5-year permit 
renewal.
    Ten-year permit terms would give local water and wastewater 
agencies adequate time to comply with their existing regulatory 
requirements before new ones are imposed, and also States could 
direct their resources to higher priority issues. Importantly, 
the new 10-year permits would include the existing permit 
reopener provisions that allow new conditions to be addressed 
into the permit during the term of the permit.
    Third, CASA and ACWA support integrated planning as an 
effective means for public agencies to address multiple Clean 
Water Act requirements. We support proposals recognizing the 
value of integrated plans, particularly those that are 
developed by our colleagues at NACWA [National Association of 
Clean Water Agencies] and in collaboration with the EPA. 
Integrated plans promote more comprehensive water planning 
while stretching limited local resources.
    And as our final request, we ask that Congress avoid 
proposals that include consolidation or reorganization of local 
water and wastewater agencies as a criterion for Federal 
funding or to rank projects for Federal funding. Consolidation 
may be appropriate in certain instances, but we believe these 
decisions are best left to the policymakers at the local level.
    In summary, we urge the subcommittee to maintain robust 
funding for the vital SRF program, extend NPDES permit terms to 
10 years, support the use of integrated plans, and avoid 
consolidation or reorganization as a criterion for Federal 
funding.
    Thank you for your consideration.
    Mr. Graves of Louisiana. Thank you. Our next witness is 
David St. Pierre from the Metropolitan Reclamation District of 
Greater Chicago.
    Mr. St. Pierre.
    Mr. St. Pierre. Chairman Graves, Ranking Member Napolitano, 
and members of the subcommittee, thank you for the opportunity 
to appear before you today. My name is David St. Pierre, and I 
am the executive director of the Metropolitan Reclamation 
District of Greater Chicago. I also serve as vice president of 
the National Association of Clean Water Agencies, which is a 
not-for-profit trade association that represents the interests 
of public clean water agencies nationwide.
    The need for greater investment in our Nation's 
infrastructure, including water, is well-known. Nationally, our 
Nation's clean water infrastructure has received a D-plus grade 
from the American Society of Civil Engineers, and the EPA 
calculates national investment needs to fully comply with the 
Clean Water Act under current conditions at approximately $271 
billion over the next 20 years.
    Those of us who work in this sector understand that the 
true investment needs are likely much higher. And while local 
clean water investments are often driven by Federal statute or 
enforcement actions, over 90 percent of water investment in the 
U.S. is funded by local dollars.
    Earlier this year, then-President-elect Trump called for a 
tripling of Federal funding to the State Revolving Funds to 
help address water infrastructure investment needs. NACWA 
applauds this recognition of the important and successful role 
of the State Revolving Funds.
    We are grateful for the work the subcommittee has done to 
support strong SRFs. As discussions advance regarding Federal 
infrastructure investment, it is imperative that the SRFs play 
a prominent role and that real investment dollars for water are 
on the table to ensure clean water gains continue to be made.
    Private investments facilitated by the Clean Water SRF may 
be appropriate in certain situations but should not come at the 
expense of financing for publicly owned systems which serve the 
overwhelming majority of the U.S. sewered population.
    Another very timely area of interest to NACWA and its 
members is the potential for regionalization, public-public, 
and public-private water utility partnerships to help advance 
clean water, particularly in areas where there are 
opportunities for economies of scale or sharing of resources 
and expertise.
    In the Chicago region, our agency provides technical and 
financial support to 125 communities in Cook County to address 
infrastructure needs and build resilient communities. These 
efforts have encouraged local community investment and 
collaboration and increased efficiency in addressing 
infrastructure needs. These regional efforts allow solutions to 
problems in local communities and decrease State and Federal 
liabilities.
    Another element of sustainable long-term financial footing 
is moving toward full-cost accounting. But given the complex 
and dynamic nature of this calculation, we do not support it as 
a barrier to the SRFs. Municipalities face enormous pressure to 
maintain rates based on the abilities of low-income households 
to pay, which can inhibit charging the full cost of the service 
provided, or lead to deferred investments. A safety net for the 
lowest income households would better position utilities to 
charge rates that fully reflect the true cost of service and 
address the infrastructure investment gap.
    In addition, utilities need flexibility to address today's 
challenges. These challenges underlie why the clean water 
sector is encouraged by the U.S. EPA's integrated planning 
framework. The integrated planning approach provides 
communities an opportunity to consider their clean water 
obligations holistically, to develop compliance schedules that 
can maximize each ratepayer dollar, focused first on the 
investments that are of top priority for the community and 
environment, and ensure the greatest possible net environmental 
benefit is achieved.
    We greatly appreciate the work that the subcommittee has 
done today on integrated planning and to address affordability 
concerns. We recognize Representative Gibbs, former chairman of 
the subcommittee, who sponsored H.R. 465, the Water Quality 
Improvement Act.
    Similarly, we recognize several members of the 
Transportation and Infrastructure Committee, including 
subcommittee Ranking Member Napolitano, Representative Bustos, 
and Representative Smucker, cosponsors of H.R. 2355, the Water 
Infrastructure Flexibility Act. These efforts signify nothing 
less than trying to bring the Clean Water Act into the 21st 
century.
    In closing, I would like to thank the subcommittee, 
Congress, and the administration for their focus on clean water 
infrastructure investment. I believe that investment in water 
is a nonpartisan issue which protects public health and the 
environment, creates jobs, and is essential for economic 
development. As Congress looks to advance the 21st-century 
infrastructure for America, clean and safe water must be a top 
investment priority supported by a true local, State, and 
Federal partnership.
    Mr. Graves of Louisiana. Thank you, Mr. St. Pierre. I think 
you ended right at 5 minutes. Perfect timing.
    Our next witness is Mr. Hector Gonzalez, El Paso Water 
Utilities.
    Mr. Gonzalez.
    Mr. Gonzalez. Good morning, Chairman Graves and members of 
the subcommittee. My name is Hector Gonzalez. I am here 
representing El Paso Water. El Paso Water provides water, 
wastewater, reclaimed water, and stormwater services for the 
residents of El Paso and some of the surrounding areas.
    I am also on the board of directors of the Association of 
Regional Water Organizations, which supports policies and 
infrastructure funding programs that will help regional water 
and wastewater systems in unserved and underserved communities.
    Thank you for the opportunity to share my thoughts on key 
priorities for infrastructure legislation. The first of the 
priorities deals with how the Association of Regional Water 
Organizations is focused on how best to help rural water 
systems in unincorporated areas receive better service at a 
lower cost. Outside of the city limits of El Paso, 
approximately 35,000 people are not connected to a public 
wastewater system. An estimated $500 million is required to 
provide the needed connections.
    Laws prohibit our utility from spending ratepayer money 
outside the service area, but we have loaned expertise and 
partnered to identify Federal funding and manage projects. 
Various Federal agencies have helped extend potable water 
service, but without wastewater connections, homes often have 
failing septic systems, which pose a public health hazard.
    There are thousands of similar stories across rural 
America, where communities are underserved and must rely on 
inadequate septic systems. There are an estimated 50,000 
community water systems across the country, and all but the 
largest have a difficult time accessing capital, which prevents 
major infrastructure improvements from moving forward.
    These are challenges that need attention in the new 
infrastructure bill. Programs with Federal matching grant 
funding are needed to fill these gaps. The Association of 
Regional Water Organizations sees regionalization through both 
private-public partnerships and public-public partnerships as 
the best solution to improve water resource planning and 
increase access to capital. Through partnerships, we can fill 
the gaps and execute major capital investments and deliver 
results.
    The second priority that I would like to focus on is water 
reuse. With the frequency of drought and growing challenges 
from declining freshwater resources, more and more communities 
are turning to impaired groundwater, wastewater, and stormwater 
to meet their future needs.
    El Paso Water is active with the WateReuse Association, 
which represents various communities and effectively advocates 
for policies and funding to increase water reuse. They 
emphasize the value of water reuse as a safe, reliable, locally 
controlled water supply that protects the environment, sustains 
economic growth, and provides a high quality of life.
    Several decades ago, El Paso Water faced water scarcity 
fears. Yet, because of our pioneering efforts in reuse and 
conservation, we are now considered a leader in water resource 
innovation. But we, and many communities throughout the arid 
West, will need to expand the reuse of water resources to 
ensure freshwater supplies for the future.
    I will share two water reuse examples from my home city. El 
Paso Water owns and operates the Kay Bailey Hutchison 
Desalination Plant. This is the largest inland desalination 
plant in the world. It provides a drought-proof supply for our 
city, and also sometimes serves the needs of Fort Bliss. We 
will need to significantly expand this plant in the future.
    In another reuse project, El Paso plans to build an 
advanced water purification facility that will transform 
wastewater into high-quality drinking water and send it 
directly to our customers. Both of these water reuse projects 
are expensive, at about $100 million apiece. Both projects are 
essential to our future water supply.
    Many other communities face similar challenges, and with 
Federal funding opportunities, these types of projects can move 
forward, spur innovation, and ultimately bring down the cost 
for water reuse overall.
    I would like to mention a couple of considerations as you 
take up the infrastructure bill. El Paso has partnered with the 
U.S. Army Corps of Engineers in various stormwater projects. 
Infrastructure legislation should expand Corps funding for dams 
and flood control systems. New focus areas should include the 
capture and treatment of stormwater for reuse.
    Military base partnerships with local water utilities 
deserve attention. El Paso Water provides 100 percent of the 
wastewater service to Fort Bliss, and infrastructure at times 
serves municipal and military base purposes and would benefit 
from Federal funding program opportunities.
    Finally, I would encourage streamlining of regulatory 
requirements, especially related to water reuse, and 
simplifying the Federal funding application process. Excessive 
delays could be removed with a new one-stop approach of 
prequalification based on a master application and a single 
comprehensive review.
    In closing, continued utility innovation success depends on 
partnership with Federal Government agencies and the ability to 
obtain funding assistance for innovation projects. Thank you 
for the opportunity to be here today.
    Mr. Graves of Louisiana. Thank you, Mr. Gonzalez.
    Our next witness is Mr. Christopher Franklin from Aqua 
America.
    Mr. Franklin.
    Mr. Franklin. Thank you, Chairman Graves, Ranking Member 
Napolitano, and members of the subcommittee. I am Chris 
Franklin, and I am president and CEO of Aqua America and 
president-elect of the National Association of Water Companies, 
on whose behalf I speak today.
    The NAWC is the association that represents the regulated 
water and wastewater industry. In many ways, our companies 
operate water utilities in the same ways that large gas and 
electric utilities operate. NAWC members are located throughout 
the Nation, and range in size from multibillion-dollar 
companies to some smaller and more localized water utilities.
    The company I lead is called Aqua America, and it is a 
water and wastewater utility that serves about 3 million people 
in 8 States across the country. In fact, we have operations in 
at least seven members' districts of this subcommittee. I would 
like to focus my time today on the actions the Federal 
Government can take to unleash solutions to meet the Nation's 
significant water and wastewater infrastructure needs.
    Now, as a result of our size and our management strategies, 
regulated water utilities are able to take advantage of 
economies of scale. Spreading the cost of infrastructure 
improvements, operating costs, and billing and customer service 
over more people creates a benefit for customers.
    Now, on a typical 3-year cycle, Aqua America spends over a 
$1 billion in capital replacing water and wastewater pipe. Over 
the last decade, we replaced an average of 130 miles of water 
main each year. Due to the large amount of pipe we purchase, we 
can buy pipe at bulk prices considerably lower than many other 
utilities. And by the way, all of this work has dropped the 
frequency of our main breaks to far less than the national 
average.
    Now, you know very well the challenges faced by small and 
mid-sized city mayors. Public safety, human services, streets--
for a mayor, finding capital dollars to replace water and 
wastewater mains underground where nobody will take notice is a 
challenge. We understand these political and financial 
challenges facing elected officials. And frankly, it is one of 
the reasons we believe that NAWC can be part of the solution.
    Today the annual appropriation for the clean water and 
drinking water State revolving loan funds are approximately $2 
billion. Importantly, the six largest members of our 
association collectively are spending $2.7 billion every year 
on their systems. So for the committee's consideration, I would 
like to talk about two policies that would lead to more 
efficiencies.
    The first recommendation is the Federal Government should 
incentivize partnerships in the water sector. Let's face it, 
there are more than 50,000 water systems in the country and 
16,000 different wastewater systems. I have been an executive 
and a board member of water and electric utilities now for more 
than two decades, and I can tell you that without economies of 
scale, it is tough to be viable in the utility business for any 
length of time.
    That is one of the reasons why most environmental agencies 
and public utility commissions have long ago adopted policies 
to encourage consolidation of water and wastewater systems. 
Incentivizing partnerships and consolidation is the partnership 
we recommend to you today.
    I want to acknowledge my colleagues on the panel and across 
the municipal sector for the fine work they do. There are many 
well-run municipal systems, particularly in larger towns and 
cities where economies of scale are apparent. But within those 
65,000 water and wastewater systems, there are also many 
smaller systems that continue to struggle.
    Now, the second recommendation that we will make is that 
the Federal Government mandate effective utility management and 
require financial viability and accountability for performance. 
Noncompliant water and wastewater systems not only create a 
growing financial burden, but they pose significant risks to 
public health and the environment.
    According to the EPA, there are presently thousands of 
domestic wastewater systems that are in significant 
noncompliance. These failing systems should not be subsidized 
with Federal dollars without demonstrating a path toward long-
term financial and operational viability.
    We recommend that all applicants for public dollars 
demonstrate that they have fully accounted for the long-term 
costs of their projects, including any risks inherent in 
construction, operations, and maintenance costs.
    I appreciate the invitation to appear before the 
subcommittee today, and at the appropriate time, will be happy 
to answer questions.
    Mr. Graves of Louisiana. Thank you, Mr. Franklin.
    Our last witness is Mr. Lawrence Levine from the Natural 
Resources Defense Council.
    Mr. Levine, thank you for being here. You are recognized 
for 5 minutes.
    Mr. Levine. Thank you. Good morning, Chairman Graves, 
Ranking Member Napolitano, and members of the subcommittee. I 
am Lawrence Levine, a senior attorney with Natural Resources 
Defense Council. I appreciate the opportunity to testify today.
    First-class infrastructure to protect clean water and 
public health is among our most basic and most important needs 
as a Nation. Yet in much of the country, our aging 
infrastructure is simply not up to the twin tasks of providing 
everyone with access to the safe water and sewer services they 
need, and keeping our waterways free of harmful pollution.
    In too many communities, both large and small, urban and 
rural, the public is still drinking water with contaminants 
that pose serious health risks from systems that leak a 
substantial portion of the water they produce. Meanwhile, 
sewage and polluted runoff make our waters both unsafe for 
human use and too degraded to support the fisheries and natural 
habitat we need for sustenance, recreation, and natural flood 
mitigation.
    The effects of climate change, droughts, floods, storms, 
sea level rise, all threaten to degrade or damage our water 
infrastructure even further, as the devastation caused by 
Hurricanes Harvey, Irma, and Maria over the last month so 
drastically illustrates.
    To protect our communities and our natural environment, 
there is a critical need for major new investments in water, 
wastewater, and stormwater infrastructure. Critically, the 
scale of the need is so vast that without a large and lasting 
commitment of new funds from the Federal Government, leveraged 
with additional funds from the States, our communities simply 
will not be able to fund the investment they need so badly to 
bring their water systems into the 21st century.
    Major new Federal investments, like all of our Nation's 
infrastructure investments, can be deployed to simultaneously 
deliver economic, social, and environmental benefits, spur 
innovation in clean and efficient water and energy systems, 
invest in climate-resilient infrastructure projects and smart 
technology, ensure accountability for every dollar, allocate 
flexible funding for local and regional planning, and create 
good, forward-looking jobs beyond the construction phase of 
infrastructure projects.
    For water, wastewater, and stormwater infrastructure 
funding specifically, NRDC also urges Congress to embrace a 
number of key principles, including the following:
    Expand the State Revolving Funds and leverage additional 
investment by States and local governments;
    Direct new funds to natural and nature-based infrastructure 
solutions;
    Ensure that projects are designed, sited, and built with 
the full consideration of the future impacts of climate change;
    Ensure that communities and families in the greatest need 
are not left behind;
    Amplify benefits to the economy by incorporating ``buy 
American'' domestic sourcing requirements, prevailing wage 
provisions, and green job opportunities.
    Based on these overarching points, NRDC offers the 
following specific priority recommendations to Congress.
    First, increase funding and improve use of existing 
funding. Increase the current annual appropriations to the SRFs 
to $6 billion, which would mark a return to a similar level, 
adjusted for inflation, as was appropriated under President 
Reagan for the Clean Water SRF alone, and it would be the level 
the President promised during last year's campaign.
    Direct the additional funds to water use efficiency, green 
infrastructure, stormwater capture and reuse, hardship 
communities, source water protection, nutrient reduction, lead 
service line replacement, water loss control, and climate 
resilience.
    Provide incentives to States to leverage Federal funds and 
invest more State dollars in water infrastructure by allowing 
States that exceed the minimum required match for Federal SRF 
capitalization grants to distribute a larger share of their SRF 
funding as grants rather than loans.
    Reauthorize and improve the sewer overflow control grant 
program under Clean Water Act section 122.
    Improve implementation of existing requirements, which 
Congress enacted in 2014, that promote the use of water 
efficiency, recapture, and reuse strategies in Clean Water SRF-
funded projects.
    Second, ensure water and sewer service remains affordable 
for low-income households even as utilities generate additional 
local revenue to meet clean water needs. This includes:
    Prioritizing disadvantaged communities in water 
infrastructure grant programs;
    Creating a Federal low-income water and sewer assistance 
program, analogous to LIHEAP [Low Income Home Energy Assistance 
Program] for energy, to help maintain affordable costs at the 
household level, and using Federal policy to spur creation of 
complementary State and local assistance programs to promote 
more equitable water and sewer rate structures;
    And to increase utilities' use of asset management, green 
infrastructure, and water efficiency strategies that reduce 
costs for all customers.
    Third, reinstate the Federal Flood Risk Management Standard 
to protect the value of Federal water infrastructure 
investments by reducing the risk of severe damage and flooding 
disasters, as S. 1798 would do, introduced 2 weeks ago.
    Fourth, support tools for effective prioritization of pipe 
replacement and leakage control, as in title 3 of H.R. 3275.
    And finally, preserve and strengthen source water 
protections, including the Clean Water Rule, to protect health 
and reduce treatment costs.
    Thank you.
    Mr. Graves of Louisiana. Thank you, Mr. Levine.
    I have a couple of quick questions and Mr. Mast and I are 
going to switch up here. I am curious. We can sit here and talk 
for hours about the need for Federal resource needs in water 
and wastewater, and it seems as though the Federal Government's 
role has continued to grow and evolve over time.
    As we focus on building a new infrastructure package, a new 
infrastructure approach at the Federal level, one of the things 
that I believe we need to do is we need to determine what the 
Federal objectives of this infrastructure package is. What are 
the Federal priorities? And then to develop effective criteria 
or metrics for us to advance those and actually complete those 
objectives, as opposed to taking a shotgun-type approach where 
we throw a nickel at every $10 problem across the country.
    I am curious if--Mayor Cooper, could you reflect a little 
bit on what you view the Federal Government's role is in water 
and wastewater infrastructure?
    Ms. Cooper. Thank you, Mr. Chair. Over the past 10 years in 
working with integrated planning and looking at what we can do, 
I believe that in my testimony, in my written testimony, in the 
suggestions that we can move forward is really work on the SRF 
funds and free up some more money as far as grants. We have 
been focused on that as well. I think that would help offset a 
lot of the affordability.
    Also, as far as integrated planning, give the timeframes 
that many of the members have suggested here. And many times it 
is about integrated planning, fair and equitable distribution 
of the funds, and the SRF plan that we are asking to fund, and 
the other list of recommendations from the U.S. Conference of 
Mayors.
    Mr. Graves of Louisiana. Anyone else care to quickly 
comment on that, on what you see the Federal Government's role 
being in water and wastewater investment? Mr. Franklin?
    Mr. Franklin. Mr. Chairman, I would suggest, as well as you 
could, encourage partnerships--partnerships within municipals, 
partnerships between municipal and investor-owned regulated 
utilities. The more we can bring economies of scale to bear 
where we can handle these heavy, heavy costs over more people 
and spread that cost more widely, I think long term we get rate 
stability.
    And certainly there is a role for Federal dollars. 
Certainly there is a role for the Federal Government. But the 
encouragement of these partnerships I believe is critical.
    Mr. Graves of Louisiana. Thank you. Being a recovering non-
Federal sponsor with many water projects in south Louisiana, 
one of the challenges we had was the Federal Government would 
say, OK, here is an area where we can participate, but the 
certainty associated with their funding stream was always very 
unpredictable.
    And so, my two cents, it seems as though if we can move in 
a direction of better prioritizing what the Federal 
Government's role is and improving predictability of certainty 
of the funding, that is going to provide a much better 
situation for folks trying to implement water and wastewater 
projects at the State and local level.
    Mr. Levine, I want to ask you a question. Toward the end, 
you made reference to the Federal Flood Risk Management 
Standard. That is something I struggled with.
    If you are going to tell communities that they cannot 
rebuild--for example, Mayor Cooper's State--that they cannot 
rebuild or invest any Federal funds unless they meet a 500-year 
standard or the alternatives that were in place, yet FEMA is 
not allowed to compensate you for that higher or more resilient 
standard, how do you recover a community that is already 
challenged with recovery, with perhaps, in the case of Florida, 
billions and billions of dollars in recovery, loss of taxes, 
loss of property values, and things along those lines?
    It seems like you are actually throwing a curve ball to a 
community that is already undermined. And this is not a curve 
ball question. I really am curious about this because I have 
struggled with this question for over a year now.
    Mr. Levine. Sure. Thanks for the question. In our view, it 
is really a commonsense approach. Right? If we are going to--it 
goes to your question, really, of prioritization and how we are 
going to spend Federal dollars in the most effective way. 
Right?
    If we are putting Federal dollars towards projects that are 
likely to see the same damage over and over again from floods, 
from larger storms that, as we all know, are more likely to 
occur more frequently over the future, and we have already been 
seeing that, if we put Federal dollars towards that and do not 
design those projects in a way that is resilient to minimize or 
avoid that flood risk damage, that flood risk, it is not a wise 
use of Federal funds.
    And so there is simply a need to find the right projects 
built in the right way to serve those local needs. But it does 
not serve either the needs of the Federal Government or the 
needs of the local community if things are rebuilt in ways that 
are not going to be resilient and be continually able to 
function and provide those basic local services.
    Mr. Graves of Louisiana. Thank you. My point--I mean, 
everyone, I think, supports resilience. The problem is that 
without the corresponding resources for a community that is 
already dealing with recovery, then you are going to be unable 
to rebuild your community.
    If you are requiring that rebuilding occur at a higher 
standard, you are going to be unable to rebuild your community 
without the corresponding resources. So I am just concerned. I 
am not a town, but I am just concerned about the relationship 
there, and I think we need to think through this a little bit 
more.
    But with that, I want to thank you all very much. I have 
some other questions we are going to submit in writing to you 
and would appreciate your responses there. But I am going to 
recognize Mrs. Napolitano and am going to switch with Mr. Mast. 
So thank you very much for being here.
    Mrs. Napolitano. Thank you, Mr. Chair.
    In my opening statement, I did express some concern about 
recent trends on how Congress provides Federal assistance to 
wastewater infrastructure projects. Several of you noted, 
rightfully, that the Federal share of individual projects has 
been decreasing over time to a point that, some of you noted, 
the Government invests less than 10 percent of annual water and 
sewer capital costs.
    Several of you also note that the current mix of federally 
subsidized loans and leveraged Federal financing does not work 
for every community. Is it time for Congress to rethink the 
trend, as my colleague has stated, envision a renewed Federal 
water and wastewater program, to address the infrastructure 
needs of communities facing affordability concerns, such as 
those with lower income populations or smaller or rural 
communities?
    Also, the Federal Government played a significant role in 
financing the first generation of water and wastewater systems 
immediately following the enactment of the Clean Water Act. Is 
it time for us to renew the role for certain communities to 
implement in the next generation of projects? Mr. Pedersen?
    Mr. Pedersen. Thank you, Ranking Member Napolitano. Good 
question, and in California we certainly support efforts to 
look at affordability for water and also affordability and 
investment in disadvantaged and economically challenged areas.
    We believe that there is a great need for grant programs to 
continue. We recognize that the funding landscape has changed 
dramatically, and loans are actually a very valuable tool, the 
SRF program. But in addition, grants for those economically 
challenged areas, we think, are very helpful to both fund their 
capital needs, and perhaps in the future, O&M needs.
    With regard to the Safe Drinking and Clean Water State 
Revolving Fund, as my colleagues on the panel have urged the 
subcommittee, increased levels of funding are very important. 
We are really on our third, perhaps even our fourth, cycle of 
improvement since the adoption of the Clean Water Act, and 
those improvements are becoming more expensive and more time-
intensive to implement. And so that funding is vital to support 
our local agencies.
    Mrs. Napolitano. Mr. St. Pierre?
    Mr. St. Pierre. So I think lower income concerns are a 
major issue and a barrier to charging the full price for water 
services. I think at the Federal level, it really would be 
helpful for some kind of a program, whether it is a water 
ratepayer assistance program, to make water affordable.
    I think that, at the local level if we could charge full-
cost pricing, a lot of these things become a lot more 
affordable. But that is the issue. It is lower income 
affordability concerns that really keep water from that full-
cost price.
    Also, I do believe in partnerships with other communities. 
Chicago, we do provide grant programs for disadvantaged 
communities. The economy of scale issue, I have 5 million 
customers; I certainly can afford a lot more than a system that 
has 100,000 customers. So I can afford that kind of help.
    I think that the economy of scale issue needs to be looked 
at, and the regionalization of water needs to be considered in 
a variety of venues.
    Mrs. Napolitano. Ms. Cooper?
    Ms. Cooper. Thank you, Ranking Member Napolitano. I believe 
there is a place for public-private partnerships as far as--the 
one thing that it needs to be looked at is community by 
community. That is why we have been focused on this integrated 
planning.
    For example, in Florida, we actually share a municipal 
service with a municipal service district with five other 
communities, but our water is independent. So when you are 
looking at this, we have been looking at at least being granted 
the ability to address it on a local demand need.
    As far as affordability, again going back to my statements 
in the presentation on evaluation, we do not want to displace 
those costs on the people that can afford. I believe that ties 
into a grant system, that we should go back to the original, so 
wisely put in your presentation and your questions, in regards 
to going back to a mix of grants and State Revolving Fund 
increases. I do not think there is another way to avoid the 
displacement of some of those costs without some kind of 
program, such as you are recommending.
    Mrs. Napolitano. Mr. Franklin?
    Mr. Franklin. Thank you, Ranking Member Napolitano. I guess 
I would make one point. I would like to see access to the State 
revolving loan fund for clean water available to all. A lot of 
people are under the misconception that companies like mine, 
utilities, can make money on low interest. And that is a 
fallacy.
    The reality is public utility commissions only allow us to 
pass through interest. And since all Federal taxpayers pay into 
these through their taxes, we should allow all Federal 
taxpayers, including the customers of utilities, to access 
these low-interest funds.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Mast [presiding]. Now we are going to go to my friend 
and fellow bomb technician, Representative Crawford.
    Mr. Crawford. Thank you, Mr. Chairman. Appreciate it.
    I have a couple of unique challenges. They are not 
necessarily unique to my district, but it is unique to rural 
geographies. And that is small towns, rural communities, remote 
areas, where it is difficult to fund wastewater treatment 
systems and things of that nature.
    I have suggested sort of working collectively with small 
communities in a given area, and just would like to get some 
feedback from you on the panel, if anybody wants to weigh in on 
this. In a municipal area, obviously, a metropolitan area, you 
have a funding mechanism that exists.
    How do we drive funding for a scenario that I just 
described along the lines of what a metropolitan area has, 
given the population challenges that we have? I certainly think 
that consolidation is one approach. But does anybody want to 
address the funding in the consolidation? Mr. St. Pierre, you 
look like you have something on your mind.
    Mr. St. Pierre. Yes. One of the things we are working with 
U.S. EPA on is a peer-to-peer network for smaller communities. 
And instead of an enforcement type program with the States, for 
small communities being able to bring in technical support from 
larger utilities that can help those utilities really put 
together a plan for their infrastructure.
    Also, be able to access SRF funds, which really, for 
smaller communities, if they do not have technical expertise, 
can be quite difficult; and really help put them on a platform. 
We have a meeting with a lot of utility leaders next Sunday and 
U.S. EPA to really look at this model and see if there can be a 
support service that is supported from a national level, 
created at a State level, where we can provide value to rural 
communities.
    Mr. Crawford. Mr. Gonzalez?
    Mr. Gonzalez. Yes. In the case of El Paso, we have some 
funding challenges to deal with. During the next 10 years, we 
expect to spend $1 billion, estimated, in order to serve the 
residents within the city.
    We also have some challenges in trying to help many of the 
small communities that are located outside the city. We have 
got a long history of working with various Federal agencies. 
Many times, some of the regulations that are in place prohibit 
us from being able to apply directly for funds for some of 
these small communities.
    We have got one specific example that comes to mind, an 
area that has about 1200 connections or so. The area already 
receives water service, but has a lot of failing systems. The 
cost to be able to serve this particular area is well over $30 
million or so.
    It is impossible for the residents to be able to pay for 
the needed service. The utility cannot provide the service and 
the Federal Government is saying that because of the 
regulations, we are not able to directly apply for funding and 
serve them. And so they are kind of caught in the middle.
    Being able to address those kinds of regulations, and to be 
able to capitalize, if you will, on utilities such as ours that 
have a willingness to go out and spend some of our own 
resources in terms of management and identifying funds and 
applying for funds, would go a long ways.
    Mr. Crawford. Let me ask you this. The population of El 
Paso, roughly?
    Mr. Gonzalez. We have got about 800,000.
    Mr. Crawford. 800,000?
    Mr. Gonzalez. That is within the county.
    Mr. Crawford. How far out are you reaching into some of 
those outlying areas that is reasonably accessible 
logistically?
    Mr. Gonzalez. Well, we are designated as the regional 
planner and provider of service, and so we come within a couple 
of miles from the State line to New Mexico, I would say 5 to 7 
miles from the State line. We provide retail service and also 
have some wholesale accounts.
    But those areas that kind of fall, like I said, in between, 
not being organized and not having the resources, we are 
willing to help. But again, in dealing with some of the Federal 
agencies, our hands are tied because we do not qualify for 
getting the assistance.
    Mr. Crawford. What would it take for you to expand that 
range to 50 miles, 60 miles? Is that possible, logistically 
feasible? Can you do that?
    Mr. Gonzalez. I do not know if it is feasible going that 
far. But we are looking at much closer areas, like I said. The 
area I just mentioned is only probably 5 miles or so from the 
closest line, and yet we are in need of $30 million or so just 
to be able to serve this very area.
    Overall, like I said, just in wastewater needs, the 
majority of the funds that are needed are for rehabilitation, 
with some new infrastructure in place.
    Mr. Crawford. So the challenge, I guess, that we face in my 
district in particular is that many of the small towns, 200 
population, less than 1,000, most of the time of the year there 
are going to be boil orders that are issued just for drinking 
water, just for use in the home. And it is a quality of life 
issue, and it is a challenge for us going forward.
    So I appreciate your insights and I look forward to working 
with you in the future with some more ideas how we can address 
that need. And I yield back. Thank you, Chairman.
    Mr. Mast. Thank you, Mr. Crawford.
    Ms. Esty, the floor is yours.
    Ms. Esty. Thank you, Mr. Chairman. I want to thank the 
chairman and ranking member for holding today's important 
hearing.
    Three topics I really wanted to touch on today, one of 
which I added because of the enlightening conversation between 
Mr. Levine and the chairman. And that has to do with resiliency 
of water infrastructure. My State of Connecticut was hit very 
hard with Superstorm Sandy.
    We expended considerable resources in rebuilding and 
learning about more resilient infrastructure, about how to 
absorb fast-flowing water, work done in part at the` 
institution that Mr. Levine attended, where he was one of my 
husband's students at the Yale School of Forestry and 
Environmental Studies. And that does cost money, and my State 
spent that money to do so. And so did New York.
    And so I think in the interest of saving lives and saving 
dollars, it is incumbent on us to do that because it is not 
only a misuse of dollars, but much more importantly, it is not 
using the best learning about how we save lives and save 
property going forward.
    So I would just say that I think we have to find a way to 
do that. And it would be wrong for the folks in Texas and in 
Florida and in Puerto Rico and in the Virgin Islands not to 
take best practices forward. And we are just going to have to 
figure out a way to do it. And we should not lower standards 
and put people's lives at risk and their property.
    So I think that is not only being stewards of the Federal 
tax dollars, but recognizing other States have figured out a 
way to do that and did not get extra support. We did it because 
it is the right thing to do.
    The two topics I really wanted to touch on were about 
public drinking water and about brownfields. On public drinking 
water, my State is one of the many in the country that has 
found we have unacceptable lead levels in our schools, in 
condominiums, in apartment buildings, in State offices 
buildings. As you may know, we found recently in the Cannon 
House Office Building that we had unacceptable lead levels and 
had to shut down all of the water fountains there.
    So this is a problem we are going to need to address. And 
it costs real money, and with aging infrastructure it has to 
happen. We saw it in Flint. We saw it in Toledo. And as a 
cochair of the Corrosion Prevention Caucus, I would urge us to 
look at that.
    And I will ask a couple of you specifically about that 
because there just is too much at stake. We cannot afford to 
poison our people, especially not our children, and too many of 
these in our schools, and we will never recoup their lost 
ability. And it is just wrong. We need to figure out how to do 
that.
    And the other is on brownfields, which is part of this 
portfolio as well. I want to thank the ranking member and 
Chairman Graves, who we have been working hard on a bill, have 
one that passed unanimously out of committee, and we are hoping 
to get it to the floor soon.
    But nearly one-third of the projects do not get funded 
because EPA does not have sufficient funding. Two of those 
projects were in my district, and they are important projects. 
There are 533 that did not make the cut last time, not because 
they did not qualify, not because they were not good projects, 
but because, simply, we did not have enough money.
    So sometimes, unfortunately, it does take money. We are 
making some improvements to Mr. Franklin's point and to Mayor 
Cooper's point about trying to do P3s, public-private 
partnerships, where appropriate. We have learned from 
practices, working with the League of Cities and with the 
mayors to improve the bill. And we would urge your support, and 
try to get this through to the floor soon. But again, we would 
like to see more robust funding for EPA for these programs, and 
then we can leverage the private dollars.
    So maybe, Mr. Pedersen, you talked a little bit about--if 
you can opine both on brownfields with some additional funding, 
recognizing that every one of those dollars leverages a lot--
and on lead, what you are seeing in our water systems on lead. 
Thanks very much.
    Mr. Pedersen. Sure, absolutely. Good questions. Lead is a 
major challenge across the country. Fortunately, on the west 
coast, we do not have as severe a lead problem because a lot of 
our pipelines are not lead-based pipes. But I think, 
absolutely, you are exactly right. We cannot be having lead 
levels exceeding standards, especially in our schools.
    California has been very proactive in this. In fact, the 
legislature just passed a bill that actually increased the 
current Federal standards for lead and copper testing whereby 
community water systems would actually pay to do testing of 
schools, which is not currently a requirement.
    The other thing is corrosion control. It is very effective. 
It is cost-effective. It does not require necessarily 
replacement of all the lead pipes, but if you can control 
corrosion and ensure that you are building that layer of 
deposit on the pipes and not leaching out lead.
    And with regard to the funding, I agree 100 percent. We 
need more robust funding. The funding can be leveraged at the 
local level. It should be.
    And then with regard to resiliency, in California it is an 
issue that we are very aware of. We have situations where we 
face both drought emergencies and flood emergencies 
simultaneously, and so we need to be thinking of both. And we 
frequently focus on drought, but flood is also an issue that we 
need to be very aware of and prepare for. And we are doing 
that, but we need to do more.
    Ms. Esty. I see my time is expired. Thank you, and I yield 
back.
    Mr. Mast. Thank you, Ms. Esty.
    Going to Texas. Mr. Babin, the questioning is yours.
    Dr. Babin. Yes, sir. Thank you, Mr. Chairman. Appreciate 
it.
    I want to thank all the witnesses for being here as well. 
Water issues are a huge issue. In Texas, it is an enormous 
issue. And as you know, countless communities across our 
country, and in my district in particular, nine counties that I 
represent in southeast Texas, from Houston to Louisiana, have 
been impacted by devastating hurricane-force winds. And it is 
not just my district. We had 39 counties impacted, not just my 
9. But just to give you a little perspective, Hurricane Harvey 
set a new continental U.S. rainfall record of 51.88 inches in 
Crosby, Texas, in Harris County just a few weeks ago.
    Can you explain what practices and methods that you all 
have learned in your collective experiences, especially since 
Hurricanes Katrina and Rita in 2005, to ensure that our 
drinking water infrastructure maintains its reliability after 
the storms like the ones we have just seen where, literally, 
trillions of gallons of water inundate our communities in just 
a matter of a few days?
    And I would just like to open it up to the entire panel. 
Mr. Proctor?
    Mr. Proctor. Yes, sir. Thank you. One of the first things 
that needs to happen is something I alluded to in my 
testimony--life-cycle costing and full-cost accounting. Many of 
the groups that are represented here today joined in something 
called the ``Effective Utility Management Practices Book,'' 
which talks about the need to understand what is your full 
life-cycle cost as you operate a utility. And once you 
understand those costs, then you can make investment decisions 
about how best to preserve those assets and make certain that 
they will serve for a long period of time.
    And when you talk about resiliency in the context of storm 
events and so forth, that is one of the factors that needs to 
be taken into account. You need to look forward and try and 
anticipate what the frequency of storms might be, what the 
impacts might be, and include that in your cost calculation in 
designing the infrastructure that you build, and then make 
certain that when you build that infrastructure, that you build 
with the most resilient designs, resilient materials, and 
everything else so that they will withstand those sorts of 
events.
    Dr. Babin. Thank you very much. Anyone else like to--Mr. 
Franklin?
    Mr. Franklin. Congressman, this is a critical issue and a 
lot of learnings. We had a lot of customers in your district. 
Many were on boiled water most recently. And I think there are 
several things that can be done, especially in serving rural 
communities, which is largely what we serve in Texas and North 
Carolina and other States.
    But number one, a monitoring system should be installed on 
as many of these systems as possible so you know when they are 
down remotely.
    Secondly, staging of generators, prestorm work. Right? 
Generators should be staged to make sure that those wells, 
those community water systems and wastewater systems are 
operational as long as possible, even though they are remote 
and difficult to get to many times.
    And third, as many mutual aid discussions that we can have 
with other utilities to back each other up. The electrics have 
had it for many years. We do not have quite the same system in 
place for water and wastewater. But those mutual aid 
discussions are really important.
    I will give you one example, Beaumont, Texas. We sent a 
team down there, and we were in Beaumont, and that was a very 
difficult situation. But we were able to put our expertise----
    Dr. Babin. That is my home town. That is where I grew up.
    Mr. Franklin. Yes, sir. They had real trouble. Right? One 
hundred eighteen thousand people out of water.
    Dr. Babin. Absolutely. And many--we lost power and water in 
many of our communities. And when you talk to folks, they will 
tell you, ``If I had to choose, I would rather lose my 
electricity than lose my water.'' And I can agree with that 
because we experienced that.
    Thank you, Mr. Franklin. Anybody else like to add to that? 
Yes, ma'am?
    Ms. Cooper. If I may, I did not get a chance to add, 
because I did not go back as far, about 10 years ago we 
actually built a water plant for about $25 million. We have 
water independence in our city. It was one thing that I was 
steadfast against. We support, as U.S. Conference of Mayors, 
all our public-private partnerships.
    And I should have started with--I am sorry for your 
struggles and your losses there.
    Dr. Babin. Thank you.
    Ms. Cooper. It is not an easy situation, especially if you 
are not familiar with it. But there is a lot of lessons 
learned. As U.S. Conference of Mayors, I assure you we have 
been working with your mayors, and look forward to working with 
you if you have any questions on resiliency and building out 
equipment. Being from Florida, we have a lot of experience in 
it as well. And our president, Mitch Landrieu, of course, is 
here to help as well.
    Dr. Babin. Absolutely. Thank you very much.
    Mr. Chairman, I think I will yield back the balance of my 
time. And I want to thank every one of you for your experiences 
and your advice.
    Mr. Mast. Thank you, Mr. Babin.
    Mr. Lowenthal, the floor is yours.
    Dr. Lowenthal. Thank you, Mr. Chair. And first I want to 
echo the comments of Ranking Member Napolitano and many of the 
panelists also--and I want to thank the panelists for being 
here--about how important the Clean Water State Revolving Fund 
is to water agencies, especially water agencies in California 
and across.
    And I think, as my own two cents, that we should be moving 
legislation, like H.R. 2510, to reauthorize the vital program 
and provide direct investment in wastewater infrastructure. But 
I want to follow up on some things that the panelists said for 
my own understanding about what are the benefits and maybe some 
of the problems.
    And Mr. Pedersen, I am going to start with you. You 
advocated in your testimony an amendment to the Clean Water Act 
to allow for the 10-year permit under the NPDES, I think it 
was. And you talked about how--some of the rationale why Aqua 
would like to have it. I would like to hear a little bit more.
    But I want to also hear--are there any down sides? I mean, 
you promoted the up side of why it would be better for 
investment. But what would be--are there any issues involved 
that we should be addressing if we go from 5 years to 10 years 
in those permits? Are there problems that we--are there 
unintended consequences?
    Mr. Pedersen. We have looked at that issue. We do not 
believe that there are, and we have not heard those. And we are 
open to listening. But we think, really, there are three key 
benefits of doing this.
    One is the longer terms promote, we think, a more efficient 
regulatory process while recognizing and preserving the water 
quality protections under the Clean Water Act, which is 
important. We also believe it encourages longer term planning 
and thinking, which is something we all need to do now, and 
every panelist has spoken about that.
    And then third, it better aligns the investments that we 
are making in the 21st century in infrastructure with the 
timeframes that are needed. And so we think it accomplishes 
those three things and actually helps to make the process more 
efficient.
    Dr. Lowenthal. I am going to follow up with Mr. Levine on 
that. NRDC has used the NPDES permit system to urge enforcement 
of the Clean Water Act, to guard against contamination. Talking 
about that, how would a longer timeframe affect enforcement and 
contamination safeguards? Because we have to balance these 
kinds of issues.
    Mr. Levine. Yes. Thank you for the question. There are some 
serious down sides, and we very much oppose changing that 5-
year term of permits, which has always been a core part of the 
act, and look back to the legislative history of when the act 
was first passed, was highlighted by the sponsors by floor 
statements as really a key thing.
    And the reason for that is that standards and technologies 
and water quality needs do in fact change over timeframes much 
shorter than 10 years. The entire scheme of the NPDES 
permitting program, not only for wastewater treatment plants 
but for all dischargers, was to recognize and to have EPA 
focusing on improvements in technology and ensuring that the 
best pollution control measures are used and that we do not 
have a 10-year gap between when a permit is written and 
catching up to the next best technology.
    And similarly, our knowledge of water quality, impairments 
of our water bodies, changes over a period of 10 years. And the 
plans that we develop to clean up those water bodies changes 
over a period of 10 years.
    So, for example, development of total maximum daily loads 
under section 303(d) of the Clean Water Act, those are 
basically pollution diets that identify how much reduction is 
needed from different pollution sources to a water body. Right? 
And those plans have consequences for permitting. They require 
permits to then meet those pollution diets, those pollution 
load reductions. And if those permit cycles get extended to 10 
years, we are going to see substantial delay in making those 
water quality improvements we needed.
    Now, I will add, if I can, just two quick related points. 
It has been suggested that by allowing for reopeners of 
permits, that would solve this problem. We do not think that 
that really solves the problem. If the default is you have got 
10 years on a permit and there is no action-forcing mechanism 
to revisit that permit for 10 years, you are cutting out the 
public and you are cutting out EPA and undermining EPA's 
authority.
    So whenever there is a permit renewal, the public has an 
opportunity to come in and seek further protections, which they 
do not have--the public cannot do a reopener. Right? The State 
permitting authority has the sole power to do a reopener.
    Similarly, EPA cannot come in in the way that they exercise 
their oversight responsibilities. When a State has a draft 
permit, EPA has a role and a responsibility to review it, see 
if it complies with the act, and the authority to object and 
ensure the State strengthens it.
    So if you put these things off for 10 years, you are taking 
those key safeguards, checks and balances, out of the process.
    Dr. Lowenthal. Thank you. And I yield back.
    Mr. Mast. Thank you, Mr. Lowenthal.
    Mr. Weber, the floor is yours.
    Mr. Weber. Thank you, Mr. Chair.
    Mayor Cooper, I want to visit with you for a second. I was 
on city council for 6 years in the little town of Pearland back 
then, which had like 26,000 people. We had 20 police officers, 
by the way, and I knew them all. Now Pearland has grown to 
about 110,000, has 160 police officers, and I do not think 
anybody knows them all.
    But anyway, I have been through that growth spurt. So you 
are mayor of Hallandale Beach, Florida. I want to come back to 
your discussion, I think, with Dr. Babin. If I understood you 
correctly, you said that you all went for water independence 10 
years ago and it cost $25 million, and you said you were 
against that. Did I hear that correctly?
    Ms. Cooper. No. I was in full support of it.
    Mr. Weber. You were supporting it. OK. You were for that. 
Well, I am sorry. I misunderstood that. And how long have you 
been mayor?
    Ms. Cooper. I have been mayor 14 years.
    Mr. Weber. Fourteen years. So you started when you were 
like in sixth grade?
    [Laughter.]
    Ms. Cooper. Well, thank you for that kind remark.
    Mr. Weber. Sure. We instituted what is known as an impact 
fee for people moving into Pearland--we are south of Houston, I 
am not there now, but that is where I grew up, in that area--at 
a rapid rate.
    Pearland was one of the fastest growing cities in the 
country. So we realized that the people coming to our little 
sleepy neighborhood town were going to have an impact on sewer 
systems, on our water system, on infrastructure--fire, police, 
EMS, and so on and so on. Do you all use an impact fee?
    Ms. Cooper. Well, you are a smart mayor for doing that, and 
we----
    Mr. Weber. Well, I never said I was mayor. I was city 
council. Yes, sure.
    Ms. Cooper. Oh, I am sorry. Oh, council. Well, we are all 
equal. We just--I run a meeting, so----
    Mr. Weber. Right.
    Ms. Cooper. But we do have impact fees, and we do--any new 
development pays their fair share of the impacts that they are 
putting on our community. We are actually in the process--I run 
a tight ship, so we just did our full evaluation of our basis 
of design report, which is that $200 million price tag. So if 
you are going to come up and do business, we want you to be a 
community partner, and you will be paying your fair share into 
our community.
    Mr. Weber. I noticed, according to Wikipedia--and you know 
if it is on Wikipedia or on Facebook, you know it is true----
    [Laughter.]
    Mr. Weber [continuing]. But your 2010 census was 37,113 
people. Their estimate of 2016 was 39,500 people. So you have 
grown by just a couple thousand people in the last 6 years. Is 
that accurate?
    Ms. Cooper. Yes. Yes.
    Mr. Weber. OK. Does the State play a role in you all's 
development in the State of Florida?
    Ms. Cooper. We actually have a robust comprehensive plan 
through the Broward County district. We have a county seat that 
does planning. And we actually are very involved. I actually 
put all our growth management tools in the toolbox about 10 
years ago, so we are pretty independent when it comes to 
approving development now.
    Mr. Weber. OK.
    Mr. Levine. Could I speak to that question about the impact 
fees real briefly?
    Mr. Weber. Yes, sir. Feel free.
    Mr. Levine. Thanks. It really speaks to a broader issue 
about equitable rate structures, right, for the reasons you 
said. If you have got folks coming in, development coming in, 
they should be paying their fair share into that.
    The question of affordability of water and sewer service 
for residential customers, we have got the assistance, the low-
income assistance, approach which is necessary, like the LIHEAP 
type approach, right, that we have talked about that, Federal 
assistance for that, State assistance for that, to help reduce 
bills directly.
    But you have also got the underlying rate structure. Right? 
So if you are giving somebody a credit or a voucher to help pay 
their bill, what was the bill to begin with, right, and what 
was the rate structure that resulted in that bill?
    Mr. Weber. And who pays that difference?
    Mr. Levine. Sure. That is right. And that is providing the 
assistance. Right? But if the rate structure itself is 
equitable, that is going to mitigate the amount of outside 
assistance that is needed.
    And so just to take an example, what I mean by that, so if 
you have got tiered rates for water, right, inclining block 
rates, where those who use enough for their basic needs are 
paying a relatively lower per-gallon price and those who are 
profligate water users are paying a higher per-gallon price for 
those higher increments, that is going to support folks of 
modest means who use modest amounts of water, and lower their 
bill simply by changing the way the rate is structured in the 
first instance.
    And you see the same dynamic with the use of stormwater 
fees, for example, based on impervious area, where you get 
people paying in corresponding to the contribution of runoff 
they have into a system. And that will help residential 
customers quite often.
    Mr. Weber. So it is safe to say, and I am running out of 
time, that that calculation, that formula, does not take into 
account two things, perhaps: old, outdated equipment, lead 
pipes or others, whatever happens; and then, also, disasters 
like hurricanes and stuff. Is that safe to say?
    Mr. Levine. Sure. Well, that gets to the full-cost pricing, 
full-cost accounting issue, right, is making sure that whatever 
the rate structure is, that it is applied in a way that 
generates the total amount of revenue needed for the utility. 
And that in turn links with how much outside assistance the 
utility is getting for those capital costs, which underscores 
the need for Federal and State investment.
    So it is a set of puzzle pieces that all fit together. 
Right? The utility needs to be able to generate revenue for its 
share. It needs to be able to do it in an equitable way. But 
that share also needs to be not so outsized that it is 
impossible to do that. And the way to keep it from getting so 
outsized is to make sure that the financial assistance is 
coming in from the Federal and State level where it is needed.
    Mr. Weber. Well, we will have that discussion later. Mr. 
Chair, I will yield back.
    Mr. Mast. Thank you, Mr. Weber.
    Mrs. Lawrence? It is all you.
    Mrs. Lawrence. Thank you so much.
    As a former mayor, I just really want to say we should 
listen to our mayors, who are dealing with this issue every 
day. It is amazing. When there are crises, you always see the 
mayor as the go-to person to deal with the crisis. Let's get 
the mayors involved and make sure their voices are heard to 
prevent some of these disasters.
    So let's talk about the data that we should. We heard my 
former colleague, Mayor Cooper, talk about the basis of design 
support. To be able us to truly address the issue of water 
infrastructure in our country, we need data. It should be 
mandatory that every city conducts this type of review of their 
water infrastructure.
    So many of us will--as we talk about investment in our 
infrastructure, water should be a priority. Ladies and 
gentlemen, I represent Michigan, and what we went through with 
Flint and across the country, it was a shock to us to 
understand that water is not a luxury. It is a need to live. 
And it is not something that should be predicated upon the 
wealth of your community.
    So there are some things that I think we really need to 
have on point. Water main breaks: People used to ask me as the 
mayor, ``What keeps you awake at night?'' It was not things 
that you think about. Potholes--yes, I did not like the 
potholes and I got beat up a lot about it. But water main 
breaks--when you flush your toilet, when it rained was it going 
to back up in your basement, those things kept me awake at 
night. It is a quality of life issue.
    We have 240,000 water main breaks. And what we are doing, 
we are wasting 2 trillion gallons of treated drinking water. 
And there are communities who are struggling right today in 
America to get clean drinking water, going through the 
conservation issues that you talked about, Mr. Gonzalez, to 
just survive and have water quality. And we are wasting it 
every single day.
    The Army Corps of Engineers has a backlog of $56 billion. 
And what does that include? The levees and the dams that are 
breaking every time we have these natural disasters, and 
coastal inlets. These are issues that we must make water 
infrastructure--so Mr. Levine, I am going to ask you this 
question, Mr. Levine.
    Across the country we are now dealing with this water 
issue, affordability with low-income communities. How do we 
create a 21st-century water infrastructure that ensures that we 
are, in America--as we talk about healthcare and tax structure, 
that the basic human need of water is being addressed?
    Mr. Levine. Thanks. So there are many legs to the stool. 
Right? It is a combination. What we really need in order to 
make sure that at the level of an individual household, of 
every individual household, that there is that access to 
affordable water and sewer and stormwater service. Right? Is to 
make sure that the cost that is borne locally is a cost that 
the utility can fairly collect from those who are served. 
Right?
    And so that is a function of knowing what the cost is, 
identifying what the needs are, what the priority spending is, 
things like water loss, water----
    Mrs. Lawrence. Can you include in that, how does 
encouraging or incentivizing these communities to consolidate? 
Because while as mayor I loved to have everything on my own, 
but then a poor community a couple miles down the road, they 
cannot afford water. But I am doing well. Can you put that in 
your statement as well?
    Mr. Levine. Sure. Yes. No, there is absolutely a place for 
that, and as other witnesses have talked about, you can have 
literal consolidation of the physical plant of different 
utilities when they are close enough to each other and when 
that makes sense.
    You can also have regionalization in ways that allow 
utilities to share management expertise and purchasing power to 
get economies of scale. And those are absolutely important 
things to look at. They do not by themselves solve the problem, 
but they help.
    And so solving the problem, as I said, there is the Federal 
money and the State money to make sure that the amount that 
needs to be spent locally is manageable. There are efficiencies 
and strategies at the local level to reduce the costs of 
providing the service. And there is assistance to individual 
households, equitable----
    Mrs. Lawrence. Mr. Proctor, before my time runs out, I am a 
strong, strong proponent of skilled trades. And your company 
talks all about the jobs that will be created through this 
investment in our infrastructure, especially water. Can you 
please, in the time remaining, talk about that?
    Mr. Proctor. Well, every $1 billion of water infrastructure 
investment produces about 28,000 jobs, I think the statistics 
show. So when we invest in our water, not only are we providing 
something essential for the health of our communities, but we 
are also helping those communities get off the ground by 
providing good-paying jobs that they can then put back into 
those communities.
    Mrs. Lawrence. It is a win/win. I close with this. We are 
looking at our tax structure tomorrow, I understand. We cannot 
take away those tax-exempt municipal bonds. It is critical that 
we keep that. Thank you so much, and I yield back.
    Mr. Mast. Thank you very much.
    And the floor is for Mr. LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Chairman. Thank you, panelists, 
for assembling here today.
    In California, the State Water Resources Control Board 
recently released their annual compliance report, and it found 
that in 2016, nearly 5 million people were affected by their 
definition of water violations, which is triple the amount 
affected in 2015.
    In my district alone, the First District of northeast 
California, there were 800 of these what they are defining as 
violations in that new year, which shows a lot of work to be 
done to fix these issues and ensure the water is clean and 
safe, as defined.
    Fixing these violations can be quite a challenge in the 
absence of funding. Again, in NorCal there is a large amount of 
very small and unincorporated communities that do not have the 
tax base, do not have the prospering industries that they once 
had, and so the challenges are huge.
    And raising the funds for a project in the short term and 
maintaining these projects in the long term, it is a great 
strain on these small towns and unincorporated areas, these 
villages that do not have the budgets that they once had, even 
countywide.
    When they are able to raise the funds, ensuring that each 
project that they come forward with, that they comply with a 
long list, Mr. Chairman, of regulations and redtape from both 
the Federal level and California's crushing State regulations 
can be darn near impossible for these small towns.
    And the questions I want to pose, Mayor Cooper, and to also 
Mr. Pedersen: Given the uncertainty of increased Federal 
funding, what we are dealing with around here, what are some of 
the regulatory burdens and other structural issues and problems 
that this committee could be tackling in order to help the 
dollars go farther in small, unincorporated communities or 
counties where, again, industry has been basically run off--to 
stretch these dollars farther? So would both of you like to 
take a run at that?
    Ms. Cooper. Thank you very, very much for the question. I 
want to go back to two issues, first address yours.
    The regulatory process is something we have been working on 
as U.S. mayors for the past 10 years. And I do believe that we 
should go back to address some of the questions. I know Mr. 
Lowenthal had asked about the 10-year process. I think that is 
critically important.
    We are all stewards of our water. We have come a long way 
over the past 40 years and the Clean Water Act. So I believe 
science as well as social equity needs to also be looked at, 
and that we have to be looking at these regulations as they 
evolved.
    So the 10-year period, I think, is critical so we can 
implement plans over the time period that we have been working 
on with Mr. Gibbs' bill. As far as what we----
    Mr. LaMalfa. Let me also allow time for Mr. Pedersen, too, 
so----
    Ms. Cooper. I know. I am sorry. And then as far as the 
monetary, that goes back, I believe, to the grants and a lot of 
distressed areas. Right now we can borrow money, and some 
cities have better borrowing capacity than others. In these 
distressed areas, we will continue to ask for grants and 
flexibility as far as implementing our plans for the best and 
most effective utilization of both our financial resources as 
well as boots on the ground doing the projects.
    Mr. LaMalfa. OK. Thank you.
    Ms. Cooper. Sorry, sir, for too much time.
    Mr. LaMalfa. That is OK. Thank you.
    And then please speak a little more to the structural 
problems that the regulatory burden is causing. Now, in 
California, again, we have our own problems with the resource 
control board. There seems to be further definition of these 
rules, of these laws that are changing and making the burden 
even higher. As I mentioned in my comments, 2015, the number 
tripled in 2016 to what they allege are violations.
    In the remaining time, please. What should we be doing to 
help address that?
    Mr. Pedersen. Thank you, Congressman. Quickly, this is a 
challenge we face. It is probably the number one challenge 
following the aging infrastructure issue. As we better 
understand the science of water, naturally there will be new 
regulations that we need to meet.
    We need to be smart about how we comply with those 
regulations, looking at things like integrated planning, where 
we can look at complying with multiple regulations----
    Mr. LaMalfa. How you comply. But how reasonable are the 
regulations to begin with as they evolve?
    Mr. Pedersen. And that speaks to the public process. As 
agencies, we need to all weigh in. We do that. And we need 
additional opportunities to give our input and feedback and 
share the science on both sides of the issue so that we develop 
balanced regulations.
    Mr. LaMalfa. I do not believe the public knows what it is 
paying for as these regulations morph on and on. And I think if 
they really understood, they would be more up in arms about 
what it is costing them, to not have this new infrastructure 
they should have.
    So Mr. Chair, I will yield back. Thank you.
    Mr. Mast. Thank you, Mr. LaMalfa.
    Mr. Garamendi, we are up to you. It is your turn.
    Mr. Garamendi. Thank you.
    There has been a lot of discussion here about what to do 
with the various hurricanes and the rebuilding of systems. And 
I note that in August, the President revoked the Flood Risk 
Management Program. It seems to me that it might be useful to 
keep that in mind. Much discussion from the witnesses about how 
to be resilient in the face of floods.
    But I guess the Federal Government is not going to require 
that in funding programs, that we do not pay any attention any 
longer to flood risk management. It seems to be a rather stupid 
thing to do, but we ought to pay attention to that. So that 
ought to go back onto the agenda. And if the President does not 
want to reinstate that, then perhaps we ought to. Otherwise, we 
are wasting a lot of money.
    Secondly, every one of the witnesses has asked for more 
money. Correct? Is there any one of you that did not ask for 
more money? No. All of you did. And we need more money. 
Tomorrow the Republicans in this House are going to hold a 
half-day seminar on how to reduce Federal revenues. Now, tell 
me how that is going to work if you want more money.
    I think we ought to keep in mind the totality of the issues 
that come before us and the way in which they interact. We can 
do all kinds of tax reduction policy, which is what I am sure 
will come out of tomorrow's meeting. And you want more money 
for water systems, for wastewater management, for flood 
systems, for highways, for new nuclear weapons, on and on.
    Just tell me how we are going to do all of that when we are 
reducing Federal tax revenue. Who would like to answer the 
question?
    Mr. Franklin. Congressman, if I could, let me just give you 
the art of the possible.
    When I joined our company in 1992, we took the amount of 
pipe that we were replacing every year against the total amount 
of pipe that we had in the ground. We would have had went on a 
900-year replacement cycle. Far from sustainable. Right? It is 
not going to last that long.
    In the 20 years or so that I have been at the company, we 
have taken that from 900 years down to 90 years. Our main 
breaks are half of the national standard, AWWA, and we have 
done it without Federal money. And we have done it on our 
rates. Our monthly rates are about $50 per month per customer.
    That is the art of the possible. It can be done, but it has 
to be done over larger groups of people. We have 450,000 
customers in that particular division. But it can be done.
    Mr. Garamendi. Excuse me. Was that pipe American-made?
    Mr. Franklin. That pipe is American-made by one of the 
people sitting at the table here.
    Mr. Garamendi. But you did ask for access to Federal 
dollars, did you not? Right?
    Mr. Franklin. Yes, sir. If we----
    Mr. Garamendi. Now, my question was not about how you could 
be more efficient, which is meritorious. But my question was 
about how do we get more Federal dollars to meet the needs that 
all of you have when we are actually reducing Federal revenues, 
or there are many who want to reduce Federal revenues?
    Ms. Cooper. If I may?
    Mr. Garamendi. Yes, please.
    Ms. Cooper. Thank you. And I do not want to repeat my whole 
testimony today. But I believe, really, what municipalities 
have been focusing on is not just money--and we face money 
issues, our balanced-budget city, on a daily basis--but really, 
the encouragement of integrated planning, flexibility, support 
of public-private partnerships, the bill that is being 
presented by one of the Members, Mr. Gibbs.
    So there are other opportunities. Money is important, the 
flexibility in the existing funds in the State Revolving Fund.
    Mr. Garamendi. Excuse me. Excuse me, but you are dancing 
around the fundamental issue that I have raised. Every one of 
you have asked for more Federal money for a variety of 
purposes, all good. And at the same time, the Congress of the 
United States is in the next--tomorrow and the days following, 
setting out to reduce Federal revenues.
    So how do we deal--and the larger infrastructure issue, a 
trillion-dollar infrastructure issue. Are you suggesting it 
does not require Federal money? It can all be done in public-
private partnerships? Yes, sir?
    Mr. Proctor. I am certainly not going to suggest that 
everything can be done with public-private partnerships. But I 
think there are three things that could be done that would 
leverage what we do have.
    Number one, when we invest in water infrastructure, that is 
not a static development. Every dollar of water infrastructure 
spending generates economic activity, I think another $6 in 
GDP, that in turn generates additional tax revenues that could 
help offset that.
    Number two----
    Mr. Garamendi. Excuse me. Are we talking chicken and egg 
here? Which comes first, the Federal revenue or the growth that 
occurs without the Federal revenue?
    Mr. Proctor. Most certainly the growth will--the growth in 
spending will sustain the growth in tax revenues. So there is 
perhaps an element of that. But there two other ways to get 
that, perhaps, that avoids that conundrum.
    One is the expansion of the WIFIA program. Right now WIFIA 
provides a leveraging opportunity through the use of credit 
insurance that would enable the few Federal dollars that we do 
have to greatly leverage into additional spending through 
private sector investment as well, which in turn would generate 
that economic activity, which would then in turn generate 
additional revenues.
    And then the last thing I would mention is lifting the cap 
on private activity bonds. The estimates are there--I think the 
last CBO estimate was----
    Mr. Garamendi. I am going to interrupt you, sir. But do any 
of those meet the needs of the infrastructure, water 
infrastructure? They are a piece of the puzzle. But by 
themselves, they are totally insufficient.
    Mr. Proctor. I would agree that none of those things by 
themselves solves the problem.
    Mr. Garamendi. That brings me back to the point that I am 
really raising here, in that we talk about a trillion-dollar 
infrastructure program. We talk about water, drinking water and 
clean water and on and on and on.
    At the end of the day, it requires Federal resources, which 
are going to shrink if the current policies being enunciated by 
the President and by my colleagues on the Republican side, are 
able to go forward.
    Thank you for the extra time. Mr. Mast.
    Mr. Mast. Thank you, Mr. Garamendi.
    We are going to move to Mr. Gibbs.
    Mr. Gibbs. Thank you, Mr. Chairman. I want to apologize for 
being late. I had another commitment.
    First of all, I got a response for my good friend from 
California. He says we are meeting to reduce Federal revenues. 
No. We are trying to put policies in place, a tax plan in 
place, that will create economic growth.
    If you believe that reducing the rates will reduce Federal 
revenues over the long term, then, my friend, we ought to just 
increase the rates. In that philosophy, the revenue is going to 
go up then.
    And I think most of us can agree increasing the tax rates 
will not bring in more revenue, but to get the economic growth 
instead of having the new normal 1 percent, 1\1/2\ percent GDP 
growth, let's get that up to 3 or 4 percent growth by having a 
tax policy that works for our American families and businesses. 
And that is where my friend from California is a little 
misunderstood.
    I want to move into my questions here. First of all, Mayor 
Cooper, I enjoyed working with the Conference of Mayors, and 
all the kudos--it is the most kudos I have ever gotten in my 
life from today, I think, on my integrated planning bill. I 
really appreciate that. And I appreciate the mayor's council 
support, and also in their written statement, the American 
Public Works Association.
    Mayor, can you maybe elaborate a little bit, if this 
integrated planning bill goes through, how that will help your 
community on flexibility? Can you maybe emphasize that a little 
bit, the flexibility and how it impacts you?
    Ms. Cooper. Well, when we are looking at resiliency 
measures and we are looking at green infrastructure measures, 
this will give us an opportunity to prioritize the investments 
of what little dollars that we do have. And I know I hear that 
through the water council continually across the Nation and the 
Nation's mayors that are represented on our board.
    So going back to the discussion, it is not just about 
money. Money is important. Investment breeds return on dollars 
and helps some of the most needy in our community. But your 
bill and that process, after working on it for 10 years, and 
the timeframes, and the flexibility, I think will bring a new 
era in partnership, in intergovernmental partnerships, to work 
together to address this need.
    Mr. Gibbs. Would you agree--I heard earlier this question 
from the gentleman, Mr. Levine. The 5-year. My bill keeps the 
5-year permitting. It would have been easier to write a 10-year 
permitting bill for this, it stays at 5 years, and I like to 
think of it as adaptive management or fine-tuning.
    When that 5 years comes up, we can fine-tune it to reach 
the goals that our local municipalities need to reach in work 
with the EPA. Would you concur?
    Ms. Cooper. Yes. I have been fortunate not to be under 
consent decrees and not being on the enforcement end of water 
issues. And those become quite arduous, and what happens is you 
are paying and spending more money after addressing something 
that might be not necessarily fundamentally scientific in 
nature.
    And I am certainly not a technician, and I have to at least 
yield that, that my understanding and working knowledge of 
water issues, that sometimes they are arduous.
    Mr. Gibbs. I agree. I got to move on because my time.
    Mr. Proctor, good to see you again. Can you talk--I got a 
couple points in testimony. Can you explain encouraging full-
cost accounting leads to water systems being more efficiently 
run and help compliance with the Clean Water Act? Can you 
elaborate on the full-cost accounting?
    Mr. Proctor. Yes. Good to see you as well. Like any 
economic activity, understanding your full cost is essential in 
making certain that you make the smartest decisions possible. 
And full-cost accounting would go a long way toward doing that.
    It would not only perhaps help utilities better price their 
product, which is something that we have talked a little about 
here today, but also to find the areas that are driving those 
costs so they can try and reduce those costs to do more with 
less.
    And so whether you get to full-cost pricing down the road, 
you may not actually get there, but at least full-cost 
accounting is an essential first step. And just to state it 
philosophically, none of us can get a loan from a bank either 
to buy a car or buy a house or fund a business unless we have a 
good understanding of what our expenses and costs are. And the 
taxpayers really deserve the same thing as the lenders in this 
process.
    Mr. Gibbs. I have a theory on this, at least on the public 
side. We kind of live on depreciation. We do not count for 
depreciation, where on the private water side they probably are 
to stay in business. Would you concur that is part of the 
problem? We do not account for depreciation on the public side?
    Mr. Proctor. I think, in large part, a lot of utilities do 
not account for depreciation, which is another word for the 
future cost of investment in future infrastructure to sustain 
itself over the long term. That is where life-cycle costing, 
which is an element of full-cost accounting, would provide a 
great service to taxpayers, so they understand what it costs to 
provide this service over the long term.
    Mr. Gibbs. My time is expired. I yield back.
    Mr. Mast. Thank you, Mr. Gibbs, and also for your insight 
on decreasing burden as we increase revenue. I think, 
unquestionably, one of the biggest things we need to avoid in 
this institution is the notion that somehow our grade goes up, 
our grade on the report card goes up, solely based on what we 
spend; that if we spend one extra dollar, we somehow get a 
better ranking.
    That cannot be the way that this institution functions, 
especially when we consider it is the fruits of other people's 
labor that we deal with here. And in that, I want to move to 
Ms. Brownley. The floor is yours.
    Ms. Brownley. Thank you, Mr. Chairman. And Mr. Chairman and 
Ranking Member, I just wanted to give a little bit of a shout-
out to Mr. Pedersen and the Las Virgenes Municipal Water 
District. They have been recycling water since 1972, and I 
consider them one of California's pioneers. So thank you for 
all of your good work.
    I had three questions, and I think Mr. Lowenthal really 
asked the first one. But I do want to comment, and I heard Mr. 
Levine's response to Mr. Lowenthal's question as well. But I 
think this notion of an extension of 5 years to 10 years for 
the NPDES permit is an interesting idea, and I think it is 
worth exploring to see if we can find a happy medium here in a 
win/win process, understanding that not every situation is 
exactly the same across the country. So I certainly would 
encourage continuing that conversation.
    The second question that I have goes back to recycled 
water. And Mr. Pedersen, you had mentioned in your testimony--
you talked about a new project in your district with the 
Triunfo Sanitation District that would create up to, I think, 
5,000 acre-feet of drought-resistant water supplies.
    So I wanted to ask you, in putting together the financing 
package for this, can you tell us which Federal programs you 
have found to be most helpful and whether you have any 
suggestions for Congress on how to augment or improve those 
programs to help spur more of these types of projects?
    Mr. Pedersen. Sure. Thank you, Congresswoman. The project 
that you are referring to is our Pure Water Project Las 
Virgenes-Triunfo. It will ultimately develop 5,000 acre-feet of 
new drought-resilient water through reservoir augmentation. It 
is one of only three projects of its type in California.
    Certainly we have built up some reserves, to the tune of 
about $20 million locally to pay for that project, recognizing 
that local monies need to be dedicated to these projects. But 
in terms of the Federal framework for infrastructure financing, 
the SRF program is essential and very important to us.
    Granted, it is a loan program. But the low-interest loan 
provides great value to us and the ability to finance those 
improvements, which are about $100 million, for an agency that 
is relatively small, a rate base of about 20,000 customers or, 
combined with our partner, Triunfo Sanitation District, about 
35,000 customers.
    The WIFIA program that was recently initiated is a 
fantastic program. We were 1 of 40-some applicants that 
submitted a letter of interest. There were many CASA and ACWA 
members who were invited back to submit full applications, and 
we think it is a valuable program and will be helpful.
    And then of course, the Bureau of Reclamation title 16 
program and a variety of research programs and programs for 
demonstration projects are very helpful for projects of this 
type. We really think water recycling is the future for 
resiliency in California, along with other local projects.
    Ms. Brownley. Thank you very much, and I will just add that 
in this particular water district, there is no local water 
source at all. And now Las Virgenes actually provides 20 
percent of the region's demand with recycled water.
    The other question, Mr. Pedersen, I wanted to ask, too, is 
in 2014, our committee requested a report on the Clean Water 
State Revolving Fund allocation formulas. The report was just 
finalized earlier this year, and can you comment on the report 
and the recommendations in it?
    Mr. Pedersen. Yes, absolutely. So the report--this was a 
report requested by the subcommittee. It is included as an 
exhibit to my written testimony. An excellent report, prepared 
by the U.S. EPA. It is an impartial report that uses data to 
analyze the distribution of Federal SRF funds to States.
    And what the report essentially found, in short, is that 
those formulas are dated and that they require updating. And 
the main reason is that those formulas were established based 
on 1987 data, both for population and demographics of all the 
States, and also the clean water needs of those States. And we 
know both of those issues, both of those figures, have changed 
dramatically in that time, and there is really a need to take a 
look at updating them.
    The report includes a number of options, and any one of 
those options would be a big step forward. And we would 
encourage the subcommittee to take a look at that report and to 
work with the EPA on bringing forward those recommendations for 
action.

        [``Review of the Allotment of the Clean Water State Revolving 
        Fund (CWSRF)'' Report to Congress issued by the U.S. EPA in May 
        2016 is available at the EPA's website at https://www.epa.gov/
        sites/production/files/2016-05/documents/
        review_of_the_allotment_of_the_cwrsf_report.pdf]

    Mr. Levine. Could I speak very quickly to two of your 
questions?
    Ms. Brownley. Yes, please.
    Mr. Levine. On the 10-year extensions, I will not rehash 
the concerns I raised earlier, but I do believe that they are 
very valid.
    The underlying issue, it seems, of the reasons that this 
10-year extension and the integrated planning issue are being 
raised, is a desire for flexibility in prioritizing and 
recognizing the time that it takes to implement expensive 
capital improvements. Right? And that general principle is not 
something that I think is controversial.
    There is a letter submitted, signed not only by NRDC but by 
a number of other environmental organizations, before this 
hearing pointing out the values, the virtues of integrated 
planning as per EPA's framework that was issued a few years 
ago.
    As far as the role of Congress and this committee, what is 
important, I think, to understand is that the existing Clean 
Water Act provides that flexibility, and the EPA framework 
document lays that out.
    The issue of the length of compliance schedules is 
something that Congress has asked the National Academy of 
Public Administration to look into the financial capability 
assessment guidance that EPA has that governs negotiations 
around those compliance schedules. The academy is due out with 
that study this month. That provides an opportunity for EPA to 
consider those findings and revisit the guidance.
    On WRRDA and recycled water I will just point out, and it 
is mentioned in my testimony, Congress in 2014 inserted 
provisions requiring that Clean Water SRF-funded projects used 
to the maximum extent that they can in a cost-effective way--
water reuse, water efficiency--it is not being implemented 
particularly well. And I urge the committee to support EPA, 
push EPA to implement that better.
    Ms. Brownley. Thank you. And my time is up. Thank you, Mr. 
Chairman.
    Mr. Mast. Thank you very much.
    And I just want to open with a couple of questions for the 
entire panel. Everybody is anticipating a large infrastructure 
package. It is something we are all waiting for. We are excited 
about. I see the smiles that it puts on your faces as we even 
mention it because it is exciting. So that is where I want to 
get a little bit into the public-private partnerships.
    Give me your view. What is your go-to on this? Where do you 
see it? And it is open to the entire panel. And from there, if 
you want to, give me what is your favorite? What is your go-to 
for any sort of consolidation that you see between public and 
private, and the number one program that you would want to work 
towards? By all means. Mr. Pedersen.
    Mr. Pedersen. Thank you. Two important issues to us. We do 
believe that there is value in public-private partnerships, 
although we do not believe in any way they are a panacea for 
infrastructure financing. As a public agency, we have engaged 
in P3s. We found them to be effective in certain areas of our 
business--renewable energy, solar, where there are tax credits 
that the private companies can take advantage of.
    But we do not believe that for big infrastructure projects 
like our recycling project that we can generate more value for 
our ratepayers and lower rates through public-private 
partnerships, uncategorically.
    With regard to consolidation and regionalization, we do 
have some concerns with both of those issues. Again, we do 
think there are circumstances that warrant agency 
consolidation, and we think that that is currently happening, 
and we see that happening in California. And there are 
incentives to do that already.
    But we do not think a Federal policy, especially a broad-
based Federal policy to push for consolidation, is a good 
thing. We think that these issues are better handled at the 
local level where local folks are familiar with some of the 
nuances involving geography, hydrology, climate differences 
that really govern these decisions. And so we would recommend 
that the committee keep that at the local level.
    Mr. Mast. Anybody else? Carte blanche. Yes, sir, Mr. 
Franklin.
    Mr. Franklin. I would agree that a lot of these things 
should be handled at the State and local levels. Often, what we 
serve, and the million customers or so that we serve, it is 
small local level, small community well systems, community 
wastewater systems.
    But I will underscore that the $1 billion-plus that we 
spend every 3 years does not have a single Federal dollar in 
it. And the expertise we put out there, and the results that we 
put out there, are put in our proxy, our proxy statement 
required by the SEC, that would underscore the connection we 
have made for also pay-for-performance--in other words, how our 
high standards are what we pay our people for. That is what 
they are incented to do.
    And I guess, in terms of Federal dollars, all I would say 
from the NAWC standpoint, the access that we would like is 
access to the existing SRF funds for wastewater. We are not 
asking for additional, but the existing. Thank you.
    Mr. Mast. Yes, ma'am?
    Ms. Cooper. Public-private partnerships, I believe, and I 
do not want to be repetitive, are important, but I do not think 
there should be a mandate for any public partnership tied to 
these programs. They are not a one-size-fits-all, and different 
private-public partnerships fit different circumstances.
    In a municipality, we can do it for wastewater. We do have 
an intergovernmental municipal partnership. Water, we do not. 
We build buildings; a lot of them are shared public-private. So 
our main concern is we are learning lessons learned of this new 
era of public-private partnerships.
    But to tie them to mandates also impacts the ability to 
create local jobs. And that was one of the concerns we faced in 
Florida this year, even through the State mandates, that they 
wanted to tie it to--they wanted to tie into our contracts to 
mandate hiring. And we want to create local jobs as well as 
regional jobs, so it is----
    Mr. Mast. Yes. By all means. Mr. Proctor. And do not worry 
about being repetitive; this is Congress.
    [Laughter.]
    Ms. Cooper. I am sorry. I am so sorry.
    Mr. Mast. Everything has been said, but not everybody has 
said it yet.
    [Laughter.]
    Ms. Cooper. Thank you very much.
    Mr. Proctor. Our working group very much believes that this 
decision is a local one, and a voluntary one as well. But there 
is a difference. One of the things I think we all ought to 
focus on is, it is one thing to talk about incentives. But it 
is also another thing to talk about disincentives.
    Presently there are some barriers in place that prevent 
local municipalities and other utilities from even considering 
partnerships where they would like to--for example, the 
defeasance penalty if you go into a concession; and also just 
simply the cost associated with planning, negotiating, then 
implementing a P3.
    For a small utility of 500 people, a legal bill of $50,000, 
$75,000 may be an actual impediment to even having the 
conversation about whether a P3 is in their best interest. Now, 
the Clean Drinking Water SRF does allow some funding for that 
sort of activity. But it is perhaps less so on the clean water 
side. But my point is, make certain that we do not create 
disincentives as we go through this process.
    And then one other thing I would like to mention is this, 
that we have not really touched on in much detail, and that is 
nonfinancial partnerships. I mentioned it in my written 
testimony.
    The opportunities for collaboration among large utilities 
and small utilities for the implementation of technology that 
can save money, make the administration and management of these 
utilities more effective, preserve human health and the 
environment, are incredible. And there are a lot of things that 
can be done to help make that happen that fall way short of 
consolidation or regionalization. They could really move the 
needle.
    Mr. Mast. Thank you. Thank you for those responses.
    Mr. Levine. If I can?
    Mr. Mast. We are actually going to move into a second round 
of questioning. So I am going to go to Ranking Member 
Napolitano here, and if we get back to you for an opportunity 
to respond to that, so be it.
    Mrs. Napolitano. Well, you could have gone ahead because we 
are just you and me and Mr. Gibbs.
    It is difficult for me to make sense of how the 
administration believes the best to address our Nation's water-
related infrastructure because as a candidate, he proposed 
tripling the requests for Clean and Drinking Water State 
Revolving Funds. But that did not materialize in his budget. It 
sure did not come through in his fiscal year 2018 budget.
    And now we hear that the majority of his forthcoming 
infrastructure investment proposal will involve leveraged 
private sector financing rather than infusion of additional 
Federal capital into the State Revolving Fund programs. In my 
view, the model leaves behind many mid-sized and small 
communities, and rural, of course, that may be unable to 
compete with larger cities and unable to afford the costs of 
leveraged private capital.
    In your view, all of you, if the plan is heavily dependent 
on leveraged private capital, would this miss the mark in 
addressing infrastructure needs of many mid-sized and small 
communities? And if you were to make recommendations to 
Congress on the appropriate mechanisms to address these needs, 
what programs would you recommend to fund and what levels? 
Anybody? Everybody?
    Mr. Levine. Ranking Member? So yes. As the----
    Mrs. Napolitano. A short answer, please.
    Mr. Levine. Yes, certainly. As others have said, private 
money is not a panacea, and the bottom line on it is that when 
private money comes in to invest in a system, there has to 
still be a revenue stream to pay back that private investment.
    And so it ultimately comes down to whether the community, 
whether the ratepayers, can afford that expense without 
financial assistance, especially in the form of grants, from 
the Federal Government and from State government. So private 
money is simply not a panacea.
    Mr. Mast. Go ahead, Ms. Cooper.
    Ms. Cooper. Thank you. Definitely, the recommendation for 
the Internal Revenue Code to remove the State volume caps for 
private activity bonds as well as preserving our muni bonds.
    Mrs. Napolitano. That would help.
    Ms. Cooper. Yes. Definitely.
    Mrs. Napolitano. Mr. Proctor?
    Mr. Proctor. And going back to the WIFIA program, right now 
that program is set up for the most part to deal with $20 
million projects, $5 million in a smaller setting. But as it is 
currently structured, it does tend to favor projects that are 
probably financed OK to begin with.
    If there is a way that program can be tweaked and tap into 
its leveraging feature so that it could help out more 
distressed utilities, that would be a positive thing.
    Mrs. Napolitano. Mr. Pedersen?
    Mr. Pedersen. Thank you. I think certainly there is value 
to leverage private capital. But I think we cannot overlook the 
importance of continuing to capitalize the SRF program. And we 
support your bill and your recommendation, and look at even 
enhancing that program to the $3 billion to $4 billion range.
    Mrs. Napolitano. Mr. St. Pierre.
    Mr. St. Pierre. I will just repeat that. When you are 
loaning money for 1.75 percent versus 3 percent or 6 percent, 
what you are doing is you are reducing the amount of work that 
you can do. Obviously, there is a lot of work to do. A full 
support of SRF funding is critical.
    Mrs. Napolitano. Mr. Gonzalez?
    Mr. Gonzalez. Yes. We have got a history of working with 
Corps of Engineers, the Bureau of Reclamation, the SRF, and so 
forth. And most of these funds have dried up. We are looking at 
pretty significant increases in rates to be able to accommodate 
some of these projects.
    And as I mentioned, the projects we are looking at are in 
excess of $100 million. And so when you look to a Federal 
agency and all they can provide is $20 million over a 3- to 4-
year timeframe because they are having to compete with other 
entities, it is not even close to saying it is not going to 
have a significant impact on ratepayers.
    Mrs. Napolitano. OK. Mr. Franklin.
    Mr. Franklin. Thank you. Whether municipal or regulated 
utility, I think there are a myriad of answers to this, not a 
single bullet. And I think we have all come to that conclusion.
    I will say, though, that probably half of the customers we 
service are in small rural areas. And it is the economies of 
scale, whether municipal or not, that really come to bear. Even 
if these systems are not interconnected, they are the same 
people so they can share employees, share knowledge. And so 
that ability to reduce this 50,000 water systems in the country 
to some manageable number that really allows us to bring 
economies of scale will make us all long term more viable.
    Mrs. Napolitano. Thank you very much. And I would ask that 
if you have those recommendations, please put them in writing 
so this committee can look at them and take them into 
consideration. There are lots of impacts to the business 
community that if you do not have clean water, you do not have 
an economy. So it is important for them, too.
    Thank you, Mr. Chair.
    Mr. Mast. Thank you, Ranking Member Napolitano.
    And Mr. Gibbs?
    Mr. Gibbs. Thank you, Mr. Chairman.
    I just want to elaborate a little bit on the private-public 
partnerships. If we cannot do it in this area, I do not know 
where we can do it. I am so hopeful. And I understand what you 
said about the 1\3/4\ percent and 3 percent. We just got to 
figure this out.
    Now, one thing, Mr. Proctor, you talked about the WIFIA 
program. I am pleased that the EPA is going to expect the issue 
in the first round of grants. And I guess can you--to all, but 
Mr. Proctor I want to start--how can we improve the WIFIA, and 
the SRF program, for that matter, considering a larger 
infrastructure package to make this work?
    And I would include the private-public partnerships in here 
because you always can do a blending thing. You get capped off 
in the money you get from SRF and stuff and you still need 
more, maybe blend that interest rate to make this thing work.
    But my big concern is if we cannot come up with public-
private partnerships in this area where we have ratepayers, 
where you have a stream of revenue coming in, I do not know how 
you would do it anywhere else in Government.
    And so I will just open it up. What suggestions? And maybe 
we might have to put those in writing and offer them to the 
committee to get more detail. But just kind of generalize right 
now.
    Mr. Proctor. Yes, sir. Thank you. Well, with respect to 
WIFIA, one of the first things Congress could do would be to 
extend it. I think it expires as a pilot in 2018. Is that 
right? So extending it at least another 5 years, but even 
better, making it permanent so that the markets can react and 
know what they are going to deal with over the long term would 
be important.
    Obviously, increased funding. I have alluded to it several 
times over the course of my testimony. But the leveraging 
feature through credit insurance as a way to bring in private 
capital is extremely powerful. You can leverage every Federal 
dollar that goes into the program by almost $65 by utilizing 
the funds that go into WIFIA for credit insurance as opposed to 
loans or other grants and that sort of thing. And that is a 
pretty hefty return on your dollar there.
    Mr. Levine. Can I speak to that leveraging issue?
    Mr. Gibbs. Yes. Go ahead.
    Mr. Levine. The SRFs as well provide an opportunity for 
leveraging, which most States do not take advantage of as much 
as they could. In my written testimony, I get into some 
extensive detail about a proposal that we offer that would 
incentivize States to leverage to a greater extent by allowing 
them to raise the cap on what is called additional 
subsidization, meaning the use of SRF funds as grants.
    To the extent that they leverage and put more State money 
into their SRF, under our proposal that would allow the States 
to use more SRF funding as grant funds rather than loan funds. 
We illustrate how that would work to help States that have 
already been investing their own funds and how it would 
incentivize more States to do so and take advantage of those 
leveraging opportunities they already have.
    Mr. Gibbs. Yes. Mr. Pedersen?
    Mr. Pedersen. One other quick suggestion. The EPA has done 
a phenomenal job kicking off the WIFIA program. Kudos to them 
and their staff. But we think there could be value in 
coordinating the SRF program that is handled at the State level 
with the EPA WIFIA program. And there is some interest in the 
EPA in doing that, and I think that would help local 
communities.
    Mr. Gibbs. Yes. The intent was WIFIA to help supplement the 
SRF. I know a lot of people are getting heartache thinking that 
it is going to eliminate SRF. That is not the intent at all of 
the WIFIA program, to make that clear.
    Yes, Mr. Franklin?
    Mr. Franklin. Congressman, I would just use as an example, 
say, for the 300,000 people that we serve water to and 
wastewater to in Ohio, they are all Federal taxpayers. And to 
be excluded from the ability to lower the cost of debt for 
those customers, since we do not have access to the Clean Water 
SRF, is really a disadvantage to those customers.
    So my strong recommendation would be that even the 
regulated utilities like ours get access to that same so that 
we could keep that cost down for customers, whether they are 
municipal or they are investor-owned.
    Mr. Gibbs. Yes. Mr. St. Pierre?
    Mr. St. Pierre. I would just speak to the P3 partnership. I 
would not discount public-to-public partnerships. The issue 
here is there is a revenue stream. It is a set revenue stream. 
And it is economies of scale, and it is efficiencies.
    And so you have 75,000 utilities across the country. That 
model is not working well in rural areas. There is a need to 
consolidate. There is a need for regionalization, whether that 
is public-public or public-private. That economy of scale 
provides a margin and an investment that is needed in 
communities that cannot support it on their own.
    Mr. Gibbs. Well, that is helpful. And if you want to submit 
any more stuff in writing, examples, we can do that. Because 
hopefully we will get to infrastructure bill, and this could be 
a key component because there are so many jobs created and 
there is so much need out there because this infrastructure, we 
know, is 80 years old, on average. So we have got to fix it.
    So thank you, Mr. Chairman.
    Mr. Mast. Thank you, Mr. Gibbs.
    If there are no further questions, I would just like to 
thank each and every one of you for your very thoughtful 
testimony this morning. It was very informative, very helpful. 
And without anything else to add, this committee stands 
adjourned.
    [Whereupon, at 12:19 p.m., the subcommittee was adjourned.]
    
    
    
    
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